8: PROJECT MANAGEMENT

Critical Path Method

A single, or deterministic, estimate for activity time was used

Nodes or circles

In critical path method (CPM), activities were represented as the __________

Project Evaluation and Review Technqiue

Probabilistic time estimates were employed

arcs, or arrowed lines, between two nodes, or circles

In project evaluation and review technique (PERT), activities were represented as ______________________

Critical Path Method

Project Evaluation and Review Technique

Management

is generally perceived to be concerned with the planning, organization, and control of an ongoing process or activity such as the production of a product or delivery of a service.

Project Management

reflects a commitment of resources and people to a typically important activity for a relatively short time frame, after which the management effort is dissolved.

Projects

do not have the continuity of supervision that is typical in the management of a production process.

Planning, Scheduling, Control

Project Management Process are composed of:

Planning

This is the foundational phase of a project where the groundwork is laid

Planning

• Manager and Team

• Scope

• WBS (Work Breakdown Structure)

• RAM (Responsibility Assignment Matrix)

• ROI (Return on Investment)

Scheduling

This phase focuses on when and how the tasks will be executed.

Scheduling

• Gantt Chart

• CPM/PERT

• Resources

Control

This phase ensures the project stays on track.

Control

• Stay on Schedule

• EVA (Earned Value Analysis)

• Cost Control

Objectives, Project Scope, Contract Requirements, Schedules, Resources, Personnel, Control, Risk and Problem Analysis

The elements of project planning are:

Objectives

A detailed statement ofwhat is to be accomplished by the project, how it will achieve the company’s goals and meet the strategic plan, and an estimate of when it needs to be completed, the cost, and the return.

Project Scope

A discussion of:

• how to approach the project

• the technological and resource feasibility

• the major tasks involved

• a preliminary schedule;

  • it includes a justification of the project and what constitutes project success.

Contract Requirements

A general structure of managerial, reporting, and performance responsibilities including:

• a detailed list of staff, suppliers, sub-contractors

• managerial requirements and agreements, reporting requirements,

• a projected organizational structure

Schedules

A list of all major events, tasks, and sub-schedules, from which a master schedule is developed.

Resources

The overall project budget for all resource requirements and procedures for budgetary control.

Personnel

Identification and recruitment of personnel required for the project team, including special skills and training.

Control

Procedures for monitoring and evaluating progress and performance, including schedules and cost.

Risk and Problem Analysis

Anticipation and assessment of uncertainties, problems, and potential difficulties that might increase the risk of project delays and/or failure and threaten project success.

Return on Investment

is a measure used to evaluate projects calculated by dividing the dollar gain minus the dollar cost of a project by the cost

Return on Investment

The project might not be undertaken

• If a project does not have a positive ROI

• If another project has a higher ROI

Return on Investment

a very popular metric for project planning because of its versatility and simplicity

Soft Returns

projects sometimes have benefits that cannot be measured in a tangible way with something like an ROI

Soft Returns

Example:

A project that has raising employee satisfaction as its goal can result in real benefits—increased productivity, improved quality, and lower costs—that are difficult to measure monetarily in the short run

Project teams

are made up of individuals from various areas and departments within a company.

Project Team

consists of a group of individuals selected from other areas in the organization, or from consultants outside the organization, because of their special skills, expertise, and experience related to the project activities

Project Team

• includes various managers and staff personnel from specific areas related to the project.

• and also workers, if their jobs are a function of the project activity

Project Team

Example as for the construction of a new loading dock facility at a plant might logically include:

• truck drivers

• forklift operators

• dock workers

• and staff personnel and managers from purchasing, shipping, receiving, and packaging

• as well as engineers to assess vehicle flow, routes, and space considerations.

Assignment to a project team

is usually temporary and thus can have both positive and negative repercussions.

Project Manager

The most important member of a project team

Project Manager

is often under great pressure.

Uncertainty, Failure

The job of managing a project is subject to a great deal of __________ and the distinct possibility of ______.

Scope Statement

a document that provides a common understanding of a project

Scope Statement

• includes a justification for the project that describes what factors have created a need within the company for the project.

• includes an indication of what the expected results of the

  project will be and what will constitute project success.

• a list of the types of planning reports and documents that are part of the project management process

Statement of Work

is often prepared for individual team members, groups, departments, subcontractors, and suppliers in a large project

Statement of Work

It describes the work in sufficient detail so that the team member responsible for it knows what is required and whether he or she has sufficient resources to accomplish the work successfully and on time

Statement of Work

Some companies require that an _________ be part of an official contract with a supplier or subcontractor

Work Breakdown Structure

an

organizational chart

that breaks down the

project into modules

for planning

Modules

are further broken down into activities, and, finally, into individual tasks

Work Breakdown Structure

• Identifies activities, tasks, resource requirements and relationship between modules and activities

• Helps avoid duplication of effort

Work Breakdown Structure

• Basis for project development, management, schedule, resources and modifications

• is most often in the form of a chart or a table

Top Down Process, Brainstorm Entire Project

These are approaches for WBS development

Top Down Process

An approch for WBS development wherein it start at the top and work your way down, asking “What components constitute this level?” until the WBS is developed in sufficient detail.

Brainstorm Entire Project

• An approch for WBS development wherein it involves writing down each item on a sticky note and then organizing the sticky notes into a WBS.

• The upper levels of the WBS tend to contain the summary activities, major components or functional areas involved in the project that indicate what is to be done.

• The lower levels tend to describe the detailed work activities of the project within the major components or modules. They typically indicate how things are done.

Work Breakdown Structure

Responsibility Assignment Matrix

is a table or chart that shows who is responsible for project work

Organizational Breakdown Structure

is a table or a chart showing which organizational units are responsible for work items

Organizational Breakdown Structure

It is used in Responsibility Assignment Matrix

Responsibility Assignment Matrix

shows who is responsible for doing the necessary work in the project

Responsibility Assignment Matrix

Project manager assigns work elements to organizational units, departments, groups, individuals or subcontractors

Responsibility Assignment Matrix

Project Scheduling

is typically the most critical element in the project management process, especially during the implementation phase (i.e., the actual project work), and it is the source of most conflict and problems.

Project Scheduling

Example:

• If a stadium is supposed to be finished in time for the first game of the season and it’s not, there will be a lot of angry ticket holders

• If a school building is not completed by the time the school year starts, there will be a lot of angry parents

• If a shopping mall is not completed on time, there will be a lot of angry tenants

• If a new product is not completed by the scheduled launch date, millions of dollars can be lost

• If a new military weapon is not completed on time, it could affect national security.

Project Scheduling

• One reason is that frequently the single most important criterion for the success of a project is that it be finished on time.

• Time is an absolute with little flexibility; you can spend less money or use fewer people, but you cannot slow down or stop the passage of time.

Define the activities, Sequence the activities, Estimate the time, Develop the schedule

Steps in Project Scheduling

1st Step in Project Scheduling

define the activities that must be performed to complete the project

2nd Step in Project Scheduling

sequence the activities in the order in which they must be completed

3rd Step in Project Scheduling

estimate the time required to complete each activity

4th Step in Project Scheduling

develop the schedule based on the sequencing and time estimates of the activities

Gantt Chart

a traditional management technique for scheduling and planning small projects that have relatively few activities and precedence relationships.

Gantt Chart

a graph or bar chart with a bar for each project activity that shows the passage of time.

Henry Gantt, 1914

Gantt Chart (also called a bar chart) was developed by , a pioneer in the_______ field of industrial engineering at the artillery ammunition shops of the Frankford Arsenal in _____.

Gantt Chart

the direct precursor of the CPM/PERT technique

Gantt Chart

provides a visual display of a project schedule, indicating when activities are scheduled to start and to finish and where extra time is available and activities can be delayed

Gantt Chart

• indicates the precedence relationships between activities; however, these relationships are not always easily discernible.

• limits the chart’s use to smaller projects with relatively few activities.

Slack

is the amount of time an activity can be delayed without delaying the project.

Project Control

is the process of making sure a project progresses toward successful completion.

Project Control

It requires that the project be monitored and progress measured so that any deviations from the project plan, and particularly the project schedule, are minimized.

Project Control

If the project is found to be deviating from the plan (i.e., it is not on schedule, cost overruns are occurring, activity results are not as expected), corrective action must be taken.

Time Management

is the process of making sure a project schedule does not slip and that a project is on time

Time Management

• This requires monitoring of individual activity schedules and frequent updates.

• If the schedule is being delayed to an extent that jeopardizes the project success, it may be necessary for the project manager to shift resources to accelerate critical activities.

Some activities may have slack time, so resources can be shifted from them to activities that are not on

schedule

Cost Management

is often closely tied to time management because of the time–cost trade-off occurrences

Cost Management

If the schedule is delayed, costs tend to go up in order to get the project back on schedule.

Cost Management

• Also, as a project progresses, some cost estimates may prove to be unrealistic or erroneous.

• Therefore, it may be necessary to revise cost estimates and develop budget updates.

• If cost overruns are excessive, corrective actions must be taken.

Performance Management

is the process of monitoring a project and developing timed (i.e., daily, weekly, monthly) status reports to make sure that goals are being met and the plan is being followed.

Performance Management

It compares planned target dates for events, milestones, and work completion with dates actually achieved to determine whether the project is on schedule or behind schedule

a specific system for performance management. Activities “earn value” as they are completed.

Earned Value Analysis

is a recognized standard procedure for numerically measuring a project’s progress, forecasting its completion date and final cost, and providing measures of schedule and budget variation as activities are completed