MANAGING PROJECT RESOURCES
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MANAGING PROJECT RESOURCES

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MANAGING PROJECT RESOURCES MANAGING PROJECT RESOURCES Presentation Transcript

  • MANAGING PROJECT RESOURCES
  • Project Crashing
    • The process of accelerating a project is referred as crashing .
    • Crashing a project relates to resource commitment; the more resources expended, the faster the project will finish .
    • There are several reasons to crash a project:
      • Initial schedule was too optimistic
      • Market needs change and the project is in demand earlier than anticipated
      • The project has slipped considerably behind schedule
      • There are contractual late penalties
  • Project Crashing
    • Principal methods for crashing are:
      • Improving existing resources’ productivity
      • Changing work methods
      • Increasing the quantity of resources
    • Increasing the quantity of resources is the most commonly used method for project crashing. There are 2 approaches:
      • Working current resources for longer hours (overtime, weekend work, etc.)
      • Adding more personnel
  • Project Crashing Time-Cost Trade-Offs for Crashing Activities Fully expedited (no expense is spared)
  • Project Crashing
    • In analyzing crash options, the goal is to find the point at which time and cost trade-offs are optimized.
    • Various combinations of time-cost trade-offs for crash options can be determined by using the following formula:
    Slope = crash cost – normal cost normal time – crash time
  • Project Crashing Example
    • SUPPOSE:
      • NORMAL ACTIVITY DURATION = 8 WEEKS
      • NORMAL COST = $14,000
      • CRASHED ACTIVITY DURATION = 5 WEEKS
      • CRASHED COST = $23,000
    • THE ACTIVITY COST SLOPE =
    • 23,000 – 14,000 OR $ 9,000 = $3,000 per w eek
    • 8 – 5 3
    • Cease crashing when
      • the target completion time is reached
      • the crash cost exceeds the penalty cost
  • Project Crashing Example Normal Crashed Activity Duration Cost Duration Cost A 4 days $1,000 3 days $2,000 B 5 days $2,500 3 days $5,000 C 3 days $750 2 days $1,200 D 7 days $3,500 5 days $5,000 E 2 days $500 1 day $2,000 F 5 days $2,000 4 days $3,000 G 9 days $4,500 7 days $6,300
    • Calculate the per day costs for crashing each activity
    • Which are the most attractive candidates for crashing? Why?
  • Project Crashing Example Activity Per Day Cost A $1,000 B $1,250 C $450 D $750 E $1,500 F $1,000 G $900
  • Project Crashing Example When deciding on whether or not to crash project activities, a project manager was faced with the following information. Activities of the critical path are highlighted with an asterisk: 5 weeks 3,000 6 weeks 2,500 H 6 weeks 2,500 7 weeks 3,000 G* 7 weeks 5,000 8 weeks 7,500 F 2 weeks 2,500 3 weeks 1,500 E* 4 weeks 4,000 6 weeks 4,500 D* 1 week 3,500 2 weeks 3,500 C 4 weeks 3,000 5 weeks 10,000 B* 3 weeks 4,000 4 weeks 5,000 A Duration Extra Cost Duration Cost Activity Crashed Normal
  • Project Crashing Example
        • The correct sequence for crashing activities is listed as:
            • Activity E or G (they both cost $2,500 more)
            • Activity E or G
            • Activity B
            • Activity D
  • Project Crashing Example
      • Suppose project overhead costs accrued at a fixed rate of $500 per week.
      • Assume that a project penalty clause kicks in after 19 weeks.
      • The penalty charged is $5,000 per week .
    56,500 8,000 - 0 - 49,500 16 weeks 54,000 9,000 - 0 - 45,500 18 weeks 52,000 9,500 - 0 - 42,500 19 weeks 55,000 10,000 5,000 40,000 20 weeks 58,000 10,500 10,000 37,500 21 weeks Total Overhead Penalties Direct Costs Duration
  • Resource Allocation Problem
    • A shortcoming of most scheduling procedures is that they do not address the issues of resource utilization and availability .
    • Scheduling procedures tend to focus on time rather than physical resources .
  • Resource Allocation Problem
    • Schedules should be evaluated not merely in terms of meeting project milestones, but also in terms of the timing and use of scarce resources .
    • A fundamental measure of the project manager’s success in project management is the skill with which the trade-offs among performance, time, and cost are managed .
    • “ I can shorten this project by 1 day at a cost of $400. Should I do it?”
  • Resource Allocation Problem
    • The extreme points of the relationship between time use and resource use are the following:
      • Time Limited : The project must be finished by a certain time, using as few resources as possible. But it is time, not resource usage, that is critical
      • Resource Limited : The project must be finished as soon as possible, but without exceeding some specific level of resource usage or some general resource constraint
  • Resource Loading
    • Resource loading describes the amounts of individual resources an existing schedule requires during specific time periods .
    • The loads (requirements) of each resource type are listed as a function of time period .
    • Resource loading gives a general understanding of the demands a project or set of projects will make on a firm’s resources .
  • Resource Loading
    • The project manager must be aware of the flows of usage for each input resource throughout the life of the project .
    • It is the project manager’s responsibility to ensure that the required resources, in the required amounts, are available when and where they are needed .
  • Resource Loading Table
  • Resource L eveling (Smooting)
    • Resource leveling aims to minimize the period-by-period variations in resource loading by shifting tasks within their slack allowances.
    • The purpose is to create a smoother distribution of resource usage.
    • Resource leveling, referred to as resource smoothing, has two objectives:
      • To determine the resource requirements so that they will be available at the right time,
      • To allow each activity to be scheduled with the smoothest possible transition across usage levels.
  • Resource L eveling (Smooting)
    • Resource management is a multivariate, combinatorial problem, i.e. multiple solutions with many variables, the mathematically optimal solution may be difficult or infeasible.
    • More common approach to analyzing resource leveling problems is to apply some resource leveling heuristics.
  • Resource L eveling Heuristics
    • Prioritizing resource allocation include applying resources to activities:
      • with the smallest amount of slack
      • with the smallest duration
      • that start earliest
      • with the most successor tasks
      • requiring the most resources
  • Resource L eveling Steps
    • Create a project activity network diagram
    • Create a table showing the resources required for each activity, durations, and the total float available
    • Develop a time-phased resource loading table
    • Identify any resource conflicts and begin to smooth the loading table using one or more heuristics
  • Resource Leveling Example Critical path:A-C-F-H-K
  • Resource Leveling Example Critical path:A-C-F-H-K
  • Resource Leveling Example 194 Total 25 5 0 5 K 6 2 5 3 J 20 4 3 5 I 21 3 0 7 H 16 4 3 4 G 12 2 0 6 F 18 3 1 6 E 18 3 3 6 D 20 4 0 5 C 8 2 1 4 B 30 6 0 5 A Total Resources Required Resource Hours Needed Per Week Total Float Duration Activity
  • Resource Leveling Example
  • Resource Leveling Example
    • On day 10 the required resource hours is 10
    • If project is budgetted for up to 10 resource units per day, then it is acceptable.
    • C, D, and E are all scheduled on this day and have require 4, 3, and 3 hours respectively
      • Which activity should be adjusted?
      • C is on the critical path
      • E has 1 day slack
      • D has 3 days of slack (we can split the activity)
  • Resource Leveling Example
  • Resource L oading Chart
    • Another way to create a visual diagram of resource management problem is to use resource-lo a ding charts.
    • Resource conflicts can be seen in the r esource -l oading c harts.
    • They are used to display the amount of resources required as a function of time on a graph.
    • Each activity’s resource requirements are represented as a block (resource requirement over time).
  • Resource L oading Chart
    • Resource limit is set at 8 hourly units per day.
    • Display the amount of resources required as a function of time.
    • Start with a network diagram
    0 A 4 Res = 6 4 B 5 Res = 2 5 D 9 Res = 7 9 E 11 Res = 3 4 C 7 Res = 2 11 F 12 Res = 6
  • Resource Loading Chart
    • Produce a table that shows the duration, early start, late finish, slack, and resource(s) required for each activity.
    12 0 11 1 6 F 11 0 9 2 3 E 9 0 5 4 7 D 11 4 4 3 2 C 5 0 4 1 2 B 4 0 0 4 6 A LF Slack ES Duration Resource Activity
  • Resource Loading Chart
    • Draw an initial loading chart with each activity scheduled at its ES.
    Resource imbalance A 2 4 6 8 2 12 10 8 6 4 14 C B D E F Project Days Resources
  • Resource Loading Chart
    • Rearrange activities within their slack to create a more level profile. Splitting C creates a more level project.
    A 2 4 6 8 2 12 10 8 6 4 14 C B D E F Project Days Resources C
  • Resource Loading Chart
  • Critical Chain Project Management
    • Critical Chain Project Management (CCPM), which was developed and publicized by Dr. Eliyahu M. Goldratt (1997) in his book Critical Chain, is a novel approach for managing projects.
    • Goldratt is well known in the operations management community as the inventor of the Theory of Constraints (TOC).
    • TOC is a tool for managing repetitive production systems based on the principle that every system has a constraint, and system performance can only be improved by enhancing the performance of the constraining resource .
  • Critical Chain Project Management
    • CCPM identifies the critical chain as the set of tasks that results in the longest path to project completion after resource leveling.
    • CCPM is the same as conventional project management except for the terminology "critical chain", which would otherwise be called the "leveled critical path".
  • Critical Chain Project Management
    • CCPM planning consists of recalculating the project schedule based on shortened task duration estimates.
    • The rationale for shortening the original duration estimates is as follows:
    • all tasks in the project are subject to some degree of uncertainty
    • when asked to provide an estimate of the duration, the task owner adds a safety margin in order to be almost certain of completing the task on time. This means that, in general, task durations are overestimated
    • In most cases, the task will not require the entire amount of safety margin and should be completed sooner than scheduled
    • Because the safety margin is internal to the task, if it is not needed, it is wasted.
  • Critical Chain Project Management
    • For project plan execution, CCPM prescribes the following principles:
    • Resources working on critical chain tasks are expected to work continuously on a single task at a time. They do not work on several tasks in parallel or suspend their critical tasks to do other work
    • Resources are to complete the task assigned as soon as possible, regardless of scheduled dates
  • Critical Chain Project Management
    • I f the task is completed ahead of schedule, work on its successor is to begin immediately. I f the task successor utilizes a critical resource for which a resource buffer has been defined, advance warning is provided to that resource at the point in time where the resource buffer begins
    • I f the task is completed past its planned completion date, as shown on the CCPM schedule, this is no reason for immediate concern, as the buffer will absorb the delay.
    • Source: http ://en.wikipedia.org/wiki/Critical_chain