Project planning involves creating a resource plan, conducting a risk assessment, communicating the plan to departments, confirming vendors, and procuring required items. Risk assessment helps determine potential downsides and rewards, while vendor confirmation and acquisition complete the planning phase.
Project planning provides the company with different steps to follow when starting a full-scale operation. While not all companies go through a project planning process, the steps are common for many types of projects. The first steps usually include creating a resource plan and conducting a risk assessment, followed by communicating the plan to the required departments, confirming vendors, and procuring the required items. Businesses can alternate each step to suit their needs. Upon completion of the project planning phase, the company begins project implementation and management.
A resource plan in project planning helps owners and managers figure out what items are needed to complete projects. Common resources include direct materials, labor, and overhead. This step requires the company’s management team to assess what they have on hand and what they need to start and complete the project. Cost analysis is also part of this plan. Identifying multiple sources for required assets starts the design process.
Risk assessment helps the company determine the potential payoff against the potential downsides of a project. Risks can be financial, operational, environmental or otherwise. Companies analyze each factor and determine the strength of each; they also decide the hierarchy of each risk factor. After reviewing all risks in the project planning phase, owners and managers decide whether the rewards – financial returns – will outweigh the costs of all risk factors combined. Not all risk factors affect every project in the same way or at all.
Once companies select a project and determine that it poses acceptable risks, they communicate the plan to the necessary departments. This brings more individuals into the project planning phase. Companies use these additional workers and employees to determine the best implementation method. This step also begins the process of contacting vendors and seeking to obtain the necessary resources to complete the project. Changes or adjustments may be necessary to plans to accommodate current company operations.
Vendor confirmation is nearing the end of the project planning phase. Once a company has an idea of the quality and quantity of resources needed, they confirm which vendors can meet the company’s needs. Large-scale projects may require the use of exclusive contracts to maintain constant resource levels. Negotiating price discounts based on volume or other factors may also be possible here.
The final phase of project planning is to acquire the items needed for the project. Placing orders, receiving goods, and inspecting them for quality are all part of this process. Acquisitions generally continue in perpetuity for the project. This requires a repeatable process for purchasing. A company can use its current system or create a subsidiary as needed to order and receive goods.
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