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OPM 533 10-1 Operations Operations Management Management Project Management Project Management Chapter 10 Chapter 10

C10 project management

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Page 1: C10 project management

OPM 53310-1

Operations Operations ManagementManagement

Project ManagementProject ManagementChapter 10Chapter 10

Page 2: C10 project management

Project A project is a one short of related activities with a definite beginning and ending time directed toward a unique goal

Project Management Project Management is planning, scheduling and controlling of resources such as equipment, workforce and materials so that they meet the time, costs and technical constraint of the project.

IntroductionIntroduction

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OPM 53310-3

Single unit Many related activities Difficult production planning and

inventory control General purpose equipment High labor skills

Project CharacteristicsProject Characteristics

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To ensure that the project will be completed on time.

To manage the project cost so that the cost is minimized and within the expected budget.

To meet the predetermined quality standard.

Objective of Project Mgt.Objective of Project Mgt.

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OPM 53310-5

Management of Large ProjectsManagement of Large Projects Planning - goal setting, project definition, team

organization Scheduling - relating people, money, and

supplies to specific activities and activities to one and other

Controlling - monitoring resources, costs, quality, and budgets; revising plans and shifting resources to meet time and cost demands

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OPM 53310-6

Planning Objectives Resources Work break-

down schedule Organization

Scheduling Project

activities Start & end

times Network

Controlling Monitor, compare,

revise, action

Project Management ActivitiesProject Management Activities

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OPM 53310-7

Establishing objectives Defining project Creating work

breakdown structure Determining resources Forming organization

© 1995 Corel Corp.

Project PlanningProject Planning

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OPM 53310-8

Often temporary structure Uses specialists from entire company Headed by project manager

Coordinates activities Monitors schedule

& costs Permanent

structure called ‘matrix organization’

© 1995 Corel Corp.

Project OrganizationProject Organization

Acct.

Eng. Eng.Mkt.

Mgr.

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The Role ofThe Role of the Project Manager the Project Manager

Highly visibleHighly visibleResponsible for making sure that:Responsible for making sure that:

All necessary activities are finished in order and on All necessary activities are finished in order and on timetime

The project comes in within budgetThe project comes in within budget The project meets quality goalsThe project meets quality goals The people assigned to the project receive The people assigned to the project receive

motivation, direction, and informationmotivation, direction, and information

Page 10: C10 project management

The Role ofThe Role of the Project Manager the Project Manager

Highly visibleHighly visibleResponsible for making sure that:Responsible for making sure that:

All necessary activities are finished in order and on All necessary activities are finished in order and on timetime

The project comes in within budgetThe project comes in within budget The project meets quality goalsThe project meets quality goals The people assigned to the project receive The people assigned to the project receive

motivation, direction, and informationmotivation, direction, and information

Project managers should be:

Good coachesGood communicatorsAble to organize activities from a

variety of disciplines

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Ethical IssuesEthical Issues Bid rigging – divulging confidential information to give Bid rigging – divulging confidential information to give

some bidders an unfair advantagesome bidders an unfair advantage ““Low balling” contractors – try to “buy” the project by Low balling” contractors – try to “buy” the project by

bidding low and hope to renegotiate or cut cornersbidding low and hope to renegotiate or cut corners Bribery – particularly on international projectsBribery – particularly on international projects Expense account paddingExpense account padding Use of substandard materialsUse of substandard materials Compromising health and safety standardsCompromising health and safety standards Withholding needed informationWithholding needed information Failure to admit project failure at closeFailure to admit project failure at close

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OPM 53310-12

Work Breakdown StructureWork Breakdown Structure

1. Project 2. Major tasks in the project 3. Subtasks in the major tasks 4. Activities (or work

packages) to be completed

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OPM 53310-13

Identifying precedence relationships

Sequencing activities Determining activity

times & costs Estimating material &

worker requirements Determining critical

activities

© 1995 Corel Corp.

J F MA M

J J

MonthActivity

Design

Build

Test

PERT

Project SchedulingProject Scheduling

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OPM 53310-14

Purposes of Project SchedulingPurposes of Project Scheduling Shows the relationship of each activity to

others and to the whole project. Identifies the precedence relationships

among activities. Encourages the setting of realistic time and

cost estimates for each activity. Helps make better use of people, money,

and material resources by identifying critical bottlenecks in the project.

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OPM 53310-15

Gantt chart Critical Path Method (CPM) Program Evaluation & Review

Technique (PERT)

© 1984-1994 T/Maker Co.

Project Management TechniquesProject Management Techniques

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OPM 53310-16

J F M A M J J

Time PeriodActivity

Design

Build

Test

Gantt ChartGantt Chart

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OPM 53310-17

Network techniques Developed in 1950’s

CPM by DuPont for chemical plants (1957) PERT by Booz, Allen & Hamilton with the

U.S. Navy, for Polaris missile (1958) Consider precedence relationships and

interdependencies Each uses a different estimate of activity

times

PERT and CPMPERT and CPM

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OPM 53310-18

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

Is the project over or under cost budget? Are there enough resources available to

finish the project on time? If the project must be finished in less

than the scheduled amount of time, what is the way to accomplish this at least cost?

Questions Which May Be Addressed Questions Which May Be Addressed by PERT & CPMby PERT & CPM

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OPM 53310-19

The Six Steps Common to PERT & CPMThe Six Steps Common to PERT & CPM Define the project and prepare the work

breakdown structure, Develop relationships among the activities.

(Decide which activities must precede and which must follow others.)

Draw the network connecting all of the activities Assign time and/or cost estimates to each

activity Compute the longest time path through the

network. This is called the critical path Use the network to help plan, schedule,

monitor, and control the project

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OPM 53310-20

A Comparison of AON and AOA Network A Comparison of AON and AOA Network ConventionsConventions

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OPM 53310-21

Provides activity information Earliest (ES) & latest (LS) start Earliest (EF) & latest (LF) finish Slack (S): Allowable delay

Identifies critical path Longest path in network Shortest time project can be completed Any delay on critical path activities delays

project Critical path activities have 0 slack

Critical Path AnalysisCritical Path Analysis

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OPM 53310-22

Begin at starting event and work forward ES = 0 for starting activities

ES is earliest start EF = ES + Activity time

EF is earliest finish ES = Maximum EF of all predecessors for

non-starting activities

Earliest Start and Finish StepsEarliest Start and Finish Steps

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OPM 53310-23

Begin at ending event and work backward LF = Maximum EF for ending activities

LF is latest finish; EF is earliest finish LS = LF - Activity time

LS is latest start LF = Minimum LS of all successors for

non-ending activities

Latest Start and Finish StepsLatest Start and Finish Steps

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OPM 53310-24

Advantages of PERT/CPMAdvantages of PERT/CPM Especially useful when scheduling and

controlling large projects. Straightforward concept and not mathematically

complex. Graphical networks aid perception of

relationships among project activities. Critical path & slack time analyses help pinpoint

activities that need to be closely watched. Project documentation and graphics point out

who is responsible for various activities. Applicable to a wide variety of projects. Useful in monitoring schedules and costs.

Page 25: C10 project management

1. Project activities have to be clearly defined, independent, and stable in their relationships

2. Precedence relationships must be specified and networked together

3. Time estimates tend to be subjective and are subject to fudging by managers

4. There is an inherent danger of too much emphasis being placed on the longest, or critical, path

Limitations of PERT/CPMLimitations of PERT/CPM

Page 26: C10 project management

AON Example AON Example

ActivityActivity DescriptionDescriptionImmediate Immediate

PredecessorsPredecessorsAA Build internal componentsBuild internal components ——BB Modify roof and floorModify roof and floor ——CC Construct collection stackConstruct collection stack AADD Pour concrete and install framePour concrete and install frame A, BA, BEE Build high-temperature burnerBuild high-temperature burner CCFF Install pollution control systemInstall pollution control system CCGG Install air pollution deviceInstall air pollution device D, ED, EHH Inspect and testInspect and test F, GF, G

Milwaukee Paper Manufacturing'sMilwaukee Paper Manufacturing'sActivities and PredecessorsActivities and Predecessors

Table 3.1Table 3.1

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AON Network for Milwaukee AON Network for Milwaukee PaperPaper

A

Start

BStart Activity

Activity A(Build Internal Components)

Activity B(Modify Roof and Floor)

Figure 3.6Figure 3.6

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AON Network for Milwaukee AON Network for Milwaukee PaperPaper

Figure 3.7Figure 3.7

C

D

A

Start

B

Activity A Precedes Activity C

Activities A and B Precede Activity D

Page 29: C10 project management

AON Network for Milwaukee AON Network for Milwaukee PaperPaper

G

E

F

H

CA

Start

DB

Arrows Show Precedence Relationships

Figure 3.8Figure 3.8

Page 30: C10 project management

HH

(Inspect/ Test)(Inspect/ Test)77Dummy Dummy

ActivityActivity

AOA Network for Milwaukee AOA Network for Milwaukee PaperPaper

66

FF(Install

(Install Controls)

Controls)

EE(Bu ild B ur ne r)(Bu ild B ur ne r)

GG

(Insta

ll

(Insta

ll

Pollution

Pollution

Device)

Device)

55DD

(Pour Concrete/ (Pour Concrete/ Install Frame)Install Frame)

44CC

(Construct (Construct Stack)Stack)

11

33

22

BB(Modify

(Modify Roof/Floor)

Roof/Floor)

AA(Build

Inter

nal

(Build In

terna

l

Compo

nents

)

Compo

nents

)

Figure 3.9Figure 3.9

Page 31: C10 project management

Determining the Project ScheduleDetermining the Project Schedule

Perform a Critical Path AnalysisPerform a Critical Path Analysis The critical path is the longest path through the The critical path is the longest path through the

networknetwork The critical path is the shortest time in which the The critical path is the shortest time in which the

project can be completedproject can be completed Any delay in critical path activities delays the Any delay in critical path activities delays the

projectproject Critical path activities have no slack timeCritical path activities have no slack time

Page 32: C10 project management

Determining the Project ScheduleDetermining the Project Schedule

Perform a Critical Path AnalysisPerform a Critical Path AnalysisActivity Description Time (weeks)

A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4F Install pollution control system 3G Install air pollution device 5H Inspect and test 2

Total Time (weeks) 25

Table 3.2Table 3.2

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Determining the Project ScheduleDetermining the Project Schedule

Perform a Critical Path AnalysisPerform a Critical Path Analysis

Table 3.2Table 3.2

Activity Description Time (weeks)A Build internal components 2B Modify roof and floor 3C Construct collection stack 2D Pour concrete and install frame 4E Build high-temperature burner 4F Install pollution control system 3G Install air pollution device 5H Inspect and test 2

Total Time (weeks) 25

Earliest start (ES) =earliest time at which an activity can start, assuming all predecessors have been completed

Earliest finish (EF) =earliest time at which an activity can be finished

Latest start (LS) =latest time at which an activity can start so as to not delay the completion time of the entire project

Latest finish (LF) =latest time by which an activity has to be finished so as to not delay the completion time of the entire project

Page 34: C10 project management

Determining the Project ScheduleDetermining the Project Schedule

Perform a Critical Path AnalysisPerform a Critical Path Analysis

Figure 3.10Figure 3.10

A

Activity Name or Symbol

Earliest Start ES

Earliest FinishEF

Latest Start

LS Latest Finish

LF

Activity Duration

2

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Forward PassForward PassBegin at starting event and work forwardBegin at starting event and work forward

Earliest Start Time Rule:

If an activity has only one immediate predecessor, its ES equals the EF of the predecessor

If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors

ES = Max (EF of all immediate predecessors)

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Forward PassForward PassBegin at starting event and work forwardBegin at starting event and work forward

Earliest Finish Time Rule:

The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time

EF = ES + Activity time

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ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

Start

0

0

ES

0

EF = ES + Activity time

Page 38: C10 project management

ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

Start0

0

0

A

2

2

EF of A = ES of A + 2

0

ESof A

Page 39: C10 project management

B

3

ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

Start0

0

0

A

2

20

3

EF of B = ES of B + 3

0

ESof B

Page 40: C10 project management

C

2

2 4

ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

B

3

0 3

Start0

0

0

A

2

20

Page 41: C10 project management

C

2

2 4

ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

B

3

0 3

Start0

0

0

A

2

20

D

4

73= Max (2, 3)

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D

4

3 7

C

2

2 4

ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

B

3

0 3

Start0

0

0

A

2

20

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E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

D

4

3 7

C

2

2 4

ES/EF Network for Milwaukee ES/EF Network for Milwaukee PaperPaper

B

3

0 3

Start0

0

0

A

2

20

Figure 3.11Figure 3.11

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Backward PassBackward PassBegin with the last event and work backwardsBegin with the last event and work backwards

Latest Finish Time Rule:

If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows it

If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it

LF = Min (LS of all immediate following activities)

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Backward PassBackward PassBegin with the last event and work backwardsBegin with the last event and work backwards

Latest Start Time Rule:

The latest start time (LS) of an activity is the difference of its latest finish time (LF) and its activity time

LS = LF – Activity time

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LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

Figure 3.12Figure 3.12

LF = EF of Project

1513

LS = LF – Activity time

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LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

LF = Min(LS of following activity)

10 13

Figure 3.12Figure 3.12

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LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

LF = Min(4, 10)

42

Figure 3.12Figure 3.12

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LS/LF Times for LS/LF Times for Milwaukee PaperMilwaukee Paper

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

42

84

20

41

00

Figure 3.12Figure 3.12

Page 50: C10 project management

Computing Slack TimeComputing Slack TimeAfter computing the ES, EF, LS, and LF times for all After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activityactivities, compute the slack or free time for each activity

Slack is the length of time an activity can be delayed without delaying the entire project

Slack = LS – ES or Slack = LF – EF

Page 51: C10 project management

Computing Slack TimeComputing Slack TimeEarliest Earliest Latest Latest On

Start Finish Start Finish Slack CriticalActivity ES EF LS LF LS – ES Path

A 0 2 0 2 0 YesB 0 3 1 4 1 NoC 2 4 2 4 0 YesD 3 7 4 8 1 NoE 4 8 4 8 0 YesF 4 7 10 13 6 NoG 8 13 8 13 0 YesH 13 15 13 15 0 Yes

Table 3.3Table 3.3

Page 52: C10 project management

Critical Path for Critical Path for Milwaukee PaperMilwaukee Paper

Figure 3.13Figure 3.13

E

4

F

3

G

5

H

2

4 8 13 15

4

8 13

7

13 15

10 13

8 13

4 8

D

4

3 7

C

2

2 4

B

3

0 3

Start0

0

0

A

2

20

42

84

20

41

00