Ch11

Chapter 11: Project Management 1

Chapter 11: Project Management


Introduction


Previous Examples of Projects

Transporting Olympic Flame (Chapter 1) Mercedes-Benz facility location (Chapter 5)


Viper Development Project

Project team given 3 years to go from concept to roadster. Needed to develop new 8.0-litter V-10

aluminum engine and new high performance six-speed transmission.

Comparable projects usually require five years at Chrysler.


Viper Development Project con’t

Project team members hand-picked. Artemis Prestige selected to help

manage project ability to track several projects

concurrently interactive use provide broad picture of entire project help identify the impact of each activity on

the ultimate completion of the project


Viper Development Project: An Overwhelming Success

First test engine required less than a year to develop.

Transmission developed in 1.5 years compared to the usual 5 to 6 years.

Many important innovations in the frame, body, and brakes were incorporated .


Zeneca Pharmaceuticals

Mission is the development of new drugs for the medical community.

The development of a new drug is a complex project with typical durations of 10 years.


Zeneca Pharmaceuticals: Major Steps in Drug Development

Preclinical Testing Investigational New Drug Human Clinical Testing

three separate phases New Drug Application Approval


Differences Between Pharmaceutical R&D Projects and Other Industries

Final product is information rather than a physical product.

Long duration, extreme costs, and high chances for failure.


Background

Project management concerned with managing organizational activities.

Often used to integrate and coordinate diverse activities.

Projects are special types of processes.


Defining a Project

Projects are processes that are performed infrequently and ad hoc, with a clear specification of the desired objective.


Examples of Projects

Constructing highways, bridges, tunnels and dams

Erecting skyscrapers, steel mills, and homes

Organizing conferences and conventions

Managing R&D projects Running political

campaigns, war operations, and advertising campaigns


Reasons for Growth in Project Operations

More Sophisticated Technology

Better-Educated Citizens

More Leisure Time Increased

Accountability Higher Productivity Faster Response to

Customers Greater customization

for customers


Planning the Project


Life Cycle of a Project (Stretched-S) & (Exponential)


Organizing the Project Team

Ad Hoc Project Form Weak Functional Matrix Strong Project Matrix


Types of Project Team Members

Those having a long-term relationship with the project.

Those that the PM will need to communicate with closely.

Those with rare skills necessary to project success.


Project Plans


Work Breakdown Structure


Project Master Schedule


Complexity of Scheduling Project Activities

Large number of activities Precedence relationships Limited time of the project


Planning and Scheduling Projects

Planning. Determining what must be done and which tasks must precede others.

Scheduling. Determining when the tasks must be completed; when they can and when they must be started; which tasks are critical to the timely completion of the project; and which tasks have slack and how much.


Scheduling the Project: PERT and CPM


Terminology

Activity Event Network Path Critical Path Critical Activities


Project Planning When Activity Times are Known

Inputs list of the activities that must be completed activity completion times activity precedence relationships


Project Planning When Activity Times are Known continued

Outputs graphical representation of project time to complete project identification of critical path(s) and activities activity and path slack earliest and latest time each activity can be

started earliest and latest time each activity can be

completed


Example

Activity Time Preceded ByA 10 --B 7 --C 5 AD 13 AE 4 B,CF 12 DG 14 E


Network Diagram


Early Start and Finish Times


Latest Start and Finish Times


Activity Slack Time

TES = earliest start time for activity

TLS = latest start time for activity

TEF = earliest finish time for activity

TLF = latest finish time for activity

Activity Slack = TLS - TES = TLF - TEF


Path Slack

Duration of Critical Path

- Path Duration

Path Slack


Activity Slack Times

Activity ES EF LS LF Slack

A 0 10 0 10 0

B 0 7 10 17 10

C 10 15 12 17 2

D 10 23 10 23 0

E 15 19 17 21 2

F 23 35 23 35 0

G 19 33 21 35 2


Project Planning When Activity Times are Uncertain

Inputs Optimistic (to), most likely (tm), and pessimistic (tp)

time estimate for each activity activity precedence relationships

Outputs graphical representation of project expected activity and path completion times variance of activity and path completion times probability that project completed by specified time


Expected Activity Time and Variance of Activity Time

tt t t

t t

eo m p

p o

4

6

62

2


Example

Activity Preceded By to tm tp te 2

A -- 2 6 7 5.50 .694

B -- 5 7 9 7.00 .444

C A 3 5 6 4.83 .250

D A 10 10 10 10.0 0.000

E B,C 3 4 5 4.0 .111

F D 8 12 13 11.5 .694

G E 2 4 8 4.33 1.000


Network Diagram with Expected Activity Times and Variances

1

2

3

4

5

6

[5.5, 0.694]

[7.0, 0.444]

[4.83, 0.250]

[10, 0.0]

[4.0, 0.111]

[4.33, 1.0]

[11.5, 0.913]A

B

C

D

E

F

G


Expected Completion Time and Variance of Path A-D-F

Expected completion time = 5.5 + 10 + 11.5=27

Path Variance = 0.694 + 0 + 0.913 = 1.607


Path Expected Times and Variances

PathExpected

Time VarianceStandardDeviation

A-D-F 27 1.607 1.27

A-C-E-G 14.66 2.055 1.43

B-E-G 15.33 1.555 1.25


Probabilities of Completion

V

timecompletion expected - timecompletion desiredz


Probability of Project Being Completed on or Before Time 25

z

25 27

127157

..

Only path A-D-F has reasonable chance of taking 25 or more:

From standard normal table in Appendix A, there is a 5.82% chance of completing project on or before time 25.


Probability of Path A-D-F being Completed on or Before Time 25

5.82%


Plan E Project Operations Network


Proper Use of Dummy Activities


Activity Expected Times and Variances


Simulating Project Completion Times with Spreadsheets

A

B

C

D

E

F


Simulating Project Completion Times

Activity Mean (days)StandardDeviation

A 32.1 1.2

B 24.6 3.1

C 22.2 2.2

D 26.1 5.2

E 34.4 6.2

F 34.5 4.1


Activity Activity Activity Activity Activity Activity Path1 Path 2 Path 3 ProjectA B C D E F (A-C-F) (B-D-F) (B-E) Finish Time

0.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.00

Minimum 0.00 0.00 0.00 0.00Maximum 0.00 0.00 0.00 0.00



Project Management Software Capabilities


Microsoft Project’s Gantt Chart


Pert Chart Generated by Microsoft Project


Calendar of Activities Created by Microsoft Project


Controlling the Project: Cost and Performance


Variance Report

Cost standard determined using engineering estimates or analysis of past performance

Actual cost monitored and compared with cost standard

Project manager can exert control if difference between standard and actual (called a variance) is considered significant.


Cost-Schedule Reconciliation Charts


Earned Value Chart


Goldratt’s Critical Chain


Introduction

Similar issues that trouble people about working on projects regardless of type of project unrealistic due dates too many changes resources and data not available unrealistic budget

These issues/problems related to need to make trade-offs

To what extent are these problems caused by human decisions and practices?


Three Project Scenarios


Project Completion Time Statistics


Observations

Average Completion Times Implications of Assuming Known

Activity Times Shape of the Distribution Worker Time Estimates Impact of Inflated Time Estimates Student Syndrome


Multitasking


Alternative Gantt Charts for Projects A and B


Common Chain of Events

Underestimate time needed to complete project assumption of known activity times and

independent paths Project team members inflate time

estimates Work fills available time

student syndrome early completions not reported


Common Chain of Events continued

Safety time misused Misused safety time results in missed

deadlines Hidden safety time complicates task of

prioritizing project activities Lack of clear priorities results in poor

multitasking


Common Chain of Events concluded

Poor multitasking increases task durations

Uneven demand on resources also results due to poor multitasking

More projects undertaken to ensure all resources fully utilized

More projects further increases poor multitasking


Reversing the Cycle

Reduce number of projects assigned to each individual

Schedule start of new projects based on availability of bottleneck resources

Reduce amount of safety time added to individual tasks and then add some fraction back as project buffer activity durations set so that there is a high

probability the task will not be finished on time


The Critical Chain

Longest chain of consecutively dependent events considers both precedence relationships

and resource dependencies Project Buffer Feeding Buffer


Sample Network Diagram


Project and Feeder Buffers


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