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    Week05 slides Week05 slides Presentation Transcript

    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 1MGT610Lecture 5Relations between Project Variation andProject ValueDr. Thomas Lechler Phone: (201) 216-8174Morton Room 636 FAX: (201) 216-5385email: tlechler@stevens.edu
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 2Lecture 5: Evidence• Analyzing project variation.• Interpreting project variation.• What to improve?• How to improve?
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 3Lecture 5: Topics and Objectives• Managing Effort Value with SPC (StatisticalProcess Control)• Applying SPC on the Project Level
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 4Lecture 5: Agenda• 1. Maximizing Effort Value• 2. Managing Variation• 3. The Problem• 4. The Solution• 5. Implementation• 6. Case Study• 7. Interpretation• 8. Improvement
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 51. Maximizing Effort Value: CC Limits• Managing Effort Value:Effort value means to implement the project by maximizingthe performance of the resources.• CC helps to minimize the project duration• but• CC does NOT explicitly support process improvement
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 61. Maximizing Effort Value: Reducing Variation• Definition of World-Class Quality:• “On-Target with Minimum Variance.”• Operating “On-Target” requires a different way of thinkingabout our processes.• Operating with “Minimum Variance” is achieved only when aprocess displays a reasonable degree of statistical control.• —Walter A. Shewhart• Wheeler, Chambers 1992, p. xix
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 71. Maximizing Effort Value: Reducing Variation• “If I had to reduce my message for management to just a fewwords, Id say it all had to do with reducing variation”• —W. Edwards Deming• “The central problem of management in all its aspects...is tounderstand better the meaning of variation, and to extract theinformation contained in variation.”• —Lloyd S. Nelson
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 82. Managing Variation: Advantages• Project Processes with less variation :– Have less variability.– Are more predictable.– Have lower costs.– Achieve faster throughput.• Variation could mean both: improvement or debasement.• What are the sources of variation?• What are the steps for process management?
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 92. Managing Variation: The Learning Cycle•How shall we learn?– learn– do– check– act•Improvement requires learning– Improvement is limited by therate of learning– We can improve at learning
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 102. Managing Variation: 7 Quality Control ToolsPareto charthistogramcauseandeffectdiagramcontrol chartcheck sheetgraphsscatter plot
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 113. The Problem: Analyzing Project Variation• Metrics on Projects:– Shareholder—Results to achieve on the business level• The product was defined by a business strategy– Stakeholder—Results to achieve high customer satisfaction• The product has to be of value to the customer– Output—attributes of the product• You fix a defective product (this is rework)• The product was produced by a process– Effort—attributes of the process• Process improvements to get better project results• Process improvements to get better products in the future• There is a problem with all process data
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 123. The Problem: Process Measurement• Measuring the Process:– Reliability Problem:All metrics come from a measurement process—and it hasvariation too. Is our measurement really stable?If the measurement error is larger than the variation of theprocess you are trying to measure, your results are notmeaningful!– Validity Problem:Using the right metrics or measures to describe the process.Do we really measure what we want to measure?
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 133. The Problem: Analyzing Process VariationThe Process:All real-world processes vary—• they have natural “common cause” variation that israndom (“noise”)• they also vary by a “special cause”So how do we know if the data is showing us a real change(from a “special cause” outside the process—a “signal”)or just noise?
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 143. The Problem: Consequences• Summary:If we can’t differentiate between signals from noise, we can’t tell whatis happening to our process…=> We can’t tell if it improved, or not…=> We can’t manage it
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 154. The Solution: The Inventor of the Control Chart• Telling signals from noise: control charts– Dr. Walter Shewhart, the “father of Quality,” developed the control chartin the 1920’s– This was the first quality tool developed
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 165. Implementation: Interpreting the Data• Process could be:– stable, predictable, in control– unstable, unpredictable, out of control• Process could be changing (improving?):– Location– Dispersion (Variation)• How can we tell? A control chart
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 174. The Solution: Effort Value with Control Chart• Aren’t control charts for manufacturing?In projects we don’t produce the same result over and over…– Within projects we find similar activities, like the communicationprocesses, change processes …– If you use a defined process for the project implementation like thesoftware development (a methodology), then you produce yourproducts with a process, and control charts will work– (If you don’t, you have nothing to improve)• Control charts don’t depend on the “product” being “the same”but on the process being “the same”– … and they will tell you if your process isn’t “the same”
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 185. Implementation: Choosing the Process Metricsperson week 1 week 2 week 3 week 4 totalAbleBakerCharlieDeltaEchototal7534322823432063272204742320251712171182data flow diagram defects
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 195. Implementation: A Controlled Processx xxxxx xxx xx xLocation: OKPlanned average metDispersion: OKVariation tolerable
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 205. Implementation: An Uncontrolled ProcessLocation: NOT OKPlanned average not metDispersion: NOT OKVariation not tolerable
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 215. Implementation: Analyzing the Process Data
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 225. Individual and Moving Range Charts• The simplest control charts:– Moving range (mR) charts• plot the successive differences between actual data points– Individual (X) charts• plot the actual data points• The strength of control charts:– NO assumptions about the data!
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 235. Implementation: X Control ChartX Control Chart: CHECK LOCATION
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 245. Implementation: Individual (X) Charts•Center Line– the average•Upper Natural Process Limit– three sigma limit•Lower Natural Process Limit– may be below zeroRXXLNPLRXXUNPLNXXCLXXNiX660.23660.231
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 255. Implementation: mR control chartmR control chart: CHECK DISPERSION
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 265. Implementation: Moving Range (mR) Charts• Center Line– the mean• Upper Control Limit– three sigma limit• Lower Control Limit– none noneRDLCLRRDUCLNRjRCLRRNjR341127.31
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 276. Case1: DataRelease 1 Release 2 Release 3 Release 4no. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24X 12.0 2.0 12.0 12.0 32.0 2.0 6.0 2.0 10.0 6.0 3.0 2.0 2.0 3.0 3.0 1.0 11.0 11.0 1.0 5.0 10.0 6.0 10.0 3.0mR 10.0 10.0 0.0 20.0 30.0 4.0 4.0 8.0 4.0 3.0 1.0 0.0 1.0 0.0 2.0 10.0 0.0 10.0 4.0 5.0 4.0 4.0 7.0Release 5 Release 6 Release 7 Release 8no. 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48X 4.4 2.9 4.2 5.4 6.6 3.6 1.0 1.3 1.2 1.2 1.0 2.8 2.0 3.0 1.8 2.3 1.3 5.2 4.1 4.3 3.1 2.3 0.9 2.1mR 1.4 1.5 1.3 1.2 1.2 3.0 2.6 0.3 0.0 0.0 0.2 1.8 0.8 1.0 1.2 0.5 1.0 3.9 1.1 0.2 1.2 0.8 1.4 1.2
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 286. Case 1: Individual (X) Chart• cImprovementsimplementedDays35302520151050Modules3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48Work assignment lostUNPL = 23.27Mean = 6.96UNPL = 6.03Mean = 2.83Newmethod•Development time in days
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 296. Case1: Moving Range (MR) ChartDevelopment time in daysImprovementsimplementedDays302520151050Modules3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48Work assignment lostUCL = 20.03Mean = 6.13
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 306. Case 2: DataModule coding Time in Hoursno. 1 2 3 4 5 6 7 8 9 10X 4.4 2.9 4.2 5.4 6.6 3.6 1.0 1.3 1.2 1.2mR 1.5 1.3 1.2 1.2 3.0 2.6 0.3 0.1 0.0no. 11 12 13 14 15 16 17 18 19 20X 1.0 2.8 2.0 3.0 1.8 2.3 1.3 5.2 4.1 4.3mR 0.2 1.8 0.8 1.0 1.2 0.5 1.0 3.9 1.1 0.2
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 316. Case 2: mR Control ChartCoding Time in Hours—moving Range (mR) chart0.00.51.01.52.02.53.03.54.04.51 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20ModulesHoursMean= 1.21UCL=3.95
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 326. Case 2: X Control ChartCoding Time in Hours—individual (X ) chart0.01.02.03.04.05.06.07.01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20ModulesHoursMean=2.98UCL=6.20
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 337. Interpretation: What’s a signal?• Western Electric zone rules:– 1 point more than three sigma– 2 out of 3 consecutive points more than two sigmaon the same side of the center line– 4 out of 5 consecutive points more than one sigmaon the same side of the center line– 8 consecutive points on the same side of the center line• These tell us the x chart has changed
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 347. Interpretation: Zone Rule 1• 1 point more than three sigmaCL321123Note: for both individual and moving range charts
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 357. Interpretation: Zone Rule 2• 2 out of 3 points more than two sigma on the same sideof the center lineCL321123Note: for individual charts ONLY
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 367. Interpretation: Zone Rule 3• 4 out of 5 points more than one sigmaon the same side of the center lineCL321123Note: for individual charts ONLY
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 377. Interpretation: Zone Rule 4CL321123Note: for individual charts ONLY• 8 on the same side of the center line
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 387. Interpretation: The Empirical Rule• For distributions commonly encountered:– 60-75% of the values will be within1 sigma of the center line– 90-98% of the values will be within2 sigma of the center line– 99-100% of the values will be within3 sigma of the center line• So x, mR charts work regardless of the distribution—which wedon’t know…
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 398. Improvement: Statistical Process Control• A process in statistical control:– is stable ("in control")– you may predict its performance,or plan based on its past performance– you may improve it(and can tell that you have)– may or may not be satisfactory!• (it may not be "capable")• So how do we improve a process?
    • Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 408. Improvement: Process Improvement…•A revolutionary idea– By what method?• What tools?Techniques?– How many last year?– How many this year?– Is there a plan?– Are you improving atimproving?– Is management doing it?Why not?