1. OPERATIONS MANAGEMENT for MBAs Fourth Edition
Meredith and Shafer
Prepared by:
Al Ansari
Seattle University
John Wiley and Sons, Inc.
Chapter 6: Managing Process Improvement Projects

2. Chapter 6: Managing Process Improvement Projects

3. Introduction
Chapter 6: Managing Process Improvement Projects

4. Background
Project management concerned with managing organizational activities.
Often used to integrate and coordinate diverse activities.
Projects are special types of processes.
Chapter 6: Managing Process Improvement Projects

5. Defining a Project
Projects are processes that are performed infrequently and ad hoc, with a clear specification of the desired objective.
Chapter 6: Managing Process Improvement Projects

6. 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
Chapter 6: Managing Process Improvement Projects

7. 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
Chapter 6: Managing Process Improvement Projects

8. Planning the Project
Chapter 6: Managing Process Improvement Projects

9. The Project Portfolio
The project portfolio also known as the aggregate project plan is to achieve the organization’s goals
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10. Four Categories of Project
Derivative projects. Seek to make incremental improvements in the output and/or process.
Breakthrough projects. Are at the opposite end of the continuum from derivative projects and seek the development of a new generation of outputs.
Platform projects. Fall between derivative and breakthrough projects.
R&D projects. Entail working with basic technology to develop new knowledge.
Chapter 6: Managing Process Improvement Projects

11. Aggregate Project Plan
Chapter 6: Managing Process Improvement Projects

12. An Example of Aggregate Project Plan
Chapter 6: Managing Process Improvement Projects

13. Life Cycle of a Project (Stretched-S) & (Exponential)
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14. Organizing the Project Team
Ad Hoc Project Form
Weak Functional Matrix
Strong Project Matrix
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15. 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.
Chapter 6: Managing Process Improvement Projects

16. Project Plans
Chapter 6: Managing Process Improvement Projects

17. Elements of Project Charter
Overview A short summary of what the client expects from the project.
Goals, or Scope Contains a more detailed statement of the general goals
Business Case Describes the justification for the project
General Approach Describes both the managerial and the technical approaches
Chapter 6: Managing Process Improvement Projects

18. Elements of Project Charter Cont.
Contractual Aspects This includes a complete list and description of all
reporting requirements, customer-supplied resources, liaison arrangements, etc.,
Schedule and Milestones This outlines the schedule and lists milestone events.
Chapter 6: Managing Process Improvement Projects

19. Elements of Project Charter Cont.
Resources -- The project budget and cost
Personnel
Risk Management Plan This covers potential problems that could affect the project.
Evaluation Method Every project should be evaluated against standards
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20. Three Project Objectives
Chapter 6: Managing Process Improvement Projects

21. Work Breakdown Structure
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22. Project Master Schedule
Chapter 6: Managing Process Improvement Projects

23. Complexity of Scheduling Project Activities
Large number of activities
Precedence relationships
Limited time of the project
Chapter 6: Managing Process Improvement Projects

24. 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.
Chapter 6: Managing Process Improvement Projects

25. Scheduling the Project
Chapter 6: Managing Process Improvement Projects

26. Terminology Activity Event Network Path Critical Path
Critical Activities
Chapter 6: Managing Process Improvement Projects

27. Project Scheduling with Certain Activity Times: A Process Improvement
Inputs
list of the activities that must be completed
activity completion times
activity precedence relationships
Chapter 6: Managing Process Improvement Projects

28. Project Scheduling with Certain Activity Times: A Process improvement
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
Chapter 6: Managing Process Improvement Projects

29. Example
Chapter 6: Managing Process Improvement Projects

30. Network Diagram
Chapter 6: Managing Process Improvement Projects

31. 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
Chapter 6: Managing Process Improvement Projects

32. Path Slack Path Slack = Duration of Critical Path - Path Duration
Chapter 6: Managing Process Improvement Projects

33. Project Scheduling with Uncertain Activity Times
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
Chapter 6: Managing Process Improvement Projects

34. Expected Activity Time and Variance of Activity Time
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35. Example
Chapter 6: Managing Process Improvement Projects

36. Probabilities of Completion
Chapter 6: Managing Process Improvement Projects

37. Probability of Project Being Completed on or Before Time 23
Only path A-D-J has reasonable chance of taking 21 or more:
Z = / = 0.818
From standard normal table in Appendix A, there is a 79 % chance of completing project on or before time 23.
Chapter 6: Managing Process Improvement Projects

38. Probability of Path A-D-J being Completed on or Before Time 23
Chapter 6: Managing Process Improvement Projects

39. Simulating Project Completion Times
Chapter 6: Managing Process Improvement Projects

40. Simulating Project Completion Times
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41. Chapter 6: Managing Process Improvement Projects

42. Project Management Software Capabilities
Chapter 6: Managing Process Improvement Projects

43. Microsoft Project’s Gantt Chart
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44. PERT Chart Generated by Microsoft Project
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45. Calendar of Activities Created by Microsoft Project
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46. Project and Feeder Buffers
Chapter 6: Managing Process Improvement Projects

47. Controlling the Project: Earned Value
Chapter 6: Managing Process Improvement Projects

48. 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.
Chapter 6: Managing Process Improvement Projects

49. Cost-Schedule Reconciliation Charts
Chapter 6: Managing Process Improvement Projects

50. Earned Value Chart
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51. Copyright
Copyright 2010John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the United States Copyright Act without the express written consent of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. Adopters of the textbook are granted permission to make back-up copies for their own use only, to make copies for distribution to students of the course the textbook is used in, and to modify this material to best suit their instructional needs. Under no circumstances can copies be made for resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
Chapter 6: Managing Process Improvement Projects