FacilitiesFacilities
Objectives of Facility LayoutObjectives of Facility Layout Minimize material handling costsMinimize material handling costs Utilize space efficientlyUtilize space efficiently Utilize labor efficientlyUtilize labor efficiently Eliminate bottlenecksEliminate bottlenecks Facilitate communication and interaction Facilitate communication and interaction
between workers, between workers and between workers, between workers and their supervisors, or between workers and their supervisors, or between workers and customerscustomers
Reduce manufacturing cycle time or customer service time
Objectives of Facility LayoutObjectives of Facility Layout Eliminate waste or redundant movementEliminate waste or redundant movement Facilitate the entry, exit, and placement of Facilitate the entry, exit, and placement of
material, products, or peoplematerial, products, or people Incorporate safety and security measuresIncorporate safety and security measures Promote product and service qualityPromote product and service quality Encourage proper maintenance activitiesEncourage proper maintenance activities Provide a visual control of operations or Provide a visual control of operations or
activitiesactivities Provide flexibility to adapt to changing Provide flexibility to adapt to changing
conditionsconditions Increase capacityIncrease capacity
Process LayoutProcess Layout Machines grouped by process they performMachines grouped by process they perform
Product LayoutProduct Layout Linear arrangement of workstations to Linear arrangement of workstations to
produce a specific productproduce a specific product
Fixed Position LayoutFixed Position Layout Used in projects where the product cannot Used in projects where the product cannot
be movedbe moved
Basic Types of LayoutsBasic Types of Layouts
Manufacturing Process LayoutManufacturing Process Layout
L
L
L
L
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L
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LM
M
M
M
D
D
D
D
D
D
D
D
G
G
G
G
G
G
A A AReceiving andShipping Assembly
Painting Department
Lathe DepartmentMilling
Department Drilling Department
Grinding Department
P
P
Manufacturing Process LayoutManufacturing Process Layout
L
L
L
L
L
L
L
L
L
LM
M
M
M
D
D
D
D
D
D
D
D
G
G
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G
A A AReceiving andShipping Assembly
Painting Department
Lathe DepartmentMilling
Department Drilling Department
Grinding Department
P
P
Manufacturing Process LayoutManufacturing Process Layout
L
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L
L
LM
M
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D
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D
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G
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A A AReceiving andShipping Assembly
Painting Department
Lathe DepartmentMilling
Department Drilling Department
Grinding Department
P
P
A Product LayoutA Product Layout
InIn
OutOut
Comparison Of Product Comparison Of Product And Process LayoutsAnd Process Layouts
1.1. DescriptionDescription Sequential arrangementSequential arrangement Functional groupingFunctional grouping
of machinesof machines of machines of machines
2.2. Type of ProcessType of Process Continuous, mass Continuous, mass Intermittent, job Intermittent, job shopshop
production, mainlyproduction, mainly batch production, batch production,
assemblyassembly mainly fabrication mainly fabrication
3.3. ProductProduct StandardizedStandardized Varied,Varied,
made to stockmade to stock made to order made to order
4.4. DemandDemand StableStable FluctuatingFluctuating
5.5. VolumeVolume HighHigh LowLow
6.6. EquipmentEquipment Special purposeSpecial purpose General purposeGeneral purpose
7.7. WorkersWorkers Limited skillsLimited skills Varied skillsVaried skills
PRODUCT LAYOUTPRODUCT LAYOUT PROCESS LAYOUTPROCESS LAYOUT
Comparison Of Product Comparison Of Product And Process LayoutsAnd Process Layouts
8. 8. InventoryInventory Low in-process,Low in-process, High in-process,High in-process,
high finished goodshigh finished goods low finished low finished goodsgoods
9. Storage space9. Storage space SmallSmall LargeLarge
10. Material10. Material Fixed pathFixed path Variable pathVariable path
handlinghandling (conveyor) (conveyor) (forklift) (forklift)
11. Aisles11. Aisles NarrowNarrow WideWide
12. Scheduling12. Scheduling Part of balancingPart of balancing DynamicDynamic
13. Layout decision13. Layout decision Line balancingLine balancing Machine locationMachine location
14. 14. GoalGoal Equalize work atEqualize work at Minimize materialMinimize material
each stationeach station handling cost handling cost
15. Advantage15. Advantage EfficiencyEfficiency FlexibilityFlexibility
PRODUCT LAYOUTPRODUCT LAYOUT PROCESS LAYOUTPROCESS LAYOUT
Fixed-Position LayoutsFixed-Position Layouts
Typical of projectsTypical of projectsEquipment, workers, materials, other Equipment, workers, materials, other
resources brought to the siteresources brought to the siteHighly skilled laborHighly skilled laborOften low fixed Often low fixed Typically high variable costsTypically high variable costs
Designing Process LayoutsDesigning Process Layouts
Minimize material handling costsMinimize material handling costs Block DiagrammingBlock Diagramming
Minimize nonadjacent loadsMinimize nonadjacent loads Use when quantitative data Use when quantitative data
is availableis available
Relationship DiagrammingRelationship Diagramming Based on location preference between areasBased on location preference between areas Use when quantitative data is not availableUse when quantitative data is not available
Block DiagrammingBlock DiagrammingCreate load summary chartCreate load summary chartCalculate composite (two way) Calculate composite (two way)
movementsmovementsDevelop trial layouts minimizing Develop trial layouts minimizing
number of nonadjacent loadsnumber of nonadjacent loads
Block DiagramsBlock Diagrams
3
2
5
1 4
(a) Initial block diagram(a) Initial block diagram
Block DiagramsBlock Diagrams
12
3
4
53
2
5
1 4
(a) Initial block diagram(a) Initial block diagram (b) Final block diagram(b) Final block diagram
Relationship DiagrammingRelationship Diagramming(Murther’s Grid)(Murther’s Grid)
Used when quantitative Used when quantitative data is not availabledata is not available
Muther’s grid displays Muther’s grid displays preferencespreferences
Denote location Denote location preferences with preferences with weighted linesweighted lines
Relationship Diagramming Relationship Diagramming ExampleExample
ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
Relationship Diagramming Relationship Diagramming ExampleExample
AA AA
AA OO
OO
OOOO
OO
UU
UU UU
UU
EEXX
II
ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
AA Absolutely Absolutely necessarynecessaryEE Especially Especially importantimportantIIImportantImportantOO OkayOkayUUUnimportantUnimportantXXUndesirableUndesirable
Relationship Diagramming Relationship Diagramming ExampleExample
AA A
A O
OO
OOOO
OO
UU
UU UU
UU
EXX
I
ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
AA Absolutely Absolutely necessarynecessaryEE Especially Especially importantimportantIIImportantImportantOO OkayOkayUUUnimportantUnimportantXXUndesirableUndesirable
Relationship Diagramming Relationship Diagramming ExampleExample
11 11
11 44
44
4444
44
55
55 55
55
2266
33
ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
11 Absolutely Absolutely necessarynecessary22 Especially Especially importantimportant33 ImportantImportant44 OkayOkay55UnimportantUnimportant66UndesirableUndesirable
Relationship Diagramming Relationship Diagramming ExampleExample
11 11
11 44
44
4444
44
55
55 55
55
2266
33
ProductionProduction
OfficesOffices
StockroomStockroom
Shipping and Shipping and receivingreceiving
Locker roomLocker room
ToolroomToolroom
11 Absolutely Absolutely necessarynecessary22 Especially Especially importantimportant33 ImportantImportant44 OkayOkay55UnimportantUnimportant66UndesirableUndesirable
Service LayoutsService LayoutsUsually process layouts due to Usually process layouts due to
customers needscustomers needsMinimize flow of customers or Minimize flow of customers or
paperworkpaperworkRetailing tries to maximize customer Retailing tries to maximize customer
exposure to productsexposure to productsComputer programs consider shelf Computer programs consider shelf
space, demand, profitabilityspace, demand, profitabilityLayouts must be aesthetically pleasingLayouts must be aesthetically pleasing
Designing Product LayoutsDesigning Product Layouts
Product layouts or assembly linesProduct layouts or assembly linesDevelop precedence diagram of Develop precedence diagram of
taskstasksJobs divided into work elementsJobs divided into work elementsAssign work elements to Assign work elements to
workstationsworkstationsTry to balance the amount work of Try to balance the amount work of
each workstationeach workstation
Line BalancingLine BalancingPrecedence diagramPrecedence diagram
Network showing order Network showing order of tasks and restrictions of tasks and restrictions on their performanceon their performance
Cycle timeCycle time Maximum time product Maximum time product
spends at any one spends at any one workstationworkstation
Hybrid LayoutsHybrid LayoutsCellular layoutsCellular layouts
Group machines into machining cellsGroup machines into machining cells
Flexible manufacturing systemsFlexible manufacturing systems Automated machining & material Automated machining & material
handling systemshandling systems
Mixed-model assembly linesMixed-model assembly lines Produce variety of models on one lineProduce variety of models on one line
Cellular LayoutsCellular Layouts1.1. Identify families of parts with Identify families of parts with
similar flow pathssimilar flow paths
2.2. Group machines into cells Group machines into cells based on part familiesbased on part families
3.3. Arrange cells so material Arrange cells so material movement is minimizedmovement is minimized
4.4. Locate large shared machines Locate large shared machines at point of useat point of use
Advantages Of Advantages Of Cellular LayoutsCellular Layouts
Reduced material handling and transit timeReduced material handling and transit time Reduced setup timeReduced setup time Reduced work-in-process inventoryReduced work-in-process inventory Better use of human resourcesBetter use of human resources Easier to control - visibilityEasier to control - visibility Easier to automateEasier to automate
Disadvantages Of Disadvantages Of Cellular LayoutsCellular Layouts
Inadequate part familiesInadequate part familiesPoorly balanced cellsPoorly balanced cellsExpanded training and scheduling Expanded training and scheduling
of workersof workers Increased capital investmentIncreased capital investment
Manufacturing Manufacturing CellCell
Key:Key:
SS = Saw= SawLL = Lathe= LatheHMHM = Horizontal milling = Horizontal milling
machinemachineVMVM = Vertical milling machine= Vertical milling machineGG = Grinder= Grinder
Paths of three Paths of three workers moving workers moving within cellwithin cell
Material Material movementmovement
InIn OutOutWorker 1Worker 1
Worker 2Worker 2
Worker 3Worker 3
Dir
ecti
on
of
par
t m
ove
men
t w
ith
in c
ell
Dir
ecti
on
of
par
t m
ove
men
t w
ith
in c
ell
S
L
HM
VM
G
VM
L
Final inspection
Finished part
Flexible Manufacturing Flexible Manufacturing SystemsSystems
Automated machining operationsAutomated machining operations Automated material handlingAutomated material handling Automated tool changersAutomated tool changers Computer controlled systemComputer controlled system Designed around size of parts processed Designed around size of parts processed
& average processing time for parts& average processing time for parts Can process wide variety of items quicklyCan process wide variety of items quickly
Mixed Model Mixed Model Assembly LinesAssembly Lines
Produce multiple models in any Produce multiple models in any order on one assembly lineorder on one assembly line
Harley, OpelHarley, Opel Issues in mixed model linesIssues in mixed model lines
Line balancingLine balancing U-shaped lineU-shaped line Flexible workforceFlexible workforce Model sequencingModel sequencing
Facility Location Facility Location ModelsModels
Types Of FacilitiesTypes Of Facilities
Heavy manufacturingHeavy manufacturingAuto plants, steel mills, chemical plantsAuto plants, steel mills, chemical plants
Light industryLight industrySmall components mfg, assemblySmall components mfg, assembly
Warehouse & distribution centersWarehouse & distribution centersRetail & serviceRetail & service
Factors in Heavy Factors in Heavy Manufacturing LocationManufacturing Location
Construction costsConstruction costsLand costsLand costsRaw material and finished goods Raw material and finished goods
shipment modesshipment modesProximity to raw materialsProximity to raw materialsUtilitiesUtilitiesLabor availabilityLabor availability
Factors in Light Factors in Light Industry LocationIndustry Location
Construction costsConstruction costsLand costsLand costsEasily accessible Easily accessible
geographic regiongeographic regionEducation & training capabilitiesEducation & training capabilities
Factors in Factors in Warehouse LocationWarehouse Location
Transportation costsTransportation costsProximity to markets (Customers)Proximity to markets (Customers)
Transportation and distribution industry--based on business and employment base providing transportation, distribution, warehousing and related services. Work force--geared to existing and available logistics-related workers in the area. Road infrastructure--measures factors like available lane miles per capita, interstate highway access, miles of paved roads etc. Road density, congestion and safety--ranks the city on traffic volumes and delays as well as accident statistics and other factors affecting the smooth flow of traffic. Road condition--draws on state performance and includes condition of highways and bridges among other measures. Interstate highway--includes access to interstate highways, spending on highway construction and maintenance. Taxes and fees--provides a measure of logistics-related costs, including highway and fuel taxes and related business activity taxes. Railroad--offers a state-based rank of access to Class 1 and other rail services and miles of track. Waterborne commerce--includes ocean port capacity as well as inland waterways. Air cargo--ranks the city on its access to cargo services, including wide-body passenger service by combination carriers, international and expedited services.
Source: Logistics Today, “The Logistics Quotient: Midwest
2007 Rating METROPOLITAN AREA
T&D Industry Metro Rank
Work Force Cost Metro Rank
Road Infra-structure Metro Rank
Road D/C/S Metro Rank
Road Condition State Rank
Interstate Highways Metro Rank
Taxes & Fees State Rank
Rail Road Metro Rank
Waterborne Commerce Metro Rank
Air Cargo Metro Rank
5-Star Champaign-Urbana, Ill.
159 39 84 65 73 36 344 24 119 134
5-Star Charleston, W.Va. MSA
115 126 223 171 251 36 247 63 6 115
5-Star Chicago-Naperville-Joliet, Ill.-Ind.-Wis. MSA
2 26 103 348 87 2 294 1 5 5
5-Star Cincinnati-Middletown, Ohio-Ky.-Ind. MSA
23 45 222 209 189 15 149 34 24 20
5-Star Cleveland-Elyria-Mentor, Ohio MSA
25 18 146 150 192 5 208 17 14 44
5-Star Columbus, Ohio MSA
21 53 146 250 192 36 208 34 52 34
5-Star Davenport-Moline-Rock Island, Iowa-Ill. MSA
99 115 162 82 109 23 288 63 51 111
Source: Logistics Today, “The Logistics Quotient: Midwest
Layout ConsiderationsLayout Considerations• Cross docking• dock doors - how many• picking techniques• bulk storage• safety/backup stocks• product flow• conveyors?• Vehicle flow
Warehouse Size Warehouse Size ConsiderationsConsiderations
• Customer service level• layout• # of products (Stock Keeping Units - SKUs)• customer base• size of products• racks/shelving• demand variability• MHE requirements/aisle size• regulations - CAL OSHA - earthquake; safety; fire
Factors in Retail LocationFactors in Retail Location
Proximity to customersProximity to customersEase of customer entry and Ease of customer entry and
exitexitLocation is everythingLocation is everything
Global Location FactorsGlobal Location Factors
Government stabilityGovernment stability Government regulationsGovernment regulations Political and economic Political and economic
systemssystems Economic stability and Economic stability and
growthgrowth Exchange ratesExchange rates CultureCulture ClimateClimate Export import regulations, Export import regulations,
duties and tariffsduties and tariffs
Raw material availability Raw material availability Number and proximity of Number and proximity of
supplierssuppliers Transportation and Transportation and
distribution systemdistribution system Labor cost and educationLabor cost and education Available technologyAvailable technology Commercial travelCommercial travel Technical expertiseTechnical expertise Cross-border trade Cross-border trade
regulationsregulations Group trade agreementsGroup trade agreements
Regional Location FactorsRegional Location Factors Labor (availability, Labor (availability,
education, cost and education, cost and unions)unions)
Proximity of Proximity of customerscustomers
Number of customersNumber of customers Construction/leasing Construction/leasing
costscosts Land costsLand costs Modes and quality of Modes and quality of
transportationtransportation Transportation costsTransportation costs
Incentive packages Incentive packages Governmental Governmental
regulationsregulations Environmental Environmental
regulationsregulations Raw material Raw material
availabilityavailability Commercial travelCommercial travel ClimateClimate InfrastructureInfrastructure Quality of lifeQuality of life
Regional Location FactorsRegional Location Factors
Community Community governmentgovernment
Local business Local business regulationsregulations
Government servicesGovernment services Business climateBusiness climate Community servicesCommunity services TaxesTaxes
Availability of sitesAvailability of sites Financial ServicesFinancial Services Community Community
inducementsinducements Proximity of suppliersProximity of suppliers Education systemEducation system
Site Location FactorsSite Location Factors
Customer baseCustomer base Construction/ Construction/
leasing costleasing cost Land costLand cost Site sizeSite size TransportationTransportation UtilitiesUtilities
Zoning restrictionsZoning restrictions TrafficTraffic Safety/securitySafety/security CompetitionCompetition Area business Area business
climateclimate Income levelIncome level
Location IncentivesLocation Incentives
Tax credits Wal-Mart in WyandotteTax credits Wal-Mart in WyandotteRelaxed government regulationRelaxed government regulationJob trainingJob training Infrastructure improvementInfrastructure improvementMoneyMoney
Locate facility at center of geographic area Locate facility at center of geographic area Based on weight and distance traveledBased on weight and distance traveled Establish grid-map of areaEstablish grid-map of area Identify coordinates Identify coordinates
and weights shipped and weights shipped for each locationfor each location
Center-of-Gravity TechniqueCenter-of-Gravity Technique
Center of gravity
DataWeight X coord Y coord
Location 1 0.2 100 400Location 2 0.2 250 200Location 3 0.2 50 125Location 4 0.2 300 300Location 5 0.2 10 475
ResultsSum 1 710 1500Average 142 300Weighted Average 142 300
Distance tableX coord 100 250 50 300 10Y coord 400 200 125 300 475
X coord Y coord Location 1 Location 2 Location 3 Location 4 Location 5100 400 Location 1 0 250 279.5085 223.6068 117.1537250 200 Location 2 250 0 213.6001 111.8034 365
50 125 Location 3 279.5085 213.6001 0 305.1639 352.2783300 300 Location 4 223.6068 111.8034 305.1639 0 338.7108
10 475 Location 5 117.1537 365 352.2783 338.7108 0Total 870.269 940.4035 1150.551 979.2849 1173.143Weighted Total 174.0538 188.0807 230.1102 195.857 234.6286
Location
0
100
200
300
400
500
0 100 200 300 400
Center of gravity
DataWeight X coord Y coord
Location 1 0.3 100 400Location 2 0.25 250 200Location 3 0.1 50 125Location 4 0.2 300 300Location 5 0.15 10 475
ResultsSum 1 710 1500Average 142 300Weighted Average 159 313.75
Distance tableX coord 100 250 50 300 10Y coord 400 200 125 300 475
X coord Y coord Location 1 Location 2 Location 3 Location 4 Location 5100 400 Location 1 0 250 279.5085 223.6068 117.1537250 200 Location 2 250 0 213.6001 111.8034 365
50 125 Location 3 279.5085 213.6001 0 305.1639 352.2783300 300 Location 4 223.6068 111.8034 305.1639 0 338.7108
10 475 Location 5 117.1537 365 352.2783 338.7108 0Total 870.269 940.4035 1150.551 979.2849 1173.143Weighted Total 152.7453 173.4707 251.1271 176.3559 229.3661
Location
0
100
200
300
400
500
0 100 200 300 400
Project ManagementProject Managementand Operationsand Operations
Project Project ManagementManagement
First Essay on Project Management:1697 – “An Essay Upon Projects”
1959 HBR Article – “The Project Manager
Air Force Manual 1964
Project ManagementProject ManagementProject management is the discipline of organizing and managing resources in such a way that these resources deliver all the work required to complete a project within defined scope, quality, time and cost constraints. A project is a temporary and one-time endeavor undertaken to create a unique product or service, that brings about beneficial change or added value. This property of being a temporary and a one-time undertaking contrasts with processes, or operations, which are permanent or semi-permanent ongoing functional work to create the same product or service over and over again. (wikipedia)
Project ManagementProject ManagementIn today’s global marketplace, complexity and speed are certainties. In such an environment, a good axiom for project management is, Do It, Do It Right, Do It Right Now. Creating clear direction, efficiency, timely response, and quality outcomes requires project managers who are agile -- adept at change. The associated disciplinary areas are clearly spelled out in the following PMI definition.
“Project management is the application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project. Project management is comprised of five Project Management Process Groups – Initiating Processes, Planning Processes, Executing Processes, Monitoring and Controlling Processes, and Closing Processes.
Source: Project Management Institute - http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501
Program management is the process of managing multiple ongoing inter-dependent projects. An example would be that of designing, manufacturing and providing support infrastructure for an automobile manufacturer. This requires hundreds, or even thousands, of separate projects. (wikipedia)
Program ManagementProgram Management
Elements of Project Elements of Project ManagementManagement
Project teamProject team Individuals from different departments within Individuals from different departments within
companycompany Matrix organizationMatrix organization
Team structure with members from different Team structure with members from different functional areas depending on skills neededfunctional areas depending on skills needed
Project manager - Leader of project teamProject manager - Leader of project team Project Charter – high level description of what is Project Charter – high level description of what is
to be accomplished in a project and delegates to be accomplished in a project and delegates authority to project manager to implement authority to project manager to implement actions to complete projectactions to complete project
Project PlanningProject PlanningStatement of workStatement of work
Written description of goals, work & Written description of goals, work & time frame of projecttime frame of project
Activities require labor, resources & Activities require labor, resources & timetime
Precedence relationship shows Precedence relationship shows sequential relationship of project sequential relationship of project activitiesactivities
Elements of Elements of Project PlanningProject Planning
Define project objective(s)Define project objective(s) Identify activitiesIdentify activitiesEstablish precedence relationshipsEstablish precedence relationshipsMake time estimatesMake time estimatesDetermine project completion timeDetermine project completion timeCompare project schedule objectivesCompare project schedule objectivesDetermine resource requirements to Determine resource requirements to
meet objectivemeet objective
Work Breakdown Work Breakdown StructureStructure
Hierarchical organization of work to Hierarchical organization of work to be done on a projectbe done on a project
Project broken down into modulesProject broken down into modules Modules subdivided into Modules subdivided into
subcomponents, activities, and taskssubcomponents, activities, and tasks Identifies individual tasks, workloads, Identifies individual tasks, workloads,
and resource requirementsand resource requirements
Project ControlProject ControlAll activities identified and includedAll activities identified and includedCompleted in proper sequenceCompleted in proper sequenceResource needs identifiedResource needs identifiedSchedule adjustedSchedule adjustedMaintain schedule and Maintain schedule and
budgetbudgetComplete on timeComplete on time
A Gantt ChartA Gantt Chart
Popular tool for project schedulingPopular tool for project schedulingGraph with bar for representing the Graph with bar for representing the
time for each tasktime for each taskProvides visual display of project Provides visual display of project
schedulescheduleAlso shows slack for activitiesAlso shows slack for activities
Amount of time activity can be Amount of time activity can be delayed without delaying projectdelayed without delaying project
Around since 1914
Gantt ChartsGantt Charts
Gantt charts were employed on major infrastructure projects including the Hoover Dam and Interstate highway system and still are an important tool in project management.
Gantt described two principles for his charts:
1. measure activities by the amount of time needed to complete them
2. the space on the chart can be used the represent the amount of the activity that should have been done in that time.
A Gantt ChartA Gantt Chart| | | | |
Activity
Design house and obtain financing
Lay foundation
Order and receive materials
Build house
Select paint
Select carpet
Finish work
00 22 44 66 88 1010MonthMonth
MonthMonth11 33 55 77 99
Figure 6.2Figure 6.2
Example of Gantt Chart Example of Gantt Chart Problem Problem
6.8
Project Management
DataTime Precedence 1Precedence 2Precedence 3Precedence 4Precedence 5Precedence 6Precedence 7
a 3b 3 ac 5 ad 4 a ce 3 cf 2 d e
Results
Task Early StartEarly Finish Late Start
Late Finish Slack
a 0 3 0 3 0b 3 6 11 14 8c 3 8 3 8 0d 8 12 8 12 0e 8 11 9 12 1f 12 14 12 14 0
Project 14
Gantt Chart
0 5 10 15
a
c
e
Activ
ity
Time
CPM/PERTCPM/PERTCritical Path Method (CPM)Critical Path Method (CPM)
DuPont & Remington-Rand (1956)DuPont & Remington-Rand (1956) Deterministic task timesDeterministic task times
Project Eval. & Review Technique Project Eval. & Review Technique (PERT)(PERT)
US Navy, LockheedUS Navy, Lockheed Multiple task time estimatesMultiple task time estimates
PERT/CPMPERT/CPM
Program Evaluation and Review Technique (PERT): developed in conjunction with the development of the Polaris missile program for submarines – developed by the US Navy with Lockheed as the lead contractor
Critical Path Method (CPM): developed through a joint venture between the DuPont Corporation and the Remington Rand Corporation – the original purpose was to monitor and evaluate plant maintenance management projects.
Project Network for a HouseProject Network for a House
3322 00
11
33
11 1111
1 2 4 6 7
3
5
Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
Figure 6.4Figure 6.4
Critical PathCritical Path A path is a sequence of connected A path is a sequence of connected
activities running from start to end activities running from start to end node in networknode in network
The critical path is the The critical path is the path with the longest path with the longest duration in the networkduration in the network
Project cannot be Project cannot be completed in less than completed in less than the time of the critical the time of the critical pathpath
The Critical The Critical PathPath
A:A: 1-2-3-4-6-71-2-3-4-6-73 + 2 + 0 + 3 + 1 = 93 + 2 + 0 + 3 + 1 = 9 months months
B:B: 1-2-3-4-5-6-71-2-3-4-5-6-73 + 2 + 0 + 1 + 1 + 1 = 83 + 2 + 0 + 1 + 1 + 1 = 8 months months
C:C: 1-2-4-6-71-2-4-6-73 + 1 + 3 + 1 = 83 + 1 + 3 + 1 = 8 months months
D:D: 1-2-4-5-6-71-2-4-5-6-73 + 1 + 1 + 1 + 1 = 73 + 1 + 1 + 1 + 1 = 7 months months
33
22 00
11
33
11 11
111 2 4 6 7
3
5
Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
The Critical The Critical PathPath
33
22 00
11
33
11 11
111 2 4 6 7
3
5
Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
1 2 4 6 7
3
5
3
2 0
1
3
1 1
Start at 3 months
Start at 5 months
1
Finish at 9 months
Start at 8 months
Figure 6.6
Activity Start Times
Early Early TimesTimes
ESES - earliest time activity can start - earliest time activity can start Forward pass starts at beginning of Forward pass starts at beginning of
CPM/PERT network to determine CPM/PERT network to determine ESES times times EF = ESEF = ES + activity time + activity time
ESESijij == maximum (EFmaximum (EFii))
EFEFijij == ESESijij - - ttijij ESES1212 == 00
EFEF1212 == ESES1212 -- t t1212
== 0 + 3 = 30 + 3 = 3 monthsmonths
33
22 00
11
33
11 11
111 2 4 6 7
3
5
Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
Why is this important?
Late TimesLate Times
LSLS - latest time activity can start & - latest time activity can start & not delay projectnot delay project
Backward pass starts at end of Backward pass starts at end of CPM/PERT network to determine CPM/PERT network to determine LSLS timestimes
LF = LS + LF = LS + activity timeactivity timeLSLSijij == LFLFijij -- ttijijLFLFijij = minimum (LS= minimum (LSjj))
Who Cares? Why is this Important?
Activity Slack Activity Slack DataData
33
22 00
11
33
11 11
111 2 4 6 7
3
5
Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
ActivityActivity LSLS ESES LFLF EFEF SlacksSlacks
*1-2*1-2 00 00 33 33 00*2-3*2-3 33 33 55 55 002-42-4 44 33 55 44 11
*3-4*3-4 55 55 55 55 004-54-5 66 55 77 66 11
*4-6*4-6 55 55 88 88 005-65-6 77 66 88 77 11
*6-7*6-7 88 88 99 99 00* Critical path* Critical path
Activity Slack Activity Slack DataData
33
22 00
11
33
11 11
111 2 4 6 7
3
5
Lay Lay foundationfoundation
Design house Design house and obtain and obtain financingfinancing
Order and Order and receive receive materialsmaterials
DummyDummy
Finish Finish workwork
Select Select carpetcarpet
Select Select paintpaint
Build Build househouse
ActivityActivity LSLS ESES LFLF EFEF SlacksSlacks
*1-2*1-2 00 00 33 33 00*2-3*2-3 33 33 55 55 002-42-4 44 33 55 44 11
*3-4*3-4 55 55 55 55 004-54-5 66 55 77 66 11
*4-6*4-6 55 55 88 88 005-65-6 77 66 88 77 11
*6-7*6-7 88 88 99 99 00* Critical path* Critical path
1 2 4 6 7
3
5
3
2 0
1
3
1 1
1
Figure 6.10
Activity Slack
S = 0
S = 1S = 1
S = 1
S = 0 S = 0
S = 0
S = 0
Project CrashingProject CrashingCrashing is reducing project time Crashing is reducing project time
by expending additional resourcesby expending additional resourcesCrash time is an amount of time an Crash time is an amount of time an
activity is reducedactivity is reducedCrash cost is the cost of reducing Crash cost is the cost of reducing
the activity timethe activity timeGoal is to reduce project duration Goal is to reduce project duration
at minimum costat minimum cost
Crashing costs increase as project Crashing costs increase as project duration decreasesduration decreases
Indirect costs increase as project Indirect costs increase as project duration increasesduration increases
Reduce project length Reduce project length as long as crashing as long as crashing costs are less than costs are less than indirect costsindirect costs
Time-Cost Relationship Time-Cost Relationship
Life Cycle ManagementLife Cycle Management
• Long term view of projects to guide decision making – solutions that provide life time success vice short term
• Acquisition; development; production; introduction; sustainment; disposal
• Links system costs to big picture; better use of resources; minimize total cost of ownership
What’s Next What’s Next
• Mid Term
• Chapters 10, 11