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33 Project ManagementProject Management

Semester 312Semester 312

Instructor: Dr Nailah AyubInstructor: Dr Nailah Ayub

Principles of Operations ManagementPrinciples of Operations Management

PowerPoint slides by Jeff Heyl

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Learning ObjectivesLearning Objectives

1. Use a Gantt chart for scheduling2. Draw AOA and AON networks3. Complete forward and backward passes for

a project4. Determine a critical path5. Calculate the variance of activity times6. Crash a project

When you complete this chapter you should be able When you complete this chapter you should be able

to:to:

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Bechtel ProjectsBechtel Projects Building 26 massive distribution centers in just two years for the

internet company Webvan Group ($1 billion) Constructing 30 high-security data centers worldwide for Equinix,

Inc. ($1.2 billion) Building and running a rail line between London and the Channel

Tunnel ($4.6 billion) Developing an oil pipeline from the Caspian Sea region to Russia

($850 million) Expanding the Dubai Airport in the UAE ($600 million), and the

Miami Airport in Florida ($2 billion) Building liquid natural gas plants in Yemen $2 billion) and in

Trinidad, West Indies ($1 billion) Building a new subway for Athens, Greece ($2.6 billion) Constructing a natural gas pipeline in Thailand ($700 million) Building 30 plants for iMotors.com, a company that sells

refurbished autos online ($300 million) Building a highway to link the north and south of Croatia ($303

million)

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Bechtel ProjectsBechtel Projects

Outstanding Project Management

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Strategic Importance of Project Strategic Importance of Project ManagementManagement Planning

Details can be monitored and controlled Growing project complexity and Collapsing product/services life-cycle

Scheduling Cost overruns Unnecessary delays

Controlling Revise and take actions

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Examples of ProjectsExamples of Projects

Building Construction

Research Project

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Management of ProjectsManagement of Projects

1. Planning - Goal setting, defining the project, team organization

2. Scheduling - Relates people, money, and supplies to specific activities and activities to each other

3. Controlling - Monitors resources, costs, quality, and budgets; Revises plans and shifts resources to meet time and cost demands

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PlanningObjectives

Resources

Work break-down structure

Organization

SchedulingProject activities

Start & end times

Network

ControllingMonitor, compare, revise, action

Project Management ActivitiesProject Management Activities

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Project Planning, Scheduling, Project Planning, Scheduling, and Controllingand Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

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Project Planning, Scheduling, Project Planning, Scheduling, and Controllingand Controlling

Figure 3.1

Before Start of project Duringproject Timeline project

BudgetsDelayed activities reportSlack activities report

Time/cost estimatesBudgetsEngineering diagramsCash flow chartsMaterial availability details

CPM/PERTGantt chartsMilestone chartsCash flow schedules

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Establishing objectives Defining project Creating work breakdown

structure Determining

resources Forming organization

Project PlanningProject Planning

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

Coordinates activities Monitors schedule

and costs

A Permanent structure/organization is called ‘matrix organization’

Project OrganizationProject Organization

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Project Organization Works Best Project Organization Works Best When:When:

1. Work can be defined with a specific goal and deadline

2. The job is unique or somewhat unfamiliar to the existing organization

3. The work contains complex interrelated tasks requiring specialized skills

4. The project is temporary but critical to the organization

5. The project cuts across organizational lines

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A Sample Project OrganizationA Sample Project Organization

TestEngineer

MechanicalEngineer

Project 1 ProjectManager

Technician

Technician

Project 2 ProjectManager

ElectricalEngineer

Computer Engineer

Marketing FinanceHumanResources Design Quality

Mgt Production

President

Figure 3.2

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Matrix OrganizationMatrix OrganizationMarketing Operations Engineering Finance

Project 1

Project 2

Project 3

Project 4

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The Role of the Project ManagerThe Role of the Project ManagerCoordinates activities with other departments and reports to top Coordinates activities with other departments and reports to top managementmanagement

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

1. All necessary activities are finished in order and on time

2. The project comes in within budget

3. The project meets quality goals

4. The people assigned to the project receive motivation, direction, and information

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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:

1. All necessary activities are finished in order and on time

2. The project comes in within budget

3. The project meets quality goals

4. The people assigned to the project receive motivation, direction, and information

Project managers should be:

Good coaches

Good communicators

Able to organize activities from a variety of disciplines

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Ethical IssuesEthical Issues

1. Offers of gifts from contractors

2. Pressure to alter status reports to mask delays

3. False reports for charges of time and expenses

4. Pressure to compromise quality to meet schedules

Project managers face many ethical decisions on a daily basis

The Project Management Institute (PMI) has established an ethical code to deal with problems such as:

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Work Breakdown Structure (WBS)Work Breakdown Structure (WBS)

Project management team begins with carefully establishing the

project objectives, then break the project down into manageable parts

WBS defines the project by dividing it into major subcomponents (or tasks),

Detailed components, set of activities and their related costs

- Gross requirements for people, supplies, and equipments are estimated

LEVEL

• Project

• Major tasks in the project

• Subtasks in the major tasks

• Activities (or work packages)to be completed

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Level 4 Compatible with Windows ME

Compatible with Windows Vista

Compatible with Windows XP 1.1.2.3

1.1.2.2

1.1.2.1

(Work packages)

Level 3 Develop GUIs Planning

Module Testing

Ensure Compatibility with Earlier Versions

Cost/Schedule Management

Defect Testing

1.1.1

1.2.2 1.3.2

1.3.11.2.1

1.1.2

Work Breakdown StructureWork Breakdown Structure

Figure 3.3

Level 2 Software Design

Project Management

System Testing1.1 1.2 1.3

Level 1 Develop Windows 7 Operating System 1.0

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PROJECT SCHEDULING

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Project SchedulingProject Scheduling Identifying precedence

relationships Sequencing activities Determining activity times

& costs Estimating material &

worker requirements Determining critical

activities

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Purposes of Project SchedulingPurposes of Project Scheduling

1. Shows the relationship of each activity to others and to the whole project

2. Identifies the precedence relationships among activities

3. Encourages the setting of realistic time and cost estimates for each activity

4. Helps make better use of people, money, and material resources by identifying critical bottlenecks in the project

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Scheduling TechniquesScheduling Techniques

1. Ensure that all activities are planned for2. Their order of performance is accounted for3. The activity time estimates are recorded4. The overall project time is developed

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

Technique (PERT)

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A Simple Gantt ChartA Simple Gantt Chart

TimeJ F M A M J J A S

Design

Prototype

Test

Revise

Production

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Service For a Delta JetService For a Delta Jet

Figure 3.4

Passengers

Baggage

Fueling

Cargo and mail

Galley servicing

Lavatory servicingDrinking water

Cabin cleaning

Cargo and mail

Flight services

Operating crewBaggagePassengers

DeplaningBaggage claimContainer offloadPumpingEngine injection waterContainer offloadMain cabin doorAft cabin doorAft, center, forwardLoadingFirst-class sectionEconomy sectionContainer/bulk loadingGalley/cabin checkReceive passengersAircraft checkLoadingBoarding

0 10 20 30 40Time, Minutes

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PERT and CPMPERT and CPM Widely used network techniques Consider precedence relationships and interdependencies Each uses a different estimate of activity times

Six Steps PERT & CPMSix Steps PERT & CPM1. Define the project and prepare the work breakdown structure2. Develop relationships among the activities - decide which

activities must precede and which must follow others3. Draw the network connecting all of the activities4. Assign time and/or cost estimates to each activity5. Compute the longest time path through the network – this is

called the critical path6. Use the network to help plan, schedule, monitor, and control the

project

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1. When will the entire project be completed?

2. What are the critical activities or tasks in the project?

3. Which are the noncritical activities?

4. What is the probability the project will be completed by a specific date?

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

6. Is the money spent equal to, less than, or greater than the budget?

7. Are there enough resources available to finish the project on time?

8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost?

Questions PERT & CPM Can Questions PERT & CPM Can AnswerAnswer

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A Comparison of AON and AOA A Comparison of AON and AOA Network Diagrams/ ConventionsNetwork Diagrams/ Conventions

Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

A comes before B, which comes before C.

(a) A B CBA C

A and B must both be completed before C can start.

(b)

A

CC

B

A

B

B and C cannot begin until A is completed.

(c)

B

A

CA

B

CFigure 3.5

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A Comparison of AON and AOA A Comparison of AON and AOA Network ConventionsNetwork Conventions

Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

C and D cannot begin until both A and B are completed.

(d)A

B

C

D B

A C

D

C cannot begin until both A and B are completed; D cannot begin until B is completed. A dummy activity is introduced in AOA.

(e)CA

B D

Dummy activityA

B

C

D

Figure 3.5

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A Comparison of AON and A Comparison of AON and AOA Network ConventionsAOA Network Conventions

Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

B and C cannot begin until A is completed. D cannot begin until both B and C are completed. A dummy activity is again introduced in AOA.

(f)

A

C

DB A B

C

D

Dummy activity

Figure 3.5

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AON ExampleAON Example

Activity DescriptionImmediate

Predecessors

A Build internal components —

B Modify roof and floor —

C Construct collection stack A

D Pour concrete and install frame A, B

E Build high-temperature burner C

F Install pollution control system C

G Install air pollution device D, E

H Inspect and test F, G

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

Table 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 3.6

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AON Network for Milwaukee AON Network for Milwaukee PaperPaper

Figure 3.7

C

D

A

Start

B

Activity A Precedes Activity C

Activities A and B Precede Activity D

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AON Network for Milwaukee AON Network for Milwaukee PaperPaper

G

E

F

H

CA

Start

DB

Arrows Show Precedence Relationships Figure 3.8

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H

(Inspect/ Test)

7Dummy Activity

AOA Network for Milwaukee AOA Network for Milwaukee PaperPaper

6

F(Install

Controls)E

(Bu

i ld B

urn

er)G

(Insta

ll

Pollutio

n

Device)

5D

(Pour Concrete/

Install Frame)

4C

(Construct Stack)

1

3

2

B(Modify

Roof/Floor)

A(B

uild In

tern

al

Componen

ts)

Figure 3.9