Chapter 11: Project Management Chapter 11: Project Management
Introduction Chapter 11: Project Management
Previous Examples of Projects <ul><li>Transporting Olympic Flame (Chapter 1) </li></ul><ul><li>Mercedes-Benz facility loca...
Viper Development Project <ul><li>Project team given 3 years to go from concept to roadster. </li></ul><ul><ul><li>Needed ...
Viper Development Project  con’t <ul><li>Project team members hand-picked. </li></ul><ul><li>Artemis Prestige selected to ...
Viper Development Project:  An Overwhelming Success <ul><li>First test engine required less than a year to develop. </li><...
Zeneca Pharmaceuticals <ul><li>Mission is the development of new drugs for the medical community. </li></ul><ul><li>The de...
Zeneca Pharmaceuticals:  Major Steps in Drug Development <ul><li>Preclinical Testing </li></ul><ul><li>Investigational New...
Differences Between Pharmaceutical R&D Projects and Other Industries <ul><li>Final product is information rather than a ph...
Background <ul><li>Project management concerned with managing organizational activities. </li></ul><ul><li>Often used to i...
Defining a Project <ul><li>Projects are processes that are performed infrequently and ad hoc, with a clear specification o...
Examples of Projects <ul><li>Constructing highways, bridges, tunnels and dams </li></ul><ul><li>Erecting skyscrapers, stee...
Reasons for Growth in Project Operations <ul><li>More Sophisticated Technology </li></ul><ul><li>Better-Educated Citizens ...
Planning the Project Chapter 11: Project Management
Life Cycle of a Project (Stretched-S) & (Exponential) Chapter 11: Project Management
Organizing the Project Team <ul><li>Ad Hoc Project Form </li></ul><ul><li>Weak Functional Matrix </li></ul><ul><li>Strong ...
Types of Project Team Members <ul><li>Those having a long-term relationship with the project. </li></ul><ul><li>Those that...
Project Plans   Chapter 11: Project Management
Work Breakdown Structure Chapter 11: Project Management
Project Master Schedule Chapter 11: Project Management
Complexity of Scheduling Project Activities <ul><li>Large number of activities </li></ul><ul><li>Precedence relationships ...
Planning and Scheduling Projects <ul><li>Planning.   Determining what must be done and which tasks must precede others. </...
Scheduling the Project: PERT and CPM Chapter 11: Project Management
Terminology <ul><li>Activity </li></ul><ul><li>Event </li></ul><ul><li>Network </li></ul><ul><li>Path </li></ul><ul><li>Cr...
Project Planning When Activity Times are Known <ul><li>Inputs </li></ul><ul><ul><li>list of the activities that must be co...
Project Planning When Activity Times are Known continued <ul><li>Outputs </li></ul><ul><ul><li>graphical representation of...
Example Chapter 11: Project Management
Network Diagram Chapter 11: Project Management
Early Start and Finish Times Chapter 11: Project Management
Latest Start and Finish Times Chapter 11: Project Management
Activity Slack Time <ul><li>T ES  = earliest start time for activity  </li></ul><ul><li>T LS  = latest start time for acti...
Path Slack <ul><li>Duration of Critical Path </li></ul><ul><li>-  Path Duration </li></ul><ul><li>Path Slack </li></ul>Cha...
Activity Slack Times Chapter 11: Project Management
Project Planning When Activity Times are Uncertain <ul><li>Inputs </li></ul><ul><ul><li>Optimistic ( t o ), most likely ( ...
Expected Activity Time and Variance of Activity Time Chapter 11: Project Management
Example Chapter 11: Project Management
Network Diagram with Expected Activity Times and Variances Chapter 11: Project Management 1 2 3 4 5 6 [5.5, 0.694] [7.0, 0...
Expected Completion Time and Variance of Path A-D-F <ul><li>Expected completion time = 5.5 + 10 + 11.5=27 </li></ul><ul><l...
Path Expected Times and Variances   Chapter 11: Project Management
Probabilities of Completion Chapter 11: Project Management
Probability of Project Being Completed on or Before Time 25 Chapter 11: Project Management Only path A-D-F has reasonable ...
Probability of Path A-D-F being Completed on or Before Time 25 Chapter 11: Project Management 5.82%
Plan E Project Operations Network Chapter 11: Project Management
Proper Use of Dummy Activities Chapter 11: Project Management
Activity Expected Times and Variances Chapter 11: Project Management
Simulating Project Completion Times with Spreadsheets Chapter 11: Project Management A B C D E F
Simulating Project Completion Times Chapter 11: Project Management
Chapter 11: Project Management
Chapter 11: Project Management
Project Management Software Capabilities Chapter 11: Project Management
Microsoft Project’s Gantt Chart Chapter 11: Project Management
Pert Chart Generated by Microsoft Project Chapter 11: Project Management
Calendar of Activities Created by Microsoft Project Chapter 11: Project Management
Controlling the Project: Cost and Performance Chapter 11: Project Management
Variance Report <ul><li>Cost standard determined using engineering estimates or analysis of past performance </li></ul><ul...
Cost-Schedule Reconciliation Charts Chapter 11: Project Management
Earned Value Chart Chapter 11: Project Management
Goldratt’s Critical Chain Chapter 11: Project Management
Introduction <ul><li>Similar issues that trouble people about working on projects regardless of type of project </li></ul>...
Three Project Scenarios Chapter 11: Project Management
Project Completion Time Statistics   Chapter 11: Project Management
Observations <ul><li>Average Completion Times </li></ul><ul><li>Implications of Assuming Known Activity Times </li></ul><u...
Multitasking Chapter 11: Project Management
Alternative Gantt Charts for Projects A and B Chapter 11: Project Management
Common Chain of Events <ul><li>Underestimate time needed to complete project </li></ul><ul><ul><li>assumption of known act...
Common Chain of Events  continued <ul><li>Safety time misused </li></ul><ul><li>Misused safety time results in missed dead...
Common Chain of Events  concluded <ul><li>Poor multitasking increases task durations </li></ul><ul><li>Uneven demand on re...
Reversing the Cycle <ul><li>Reduce number of projects assigned to each individual </li></ul><ul><li>Schedule start of new ...
The Critical Chain <ul><li>Longest chain of consecutively dependent events </li></ul><ul><ul><li>considers both precedence...
Sample Network Diagram Chapter 11: Project Management
Project and Feeder Buffers Chapter 11: Project Management
Copyright <ul><li>Copyright   John Wiley & Sons, Inc.  All rights reserved.  Reproduction or translation of this wo...
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Ch11

  1. 1. Chapter 11: Project Management Chapter 11: Project Management
  2. 2. Introduction Chapter 11: Project Management
  3. 3. Previous Examples of Projects <ul><li>Transporting Olympic Flame (Chapter 1) </li></ul><ul><li>Mercedes-Benz facility location (Chapter 5) </li></ul>Chapter 11: Project Management
  4. 4. Viper Development Project <ul><li>Project team given 3 years to go from concept to roadster. </li></ul><ul><ul><li>Needed to develop new 8.0-litter V-10 aluminum engine and new high performance six-speed transmission. </li></ul></ul><ul><ul><li>Comparable projects usually require five years at Chrysler. </li></ul></ul>Chapter 11: Project Management
  5. 5. Viper Development Project con’t <ul><li>Project team members hand-picked. </li></ul><ul><li>Artemis Prestige selected to help manage project </li></ul><ul><ul><li>ability to track several projects concurrently </li></ul></ul><ul><ul><li>interactive use </li></ul></ul><ul><ul><li>provide broad picture of entire project </li></ul></ul><ul><ul><li>help identify the impact of each activity on the ultimate completion of the project </li></ul></ul>Chapter 11: Project Management
  6. 6. Viper Development Project: An Overwhelming Success <ul><li>First test engine required less than a year to develop. </li></ul><ul><li>Transmission developed in 1.5 years compared to the usual 5 to 6 years. </li></ul><ul><li>Many important innovations in the frame, body, and brakes were incorporated . </li></ul>Chapter 11: Project Management
  7. 7. Zeneca Pharmaceuticals <ul><li>Mission is the development of new drugs for the medical community. </li></ul><ul><li>The development of a new drug is a complex project with typical durations of 10 years. </li></ul>Chapter 11: Project Management
  8. 8. Zeneca Pharmaceuticals: Major Steps in Drug Development <ul><li>Preclinical Testing </li></ul><ul><li>Investigational New Drug </li></ul><ul><li>Human Clinical Testing </li></ul><ul><ul><li>three separate phases </li></ul></ul><ul><li>New Drug Application </li></ul><ul><li>Approval </li></ul>Chapter 11: Project Management
  9. 9. Differences Between Pharmaceutical R&D Projects and Other Industries <ul><li>Final product is information rather than a physical product. </li></ul><ul><li>Long duration, extreme costs, and high chances for failure. </li></ul>Chapter 11: Project Management
  10. 10. Background <ul><li>Project management concerned with managing organizational activities. </li></ul><ul><li>Often used to integrate and coordinate diverse activities. </li></ul><ul><li>Projects are special types of processes. </li></ul>Chapter 11: Project Management
  11. 11. Defining a Project <ul><li>Projects are processes that are performed infrequently and ad hoc, with a clear specification of the desired objective. </li></ul>Chapter 11: Project Management
  12. 12. Examples of Projects <ul><li>Constructing highways, bridges, tunnels and dams </li></ul><ul><li>Erecting skyscrapers, steel mills, and homes </li></ul><ul><li>Organizing conferences and conventions </li></ul><ul><li>Managing R&D projects </li></ul><ul><li>Running political campaigns, war operations, and advertising campaigns </li></ul>Chapter 11: Project Management
  13. 13. Reasons for Growth in Project Operations <ul><li>More Sophisticated Technology </li></ul><ul><li>Better-Educated Citizens </li></ul><ul><li>More Leisure Time </li></ul><ul><li>Increased Accountability </li></ul><ul><li>Higher Productivity </li></ul><ul><li>Faster Response to Customers </li></ul><ul><li>Greater customization for customers </li></ul>Chapter 11: Project Management
  14. 14. Planning the Project Chapter 11: Project Management
  15. 15. Life Cycle of a Project (Stretched-S) & (Exponential) Chapter 11: Project Management
  16. 16. Organizing the Project Team <ul><li>Ad Hoc Project Form </li></ul><ul><li>Weak Functional Matrix </li></ul><ul><li>Strong Project Matrix </li></ul>Chapter 11: Project Management
  17. 17. Types of Project Team Members <ul><li>Those having a long-term relationship with the project. </li></ul><ul><li>Those that the PM will need to communicate with closely. </li></ul><ul><li>Those with rare skills necessary to project success. </li></ul>Chapter 11: Project Management
  18. 18. Project Plans Chapter 11: Project Management
  19. 19. Work Breakdown Structure Chapter 11: Project Management
  20. 20. Project Master Schedule Chapter 11: Project Management
  21. 21. Complexity of Scheduling Project Activities <ul><li>Large number of activities </li></ul><ul><li>Precedence relationships </li></ul><ul><li>Limited time of the project </li></ul>Chapter 11: Project Management
  22. 22. Planning and Scheduling Projects <ul><li>Planning. Determining what must be done and which tasks must precede others. </li></ul><ul><li>Scheduling . Determining when the tasks must be completed; when they can and when they must be started; which tasks are critical to the timely completion of the project; and which tasks have slack and how much. </li></ul>Chapter 11: Project Management
  23. 23. Scheduling the Project: PERT and CPM Chapter 11: Project Management
  24. 24. Terminology <ul><li>Activity </li></ul><ul><li>Event </li></ul><ul><li>Network </li></ul><ul><li>Path </li></ul><ul><li>Critical Path </li></ul><ul><li>Critical Activities </li></ul>Chapter 11: Project Management
  25. 25. Project Planning When Activity Times are Known <ul><li>Inputs </li></ul><ul><ul><li>list of the activities that must be completed </li></ul></ul><ul><ul><li>activity completion times </li></ul></ul><ul><ul><li>activity precedence relationships </li></ul></ul>Chapter 11: Project Management
  26. 26. Project Planning When Activity Times are Known continued <ul><li>Outputs </li></ul><ul><ul><li>graphical representation of project </li></ul></ul><ul><ul><li>time to complete project </li></ul></ul><ul><ul><li>identification of critical path(s) and activities </li></ul></ul><ul><ul><li>activity and path slack </li></ul></ul><ul><ul><li>earliest and latest time each activity can be started </li></ul></ul><ul><ul><li>earliest and latest time each activity can be completed </li></ul></ul>Chapter 11: Project Management
  27. 27. Example Chapter 11: Project Management
  28. 28. Network Diagram Chapter 11: Project Management
  29. 29. Early Start and Finish Times Chapter 11: Project Management
  30. 30. Latest Start and Finish Times Chapter 11: Project Management
  31. 31. Activity Slack Time <ul><li>T ES = earliest start time for activity </li></ul><ul><li>T LS = latest start time for activity </li></ul><ul><li>T EF = earliest finish time for activity </li></ul><ul><li>T LF = latest finish time for activity </li></ul><ul><li>Activity Slack = T LS - T ES = T LF - T EF </li></ul>Chapter 11: Project Management
  32. 32. Path Slack <ul><li>Duration of Critical Path </li></ul><ul><li>- Path Duration </li></ul><ul><li>Path Slack </li></ul>Chapter 11: Project Management
  33. 33. Activity Slack Times Chapter 11: Project Management
  34. 34. Project Planning When Activity Times are Uncertain <ul><li>Inputs </li></ul><ul><ul><li>Optimistic ( t o ), most likely ( t m ), and pessimistic ( t p ) time estimate for each activity </li></ul></ul><ul><ul><li>activity precedence relationships </li></ul></ul><ul><li>Outputs </li></ul><ul><ul><li>graphical representation of project </li></ul></ul><ul><ul><li>expected activity and path completion times </li></ul></ul><ul><ul><li>variance of activity and path completion times </li></ul></ul><ul><ul><li>probability that project completed by specified time </li></ul></ul>Chapter 11: Project Management
  35. 35. Expected Activity Time and Variance of Activity Time Chapter 11: Project Management
  36. 36. Example Chapter 11: Project Management
  37. 37. Network Diagram with Expected Activity Times and Variances Chapter 11: Project Management 1 2 3 4 5 6 [5.5, 0.694] [7.0, 0.444] [4.83, 0.250] [10, 0.0] [4.0, 0.111] [4.33, 1.0] [11.5, 0.913] A B C D E F G
  38. 38. Expected Completion Time and Variance of Path A-D-F <ul><li>Expected completion time = 5.5 + 10 + 11.5=27 </li></ul><ul><li>Path Variance = 0.694 + 0 + 0.913 = 1.607 </li></ul>Chapter 11: Project Management
  39. 39. Path Expected Times and Variances Chapter 11: Project Management
  40. 40. Probabilities of Completion Chapter 11: Project Management
  41. 41. Probability of Project Being Completed on or Before Time 25 Chapter 11: Project Management Only path A-D-F has reasonable chance of taking 25 or more: From standard normal table in Appendix A, there is a 5.82% chance of completing project on or before time 25.
  42. 42. Probability of Path A-D-F being Completed on or Before Time 25 Chapter 11: Project Management 5.82%
  43. 43. Plan E Project Operations Network Chapter 11: Project Management
  44. 44. Proper Use of Dummy Activities Chapter 11: Project Management
  45. 45. Activity Expected Times and Variances Chapter 11: Project Management
  46. 46. Simulating Project Completion Times with Spreadsheets Chapter 11: Project Management A B C D E F
  47. 47. Simulating Project Completion Times Chapter 11: Project Management
  48. 48. Chapter 11: Project Management
  49. 49. Chapter 11: Project Management
  50. 50. Project Management Software Capabilities Chapter 11: Project Management
  51. 51. Microsoft Project’s Gantt Chart Chapter 11: Project Management
  52. 52. Pert Chart Generated by Microsoft Project Chapter 11: Project Management
  53. 53. Calendar of Activities Created by Microsoft Project Chapter 11: Project Management
  54. 54. Controlling the Project: Cost and Performance Chapter 11: Project Management
  55. 55. Variance Report <ul><li>Cost standard determined using engineering estimates or analysis of past performance </li></ul><ul><li>Actual cost monitored and compared with cost standard </li></ul><ul><li>Project manager can exert control if difference between standard and actual (called a variance ) is considered significant. </li></ul>Chapter 11: Project Management
  56. 56. Cost-Schedule Reconciliation Charts Chapter 11: Project Management
  57. 57. Earned Value Chart Chapter 11: Project Management
  58. 58. Goldratt’s Critical Chain Chapter 11: Project Management
  59. 59. Introduction <ul><li>Similar issues that trouble people about working on projects regardless of type of project </li></ul><ul><ul><li>unrealistic due dates </li></ul></ul><ul><ul><li>too many changes </li></ul></ul><ul><ul><li>resources and data not available </li></ul></ul><ul><ul><li>unrealistic budget </li></ul></ul><ul><li>These issues/problems related to need to make trade-offs </li></ul><ul><li>To what extent are these problems caused by human decisions and practices? </li></ul>Chapter 11: Project Management
  60. 60. Three Project Scenarios Chapter 11: Project Management
  61. 61. Project Completion Time Statistics Chapter 11: Project Management
  62. 62. Observations <ul><li>Average Completion Times </li></ul><ul><li>Implications of Assuming Known Activity Times </li></ul><ul><li>Shape of the Distribution </li></ul><ul><li>Worker Time Estimates </li></ul><ul><li>Impact of Inflated Time Estimates </li></ul><ul><li>Student Syndrome </li></ul>Chapter 11: Project Management
  63. 63. Multitasking Chapter 11: Project Management
  64. 64. Alternative Gantt Charts for Projects A and B Chapter 11: Project Management
  65. 65. Common Chain of Events <ul><li>Underestimate time needed to complete project </li></ul><ul><ul><li>assumption of known activity times and independent paths </li></ul></ul><ul><li>Project team members inflate time estimates </li></ul><ul><li>Work fills available time </li></ul><ul><ul><li>student syndrome </li></ul></ul><ul><ul><li>early completions not reported </li></ul></ul>Chapter 11: Project Management
  66. 66. Common Chain of Events continued <ul><li>Safety time misused </li></ul><ul><li>Misused safety time results in missed deadlines </li></ul><ul><li>Hidden safety time complicates task of prioritizing project activities </li></ul><ul><li>Lack of clear priorities results in poor multitasking </li></ul>Chapter 11: Project Management
  67. 67. Common Chain of Events concluded <ul><li>Poor multitasking increases task durations </li></ul><ul><li>Uneven demand on resources also results due to poor multitasking </li></ul><ul><li>More projects undertaken to ensure all resources fully utilized </li></ul><ul><li>More projects further increases poor multitasking </li></ul>Chapter 11: Project Management
  68. 68. Reversing the Cycle <ul><li>Reduce number of projects assigned to each individual </li></ul><ul><li>Schedule start of new projects based on availability of bottleneck resources </li></ul><ul><li>Reduce amount of safety time added to individual tasks and then add some fraction back as project buffer </li></ul><ul><ul><li>activity durations set so that there is a high probability the task will not be finished on time </li></ul></ul>Chapter 11: Project Management
  69. 69. The Critical Chain <ul><li>Longest chain of consecutively dependent events </li></ul><ul><ul><li>considers both precedence relationships and resource dependencies </li></ul></ul><ul><li>Project Buffer </li></ul><ul><li>Feeding Buffer </li></ul>Chapter 11: Project Management
  70. 70. Sample Network Diagram Chapter 11: Project Management
  71. 71. Project and Feeder Buffers Chapter 11: Project Management
  72. 72. Copyright <ul><li>Copyright  John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the United States Copyright Act without the express written consent of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. Adopters of the textbook are granted permission to make back-up copies for their own use only, to make copies for distribution to students of the course the textbook is used in, and to modify this material to best suit their instructional needs. Under no circumstances can copies be made for resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein. </li></ul>Chapter 11: Project Management
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