Wednesday, 2 February 2022

Allocation and redeployment of resources in project

When implementing most projects, even the most significant, the investor always tries to save, so the financial and resource capabilities of the contractor are most often limited. In such circumstances, the optimal allocation of resources is of great importance, in which their most efficient use is ensured. Often, the project manager begins his work without having an accurate idea of what he can count on in the process of implementing the undertaking, so the current management of the allocated funds is of great importance.

Types of resources

Any undertaking is implemented on the basis of a work plan, which is based on design and estimate documentation. Among all types of planning, a special place is occupied by the effective allocation of resources that must be purchased and delivered at the right time and in the required quantity. In addition, the already purchased funds should be optimally distributed among different processes for the fastest and highest quality performance of work.Distribution of resources from a smartphone.

When performing project tasks, different types of resources are used:

  • natural (land, water, atmosphere);
  • labor;
  • means of production (objects of labor, production capacities);
  • financial (credit or own capital investments);
  • information (educational, scientific and cultural potential);
  • external (relations with foreign partners, foreign exchange reserves).

All types of resources are grouped into two large groups that are critical to the implementation of the plan:

Workers are people who work with materials and equipment (engineers, builders, installers, drivers, operators of various mechanisms). In addition, in a broader context, this list can include all the people involved in the project, for example, the customer, planners, contractors, sponsors, etc.
Logistical includes things without which nothing can be produced. These are raw materials (materials, components, structures), machines and other technical means (equipment, mechanisms). This also includes fuel and other energy carriers.

When planning a project, keep in mind that there are two types of resources:

  • Non-reproducible, accumulated, stored. They are completely consumed in the process of work, their reuse is impossible. However, if they are not used in a given period of time, they can be saved (accumulated) and applied later. These include fuel, money, objects and means of labor used only once.
  • Reproducible, non-cumulative, non-stackable. In the process of work, such funds are not spent, retain their shape and can be used in other areas. At the same time, if such a tool is not used at a certain point in time (idle), then this downtime cannot be compensated in the future, since its ability to perform certain useful actions does not accumulate. Basically, we are talking about people and means of labor used repeatedly (mechanisms, machines and other equipment).
  • At the same time, it is important to understand that specific resources have little to do with the entire project as a whole, they are mainly tied to the performance of specific work in the technological process.

Scheduling as a method of resource management

Resource management is an integral part of the overall management of the entire project. It begins at the phase of concept development and feasibility study, is detailed when drawing up a plan and involves the implementation of actions in such areas:

  • general planning;
  • procurement and supply management;
  • inventory management;
  • logistics and logistics, i.e. distribution management.

Having previously calculated all the necessary processes according to the typical deadlines, and making an approximate distribution of resources between different sites, it is possible to calculate the approximate time of project implementation. At the same time, the economic and mathematical modeling used for calculations is always aimed at achieving the maximum effect with a minimum of costs or subject to limited various means.Analysis of the resource potential of the enterprise

Since the sequence of all works is described in the network calendar plan, the need for people or raw materials is also directly tied to the plan. Depending on the total volume, phase of work and cost intensity, the need for a stored and non-stackable resource is determined.

For example, when erecting the walls of the structure, several teams of masons are needed, timely and in the right amount of delivery of bricks and mortar, as well as lifting equipment. As the work approaches the end, the number of workers and equipment can be reduced, the required stock of bricks can be stored, and the released forces can be directed to a parallel section of work.

In this case, resources are redistributed, that is, to perform one task, their number increases due to decrease during the implementation of another task. Sometimes a process can be stopped or suspended altogether if there is an urgent need for people or technical means at another site.

The project manager is obliged to know in detail the plan of all works and keep his finger on the pulse of events in order to ensure the correct distribution and redistribution of means of production and personnel.

In modern project management, two main approaches to resource planning are applied:

Time-limited. In this case, the customer sets the exact date of completion of all work, which the manager must focus on. At the same time, it can attract additional labor, equipment, money to speed up processes, especially during overloads.

With limited resources. Here the main limitation is the availability of certain resources, most often money. In this regard, it is necessary to choose certain technical solutions depending on their cost and it is not possible to accurately calculate the time of the end of the idea. If during the implementation of the idea there is an increase in prices for building materials, components or labor, then the manager, together with the customer, will have to make a decision on the termination of work, the search for cheaper technical solutions or the use of borrowed funds.

Based on the choice of one of the above planning methods, the manager can begin to develop the principles of logistics support for the initiative.

Key stages of resource management

A loop diagram that describes the process.

  • planning (scheduling, procurement in accordance with planned processes);
  • regulation (establishment of timely supplies, distribution of raw materials and other funds to facilities, creation of necessary reserves);
  • control (assessment of the availability of necessary components and costs for them, quality control and inventory, control over the implementation of planned indicators by cost and timing).
  • Improper implementation of at least one of the above points may disrupt the progress of work included in the network diagram. This, with consistent planning of the camp, will cause the failure of the deadlines for the delivery of the object, and with parallel planning, it will create significant problems that can be solved by reducing the duration of the critical path. For such a reduction, it will be necessary to urgently redistribute human and material funds between the sites, disrupting the overall cycle of the project. Realizing the importance of each stage, it is possible to dwell in more detail on the main components of resource management.

Separately, it is worth dwelling on the procurement system - this is the most complex and important system of measures that provides the project with the required goods, services and intellectual property from external suppliers. It is inextricably linked with the supply of products.

The procurement and supply subsystem consists of a number of actions:

  • Planning. Purchases are planned at the very initial stage of the development of the idea, directly correlate with the design and estimate documentation and the list of works. In order to avoid problems, the duration of the process of purchasing, manufacturing or extracting the necessary goods and its delivery to the destination is always taken into account.
  • The choice of suppliers is based on the analysis of their qualification questionnaires, which indicate their financial, technical, production and managerial capabilities. Several pre-selected candidate firms are agreed with the project manager and the customer, after which the winner is determined during the bidding process. Sometimes the contract is concluded without bidding directly with the enterprise (organization) or through an intermediary.
  • Placing orders. The project manager, in cooperation with the design organization, standardizes the procurement nomenclature, reviews the applications submitted by manufacturers, conducts tenders and concludes contracts that stipulate all the necessary requirements (storage and transportation of goods, settlement procedure).
  • Control over supplies is carried out in accordance with the schedules for each nomenclature item (materials, services, equipment, fuel). Each change entails an adjustment to the project. The most important points of supply can be called accounting and control of delivery, acceptance of goods, its storage. Well-delivered accounting with the use of standard reporting forms will help to avoid failures in this matter.

The procurement process is very multi-component, complex and responsible.

During the implementation of a large-scale initiative, for example, the construction of a new plant, a major undertaking in the aviation or oil and gas industry, hundreds of a wide variety of goods and services have to be purchased.

At the same time, their quality and price should be correlated optimally in order not to, on the one hand, make the project too expensive, and on the other hand, prevent the supply of low-quality components.

When preparing for the procurement process, pay attention to such factors:

  • The general environment that affects the processes is economic, political, organizational, technological factors that can negatively or positively affect the achievement of the goal.
  • A strategy for acquiring components and linking them to project stages in terms of time and work structure.
  • Procurement planning – preparation of documentation for each type of goods or services with details of requirements for technical characteristics, quality, costs, contracts and suppliers.
  • Preliminary assessment, selection and verification of suppliers. This phase includes the study of the current workload, the potential capacity of manufacturers - potential suppliers, their production indicators.

Study of the technical competence of potential partners. Analysis of the compliance of the materials or services produced by them with the requirements of a specific task, qualification checks, negotiations.
Valuation. Studying the realism of the approach to price formation, considering possible risks that may affect the increase in the price of components, and, consequently, the rise in price of the entire project.
Goods such as fuel, metal products, raw materials, building materials, universal equipment are usually well prescribed in various standards, so they are produced by a large number of enterprises. 


This allows you to buy them on specialized commodity exchanges. As for complex equipment and precision instruments, electronics that require professional adjustment and constant maintenance, here the leader is branded sales and specialized intermediary companies that provide a full range of services.

Immediately after the conclusion of the contract, work begins on the continuous monitoring of the rhythm of deliveries in accordance with the phases of construction and installation works, quality control and the compilation of statistics for use in subsequent projects. This analysis lasts until the facility is put into operation.

A separate place in the construction and installation is occupied by the availability and size of stocks of raw materials or structures. This is an optimization task, which is being worked on in parallel with the development of a procurement strategy.

Usually, for each type of product, the safety stock is calculated - this is the minimum resource that will allow you to work smoothly with a certain delay on the part of the supplier or in case of an error in the calculations of the order point, i.e. the moment when it is necessary to place a new order.

Inventory management includes such managed parameters: inventory volumes for each item item, frequency, as well as volumes and terms of their replenishment, minimization of damage, control of the degree of readiness of stored products for use.

Features of proper resource management in the economy

The task of the state is to effectively use the resource complex available to ensure the production of the necessary goods, as well as to get the maximum profit. All resources in the economic section can be ranked as follows:

  • Entrepreneurial potential or the ability to create benefits for comfort and safety.
  • Intellectual developments: technical experience, scientific discoveries.
  • Natural resources: minerals, climate, geographical location of the country.
  • Human resources are culture, education, professionalism of the population, as a key factor in the functioning of the economy.
  • Financial savings, expressed in specific figures of accumulated capital.
  • Since resources are not always available in the required quantity, a competent methodology for managing them comes to the fore. The statement is true for all communities, regardless of their degree of development, the type of political system. That is why the differences between individual states are often reduced exclusively to the methods of separation.


What to produce, in what way and for whom? Answering these questions, each state determines the method of optimal distribution of the resource complex. But the logic of division also depends on the level of closeness of the economy. If a country is actively involved in international trade, it is considered open. Today it is customary to classify countries with a market mechanism for the functioning of the economy, a mixed and a team approach. Let's take a closer look.

  • Market economy. The factor determining price indicators is exclusively the market, and not the central authority. Demand and supply, freely interacting with each other, form the final cost of products with production plans. At the same time, commercial structures are guided by the maximization of profits, and consumers are interested in the usefulness of the goods or services offered.
  • Mixed way. It is characterized by a double impact on prices, both from the market and decisions made by the government.
  • Command economy. The upper bars of the cost characteristics are set exclusively by government orders. Civil servants in a command economy set output and allocate resources. For these purposes, a central administrative apparatus engaged in long-term planning is being legally created. The method of dividing the entire resource complex through the issuance of acts by a planning body is still used in North Korea.
  • In the 21st century, the vast majority of regions live in a mixed economy. Large-scale intervention in market relations is allowed only by those states that are guided by the socialist path of development. The idea is that officials control key production facilities, restrain prices. In the capitalist countries, the state apparatus manifests itself only in some sectors, interfering in market mechanisms with directive constraints.

Other factors, not only state ones, can hinder the development of the market. For example, the cost of obtaining information about the cost, resources, since the information does not belong to freely distributed data. Lack of awareness leads to the adoption of not quite optimal decisions, inevitably reflected in the allocation of resources. The power of monopolies also does not allow economic entities to develop, as well as external factors, public goods.

Understanding the Resource Allocation Model

The deficit in providing production with resources and the desire to find the most optimal solution forces economists to resort to mathematical modeling of processes. For the effective distribution of limited resources, today there are the following models:

  • Linear economic calculations in conditions of severe resource scarcity.
  • Static methods of quantitative calculations.
  • Dynamic planning a few steps ahead.
  • Network diagrams with logical and mathematical plans.

An example of successful step-by-step planning is bellman's formula, where the key factor is the optimal and consistency of the distribution of the resource package. It is the optimization of management that should be carried out at each stage, and the breakdown into steps will help in this. That is, not only the general objective function of a particular step is taken into account, but also the consequences of previous stages are taken into account.

Unlike ancient people, who relied solely on folk signs and stars when making decisions, modern economists have powerful computer technology and reliable algorithms, where a combination of factors and interrelations expressed by mathematical formulas will lead the economy from the initial state to the specified parameters, thanks to the influence of competently made management decisions.

Resource allocation in projects

In project activities, there are limits on time or resource reserves. The first option involves completion by the designated date. If necessary, resources can be added to the deadline. The second type of restriction is associated with the impossibility of exceeding the available level of resources, therefore, if they are insufficient, the implementation of the project must be delayed. Solutions:

  • Methods of equalizing needs are applicable if time is short. They boil down to suspending non-critical iterations using time reserves to reduce peak demand for a resource that is evenly distributed over time periods where the needs are less significant.
  • The lack of resource provision obliges management to build a structure of priorities. Subject to the relevant rules, lags behind plans are minimized without overspending resources and adjusting the relationships within the network schedule. First, operations with a small reserve of time should be carried out. Then you need to focus on the duration of the procedures.
  • In rare situations, the rule of least sequence number is used. You can't just shift steps that have already begun to be implemented.
  • Features of redistribution after primary separation
  • Initially, the products of labor activity with financial incomes in the economy are manifested in the production sphere. Thanks to distribution mechanisms, the primary division of the money supply is carried out between the state in the form of tax deductions, enterprises that receive profits, employees who are paid wages.

Secondary distribution occurs in the next stage. All industries are included in the redistribution. The working people and the non-working population take part in the process, acquiring goods and services that are important for themselves. As a result, the final revenues of economic entities are formed, which are again redistributed due to taxes and related costs, allow maintaining special services, creating national resources necessary for the implementation of socially significant programs.

Nuances of resource allocation in different economies

In any economic model, the principle of equitable distribution of resources and Pareto efficiency are key. Most countries of the 21st century live in a market economy: the USA, Canada, Great Britain, Austria, etc. This means that consumers broadcast their own preferences to manufacturers through money, thereby "ordering" the necessary goods and goods. Competition contributes to the presentation of a better product to the market, and businessmen are trying to reduce the cost of products, introduce the most effective technologies and master the resource base. But it's kind of an ideal model.

In life: monopolists without state intervention will adhere to a pricing policy that is aimed solely at inflating the selling price. For this reason, the governments of many countries are forced to control the profitability of monopolies, as well as to eliminate other consequences, including environmental ones: environmental pollution, noise reduction, etc.

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