1. 18-1Project Management Chapter 18 Project Management

2. 18-2Project Management Unique, one-time operations designed to accomplish a specific set of objectives in a limited time frame. Build A A Done Build B B Done Build C C Done Build D Ship JANFEBMARAPRMAYJUN On time! Projects

3. 18-3Project Management Project Manager Responsible for: WorkQuality Human ResourcesTime CommunicationsCosts

4. 18-4Project Management Ability to motivate and direct team members. Make trade-off decisions. Expedite the work when necessary. Put out fires. Monitor time, budget, and technical details. Strong leadership skills. Function in an environment that is beset with uncertainties. Persuasion and cooperation of others to realize project goals. Maintain ethical behavior. Work with project champions, people, usually within the company, who promote and support the project. Project Management Skills

5. 18-5Project Management Temptation to understate costs Withhold information Alter or mislead status reports Falsify records Compromise workers’ safety Approve substandard work Ethical Issues

6. 18-6Project Management Project Life Cycle Concept Feasibility Planning Execution Termination Management

7. 18-7Project Management Risk: occurrence of events that have undesirable consequences –Delays –Increased costs –Inability to meet specifications –Project termination Project Risk

8. 18-8Project Management Identify potential risks Analyze and assess risks Work to minimize occurrence of risk Establish contingency plans Risk Management

9. 18-9Project Management Work Breakdown Structure Project X Level 1 Level 2 Level 3 Level 4 Figure 18-3

10. 18-10Project Management MARAPRMAYJUNJULAUGSEPOCTNOVDEC Locate new facilities Interview staff Hire and train staff Select and order furniture Remodel and install phones Move in/startup Planning and Scheduling Gantt Chart

11. 18-11Project Management PERT and CPM PERT: Program Evaluation and Review Technique CPM: Critical Path Method Graphically displays project activities Estimates how long the project will take Indicates most critical activities Show where delays will not affect project

12. 18-12Project Management Project Network – Activity on Arrow (AOA) 1 2 3 4 56 Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in

13. 18-13Project Management Project Network – Activity on Node (AON) 1 2 3 5 6 Locate facilities Order furniture Furniture setup Interview Remodel Move in 4 Hire and train 7S

14. 18-14Project Management Project Network Path: A sequence of activities that leads from the starting node to the ending node. Critical path: The path with the longest activity time. Slack: The difference between the length of a given path and the length of the critical path.

15. 18-15Project Management Network activities –ES: early start –EF: early finish –LS: late start –LF: late finish Used to determine –Expected project duration –Slack time –Critical path Project Network Time Estimation

16. 18-16Project Management Project Network Time Estimation ES and EF Computation: –EF = ES+t –ES for activities leaving nodes with multiple entering arrows is equal to the largest EF of the entering arrow. LS and LF Computation: –LS = LF-t –For nodes with multiple leaving arrows, LF for arrows entering that node is equal to the smallest LS of the leaving arrow.

17. 18-17Project Management Project Network Slack Time The slack time can be computed in either of two ways: Slack = LS - ES or LF – EF

18. 18-18Project Management Example 1 1 2 3 4 56 8 weeks 6 weeks 3 weeks 4 weeks 9 weeks 11 weeks 1 week Locate facilities Order furniture Furniture setup Interview Hire and train Remodel Move in

19. 18-19Project Management Example 1: Path Length, CP, Slack Time Critical Path

20. 18-20Project Management Example 1: ES and EF

21. 18-21Project Management Example 1: LS and LF

22. 18-22Project Management Example 1: Activity Slack Time ActivityLSES(LE-ES) Slack 1-2000 1-3606 2-41082 2-5880 3-51046 4-516142 5-619 0

23. 18-23Project Management Time-Cost Trade-Offs: Crashing To avoid late penalties, To take advantage of monetary incentives for timely or early competition of a project, To free resources for use on other projects, To beat the competition to the market, or To reduce the indirect costs associated with running the project.

24. 18-24Project Management Time-Cost Trade-Offs: Crashing Total cost Shorten Cumulative cost of crashing Expected indirect costs Optimum CRASH Figure 18-11

25. 18-25Project Management 6a6a 4d4d 5c5c 10 b 9e9e 2f2f Example 2: Project Network

26. 18-26Project Management Example 2: Crashing Cost

27. 18-27Project Management Example 2: Path Length and CP

28. 18-28Project Management Example 2: CP Activity Slacks

29. 18-29Project Management Example 2: Crashing

30. 18-30Project Management Advantages of PERT Forces managers to organize Provides graphic display of activities Identifies –Critical activities –Slack activities 1 2 3 4 56

31. 18-31Project Management Limitations of PERT Important activities may be omitted Precedence relationships may not be correct Estimates may include a fudge factor 1 2 3 4 56 142 weeks

32. 18-32Project Management Imposes a methodology Provides logical planning structure Enhances team communication Flag constraint violations Automatic report formats Multiple levels of reports Enables what-if scenarios Generates various chart types Advantages of PM Software

33. 18-33Project Management Computer aided design (CAD) Groupware (Lotus Notes) Project management software –CA Super Project –Harvard Total Manager –MS Project –Sure Track Project Manager –Time Line PM Software Technology