Lecture Operations and supply chain management: The Core (3/e) – Chapter 5: Projects

Projects
Chapter 05
McGraw­Hill/Irwin

        Copyright © 2013 by The McGraw­Hill Companies, Inc. All rights reserved.


Learning Objectives
1.
2.
3.
4.
5.
6.
7.

Explain what project management is and why it is
important.
Identify the different ways projects can be structured.
Describe how projects are organized into major
subprojects.
Understand the concept of Earned Value
Management.
Determine the “critical path” for a project.
Show how activity time uncertainty can be analyzed
in projects.
Demonstrate how to “crash,” or reduce the length, of
a project.
5­2

Project Management


What is a project?




What is project management?




A series of related jobs, usually directed toward some
major output and requiring a significant period of time
to perform.
Planning, directing, and controlling resources (people,
equipment, material, etc.) to meet the technical, cost,
and time constraints of the project.

Why is project management important?


At the highest levels of an organization, management
often involves juggling a portfolio of projects.
5­3


Types of Development Projects
Degree of Change

Type of
Project

5­4


Project Structure

5­5


Defining the Project


Statement of Work




Task




Specific events in the life of the project.

Work Breakdown Structure




A group of activities combined to be assignable to a single
organizational unit

Project Milestone




A further subdivision of a project – usually shorter than several months
and performed by a single group or organization

Work Package




A written description of the objectives to be achieved

Defines the hierarchy of project tasks, subtasks, and work packages

Activities


Pieces of work that consume time

5­6

Project Control Charts






Charts provide an
easily understood
visual presentation
Software can be used
to create the charts
Gantt chart – shows
in a graphic manner
the amount of time
involved and the
sequence of activities.
Often referred to as a
bar c hart.
5­7


Earned Value Management
(EVM)






A technique for measuring project progress in
an objective manner
Has the ability to combine measurements of
scope, schedule, and cost in a project
Provides a method for evaluating the relative
success of a project at a point in time

5­8


Earned Value Management –
Essential Features

5­9


Network-Planning Models

5­10


Critical Path Method (CPM)

Excel: Critical Paths
5­11


Project Crashing

5­12

Project Crashing

5­13


Project Crashing

Excel: Project Crashin
Activity D cannot be
reduced any further
at this point

Project has reached
minimum duration

Activity A cannot be
reduced any further
at this point
Activity C cannot be
reduced any further
at this point

5­14


Managing Resources




In addition to scheduling tasks, resources
must also be assigned to specific tasks
Software can be used to spot over-allocation




Planned use exceeds available supply

When resources are over-allocated, either
more resources are required or rescheduling
is necessary


Taking advantage of task slack can free
resources
5­15