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Project Management

Project Management. Class 2: 1/19/11. 3- 2. OBJECTIVES . Definition of Project Management Work Breakdown Structure Project Control Charts Structuring Projects Critical Path Scheduling. 3- 3. Project Examples. Building: a ship, a satellite, an oil rig, and a nuclear plant.

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Project Management

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  1. Project Management Class 2: 1/19/11

  2. 3-2 OBJECTIVES • Definition of Project Management • Work Breakdown Structure • Project Control Charts • Structuring Projects • Critical Path Scheduling

  3. 3-3 Project Examples • Building: a ship, a satellite, an oil rig, and a nuclear plant. • Developing: computer programs, an advertising campaign, a new product, a new process, and training materials. • Implementing: new technologies and work procedures.

  4. 3-4 Project Management Defined • A Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform • Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project

  5. 3-5 Objectives of a Project

  6. 3-6 Objectives of a Project The 4th dimension: client satisfaction

  7. 3-7 Project Life Cycle Project Life Cycle: changing patterns of resource usage and level of activity over the course of the project

  8. 3-8 Project Life Cycle • Stages of a Conventional Project: • Slow beginning • Buildup of size • Peak • Begin a decline • Termination

  9. 3-9 Project Life Cycle

  10. 3-10 Project Life Cycle Time distribution of project effort is characterized by slow-rapid-slow

  11. 3-11 Project Life Cycle • Try to avoid the “90-90 rule of project management”: The first 90% of the project takes 90% of the time, the last 10% takes the other 90%.

  12. 3-12 Project Life Cycle What does this rule really mean?

  13. 3-13 Project Life Cycle • During the life cycle cycle, project management is accomplished through the use of processes such as: • Initiating, planning, executing, controlling, and closing • Many of these processes are iterative in nature because the project is being progressively elaborated

  14. 3-14 Defining Project Objectives Why Set Project Objectives • To provide direction for project activities • To enable measuring results against prior exceptions • Resource usage (manpower, materials, etc.) • Schedule integrity • Quality of work • To determine specific goals which will provide maximum effectiveness of project activities

  15. 3-15 Defining Project Objectives Requirements for Project Objectives • Achievable (time, resources, staff) • Understandable (vs. complex) • Specific (vs. general, vague statements) • Tangible (“deliverables”) • Measurable (resources, schedule, quality) • Consistent (with strategy, programs, policies, procedures) • Assignable (department or individual)

  16. 3-16 Defining Project Objectives Some Problems in Setting Objectives • Stating activities rather than deliverables • Exceeding the scope of the defined project • Failing to be specific • Omitting important deliverables • Inconsistency with stated policies

  17. 3-17 Defining Project Objectives Example: D.U. Singer Project Title: Permanent Antiseptic Production Start-Up • Objectives: • Develop a comprehensive plan for the production of a new, permanent antiseptic • Complete development and testing of a manufacturing process that: • Meets all current FDA, EPA, and OSHA regulations as well as internal specifications • produces 95% yield of product (full packaged) at a level of 80% of full production goal of 10 million liters per year

  18. 3-18

  19. 3-19 Another problem in objective setting …

  20. 3-20 Level Program 1 Project 1 Project 2 2 Task 1.1 Task 1.2 3 Subtask 1.1.1 Subtask 1.1.2 4 Work Package 1.1.1.1 Work Package 1.1.1.2 Work Breakdown Structure Awork breakdown structuredefines the hierarchy of project tasks, subtasks, and work packages

  21. 3-21 Work Breakdown Structure Program: New Product Introduction 1.0 Project 1: Engineering Development 1.1 Task 1: Run pilot test 1.2 Task 2: Review process costs and efficiencies 1.3 Task 3: Prepare Capital Equipment List 2.0 Project 2: Market Survey 2.1 Task 1: Complete Market Survey 2.2 Task 2: Analyze Survey Results 2.3 Task 3: Prepare Marketing Plan

  22. 3-22 Work Breakdown Structure 3.0 Project 3: Manufacturing Start-up 3.1 Task 1: Install and Test New Equipment 3.2 Task 2: Establish Manufacturing Procedures 3.3 Task 3: Detailed Testing of Initial Output 4.0 Project 4: Sales Force Training 4.1 Task 1: Select Sales People 4.2 Task 2: Select Distributors 4.3 Task 3: Train Sales Force and Distributors

  23. 3-23 Gantt Chart Vertical Axis: Always Activities or Jobs Horizontal bars used to denote length of time for each activity or job. Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time Horizontal Axis: Always Time

  24. 3-24 Service Activities for A Delta Jet During a 60 Minute Layover

  25. 3-25 Network-Planning Models • A project is made up of a sequence of activities that form a network representing a project • The path taking longest time through this network of activities is called the “critical path” • The critical path provides a wide range of scheduling information useful in managing a project • Critical Path Method (CPM) helps to identify the critical path(s) in the project networks

  26. 3-26 Prerequisites for Critical Path Methodology A project must have: well-defined jobs or tasks whose completion marks the end of the project; independent jobs or tasks; and tasks that follow a given sequence.

  27. 3-27 Steps in the CPMMethod • Activity Identification • Activity Sequencing and Network Construction • Determine the critical path • From the critical path all of the project and activity timing information can be obtained

  28. 3-28 Activity Designation Immed. Pred. Time (Weeks) Assess customer's needs A None 2 Write and submit proposal B A 1 Obtain approval C B 1 Develop service vision and goals D C 2 Train employees E C 5 Quality improvement pilot groups F D, E 5 Write assessment report G F 1 CPMExample Consider the following consulting project: Develop a critical path diagram and determine the duration of the critical path and slack times for all activities.

  29. 3-29 D(2) G(1) A(2) B(1) F(5) C(1) E(5) First draw the network Act. Imed. Pred. Time A None 2 B A 1 C B 1 D C 2 E C 5 F D,E 5 G F 1

  30. 3-30 Find the Critical Path • Activities on the critical path cannot be delayed without delaying the completion of the project • There are two paths: A – B – C – D – F – G: 12 weeks A – B – C – E – F – G: 15 weeks • Activity D can be delayed by up to 3 weeks without delaying the project • The longest path is critical – why?

  31. 3-31 Determine early starts and early finish times ES=4 EF=6 D(2) ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=9 EF=14 ES=14 EF=15 G(1) A(2) B(1) C(1) F(5) ES=4 EF=9 Hint: Start with ES=0 and go forward in the network from A to G. E(5)

  32. 3-32 D(2) ES=9 EF=14 ES=14 EF=15 G(1) A(2) B(1) F(5) LS=0 LF=2 LS=2 LF=3 LS=3 LF=4 E(5) Determine late starts and late finish times Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A. ES=4 EF=6 ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 LS=7 LF=9 C(1) ES=4 EF=9 LS=9 LF=14 LS=14 LF=15 LS=4 LF=9

  33. 3-33 Slack=(7-4)=(9-6)= 3 Wks ES=9 EF=14 ES=14 EF=15 G(1) A(2) B(1) F(5) LS=0 LF=2 LS=2 LF=3 LS=3 LF=4 Critical Path & Slack ES=4 EF=6 D(2) ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 LS=7 LF=9 C(1) ES=4 EF=9 LS=9 LF=14 LS=14 LF=15 E(5) LS=4 LF=9 Duration=15 weeks

  34. 3-34 Example 2: Great Valley Hospital Project

  35. 3-35 F A C E Start H B D G Network for Great Valley Hospital Project 3 2 2 2 4 3 5 4 Arrows show precedence relationships

  36. 3-36 Critical Path for Great Valley Hospital Project F A C E Start H B D G Arrows show precedence relationships

  37. 3-37 Critical Path for Great Valley Hospital Project • Four paths in the network: Path 1: Start – A – C – F – H: 9 weeks Path 2: Start – A – C – E – G – H: 15 weeks Path 3: Start – A – D – G – H: 13 weeks Path 4: Start – B – D – G – H: 14 weeks • Path 2 is critical See GreatValley.mpp

  38. 3-38 Critical Path for Great Valley Hospital Project • A, C, E, G, and H are on the critical path and so they have 0 slack • B is on path 4, so its slack is 15 – 14 = 1 • D is on paths 3 and 4, so its slack is 15 – Max (13,14) = 1 • F is on path 1, so its slack is 15 – 9 = 6 • An activity can be delayed by its slack and not delay the project completion

  39. 3-39 Activity Name Earliest Start Earliest Finish ES EF Latest Start LS LF Activity Duration Critical Path Analysis Setup Latest Finish

  40. 3-40 A C F F 0 2 2 4 4 7 H H H A 2 C 4 13 0 2 10 2 2 3 E H Slack=0 Slack=0 Slack=6 4 8 13 15 0 0 H F H H Start 8 4 15 13 0 0 4 2 0 Slack=0 Start B D G B D G 0 3 3 7 8 13 H H H 4 8 13 1 4 8 3 4 5 Slack=1 Slack=1 Slack=0 Critical Path Analysis for Great Valley Hospital Project Determine early starts and early finish times Slack=0

  41. 3-41 Great Valley General Hospital 1 2 3 4 5 6 7 8 9 10 1112 13 1415 16 A Build internal components B Modify roof and floor C Construct collection stack D Pour concrete and install frame E Build high-temperature burner F Install pollution control system G Install air pollution device H Inspect and test Great Valley Gantt Chart: Earliest Start and Finish

  42. 3-42 Time-Cost Models • In construction, incentives for completing project early • In new product development, revenue stream starts earlier if project is launched earlier • Time-Cost Models: • To accelerate the completion of a project, expedite or “crash” the critical path project activity that has the cheapest cost per unit time to shorten its duration

  43. 3-43 Steps in Time-Cost Analysis • Using normal activity times, find the critical path • Compute the crash cost per time period: Crash cost/period = (Crash cost - Normal cost)/ (Normal time - Crash time) • If there is only one critical path, select the activity on the critical path that (a) can still be crashed, and (b) has the smallest crash cost per period • If there are multiple critical paths, select the cheapest crash cost combination of critical path activities that can still be crashed that will reduce ALL critical paths by one period • Update all activity times and repeat process if further reduction in critical path time is desired

  44. 3-44 Example 3. Great Valley Hospital Project with Crashing Act. NT CT NC CC CC/WK CP? A 2 1 22,000 22,750 750 Y B 3 1 30,000 34,000 2000 N C 2 1 26,000 27,000 1,000 Y D 4 3 48,000 49,000 1,000 N E 4 2 56,000 58,000 1,000 Y F 3 2 30,000 30,500 500 N G 5 2 80,000 84,500 1,500 Y H 2 1 16,000 19,000 3,000 Y

  45. 3-45 Example 3. Great Valley Hospital Project Crashing Analysis • Select the activity with smallest crash cost per week that is on the critical path – activity A at a cost of $750 • Start – B – D – G – H is also critical (14 wks) • Crash G by 1 week at a cost of $1,500 to reduce the project by an additional week (vs. crashing C and D at a combined cost of $2,000)

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