Operations management 12th stevenson ch17 project management

Chapter 17
Project
Management

McGraw-Hill/Irwin

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.


Chapter 17: Learning Objectives
 You should be able to:
1. Discuss the behavioral aspects of projects in terms of project
personnel and the project manager
2. Explain the nature and importance of a work breakdown
structure in project management
3. Give a general description of PERT/CPM techniques
4. Construct simple network diagrams
5. List the kinds of information that a PERT or CPM analysis can
provide
6. Analyze networks with deterministic times
7. Analyze networks with probabilistic times
8. Describe activity ‘crashing’ and solve typical problems

Instructor Slides

17-2


Projects
Projects
 Unique, one-time operations designed to

accomplish a specific set of objectives in a
limited time frame
 Examples:
The Olympic Games
Producing a movie
Software development
Product development
ERP implementation

Instructor Slides

17-3


Project Life Cycle

Instructor Slides

17-4


The Nature of Projects
Projects go through a series of stages– a life

cycle
Projects bring together people with a
diversity of knowledge and skills, most of
whom remain associated with the project for
less than its full life

Organizational structure affects how projects
are managed

Instructor Slides

17-5


Project Management

What are the Major Administrative

Issues?
 Executive responsibilities
Project selection
Project manager selection
Organizational structure
 Organizational alternatives
Manage within functional unit
Assign a coordinator
Use a matrix organization with a project leader


The Nature of Projects
Projects go through a series of stages– a

life cycle
Projects bring together people with a
diversity of knowledge and skills, most
of whom remain associated with the

project for less than its full life
Organizational structure affects how
projects are managed


Project Management
How is it different?
 Limited time frame
 Narrow focus, specific objectives
 Less bureaucratic

Why is it used?
 Special needs
 Pressures for new or improves products or

services
What are the Key Metrics
 Time
 Cost
 Performance objectives


Project Management
What are the tools?

 Work breakdown structure
 Network diagram
 Gantt charts
 Project Management software
 Risk management

Project Management
What are the Key Metrics
 Time
 Cost
 Performance objectives

What are the Key Success Factors?
 Top-down commitment
 Having a capable project manager
 Having time to plan
 Careful tracking and control
 Good communications


Project Management Decisions
Project success depends upon making

key managerial decisions over a
sequence of steps:
 Deciding which projects to implement
 Selecting the project manager
 Selecting the project team
 Planning and designing the project
 Managing and controlling project resources
 Deciding if and when a project should be

terminated

Project Manager
 The project manager is ultimately responsible for

the success or failure of the project
 The project manager must effectively manage:
 The work
 The human resources
 Communications
 Quality
 Time
 Costs

Instructor Slides

17-12


Behavioral Issues
 Behavioral problems can be created or

exacerbated by
 Decentralized decision making
 Stress of achieving project milestones on time and

within budget
 Surprises

 The team must be able to function as a unit
 Interpersonal and coping skills are very important

 Conflict resolution and negotiation can be an important
part of a project manager’s job

Instructor Slides

17-13


Avoiding Problems
 Many problems can be avoided or mitigated

by:
 Effective team selection
 Leadership
 Motivation
 Maintaining an environment of
 Integrity
 Trust
 Professionalism
 Being supportive of team efforts

Instructor Slides

17-14


Project Champion
Project champion
 A person who promotes and supports a project
Usually resides within the organization

Facilitate the work of the project by ‘talking up’ the
project to other managers, and who might be
asked to share resources with the project team as
well as employees who might be asked to work on
parts of the project
The project champion can be critical to the success
of a project

Instructor Slides

17-15


Work Breakdown Structure (WBS)
WBS
 A hierarchical listing of what must be done

during a project
Establishes a logical framework for identifying the

required activities for the project
1.
2.
3.

Instructor Slides

Identify the major elements of the project
Identify the major supporting activities for each of
the major elements

Break down each major supporting activity into a
list of the activities that will be needed to
accomplish it

17-16


WBS

Instructor Slides

17-17


Gantt Chart

Instructor Slides

17-18


PERT and CPM
 PERT (program evaluation and review

technique) and CPM (critical path method)
are two techniques used to manage largescale projects
 By using PERT or CPM Managers can obtain:
A graphical display of project activities
2. An estimate of how long the project will take
3. An indication of which activities are most critical to

timely project completion
4. An indication of how long any activity can be delayed
without delaying the project
1.

Instructor Slides

17-19


Network Diagram
 Network diagram
 Diagram of project activities that shows sequential
relationships by use of arrows and nodes
 Activity on arrow (AOA)
 Network diagram convention in which arrows designate
activities
 Activity on node (AON)
 Network convention in which nodes designate activities
 Activities
 Project steps that consume resources and/or time
 Events
 The starting and finishing of activities

Instructor Slides

17-20


The Network Diagram (cont’d)

Path
 Sequence of activities that leads from the

starting node to the finishing node
Critical path
 The longest path; determines expected

project duration
Critical activities
 Activities on the critical path

Slack
 Allowable slippage for path; the difference

the length of path and the length of critical
path


Network Conventions

Node

Arc


Network Conventions


PERT and CPM
PERT: Program Evaluation and

Review Technique
CPM: Critical Path Method
Graphically displays project activities
Estimates how long the project will

take
Indicates most critical activities
Show where delays will not affect
project


Project
Figure
17.4

Network – Activity on Arrow

AOA
Locate
facilities

Order
furniture

4
Furniture
setup

2
Remodel

1

5

Interview

3

Hire and
train

Move
in

6