Chapter 11: Project Management 1
Chapter 11: Project Management
Chapter 11: Project Management 2
Introduction
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Previous Examples of Projects
Transporting Olympic Flame (Chapter 1) Mercedes-Benz facility location (Chapter 5)
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Viper Development Project
Project team given 3 years to go from concept to roadster. Needed to develop new 8.0-litter V-10
aluminum engine and new high performance six-speed transmission.
Comparable projects usually require five years at Chrysler.
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Viper Development Project con’t
Project team members hand-picked. Artemis Prestige selected to help
manage project ability to track several projects concurrently interactive use provide broad picture of entire project help identify the impact of each activity on
the ultimate completion of the project
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Viper Development Project: An Overwhelming Success
First test engine required less than a year to develop.
Transmission developed in 1.5 years compared to the usual 5 to 6 years.
Many important innovations in the frame, body, and brakes were incorporated .
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Zeneca Pharmaceuticals
Mission is the development of new drugs for the medical community.
The development of a new drug is a complex project with typical durations of 10 years.
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Zeneca Pharmaceuticals: Major Steps in Drug Development
Preclinical Testing Investigational New Drug Human Clinical Testing
three separate phases New Drug Application Approval
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Differences Between Pharmaceutical R&D Projects and Other Industries
Final product is information rather than a physical product.
Long duration, extreme costs, and high chances for failure.
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Background
Project management concerned with managing organizational activities.
Often used to integrate and coordinate diverse activities.
Projects are special types of processes.
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Defining a Project
Projects are processes that are performed infrequently and ad hoc, with a clear specification of the desired objective.
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Examples of Projects
Constructing highways, bridges, tunnels and dams
Erecting skyscrapers, steel mills, and homes
Organizing conferences and conventions
Managing R&D projects Running political
campaigns, war operations, and advertising campaigns
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Reasons for Growth in Project Operations
More Sophisticated Technology
Better-Educated Citizens
More Leisure Time Increased Accountability Higher Productivity Faster Response to
Customers Greater customization
for customers
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Planning the Project
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Life Cycle of a Project (Stretched-S) & (Exponential)
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Organizing the Project Team
Ad Hoc Project Form Weak Functional Matrix Strong Project Matrix
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Types of Project Team Members
Those having a long-term relationship with the project.
Those that the PM will need to communicate with closely.
Those with rare skills necessary to project success.
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Project Plans
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Work Breakdown Structure
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Project Master Schedule
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Complexity of Scheduling Project Activities
Large number of activities Precedence relationships Limited time of the project
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Planning and Scheduling Projects
Planning. Determining what must be done and which tasks must precede others.
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.
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Scheduling the Project: PERT and CPM
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Terminology
Activity Event Network Path Critical Path Critical Activities
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Project Planning When Activity Times are Known
Inputs list of the activities that must be completed activity completion times activity precedence relationships
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Project Planning When Activity Times are Known continued
Outputs graphical representation of project time to complete project identification of critical path(s) and activities activity and path slack earliest and latest time each activity can be
started earliest and latest time each activity can be
completed
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Example
Activity Time Preceded ByA 10 --B 7 --C 5 AD 13 AE 4 B,CF 12 DG 14 E
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Network Diagram
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Early Start and Finish Times
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Latest Start and Finish Times
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Activity Slack Time
TES = earliest start time for activity
TLS = latest start time for activity
TEF = earliest finish time for activity
TLF = latest finish time for activity
Activity Slack = TLS - TES = TLF - TEF
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Path Slack
Duration of Critical Path - Path Duration Path Slack
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Activity Slack Times
Activity ES EF LS LF Slack A 0 10 0 10 0 B 0 7 10 17 10 C 10 15 12 17 2 D 10 23 10 23 0 E 15 19 17 21 2 F 23 35 23 35 0 G 19 33 21 35 2
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Project Planning When Activity Times are Uncertain
Inputs Optimistic (to), most likely (tm), and pessimistic (tp)
time estimate for each activity activity precedence relationships
Outputs graphical representation of project expected activity and path completion times variance of activity and path completion times probability that project completed by specified time
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Expected Activity Time and Variance of Activity Time
tt t t
t t
eo m p
p o
46
62
2
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Example
Activity Preceded By to tm tp te 2 A -- 2 6 7 5.50 .694
B -- 5 7 9 7.00 .444
C A 3 5 6 4.83 .250
D A 10 10 10 10.0 0.000
E B,C 3 4 5 4.0 .111
F D 8 12 13 11.5 .694
G E 2 4 8 4.33 1.000
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Network Diagram with Expected Activity Times and Variances
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
BC
D
E
F
G
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Expected Completion Time and Variance of Path A-D-F
Expected completion time = 5.5 + 10 + 11.5=27
Path Variance = 0.694 + 0 + 0.913 = 1.607
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Path Expected Times and Variances
PathExpected
Time VarianceStandardDeviation
A-D-F 27 1.607 1.27
A-C-E-G 14.66 2.055 1.43
B-E-G 15.33 1.555 1.25
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Probabilities of Completion
V timecompletion expected - timecompletion desired
z
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Probability of Project Being Completed on or Before Time 25
z
25 27
127157
..
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.
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Probability of Path A-D-F being Completed on or Before Time 25
5.82%
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Plan E Project Operations Network
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Proper Use of Dummy Activities
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Activity Expected Times and Variances
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Simulating Project Completion Times with Spreadsheets
A
B
C
D
E
F
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Simulating Project Completion Times
Activity Mean (days)StandardDeviation
A 32.1 1.2
B 24.6 3.1
C 22.2 2.2
D 26.1 5.2
E 34.4 6.2
F 34.5 4.1
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Activity Activity Activity Activity Activity Activity Path1 Path 2 Path 3 ProjectA B C D E F (A-C-F) (B-D-F) (B-E) Finish Time
0.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.000.00 0.00 0.00 0.00
Minimum 0.00 0.00 0.00 0.00Maximum 0.00 0.00 0.00 0.00
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Project Management Software Capabilities
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Microsoft Project’s Gantt Chart
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Pert Chart Generated by Microsoft Project
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Calendar of Activities Created by Microsoft Project
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Controlling the Project: Cost and Performance
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Variance Report
Cost standard determined using engineering estimates or analysis of past performance
Actual cost monitored and compared with cost standard
Project manager can exert control if difference between standard and actual (called a variance) is considered significant.
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Cost-Schedule Reconciliation Charts
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Earned Value Chart
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Goldratt’s Critical Chain
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Introduction Similar issues that trouble people about working
on projects regardless of type of project unrealistic due dates too many changes resources and data not available unrealistic budget
These issues/problems related to need to make trade-offs
To what extent are these problems caused by human decisions and practices?
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Three Project Scenarios
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Project Completion Time Statistics
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Observations
Average Completion Times Implications of Assuming Known
Activity Times Shape of the Distribution Worker Time Estimates Impact of Inflated Time Estimates Student Syndrome
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Multitasking
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Alternative Gantt Charts for Projects A and B
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Common Chain of Events
Underestimate time needed to complete project assumption of known activity times and
independent paths Project team members inflate time
estimates Work fills available time
student syndrome early completions not reported
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Common Chain of Events continued
Safety time misused Misused safety time results in missed
deadlines Hidden safety time complicates task of
prioritizing project activities Lack of clear priorities results in poor
multitasking
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Common Chain of Events concluded
Poor multitasking increases task durations
Uneven demand on resources also results due to poor multitasking
More projects undertaken to ensure all resources fully utilized
More projects further increases poor multitasking
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Reversing the Cycle
Reduce number of projects assigned to each individual
Schedule start of new projects based on availability of bottleneck resources
Reduce amount of safety time added to individual tasks and then add some fraction back as project buffer activity durations set so that there is a high
probability the task will not be finished on time
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The Critical Chain
Longest chain of consecutively dependent events considers both precedence relationships
and resource dependencies Project Buffer Feeding Buffer
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Sample Network Diagram
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Project and Feeder Buffers
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