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Lecture4

Project ManagementChapter 17

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Project ManagementProject Management

How is it different? Limited time frame Narrow focus, specific objectives

Why is it used? Special needs Pressures for new or improves products or

services

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Project ManagementProject Management

What are the Key Metrics Time Cost Performance objectives

What are the Key Success Factors? Top-down commitment Having a capable project manager Having time to plan Careful tracking and control Good communications

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Project ManagementProject Management

What are the tools? Work breakdown structure Network diagram Gantt charts Risk management

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Planning and SchedulingPlanning and Scheduling

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Locate new facilities

Interview staff

Hire and train staff

Select and order furniture

Remodel and install phones

Move in/startup

Gantt Chart

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Deciding which projects to implement

Selecting a project manager

Selecting a project team

Planning and designing the project

Managing and controlling project resources

Deciding if and when a project should be terminated

Key DecisionsKey Decisions

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Project ManagerProject Manager

Responsible for:

Work QualityHuman Resources TimeCommunications Costs

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Temptation to understate costs

Withhold information

Misleading status reports

Falsifying records

Compromising workers’ safety

Approving substandard work

Ethical IssuesEthical Issues

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Project Life CycleProject Life Cycle

Concept

FeasibilityFeasibility

PlanningPlanning

ExecutionExecution

TerminationTermination

Man

agem

ent

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Work Breakdown StructureWork Breakdown Structure

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PERT and CPMPERT and CPM

PERT: Program Evaluation and Review Technique

CPM: Critical Path Method

Graphically displays project activities Estimates how long the project will take Indicates most critical activities Show where delays will not affect project

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The Network DiagramThe Network Diagram

Network (precedence) diagram

Activity-on-arrow (AOA)

Activity-on-node (AON)

Activities

consume resources and/or time

Events

points in time

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Project Network – Activity on NodeProject Network – Activity on Node

1

2

3

5

6

Locatefacilities

Orderfurniture

Furnituresetup

Interview

RemodelMove in

4

Hire andtrain

7S

Figure 17.4

AON

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The Network Diagram (cont’d)The Network Diagram (cont’d) Path

Sequence of activities that leads from the starting node to the finishing node

AON path: S-1-2-6-7 Critical path

The longest path; determines expected project duration Critical activities

Activities on the critical path Slack

Allowable slippage for path; the difference the length of path and the length of critical path

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Time EstimatesTime Estimates

Deterministic

Time estimates that are fairly certain

Probabilistic

Estimates of times that allow for variation

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Project Network – Activity on NodeProject Network – Activity on Node

1

2

3

5

6

Locatefacilities

Orderfurniture

Furnituresetup

Interview

RemodelMove in

4

Hire andtrain

7S

Figure 17.4

AON

8 weeks

6 weeks

3 weeks

4 weeks9 weeks

11 weeks

1 week

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Management Scientist SolutionManagement Scientist Solution

Path Length (weeks)

Slack

A-B-F-G A-E-G C-D-G

18 20 14

2 0 6

Critical PathCritical Path

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Example 1: Activity on Arc (AOA) Example 1: Activity on Arc (AOA) RepresentationRepresentation

1

2

3

4

5 6

8 weeks

6 weeks

3 weeks

4 weeks9 weeks

11 weeks

1 week

Locate

facilities

Order

furniture Fu

rnitu

re

setup

InterviewHire

and train

Remodel Move in

DeterministicDeterministictime estimatestime estimates

Figure 17.5

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Network activities ES: early start EF: early finish LS: late start LF: late finish

Used to determine Expected project duration Slack time Critical path

Computing AlgorithmComputing Algorithm

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Advantages of PERTAdvantages of PERT

Forces managers to organize

Provides graphic display of activities

Identifies

Critical activities

Slack activities1

2

3

4

5 6

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Limitations of PERTLimitations of PERT

Important activities may be omitted

Precedence relationships may not be correct

Estimates may include a fudge factor

May focus solely on critical path