Operation management 9e stevenson mcgrwhill chap017

17 Project Management McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc All Learning Objectives     Discuss the behavioral aspects of projects in terms of project personnel and the project manager Discuss the nature and importance of a work breakdown structure in project management Give a general description of PERT/CPM techniques Construct simple network diagrams 17-2 Learning Objectives     List the kinds of information that a PERT or CPM analysis can provide Analyze networks with deterministic times Analyze networks with probabilistic times Describe activity “crashing” and solve typical problems 17-3 Projects JAN FEB MAR APR MAY JUN Build A A Done Build B B Done Build C C Done Build D On time! Ship Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame 17-4 Project Management  How is it different?  Limited time frame  Narrow focus, specific objectives  Less bureaucratic  Why is it used?  Special needs  Pressures for new or improves products or services 17-5 Project 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 17-6 Project Management  What are the Major Administrative Issues?  Executive responsibilities  Project selection  Project manager selection  Organizational structure  Organizational alternatives  Manage within functional unit  Assign a coordinator  Use a matrix organization with a project leader 17-7 Project Management  What are the tools?     Work breakdown structure Network diagram Gantt charts Risk management 17-8 Planning and Scheduling Gantt Chart 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 17-9 Key Decisions  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 17-10 Example Optimistic time 2-4-6 b 3-5-7 e 32- g 4-6-8 h Pessimistic time 32- c -4 a 3-4-5 d Most likely time 5-7-9 f -6 3- i 17-29 Example Time Estimates a 4.00 d 4.00 b 5.0 e 3 g 6.0 h c Tabc = 10.0 Tdef = 16.0 Tghi = 13.50 7.0 f 17 i 17-30 Path Probabilities Z = Specified time – Path mean Path standard deviation Z indicates how many standard deviations of the path distribution the specified tine is beyond the expected path duration 17-31 Example 17 Weeks 1.00 a-b-c Weeks 10.0 d-e-f 16.0 Weeks 1.00 g-h-i 13.5 Weeks 17-32 Time-cost Trade-offs: Crashing  Crash – shortening activity duration  Procedure for crashing  Crash the project one period at a time  Only an activity on the critical path  Crash the least expensive activity  Multiple critical paths: find the sum of crashing the least expensive activity on each critical path 17-33 Time-Cost Trade-Offs: Crashing Figure 17.11 Total cost Expected indirect costs Shorten CRASH Cumulative cost of crashing Shorten Optimum 17-34 Example b a 10 f e c d 17-35 Advantages of PERT  Forces managers to organize  Provides graphic display of activities  Identifies  Critical activities  Slack activities 17-36 Limitations 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 142 weeks 17-37 Goldratt’s Critical Chain  Goldratt’s insight on project management  Time estimates are often pessimistic  Activities finished ahead of schedule often go unreported  With multiple projects, resources needed for one project may be in use on another 17-38 Project Management Software        Computer aided design (CAD) Groupware (Lotus Notes) CA Super Project Harvard Total Manager MS Project Sure Track Project Manager Time Line 17-39 Advantages of PM Software  Imposes a methodology  Provides logical planning structure  Enhances team communication  Flag constraint violations  Automatic report formats  Multiple levels of reports  Enables what-if scenarios  Generates various chart types 17-40 Project Risk Management  Risk: occurrence of events that have undesirable consequences  Delays  Increased costs  Inability to meet specifications  Project termination 17-41 Risk Management  Identify potential risks  Analyze and assess risks  Work to minimize occurrence of risk  Establish contingency plans 17-42 Summary  Projects are a unique set of activities  Projects go through life cycles  PERT and CPM are two common techniques  Network diagrams  Project management software available 17-43 ... C Done Build D On time! Ship Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame 17-4 Project Management  How is it different?  Limited time... organization with a project leader 17-7 Project Management  What are the tools?     Work breakdown structure Network diagram Gantt charts Risk management 17-8 Planning and Scheduling Gantt... Why is it used?  Special needs  Pressures for new or improves products or services 17-5 Project Management  What are the Key Metrics  Time  Cost  Performance objectives  What are the Key