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Chapter 10

Chapter 10. Resource Management. Objectives. Human Resource Management Capital Resource Management Managing the Resource Profile. Human Resources. As a project manager you know your most critical resource is your people.

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Chapter 10

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  1. Chapter 10 Resource Management

  2. Objectives • Human Resource Management • Capital Resource Management • Managing the Resource Profile

  3. Human Resources • As a project manager you know your most critical resource is your people. • Of the three resources (money, time, and people), people will demand the most attention. • The Human Resource Challenge Today: Project managers are turning to contract employees managed by the contracting company that supplies them because of cost. • Direction: Keep the team focused. Tangential issues absorb time, money, and energy of the team. • Guidance: Coach your people along. • Support: Back your team. Encourage creative thinking. • Encouragement: Cheerleading for cohesiveness. • Cost of Human Resources: You should need two people before you hire one because of the cost of benefits (insurance, retirement, training, and support).

  4. The Capital Resource • Direct (variable) Costs: costs that vary directly with your volume of output, including labor wages, overtime premium, materials, and sales tax. • Indirect (fixed) Costs: fixed periodic costs including insurance, start up, utilities (HVAC, lighting), and security. • Duration and Cost (fig 10-1, page 207): 1. Normal Point: Point of least direct cost. 2. Fully Crashed Point: Point of shortest duration. • Criteria to select activities to crash: 1. Must be on critical path – will shorten project duration. 2. Precedes multiple activities – bottlenecks numerous activities. 3. Long duration – more potential time gain from crashing. 4. Lower cost – low skill or resources that are sitting idle. 5. Sunshine Rule – if it is early in the project and you fail, you still have recovery time. 6. Labor intensive – low skill is easy to add people. 7. Subject to common problems – lowers exposure to having future problems. • Time/Cost Tradeoff Analysis: Fig 10-2, page 208. The optimum duration yields the minimum total cost.

  5. Managing the Resource Profile • A project’s resource profile describes the rate at which resources are consumed over time (fig 10-3, page 210). • Some typical resources that exhibit erratic profiles are: staffing levels, consumption of funds, equipment use and the need for travel. • Profile management tools: The key to leveling resource profiles is to shift work from the peaks to the valleys by rescheduling activities. • Avoid any changes to activities on the critical paths. • Activities not on the critical path afford us the opportunity to level resource requirements since they have some slack. • Total slack(TS): the amount of time an activity can be delayed without delaying the finish date of the project. • Free slack (FS): the amount of time an activity can be delayed without delaying its successor tasks.

  6. The Final Plan • Resource leveling should be performed after the optimum duration is found, and the project’s duration is brought within the expected deadlines. • Once resource levels are satisfactorily leveled, the CPM network is to be redone, and both forward and backward pass calculations are performed. • One last review for reasonableness is performed before the plan is considered firm and is presented for final approval.

  7. Summary • As a project manager you know your most critical resource is your people. • Of the three resources (money, time, and people), people will demand the most attention. • Cost of Human Resources: You should need two people before you hire one because of the cost of benefits (insurance, retirement, training, and support). • Direct (variable) Costs: costs that vary directly with your volume of output, including labor wages, overtime premium, materials, and sales tax. • Indirect (fixed) Costs: fixed periodic costs including insurance, start up, utilities (HVAC, lighting), and security. • Time/Cost Tradeoff Analysis: The optimum duration yields the minimum total cost. • Activities not on the critical path afford us the opportunity to level resource requirements since they have some slack. • Resource leveling should be performed after the optimum duration is found, and the project’s duration is brought within the expected deadlines.

  8. Home Work • 1. What are the 3 resources a project manager requires and what is the most critical resource? • 2. Explain the two types of costs: direct and indirect (fixed). • 3. Explain optimum duration of a project. • 4. What activities afford us the opportunity to level resource requirements?

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