Lecture Operations and supply chain management: The Core (3/e) – Chapter 5: Projects

The main goals of this chapter are to: Explain what project management is and why it is important, identify the different ways projects can be structured, describe how projects are organized into major subprojects, understand the concept of earned value management,...

Projects Chapter 05 McGraw­Hill/Irwin         Copyright © 2013 by The McGraw­Hill Companies, Inc. All rights reserved Learning Objectives Explain what project management is and why it is important Identify the different ways projects can be structured Describe how projects are organized into major subprojects Understand the concept of Earned Value Management Determine the “critical path” for a project Show how activity time uncertainty can be analyzed in projects Demonstrate how to “crash,” or reduce the length, of a project 5­2 Project Management  What is a project?   What is project management?   A series of related jobs, usually directed toward some major output and requiring a significant period of time to perform Planning, directing, and controlling resources (people, equipment, material, etc.) to meet the technical, cost, and time constraints of the project Why is project management important?  At the highest levels of an organization, management often involves juggling a portfolio of projects 5­3 Types of Development Projects Degree of Change Type of Project 5­4 Project Structure 5­5 Defining the Project  Statement of Work   Task   Specific events in the life of the project Work Breakdown Structure   A group of activities combined to be assignable to a single organizational unit Project Milestone   A further subdivision of a project – usually shorter than several months and performed by a single group or organization Work Package   A written description of the objectives to be achieved Defines the hierarchy of project tasks, subtasks, and work packages Activities  Pieces of work that consume time 5­6 Project Control Charts    Charts provide an easily understood visual presentation Software can be used to create the charts Gantt chart – shows in a graphic manner the amount of time involved and the sequence of activities Often referred to as a bar c hart 5­7 Earned Value Management (EVM)    A technique for measuring project progress in an objective manner Has the ability to combine measurements of scope, schedule, and cost in a project Provides a method for evaluating the relative success of a project at a point in time 5­8 Earned Value Management – Essential Features 5­9 Network-Planning Models 5­10 Critical Path Method (CPM) Excel: Critical Paths 5­11 Project Crashing 5­12 Project Crashing 5­13 Project Crashing Excel: Project Crashin Activity D cannot be reduced any further at this point Project has reached minimum duration Activity A cannot be reduced any further at this point Activity C cannot be reduced any further at this point 5­14 Managing Resources   In addition to scheduling tasks, resources must also be assigned to specific tasks Software can be used to spot over-allocation   Planned use exceeds available supply When resources are over-allocated, either more resources are required or rescheduling is necessary  Taking advantage of task slack can free resources 5­15 ... project management is and why it is important Identify the different ways projects can be structured Describe how projects are organized into major subprojects Understand the concept of Earned... and requiring a significant period of time to perform Planning, directing, and controlling resources (people, equipment, material, etc.) to meet the technical, cost, and time constraints of the. .. understood visual presentation Software can be used to create the charts Gantt chart – shows in a graphic manner the amount of time involved and the sequence of activities Often referred to as a bar c