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OMG 402 - Operations ManagementSpring 1997
CLASS 16:
Project Management
Harry Groenevelt
March 1997 2
Agenda
1. Introduction
2. Planning and scheduling– Scheduling with network diagrams– Scheduling resources
3. Planning for risky projects
4. Reducing project time– ‘Crashing’ and changing the project structure– Monitoring and control
5. Summary and comments on Boeing
3
1. Introduction: What is a Project?
A project is...a business within a business, designed to go out of business when the goals are met
Distinguishing attributes:– low volume
– high labor costs, specialization
– customized
project job shop batch line flow continuous flow
4
A Few Examples
• Installation of automatic readers on 1/2-million RG&E gas and electric
meters
• Development of the Advanced Automation System (AAS) for U.S. air traffic control
• Launch of an on-line banking service
• My daughter’s birthday party
5
Introduction: Why Project Management?
• Effective project management of new product development is a competitive priority in markets with short life-cycles
• Poor project management can be financially (and emotionally) destructive to the firm
• Project management is the core business for some firms
6
Introduction: Project Management Stages
Stage Decision Level
Evaluation strategic
Planning tactical
Scheduling operational
Monitoring and control operational
Termination all
Post-project assessment strategic
7
2. Planning and Scheduling
• MacroTemp precedence relationshipsTask Name Duration Predecessors
Notify 1.5 weeks –Mover Appt. 1 –
Phones 1 –Network 1 Phones
Mover walk 0.5 NotifyMover Appt
Move Equip 1 Mover walkPeople move 0.5 NotifySet up people 1 Move people
Move equip
8
earliest start
activity, duration, slack
earliestfinish
latestfinish
latest start
Note: you may see a variety of formats in books and software packages
Planning and Scheduling with Project Networks
(how to represent ‘dependent events’)
_____
activity, duration, ____
_____
__________
This activity ends …
Before this one begins
9
Calculating start dates, stop dates, slack
Notify1.5, _____
Ppl move0.5, _____
Set up ppl1.0, _____
Appt1.0, _____
Walk0.5, _____
Move Equip1.0, _____
Phones1.0, _____
Network0.5, _____
Begin End
Activityduration, slack
earlieststart
earliestfinish
latestfinish
lateststart
10How long will the project take?
Critical Activities and Path(s)
Notify1.5, 0
Ppl move0.5, 1.0
Set up ppl1.0, 0
Appt1.0, 0.5
Walk0.5, 0
Move Equip1.0, 0
Phones1.0, 2.0
Network1.0, 2.0
Begin End
11
Comments on the Critical Path Method (CPM)
• Critical path = longest ‘path’ of activities from start to finish
• Activities on the critical path have slack = 0• Duration of project = duration of critical path (CP)• “CPM” says: focus attention on critical activities
BUT: ignoring other activities may not be wise …
Why?
12
Scheduling Resources
• Scarce resources may be shared between activities Examples:– engineers and programmers for a new electronics product
– trucks and crew for a touring rock concert
• Method for resource scheduling:– determine time and resource needs for each activity
– determine resource availability
– derive schedule and adjust to fit available resources
• Is encoded in software (e.g. Microsoft Project)
13
Task Time Required ImmediatePredecessors
ProgrammersNeeded(approx.)
A. Perform market survey 3 weeks – 0B. Design graphic icons 4 weeks A 0C. Develop flow chart 2 weeks A 10D. Design input/output screens 6 weeks B, C 10E. Module 1 coding 5 weeks C 10F. Module 2 coding 3 weeks C 10G. Module 3 coding 7 weeks E 10H. Module 4 coding 5 weeks E, F 10I. Merge modules and
graphics and test program8 weeks D, G, H 20
Scheduling Resources
Example: a software development project (20 programmers available)
14
AC
TIV
ITIE
S
TIME (IN WEEKS FROM PROJECT START)
0 5 10 15 20 25
ABCDEFGHI
Software Development Project Schedule
GANTT chart with all activities at earliest start date
15
TIME (IN WEEKS FROM PROJECT START)
NR
OF P
RO
GR
AM
MER
S
0
10
20
30
1 3 5 7 9 11 13 15 17 19 21 23 25
Resource Consumption
number of programmers according to earliest start schedule
16
Scheduling Resources
What can be done to satisfy 20-programmer resource constraint?
17
3. Planning for Risky Projects
Example: the Air Traffic Control Technology Project• Financial Risk• Risk to On-Time Delivery
What aspects of the project increased these risks?
How could the risks have been managed?
18
RADAR TRACKINGSOFTWARE DEVELOPMENT 6 months
USER INTERFACE4 months
AIRCRAFT HANDOFFSOFTWARE4 months with probability 1/28 months with probability 1/2
INTEGRATION1 month
Duration of HANDOFF
4 months 8 months
Probability
1/2
Planning for Risky Projects
Quantifying on-time delivery risk.
19
Task Duration Uncertainty
Expected duration of HANDOFF = _______
Expected project duration using expected activity times = ________
Expected project duration = _______
To find the expected task of a project, can we ‘plug in’ the expected duration of each activity?
20
Task Duration Uncertainty
FACT: when large projects are subject to variability:
Expected project duration > Project duration calculated from expected activity times of individual tasks
Typically managers ‘plug in’ expected values and under-estimate project duration
Does this concept sound familiar?
21
0
• A project may have many random (or unknown) activity times and critical paths
• Use simulation to find distributions of project duration, slack times, probabilities that activities lie on critical paths
• Schedules and probabilities updated asproject progresses
0.5
1
3 4 5
Project Duration (weeks)
Cu
mu
lativ
eP
rob
ab
ility
Task Duration Uncertainty
22
4. Reducing Project Time
Direct costs from ‘crashing’ a new product development program:
Indirect costs from (not) crashing:
23
Project time
Pro
ject
cost
Direct CostIndirect Cost
Total Cost
Normaltime
Optimaltime
Expeditedtime
Reducing Project Time: Time/cost Trade-off
24
Reducing Project Time,Using Project Networks as a Guide
1. Construct project network.
2. Select least expensive speed-ups along critical paths until … – Deadline is met– No more speed-up is possible– Other paths become critical
3. If other paths have become critical, return to step 1
25
A B
A
B
Reducing Project Time: Changing the Structure of the Project
• Do things in parallel– simultaneous engineering– multiple test facilities
Note that this can create ‘coupled’ tasks, where eachtask depends on the output of the otherCommunication is vital!
How can communication be encouraged?
26
Changing the Structure
• Shorten or eliminate error correction loops– increase communication and
information accuracy(when are problems in an activity usually reported?)
– use multi-functional teams
– clearly define specifications
27
Changing the Structure
• Do it faster– remove start-up delays
– remove ‘waiting delays’ due to busy resources (especially for activities on the critical path)
– use proven technology and improve communication from project to project
28
Reducing Project Time:Monitoring and Control
• While the project is running:– Progress against schedule
– Cost against scheduled expenditures
– Earned Value = budgeted cost of work performed
29Earned Value ($)
Actu
al C
ost
of
Work
Perf
orm
ed
($)
0
5000
10000
15000
20000
25000
30000
0 5000 10000 15000 20000 25000 30000
earned value = budgeted cost of work performed
cost variance
Monitoring and Control: Earned Value
30
5. Project Management Summary
• Manage effectively to remain competitive
• Project planning:– tools to schedule and balance resources– planning for and managing risk
• Speeding up projects:– examine the project structure– consider multiple performance measures– encourage communication
31
Comments on Boeing
• Consider risks Boeing facesHow does Boeing manage those risks?
• Define criteria for choosing among production options (in-line vs. off-line conversion)
• Consider pros and cons of each choice
• Do not try to draw a project network (at Boeing, they cover walls)