Lecture Operations management: Creating value along the supply chain (Canadian edition) - Chapter 9

OPERATIONS MANAGEMENT:
Creating Value Along the Supply Chain,
Canadian Edition
Robert S. Russell, Bernard W. Taylor III, Ignacio Castillo, Navneet Vidyarthi

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CHAPTER 9
Project Management

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Learning Objectives
— Project Planning
— Project Scheduling
— Project Control
— CPM/PERT
— Probabilistic Activity Times
— Microsoft Project
— Project Crashing and Time-Cost Trade-off

9-2

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Project Management Process
—Project

• unique, one-time operational activity or effort

9-3

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Project Management Process

9-4

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Project Management Process

9-5

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Project Elements
—Objective
—Scope
—Contract requirements
—Schedules
—Resources
—Personnel
—Control
—Risk and problem analysis

9-6

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Project Team and Project Manager
—Project team
—made up of individuals from various areas and
departments within a company
—Matrix organization
—a team structure with members from functional areas,

depending on skills required
—Project manager
—most important member of project team

9-7

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Scope Statement
—Scope statement
—a document that provides an understanding, justification,
and expected result of a project
—Statement of work
—written description of objectives of a project

9-8

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Work Breakdown Structure
—Work breakdown structure (WBS)
—Breaks a project into components, subcomponents,
activities, and tasks

9-9

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Work Breakdown Structure for Computer Order
Processing System Project

9-10

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Responsibility Assignment Matrix
—Organizational Breakdown Structure (OBS)
—a chart that shows which organizational units are
responsible for work items
—Responsibility Assignment Matrix (RAM)
—shows who is responsible for work in a project

9-11

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Responsibility Assignment Matrix

9-12

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Project Scheduling
—Steps
—Define activities
—Sequence activities
—Estimate time
—Develop schedule

—Techniques
—Gantt chart
—CPM/PERT

—Software
—Microsoft Project

9-13

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Gantt Chart
—Graph or bar chart
—Bars represent the time for each task
—Bars also indicate status of tasks
—Provides visual display of project schedule
—Slack
—amount of time an activity can be delayed without

delaying the project

9-14

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Example of Gantt Chart

9-15

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Project Control
—Time management
—Cost management
—Performance management
—Earned Value Analysis – standard procedure to
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•
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numerically measure a project’s progress
forecast its completion date and cost
measure schedule and budget variation

9-16

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Project Control
—Quality management
—Communication
—Enterprise project management

9-17

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CPM/PERT
—Critical Path Method (CPM)
—DuPont & Remington-Rand
—Deterministic task times
—Activity-on-node network construction
—Project Evaluation and Review Technique (PERT)
—US Navy and Booz, Allen & Hamilton
—Probabilistic task time estimates
—Activity-on-arrow network construction

9-18

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Project Network
—Activity-on-node (AON)
—nodes represent activities
—arrows show precedence
relationships
—Activity-on-arrow (AOA)
—arrows represent activities
—nodes are events for points in time

—Event
—completion or beginning of an activity

in a project
9-19

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AOA Project Network for a House

9-20

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Concurrent Activities
—Dummy
—two or more activities cannot share same start and end

nodes

9-21

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AON Network for House Building Project

9-22

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Critical Path
2
2
Start

1
3

7
1
3
1

A:
B:
C:
D:

4
3

1-2-4-7
3 + 2 + 3 + 1 = 9 months
1-2-5-6-7
3 + 2 + 1 + 1 + 1 = 8 months
1-3-4-7
3 + 1 + 3 + 1 = 8 months
1-3-5-6-7
3 + 1 + 1 + 1 + 1 = 7 months

5
1

6
1

—Critical path
—Longest path through a
network
—Minimum project
completion time
9-23

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Activity Start Times

9-24

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Node Configuration

9-25

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