Project Management Operations Management - 5 th Edition Chapter 9 Roberta Russell & Bernard W....

Project ManagementProject Management

Operations Management - 5th EditionOperations Management - 5th Edition

Chapter 9Chapter 9

Roberta Russell & Bernard W. Taylor, IIIRoberta Russell & Bernard W. Taylor, III

9A-9A-22

What is a Project?

Project unique, one-time operational activity or effort

Examples constructing houses, factories, shopping malls, athletic

stadiums or arenas developing military weapons systems, aircrafts, new ships launching satellite systems constructing oil pipelines developing and implementing new computer systems planning concert, football games, or basketball tournaments introducing new products into market

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Project ElementsProject Elements

ObjectiveObjective ScopeScope Contract requirementsContract requirements SchedulesSchedules ResourcesResources PersonnelPersonnel ControlControl Risk and problem analysisRisk and problem analysis

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Project Management Process

Project planningProject planning Project scheduling Project scheduling Project controlProject control Project teamProject team

made up of individuals from various areas and made up of individuals from various areas and departments within a companydepartments within a company

Matrix organizationMatrix organization a team structure with members from functional areas, a team structure with members from functional areas,

depending on skills requireddepending on skills required Project ManagerProject Manager

most important member of project teammost important member of project team

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PlanningPlanning ObjectivesObjectives

ResourcesResources

Work break-down Work break-down scheduleschedule

OrganizationOrganization

SchedulingScheduling Project activitiesProject activities

Start & end timesStart & end times

NetworkNetwork

ControllingControlling Monitor, compare, revise, actionMonitor, compare, revise, action

Project Management ScopeProject Management Scope

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BeforeBefore Start of projectStart of project DuringDuringprojectproject TimelineTimeline projectproject

Project Planning, Scheduling, and Project Planning, Scheduling, and ControllingControlling

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BudgetsDelayed activities reportSlack activities report

CPM/PERTGantt chartsMilestone chartsCash flow schedules


Time/cost estimatesBudgetsEngineering diagramsCash flow chartsMaterial availability details

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Project ScopeProject Scope

Scope statementScope statement a document that provides an understanding, a document that provides an understanding,

justification, and expected result of a projectjustification, and expected result of a project Statement of workStatement of work

written description of objectives of a projectwritten description of objectives of a project Work breakdown structureWork breakdown structure

breaks down a project into components, breaks down a project into components, subcomponents, activities, and taskssubcomponents, activities, and tasks

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Work Breakdown Structure for Computer Order Processing System Project

Work Breakdown Structure for Computer Order Processing System Project

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Organizational Breakdown StructureOrganizational Breakdown Structure a chart that shows which organizational units are a chart that shows which organizational units are

responsible for work itemsresponsible for work items Responsibility Assignment MatrixResponsibility Assignment Matrix

shows who is responsible for work in a projectshows who is responsible for work in a project

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Project Scheduling

StepsSteps Define activitiesDefine activities Sequence Sequence

activitiesactivities Estimate timeEstimate time Develop scheduleDevelop schedule

TechniquesTechniques Gantt chartGantt chart CPMCPM PERTPERT Microsoft ProjectMicrosoft Project

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Gantt Chart

Graph or bar chart with a bar for each project activity that shows passage of time

Provides visual display of project Provides visual display of project scheduleschedule

Slack amount of time an activity can be delayed

without delaying the project

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| | | | |Activity

Design house and obtain financing

Lay foundation

Order and receive materials

Build house

Select paint

Select carpet

Finish work

00 22 44 66 88 1010MonthMonth

MonthMonth11 33 55 77 99

Example of Gantt ChartExample of Gantt Chart

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Project ControlProject Control

Time managementTime management Cost managementCost management Quality managementQuality management Performance managementPerformance management

Earned Value AnalysisEarned Value Analysis a standard procedure for numerically measuring a a standard procedure for numerically measuring a

project’s progress, forecasting its completion date and project’s progress, forecasting its completion date and cost and measuring schedule and budget variationcost and measuring schedule and budget variation

CommunicationCommunication Enterprise project managementEnterprise project management

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CPM/PERTCPM/PERT

Critical Path Method (CPM)Critical Path Method (CPM) DuPont & Remington-Rand (1956)DuPont & Remington-Rand (1956) Deterministic task timesDeterministic task times Activity-on-node network constructionActivity-on-node network construction

Project Evaluation and Review Technique Project Evaluation and Review Technique (PERT)(PERT) US Navy, Booz, Allen & HamiltonUS Navy, Booz, Allen & Hamilton Multiple task time estimatesMultiple task time estimates Activity-on-arrow network constructionActivity-on-arrow network construction

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1.1. Define the project and prepare the Define the project and prepare the work breakdown structurework breakdown structure

2.2. Develop relationships among the Develop relationships among the activities - decide which activities must activities - decide which activities must precede and which must follow othersprecede and which must follow others

3.3. Draw the network connecting all of the Draw the network connecting all of the activitiesactivities

Six Steps: CPM and PERTSix Steps: CPM and PERT

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4.4. Assign time and/or cost estimates to Assign time and/or cost estimates to each activityeach activity

5.5. Compute the longest time path through Compute the longest time path through the network the network –– this is called the critical this is called the critical pathpath

6.6. Use the network to help plan, Use the network to help plan, schedule, monitor, and control the schedule, monitor, and control the projectproject

Six Steps: CPM and PERTSix Steps: CPM and PERT

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1. When will the entire project be completed?

2. What are the critical activities or tasks in the project?

3. Which are the noncritical activities?

4. What is the probability the project will be completed by a specific date?

Questions PERT & CPM Questions PERT & CPM Can AnswerCan Answer

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5. Is the project on schedule, behind schedule, or ahead of schedule?

6. Is the money spent equal to, less than, or greater than the budget?

7. Are there enough resources available to finish the project on time?

8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost?

Questions PERT & CPM Questions PERT & CPM Can AnswerCan Answer

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Project NetworkProject Network

Activity-on-node (AON)

nodes represent activities, and arrows show precedence relationships

Activity-on-arrow (AOA) arrows represent activities

and nodes are events for points in time

Event completion or beginning

of an activity in a project

1 32

BranchBranch

NodeNode

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AON Network for House Building Project

13

22

43

31 5

1

61

71Start


Order and receive materials Select paint

Select carpet

Lay foundations Build house

Finish work

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13

22

43

31 5

1

61

71Start

Critical Path

Critical pathCritical path Longest path Longest path

through a networkthrough a network Minimum project Minimum project

completion timecompletion time

A:A: 1-2-4-71-2-4-73 + 2 + 3 + 1 = 9 months 3 + 2 + 3 + 1 = 9 months

B:B: 1-2-5-6-71-2-5-6-73 + 2 + 1 + 1 + 1 = 8 months3 + 2 + 1 + 1 + 1 = 8 months

C:C: 1-3-4-71-3-4-73 + 1 + 3 + 1 = 8 months3 + 1 + 3 + 1 = 8 months

D:D: 1-3-5-6-71-3-5-6-73 + 1 + 1 + 1 + 1 = 7 months3 + 1 + 1 + 1 + 1 = 7 months

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Activity Start Times

13

22

43

31 5

1

61

71Start

Start at 3 monthsStart at 6 months

Start at 5 months

Finish at 9 months

Finish

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Node ConfigurationNode Configuration

1 0 3

3 0 3

Activity number

Activity duration

Earliest start

Latest start

Earliest finish

Latest finish

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Forward PassForward Pass

Start at the beginning of CPM/PERT network to determine the earliest activity times

Earliest Start Time (ES) earliest time an activity can start ES = maximum EF of immediate predecessors

Earliest finish time (EF) earliest time an activity can finish earliest start time plus activity time

EF= ES + t

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Earliest Activity Start and Earliest Activity Start and Finish TimesFinish Times

1 0 3

3

2 3 5

2

3 3 4

1 5 5 6

1

4 5 8

3

6 6 7

1

7 8 9

1

Start


Select paint

Lay foundations

Select carpet

Build house

Finish work


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Backward PassBackward Pass

Determines latest activity times by starting at the end of CPM/PERT network and working backward

Latest Start Time (LS) Latest time an activity can start without delaying

critical path time

LS= LF - t Latest finish time (LF)

latest time an activity can be completed without delaying critical path time

LS = minimum LS of immediate predecessors

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Latest Activity Start and Latest Activity Start and Finish TimesFinish Times

1 0 3

3 0 3

2 3 5

2 3 5

3 3 4

1 4 5 5 5 6

1 6 7

4 5 8

3 5 8

6 6 7

1 7 8

7 8 9

1 8 9

Start


Select paint

Lay foundations

Select carpet

Build house

Finish work


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* Critical Path* Critical Path

00009999999988888888*7*7*7*7

111177778888666677776666

111166667777555566665555

00008888888855555555*4*4*4*4

111144445555333344443333

00005555555533333333*2*2*2*2

00003333333300000000*1*1*1*1

Slack SSlack SEFEFLFLFESESLSLSActivityActivity

Activity SlackActivity Slack

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Using OM ToolsUsing OM Tools

Now let’s look at this problem in OM Now let’s look at this problem in OM ToolsTools

Project Management Operations Management - 5 th Edition Chapter 9 Roberta Russell & Bernard W....

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