Project Management

Lecture 27

Dr. Arshad Zaheer

Source: CASE material and online sources

Recap What is a Project Project Management Modern Tools and Techniques Project Selection Models Project Life Cycle Project manager and functional manager Project organizations Benefits of Project management Causes of failure of projects

Outline PERT and CPM Framework of PERT/CPM Terminology Drawing Network Diagrams Calculation of expected time Identification of critical path Gantt charts, Resource loading and leveling Work Breakdown Structures Linear Responsibility Charts

PERT AND CPM

• RERT (program evaluation and review technique) and CPM (critical path method) are two of the most widely used techniques for planning and coordinating large scale projects.

• By using PERT or CPM managers are able to obtain:– A graphical display of the project activities– An estimate of how long the project will take– An indication of which activities are most critical– An indication of how long an activity can be delayed

without lengthening the project

The framework of PERT and CPM

• For proceeding with PERT/CPM following common six points have to be followed:– Define the project with significant activities or tasks– Develop relationship among the activities– Draw network connecting all activities– Assign time and/or cost estimates to each activity– Compute the critical path– Use network to help plan, schedule, monitor and

control the project

Terminology• PERT: A technique for planning, scheduling and

controlling the activities

• Activity: A specific or set of tasks required by the project. Actions taken to accomplish a task are called activities which consumes time and other organizational sources. Activities are represented by arrows.

• Event: Outcome of one or more activities. The starting and ending point of an activity is called event. It is a statement of accomplished task from where another activity starts. Events are represented by circles called nodes.

Terminology

• Network: Combination of all activities and events. A systematic diagram showing the logical sequence and interrelationships between events and activities.

• Path: Series of connected activities or events

• Critical path: Longest – Critical path is the path which has longest total duration of the project. Any delay would delay the project

• Slack/float: Allowable slippage for a path

A simple project network diagram

1

2

3

4

5 6

Locate facilities

Interview

Order furniture

Remodel

Furniture setup

Hire & train

Move in

Activity relationship

a

b

c

a b

c

a

b

c

d

a

b

c

Dummy Activity

Activity Preceding Activity Time

A - 10B - 12C A 11D B 16E C, D 8

Expected timeExpected time = t = a + 4m + b

6a = Optimistic time: Time taken if every thing progress in an ideal manner with nothing going wrongm = Most probable time: This is most likely activity time under the normal conditionsb = This is the pessimistic time if there are abnormal conditions for any significant breakdown or delay

ActivityImmediate

Predecessors

Time Estimates (Week)

Optimistic Most Probable Pessimistic

A - 4 5 12

B - 1 1.5 5

C A 2 3 4

D A 3 4 11

E A 2 3 4

F C 1.5 2 2.5

G D 1.5 3 4.5

H B, E 5 3.5 5

I H 1.5 2 2.5

J F, G, I 1 2 3

ActivityImmediate Predecessor

Time Estimates (Week)

Expected time = t =(a + 4m + b)/6

A - 6B - 2

C A 3D A 5

E A 3F C 2

G D 3H B, E 4

I H 2J F, G, I 2

2 5

71 4 8

3 6

Routing(C)

ProductDesign

(A)

MarketResearch

Plan(B)

Prototype(D)

MarketingBrochure

(E)

CostEstimates

(F)Testing

(G)

MarketSurvey

(H)

Pricingand

Forecast(I)

FinalReport

(J)

COMPLETION

Activity list for the Daugherty Porta-Vac Project

Activity Description ImmediatePredecessors

A R&D product design -B Plan market research -C Routing (manufacturing engineering) AD Build prototype model AE Prepare marketing brochure AF Cost estimates (industrial engineering) CG Preliminary product testing DH Market survey B, EI Pricing and forecast report HJ Final report F, G, I

2

4 51

3

(A) (B)

(C) (D)

(E)

Activity List for a Two-Machine Maintenance Project

Activity Description Expected Time (in days)

A Overhaul machine I 7

B Adjust machine I 3

C Overhaul machine II 6

D Adjust machine II 3

E Test system 2

PERT DiagramActivity Preceding Activity

A --B --C --D AE AF CG CH E, B, FI E, B, FJ D, HK G, I, J

2

4 61

3

E

5

B

C

G

J

K7

H

I

A

D

F

Activities of a projectActivity Predecessor Activity

a -

b -

c -

d a

e b,c

f b,c

g b,c

h c

I g,h

j d,e

•

Network Diagram

1

2

4

3

6

5

7

a

b

c

d

ef

g

h

i

j

Make a Network Diagram

Activity Time (days)

Preceding Activity

A 6 -- B 2 -- C 2 -- D 3 -- E 8 A F 5 B, E G 9 C, F, D H 3 -- I 2 P, H J 3 B, E K 10 G L 1 D M 10 I, J, K N 3 L, Q O 5 M, N P 4 A Q 5 G

1

3

4

2

6 7

5 8

9

10

11

A,6

H, 3

B, 2

C, 2

D, 3

L, 1

Q, 5

G, 9N, 3

K, 10

J, 3

I, 2

O, 5

Dum1

P, 4M, 10

E, 8

F, 5

Resource loading describes the amount of individual resource an existing schedule requires during specific time periods.  The PERT/CPM network technique is well suited for the job of

generating time-phased resource requirements.

Resource Loading

Resource Leveling

Resource leveling aims to minimize the period-by-period variations in resource lading by shifting tasks within their

slack allowances.

The Work Breakdown Structure & Linear Responsibility Charts

Pictures a project subdivided into hierarchical units of task,

subtasks, work packages, etc.

The project management software actually creates WBSs

automatically, given that the action plans have been input.

WBSs are usually in the form of outlines with the first level

tasks at the left, and successive levels appropriately indented.

230XZ3Robot

(10.00.00)

Electronics(12.00.00)

Contractadmin.

(13.00.00)

Install. &service

(15.00.00)

Manufatrg.(14.00.00)

Systemsdesign

(11.00.00)

Syst.engr.

(11.01.00)

Prof.test

(11.02.00)

Equip.(12.01.00)

Sftwr.(12.03.00)

Prod.cntrl.

Mfg.engr.

PersonnelDataSite

prep.Logistics

Cntrl(12.02.00)

Vrtl.(12.02.01)

Elbow(12.02.02)

Wrist(12.02.03)

Engrs.(12.02.04)

Trans.(12.02.05)

Work Breakdown Structure(account numbers shown)

Cont. It may illustrate:

How each project contributes to the whole in terms performance,

responsibility, budget, schedule.

List the vendors and sub contractors associated with specific

tasks.

Documentation of that all parties have signed-off on their various

commitments to the projects.

Any specifications for any work package, establish account

numbers, specify hardware/software to be used, and identify

resource needs.

The basis for making cost estimates.

Procedure for designing and using the WBS

1. Using information from the action plan, list the task

breakdown in successively finer levels of detail. Continue

until all meaningful tasks or work packages have been

identified and each task can be individually planned,

budgeted, scheduled, monitored, and controlled.

2. For each work package, identify the data relevant to the

WBS. List the personnel and organizations responsible for

each task.

Cont.

It is helpful to construct a linear responsibility chart

(sometimes called a responsibility matrix) to show who is

responsible for what. This chart also shows critical interfaces

between units that may require special managerial

coordination. With it, the PM can keep track of who must

approve what and who must report to whom.

Linear Responsibility Chart

Legend: Responsible Support Notification Approval

Subproject Task

Project

Manager

Contract

Admin.

Project

Eng.

Industrial

Eng.

Determine

Need

A1

A2

Solicit

Quotations B1

Write Approp.

Request C1

C2

C3

“

“

“

“

“

“

WBS

Responsibility

Project Office Field Oper.

Field Manager

Simplified Linear Responsibility Chart

Vice-p

residen

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Establish project plan 6 2 1 3 3 3 3 4 4 4 4

Define WBS 5 1 3 3 3 3 3 3 3 3

Establish hardware specs 2 3 1 4 4 4

Establish software specs 2 3 4 1 4

Establish interface specs 2 3 1 4 4 4

Establish manufacturing specs 2 3 4 4 1 4

Define documentation 2 1 4 4 4 4

1 Actual responsibility, 2 General supervision, 3 Must be consulted, 4 May be consulted, 5 Must be noted, 6 Final Approach

Vice-p

residen

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ana

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Man

ag

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Establish project plan 6 2 1 3 3 3 3 4 4 4 4

Define WBS 5 1 3 3 3 3 3 3 3 3

Establish hardware specs 2 3 1 4 4 4

Establish software specs 2 3 4 1 4

Establish interface specs 2 3 1 4 4 4

Establish manufacturing specs 2 3 4 4 1 4

Define documentation 2 1 4 4 4 4

1 Actual responsibility, 2 General supervision, 3 Must be consulted, 4 May be consulted, 5 Must be noted, 6 Final Approach

Verbal Responsibility Chart

Legend:IA, ILI, IHI: Product linesLOB: Line of businessMC: Management committeeM-A Cttee: Marketing administration committeeS&S: Sales and serviceMP&R: Marketing planning and research

Clear Action withActivities

Responsible Individuals

Work withInitiate Action

Distribution System

And its Administration1. Recommend distribution

system to be used.

Mktg Officer

Mktg Officer

Mktg Officer

LIL & IHI LOB

MCs

M-A Cttee

VP & Agcy Dir

Group LOB MC

M-A Cttee

VP & Agcy Dir

IA LOB MC

M-A Cttee

VP & Agcy Dir

Sr VP Mktg

Sr VP Mktg

Sr VP Mktg

Compensation2. Determine provisions of

sales compensation programs

(e.g., commissions, subsidies, fringes).

3. Ensure cost-effectiveness

testing of sales compensation

programs.

Compensation

Task Force

Compensation

Task Force

Compensation

Task Force

Compensation

Task Force

Mktg, S&S &

Eqty Prod Offrs

Mktg, S&S &

Eqty Prod Offrs

Mktg, S&S &

Eqty Prod Offrs

Mktg, S&S &

Eqty Prod Offrs

President

President

President

Territory4. Establish territorial strategy

for our primary distribution

system.

VP & Agcy Dir Dir MP&R

M-A Cttee

Sr VP Mktg

Clear Action withActivities

Responsible Individuals

Work withInitiate Action

Territory5. Determine territories for

agency locations and establish

priorities for standing.

6. Determine agencies in

Which advanced sales personnel

Are to operate.

VP & Agcy Dir

Dir Ret Pln

Sls

Dir Adv Sls

Dir MP&R

M-A Cttee

VP S&S

Sr VP Mktg

Sr VP Mktg