Chapter 4 Supply Chain

Projects should be selected from the following types:

• Breakthrough (major changes that create entirely new markets)

• Platform (fundamental improvements to existing products)

• Derivative (incremental changes such as new product packaging or no-frills version)

Products can be categorized in 4 major areas:

• Product change

• Process change

• Research and development

• Alliance and partnership

Project

A series of related jobs usually directed toward some major output and requiring a significant period of time to perform

Project management

Planning, directing, and controlling resources to meet the technical, cost, and time constraints of a project

3 organizational structures that can be used to tie a project to the parent firm:

• Pure project

• Functional project

• Matrix project

Pure project

A self-contained team word full-time on the project

Functional project

• Responsibility for the project lies within one functional area of the firm

• Employees from that area work on the project, usually only part-time

Matrix project

A blend of pure and functional project structures-people from different functional areas work on the project, possibly only part time

3 objectives of project management:

1. Be within budget

2. Be on time

3. Meet customer expectations

Project scope (statement of work)

Identify:

• The critical customer

• The customer’s needs and expectations

• Deliverables

• Schedule

• Resources required

Work package

Group of activities combined to be assignable to a single organizational unit

Task

Further subdivision of a project. Performed by one group or organization

Subtask

May be used if needed to further subdivide the project into more meaningful pieces

Work breakdown structure (WBS)

The hierarchy of tasks, subtasks, and work packages

Activities

Pieces of work within a project that consume time

Cost budgeting

• For each task provide cost estimates

• Use the WBS to incorporate estimates

Time budgeting

1. For each task, identify: Duration and predecessors

2. Prepare a network diagram

3. Compute project completion time and its critical paths

Gantt Chart

Shows in a graphic manner the amount of time involved and the sequence in which activities can be performed

Earned Value Management (EVM)

Technique that combines measure of scope, schedule, and cost for evaluating project progress

Critical path

• The sequence of activities requiring the longest time to complete the project

• The path contains 0 slack time

• Determines the project completion time

Slack time

The time to at an activity can be delayed without delaying the entire project; the difference between the late and early start times of an activity

Project crashing model

A time-cost model extends the CPM model to consider the trade-off between project completion time and total project cost

Cost per day to expedite formula

(CC-NC)/(NT-CT)

Which project organizational structure minimizes the duplication of resources?

Matrix

Disadvantages of the functional project:

• Aspects of project unrelated to the functional area get shortchanged

• Motivation of team members is often weak

• Needs of the client are secondary and are responded to slowly

Disadvantages of the matrix project:

• Sub-optimization is a danger

• There are 2 bosses

• It is doomed to failure unless the project manager has strong negotiating skills

What are the 3 forms of the matrix project?

• Weak

• Strong

• Balanced