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In this chapter, we shift our attention to the management of projects. We use a process improvement project as an example, but projects are used in all kinds of organizations for every conceivable purpose. They range from simple combinations of tactical tasks to strategic organizational change, and from setting up a party to putting a person on the moon. The chapter begins with a discussion of the crucial topics of project selection, project planning, and organizing the project team. We then move on to an explanation of some project-scheduling techniques, showing some typical project management software printouts that are available to project managers. The chapter continues with a discussion of controlling project cost and performance, primarily through the use of "earned value," and then concludes with a brief description of Goldratt's "critical chain."

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• Hewlett-Packard found itself in the common position of having more ongoing projects than it could effectively control and came up with a process dubbed the HP Project Management Initiative. The goal of the "Initiative" was to develop an "aggregate project plan," or map, to help them distinguish between projects that contributed to their strategic goals and the great mass of others that did not. This map illustrated on a grid the various types of projects that were ongoing, the degree of change each involved in terms of products and processes, the resource requirements of each project, and the history of the projects. At one extreme were the R&D or "blue sky" projects that could payoff in the dista?t future, and at the other extreme were the incremental variants on existing projects. By intensely scrutinizing all the projects and taking into consideration the gaps and excesses on their aggregate project plan, HP was able to prioritize the projects and concentrate on those that made the greatest contribution to their strategic goals for the least resource use. The Initi~tive helped one organization systematically reduce 120 projects down to 30, and another organization from 50 to 17, thereby increasing the chances of success for the most important projects (Englund and Graham 1,999). • One day, Melvin Wilson was Simply a marketing manager for little 1250-employee Mississippi Power in Gulfport, Mississippi. But the next day, after Hurricane Katrina hit New Orleans and Gulfport, he was the firm's "Director of Storm Logistics," responsible for 11,000 repairmen with a goal of restoring power to 195,000 customers within 12 days. Although Mississippi Power's primary storm center at headquarters was knocked out, they had a backup storm center 5 miles inland. , However, when \Wilson got there, the cars were floating in the parking lot, so he moved his group in charge to a third location, an old service office without electricity or miming water. In spite of the phone lines being down, the group managed to get word of their needs to the outside world and within days, 11,000

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And the lack of a risk management strategy resulted in no contingency or fallback plans in case of trouble. This project was clearly one that offered little value. In early 2003." since the trains are virtually empty. fuel costs. after two decades and over $14 billion for planning and construction. but the contract did not include a scope management plan to help define what constituted a scope change request. and lateness. accidents. so when project delays surfaced and inadequate training became apparent. most project (Project complex. showers. by the end of 2004. and timing success of the project. budget. there was no way to recover (Project Management Institute 2005) . Reaching speeds over 300 miles an hour. The reason is because to meet the project's time deadline and budget. according to the vice-director of the train company. the group needed housing." originally expected to cost less than $3 billion. but a total investment cost of $14. So in spite of the technical. and the power was restored to every customer who could handle it within 12 days (Cauchon 2005). However. while CSA maintained there were only 50. The problem was thought to be due to both scope creep and the lack of a risk management strategy. pollution. so it continued far past what planners thought was a worthwhile investment. In March 2003. Directing such a massive project as the restoration of power was far beyond the experience of little Mississippi Power's group. and even those took about three times longerto process than they were supposed to take. the United Kingdom's Child Support Agency (CSA) started using their new $860 million software system for receiving and disbursing child support payments. 140. "We -are not lucky with ticket sales. To support the 11. The vendor claimed that the project was disrupted constantly by CSA's 2500 change requests. \Vith an estimated benefit of $500 million per year in reduced congestion. it is expected to take 78 years to pay its costs back. primarily because the federal government was paying 85 percent of its cost. it failed to meet the needs of the passengers. food. was declared complete. but they succeeded. The overrun is attributed to two major factors (1) A major underestimate of the . CSAthus threatened to scrap the entire system and withhold $2 million/month in service payments to the software vendor. 8000 tetanus shots. • To speed passengers to Shanghai's new international airport. However. to the city if it wasn't completed. and technologically challenging highway projects in U. • Boston's "Big Dig" highway/tunnel project is considered one of the largest. and hundreds of other such items. 5000 trucks. but that will be a much more expensive and time-consuming . laundry. history. Management Institute 2004a) . beds. requiring lengthy public transportation to get there.Introduction 209 repairmen from 24 states and Canada came to help. China is currently investigating extending the line to the downtown area. the train station was located 6 miles outside the city center.000 workers. clean water. China built a magnetic levitation (maglev) train that runs every 10 minutes from Shanghai's business center to the Pudong International Airport.S. it whisks people to the airport 20 miles away in less than 8 minutes.6 billion (a 470 percent cost overrun). Boston's "Big Dig. only about 12 percent of all applications had received payments.000 gallons of fuel each day. bulldozers.

a product development team with representatives from production. typical of government projects. owing to the synergy of« including a variety of different perspectives earlier in the design process. and what can go wrong when such management is missing. Typically. For example. in the traditional functional organization. The chapter concludes with a discussion of the "critical chain" concept of project management. and (2) lack of control. such as processing insurance forms. there won't be serious local deliberation of their pros and cons (Abrams 2003. it should be clear that this is only one use among many for project management. handling customers' complaints. we discuss the major topics of scheduling the project and determining the probability of completing it by its due date. From the above examples. we describe the many activities required in the successful management of projects. including conflicts of interest between the public and private sectors. finance. We then move into the project life cycle activities starting with planning the project. This is then followed by a discussion about organizing the project team and the various techniques available to the project manager for planning the project activities. and assembling an . Moving along the project life cycle. and engineering can be 'assembled to ensure that new product designs simultaneously meet the requirements of each area. particularly costs. In the process. we then address the topics of controlling the project's cost and performance. The result is that new products can be developed faster and less expensively. One clear lesson from the project has been that unless the state and local governments are required to pay at least half the cost of these megaprojects. Although we have titled this chapter Managing Process Improvement Projects. which includes an understanding of the role of the project in the organization's strategy. And we see how some tools can help in the management and control of projects. well. marketing.210 Chapter 6: Managing Process Improvement Projects initial project scope. We next describe the two major types of project life cycles and why it is important to be able to tell which is applicable for the project at hand. desired output. the term process is used to refer to a set of activities that are routinely repeated. you might not have realized that projects are actually a special type of process. thereby enhancing the firm's overall responsiveness. creates something of value to customers. the term process refers to a set of activities that. Ensuring that each area's requirements are being met as the new design is developed reduces the likelihood that costly changes will have to be made later in the process. we describe the capabilities and outputs of some project management software packages. we see the ubiquitous role of project management in all types of organizations and in all countries. In this chapter. We start with the definition of a project and why project management is different from managing functional activities. Project management is concerned with managing organizational activities that result in some particular. Project Management Institute 2004b). As described in Chapter 2. frJEFINING A PROJECT--------~--~~----------- Up to this point. Perhaps a better product is developed as. taken together. Following this.

. steel mills. homes. each project is unique and has a clear beginning and end. it could be done by regular functional departmental employees doing their routine work. top-grade resources. "middle managers. Projects frequently require different emphases during their life cycle. and dams • BUilding ships. are often made available for project operations. camping grounds. cost overruns in the middle. As a result. That is.· and the project team professionals are charged with solving the problem and obtaining the required results (cost. the community. The choice of the project form usually indicates the importance of the project objective to the organization. with an unlimited budget. administrative routine is minimized. This ability results from the close contact of the project manager with the technical staff-there are few. overseeing planning for government agencies. the project team. it would be foolish to designate a special project team to accomplish the project since. The project team is then given the privacy and freedom to decide boui to solve the problem. • Running political campaigns. Some of the reasons for this growth in project operations are as follows: . and refuges Organizing conferences. The term project also refers to a set of activities that. conventions. taken together.lib lib Locating and laying out amusement parks. performance. tunnels." Following are some examples of projects: Ell Constructing highways. subcontractors. technical performance may be crucial at the beginning. project organizations become professionalized and are often managed on that basis. produces a valued output. minimal supervision is exercised. if any. the project form of the transformation process was briefly described. Chairing ad hoc task forces. and possibly others. bridges. and on-time completion at the end. The flexibility of making spurof-the-moment changes in emphasis by trading off one criterion for another is basic to the project design form. However. There are two other typical characteristics of projects which are less obvious. probably at about the same rate as services (which many of them are). consultants. and the many other stakeholders such as the client. One is that there is a limited budget to attain the unique desired objective. planes) and rockets. including staff. banquets. or a doghouse • Erecting skyscrapers. deadline). and processing plants lib . or firefighting operations .Defining a Project 211 MP3 player. Thus. unlike a typical process. with a clear specification of the desired objective. If neither of these two characteristics were true. In Chapter 2. war operations. For example. conducting corporate audits e Converting from one computer system to another As may be noticed in this list. or . advertising campaigns. The second is that the objective is extremely important to the organization. the project management office. Therefore. the government (sometimes). the number of project operations is growing in our economy. projects are processes that are performed infrequently and ad hoc. and weddings Managing R&D projects such as the Manhattan Project (which developed the atomic bomb) .

Faster response to clients. We start with the role of the organization's many projects in achieving its strategy. Better-educated citizens. Following this. Society as a whole has increased its emphasis on the attainment of objectives (affirmative action. Some of the scheduling considerations in project management are knowing what activities must be completed and in what order. planning is probably the single most important element in the success of the project and considerable research has been done on the topic. Mom sophisticated technology. People and organizations are involved in more activities. Higher productivity. knowing what resources can be shifted among activities to keep the project on schedule. and so forth. projects. such as bridge construction. The control activitiesinclude anticipating what can and might go wrong. than ever before. As a result. Greater custornization for clients. 3. and are more productive in those activities. has been increased public awareness of project operations (e. we focus in detail on the planning of projects. More leisure time. environmental protection. 4. People are more aware of the world around them. This portfolio evolves over time since projects have a finite life cycle. and of techniques (such as project management) for achieving their o~jectives. . The project form of organizing is more likely to meet this need. In physical project operations. or 7. we describe the actual project planning tools. People have the time available to follow. Increased accountability. Intense competition has also increased the importance of better meeting the client's unique needs in terms of both the service and the facilitating good. we discuss the project team and its tie to the parent organization. known as the organization's project portfolio. In the area of project management. as discussed in the next subsection. when to increase and decrease the labor force. how long they will take.0DL AN N I N G THE PROJECT In this section. 5. better fuel economy) and the evaluation of activities leading toward those objectives. The project design form concentrates resources on the achievement of specific objectives primarily through proper scheduling and control of activities. and projects are often more responsive and flexible than bureaucracies functionally organized firms. 2. and its technology. and when to order materials so that they will not arrive too early (thus requiring storage and being in the way) or too late (thus delaying the project).g. An outgrowth of our information age. . a great many project activities are assembly operations. .. and even participate in. Project Apollo) and interest in using the project form to achieve society's goals (Project Head Start).to clients' needs. Last. most of the production per se is completed elsewhere and brought to the project area at the proper time. Today's intense competition has escalated the importance of quick response.212 Chapter 6: Managing Process Improvement Projects I. many of which are simultaneous. 6.

It is important to point out. innovativeness. If this computer succeeds. or its project portfolio. 3. Derivative projects seek to make incremental improvements in the output and/or process. output development projects are categorized along two dimensions: (1) the extent of changes made to the output and (2) the degree of process change. A key difference between platform projects and breakthrough projects is that platform projects stick with existing technology. 2. Projects that seek to reduce the output's cost or make minor product line extensions exemplify these types of projects. Therefore. Derivative projects. In making project selection decisions. This category accounts. also known as the organization's aggregate project plan. but rather the set of research projects pursued by the organization. or an entirely online grocery store is an example of a breakthrough project. the result of these projects is an output that can serve as the platform for an entire line of new outputs. Platform projects. In general. This is in stark contrast to the common practice of simply setting a project budget and specified return on investment (ROI) hurdle rate. Organizations that fund all projects that meet their ROI criterion typically end up with significantly more ongoing projects than they can competently manage and thus their contribution to the organization's long-term goals can be lost. Professors Wheelwright and Clark (1992) of the Harvard Business School developed a framework for categorizing projects that they call the Aggregate Project Plan. for a large majority of all innovations. it is vital to consider the interactions among various projects and to manage the projects as a set in order to achieve the organization's strategic objectives. The purpose of the framework is to illustrate the distribution of all the. Breakthrough projects. and project type. A computer that operated by voice recognition as opposed to a keyboard and mouse. In an attempt to better tie the firm's product development projects to their strategic objectives. however. Using this framework. the development of an ultrathin netbook computer would qualify as a platform project. projects can then be categorized into the following four categories as shown in Figure 6. then funding projects until either the budget or supply of acceptable projects is exhausted.Planning the Project 213 r: ! . Because ROI is an insufficient selection criterion. the set of projects chosen may not be close to an optimal portfolio for achieving their purpose. it could serve as the basis for a number of derivative I I I . organization's product/service design projects across a variety of measures such as resource demands. This tie is accomplished through the project portfolio. that it is typically not a single project that determines the organization's long-run success. As an example. product lines. Developing a stripped down version of a notebook computer or adding a new menu item at a fast-food restaurant would qualify as derivative projects.! I The long-term purpose of projects in the organization is to ultimately achieve the organization's goals. These projects are at the opposite end of the continuum from derivative projects and typically seek the development of a new generation of outputs. Platform projects fall between derivative and breakthrough projects. Based on these two dimensions.1: 1. it is vital to consider the interactions among various projects and to manage the projects as a set. in making project selection decisions. time.

2.214 Chapter 6: Managing Process Improvement Projects projects focusing on cost improvement and the development of other computer models with different features. The size of the points plotted for each project should be proportional to the amount of resources the project will require. ernployees can be assigned to a platform project. we have used different shapes to indicate different types of projects. Finally. There are a number of ways the aggregate project plan can be used. 4.1 The aggregate project plan. After gaining experience. Use of the aggregate project plan requires that-all projects be identified and plotted. the aggregate project plan facilitates evaluation of the resource commitments of the ongoing as well as proposed projects. or derivative innovations. the employee will qualify for larger and more valuable projects. this framework can serve as a model for employee development. we must remember that the . Extensive product changes RandD projects Extensive process changes Minor product changes Platform projects Minor process changes Figure 6. For example. In Figure 6. Also. The identification of gaps in the types of projects being undertaken is probably most important. R&D projects. Of course. an R&D project might lead to breakthrough. Internal projects are plotted using circles while projects pursued as part of a strategic alliance with other firms are plotted using squares. Dependingon its focus. New employees can be initially assigned to a team working on a derivative project. are the types of projects undertaken too heavily skewed toward derivative type projects? This might indicate an inadequate consideration of the firm's long-run competitive position. platform. As managerial skill accumulates. R&D projects entail working with basic technology to develop new knowledge. then assigned to manage a derivative project.

'This is typical of projects that require final assembly of components to produce the Whole (like a car). or ad piece. or earned credit. for example. that progress in a project is rarely uniform. The Project Life Cycle It has been found. which is only glop until it is baked in the oven). when the project is initiated. or goods (like a cake. In the stretched-S life cycle form. In the exponential form. the more difficult tasks that were postponed earlier must now be completed. but instead often follows one of two common forms. yet people are being drawn off the project and activity is "winding down.Planning the Project Extensive product changes Minor product changes 215 D Extensive process changes 4r--------------------------------------v Minor process changes 0 Figure 6. or perhaps even an MBA degree.3a. and much progress is made. the progress toward their goal may indeed be linear with every day they spend in class. as shown in Figure 6. if a student is auditing courses with the goal of understanding rather than getting a degree.3." so the end keeps slipping out of reach. after the project is initiated there is continuous activity on numerous aspects of the project. (However. there is no final output. It is especially typical of office and other such service work where the final output is a life insurance policy. illustrated in Figure 6.3b. As the end of the project draws near. there is virtually no product. or piece of paper. but until all the elemental parts come together at the end. Without that last signature. progress is slow as responsibilities are assigned and organization takes place. But the project gathers speed during the implementation stage. illustrated in Figure 6.2 An exampleaggregateprojectplan. fundamental purpose of this entire process is to ensure that the set of projects accurately reflects the organization's strategic goals and objectives.) .

Terminating the stretchedS form early will have negligible impact. There are matrix organizations where projects have both a functional and a program superior. There are three types of team members who should report directly to the project manager (PM). form. It is imperative the project manager and top management know which type of project they are working with before taking such actions. There is the ad hoc project form in a functional organization that reports to a senior executive. say. Combinations of these forms are also common. And there are projects that are just another activity in a project organization that is completely organized in terms of projects. such as the "weak" or functional matrix. (b) Exponential. since probably 97 percent of the benefits will be achieved anyway. . while others may have only partial responsibilities for the project and still report to their functional superior. 10 percent and the project is of the stretched-S. a team will be required to run the project.3 Two project life cycles. (a) Stretched-S. besides pointing out their difference in managerial needs. Each of these has its own advantages and disadvantages. and what works the best depends largely on the circumstances of the organization and the reason it started a project. then missing the last 10 percent is catastrophic because this is where all the value is attained. Management consulting firms typify project organizations. but terminating the exponential formwill be a complete disaster.216 Project initiation Chapter 6: Managing Process Project Improvement Projects Project implementation Project termination Project implementation termination Project initiation Time (a) Time (b) Figure 6. if the project is of the exponential form. Regardless of the form of the project. however. Another perspective on the same issue is the effect of early termination of the project. and the "strong" or project matrix. However. then not being able to spend that last 10 percent of the budget is of no urgent matter. Organizing the Project Team I Projects can be organized in any of a number of ways. Some members of the team may be directly assigned to the project manager for the duration. if there is a flat across-the-board budget cut of. The reason it is important to contrast these two forms. is that during the budgeting stage.

Project Plans The initiation of a project should in most cases include the development of some level of project charter (also known as the project plan). only schedules were the source of conflict. 411 ""Business Case This describes the justification for the project in terms of the benefits to the project organization. and what kinds. which may be more important than profits. there are not a lot of incentives the PM can give people for working hard on the project. Thus. even if these people report to the PM. and general management of the project are described below. and client that must be satisfactorily completed. and doing something that will be important to the organization. work plan. But toward the end of the project when timing was becoming crucial.Planning the Project 217 Those who will be having a long-term relationship with the project Those with whom the PM will need to communicate closely or continuously o Those with rare skills necessary to project success Yet. working with an important client. sponsor. It should be noted that the process of devel. As the project got under way. e General Approach This describes both the managerial and the technical approaches to the work. it is still not common for the PM to have the authority to reward these people with pay bonuses. or Scope This contains a more detailed statement of the general goals noted in the overview section and the specific requirements of the stakeholders. and a list of the major milestones in the project schedule. a description of the managerial structure that will be used for the project. With the pressures that tend to gravitate toward such important and high-profile projects. but any project charter should contain some level of information regarding the following elements. but even between members of the project team. such as whether the project is an extension of work done by the company for an earlier project and whether there are any . a: brief explanation of their relationship to the firm's objectives. priorities and schedules became the main points of conflict. 411 Overview This is a short summary of what the client expects from the project. The main ones are the fun and excitement of the challenge. and not only between the PM and other organizational units. unless the project is highly routine. at project formation the main sources of conflict were priorities and procedures. Knowing when to expect trouble. establishing a strong track record. According to Thamhain and Wilemon (1975). but also other gains such as experience. Goals. and so on. throughout the project can help the PM keep peace within the project team and facilitate smooth project progress. schedules. The elements that constitute the project plan and form the basis for more detailed planning of the budgets. it may be assumed that there is also a lot of opportunity for conflict to arise. It is directed to top management and contains a statement of the goals of the project. It includes the expected profits and ROI (return on investment) of course. or other such personnel matters-that authority normally still resides with the functional manager. This is true. During the main implementation stage. conflict shifted to technical issues and schedules. extra vacation. oping the project charter varies from organization to organization.

Evaluation Method Every project should be evaluated against standards and by methods established at the project's inception. customer-supplied resources. C. The first is the project budget. as well as the technical deliverables and their specifications. The Project Plan described above lays out these three objectives in detail but the task for the manager is to "make it happen. the use of subcontractors Contractual Aspects This includes a complete list and description of all reporting requirements. If known. These objectives are generally illustrated in Figure 6. types of training needed. one 'of the project manager's first responsibilities is to define all the tasks in as much detail as. The project master schedule is constructed from these inputs. new markets for our technology. legal or policy restrictions on work force composition. The linear responsibility chart is similar to a RACImatrix. and responsibility can be assigned. possible recruiting problems. @ Schedule and Milestones This outlines the schedule and lists milestone events.. Time-phasing the personnel needs makes clear to management and other departments when the various types of contributors are needed and in what numbers. collecting. One or more issues such as subcontractor default. and their impact. Personnel This lists both who must be involved in the review and approval process as well as the time-phased personnel requirements of the project.4. storing. that is. should be noted. etc. delivery schedules. strikes. and evaluating the history of the project. cost monitoring and control procedures should be described. Consult (or coordinate for support). and it provides the inputs for the project schedule (usually put into a format known as the project Gantt chart) and the linear responsibility chart that depicts the tasks of those outside the project team but with responsibilities related to the project. hurricanes. the name and authority level of the project manager should also be included here. a project is an attempt to meet specified performance or "scope" requirements by a specific deadline within a limited budget. Both capital and expense requirements are detailed by task. unexpected technical breakthroughs. and the estimated time for each task should be obtained from those who will do the work. which stands for the four main project responsibilities: Responsible (for a task). and sudden moves by a competitor are certain to occur-the only uncertainties are which. and I are put in . The main difference is that the letters R. Resources There are two primary aspects to be considered here. and any other special requirements. when. Plans to deal with unfavorable (or favorable) contingencies should be developed early in the project's life. This set of task descriptions is called the work breakdown structure (WES). and the procedures for changing any of the above. Approval. and Inform (notify). Special skills. IiII> IiII> IiII> IiII> Almost by definition." To achieve these three project objectives. liaison arrangements. Risk Management Plan This covers potential problems that could affect the project. This includes a brief description of the procedures to be followed in monitoring. Second.218 Chapter 6: Managing Process Improvement Projects deviations from routine procedure-for for some parts of the work. tight deadlines and budgets. such as security clearances. Each task is listed.possible so that they can be scheduled and costed out. instance. the team and other involved departments.

7th ed. Size. Milestone. jr. Contacts A. and a linear responsibility chart may have other personnel involvement included as well such as "initiate" or "supervise. commitment.. Purchase resources E. J. Reprinted with permission from]. Determine need C. New York: Wiley 2009. ) 1.7 illustrates the linear responsibility chart or RAel matrix for the robot project. and completion points are shown.5 Work breakdown structure. (2) the precedence relationships among the activities. The scheduling of project activities is highly complex because of (1) the number of activities required.6 for a project installing robots on a manufacturing assembly line. Meredith and S. Order Figure 6. Robot installation fIj. Mantel." A typical WBS and project schedule are illustrated in Figures 65 and 6. Appropriation request 1 D. Benefit 2.4 Three project objectives. type 1. Install and 1. The last status update shows that the project is a month behind schedule. Project Management: A Managerial Approach. place of the symbols in a RACI matrix. and .Planning the Project 219 Performance ("scope") Required performance Cost Figure 6. Figure 6.. and actual progress is graphed.

Project scheduling is similar to the scheduling discussed earlier in some ways but still differs significantly. a project schedule has to handle an enormous number of different activities. Meredith and S. Milestone achieved . for example. task AI. . 20X5 the project is one month behind schedule. Hoboken.. That is.to.6 Project baseline schedule. Project Management: A Manageiial Approacb. 7th ed. which must be coordinated in such a way that the subsequent activities can take place and the entire project (job) can be completed by the due date... (3) the limited time of the project. which was caused by the late completion ofA2 .]..220 Chapter 6: Managing Process Improvell1ent Projects Legend: + Project completion 0 Milestone planned o Contractu~ commitment A Planned completion ..6 is a project Gantt chart but is inadequate for scheduling the multitude of subtasks that compose. For example. Status date - . Mantel. jr. N]: Wiley 2009. Actual completion ). Reprinted with permission from].This is due mainly to the delay in task Cl. the basic network approaches-program: evaluation and review technique (PERT) and critical path method (CPM)-are based on variations of the Gantt chart. Figure 6. Figure 6.Planned progress Actual progress Note:As of 31 jan.

' . it must be able to integrate the performance and timing of all the tasks with the project as a whole so that control can be exercised.7 Linear responsibility chart or RACI matrix. which tasks are critical to the timely completion of the project. C R R A A Eng. U'_. If a number of similar projects must be conducted. Meredith and S.. Inductrial Contract Admin. for example. .><. J. NJ: Wiley 2009. and the order in which they must be completed. 7th ed.Scheduling ~n'ibli'Y the Project 221 S Subproject Determine need Solicit quotations .. Hoboken. In addition. Mantel. when they can and when they must be started. and which tasks have slack in their timing and how much JcHEDULING THE PROJECT---------------------- The project scheduling process is based on the activities that must be conducted to achieve the project's goals. A I Project Eng. Project Management: A Managerial Approach. Determining what must be done and which tasks must precede others e Scheduling. Determining when the tasks must be completed. the length of time each requires.. R C Field Manager BI Cl C2 A I C C 'Y{ft " " " R C I C R I C3 R u Legend: R Responsible A Approval C Consult I Inform Figure 6. Reprinted with permission from J. '1 Task Al A2 Project Office Project Manager A I Field Oper. The tasks involved in planning and scheduling project operations are: e Planning. sometimes these activities can be structured generically to apply equally well to all the projects.. jr. The scheduling procedure for project operations must be able not only to identify and handle the variety of tasks that must be done. but also to handle their time sequencing. by shifting resources from operations with slack (permissible slippage) to other operations whose delay might threaten the project's timely completion.

Although PERTand CPM originally had some differences in the way activities were determined and laid out. or tasks. and precedence relationships among the activities (i. In this text. • Event. _ • Activity. We next illustrate the process of scheduling with . One of the project operations.. Completion of an activity. an activity requires resources and takes some amount of time to complete.) • Path. We use the DMAIC approach-(see Chapter 4) to improve a bank's process for handling mortgage refinancing applications. The activities on the critical path or paths. lit Critical activities. A series of connected activities from the start to the finish of the project. . Later. Project Scheduling with Certain Activity Times: A Process Imp-rovement Example 'the primary inputs -to project planning are a list of the activities that must be completed. • Critical path. Any path that if delayed will delay the completion of the entire project. at a particular point in time. we relax this assumption and consider situations in which activity completion times are uncertain.e.a' Six Sigma process improvement project example. in PERT the arrows represent activities. Important outputs of project scheduling include: lit Graphical representation of the entire project. The set of all project activities graphically interrelated through precedence relationships. or series of activities. the activity completion times (also called activity durations). 4) Network. we assume that activity completion times are known with certainty.222 Chap ter -6: Mana gin g Pro c e s s I III p'r 0 v e III e n t Pro j e c t s Two primary techniques have been developed to plan projects consisting of ordered activities: PERT and CPM. as we will see here. what activities must be completed before another activity can be started). In this section. It will be helpful to define some terms first. many current approaches to project scheduling minimize these differences and present an integrated view. showing all precedence relationships among the activities Identification of critical path or paths Identification of critical activities Slack times for all activities and paths Earliest and latest time each activity can be started Earliest and latest time each activity can be completed • Time it will take to complete the project lit lit lit lit IiJi. boxes (called nodes) represent activities and arrows between the boxes represent precedence. (This is typical of the CPM approach.

in which ellipses show the start and end of the project. activities A. activity J can be started only as early as day 17. arrows represent the required precedence. as shown in Figure 6. To determine the expected completion time of each of the nodes on the network and thus the entire project. the PERT alternative. can finish as early as day 17. since activity A can be finished as early as day 10. Since J takes four days.Scheduling the Project 223 ~BLE 6. The same logic applies to activities E through H. and rectangular nodes represent the activities A-J in Table 6. Thus. According to the table. Activities E.H D. early start times TES and early finish times TEF are calculated for each activity. This way of depicting a project is known as "activity-on-node" (AON) and is typical . then activities A. Continuing on. the latest of its preceding activities (remember. Activity D can be started once activity A is completed. Likewise.E J: Uncover any new constraints on design 4 Project Completion and Critical Paths Table 6. and C can be started at any time. then it can be finished as early as 21 days. followed by its expected time (in days). To illustrate. the project starts at time zero (sometimes this is not the case). it can be completed (Td as early as day 10. activity-on-arrow (AOA). The values of TES and TEF are calculated moving left to right through the network. it can be completed as early as day 10 and activity C can be completed by day 5. J cannot start until both activities D and E are completed). since none of them is preceded by another activity. activity D can start as early as day 10 and. Now consider activity J. if it is started at time zero (~).8. Since activity A requires 10 days. B. is also common however (see Meredith and Mantel 2009 for examples). The rectangular nodes list the activity by letter. and C can also be started as early as time zero.C C G.1 shows the activity times and precedence for the ten activities that must all be finished to complete a bank's process improvement project.8. It cannot start until the latest of its predecessors is . if activity B is started at time zero. The same logic applies to activity 1. F.of CPM.1. since it takes seven days.C B. te E: Determine total refinancing time F: Use accounting data for total cost G: Interview to determine unknown risks H: Redesign so as to reduce tasks times I: Determine cost reductions of new design B.C B. The network diagram for this project is shown in Figure 6. and G cannot be started until both activities B and C are finished. Since activity D can be finished as early as day 17 and E can be finished as early as day 15. B. we begin with the Start node and work our way to the End node. and so on. ActivityJ cannot be started until activities D and E are both completed.1 Data for a Mortgage Refinancing Pr oj eet Preceding Activities 10 10 5 7 5 7 2 5 8 A Activity A: Identify all stakeholders B: Develop the project charter C: Uncover all relevant regulations D: Set up project procedures Expected Time.

And D depended on the completion of A.sand T. and J. resulting in the critical path A-D-J and the critical activities A.8 or 13 and still finish by day 21 and activity F can start as late as 21. we can determine the earliest time that the project can be completed.8 Network diagram for process improvement project. and I can be completed as late as day 21 without delaying completion of the project. Since the project "End" cannot be completed until all its predecessors are completed. and then the arrow from the Start node to A. so we bold the arrow from D to J. rather than E..Fhavebeen calculated for all the activities. Since activity D requires seven days. the latest finish time for activities J. the latest times each activity can be started and finished without delaying the completion of the project can be determined. F. then activities J. D. J's start time depended on activity D. Now that T. Since activity J requires four days. it can be completed by day 20. . -In calculating TES and T EF' we determined that the project could be completed by day 21. and hence 12. 12 for G and 10 for H. so we bold that arrow. the earliest it could be completed is day 21.S. to TES' TEF TLS. completed. resulting in the late start and finish times for activities G and H. We can now find the critical path and critical activities for the project. Since the End of the project depended on activity J. we bold the arrow from J to End. it can start as late as 21 . These TLS and TLF times are also shown in Figure 6. based on activity].7 = 10 without delaying the entire project.4 or 17 and still finish by day 21. In contrast to TES and T EF' the latest start time (T J and latest finish time (Td are calculated by moving backward through the network. Since it takes eight days. Likewise.7 = 14. Continuing on. TLF Figure 6. F. Activities G and H are handled similarly. Once TES and TEF have been calculated for each activity. activity D can finish as late as day 17. and I is 21. it can start as late as day 17 . from right to left. Similarly. If the project is to be completed by day 21. Thus.224 Chapter 6: Managing Process Improvement Projects Activity. since activity J can start as late as day 17. activity I can start as late as 21 ..

one day in this case. if an activity requires a key resource or individual.8 that for some activities. . activity H has a late start time of 8 and an early start time of 5. and G. there is no room for delay in any activity on the critical path without delaying the entire project. The amount of flexibility the project manager has in terms of starting and completing an activity is referred to as its slack Corfloat) and is calculated as Activity slack = TLS - ~s = TLF - TEF All activities on the critical path have zero slack-that is. perhaps reducing the duration of activity A by one day and bringing the project in at day 20 instead of 21. activity G can't start and will delay activity I which will delay the project. Since the late start dates of these three activities are 12 (for E). starting it at day 3 instead of 0. The latest dates for activity C are found in the same manner. activity B's latest finish date must be 11 because if it doesn't finish by 11. Alternatively. or else the entire project will be delayed! This will always be the case since this represents the critical path of the project. Before leaving the topic of slack. which precedes activities E. TES is less than its TLS and its TEFis less than its TIf In these cases the project manager can exercise some discretion in terms of when the activity is started and when it is completed. For example. but path B-G-I has a path slack of only 1 day. The latest it can finish is the earliest late start date of activities E. that activity will be late and will delay the entire project.early completion! In addition to calculating slack times for individual activities.Scheduling the Project 225 Now let's look at activity B. F. both activities C and H have slacks of three days. the latest completion time provides an indication of whether the slippage will delay the entire project or can simply be absorbed. leaving three days of possible slack.8 that the latest dates for the critical activities (A. D. the latest dates cannot be delayed from the earliest dates at all. slack times can be calculated for entire paths. Path slacks are calculated as Path slack = duration of critical path . Since all paths must be finished to complete the project. To illustrate. 14. and J) are identical to the earliest dates. it has a duration of 18 so its path slack is 21 . there is then no slack for activities H or 1. If resources for activity H are sitting idle and could be used to expedite activity A. Note in Figure 6. and 11. it is important to point out that the slack times computed for individual activities are not additive over a path. That is. But activities off the critical path may delay up to a point where further delay would delay the entire project. for example. if an activity falls behind schedule. The point is that slack times for individual activities are computed on the assumpthat only one particular is delayed. its slack is always the lesser of the two paths. Slack Time The times T ES' T EF' T J.51 and T IF can be used by the project manager to help plan and develop schedules for the project. and G since if it doesn't start by then. the time to complete the project is the time to complete the path with the longest duration. Since activity I is on both paths. for an. the project manager may choose to do this. Thus. For example.18 = 3 days. F. the path with the longest duration is critical in the sense that any delay in completing it will delay the completion of the entire project. but if we use those three days for activity C. Notice in Figure 6.path duration If we consider path C-H-I. its earliest and latest start times provide a window during which that resource can be acquired or assigned to the project.

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