17-1Project Management CHAPTER 17 Project Management.

17-1 Project Management

CHAPTER17

Project Management


Unique, one-time operations designed to accomplish Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame.a specific set of objectives in a limited time frame.

Build A

A Done

Build B

B Done

Build C

C Done

Build D

Ship

JAN FEB MAR APR MAY JUN

On time!

ProjectsProjects


Project ManagementProject Management

How is it different? Limited time frame Narrow focus, specific objectives Less bureaucratic

Why is it used? Special needs Pressures for new or improves products or

services



What are the Key Metrics Time Cost Performance objectives

What are the Key Success Factors? Top-down commitment Having a capable project manager Having time to plan Careful tracking and control Good communications



What are the Major Administrative Issues? Executive responsibilities

Project selection Project manager selection Organizational structure

Organizational alternatives Manage within functional unit Assign a coordinator Use a matrix organization with a project leader



What are the tools? Work breakdown structure Network diagram Gantt charts Risk management


Planning and SchedulingPlanning and Scheduling

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Locate new facilities

Interview staff

Hire and train staff

Select and order furniture

Remodel and install phones

Move in/startup

Gantt Chart


Deciding which projects to implement

Selecting a project manager

Selecting a project team

Planning and designing the project

Managing and controlling project resources

Deciding if and when a project should be terminated

Key DecisionsKey Decisions


Project ManagerProject Manager

Responsible for:

Work QualityHuman Resources TimeCommunications Costs


Temptation to understate costs

Withhold information

Misleading status reports

Falsifying records

Comprising workers’ safety

Approving substandard work

Ethical IssuesEthical Issues


Project Life CycleProject Life Cycle

Concept

FeasibilityFeasibility

PlanningPlanning

ExecutionExecution

TerminationTermination

Man

agem

ent


Work Breakdown StructureWork Breakdown Structure

Project XProject X

Level 1

Level 2

Level 3

Level 4

Figure 17.2


PERT and CPMPERT and CPM

PERT: Program Evaluation and Review Technique

CPM: Critical Path Method

Graphically displays project activities Estimates how long the project will take Indicates most critical activities Show where delays will not affect project


The Network DiagramThe Network Diagram

Network (precedence) diagram

Activity-on-arrow (AOA)

Activity-on-node (AON)

Activities

Events


The Network Diagram (cont’d)The Network Diagram (cont’d)

Path Sequence of activities that leads from the starting

node to the finishing node Critical path

The longest path; determines expected project duration

Critical activities Activities on the critical path

Slack Allowable slippage for path; the difference the

length of path and the length of critical path


Project Network – Activity on ArrowProject Network – Activity on Arrow

1

2

3

4

5 6

Locatefacilities

Orderfurniture

Furnituresetup

InterviewHire andtrain

Remodel

Move in

Figure 17.4

AOA


Project Network – Activity on NodeProject Network – Activity on Node

1

2

3

5

6

Locatefacilities

Orderfurniture

Furnituresetup

Interview

RemodelMove in

4

Hire andtrain

7S

Figure 17.4

AON


Network ConventionsNetwork Conventions

a

b

c ab

c

a

b

c

d

a

b

c

Dummyactivity


Time EstimatesTime Estimates

Deterministic

Time estimates that are fairly certain

Probabilistic

Estimates of times that allow for variation


Example 1Example 1

1

2

3

4

5 6

8 weeks

6 weeks

3 weeks

4 weeks9 weeks

11 weeks

1 week

Locate

facilities

Order

furniture Fu

rnitu

re

setup

InterviewHire

and train

Remodel Move in

DeterministicDeterministictime estimatestime estimates

Figure 17.5


Example 1 SolutionExample 1 Solution

P a t h L e n g t h( w e e k s )

S l a c k

1 - 2 - 3 - 4 - 5 - 61 - 2 - 5 - 61 - 3 - 5 - 6

1 82 01 4

206

Critical PathCritical Path


Network activities ES: early start EF: early finish LS: late start LF: late finish

Used to determine Expected project duration Slack time Critical path

Computing AlgorithmComputing Algorithm


Probabilistic Time EstimatesProbabilistic Time Estimates

Optimistic time

Time required under optimal conditions

Pessimistic time

Time required under worst conditions

Most likely time

Most probable length of time that will be required


Probabilistic EstimatesProbabilistic Estimates

Activitystart

Optimistictime

Most likelytime (mode)

Pessimistictime

to tptm te

Figure 17.8


Expected TimeExpected Time

te = to + 4tm +tp

6

te = expected timeto = optimistic timetm = most likely timetp = pessimistic time


VarianceVariance

(tp – to)2

36

= varianceto = optimistic timetp = pessimistic time


Example 5Example 5

1-3-4a

3-4-5d

3-5-7e

5-7-9f

2-4-6b

4-6-8h

2-3-6g 3-4-6

i

2-3-5c

Optimistictime

Most likelytime

Pessimistictime


Path ProbabilitiesPath Probabilities

Z = Specified time – Path meanPath standard deviation

Z indicates how many standard deviationsof the path distribution the specified tineis beyond the expected path duration.


17Weeks

Weeks

Weeks

Weeks

10.0

16.0

13.5

1.00

1.00

a-b-c

d-e-f

g-h-i

Example 6Example 6


Time-cost Trade-offs: CrashingTime-cost Trade-offs: Crashing

Crash – shortening activity duration

Procedure for crashing

Crash the project one period at a time

Only an activity on the critical path

Crash the least expensive activity

Multiple critical paths: find the sum of crashing the least expensive activity on each critical path


Time-Cost Trade-Offs: CrashingTime-Cost Trade-Offs: Crashing

TotalcostTotalcost

ShortenShorten

ShortenShorten

Cumulativecost of crashing

Cumulativecost of crashing

Expected indirect costsExpected indirect costs

Optimum

CRASHCRASH

Figure 17.11


6a

4d

5c

10b

9 e

2f

Example 7Example 7


Advantages of PERTAdvantages of PERT

Forces managers to organize

Provides graphic display of activities

Identifies

Critical activities

Slack activities1

2

3

4

5 6


Limitations of PERTLimitations of PERT

Important activities may be omitted

Precedence relationships may not be correct

Estimates may include a fudge factor

May focus solelyon critical path 1

2

3

4

5 6

142 weeks


Computer aided design (CAD) Groupware (Lotus Notes) Project management software

CA Super Project Harvard Total Manager MS Project Sure Track Project Manager Time Line

Technology for Managing ProjectsTechnology for Managing Projects


Imposes a methodology

Provides logical planning structure

Enhances team communication

Flag constraint violations

Automatic report formats

Multiple levels of reports

Enables what-if scenarios

Generates various chart types

Advantages of PM SoftwareAdvantages of PM Software


Risk: occurrence of events that have undesirable consequences

Delays

Increased costs

Inability to meet specifications

Project termination

Project Risk ManagementProject Risk Management


Identify potential risks

Analyze and assess risks

Work to minimize occurrence of risk

Establish contingency plans

Risk ManagementRisk Management


SummarySummary

Projects are a unique set of activities

Projects go through life cycles

PERT and CPM are two common techniques

Network diagrams

Project management software available


Projects — ConceptsProjects — Concepts

PM1Definition/Example Alton Bridge

17-1Project Management CHAPTER 17 Project Management.

Documents

Transcript of 17-1Project Management CHAPTER 17 Project Management.