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PROJECT MANAGEMENT. For this portion of the session, the learning objectives are: Understand the variety of applications of Project Management. Understand the history of Project Management. Learn the quantitative techniques for Project Management.
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PROJECT MANAGEMENT • For this portion of the session, the learning objectives are: • Understand the variety of applications of Project Management. • Understand the history of Project Management. • Learn the quantitative techniques for Project Management. • Learn the qualitative concepts of Project Management. • Learn the “basics” of Microsoft Project.
Project Management Program Evaluation and Review Technique (PERT) Critical Path Method (CPM) Successful project management asks and answers the following questions: • What is an estimate of the project’s duration? • Among the project’s activities, which are likely to be “critical” activities in the sense that they will directly affect the project’s duration? (While the project is still in its planning phase, the project manager may take actions that will speed up one or more critical activities, thereby shortening the project’s planned duration. Furthermore, once the project begins, the project manager should closely monitor critical activities in order to prevent delays that would otherwise increase the project’s planned duration.) • For each of the project’s activities, what should be the scheduled Start Time and Finish Time? • What are the resource implications of the schedule for the activities? • Because a project never proceeds exactly as planned, how can the project manager quickly recognize and react to a “surprise” that might otherwise unfavorably affect the project’s duration?
Some Applications of Project Management • Construction or renovation of a plant, an office complex, a residential housing plan, a sports stadium, or a freeway. • Research and development associated with a new product. • Relocation of a major facility (e.g., a plant or a hospital). • Manufacture, maintenance, or repair, of a large item (e.g., an airplane or a nuclear reactor). • Installation of a new information technology (e.g., a new accounting system or a new supply chain management system). • Countdown for a launch of a rocket. • Making financial arrangements (e.g., an IPO or a revenue bond). • A fund raising campaign for a charity. • An advertising campaign. • A political campaign. • Performing a complex surgery. • Filming a major motion picture.
The History of PERT and CPM • In the late 1950s, two methodologies for managing projects emerged concurrently but independently: • the Program Evaluation and Review Technique (PERT) • the Critical Path Method (CPM). PERT was developed jointly by representatives of the United States Navy and the management consulting firm of Booze, Allen, and Hamilton. Their motivation was the research and development associated with one of the Navy’s “new products”, the Polaris nuclear missile, designed to launch from a submarine beneath the ocean’s surface. CPM was developed jointly by representatives of Du Pont and Remington-Rand. Their motivation was Du Pont’s desire to improve the planning and execution of both the construction of new production facilities and the maintenance shutdowns of existing facilities. Although developed independently, PERT and CPM have much in common. Although traditionalists continue to distinguish between PERT and CPM, most practitioners today use the acronyms interchangeably or, as we will, combine them into the single acronym of PERT/CPM. In this session, we will learn the elements of PERT and CPM that are common to both.
PROJECT MANAGEMENT: THE 3 PHASES AND 10 STEPS
THE DESIGNER GENES PROJECT Designer Genes, a rapidly expanding genetic engineering firm, is relocating to a new office building. Jean Ettic, the project manager, has already leased a vacant office building and approved architectural plans for renovating it. To save money and to gain more control over the project, Jean herself will act as the general contractor for the renovation. Jean has already selected the subcontractors that she will employ. The move to the new building is complicated by the fact that Designer Genes' current outsourcing of its computer needs is no longer viable. Therefore, in moving to the new building, Designer Genes will use this opportunity to purchase a new main-frame computer and establish an in-house Computer Services Department.
Phase I: Project Formulation Step 1: Project Decomposition Step 2: Specification of the Precedence Relationships Step 3: Estimation of the Activity Durations “Coarse” versus “Fine” Decomposition “Hard” versus “Soft” Activities Redundant Predecessor Relationship Cyclic Predecessor Relationships
Phase I: Project Formulation Step 4: Construction of the Project Network
Phase II: Planning & Scheduling Step 5: Computation of Each Activity's EST & EFT An activity's Earliest Start Time (EST) is the earliest possible time at which the activity can start. An activity's Earliest Finish Time (EFT) is the earliest possible time at which the activity can finish. Step 6: Computation of Each Activity's LST & LFT An activity's Latest Start Time (LST) is the earliest possible time at which the activity can start without causing the project to finish after its earliest finish time. An activity's Latest Finish Time (LFT) is the earliest possible time at which the activity can finish without causing the project to finish after its earliest finish time. Step 7: Computation of Each Activity’s TS and Identification of the Critical Path An activity's Total Slack (TS) is the maximum possible increase in the activity's duration that will not increase the project's earliest finish time (assuming that all other durations remain the same). A critical activity has a Total Slack of 0. The critical path consists of the critical activities. (It is possible to have more than one critical path.)
SHORTENING THE PROJECT’S DURATION Suppose it is desired to shorten the project's duration by one day. Then, the project manager should proceed as follows: NOTE: If you need to shorten the project duration by more than one day, then repeat the above procedure one day at a time.
Phase II: Planning & Scheduling Step 8: Scheduling the Activities The Gantt Chart (“Stripped Down” Version) NOTE: Temporarily ignore the [bracketed numbers] after the activity codes.
ADDING A RESOURCE TO THE DESIGNER GENES PROJECT In the Designer Genes project, assume (unrealistically) that the same type of laborers perform all activities. More specifically, assume that the table below displays the size of the daily workforce of these laborers required to perform each activity, where an activity’s daily requirement remains constant during the activity’s duration. For example, for each day of activity C’s duration, 4 laborers are required. Note: In the preceding Gantt Charts, the above numbers were the [bracketed numbers] that appeared after the activity codes.
Desirable Characteristics of a Resource Loading Diagram 1. 2. In fact, from among all possible Hybrid Schedules, there is one that has a peak resource usage of 10 laborers. What happens when there is more than one resource?
Phase III: Monitoring & Replanning Step 9: Monitoring of the Project’s Activities Step 10: Replanning of the Remaining Portion of the Project • Thus far, Phases I & II have provided a plan for how the project should go. However, once the project begins, this plan must undergo periodic revision. A revision should occur in one of the following two ways: • On a periodic basis at the end of every week, 2 weeks, or month – whichever is most appropriate. • Whenever there is a “big surprise”. Step 9: Monitoring of the Project’s Activities As the project progresses, the project manager must closely monitor the project’s activities, comparing the planned progress to the actual progress. Such monitoring will enable the project manager to quickly recognize and react to an unforeseen event that significantly affects one or more activity durations. Step 10: Replanning of the Remaining Portion of the Project When it’s time for a periodic review (e.g., an end-of-the-week review), or when an unforeseen event occurs that significantly affects one or more activity durations, the project manager should proceed as follows: • Considering the most up-to-date information, the project manager should revise the estimate of all activity durations. (At the time of revision, there is no uncertainty about the durations of the activities that have already finished. However, for those activities either in-progress or not-yet-started,the most up-to-date information should lead to more accurate estimates of the durations.) • Using these revised estimates of the activity durations, the project manager should determine a revised plan by repeating Phase II’s planning and scheduling.
PROJECT MANAGEMENT: QUALITATIVE CONCEPTS • Post the project network, schedule, and other data prominently (e.g., on a wall or on a website). • Form a “Planning & Monitoring Committee” consisting of the Project Manager and the persons responsible for the major activities. Have this Planning & Monitoring Committee meet regularly to review any new information and to anticipate potential problems. For each potential problem, formulate a plan that will either resolve or mitigate the problem. • Create a culture that fosters timely and honest communication. There should be no “punishment” for conveying bad news. The “punishment” should be for delaying or concealing bad news. • Learn from prior similar projects (e.g., Boeing with its 707, 727, 737, 747). • Create a “Change Order Board” to review each change order, assess the change order’s impact on both schedule and budget, and decide for each change order which is more important – schedule or budget. • Leave as little as possible to chance. Before the project begins, anticipate what might go wrong and prepare a contingency plan (e.g., Boeing’s approach to the transportation of the 767’s body sections from Japan to Seattle). • Create a policy that a project is never done until it has been reviewed in a timely manner by asking and answering the following three questions: • What did we do well that must been sustained in the future when performing similar projects? • What did we do poorly that must be improved in the future when performing similar projects? • Have we “transferred” the knowledge gained to the corporate level, so that the entire organization can benefit?
