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Operations Management (TQM)

Rosemarie J. Pascua
Ilocos Sur Polytechnic State College
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Operations Management
(TQM)

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

OVERVIEW ON THE MODULES FOR OPERATIONS MANAGEMENT (TQM)

I. Course Title: Operations Management (TQM)


II. Course Overview:

The course Operations Management with Total Quality Management


provides the student with an analytical approach to the economic problems of
planning and deploying human resources, materials, plus facilities and equipment
to generate goods and/or services for the marketplace. Course emphasis will be
on the application of the analytical tools and strategy to address critical issues
related to strengthening the competitive position of the enterprise. The course also
examines the concepts of both operations management and total quality
management. It discusses its importance to the overall strategy and
competitiveness of a firm. In addition, operations management focuses on specific
tools such as project management, forecasting, system design, and inventory
management. Total quality management would focus on quality control, total
quality paradigms, and quality teamwork and empowerment. Overall, the course
provides students necessary knowledge and concepts in managing the operations
of a firm through total quality management.The course have been divided into the
following modules:

Module 1: Introduction to Operations Management

Module 2: Competitiveness, Strategy, and Productivity

Module 3: Introduction to Project Management

Module 4: Forecasting

Module 5: System Design

Module 6: Inventory Management

Module 7: Managing Quality

Module 8: Quality Control

Module 9: Total Quality Paradigms

Module 10: Quality Teamwork and Empowerment

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Learning Outcomes:

At the end of the module, the students should be able to:

1. To understand the fundamentals of project management.


2. To know the importance of project management.
3. To demonstrate awareness about how different organizations plan their
projects as well as the roles of project managers.
4. To be knowledgeable in the different dimensions of scheduling and controlling,
and to be introduced with the Program Evaluation and Review Techniques
(PERT), as well as the Critical Path Method (CPM).

MODULE 3: INTRODUCTION TO PROJECT MANAGEMENT

In this module, you will gain knowledge about the fundamentals of project
management, what is the importance of management, how different organization plan
their projects as well as the roles of project managers. It also tackles the different
dimension of scheduling and controlling. It also introduce the Program Evaluation and
Review Techniques (PERT) as well as the Critical Path Method (CPM).

An Overview of Project Management

According to Project Management Institute (PMI), Project Management is


defined as an application of knowledge, skill, tools, and techniques to project activities
to meet the project requirements. It is also the integration of five (5) project
management process group such as initiating, planning, executing, monitoring and
controlling, and closing. This means, project should be done in a specific period of
time. Hence, project is a temporary undertaking which has specific start and ending
that also include financial resources. For instance, creation of a certain event is a
temporary undertaking wherein there will be a definite end. Project normally comes
with time and budget.

Time pertains to when to starts and to end a project. On the other hand, budget
pertains to how much should financial resources be include in the project. It also has
the elements of scope and quality. Scope refers to the list of deliverables or types that
need to be done or agreed upon. Quality, on the other hand stands for standard or
the measurement of something. In project management, quality is not necessarily the
quality of the output, it is also includes the quality of processes and approaches used
in a particular project. These four aspects of the project are called the Balance
Quadrant. It demonstrates the relationship and how some changes in these aspects
affect one another.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Figure 3.1 Balance Quadrant of Project

Project Life Cycle

As we define project as a temporary undertaking with a define start and ending;


commonly, the life cycle of the project starts with initiating, than followed by planning,
executing, monitoring and control, then by closing. To show this life cycle, illustration
is presented below.

Second Phase
•Initiating •Closing
•Planning
•Executing
•Monitoring and
Control
First Phase Final Phase

Figure 3.2 Project Life Cycle

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
The second phase of the project life cycle is a loop which is interrelated to each
other. Normally, project manager tend to focus their time in execution and controlling
the project since most of the time project manager do the task, structure the project,
and making sure that all are in place. However, initiating, planning, and closing are the
most important phases of the project since, there will o project to be done.

Planning

Monitoring
Executing
and Control

Figure 3.3 Second Phase of Project Life Cycle

Defining the Phase of Project Life Cycle

Initiating – it is the phase of a certain project which aims to set the project itself for
success. There are various number of activities connected with this. One of these is
creating project charter which mean is what to be done in meeting the requirements
of the customer.

Planning - the most important phase of the project. This is where you answer, who,
what, where, when, how much, and how long.

Executing – a phase of project life cycle which pertains to the implementation of the
project plan, what should be done, as well as the technical works of the project.

Monitoring and Control – in general, monitoring and control are different activities,
however since these two activities work together, it can be considered as one activity.
It entails the comparison of the planning to the execution of the project, then taking
preventive action if there are activities that are not going into plan.

Closing – once the output that was produced in satisfying the customer normally the
project can be considered as close.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
In summary, here the definition of the phases and what should be done.

Table 3.1 Definition of Phases and Activities

Initiating Planning Execution Monitoring & Closing


Control

1.Identifying 1.Developing 1.Do all the 1.Monitoring 1.Final


Inputs Strategy works of Progress Report

2.Knowing the 2.Implementation 2.Corrective 2. Review of


Competitor planning Actions the entire job
done.
3.Defining the 3.Risk
problem Management 3.Audit

4.Developing
Vision and
Mission
Statement

Why a Project Fails

If initiating the project isn’t done properly, there are possibilities that the team
of the project will be having difficulties of identifying what should be done, what will be
the plan or even will be hard for them to comprehend the idea of the project.

These are the reason why some project fails:

1. Initiating project is not done properly;


2. Project members aren’t included in the planning stage of the project.
3. Failure to identify the stakeholders of the project.
4. Failure to plan the project at all.
5. Not giving attention to the close-out of the project.

Misconceptions about Project Management

It is not just Scheduling

One of the misconceptions about project management is that it pertains to


scheduling. Even though one of the components of project management is

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
scheduling, there are many aspects that one’s needs to consider such as strategy,
plans, execution, as well as logistics.

It’s Boring

It may viewed by some that project management is boring and can interfere
only in what we call “real work”. However, the reality is that without it, all works are not
worth it or value at all. Despite the fact that one’s done something beautiful, it will be
meaningless if the output will never be in line with customer wants and expectation.

It Takes Too Long

Another one view of project management us taking too much time to do. It may
be true in some ways, if you are looking at the traditional way of project management.
However, the need for balancing between the sciences of project management which
pertains to what you are told you should do from the art of project management as
pertain on what you actually need to do.

It’s Too Hard

The other misconception about project management is that it is too hard to do.
Some of the reason for some to assume that project management is hard because of
too many paper works that need to be done.

Aside from the misconception given there are concepts that are
misinterpretation of Project management.

1. Project Management is not personal efficiency. Most of project manager


tend to think that it is a personal productivity by doing the to-do-list needed in
the project. However, there should be a clear line between what you need to do
personally and what are the needed to do in a project.
2. Project Management is not people management. Despite the fact that in
project management, people management is one area. However, it is two
different things. People are more complex that an average project that someone
is handling.
3. Project Management is not operation or service management. The different
tasks of operation or service management are very much different from what
you are doing in a project.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Importance of Project Management

There are various reasons why project management is important. These are
the following reason why some if administrators use project management:

1. To have a clear, focus, and lay down objectives – without an efficient project
management, teams may not know what the project is all about. When project
members know when and where to focus and what will be the objective of the project,
it can give the team a progression without and confusion or chaos.

2. Project Management gives realistic planning – you can deliver a project


when you have a clear plan and what will be expected from you. On the other hand,
without proper planning or without planning at all, it may give you vague budget,
unrealistic deadline as well as too much expectation.

3. Project management gives the organization maximum resources


utilization – in any type of task, inefficient utilization of resources can cause much to
the organization. With the used of proper project management methodology, can give
you realization on how to use your resources properly. It can give you a good
advantage in any aspects of a project.

4. Project management can minimize or mitigate risk – oftentimes we use to


focus on the strategies and tactics in executing plans but we often fail the concept of
risk that potentially can misalign all our plans. With a good project manager and project
plans, one can step ahead with risk and threats that may rise.

5. Project management can ensure quality control – despite the fact that we
are working with enormous pressure of deadline, expectations, budgets and
compliances as well as control of quality project management is important in order to
identify, manage, as well as control the quality of whenever output that needs to be
done.

Project Management Knowledge Areas

According to the Project Management Institute (PMI) who published the Project
Management Body of Knowledge (PMBOK), there are nine (9) areas of knowledge
that project managers should know and familiarized with.

These are:

1. Project Integration Management – this ensures that all coordination from


planning, execution, and controlling the project must be exercised. As the term implies,
integration of all tasks must be integrated as well as coordinate to all members of the
project in order to meet the desire outcomes.
Course Code:Strat 102
Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

2. Project Scope Management – any changes from the project scope can ruin
the project as a whole. This portion entails the authorizing the job, developing the
statement of scope that will ensure that boundaries are defined, dividing the task into
a manageable works as one of the components of deliverables, verification of task that
has been accomplished, and also the control on the changes of scope with proper
procedure in place.

3. Project Time Management – it ensures that all works are in place or in


schedule. Generally, this pertains to the development of schedule that can be met,
then there’s a need for controlling in order for the scheduled task to happen.

4. Project Cost Management - it involves cost estimation on the resources or


budgeting which includes people, materials, equipment, and other areas in the project.

5. Project Quality Management - it is important that quality of the project must


be taken into consideration. There’s no meaning at all if a project will be finished on
time yet the quality suffered. In this area, project manager must look at quality
assurance and quality control.

6. Project Human Resources Management – it is often unnoticed by project


manager to identify what the people need in the project. In this area, it involves the
definition of project team member’s roles as well as their responsibility. It also require
as to whom they are going to report. Most importantly, is to acquire the best people
that will execute the project.

7. Project Communications Management – as implied with its area, it involves


planning, executing and controlling of distribution of information about the project. This
information comprises of the status of the project, as well as the project
accomplishment. It is also important that all change about the project and delay must
be relayed to the team or those stakeholders that might be affected by these changes.

8. Project Risk Management – it is a systematic way of identifying calculating,


analyzing, and responding to any risk that one may encounter in a particular project.
It is a way of minimizing the uncertainties and maximizing the positive events to the
project objectives.

9. Project Procurement Management - in this area, logistics is very important. It


is the process of procuring necessary goods and services or materials that are needed
in particular projects. It involves the decision of what must be procured, issuances of
bids and contracts, vendor selection, and closing them after the project has been done.

The Role of Project Manager


Course Code:Strat 102
Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
The primary obligation of a project manager is to ensure that all works for
the project will be executed according to plan, budget, and scope as well. They ensure
that works will be finished on time within the agreed quality and level of performance.
There are misconceptions that project managers do the majority of work; however,
they are the one whose primary responsibility is to manage the whole project. Project
managers must understand the organization’ mission statement, after which the
project manager must see to it that all the plans and execution of the project are within
the mission of the organization. It is important that the interests of the organization are
being met.

Skills of a Project Manager

As a project manager, one must take note of different skills in order to be an


effective project manager. These are the skills in order to ace project.

1. Leadership Skills
2. Communication Skills
3. Planning Skills
4. Time Management Skills

Let us look at the importance of these following skills:

Leadership Skills – leadership is one of the most important traits that one’s manager
should have order to have good management skill in a project. One should have a
right vision in order for the leader to bring his member to the right direction. It is
important also that a project manager can guide them, inspire, and motivating his
member.

Communication Skills – without proper communication or miscommunication about


the project it may lead to chaos and failure to a project. Proper communication plays
also a big role in project management. It is important for the project manager to ensure
all members and stakeholders are well aware of their tasks as well as the
accomplishments and progression that is happening about the project.

Planning Skills - as a project manager, planning and organizing tasks of the members
and stakeholders is in the proper order, most significantly, to the right person. It is a
golden skills that one know how to identify and foresee the risk that may arise in a
project and how to prepare to mitigate and minimize this occurrences, and on how
formulate strategies.

Time Management Skills – it is not just about scheduling of task. It means that project
manager is making sure that that every task is plotted and identifies the urgency and
prioritization of the same. Project manager understand the difference between what is
important and what is urgent.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
Out of these four skills, the most important and first skill that one’s project manager
has is leadership. But everything must be in coordination.

Biggest Trap for Project Manager

In spite of the fact that project manager (PM) normally do managerial task, there are
instances that PM’s are doing technical works aside from its managerial task. These
two must also be in balance to avoid any conflicts.

Initiating the Project

One of the first task in project management is to initiate the project. The purpose
of initiating the plan is to set up the project in order to achieve its success. It is indeed
important for the project management as it may implies chaotic scene if undone or
incorrectly done. At the beginning of the project, you will be forming customer’s
contract which informing them what should be done, how it will be done, and when it
will be done.

Formal and Informal Contract

Formal Contract is a piece of paper you sign in the presence of someone


which includes all the written statement and agreement of both parties. On the other
hand, Informal Contract pertains to the assumed understanding of both parties.

At the very beginning, initiating can give you best chance on defining what
success is. In this phase, you are able to identify the success criteria and the key
elements that need to be conveyed for the project to be up-and-coming.

Process of Initiating

The process of project initiating is simple. Project manager should gather the
following information:

1. Why there’s a need for the project to happen


2. What should be delivered and how it will be delivered
3. Who are going to deliver the project or who are involved with it.
4. When will be the project to be delivered.

After all of these are answered, gather some inputs from the stakeholders and make
sure to have the following:

1. Summarize the Why, what, when, who, and how on the project initiation
document.

2. There’s a need to review everything in the project initiation document together


with the project board and key project stakeholders to come up with an agreement.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
3. After all the consultation and agreement with the stakeholders and project
board, ensure to have a meeting to pronounce the start, share what have transpired
in the consultation and what are the details in the project initiation document. Proceed
planning along with the project management team, key stakeholder and project
management board.

Different Initiating Tool and Best Practices

There are a lot of tools and best practices to be use that will help to ease this
phase of the project management.

Project Initiation Document (PID) – it is the document where you are able to get the
summarized agreement of one party to another. You can also see the summary of
what, where, who, why, and how the project will be delivered. It also includes some
criteria such as assumptions, constraints as well as the success criteria. It is important
to understand that PID is not a contract; PID should be concise and short as compared
with contract.

Project Initiation Document has a different section which need to be address during
the first phase of the project. These are the following sections:

1. Business Need (Why)


2. Project Objective (What)
3. Project Deliverables (How)
4. Project Timeline (When)
5. Project Organization (Who)

Kick-off Meeting – it is important to practice this stage of initiation. In this meeting,


you have the opportunity to bring all the key players of the project which is also the
signal that a particular project will be starting.

Planning the Project – after the initiation stage or the phase of the project, the second
thing to do is to plan for the project. In this phase, you will understand the importance
of planning, the different aspects, tools and technique in order to have a smooth project
management.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Importance of Planning

Some people do not focus on planning and tend to think that planning is just a waste
of time. There are many reasons why planning is important:

1. To have a better understanding of the project.


2. To know the best approach on how to handle the project.
3. To have a better communication for both the team member as well as the
customers on different approaches of the plan to be executed.
4. To help on getting the work done and tracking the progress of the project.
5. Most importantly, it will provide right direction of the project.

Traditionally, planning is pertaining to what task and how to execute this. If the
planning will be on a task-based approached it will not give us the high point of the
project or the progress of it. It is hard to measure. Task-based planning literally can
just give you the list of things to so or what we can to-do-list of the project. So to speak,
instead of planning the task, it should be deliverables.

Task versus Deliverables

When we say task, it is the job you are busy doing, for instance building, designing,
and creating. On the other hand, deliverables are the actual end-products of your
project whether it’s tangible or intangible outputs. It is more likely task is to lay the
foundation; and deliverables are the foundation itself.

How to Make a Plan

There are six steps that you need to consider in making a plan:

1. Evaluate the project and breaking down into deliverables.


2. Identify needs and dependencies.
3. Estimate how long each parts will take to work with.
4. There’s a need for any contingency.
5. Consider any risk that may arise
6. Exemplify the plan into format that the project management team, other
stakeholders, and the board will comprehend and follow.

Evaluating the project and breaking down into deliverables

The first task you need to do is to evaluate the project and breaking down into
deliverables that is small and sufficient in achieving it and measuring it.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Identifying needs and dependencies

The next step is to identify the dependencies. It is the process of identifying whether
one deliverables depends on other deliverables. Many of us are doing one deliverables
after another due to the restriction of resources or even the number of people who are
working on a project. For instance, if you are the only one who will be doing a project,
you may end up doing one task after another. Identifying dependencies can give you
a glimpse on any mishaps on your first breakdown. It is easily drawn or connected by
an arrow on your list of deliverables that identifies what deliverables heralds another.

Estimating Time on each parts of deliverables

It is important to know how much time needed to accomplished one deliverables


to another. It is important to estimate the time of deliverables in order to know how
long these deliverables will be processes. It can also create an initial project
scheduling. It is a golden rule in project management that the person who will actually
undertake the work should be the one to do the estimation.

Adding Contingency

Contingency pertains to the extra time that will be added on the estimation in
order to cover up unexpected occurrences or event. In this way you will be having
enough time if you have delays on the scheduled plotted on the planning.

Considering any risk that may arise

Risk management is considered to be part of the planning stage, where we


need to identify any occurrences that may affect the whole process of the project.
These risks can be in the form of internal and external risk. There are ways or steps
in risk management such as:

1. Risk Identification
2. Rate the risk if it is likely to happen and also the severity of the risk.
3. Choosing risk that needs to be plan.
4. Making plans in order to deal with this risk.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Assessing Project Risk

It is important to ensure that we assess the risk of the following aspects of the
project:

1. Schedule
2. Budget
3. Project Quality
4. Customer Satisfaction

Representing the Plan

After all the steps are already done, it I time that you represent the plan. It is
important to reiterate that planning is not scheduling. Scheduling pertains to the timing
that specific deliverables are needed to be done and planning encompasses
everything in a project. Moreover, project plan comprises the following:

1. Deliverables and milestone


2. Schedule
3. Assumption and Constraints
4. Risk management plan

Tools and Best Practices in Planning the Project

There are tools and best practices that you need to consider in this phase of
the project.

Work Breakdown Structure (WBS)

It is representation of the scope of the project. It encompasses the whole scope,


structure and hierarchy and deliverables of the project. WBS does not show the
sequence, in which the work should be performing, it is determined once the schedule
has been developed.

A good example of work breakdown is when you want to clean your room.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Figure 3.4 Work Breakdown Structure of Cleaning the Room

The Gantt chart

It is a diagram developed by Henry Gantt that is notational for the many. It is a


bar chart that represents the particular project schedule. Normally it is the list plotted
on the left side with specific bar representing the whole duration of a particular task in
the right side.

Figure 3.5 Sample Gantt Chart (Source:www.teamgantt.com)

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
Plan Reviews

This is more of a best practice than a tool. It is where you set up a meeting in
order to review the project plan with those people involved with the project per se. it
consists of taking people keep on track about the project and their involvement at the
high point of the project. Without plan reviews, it might be difficult for some
stakeholders and board to catch up with the milestone as well as the progression of
the project. It may lead to confusion and misunderstanding.

Executing the Project

This phase of the project deals with the actual work to be done or executing in
creating a particular product or services.

Ownership of the Deliverables

It is important that there are members of the team that have the sense of
ownership when it comes to executing the project. There should be an individual that
is responsible and accountable in making things possible and executing the plans that
you has created.

Linkage to persona productivity

In the previous module we have discussed the fundamentals of productivity. In


this phase of the project you are giving the idea to the person on the responsibility as
well as the accountability of the deliverables wherein you can measure their personal
productivity.

Tools and Best Practices in Executing the Project

There are numerous tools and practice that you may consider that also can help
you for the smooth execute of the project.

Adding Ownership to the Existing Plans

After you have formulated the plans, all you need to do is to add some
ownership, wherein you have to identify the key person who is responsible and
accountable in executing some areas or deliverables of the project.

Stand-up Meetings

As that term implies, this is a meeting wherein the responsible person will be
standing up and discuss the progress of the deliverables assign to them. This way, all
are on track on the progression of the project and no one is left behind. It is also one
way of identifying the some issues or if there are overlapping of works between people.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
Controlling the Project

In this phase, you are identifying if you are on track, the progress of the project,
as well as the adaptation of any changes that may arise.

The most important question you need to ask is “Are you on track”? It is
important for the project management team to know if all the deliverable are on time,
if it is not on time, what are the possible remedies that you need to do? Are you doing
something to address it?

Measuring Deliverables

In this stage, it can simply say measuring deliverables is just asking the work
has been done. However, it is important that the project team and the customer have
the same definition of work done. For instance, if you are working on a website, team
member might have the definition of done as “all information has been encoded” on
the other hand, the customer think that done is “encoded, it has been tested as well
as t is ready for use”.

Measuring Everything such as Time, Quality and Cost

After you have already measures the deliverables, it is much equal for you to
measure other factors such as the time, quality and cost.

There are also measurements to different areas where you can see the progress as
well as the resources used in the given project.

1. Scoped Delivered – are all deliverables completed?

2. Time Spend versus Time Planned – after the scopes were completed, are we
on time? Are we late or ahead of the planned time?

3. Budget used to date – it is important to see if the entire budget was used on
the half of the scope or after all the scopes has been done.

Risks in the Project

If you are not on track, might as well look back on the possible risks you have
identified in your planning. These risks might already materialize that’s why there are
some delays or mishaps on the project. It is important that you have drawn a risk
management plan in order to mitigate or minimize any anticipated risks that may occur.
As stated in PMBOK (Project Management Body of Knowledge), Project Risk
Management is a process of identifying, analyzing and responding to any risks and
how are you going to monitor and control this risks.

There are six-step in Processing Project Risk Management. These are:

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
1. Make a list – making a list of potential risks or uncertainly is important in this
process. If you fail to identify these risks, you might end up unprepared.

2. Determining the probability of it occurrence – in this step you are likely to


identify the probability of the risk occurrence.

3. Determining the negative impact of this risk occurrence – it will help you to
understand the severity of the risk and able for you to prioritize how much time effort
should be done in order to resolve.

4. Prevention or Mitigation of Risk – Some risk can be prevented, or even


mitigated, however some of risk can also be accepted. If the risk is already been
identified it is important have mitigation plan, but you need to consider the cost of the
program you are applying to a particular risk. The cost of your program might be higher
than the amount of losses that you may incur.

5. Considering Contingency – it is different in preventing risk. Risk prevention is


when you already identify the risk and try to prevent it. Contingency planning however
pertains to taking action once and rises occur.

6. Establishing the Activation Point – once possible risks become a reality,


project manager must take into consideration in using the contingency.

Creating Reserves

Comprehensive risk plan can be conceded if you aren’t able to establish


reserves. This makes you prepare or act upon the implementation of risk plan; it can
give you time and resources in order to execute it. There are two reserves that you
need to consider.

1. Contingency Reserve – it is the time and budget that is allocated in the project
specifically for those identified risk.

2. Management Reserve – it is the allocation of time and resources for those risks
that are not predictable. It is a way of enabling the organization to act upon unknown
risk.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Risk Management Tools

There are numerous tools that you need to consider in risk management. These
are:

1. Risk Management Information System – it is a computer-based system that


allows project manager to store, update as well as analyze risk data in order to predict,
attempt in controlling those risks and minimize the losses in the future.

2. Risk Management Intranets – it is a private internet network that limits the


audience or access on data.

3. Risk Maps or Risk Matrix – these are grids with the details of possibility or
potential risk that may occur. It also listed the frequency as well as the severity of risks
that the organization may face.

4. Value at Risk (VAR) Analysis – it is the process of analyzing the worse


possible losses that is likely to occur in given period of time.

5. Catastrophe Model – it is a model that is computer-based that identify the


amount of losses in the event of a catastrophe.

Project Scheduling

As mentioned in the previous discussion, in the planning stage we have


discussed the Gantt chart, the list of tasks and timeline of the project can be seen. In
the late 1950’s and early 60s, there were two methods that have been developed to
address some issues about Gantt Chart as well as to develop the way project manager
schedule the entire deliverables. These are Critical Path Methods (CPM) and Program
Evaluation and Review Technique (PERT)

Critical Path Method

It is a step-by-step project management technique that identifies activities on a


critical path. It is an approached for object scheduling that breaks the project on
several deliverable. There are different advantages of this method such as:

1. It identifies the most important tasks;


2. It helps to reduce timelines; and
3. It helps to compare the actual from what is plan.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Figure 3.6 Sample Critical Path Method (Source: www.smartsheet.com)

Program Evaluation and Review Technique (PERT) Chart

PERT is a methodology that is the same with Critical Path Method. Enhances
the scheduling, organizing as well as the coordination of a certain projects. It was
developed by US Navy in the 1950’s in order manage the missile program. It
represents a network diagram with numerous nodes that connect the entire tasks on
a particular project.

Figure 3.7 PERT Diagram (Source: www.searcsoftwarequality.techtarget.com)

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2

Closing the Project

The final stage or phase of the project management is closing it. In this phase,
we are able to identify that a project has been delivered or has been done.

Identifying when it is done

Knowing when the project is done is very important after the second phase of
the project which is the planning, executing, and monitoring and control. Once the
entire deliverables are done, is it safe to say that the project is done? It is important
that you look back on how you first draw the project. The first phase of the project
which is initiating must be reviewed. Try to look back at the Project Initiation Document
(PID) where all the scope, timeline, as well as budget was drawn. These are success
criteria that need to be considered in closing the project.

Attaining Customer Settlement

As a project manager, you can’t just state that the project is done. It is more
likely closed if the customer was satisfied on the output of the project. At the end of
the day, the customer has their final say about the project. Once both parties are
agreed upon the final outcome of the project, it is safe to say that the project was
actually closed. However, there are three scenarios that may arise upon the
completion of the deliverable.

1. Total Success – meaning all are in place and both parties agreed upon the
outcome of the project.

2. Compromise – the project delivered most of the important elements, however


the satisfaction of the customer is not within 100%. Most likely there are areas that
need to revisit in order to attain its total success.

3. Total Disconnect – project management team may think that they already have
delivered the needed by the customer; however, the customer may feel differently or
either they will think that you have broken the contract with them.

Closing the project encompasses four steps such as review agreement, completeness
and celebration.

Review

Reviewing the project is the first step which also presents the product,
processes, as well as the task delivered. This review encompasses in the initiating
phase. It is important that you answered the following question:

1. Has the project come in and/or within budget


Course Code:Strat 102
Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus

MODULE 2
2. Has the project been delivered timely
3. Has the project was delivered within the scope given
4. Has the project comes with the required standard and quality

Agree

The second step is to have agreement on both parties that the project is
officially closed. In this step, documentation is important and administrative task and
reconciliation of the budget and expenses.

Complete

The third step is to have agreement on both parties that the when review was
made.

Celebrate

It is also important for the project management team to celebrate the completion
of the project.

Course Code:Strat 102


Descriptive Title: Operations Management (TQM) Instructor: Rosemarie Jimeno Pascua

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