PROJECT MANAGEMENT (N MBA 034). What is a Project? Project Defined –A complex, Nonroutine, One-time effort – limited by time, budget, resources ( Triple

PROJECT MANAGEMENT PROJECT MANAGEMENT (N MBA 034)(N MBA 034)

PROJECT MANAGEMENT PROJECT MANAGEMENT (N MBA 034)(N MBA 034)

What is a Project?What is a Project?What is a Project?What is a Project?

• Project Defined–A complex, Nonroutine, One-time effort– limited by time, budget, resources ( Triple Constraint)–Performance specifications designed to meet customer

needs.

• Major Characteristics of a Project–Has an established objective.–Has a defined life span with a beginning and an end.–Requires across-the-organizational participation.–Involves doing something never been done before.–Has specific time, cost, and performance requirements.

► Single unit► Many related activities► Difficult production planning and inventory

control► General purpose equipment► High labor skills

Project CharacteristicsProject CharacteristicsProject CharacteristicsProject Characteristics

Examples of ProjectsExamples of ProjectsExamples of ProjectsExamples of Projects

► Building Construction

► Research Project

Programs versus ProjectsPrograms versus ProjectsPrograms versus ProjectsPrograms versus Projects

• Program Defined–A series of coordinated, related, multiple

projects that continue over an extended time and are intended to achieve a goal.

–A higher level group of projects targeted at a common goal.

–Example:•Project: completion of a required

course in project management.

•Program: completion of all courses required

for a business major.

Comparison of Routine Work with ProjectsComparison of Routine Work with ProjectsComparison of Routine Work with ProjectsComparison of Routine Work with Projects

Routine, Repetitive Work

Taking class notes

Daily entering sales receipts into the accounting ledger

Responding to a supply-chain request

Practicing scales on the piano

Routine manufacture of an Apple iPod

Attaching tags on a manufactured product

Projects

Writing a term paper

Setting up a sales kiosk for a professional accounting meeting

Developing a supply-chain information system

Writing a new piano piece

Designing an iPod that is approximately 2 X 4 inches, interfaces with PC, and stores 10,000 songs

Wire-tag projects for GE and Wal-Mart

Project Life CycleProject Life CycleProject Life CycleProject Life Cycle

► Planning

► Objectives

► Resources

► Work break-down structure

► Organization

► Scheduling

► Project activities

► Start & end times

► Network

► Controlling

► Monitor, compare, revise, action

Project Management ActivitiesProject Management ActivitiesProject Management ActivitiesProject Management Activities

► Often temporary structure► Uses specialists from entire company► Headed by project manager

► Coordinates activities ► Monitors schedule

and costs

► Permanent structure called ‘MATRIX ORGANIZATION’

Project OrganizationProject OrganizationProject OrganizationProject Organization

Project OrganizationProject OrganizationWorks Best WhenWorks Best When

Project OrganizationProject OrganizationWorks Best WhenWorks Best When

1. Work can be defined with a specific goal and deadline

2. The job is unique or somewhat unfamiliar to the existing organization

3. The work contains complex interrelated tasks requiring specialized skills

4. The project is temporary but critical to the organization

5. The project cuts across organizational lines

TechnicianProject No. 2 Project

ManagerElectricalEngineer

Computer Engineer

A Sample Project OrganizationA Sample Project OrganizationA Sample Project OrganizationA Sample Project Organization

TestEngineer

MechanicalEngineer

Project No. 1 ProjectManager Technician

Marketing FinanceHumanResources Design Quality

Mgt Production

President

Matrix OrganizationMatrix OrganizationMatrix OrganizationMatrix Organization

Marketing Operations Engineering Finance

Project 1

Project 2

Project 3

Project 4

The Importance of Project ManagementThe Importance of Project ManagementThe Importance of Project ManagementThe Importance of Project Management

• Factors leading to the increased use of project management:–Compression of the product life cycle

–Knowledge explosion

–Triple bottom line (planet, people, profit)

–Corporate downsizing

–Increased customer focus

–Small projects represent big problems

Benefits of an Integrative Approach Benefits of an Integrative Approach to Project Management to Project Management

Benefits of an Integrative Approach Benefits of an Integrative Approach to Project Management to Project Management

• Integration (or centralization) of project management provides senior management with:–An overview of all project management activities

–A big picture of how organizational resources are used

–A risk assessment of their portfolio of projects

–A rough metric of the firm’s improvement in managing projects relative to others in the industry

–Linkages of senior management with actual project execution management

Integrated Project Management SystemsIntegrated Project Management SystemsIntegrated Project Management SystemsIntegrated Project Management Systems

• Problems resulting from the use of piecemeal project management systems:

–Do not tie together the overall strategies of the firm.

–Fail to prioritize selection of projects by their importance of their contribution to the firm.

–Are not integrated throughout the project life cycle.

–Do not match project planning and controls with organizational culture to make appropriate adjustments in support of project endeavors.

Integrated Management of ProjectsIntegrated Management of ProjectsIntegrated Management of ProjectsIntegrated Management of Projects

FIGURE 1.2

The Technical The Technical and Sociocultural and Sociocultural

DimensionsDimensionsof the Project of the Project Management Management

ProcessProcess

The Technical The Technical and Sociocultural and Sociocultural

DimensionsDimensionsof the Project of the Project Management Management

ProcessProcess

► Gantt chart► Critical Path Method

(CPM)► Program Evaluation and

Review Technique (PERT)

Project Management TechniquesProject Management TechniquesProject Management TechniquesProject Management Techniques

A Simple Gantt ChartA Simple Gantt ChartA Simple Gantt ChartA Simple Gantt Chart

TimeJ F M A M J J A S

Design

Prototype

Test

Revise

Production

A Comparison of AON and AOA Network A Comparison of AON and AOA Network ConventionsConventions


Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

C and D cannot begin until both

A and B are completed

(d)A

B

C

D B

A C

D

C cannot begin until both A and B are

completedD cannot begin until

B is completedA dummy activity is introduced in AOA

(e)CA

B D

Dummy activityA

B

C

D



Activity on Activity Activity onNode (AON) Meaning Arrow (AOA)

B and C cannot begin until A is

completedD cannot begin

until both B and C are completed

A dummy activity is again

introduced in AOA

(f)

A

C

DB A B

C

D

Dummy activity

Determining the Project ScheduleDetermining the Project ScheduleDetermining the Project ScheduleDetermining the Project Schedule

Perform a Critical Path Analysis

► The critical path is the longest path through the network

► The critical path is the shortest time in which the project can be completed

► Any delay in critical path activities delays the project

► Critical path activities have no slack time


Perform a Critical Path Analysis

Earliest start (ES) =earliest time at which an activity can start, assuming all

predecessors have been completed

Earliest finish (EF) =earliest time at which an activity can be finished

Latest start (LS) =latest time at which an activity can start so as to not delay the

completion time of the entire project

Latest finish (LF) =latest time by which an activity has to be finished so as to not

delay the completion time of the entire project


Activity Format Figure 3.9

A

Activity Name or Symbol

Earliest Start ES

Earliest FinishEF

Latest Start

LS Latest Finish

LF

Activity Duration

2

Forward PassForward PassForward PassForward Pass

Begin at starting event and work forward

Earliest Start Time Rule:

► If an activity has only a single immediate predecessor, its ES equals the EF of the

predecessor

► If an activity has multiple immediate predecessors, its ES is the maximum of all

the EF values of its predecessors

ES = Max {EF of all immediate predecessors}

Forward PassForward PassForward PassForward Pass

Earliest Finish Time Rule:

► The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its

activity time

EF = ES + Activity time

Begin at starting event and work forward

Computing VarianceComputing VarianceComputing VarianceComputing Variance

TABLE 3.4 Time Estimates (in weeks)

ACTIVITYOPTIMISTIC

a

MOST LIKELYm

PESSIMISTICb

EXPECTED TIMEt = (a + 4m + b)/6

VARIANCE[(b – a)/6]2

A 1 2 3 2 .11

B 2 3 4 3 .11

C 1 2 3 2 .11

D 2 4 6 4 .44

E 1 4 7 4 1.00

F 1 2 9 3 1.78

G 3 4 11 5 1.78

H 1 2 3 2 .11

Advantages of PERT/CPMAdvantages of PERT/CPMAdvantages of PERT/CPMAdvantages of PERT/CPM

1. Especially useful when scheduling and controlling large projects

2. Straightforward concept and not mathematically complex

3. Graphical networks help highlight relationships among project activities

4. Critical path and slack time analyses help pinpoint activities that need to be closely watched

Advantages of PERT/CPMAdvantages of PERT/CPMAdvantages of PERT/CPMAdvantages of PERT/CPM

5. Project documentation and graphics point out who is responsible for various activities

6. Applicable to a wide variety of projects

7. Useful in monitoring not only schedules but costs as well

1. Project activities have to be clearly defined, independent, and stable in their relationships

2. Precedence relationships must be specified and networked together

3. Time estimates tend to be subjective and are subject to fudging by managers

4. There is an inherent danger of too much emphasis being placed on the longest, or critical, path

Limitations of PERT/CPMLimitations of PERT/CPMLimitations of PERT/CPMLimitations of PERT/CPM

Documents

PROJECT MANAGEMENT (N MBA 034). What is a Project? Project Defined –A complex, Nonroutine, One-time effort – limited by time, budget, resources ( Triple