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The Strategic Importance of Project Management Scheduling large, often one-time projects is a difficult challenge to operations managers and is one of the 10 OM decisions. The stakes in project management are high Millions of dollars in cost overruns have been wasted due to poor planning on projects, unnecessary delays have occurred due to poor scheduling, and companies have gone bankrupt due to poor controls.
The management of large projects involves three phases; 2. Planning. This phase involves goal setting, defining the project, and team organization. 3. Scheduling. This phase relates people, money, and supplies to specific activities and relates activities to each other. 4. Controlling. Here the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to meet time and cost demands.
Projects can be defined as a series of related tasks directed toward a major output. A project organization is developed to make sure existing programs continue to run smoothly on a day-to-day basis while new projects are successfully completed. The project organization works best when; 2. Work can be defined with a specific goal and deadline 3. The job is unique or somewhat unfamiliar to the existing organization 4. The work contains complex interrelated tasks requiring specialized skills 5. The project is temporary but critical to the organization.
Project scheduling involves sequencing and allotting time to all project activities. At this stage, managers decide how long each activity will take and compute how many people and materials will be needed at each stage of production. Managers also chart separate schedules for personnel needs by type of skill (management, engineering or pouring concrete).
To summarize, whatever the approach taken by a project manager, project scheduling serves several purposes: 2. It shows the relationship of each activity to others and to the whole project 3. It identifies the precedence relationships among activities 4. It encourages the setting of realistic time and cost estimates for each activity. 5. It helps make better use of people, money, and material by identifying critical bottlenecks in the project
The control of large projects, like the control of any management system, involves close monitoring of resources, costs, quality, and budgets. Control means using a feedback loop to revise the project plan and having the ability to shift resources to where they are needed most.
PROJECT MANAGEMENT TECHNIQUES
Program Evaluation and Review Techniques A technique to enable managers to schedule, monitor, and control large and complex projects by employing three time estimates for each activity. Critical Path Method (CPM) A network technique using only one time factor per activity that enables managers to schedule, monitor, and control large and complex projects. Critical Path The computed longest time path(s) through a network.
PROJECT MANAGEMENT TECHNIQUES
PERT and CPM are important because they can help answer questions such as the following about projects with thousands of activities: 2. When will the entire project be completed? 3. What are the critical activities or tasks in the project-that is, the ones that will delay the entire project if they are late? 4. Which are the noncritical activities-the ones that can run late without delaying the whole project’s completion?
PROJECT MANAGEMENT TECHNIQUES
4. What is the probability that the project will be completed by a specific date? 5. At any particular date, is the project on schedule, behind schedule, or ahead of schedule? 6. On any given date, is the money spent equal to, less than, or greater than the budgeted amount? 7. Are there enough resources available to finish the project on time? 8. If the project is to be finished in a shorter amount of time, what is the best way to accomplish this goal at the least cost?
If the diagram had looked like the one following, both activities a and b would have to be completed before activity c could begin, but a and b could be performed at the same time; performance of a is independent of performance of b.
a c b
If activity a must precede b and c, the appropriate network would look like this:
When multiple activities enter a node, this implies that all those activities must be completed before any activities that are to begin at that node can start. Hence, in this next diagram, activities a and b must both be finished before either activity c or activity d can start.
When two activities both have the same beginning and ending nodes, a dummy node and activity is used to preserve the separate identity of each activity. In the diagram below, activities a and b must be completed before activity c can be started.
b Dummy Activity/Broken Line
Example #1: Given the following information
8 wks 11 wks
a. The length of each path b. The critical path c. The expected length of the project d. Amount of slack time for each path
Compute the earliest starting time and earliest finishing time for each activity.
The network diagram for a project is shown in the accompanying figure, with three time estimates for each activity. Activity times are in months. b.Compute the expected time for each activity and the expected duration for each path. c.Identify the critical path. d.Compute the variance of each activity and the variance of each path.
Diagram for Example #3
Using the information from the previous example, answer the following: b.Can the paths be considered independent? Why? c.What is the probability that the project can be completed within 17 of its start? d.What is the probability that the project will be completed within 15 months of its start? e.What is the probability that the project will not be completed within 15 months of its start?