ISD 351

Introduction to Operations Management

Lecture 5: Project Management

Dr. J. Frimpong Manso

Jan 2014
 Chapter Objectives
After reading this chapter you should be able to:
• Define project and project management
• State and explain the nine knowledge areas of project management
• State and explain the components of project management
• Appreciate the constraints of project management
• State the role of the project manager
• Explain Critical Path Method and Project Evaluation and Review Techniques as project
management techniques.
• Draw project network diagram and consequently determine the critical path of a project.

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 Introduction
• WHAT IS A PROJECT?
A project is a temporary endeavor, having a defined beginning and
end, undertaken to meet unique goals and objectives, usually to bring
about beneficial change or added value.

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 Introduction
Examples of project:
• Career development (education and training courses).
• Designing and constructing a building, a house, etc
• Designing and testing a new prototype (a car or a washing machine).
• The launch of a new product (advertising and marketing project).
• Implementing a new computer system (IT project, or
• upgrade).

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 Introduction
• Designing and implementing a new organizational structure (human
resource project).
• Planning and conducting an audit (quality management project).
• Improving productivity within a target period.
• Disaster recovery.
• Olympics event (a sports project).
• Musical concert tour (an entertainment project).
• Going on holiday (a domestic project).

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 Introduction
• What is Project Management?
Project management as defined by the Project Management Body of
Knowledge (PMBOK) is: .....
the application of knowledge, skills, tools and techniques to project
activities in order to meet stakeholder's needs and expectations from
a project

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 The knowledge areas(components) of project
management
• Integration
• Scope
• Communication
• Time
• Cost
• Procurement
• Quality
• Human Resource Management
• Risk
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 • Project Integration: integrates the three main project management
processes of planning, execution and control
• Project Scope Management: It is primarily concerned with defining and
controlling what is or is not included in the project
• Project Time Management: includes the process required to ensure
timely performance of the project. It consists of activity definition,
activity sequencing, duration estimating, establishing the calendar,
schedule development and time control.

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 • Project Cost Management: includes the process required to ensure that
the project is completed within the approved budget. It consists of
resource planning, cost estimating, cost budgeting, cash-flow and cost
control.
• Project Quality Management: includes the process required to ensure
that the project will satisfy the needs for which it was undertaken. It
consists of determining the required condition, quality planning, quality
assurance and quality control.
• Project Human Resource Management: includes the process required
to make the most effective use of the people involved with the project. It
consists of organization planning, staff acquisition and team development.

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 • Project Communications Management: includes the process required to
ensure proper collection and dissemination of project information. It consists
of communication planning, information distribution, project meetings,
progress reporting and administrative closure.
• Project Risk Management: includes the process concerned with identifying,
analyzing, and responding to project risk. It consists of risk identification,
risk quantification and impact, response development and risk control.
• Project Procurement Management: includes the process required to acquire
goods and services from outside the performing project team or organization.
It consists of procurement planning, solicitation planning, source selection,
contract administration and contract closeout.
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 The Project Management Process

• Project initiation stage;

• Project planning and design stage;
• Project execution and construction stage;
• Project monitoring and controlling systems;**
• Project completion

**Some authors don’t include this step

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 Typical development phases of a project

Initiation Planning &Design

Monitoring
Execution Completion/ Closure
&Controlling

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 Project Initiation Stage

• The initiating processes determine the nature and scope of the

project.
• Analyzing the business needs/requirements in measurable goals
• Reviewing of the current operations
• Financial analysis of the costs and benefits including a budget
• Stakeholder analysis, including users, and support personnel for the
project
• Project charter including costs, tasks, deliverables, and schedule

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 Planning and design Stage

• The main purpose is to plan time, cost and resources adequately to

estimate the work needed and to effectively manage risk during project
execution.

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 Execution Stage

• Executing consists of the processes used to complete the work defined

in the project management plan to accomplish the project's
requirements.
• Execution process involves coordinating people and resources, as
well as integrating and performing the activities of the project in
accordance with the project management plan.

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 Monitoring and Controlling Stage

• This stage consists of those processes performed to observe project

execution so that potential problems can be identified in a timely
manner and corrective action can be taken, when necessary, to control
the execution of the project.
• The key benefit is that project performance is observed and measured
regularly to identify variances from the project management plan.

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 Completion/Closing Stage

• Closing stage includes the formal acceptance of the project and the
ending thereof.
• Project close: Finalize all activities across all of the process groups to
formally close the project or a project phase
• Contract closure: Complete and settle each contract.

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 Project Management Constraints

• Traditionally, projects need to be performed and delivered

under certain constraints. These are
1. time Time
2. cost
3. scope
Quality
Cost Scope

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 constraints
• The time constraint refers to the amount of time available to
complete a project.
• The cost constraint refers to the budgeted amount available
for the project.
• The scope constraint refers to what must be done to produce
the project's end result.

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 constraints
• These three constraints are often competing constraints:
1. increased scope typically means increased time and increased cost,
2. a tight time constraint could mean increased costs and reduced
scope, and
3. a tight budget could mean increased time and reduced scope.

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 The Role Of The Project Manager

• select and develop an operational team from a standing start

• anticipate problems, solve problems and make decisions
• integrate the project stakeholders
• plan, expedite and get things done
• negotiate and persuade
• monitor and apply control
• administer the contract, the scope of work and scope changes
• manage within an environment of constant change

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 Project Scheduling

• Project scheduling is concerned with the techniques that can be employed

to manage the activities that need to be undertaken during the
development of a project.

• Scheduling is carried out in advance of the project commencing and

involves:
1. identifying the tasks that need to be carried out;
2. estimating how long they will take;
3. allocating resources (mainly personnel);
4. scheduling when the tasks will occur.
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 Project Scheduling Techniques

• Gantt or bar charts

• Milestone charts
• Line of balance
• Networks
• Program Evaluation and Review Technique (PERT)
• Arrow Diagram Method (ADM) [Sometimes called the Critical Path
Method (CPM)]
• Precedence Diagram Method (PDM)
• Graphical Evaluation and Review Technique (GERT)
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 Critical Path Method (CPM)

• The Critical Path Method (CPM) is one of several

related techniques for doing project planning.
• CPM is for projects that are made up of a number of
individual "activities."
• If some of the activities require other activities to
finish before they can start, then the project becomes a
complex web of activities.

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 CPM
• example of a CPM network diagram:

B E
5 3

A D G
3 7 6

C F
10 5

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 Steps in CPM Project Planning

• Specify the individual activities.

• Determine the sequence of those activities.
• Draw a network diagram.
• Estimate the completion time for each activity.
• Identify the critical path (longest path through the network)
• Update the CPM diagram as the project progresses.

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 Example

Activity Predecessor Duration(wks)

A - 2

B A 4

C A 3

D B,C 5

E B 2

F D, E 5

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 Network Diagram

E
B
2
4

A F
2 5

C D
3 5

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 Paths Identified
• A-B-E-F = 2+4+2+5 = 13wks
• A-B-D-F = 2+4+5+5 = 16wks
• A-C-D-F = 2+3+5+5 = 15wks
What is the project completion time?
Which of these paths is critical to the project?
To confirm the critical path, calculate the
1. forward pass EF= ES + duration
2. backward pass LS= LF - duration
3. slack = LS – ES or LF – EF
Activities with zero (0)slack are critical activities and the path becomes critical path

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 Network Diagram

2 0 6 6 3 8
B E
2 4 6 9 2 11

0 0 2 11 0 16
A F
0 2 2 11 5 16

2 1 5 6 0 11
C D
3 3 6 6 5 11

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 Summary
Activity predecessor duration ES EF LS LF Slack

A - 2 0 2 0 2 0

B A 4 2 6 2 6 0

C A 3 2 5 3 6 1

D B,C 5 6 11 6 11 0

E B 2 6 8 9 11 3

F D,E 5 11 16 11 16 0

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 Thank You

Jan 2014