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  1. 1. Lecture notes by Meet Bakotia UNIT 5: Project Management and Quality anagement Objectives: After studying this lesson, student shall be able to : 1) Understand terms such as network, activity, event, critical path etc; 2) Compare CPM and PERT techniques; 3) Identify the steps in CPM calculations; 4) Identify the steps in PERT calculations; 5) Understand the quality management principles such as quality control, quality audit, total quality management; Introduction to Project Management: Project is a set of interrelated activities which has a starting and ending point. Project management is planning; scheduling and controlling the project such as resources are consumed effectively with minimum capital investment. PERT/CPM are project management techniques. Common CPM and PERT terminologies: (a) Network and Network diagram- A combination of all project activities and the events in graphical form is called network. Network diagram is a graphical representation of project events and activities. (b) Event: An event is the start or end of some activity and so event neither consumes time, nor resources. Event sometimes is known as NODE. Event is represented by a circle. (c) Activity: Activity is a task that consumes time, resources and manpower. Activity is represented by arrow line. (d) Dummy activity: It does not consume any resource and time is known as dummy activity. (dotted line in the network). (e) Critical path and critical activity: A path is one of the routes of arrows from the start node to the finish node in the network. The longest path is called the critical path. All of the activities that make up the critical path are called critical activities. Critical path is shown by double arrows in the network diagram.
  2. 2. Lecture notes by Meet Bakotia Critical Path Method: CPM is a deterministic model & places emphasis on time & cost for activities of a project. This is used where a person is certain about the duration times of activities. It is commonly used to manage construction project. Steps of CPM method: 1. Decompose the project into individual jobs or task and identify each of them. 2. Find out activities’ or tasks’ sequence and develop the network. 3. Estimate each activity’s duration time. 4. Find out the critical path of the network under study. CPM time estimates and Calculation formulas: 1) EST - earliest start time: the earliest time at which the activity can start given that all its precedent activities must be completed first. 2) EFT - earliest finish time, equal to the earliest start time for the activity plus the time required to complete the activity. Hence EFT= EST+ Time duration of the activity. 3) LFT - latest finish time: the latest time at which the activity can be completed without delaying (beyond its targeted completion time) the project. 4) LST - latest start time, equal to the latest finish time minus the time required to complete the activity =LFT-Time duration of that activity. 5) Total Float: is concerned with overall project duration. It is time by activity completion can be delayed beyond earliest expected time. Total Float = Earliest Expected completion time – Latest allowable completion time 6) Free Float: is the excess of available time over activity time. 7) Independent float: is the excess of available over minimum available time. 8) Interfering float: difference between total float and free float. Slack is used in PERT and float is used in CPM and generally both mean the same. Following illustration shows how CPM calculations are done: Problem: A Foundry is interested to develop a cupola furnace. There are six activities and the estimated times for them are given below. Draw the network diagram, mark the critical path and find the total project duration. ACTIVITY Time in days PRE-ACTIVITY A 5 None B 6 A C 5 B D 4 A E 3 D F 4 C,E Solution:
  3. 3. Lecture notes by Meet Bakotia Activity Duration EST LST EFT LFT Float Remark 1-2 (A) 5 0 0 5 5 0 Critical 2-3 (B) 6 5 5 11 11 0 Critical 3-5 (C) 5 11 11 16 16 0 Critical 2-4 (D) 4 5 9 9 13 4 Non-critical 4-5 (E) 3 9 13 12 16 4 Non-critical 5 -6 (F) 4 16 16 20 20 0 Critical The critical path is 1-2-3-5-6 as shown in network diagram. Total project duration is 20. Programme evaluation and review technique (PERT): PERT is applied when there are uncertainties associated with completion times of activity of the project. It is more applied in research and development work. Steps of PERT method: 1. Decompose project into individual job or tasks and identify each of them. 2. Find out activities or tasks sequence and develop network 3. Estimate each activities duration time. 3 time estimates are: Optimistic time (to), Pessimistic time (tp), Most likely time (tm). 4. Obtain expected duration time of each activity (te). 5. Determine each activity time variance Where is the variance of the activity duration time. 6. Find out the critical path of the network under study. 7. Calculate project completion probability on the specified time (date). Slack: Float or slack means a margin of extra time over and above its duration which a non-critical activity can consume without delaying the date of completion of the project. Slack = Time for completion of activity – Time necessary to complete the same
  4. 4. Lecture notes by Meet Bakotia Slack = (LST – EST) or (LFT – EFT) Slack is used in PERT and float is used in CPM and generally both mean the same. Slack can be positive, Zero or negative. Positive slack is when LFT is more than EFT, zero slack when both LFT and EFT are same and negative slack when EFT is more than LFT. Following illustration shows how PERT calculations are done: Problem: A small engineering project consists of six activities. The three time estimates in number of days for each activity are given below: Activity to tm tp 1-2 2 5 8 2-3 1 1 1 3-5 0 6 18 5-6 7 7 7 1-4 3 3 3 4-5 2 8 14 (a) Calculate the values of expected time (te). Standard deviation (σt) and variance (Vi) for each activity. (b) Draw the network diagram and mark te on each activity. (c) Calculate EST and LFT and mark them on the network diagram. (d) Calculate the total slack for each activity. (e) Identify the critical path and mark on the network diagram Solution: For other activities the expected time (te) is calculated in table below and shown on arrow diagram. Activity to tm tp te σt = tp - to 6 Vi = (σt)2 1-2 2 5 8 5 1 (1)2 = 1 2-3 1 1 1 1 0 (0)2 = 0 3-5 0 6 18 7 3 (3)2 = 9 5-6 7 7 7 7 0 (0)2 = 0 1-4 3 3 3 3 0 (0)2 = 0 4-5 2 8 14 8 2 (2)2 = 4
  5. 5. Lecture notes by Meet Bakotia Activity Duration (te) EST LST EFT LFT Slack Remarks 1-2 5 0 0 5 5 0 Critical 2-3 1 5 5 6 6 0 Critical 3-5 7 6 6 13 13 0 Critical 5-6 7 13 13 20 20 0 Critical 1-4 3 0 2 3 5 2 Non critical 4-5 8 3 5 11 13 2 Non critical The critical path is 1-2-3-5-6 as marked on network diagram. The total project duration is 20 days. Comparison/Difference between CPM and PERT techniques: CPM PERT CPM was “Activity oriented”, PERT is “Event oriented” It is applied for project planning It is applied for project controlling Uses one time estimate Requires 3 time estimates Used where times can be estimated with confidence, familiar activities Used where times can’t be estimated with confidence. Unfamiliar or new activities Minimizing cost is more important Meeting time target or estimating % completion is more important Example: construction projects, building one off machines, ships, etc Example: Involving new activities or products, research and development etc Quality Management Quality: Quality is meeting the needs and expectations of customers. Ishikawa says: “Quality is customer satisfaction.” Crosby says “Conformance to specifications”. Joseph Juran defines quality as “Fitness for use”. Quality management: It is concerned with controlling activities with the aim of ensuring that products and services are fit for their purpose and meets the specifications. There are 2 main parts of quality management (1) Quality assurance (2) Quality control (1) Quality assurance:
  6. 6. Lecture notes by Meet Bakotia “Quality assurance is a kind of protection offered to the customers regarding the quality and satisfying them that product is fit for use and all required procedures are followed while developing that particular product.” Quality assurance is the activity of providing evidence to establish confidence to the customer. Assurance reaches to the customers through two major documents (a) The summary (or management report) and (b) the quality audit. (2) Quality control: Quality control is a process through which we measure the actual quality performance, compare it with the standards and take corrective action if required. “It is an effective system of integrating quality development, quality maintenance, and quality improvement efforts of various groups in an organisation with common goal.” A product, before it is sent out for selling to customer from factory, goes through number of stages. Naturally, in order that final product possesses required quality, the product and its components must be observed at all the stages mentioned below. The five basic steps in quality control are: 1) Setting a standard: Determining required quality costs, quality performance and safety quality relations and standards for the product. 2) Plan for inspection and required quality: Once the product via process is prepared, it needs to be checked/inspected. 3) Appraising conformance: Comparing the actual product with the set standard. 4) Control via feedback/ Action when necessary: Correcting problems i.e. applying corrective action. 5) Continue: Developing a continuing effort to improve the cost, performance, safety and reliability standards. Inspection: Inspection is checking of material, products or components of product at various stages in manufacturing. Inspection is a part of quality control. Inspection is act of checking component products at various stages and sorting out as defective items and good items. Inspection uses precision measuring instruments such as Vernier callipers, micrometers etc for checking products and sorting them into good items and defective items. In Q. Control feedback is provided so further defective items can be reduced but in inspection no feedback is provided so further manufacturing of defective items is minimized. Quality Control is everybody’s business which means everyone in organisation is responsible for Quality Control but inspection is mainly the responsibility of inspectors only. Inspection is done to fulfill following objectives: a) To check the incoming materials and parts. b) To check the raw materials as it goes from one machine to another. c) To check the final dimension of the product. d) To compare one product and its dimension with the other or with the standard. e) To make decision whether the manufactured product is defective or not. f) To make decision whether the defective product should be scraped or reworked. Quality policies Overall intentions and direction of an organisation related to quality are formally expressed by top management. – by ISO 8402. Quality policies refer to the basic principles used to guide the actions of
  7. 7. Lecture notes by Meet Bakotia the company in order to meet the quality objectives. If quality policies provide broad guidelines on company affairs, then quality objectives define specific goals and desired result to be achieved within a specified time. Some examples of quality policy statements are- “We will deliver defect free products and service, on time, to our clients”. The quality policy must be laid down in clear cut words and should be communicated to all concerned from top to bottom. The reasons for forming quality policies are (a) It explains the procedures of any organisation and these procedures tell how some activity is accomplished by an organisation and (b) Quality policy will ensure the degree of commitment of top management to quality. In some ways the customer gets an idea about organisation and also a feeling of satisfaction regarding the product or service he shall get from the organisation. Concept of quality Circle: “Quality Circle is a small group of 6 to 12 people coming from the same area, performing similar work, who voluntarily meet on a regular basis to identify, investigate, analyse and solve work related problems.” Quality circle is a participative management system in which workers make suggestions and improvements for betterment of an organisation by solving problems. Q. circle uses human resources in the best possible way. It wants every employee of organisation to take pride and interest in their work. Because of quality circle, employee feels a sense of belongingness towards the organisation. He gets motivation to volunteer and get involved in every work and deliver best quality work. The objectives of Quality Circles are a) Improves quality and productivity of products. b) Eliminate conflicts between people. c) Total involvement of people at all levels. d) Provides opportunities to individuals to learn new techniques and concepts. e) Motivates employees. f) Establishes a pleasant workplace for employees. g) Enhances morale of employees in the organisation. h) Brings a sense of team work amongst employees. i) Develops healthy relations amongst employees. Total Quality Management (TQM): TQM is a concept to improve the business as a whole. It is a way of organising and involving every department, every single person in every action at every level so best quality is achieved. TQM is defined as: “the business process and philosophy of continuous improvement through full participation of all levels of organisation and in every functions of organisation.” TQM is an approach for continuously improving the quality of goods and services delivered through the participation of all the levels and functions of organisation. The main aim of TQM is Quality improvement and it is fulfilled through full participation of all its members of the organisation and to society. TQM is a type of management in which all the employees are able to fulfill their human potential and performs worthwhile works. TQM is about total culture change of organisation. The mission of TQM is to think about the needs of the customers and try to satisfy them. Every one from top to the lowest level of organisation should change their attitude and participate in the TQM mission. Participation can be in form of quality circle also. Quality Audit Quality audit is checking if the practices which are mentioned in quality system are properly followed or not. Quality audit is an evaluation to check whether quality activities and related results comply/confirms with the planned arrangements or not. By conducting quality audit, organisation can check whether (a) laws and regulations are properly followed or not and (b) specifications are properly met which will deliver safe product and intended quality is achieved. In account audit, checking of journal is done by bookkeeper while quality audit evaluates the product, the inspector and
  8. 8. Lecture notes by Meet Bakotia the quality system for achieving best product quality. Quality audit makes people know where they stand in quality. It helps in proper decision making, taking into account all deficiencies of quality system and improves the quality system. In short, it is a step towards improving quality i.e. steps towards implementing quality control in organisation. Following are the objectives of quality audit: a) Make people know where they stand in quality. b) Finds out how much effective organisation’s Quality system is. c) Non-conformities identified helps in analyzing where the process and the system lack. d) Problem solving is taken up with high priority, once the non-conformities are identified by audit teams. e) Helps in quality assurance f) After audit, quality certification is achieved. g) It is one of the important steps in achieving ISO 9000 certification.