What Are the Steps in Project Planning?

Project planning provides a company with different steps to follow when initiating a large-scale operation. Though not all companies go through a project planning process, the steps are common for many project types. The first steps often include creating a resource plan and conducting a risk assessment, followed by communicating the plan to necessary departments, confirming suppliers, and procuring the necessary items. Companies may alternate each step in order to meet their needs. Once the project planning phase is complete, the company initiates project implementation and management.

A resource plan in project planning helps owners and managers discover what items are necessary to complete projects. Common resources include direct materials, labor, and overhead. This step requires a company’s management team to assess what they have on hand and what they will need to start and complete the project. Cost analysis is also part of this plan. Identifying multiple sources for needed assets starts the project process.

Risk assessment helps a company determine the potential reward against the possible downsides of a project. Risks can be financial, operational, environmental, or another type. Companies look at each factor and determine the strength of each one; they also decide the hierarchy of each risk factor. Once they review all risks in the project planning phase, owners and managers decide whether the rewards — financial returns — will be greater than the costs of all risk factors combined. Not all risk factors affect each project in the same manner or at all.

Once companies select a project and determine it carries acceptable risk, 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 starts the process of contacting suppliers and looking to obtain the requisite resources for completing the project. Alterations or adjustment may be necessary to plans in order to accommodate the company’s current operations.

Confirming suppliers is toward the end of the project planning phase. After a company has an idea of the quality and quantity of resources needed, they confirm which suppliers can meet the company’s needs. Large-scale projects may require the use of exclusive contracts to maintain steady resource levels. Negotiating price discounts based on volume or other factors may also be possible here.

The final project planning phase is to procure the items needed for the project. Placing orders, receiving goods, and inspecting them for quality are part of this process. Procurement often continues in perpetuity for the project. This requires a repeatable process for procurement. A company can use its current system or set up a subsidiary as needed to order and receive goods.