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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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slide1

Project Management

Class 2: 1/19/11

slide2

3-2

OBJECTIVES

  • Definition of Project Management
  • Work Breakdown Structure
  • Project Control Charts
  • Structuring Projects
  • Critical Path Scheduling
project examples

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.
slide4

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
objectives of a project1

3-6

Objectives of a Project

The 4th dimension: client satisfaction

project life cycle

3-7

Project Life Cycle

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

project life cycle1

3-8

Project Life Cycle
  • Stages of a Conventional Project:
    • Slow beginning
    • Buildup of size
    • Peak
    • Begin a decline
    • Termination
project life cycle3

3-10

Project Life Cycle

Time distribution of project effort is characterized by slow-rapid-slow

project life cycle4

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%.

project life cycle5

3-12

Project Life Cycle

What does this rule really mean?

project life cycle6

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
slide14

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
slide15

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)
slide16

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
slide17

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
slide19

3-19

Another problem in objective setting …

work breakdown structure

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

slide21

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

slide22

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

gantt chart

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

network planning models

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
prerequisites for critical path methodology

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.

steps in the cpm method

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
cpm example

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.

first draw the network

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

find the critical path

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?
determine early starts and early finish times

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)

determine late starts and late finish times

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

critical path slack

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

network for great valley hospital project

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

critical path for great valley hospital project

3-36

Critical Path for Great Valley Hospital Project

F

A

C

E

Start

H

B

D

G

Arrows show precedence relationships

critical path for great valley hospital project1

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

critical path for great valley hospital project2

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
critical path analysis setup

3-39

Activity Name

Earliest Start

Earliest Finish

ES

EF

Latest Start

LS

LF

Activity Duration

Critical Path Analysis Setup

Latest Finish

determine early starts and early finish times1

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

great valley gantt chart earliest start and finish

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
time cost models

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
slide43

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
slide44

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

slide45

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)