Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers,...

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Chapter 16

Project planning and control

Source: Arup

Operations strategy

Design Improvement

Planning and control

Operations management

The operation supplies … the delivery of the project on time, to specification and to

budget

The market requires … specified time, quality and

cost of a project

Individual Group Organization Multi- organization

Nation Multi-nation

ComplexityLow High

Novel writing Wedding

Product development

Oil and gas exploration

Basic research

Company audit

Advertising campaign

Antarctic expedition

Oil tanker

Chemical plant

Airport

Car plant

Airbus

Channel Tunnel

Euro project

Motorway

Thames Barrier

Military campaign

Complexity and uncertainty as project dimensions

Understandingthe project

environment

Stage 1

Project definition

Stage 2

Project planningStage

Technical execution

Stage 4 Project control

Stage 5

Changes

Corrective action

Stages in project management

The project

Geo-social environmentGeography

National culture

Econo-political environment

EconomyGovernment

Business environmentCustomersCompetitorsSuppliers/

subcontractors

Internal environment

Company strategyResources

Other projects

The project environment consists of all the factorsthat can affect the project

The stakeholder power–interest grid

Stakeholder power

Stakeholder interest

Keep satisfiedManage closely

Monitor Keep informed

Low High

How projects can be defined

Project objectives

Phase 1 Phase 3Phase 4

Project strategy

Milestones

Phase 2Pro

The project

Department 1

Department 2

Department 3

Project A

Project B

Full-time equivalent resourceReporting relationship

Matrix management structures often resultin staff reporting to more than one project manager

as well as their own department

How projects are planned

Identify activities

Estimate time and resources

Identify relationships and dependencies

Identify schedule constraints

Fix the schedule

Quality

TimeCost

New aircraft project

Music festival

Fixed grant research project

The three project objectives of quality, cost and time

Identify the

activities in the

project

Adjust as necessary

Stages in the project planning process

Estimate times and resources

for the activities

Identify the relationships

and dependencies between the

activities

Identify time and resource schedule

constraints

Fix the schedule for time

and resources

Serve breakfast in bed

Obtain juice

Obtain glass

Produce boiled egg

Obtain egg cup

Produce toast

Obtain butter

Obtain plates and

cutlery

Obtain tray

Obtain egg

Obtain water

Obtain bread

Work breakdown structure

Arrange tray

Produce buttered

Produce boiled egg in egg cup

Produce glass of

orange drink

Design information interface for new sales knowledge

management system

Form and train user

Install systems

Specify sales

training

Design initial screen

interface

Test interface in pilot area

Modify interface

Training Installation Testing

Work breakdown structureProject to design an information interface for a new sales knowledge

management system in an insurance company

‘Making breakfast’ – Do activities at earliest time

0 1 2 3 4 6 7 8 95

Orange

Boil water Boil egg Bed room

0 1 2 3 4 6 7 8 950

Butter

Time (mins)

Activities requiring operator time

‘Making breakfast’ – Minimizing staff requirements

0 1 2 3 4 6 7 8 95

Orange

0 1 2 3 4 6 7 8 950

Butter

Time (mins)

‘Making breakfast’ – Maximizing toast quality

0 1 2 3 4 6 7 8 95

Orange

0 1 2 3 4 6 7 8 950

Bread Toast Butter

Time (mins)

a Form and train user group

b Install systems

c Specify sales training

d Design initial screen interface

e Test interface in pilot area

f Modify interface

0 10 20 30 40 50 60

Activity

Time (days)

Gantt chartProject to design an information interface for a new sales knowledge

management system in an insurance company

Prepare bedroom Paint bedroom

Prepare kitchen Paint kitchen

Remove furniture Replace furniture

a Remove furniture None 1b Prepare bedroom a 2c Paint bedroom b 3d Prepare kitchen a 1e Paint kitchen d 2f Replace furniture c, e 1

ActivityImmediate

predecessorsActivity duration

(days)

Activities and network for simple decorating project

Network analysis for simple decorating project

1 2 5 6

Activity reference

Activity duration

Event number

An event

Network analysis for simple decorating project

1 2 5 6

00 11 66 77

with earliest and latest event times

Activity on arrow –Using ‘dummy’ activities to clarify relationships

Activity on arrow – Using ‘dummy’ activities to describe a relationship

that could not be expressed any other way

Remove furniture

Prepare kitchen

Paint kitchen

Prepare bedroom

Paint bedroom

Replace furniture

Activity on node (AON) network for simple decorating project

Network diagram for a motorway project

Typical subjective probability distributionfor an activity time estimate

Activity duration3

Optimistic time

Most likely time

Expected time

Pessimistic time

How projects are controlled

Value of work completed

Actualexpenditure

Planned expenditure

ACWP: Actual cost of work performed

BCWP: Budgeted cost of work performed

BCWS: Budgeted cost of work scheduled

SV: Schedule variance

CV: Cost variance

re ACWP

Integration

Some of the elements integrated in Enterprise Project Management systems

Project

portfolio

analysis

Multi-project analysisComplex resource schedulingReal-time reporting

Scenario planningForecastingRisk management

Communi-cationProject portal

Web-based collaborationDocument managementE-mail notification

Project planning

Critical activity analysisFloat calculationWork order management

BudgetingCost managementEarned value control

Resource

schedulingResource levellingResource availabilitySkills scheduling

Key Terms TestProjectA set of activities with a defined start point and a defined end

state which pursue a defined goal using a defined set of resources.

ProgrammeAs used in project management, generally taken to mean an

ongoing process of change comprising individual projects. A programme has no defined end point.

UncertaintyProjects can be defined in terms of their complexity and their

uncertainty.

Key Terms TestStakeholdersThe people and groups of people who have an interest in the

operation and who may influence, or be influenced by, the operation’s activities.

Work breakdown structure (WBS)The definition of, and the relationship between, the individual work

packages in project management. Each work package can be allocated its own objectives that fit in with the overall WBS.

Earned-value controlA method of assessing performance in project management by

combining the costs and times achieved in the project with the original plan.

Key Terms TestNetwork analysisOverall term for the use of network-based techniques for the

analysis and management of projects. Includes, for example, the critical path method (CPM) and the programme evaluation and review technique (PERT).

Critical path method (CPM)A technique of network analysis.

Programme evaluation and review technique (PERT)A method of network planning that uses probabilistic time

estimates.

Key Terms TestActivityAs used in project management, an identifiable and defined

task; together with events, they form network planning diagrams.

EventPoint in time within a project plan; together with activities, they

form network planning diagrams.

Critical pathThe longest sequence of activities through a project network, so

called because any delay in any of its activities will delay the whole project.

Key Terms Test

CrashingA term used in project management to mean reducing

the time spent on critical path activities so as to shorten the whole project.

Enterprise project management (EPM) Software that integrates all the common activities in

project management.

Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers,...

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