Managing Projects Chapter 14 14 Chapter Objectives Be

Managing Projects Chapter 14

14 Chapter Objectives Be able to: § Explain the difference between routine business activities and projects. § Describe the five major phases of a project. § Construct a Gantt chart and interpret the results. § Construct a project network diagram and calculate the earliest and latest start and finish times for all activities. § Identify the critical activities and paths in a network. § Crash a project. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 2

14 Project § Project – A temporary endeavor undertaken to create a unique product, service, or result. © 2008 Project Management Institute § Projects have clear starting and ending points after which the people and resources dedicated to the project are reassigned. § Projects are non-routine, can be large or small, and may be difficult to manage. § Projects typically require significant levels of crossfunctional and interorganizational coordination. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 3

14 Project Management § Project Management – The application of knowledge, skills, tools, and techniques to project activities to meet project requirements. © 2008 Project Management Institute Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 4

14 Project Management Trends § The faster pace of strategic change § New product lines are introduced more often to fight off competitors. § Information technology solutions become quickly out-ofdate. § Customer and supplier networks quickly change. § The changing role of middle management § The role has decreased due to more advanced information systems handling many of the tasks. § Responsibilities given to middle managers have been pushed down to supervisors and employees. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 5

14 § § § Project Phases Concept phase Project definition phase Planning phase Performance phase Postcompletion phase Figure 14. 1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 6

14 Project Phases § Concept Phase § Broad definition and scope § Budget estimates within 30% § Project definition Phase § Tentative schedules and budgets, organization, key personnel and resource requirements § Budget estimates refined within 5% to 10% Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 7

14 Project Phases § Planning phase § Detailed plans, timing, budgets and resources § Milestones § Project management tools and techniques § Performance phase § Execution and control § Postcompletion phase § “Wrap-up” § Reassignment of project resources Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 8

14 Project Management Tools § Gantt charts – Graphical tools used to show expected start and end times for project activities and to track actual progress against these time targets. § Network diagrams – Graphical tools that show the logical linkages between activities in a project. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 9

14 Gantt Charts Table 14. 2 Activities can occur simultaneously and some have predecessors that must be completed beforehand. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 10

14 Gantt Charts Figure 14. 2 Shows that the project should be completed by the end of Week 18 and when specific activities should start and finish. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 11

14 Network Diagrams § Critical-path method – A network-based technique in which there is a single time estimate for each activity. § Program evaluation and review technique (PERT) – A network-based technique in which there are multiple time estimates for each activity. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 12

14 Constructing a Network Diagram § Identify each unique activity in a project by a capital letter that corresponds only to that activity. § Represent each activity in the project by a node that shows the estimate length. (Activity on node (AON) diagram. ) § If an activity has an immediate predecessor(s), show the relationship by connecting the two activities with an arrow. § Determine the earliest start time (ES) and earliest finish time (EF) for each activity by performing a forward pass. § Determine the latest finish time (LF) and latest starting time (LS) for each activity by doing a backward pass. § Determine the critical activities and path(s) in the project. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 13

14 Network Diagrams § Critical path – A network path that has the longest, or is tied for the longest, linked sequence of activities. § Project duration – The duration of a project is equal to the duration of the critical path. § Network path – A logically linked sequence of activities in a network diagram. § Critical activities – Project activities for which the earliest start time and latest start time are equal. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 14

14 AON Example – Gina 3000 § Use the following data to develop a

14 AON Example – Gina 3000 § Network Diagram Figure 14. 4 Copyright ©

14 AON Example – Gina 3000 § Identify the Paths: § § § §

14 AON Times and Slack § Earliest Start Time (ES) § = Latest EF for all immediate predecessors § Earliest Finish Time (EF) § = ES + activity’s duration § Latest Start Time (LS) § = LF – activity’s duration § Latest Finish Time (LF) § = Earliest LS for all immediate successors § Slack = amount of allowable delay in an activity § = Equal to LS – ES or LF – EF for an activity Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 18

14 AON Example – Gina 3000 Table 14. 3 Calculate Earliest Start and Earliest

14 AON Example – Gina 3000 Table 14. 4 Calculate Latest Start and Latest

14 AON Example – Gina 3000 § Identify the Critical Path(s) § § § § ACFGJ = 13 weeks ACDEGJ = 17 weeks ACDEHJ = 17 weeks ACDEIJ = 17 weeks BCFGJ = 14 weeks BCDEGJ = 18 weeks BCDEHJ = 18 weeks BCDEIJ = 18 weeks The activities in these critical paths have no slack. The project should be completed in 18 weeks. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 21

14 Crashing a Project § Crashing a Project – Shortening the overall duration of a project by reducing the time it takes to perform certain activities. § List all network paths and their current lengths and mark all activities that can be crashed. § Focus on the critical path or paths. Working one period at a time, choose the activity or activities that will shorten all critical paths at the least cost. The one rule is this: Never shorten an activity that is not on a critical path, regardless of the cost. Doing so will not shorten the project; it will only add costs. § Recalculate the lengths of all paths and repeat step 2 until the target project completion is reached or until all options have been exhausted. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 22

14 Crashing Example 14. 3 Courter Corporation § Use the following data to develop a schedule to complete the project within 23 weeks: Table 14. 5 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 23

14 Crashing Example 14. 3 Courter Corporation § Network Diagram: Figure 14. 6 Copyright

Crashing Example 14. 3 Courter Corporation 14 § Calculate ES, EF, LS, and LF for each activity * Critical Activity Note: Critical Activities have a Slack = 0 Table 14. 6 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 25

14 Crashing Example 14. 3 Courter Corporation § Network Paths for the Project § ABEFGK – 25 weeks § ACDFGK – 24 weeks § AHIJ – 19 weeks Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 26

14 Crashing Example 14. 3 Courter Corporation § Choose the activity(s) that will shorten all critical path(s) at the least cost: § ABEFGK – 25 weeks • Activity B - shorten 1 week at a cost of $500 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 27

14 Crashing Example 14. 3 Courter Corporation § Updated Network Paths for the Project § ABEFGK – 24 weeks § ACDFGK – 24 weeks § AHIJ – 19 weeks § Crashing cost: $500 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 28

14 Crashing Example 14. 3 Courter Corporation § Choose the activity(s) that will shorten all critical path(s) at the least cost: § ABEFGK – 24 weeks § ACDFGK – 24 weeks • Activity G - shorten 1 week at a cost of $700 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 29

14 Crashing Example 14. 3 Courter Corporation § Updated Network Paths for the Project § ABEFGK – 23 weeks § ACDFGK – 23 weeks § AHIJ – 19 weeks § Crashing Cost = $500 + $700 = $1200 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 30

14 Project Management Resources § Project Management Software § Microsoft Project § PMI (Project Management Institute) § Sponsors education and certification § Sponsors conferences, research, user groups § Publishes Guide to the Project Management Body of Knowledge (PMBOK®) § PMBOK® § Part I: Various business processes for projects § Part II: Nine project management knowledge areas Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 14 - 31

Managing Projects Case Study Viva Roma! Copyright © 2013 Pearson Education, Inc. publishing as

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