Transcript Chapter 14 Project Management

Chapter 11: Project
Management
Chapter 11: Project Management
1
Introduction
Chapter 11: Project Management
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Previous Examples of Projects
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Transporting Olympic Flame (Chapter 1)
Mercedes-Benz facility location (Chapter 5)
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Viper Development Project
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Project team given 3 years to go from
concept to roadster.
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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.
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Viper Development Project con’t
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Project team members hand-picked.
Artemis Prestige selected to help
manage project
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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
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Viper Development Project: An
Overwhelming Success
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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 .
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Zeneca Pharmaceuticals
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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.
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Zeneca Pharmaceuticals: Major Steps
in Drug Development
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Preclinical Testing
Investigational New Drug
Human Clinical Testing
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three separate phases
New Drug Application
Approval
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Differences Between Pharmaceutical
R&D Projects and Other Industries
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Final product is information rather than
a physical product.
Long duration, extreme costs, and high
chances for failure.
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Background
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Project management concerned with
managing organizational activities.
Often used to integrate and coordinate
diverse activities.
Projects are special types of
processes.
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Defining a Project
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Projects are processes that are
performed infrequently and ad hoc,
with a clear specification of the desired
objective.
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Examples of Projects
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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
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Reasons for Growth in Project
Operations
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More Sophisticated
Technology
Better-Educated
Citizens
More Leisure Time
Increased
Accountability
Higher Productivity
Faster Response to
Customers
Greater customization
for customers
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Planning the Project
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Life Cycle of a Project (Stretched-S) &
(Exponential)
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Organizing the Project Team
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Ad Hoc Project Form
Weak Functional Matrix
Strong Project Matrix
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Types of Project Team Members
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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.
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Project Plans
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Work Breakdown Structure
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Project Master Schedule
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Complexity of Scheduling Project
Activities
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Large number of activities
Precedence relationships
Limited time of the project
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Planning and Scheduling Projects
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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.
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Scheduling the Project: PERT
and CPM
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Terminology
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Activity
Event
Network
Path
Critical Path
Critical Activities
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Project Planning When Activity Times
are Known
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Inputs
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list of the activities that must be completed
activity completion times
activity precedence relationships
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Project Planning When Activity Times
are Known continued
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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
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Example
Activity Time Preceded By
A
10
-B
7
-C
5
A
D
13
A
E
4
B,C
F
12
D
G
14
E
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Network Diagram
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Early Start and Finish Times
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Latest Start and Finish Times
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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
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Path Slack
Duration of Critical Path
- Path Duration
Path Slack
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Activity Slack Times
Activity
A
B
C
D
E
F
G
ES EF LS LF Slack
0
0
10
10
15
23
19
10
7
15
23
19
35
33
0
10
12
10
17
23
21
10
17
17
23
21
35
35
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10
2
0
2
0
2
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Project Planning When Activity
Times are Uncertain
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Inputs
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Optimistic (to), most likely (tm), and pessimistic
(tp) time estimate for each activity
activity precedence relationships
Outputs
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graphical representation of project
expected activity and path completion times
variance of activity and path completion times
probability that project completed by specified
time
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Expected Activity Time and Variance
of Activity Time
te 
t o  4t m  t p
6
 t p  to 
 

 6 
2
2
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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
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Network Diagram with Expected
Activity Times and Variances
[5.5,
0.694]
A
1
[7.0,
0.444]
B
2 [10, 0.0]
4
D
F
C [4.83,
0.250]
3
[11.5, 0.913]
6
E
5
G
[4.33, 1.0]
[4.0,
0.111]
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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
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Path Expected Times and Variances
Path
Expected
Standard
Time
Variance Deviation
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
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Probabilities of Completion
desired completiontime- expectedcompletiontime
z
V
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Probability of Project Being Completed
on or Before Time 25
Only path A-D-F has reasonable
chance of taking 25 or more:
25  27
z
 157
.
1.27
From standard normal table in Appendix A,
there is a 5.82% chance of completing
project on or before time 25.
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Probability of Path A-D-F being
Completed on or Before Time 25
5.82%
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Plan E Project Operations Network
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Proper Use of Dummy Activities
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Activity Expected Times and Variances
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Simulating Project Completion Times
with Spreadsheets
C
A
F
D
B
E
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Simulating Project Completion Times
Activity
A
Mean (days)
32.1
Standard
Deviation
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
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Activity Activity Activity Activity Activity
A
B
C
D
E
Activity
F
Minimum
Maximum
Path1 Path 2
(A-C-F) (B-D-F)
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Project Management Software
Capabilities
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Microsoft Project’s Gantt Chart
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Pert Chart Generated by Microsoft
Project
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Calendar of Activities Created by
Microsoft Project
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Controlling the Project: Cost
and Performance
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Variance Report
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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.
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Cost-Schedule Reconciliation Charts
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Earned Value Chart
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Goldratt’s Critical Chain
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Introduction
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Similar issues that trouble people about
working on projects regardless of type of
project
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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?
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Three Project Scenarios
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Project Completion Time Statistics
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Observations
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Average Completion Times
Implications of Assuming Known
Activity Times
Shape of the Distribution
Worker Time Estimates
Impact of Inflated Time Estimates
Student Syndrome
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Multitasking
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Alternative Gantt Charts for Projects A and B
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Common Chain of Events
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Underestimate time needed to
complete project
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assumption of known activity times and
independent paths
Project team members inflate time
estimates
Work fills available time
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student syndrome
early completions not reported
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Common Chain of Events continued
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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
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Common Chain of Events concluded
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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
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Reversing the Cycle
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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
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activity durations set so that there is a high
probability the task will not be finished on time
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The Critical Chain
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Longest chain of consecutively
dependent events
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considers both precedence relationships
and resource dependencies
Project Buffer
Feeding Buffer
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Sample Network Diagram
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Project and Feeder Buffers
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Copyright
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