1. PROJECT MANAGEMENT (N MBA 034)

2. What is a Project? Project Defined Major Characteristics of a Project
A complex, Nonroutine, One-time effort
limited by time, budget, resources ( Triple Constraint)
Performance specifications designed to meet customer needs.
Major Characteristics of a Project
Has an established objective.
Has a defined life span with a beginning and an end.
Requires across-the-organizational participation.
Involves doing something never been done before.
Has specific time, cost, and performance requirements.

3. Project Characteristics
Single unit
Many related activities
Difficult production planning and inventory control
General purpose equipment
High labor skills

4. Building Construction
Examples of Projects
Building Construction
Research Project

5. Programs versus Projects
Program Defined
A series of coordinated, related, multiple projects that continue over an extended time and are intended to achieve a goal.
A higher level group of projects targeted at a common goal.
Example:
Project: completion of a required course in project management.
Program: completion of all courses required for a business major.

6. Comparison of Routine Work with Projects
Routine, Repetitive Work
Taking class notes
Daily entering sales receipts into the accounting ledger
Responding to a supply-chain request
Practicing scales on the piano
Routine manufacture of an Apple iPod
Attaching tags on a manufactured product
Projects
Writing a term paper
Setting up a sales kiosk for a professional accounting meeting
Developing a supply-chain information system
Writing a new piano piece
Designing an iPod that is approximately 2 X 4 inches, interfaces with PC, and stores 10,000 songs
Wire-tag projects for GE and Wal-Mart

7. Project Life Cycle

8. Project Management Activities
Planning
Objectives
Resources
Work break-down structure
Organization
Scheduling
Project activities
Start & end times
Network
Controlling
Monitor, compare, revise, action

9. Project Organization Often temporary structure
Uses specialists from entire company
Headed by project manager
Coordinates activities
Monitors schedule and costs
Permanent structure called ‘MATRIX ORGANIZATION’

10. Project Organization Works Best When
Work can be defined with a specific goal and deadline
The job is unique or somewhat unfamiliar to the existing organization
The work contains complex interrelated tasks requiring specialized skills
The project is temporary but critical to the organization
The project cuts across organizational lines

11. A Sample Project Organization
Marketing
Finance
Human
Resources
Design
Quality
Mgt
Production
President
Test
Engineer
Mechanical
Project No. 1
Project
Manager
Technician
Technician
Project No. 2
Project
Manager
Electrical
Engineer
Computer Engineer

12. Marketing Operations Engineering Finance
Matrix Organization
Marketing Operations Engineering Finance
Project 1
Project 2
Project 3
Project 4

13. The Importance of Project Management
Factors leading to the increased use of project management:
Compression of the product life cycle
Knowledge explosion
Triple bottom line (planet, people, profit)
Corporate downsizing
Increased customer focus
Small projects represent big problems

14. Benefits of an Integrative Approach to Project Management
Integration (or centralization) of project management provides senior management with:
An overview of all project management activities
A big picture of how organizational resources are used
A risk assessment of their portfolio of projects
A rough metric of the firm’s improvement in managing projects relative to others in the industry
Linkages of senior management with actual project execution management

15. Integrated Project Management Systems
Problems resulting from the use of piecemeal project management systems:
Do not tie together the overall strategies of the firm.
Fail to prioritize selection of projects by their importance of their contribution to the firm.
Are not integrated throughout the project life cycle.
Do not match project planning and controls with organizational culture to make appropriate adjustments in support of project endeavors.

16. Integrated Management of Projects
FIGURE 1.2

17. The Technical and Sociocultural Dimensions of the Project Management Process

18. Project Management Techniques
Gantt chart
Critical Path Method (CPM)
Program Evaluation and Review Technique (PERT)

19. A Simple Gantt Chart Time J F M A M J J A S Design Prototype Test
Revise
Production

20. A Comparison of AON and AOA Network Conventions
Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
C and D cannot begin until both A and B are completed
(d) A B C D
C cannot begin until both A and B are completed
D cannot begin until B is completed
A dummy activity is introduced in AOA
(e) C A B D
Dummy activity

21. A Comparison of AON and AOA Network Conventions
Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
B and C cannot begin until A is completed
D cannot begin until both B and C are completed
A dummy activity is again introduced in AOA
(f) A C D B
Dummy activity

22. Determining the Project Schedule
Perform a Critical Path Analysis
The critical path is the longest path through the network
The critical path is the shortest time in which the project can be completed
Any delay in critical path activities delays the project
Critical path activities have no slack time

23. Determining the Project Schedule
Perform a Critical Path Analysis
Earliest start (ES) = earliest time at which an activity can start, assuming all predecessors have been completed
Earliest finish (EF) = earliest time at which an activity can be finished
Latest start (LS) = latest time at which an activity can start so as to not delay the completion time of the entire project
Latest finish (LF) = latest time by which an activity has to be finished so as to not delay the completion time of the entire project

24. Determining the Project Schedule
Activity Format
Figure 3.9 A
Activity Name or Symbol
Earliest Start ES
Earliest Finish EF
Latest Start LS
Latest Finish LF
Activity Duration 2

25. Begin at starting event and work forward
Forward Pass
Begin at starting event and work forward
Earliest Start Time Rule:
If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor
If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors
ES = Max {EF of all immediate predecessors}

26. Begin at starting event and work forward
Forward Pass
Begin at starting event and work forward
Earliest Finish Time Rule:
The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time
EF = ES + Activity time

27. EXPECTED TIME t = (a + 4m + b)/6
Computing Variance
TABLE 3.4
Time Estimates (in weeks)
ACTIVITY
OPTIMISTIC a
MOST LIKELY m
PESSIMISTIC b
EXPECTED TIME t = (a + 4m + b)/6
VARIANCE [(b – a)/6]2 A 1 2 3
.11 B 4 C D 6
.44 E 7
1.00 F 9
1.78 G 11 5 H

28. Advantages of PERT/CPM
Especially useful when scheduling and controlling large projects
Straightforward concept and not mathematically complex
Graphical networks help highlight relationships among project activities
Critical path and slack time analyses help pinpoint activities that need to be closely watched

29. Advantages of PERT/CPM
Project documentation and graphics point out who is responsible for various activities
Applicable to a wide variety of projects
Useful in monitoring not only schedules but costs as well

30. Limitations of PERT/CPM
Project activities have to be clearly defined, independent, and stable in their relationships
Precedence relationships must be specified and networked together
Time estimates tend to be subjective and are subject to fudging by managers
There is an inherent danger of too much emphasis being placed on the longest, or critical, path