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
Chapter 6: Managing Process Improvement Projects
Introduction Chapter 6: Managing Process Improvement Projects
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
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
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
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
Planning the Project Chapter 6: Managing Process Improvement Projects
The Project Portfolio The project portfolio also known as the aggregate project plan is to achieve the organization’s goals Chapter 6: Managing Process Improvement Projects
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
Aggregate Project Plan Chapter 6: Managing Process Improvement Projects
An Example of Aggregate Project Plan Chapter 6: Managing Process Improvement Projects
Life Cycle of a Project (Stretched-S) & (Exponential) Chapter 6: Managing Process Improvement Projects
Organizing the Project Team Ad Hoc Project Form Weak Functional Matrix Strong Project Matrix Chapter 6: Managing Process Improvement Projects
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
Project Plans Chapter 6: Managing Process Improvement Projects
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
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
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 Chapter 6: Managing Process Improvement Projects
Three Project Objectives Chapter 6: Managing Process Improvement Projects
Work Breakdown Structure Chapter 6: Managing Process Improvement Projects
Project Master Schedule Chapter 6: Managing Process Improvement Projects
Complexity of Scheduling Project Activities Large number of activities Precedence relationships Limited time of the project Chapter 6: Managing Process Improvement Projects
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
Scheduling the Project Chapter 6: Managing Process Improvement Projects
Terminology Activity Event Network Path Critical Path Critical Activities Chapter 6: Managing Process Improvement Projects
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
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
Example Chapter 6: Managing Process Improvement Projects
Network Diagram Chapter 6: Managing Process Improvement Projects
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
Path Slack Path Slack = Duration of Critical Path - Path Duration Chapter 6: Managing Process Improvement Projects
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
Expected Activity Time and Variance of Activity Time Chapter 6: Managing Process Improvement Projects
Example Chapter 6: Managing Process Improvement Projects
Probabilities of Completion Chapter 6: Managing Process Improvement Projects
Probability of Project Being Completed on or Before Time 23 Only path A-D-J has reasonable chance of taking 21 or more: Z = 23 -21/2.449 = 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
Probability of Path A-D-J being Completed on or Before Time 23 Chapter 6: Managing Process Improvement Projects
Simulating Project Completion Times Chapter 6: Managing Process Improvement Projects
Simulating Project Completion Times Chapter 6: Managing Process Improvement Projects
Chapter 6: Managing Process Improvement Projects
Project Management Software Capabilities Chapter 6: Managing Process Improvement Projects
Microsoft Project’s Gantt Chart Chapter 6: Managing Process Improvement Projects
PERT Chart Generated by Microsoft Project Chapter 6: Managing Process Improvement Projects
Calendar of Activities Created by Microsoft Project Chapter 6: Managing Process Improvement Projects
Project and Feeder Buffers Chapter 6: Managing Process Improvement Projects
Controlling the Project: Earned Value Chapter 6: Managing Process Improvement Projects
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
Cost-Schedule Reconciliation Charts Chapter 6: Managing Process Improvement Projects
Earned Value Chart Chapter 6: Managing Process Improvement Projects
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