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Project Management

Project Management. Dr. Ron Lembke Operations Management. What’s a Project?. Changing something from the way it is to the desired state Never done one exactly like this Many related activities Focus on the outcome Regular teamwork focuses on the work process. Examples of Projects.

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Project Management

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  1. Project Management Dr. Ron Lembke Operations Management

  2. What’s a Project? • Changing something from the way it is to the desired state • Never done one exactly like this • Many related activities • Focus on the outcome • Regular teamwork focuses on the work process

  3. Examples of Projects • Building construction • New product introduction • Software implementation • Training seminar • Research project

  4. Why are projects hard? • Resources- • People, materials • Planning • What needs to be done? • How long will it take? • What sequence? • Keeping track of who is supposedly doing what, and getting them to do it

  5. IT Projects • Half finish late and over budget • Nearly a third are abandoned before completion • The Standish Group, in Infoworld • Get & keep users involved & informed • Watch for scope creep / feature creep

  6. Pinion Pine Power Plant SPP Co. 1992-97 • A year late, $25m over budget • Experimental technology • Coal gasification • 20% less water than other plants • Partnership with DOE • Unfortunately, didn’t work • “In the Reno demonstration project, researchers found an inherent problem with the design of IGCC technology available at that time such that it would not work above 300 feet from sea level elevations.” - Wikipedia • “Chemistry helped kill Pinon Pine, a $400 million government-funded flop in Nevada.” – NJ Ledger

  7. Project Scheduling • Establishing objectives • Determining available resources • Sequencing activities • Identifying precedence relationships • Determining activity times & costs • Estimating material & worker requirements • Determining critical activities

  8. Project Personnel Structure • Pure project “Skunk Works” • Functional Project • Matrix Project

  9. Work Breakdown Structure • Hierarchy of what needs to be done, in what order • For me, the hardest part • I’ve never done this before. How do I know what I’ll do when and how long it’ll take? • I think in phases • The farther ahead in time, the less detailed • Figure out the tricky issues, the rest is details • A lot will happen between now and then • It works not badly with no deadline

  10. W D Mudroom Remodel D • Big-picture sequence easy: • Demolition • Framing • Plumbing • Electrical • Drywall, tape & texture • Slate flooring • Cabinets, lights, paint • Hard: can a sink fit? W

  11. Project Scheduling Techniques • Gantt chart • Critical Path Method (CPM) • Program Evaluation & Review Technique (PERT)

  12. Gantt Chart

  13. PERT & CPM • Network techniques • Developed in 1950’s • CPM by DuPont for chemical plants • PERT by U.S. Navy for Polaris missile • Consider precedence relationships & interdependencies • Each uses a different estimate of activity times

  14. Questions Answered by PERT & CPM • Completion date? • On schedule? Within budget? • Probability of completing by ...? • Critical activities? • Enough resources available? • How can the project be finished early at the least cost?

  15. PERT & CPM Steps • Identify activities • Determine sequence • Create network • Determine activity times • Find critical path • Earliest & latest start times • Earliest & latest finish times • Slack

  16. 1 2 3 Activity on Node (AoN) Project: Obtain a college degree (B.S.) Receive diploma Attend class, study etc. Enroll 1 month 4? Years 1 day

  17. 1 2 3 4 Activity on Arc (AoA) Project: Obtain a college degree (B.S.) Attend class, study, etc. Receive diploma Enroll 1 month 4,5 ? Years 1 day

  18. 1 2 3 4 AoA Nodes have meaning Project: Obtain a college degree (B.S.) GraduatingSenior Applicant Student Alum

  19. We’ll use Activity on Node 3 2 1 4 1-2 must be done before 2-3 or 3-4 can start

  20. Activity Relationships 2-3 must be done before 3-4 or 3-5 can start 3 5 2 1 4

  21. Activity Relationships 2-4 and 3-4 must be done before 4-5 can start 3 5 2 1 4

  22. Network Example You’re a project manager for Bechtel. Construct the network. Activity Predecessors A --B A C AD B E BF C G DH E, F

  23. A C E F B D G H Z Network Example - AON

  24. 7 2 9 5 1 3 6 8 Network Example - AOA G D B E A H C F 4

  25. 2 2 3 1 5 3 1 4 4 AOA Diagrams A precedes B and C, B and C precede D B A D C B A C D Add a phantom arc for clarity.

  26. Critical Path Analysis • Provides activity information • Earliest (ES) & latest (LS) start • Earliest (EF) & latest (LF) finish • Slack (S): Allowable delay • Identifies critical path • Longest path in network • Shortest time project can be completed • Any delay on activities delays project • Activities have 0 slack

  27. Critical Path Analysis Example

  28. Network Solution B D E A G 2 6 3 1 1 C F 3 4

  29. Earliest Start & Finish Steps • Begin at starting event & work forward • ES = 0 for starting activities • ES is earliest start • EF = ES + Activity time • EF is earliest finish • ES = Maximum EF of all predecessors for non-starting activities

  30. B D E A G 2 6 3 1 1 C F 3 4 Activity A Earliest Start Solution For starting activities, ES = 0.

  31. B D E A G 2 6 3 1 1 C F 3 4 Earliest Start Solution

  32. Latest Start & Finish Steps • Begin at ending event & work backward • LF = Maximum EF for ending activities • LF is latest finish; EF is earliest finish • LS = LF - Activity time • LS is latest start • LF = Minimum LS of all successors for non-ending activities

  33. B D E A G 2 6 3 1 1 C F 3 4 Earliest Start Solution

  34. B D E A G 2 6 3 1 1 C F 3 4 Latest Finish Solution

  35. Compute Slack

  36. B D E A G 2 6 3 1 1 C F 3 4 Critical Path

  37. New notation • Compute ES, EF for each activity, Left to Right • Compute, LF, LS, Right to Left ES EF C 7 LS LF

  38. Exhibit 2.6, p.35 F 8 C 7 A 21 G 2 B 5 D 2 E 5

  39. Exhibit 2.6, p.35 21 28 28 36 F 8 C 7 0 21 36 38 A 21 G 2 28 33 21 26 26 28 B 5 D 2 E 5 F cannot start until C and D are done. G cannot start until both E and F are done.

  40. Exhibit 2.6, p.35 21 28 28 36 F 8 C 7 21 28 28 36 0 21 36 38 A 21 G 2 0 21 36 38 28 33 21 26 26 28 B 5 D 2 E 5 21 26 26 28 31 36 E just has to be done in time for G to start at 36, so it has slack. D has to be done in time for F to go at 28, so it has no slack.

  41. Exhibit 2.6, p.35 21 28 28 36 F 8 C 7 21 28 28 36 0 21 36 38 A 21 G 2 0 21 36 38 28 33 21 26 26 28 B 5 D 2 E 5 21 26 26 28 31 36

  42. Gantt Chart - ES A C B D E F G 0 5 10 15 20 25 30 35 40

  43. Can We Go Faster?

  44. Time-Cost Models 1. Identify the critical path 2. Find cost per day to expedite each node on critical path. 3. For cheapest node to expedite, reduce it as much as possible, or until critical path changes. 4. Repeat 1-3 until no feasible savings exist.

  45. Time-Cost Example D 8 A 10 B 10 C 10 • ABC is critical path=30 Crash cost Crash per week wks avail A 500 2 B 800 3 C 5,000 2 D 1,100 2 Cheapest way to gain 1 Week is to cut A

  46. Time-Cost Example D 8 A 9 B 10 C 10 • ABC is critical path=29 Crash cost Crash per week wks avail A 500 1 B 800 3 C 5,000 2 D 1,100 2 Wks Incremental Total Gained Crash $ Crash $ 1 500 500 Cheapest way to gain 1 wk Still is to cut A

  47. Time-Cost Example D 8 A 8 B 10 C 10 • ABC is critical path=28 Crash cost Crash per week wks avail A 500 0 B 800 3 C 5,000 2 D 1,100 2 Wks Incremental Total Gained Crash $ Crash $ 1 500 500 2 500 1,000 Cheapest way to gain 1 wk is to cut B

  48. Time-Cost Example D 8 A 8 B 9 C 10 • ABC is critical path=27 Crash cost Crash per week wks avail A 500 0 B 800 2 C 5,000 2 D 1,100 2 Wks Incremental Total Gained Crash $ Crash $ 1 500 500 2 500 1,000 3 800 1,800 Cheapest way to gain 1 wk Still is to cut B

  49. Time-Cost Example D 8 A 8 B 8 C 10 • Critical paths=26 ADC & ABC Crash cost Crash per week wks avail A 500 0 B 800 1 C 5,000 2 D 1,100 2 Wks Incremental Total Gained Crash $ Crash $ 1 500 500 2 500 1,000 3 800 1,800 4 800 2,600 To gain 1 wk, cut B and D, Or cut C Cut B&D = $1,900 Cut C = $5,000 So cut B&D

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