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Bechtel project planning example



Bechtel Project Planing Example

Bechtel Project Planing Example



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  • It may be helpful here to ask students to compare the effort they believe necessary to manage this project to the effort they believe required to actually perform the physical tasks. Total cost might be a useful unit of comparison. One might expect the management cost to run 10% - 20% of the total.
  • It is helpful here to provide an expanded discussion of the activities.
  • A useful project management technique must contribute in all areas.
  • If students have been assigned a term project, this material can be covered early in the semester and the students asked to develop a plan for their project.
  • Students should be asked to explain why these requirements are appropriate.
  • This may be a good time to look, at least briefly, at alternative organizational structures. Certainly hierarchical and matrix structures should be examined. The role of information technology in each of the alternatives should be examined. The following several slides illustrate various organizational structures.
  • Given that a project is something the firm is relatively unfamiliar with, how does one go about determining the appropriate costs and times? You might point out that specifying the beginning and end points for an activity is often a difficult task. Work breakdown may be the most difficult aspect of many projects.
  • You might point out to students that there are those who claim that the real benefit of using project management tools comes from the planning and organizing effort, not the actual management of the tasks during the project.
  • As you discuss the various project scheduling techniques, you should include at least: - the basic assumptions of the technique - problems typically encountered in applying it - the nature of the effort required to keep the tool current - sources of problems - the nature of the decisions supported by the tool - the nature of the management effort and cost associated with using the tool.
  • What circumstances lead the two organizations to develop different, yet similar tools for the management of complex projects? In your discussion of PERT/CPM, you should probably note that PERT helps us identify critical tasks/activities and look at the probability of completing the project by a given date; CPM helps us analyze the cost/time tradeoffs possible if we need to speed the project up.
  • Students should be informed that an alternate representation where the node represents the activity, and the arrow the event are also used. The notation illustrated here comes from PERT; the alternate from CPM.
  • It should be noted here that a dummy activity is required because of the way in which PERT/CPM models are represented in the computer.
  • In your discussion of activity times, you should probably at least make note of the difference between “most likely” and “average” or “ expected” completion times.
  • This and the next several slides illustrate the definitions of terms appropriate to critical path analysis. There are many opportunities for good managers to truly manage a project once they have a PERT network established. For instance, sub-contractors know early start and late start times and the managers know the activities on the critical path upon which to focus effort.
  • This and the following slide illustrate the translation of Early and Late Start and Finish time to Gantt charts.
  • There are those that argue that the Polaris could not have been built without the use of project management techniques (PERT).
  • Another issue with respect to the use of PERT/CPM is the cost and amount of management time require to keep the system up to date.

Bechtel project planning example Bechtel project planning example Presentation Transcript

  • Operations Management Project Management Chapter 16PowerPoint 16-1 © 2001 by Prentice
  • Outline♦ Global Company Profile: Bechtel Group♦ The Strategic Importance of Project Management♦ Project Planning ♦ The Project Manager ♦ Work Breakdown Structure♦ Project Scheduling♦ Project ControllingPowerPoint 16-2 © 2001 by Prentice
  • Outline - continued♦ Project Management Techniques: PERT and CPM ♦ The Framework of PERT and CPM ♦ Activities, Events, and Networks ♦ Dummy Activities and Events ♦ PERT and Activity Time Estimates ♦ Critical Path Analysis ♦ The Probability of Project Completion ♦ Case Study of PERT: Anderson-Touche Consulting Services♦ Cost-Time Tradeoffs and Project Crashing♦ A Critique of PERT and CPMPowerPoint 16-3 © 2001 by Prentice
  • Learning ObjectivesWhen you complete this chapter, you should be able to :♦ Identify or Define: ♦ Work breakdown structure ♦ Critical path ♦ Event ♦ Activity ♦ Dummy activityPowerPoint 16-4 © 2001 by Prentice
  • Learning Objectives - continuedWhen you complete this chapter, you should be able to :Describe or Explain: ♦ The role of the project manager ♦ Program evaluation and review technique (PERT) ♦ Critical path method (CPM) ♦ Crashing a projectPowerPoint 16-5 © 2001 by Prentice
  • Bechtel♦ Asked by Kuwait to begin rebuilding after Desert Storm♦ 650 wells ablaze, others uncapped♦ No water, electricity, food or facilities♦ Land mines! Bombs! Grenades!♦ Many fires inaccessible because of oil- covered roadsPowerPoint 16-6 © 2001 by Prentice
  • Bechtel♦ Project required: ♦ Storage, docking, and warehousing facilities at Dubai ♦ 125,000 tons of equipment and supplies ♦ 150 kilometers of pipeline capable of delivering 20,000,000 gallons of water per day to the fire site ♦ more than 200 lagoons with 1,000,000 gals of seawaterPowerPoint 16-7 © 2001 by Prentice
  • Bechtel Other Projects♦ Building and running a rail line between London and the Channel Tunnel ($4.6 billion)♦ Developing an oil pipeline from the Caspian Sea region to Russia ($850 million)♦ Expanding the Dubai Airport in the UAE ($600 million), and the Miami Airport in Florida $2 billion)♦ Building liquid natural gas plants in Yemen and in Trinidad, West IndiesPowerPoint 16-8 © 2001 by Prentice
  • Bechtel Other Projects - continued♦ Building liquid natural gas plants in Yemen $2 billion) and in Trinidad, West Indies ($1 billion)♦ Building a new subway for Athens, Greece ($2.6 billion)♦ Constructing a natural gas pipeline in Thailand ($700 million)♦ Building a highway to link the north and south of Croatia ($303 million)PowerPoint 16-9 © 2001 by Prentice
  • Strategic Importance of Project Management♦ Bechtel Kuwait Project: ♦ 8,000 workers ♦ 1,000 construction professionals ♦ 100 medical personnel ♦ 2 helicopter evacuation teams ♦ 6 full-service dining halls ♦ 27,000 meals per day ♦ 40 bed field hospitalPowerPoint 16-10 © 2001 by Prentice
  • Strategic Importance of Project Management - continued♦ Microsoft Windows 2000 Project: ♦ hundreds of programmers ♦ millions of lines of code ♦ millions of dollars cost♦ Ford Redesign of Mustang Project: ♦ 450 member project team ♦ Cost $700-million ♦ 25% faster and 30% cheaper than comparable project at FordPowerPoint 16-11 © 2001 by Prentice
  • Project Characteristics♦ Single unit♦ Many related activities♦ Difficult production planning and inventory control♦ General purpose equipment♦ High labor skillsPowerPoint 16-12 © 2001 by Prentice
  • An Example♦ Building construction © 1995 Corel Corp.PowerPoint 16-13 © 2001 by Prentice
  • An Example♦ Research project © 1995PowerPoint 16-14 © 2001 by Prentice Corel Corp.
  • Management of Large Projects♦ Planning - goal setting, project definition, team organization♦ Scheduling - relating people, money, and supplies to specific activities and activities to one and other♦ Controlling - monitoring resources, costs, quality, and budgets; revising plans and shifting resources to meet time and cost demandsPowerPoint 16-15 © 2001 by Prentice
  • Project Management ActivitiesPlanning Scheduling Objectives Project Resources activities Work break- Start & end down schedule times Organization Network Controlling Monitor, compare, revise, action PowerPoint 16-16 © 2001 by Prentice
  • Project Planning, Scheduling, and Controlling Project Planning Time/cost estimates 1. Setting goals Budgets 2. Defining the project Engineering diagrams 3. Tying needs into timed project Cash flow charts activities Material availability details 4. Organizing the team Project Scheduling 1. Tying resources to specific CPM/PERT activities Gantt charts 2. Relating activities to each other Milestone charts 3. Updating and revising on a Cash flow schedules regular basis Project Controlling Reports 1. Monitoring resources, costs, quality, • budgets and budgets • delayed activities 2. Revising and changing plans • slack activities 3. Shifting resources to meet demandsBefore Project During Project PowerPoint 16-17 © 2001 by Prentice
  • New Figure 16.1PowerPoint 16-18 © 2001 by Prentice
  • Project Planning♦ Establishing objectives♦ Defining project♦ Creating work breakdown structure♦ Determining resources♦ Forming organization © 1995 Corel Corp. PowerPoint 16-19 © 2001 by Prentice
  • Project Organization Works Best When♦ Work can be defined with a specific goal and deadline♦ The job is unique or somewhat unfamiliar to the existing organization♦ The work contains complex interrelated tasks requiring specialized skills♦ The project is temporary but critical to the organizationPowerPoint 16-20 © 2001 by Prentice
  • Project Organization♦ Often temporary structure♦ Uses specialists from entire company♦ Headed by project manager ♦ Coordinates activities ♦ Monitors schedule Eng. Eng. & costs Mkt. Acct.♦ Permanent structure called Mgr. ‘matrix organization’ © 1995 Corel Corp. PowerPoint 16-21 © 2001 by Prentice
  • A Sample Project Organization President Human Quality Sales Finance Engineering Production Factors ControlProject 1 Project Manager Propulsion Test Physiologist Technician Engineer EngineerProject 2 Project Manager Structural Inspection Psychologist Technician Engineer Technician PowerPoint 16-22 © 2001 by Prentice
  • Matrix Organization Mkt Oper Eng FinProject 1  Project 2    Project 3  Project 4   PowerPoint 16-23 © 2001 by Prentice
  • Types of Organizations for Development Projects (A) Functional Organization (B) Lightweight Project Manager FM FM FM FM FMWorkingEngineers Project Liaison Manager People (PM)(C) Heavyweight Project Manager (D) Tiger Team Organization FM FM FM FM FM FM PM PM PowerPoint 16-24 © 2001 by Prentice
  • The Role of the Project Manager Project Plan and Schedule Revisions and Updates Project Project Manager Team Information regarding times, Performance costs, problems, Reports delays Feedback Loop Top Resources ManagementPowerPoint 16-25 © 2001 by Prentice
  • Work Breakdown Structure♦ 1. Project♦ 2.. Major tasks in the project♦ 3. Subtasks in the major tasks♦ 4. ActivitiesPowerPoint 16-26 © 2001 by Prentice
  • Project Scheduling♦ Identifying precedence relationships♦ Sequencing activities © 1995 Corel Corp.♦ Determining activity times & costs♦ Estimating material & worker requirements PERT♦ Determining critical activities Des Tes Buil ign d t J M Mo A nth M F J J Acti v ity PowerPoint 16-27 © 2001 by Prentice
  • Purposes of Project Scheduling♦ Shows the relationship of each activity to others and to the project as a whole♦ Identifies the precedence relationships among activities♦ Encourages the setting of realistic time and cost estimates for each activity♦ Helps make better use of people, money, and material resources by identifying critical bottlenecksPowerPoint 16-28 © 2001 by Prentice
  • Project Scheduling Techniques ♦ Gantt chart ♦ Critical Path Method (CPM) ♦ Program Evaluation & Review Technique (PERT) © 1984-1994 T/Maker Co.PowerPoint 16-29 © 2001 by Prentice
  • Gantt Chart Time Period Activity J F M A M J J Design Build TestPowerPoint 16-30 © 2001 by Prentice
  • Figure 16.4PowerPoint 16-31 © 2001 by Prentice
  • Project Control Reports♦ Detailed cost breakdowns for each task♦ Total program labor curves♦ Cost distribution tables♦ Functional cost and hour summaries♦ Raw materials and expenditure forecasts♦ Variance reports♦ Time analysis reports♦ Work status reportsPowerPoint 16-32 © 2001 by Prentice
  • PERT and CPM♦ Network techniques♦ Developed in 1950’s ♦ CPM by DuPont for chemical plants ♦ PERT by U.S. Navy for Polaris missile♦ Consider precedence relationships and interdependencies♦ Each uses a different estimate of activity timesPowerPoint 16-33 © 2001 by Prentice
  • Questions Which May Be Addressed by PERT & CPM ♦ Is the project on schedule, ahead of schedule, or behind schedule? ♦ Is the project over or under cost budget? ♦ Are there enough resources available to finish the project on time? ♦ If the project must be finished in less than the scheduled amount of time, what is the way to accomplish this at least cost? PowerPoint 16-34 © 2001 by Prentice
  • The Six Steps Common to PERT & CPM Define the project and all of its significant activities or tasks Develop relationships among the activities. (Decide which activities must precede and which must follow others.) Draw the network connecting all of the activities Assign time and cost estimates to each activity Compute the longest time path through the network. This is called the critical path Use the network to help plan, schedule, monitor, and control the projectPowerPoint 16-35 © 2001 by Prentice
  • Network TermsProject: Obtain a college degree (B.S.) Receive diploma Register Attend class, study etc. 1 4 Years 2 Activity (Arrow)Event (Node) Event (Node) PowerPoint 16-36 © 2001 by Prentice
  • Activity Relationships 2 A 1 B 3 A & B can occur concurrentlyPowerPoint 16-37 © 2001 by Prentice
  • Activity RelationshipsA must be done beforeC & D can begin 2 D A C 1 4 B 3PowerPoint 16-38 © 2001 by Prentice
  • Activity Relationships 2 D A C 1 4 B 3 E B & C must be done before E can beginPowerPoint 16-39 © 2001 by Prentice
  • Dummy Activities♦ Activities are defined by beginning & ending events ♦ Example: Activity 2-3♦ Every activity must have unique pair of beginning & ending events ♦ Otherwise, computer programs get confused♦ Dummy activities maintain precedence ♦ Consume no time or resourcesPowerPoint 16-40 © 2001 by Prentice
  • Dummy Activity ExampleIncorrect 2-3 1-2 3-4 1 2 3 4 2-3Correct 1-2 2-4 4-5 1 2 4 5 2-3 3-4: Dummy 3 activity PowerPoint 16-41 © 2001 by Prentice
  • PERT Activity Times♦ 3 time estimates Optimistic times (a)  ♦ ♦ Most-likely time (m) ♦ Pessimistic time (b)♦ Follow beta distribution♦ Expected time: t = (a + 4m + b)/6♦ Variance of times: v = (b - a)2/6PowerPoint 16-42 © 2001 by Prentice
  • Critical Path Analysis♦ Provides activity information ♦ Earliest (ES) & latest (LS) start ♦ Earliest (EF) & latest (LF) finish ♦ Slack (S): Allowable delay♦ Identifies critical path ♦ Longest path in network ♦ Shortest time project can be completed ♦ Any delay on critical path activities delays project ♦ Critical path activities have 0 slackPowerPoint 16-43 © 2001 by Prentice
  • Earliest Start and Finish Steps♦ Begin at starting event and work forward♦ ES = 0 for starting activities ♦ ES is earliest start♦ EF = ES + Activity time ♦ EF is earliest finish♦ ES = Maximum EF of all predecessors for non- starting activitiesPowerPoint 16-44 © 2001 by Prentice
  • Latest Start and Finish Steps♦ Begin at ending event and work backward♦ LF = Maximum EF for ending activities ♦ LF is latest finish; EF is earliest finish♦ LS = LF - Activity time ♦ LS is latest start♦ LF = Minimum LS of all successors for non- ending activitiesPowerPoint 16-45 © 2001 by Prentice
  • Critical Path in Network Pour Do interior foundation & 2 work frame 3 wk. 6 wk. Roof 1 2 wk. 4 3 wk. Buy 3 Landscape shrubs etc. 4 wk. Critical path is longest path: 12 weeks.PowerPoint 16-46 © 2001 by Prentice
  • Gantt Chart Earliest Start and Finish Build House Project 1 1 1 Activity 1 2 3 4 5 6 7 8 9 0 1 2 1-2 Fdn & frame 1-3 Buy shrubs 2-3 Roof 2-4 Interior work 3-4 LandscapePowerPoint 16-47 © 2001 by Prentice
  • Gantt Chart Latest Start and Finish Build House Project 1 1 1 Activity 1 2 3 4 5 6 7 8 9 0 1 2 1-2 Fdn & frame 1-3 Buy shrubs 2-3 Roof 2-4 Interior work 3-4 LandscapePowerPoint 16-48 © 2001 by Prentice
  • Project Times♦ Expected project time (T) Used to obtain probability of project ♦ Sum of critical path activity completion! times, t♦ Project variance (V) ♦ Sum of critical path activity variances, vPowerPoint 16-49 © 2001 by Prentice
  • PERT Probability ExampleYou’re a project plannerfor General Dynamics. Asubmarine project has an © 1995 Corel Corp.expected completion timeof 40 weeks, with astandard deviation of 5weeks. What is theprobability of finishingthe sub in 50 weeks orless?PowerPoint 16-50 © 2001 by Prentice
  • Converting to Standardized Variable X - T 50 - 40 Z = = = 2 .0 s 5Normal Standardized NormalDistribution Distribution s =5 sZ = 1 T = 40 50 X mz = 0 2.0 Z PowerPoint 16-51 © 2001 by Prentice
  • Obtaining the ProbabilityStandardized Normal ProbabilityTable (Portion) Z .00 .01 .020.0 .50000 .50399 .50798 sZ =1 : : : :2.0 .97725 .97784 .97831 .977252.1 .98214 .98257 .98300 mz = 0 2.0 Z Probabilities in body PowerPoint 16-52 © 2001 by Prentice
  • Figure 16.9PowerPoint 16-53 © 2001 by Prentice
  • Benefits of PERT/CPM♦ Useful at many stages of project management♦ Mathematically simple♦ Uses graphical displays♦ Gives critical path & slack time♦ Provides project documentation♦ Useful in monitoring costsPowerPoint 16-54 © 2001 by Prentice
  • Advantages of PERT/CPM♦ Networks generated provide valuable project documentation and graphically point out who is responsible for various project activities♦ Applicable to a wide variety of projects and industries♦ Useful in monitoring not only schedules, but costs as wellPowerPoint 16-55 © 2001 by Prentice
  • Limitations of PERT/CPM♦ Assumes clearly defined, independent, & stable activities♦ Specified precedence relationships♦ Activity times (PERT) follow beta distribution♦ Subjective time estimates♦ Over-emphasis on critical pathPowerPoint 16-56 © 2001 by Prentice