Transcript Chapter 6: ERP Project Management

Chapter 6:
ERP Project Management
Fundamental project management
concepts
ERP Installation Projects
• Need aggressive implementation
– Organization needs to start gaining benefits
• Need clear definition of objectives
– Avoid scope creep – incremental changes in system
during installation
• Steering committee very important
– Management
– Users
– Consultants as needed
Critical Path Method
• Identify the fastest schedule to complete a project
– Makes a lot of assumptions
• Accurate time estimates
• Unlimited resources
• Develop activity list
– Durations
– Predecessor relationships
• Network of activities
Network Diagrams
• activity duration
• milestone
milestone
activity
(duration)
• immediate predecessors
identified by arrows leading into
• durations
can include in parentheses
networks
• networks make a good visual
• they are UNNECESSARY for identifying
–
–
–
–
early starts
late finishes
slack
critical paths
earliest an activity can be begun
latest an activity can finish
spare time
activities with no slack
Project Scheduling
MODEL COMPONENTS
• activities
• predecessors
• durations
what needs doing
what this activity waits on
how long
– durations are PROBABILISTIC
– CPM DETERMINISTIC
• assumes unlimited resources
Critical Path Method
• INPUTS: activities, durations, immediate predecessors
• ALGORITHM
forward pass schedule all activities with no unscheduled predecessors
ES/EF determine early starts & early finishes (start ASAP, add duration)
backwards pass schedule in reverse (schedule all activities with no
unscheduled FOLLOWERS)
LF/LS determine late finishes, subtract duration to get late starts
slack difference between LS-ES (same as LF-EF)
critical path all chains of activities with no slack
CPM Example
FORWARD PASS
activity
A requirements analysis
B programming
C get hardware
D train users
schedule A
start
schedule B
&C
schedule D
duration
3 weeks
7 weeks
1 week
3 weeks
0
finish
3
3
10
predecessor
A
A
B, C
0+3 =3
3+7 =10
3+1 =4
10+3 =13
CPM Example
backward pass
schedule D finish 13
schedule B
10
&C
10
schedule A
3
slack A
LF= 3
B
LF= 10
C
LF= 10
D
LF= 13
critical path: A-B-D
late start=
EF=
EF=
EF=
EF=
3
10
4
13
13-3
10-7
10-1
3-3
3-3
10-10
10-4
13-13
= 10
=3
=9
=0
=0
=0
=6
=0
Gantt Chart
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A
x x x
B
xxxx x x x
C
x
D
x
x
x
CPM
• can have more than one critical path
activity
A requirements analysis
B programming
C get hardware
D train users
duration
3 weeks
7 weeks
7 weeks
3 weeks
predecessor
A
A
B, C
• critical paths A-B-D
A-C-D
both with duration of 13 weeks
Buffers
• Assure activities completed on time (Goldratt, 1997)
• Project Buffers: after final project task
• Feeding Buffers: where non-critical
activities lead into critical activities
• Resource Buffers: before resources
scheduled to work on critical activities
• Strategic Resource Buffers: assure key
resources available
Project Buffer
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A
x x x
B
x xx x x x x
C
x
D
x
x
x
b
b
Resource Constraining
• CPM assumes unlimited resources
NOT TRUE
– may have only a finite number of systems
analysts, programmers
• RESOURCE LEVELING - balance
the resource load
• RESOURCE CONSTRAINING don’t exceed available resources
Resource Leveling
unleveled
leveled
25
40
35
20
30
15
analysts
programmers
10
trainers
25
20
15
10
analysts
programmers
trainers
5
5
0
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Criticisms of CPM
• Rarely to activities proceed as planned
– critical path therefore very volatile
• options to speed some activities available
– crashing
• resource limits not reflected
– resource leveling
• schedule likely to be very lumpy
– resource smoothing
Effective ERP Implementation
•
Motwani et al. [2002]
• Incremental, bureaucratic, strategy-driven
• Support with
– User preparation
– Inter-organizational linkages
– Careful change management
• Redefinition of project
– Respond to identified needs
• Improve project management
– More meetings, tighter control
Effective ERP Implementation
• Motwani et al. [2002]
• Subdivide project into manageable parts
• Add or remove resources as needed
• Time layoff & hiring
– Especially external consultants
• Training critical
Summary
• ERP can be very beneficial
• Implementing ERP (no matter how) is a
project
• CPM provides a useful tool for project
scheduling & management