Transcript Project Management Chapter 16

Project Management
Chapter 16
Management 326
Operations
and
Operations
Strategy
Designing
an
Operations
System
Managing
an
Operations
System
Improving
an
Operations
System
Designing an
Operations System
Project
Management:
A Design Tool
Project Management
Chapter Outline
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What is a project?
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Project requirements
Project life cycle phases
Scheduling methods: PERT & CPM
Network diagrams
Scheduling calculations
What is a project?
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A one-time set of related tasks that produce a
major output and usually
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Involves many tasks
Requires significant investment
Uses significant inputs
Has some tasks must be completed before others can
be started
Is strategically important to the firm
Examples of Projects
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Entrepreneurship: Starting a new business
Marketing: Designing and launching a new
product or model
Finance: Evaluating a merger or acquisition
Finance: Developing a new financial product
for investors
Accounting: Changing accounting practices to
conform to a new accounting regulation
Examples of Projects
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Health care management: Opening a new
hospital
Operations: renovating a building
CIFS: Selecting and installing new software
Human resources management: Developing
a new training program
Economics: developing a new index to
measure inflation
Project Expectations
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Achieve project objectives
Meet quality specifications
Completed on time
Completed within budget
Five Project Life Cycle Phases
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Conception: Identify the need
Feasibility analysis: Identify costs, benefits,
and risks. Decide whether to do the project.
Planning: Set up project team & schedule.
Execution: Do the project. Respond to
unexpected problems.
Termination: End project. Re-assign team
members. Evaluate: lessons learned.
Network Planning Techniques (1)
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Critical Path Method (CPM):
 Developed to coordinate maintenance
projects in the chemical industry
 Use when times for individual project
activities are known (deterministic)
 Used to determine project duration
Network Planning Techniques (2)
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Program Evaluation & Review Technique
(PERT):
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Developed to manage the Polaris missile project –
many tasks pushed the boundaries of science &
engineering
Used when times for individual project activities
are not known (probabilistic)
Gives an expected value and a probability
distribution for project duration
Both PERT and CPM
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Graphically display the precedence
relationships & sequence of activities
Estimate the project’s duration
Identify critical activities that cannot be
delayed without delaying the project
Estimate the amount of slack associated
with non-critical activities
Network Diagrams
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Activity-on-Node (AON):
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Uses nodes to represent the activity
Uses arrows to represent precedence relationships
Step 1-Define the Project: Cables By Us is bringing a new product on line to be
manufactured in their current facility in some existing space. The owners have
identified 11 activities and their precedence relationships. Develop an AON for the
project.
Immediate Duration
Predecessor (weeks)
Develop product specifications
None
4
Design manufacturing process
A
6
Source & purchase materials
A
3
Source & purchase tooling & equipment B
6
Receive & install tooling & equipment D
14
Receive materials
C
5
Pilot production run
E&F
2
Evaluate product design
G
2
Evaluate process performance
G
3
Write documentation report
H&I
4
Transition to manufacturing
J
2
Activity
A
B
C
D
E
F
G
H
I
J
K
Description
Step 2- Diagram the Network for
Cables By Us
Step 3 (a)- Add Deterministic Time Estimates and
Connected Paths
Step 3 (a) (Continued): Calculate the Path
Completion Times
Paths
ABDEGHJK
ABDEGIJK
ACFGHJK
ACFGIJK
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Path duration
40
41
22
23
The longest path (ABDEGIJK) limits the
project’s duration (project cannot finish in
less time than its longest path)
ABDEGIJK is the project’s critical path
Some Network Definitions
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All activities on the critical path have zero slack
Slack defines how long non-critical activities can be
delayed without delaying the project
Slack = the activity’s late finish minus its early finish
(or its late start minus its early start)
Earliest Start (ES) = the earliest finish of the immediately
preceding activity
Earliest Finish (EF) = is the ES plus the activity time
Latest Start (LS) and Latest Finish (LF) depend on
whether or not the activity is on the critical path
ES, EF Network
LS, LF Network
Calculating Slack
Activity
A
B
C
D
E
F
G
H
I
J
K
Late
Finish
4
10
25
16
30
30
32
35
35
39
41
Early
Finish
4
10
7
16
30
12
32
34
35
39
41
Slack
(weeks)
0
0
18
0
0
18
0
1
0
0
0