Project ManagementCourse: MBA

Subject: Production & Operation ManagementUnit: 4.1

The Two End Points in a ProjectInspiration

Operation

A miracle occurs

Purpose of Project Management

• Ensure meeting the project objectives within the allocated schedule & budget– Communication– Meetings– Reviews– Authorization– Record Keeping– Monitoring (testing)– Interface Control

• Not for assigning blame (usually)

What is Project Management?

• Project : A group of milestones or phases, activities or tasks that support an effort to accomplish something

• Management : is the process of

Planning, Organizing, Controlling and

Measuring

Project

• A collection of linked activities, carried out in an organised manner,with a clearly defined START POINT and END POINT to achieve some specific results desired to satisfy the needs of the organisation at the current time

Project Management

• A dynamic process that utilises the appropriate resources of the organisation in a controlled and structured manner, to achieve some clearly defined objectives identified as needs.

• It is always conducted within a defined set of constraints

What does Project Management Entail?

• Planning: is the most critical and gets the least amount of our time

Beginning with the End in mind-Stephen Covey• Organizing: Orderly fashion

(Contingent/Prerequisites)• Controlling: is critical if we are to use our

limited resources wisely• Measuring: To determine if we accomplished

the goal or met the target?

Measuring…….

• Are we efficient?• Are we productive?• Are we doing a good job?• What is the outcome?• Is it what we wanted to be?

If you can’t plan it, You can’t do itIf you can’t measure it, you can’t manage it

Who uses Project Management?

· Nearly Everyone to some degreePeople plan their Days, their Weeks, their Vacations and their Budgets and keep a simple project management form known as ‘’To Do’’ list

· Any Process or Means used to track tasks or efforts towards accomplishing a goal could be considered Project Management

Why is Project Management used?

• It is necessary to Track or Measure the progress we have achieved towards a Goal we wish to accomplish

• We use Project Management to Aid us in Maximizing and Optimizing our resources to accomplish our goals

How much time does Project Management take?

• Not much. Probably more time is wasted as a consequence of lack of Project Management tool than is spent to Plan adequately, Organize, Control effectively and Measure appropriately

• How long: As long as there are things to do

Why is Project Management Important?

• Enables us to map out a course of action or work plan

• Helps us to think systematically and thoroughly

• Unique Task• Specific Objective• Variety of Resources• Time bound

Advantages

• In built Monitoring/ Sequencing

• Easy and Early identification of Bottlenecks

• Activity based costing

• Identification and Addition of missing and new activities

• Preempting unnecessary activity/expenditure

• Timely Completion

• Assigning tasks

• Reporting

Road to Better Project Management

• Find a Project plan that fits your style of project management needs

• It may be as simple as creating templates, forms and spreadsheets to track tasks

• Formation of a Project Management committee

• Listing out all the tasks and sub-tasks to accomplish a goal

• Jot down the time period and person responsible against each task/sub-task

Implementation

• Regular Monitoring• Resource Support• Critical issues discussed and solution• Meeting with the team on completion of

each major milestone• Track the progress against the plan• System to add/delete tasks in the PMT

Consequences of not using PMT

· DELAY· COST· WASTE OF RESOURCES· QUALITY· DISSATISFACTION· REPUTATION

Project Phases and the Project Life Cycle

• A project life cycle is a collection of project phases that defines:– What work will be performed in each phase.– What deliverables will be produced and when.– Who is involved in each phase. – How management will control and approve work

produced in each phase.• A deliverable is a product or service produced

or provided as part of a project.

More on Project Phases• In the early phases of a project life cycle:– Resource needs are usually lowest.– The level of uncertainty (risk) is highest.– Project stakeholders have the greatest opportunity to

influence the project.• In the middle phases of a project life cycle:– The certainty of completing a project increases.– More resources are needed.

• In the final phase of a project life cycle:– The focus is on ensuring that project requirements were

met.– The sponsor approves completion of the project.

Phases of the Traditional Project Life Cycle

History• Developed in 1950’s• CPM by DuPont for chemical plants• PERT by U.S. Navy for Polaris missile

PERT was developed by the US Navy for the planning and control of the Polaris missile program and the emphasis was on completing the program in the shortest possible time. In addition PERT had the ability to cope with uncertain activity completion times (e.g. for a particular activity the most likely completion time is 4 weeks but it could be anywhere between 3 weeks and 8 weeks).

CPM was developed by Du Pont and the emphasis was on the trade-off between the cost of the project and its overall completion time (e.g. for certain activities it may be possible to decrease their completion times by spending more money - how does this affect the overall completion time of the project?)

CPM - Critical Path Method

• Definition: In CPM activities are shown as a network of precedence relationships using activity-on-node network construction– Single estimate of activity time– Deterministic activity times

USED IN : Production management - for the jobs of repetitive in nature where the activity time estimates can be predicted with considerable certainty due to the existence of past experience.

PERT - Project Evaluation & Review Techniques

• Definition: In PERT activities are shown as a network of precedence relationships using activity-on-arrow network construction– Multiple time estimates – Probabilistic activity times

USED IN : Project management - for non-repetitive jobs (research and development work), where the time and cost estimates tend to be quite uncertain. This technique uses probabilistic time estimates.

Gantt chart

Advantages

- Gantt charts are quite commonly used. They provide an easy graphical representation of when activities (might) take place.

Limitations

- Do not clearly indicate details regarding the progress of activities

- Do not give a clear indication of interrelation ship between the separate activities

Originated by H.L.Gantt in 1918

CPM/PERT

These deficiencies can be eliminated to a large extent by showing the interdependence of various activities by means of connecting arrows called network technique.

• Overtime CPM and PERT became one technique• ADVANTAGES:– Precedence relationships– large projects– more efficient

The Project Network

• Use of nodes and arrows

Arrows An arrow leads from tail to head directionally– Indicate ACTIVITY, a time consuming effort that is required to perform

a part of the work.

Nodes A node is represented by a circle- Indicate EVENT, a point in time where one or more activities start

and/or finish.

Activity on Node & Activity on Arrow

Activity on Node- A completion of an activity

is represented by a node

Activity on Arrow- An arrow represents a

task, while a node is the completion of a task

- Arrows represent order of events

Activity Slack

Each event has two important times associated with it :- Earliest time , Te , which is a calendar time when a event can occur

when all the predecessor events completed at the earliest possible times

- Latest time , TL , which is the latest time the event can occur with out delaying the subsequent events and completion of project.

• Difference between the latest time and the earliest time of an event is the slack time for that event

Positive slack : Slack is the amount of time an event can be delayed without delaying the project completion

Critical Path

• Is that the sequence of activities and events where there is no “slack” i.e.. Zero slack

• Longest path through a network• minimum project completion time

Benefits of CPM/PERT

• Useful at many stages of project management• Mathematically simple• Give critical path and slack time• Provide project documentation• Useful in monitoring costs

Questions Answered by CPM & PERT

• Completion date?• On Schedule?• Within Budget?• Critical Activities?• How can the project be finished early at the

least cost?

Limitations to CPM/PERT

• Clearly defined, independent and stable activities

• Specified precedence relationships• Over emphasis on critical paths

Project Crashing

Question: Can we cut short its project completion time?

If so, how!

Project Crashing Solution!

Yes, the project duration can be reduced by assigning more resources to project activities. But, doing this would somehow increase our project cost!How do we strike a balance?

■Project crashing is a method for shortening project duration by reducing one or more critical activities to a time less than normal activity time.

Trade-off concept

Here, we adopt the “Trade-off” concept• We attempt to “crash” some “critical” events

by allocating more resources to them, so that the time of one or more critical activities is reduced to a time that is less than the normal activity time.

• How to do that:• Question: What criteria should it be based

on when deciding to crashing critical times?

Example – crashing

The critical path is 1-2-3, the completion time =11How? Path: 1-2-3 = 5+6=11 weeks

Path: 1-3 = 5 weeksNow, how many days can we “crash” it?

13

25 (1) 6(3)

5(0)

Normal weeks

Max weeks can be crashed

Example – crashing

13

25 (1) 6(3)

5(0)

The maximum time that can be crashed for:Path 1-2-3 = 1 + 3 = 4Path 1-3 = 0

Should we use up all these 4 weeks?

Example – crashing

13

25 (1) 6(3)

5(0)If we used all 4 days, then path 1-2-3 has

(5-1) + (6-3) = 7 completion weeks

Now, we need to check if the completion time for path 1-3 has lesser than 7 weeks (why?)

Now, path 1-3 has (5-0) = 5 weeksSince path 1-3 still shorter than 7 weeks, we used up all 4 crashed weeks

Question: What if path 1-3 has, say 8 weeks completion time?

4(0) 3(0)

Example – crashing

13

25 (1) 6(3)

8(0)

Such as

Now, we cannot use all 4 days (Why?)Because path 1-2-3 will not be critical path anymore aspath 1-3 would now has longest hour to finish

Rule: When a path is a critical path, it will not stay as a critical path

So, we can only reduce the path 1-2-3 completion time to the same timeas path 1-3. (HOW?)

Example – crashing

13

25 (1) 6(3)

8(0)

Solution:

We can only reduce total time for path 1-2-3 = path 1-3,

that is 8 weeks

If the cost for path 1-2 and path 2-3 is the same thenWe can random pick them to crash so that its completionTime is 8 weeks

Example – crashing

13

25 (1) 6(3)

8(0)

Solution:

1

2

3

5 (1) 6(3)

8(0)

OR

4(0) 4(1)

3(0)

Now, paths 1-2-3 and 1-3 are both critical paths

References

• homes.ieu.edu.tr/stunali/courses/ch08_crashing

• ww.csus.edu/indiv/b/blakeh/mgmt/