Introduction to Project Management
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This chapter discusses project management concepts including defining a project, work breakdown structures, project control charts like Gantt charts, structuring projects as pure, functional or matrix, critical path scheduling, and using critical path methodology with single and three-time estimates to determine project duration and probability of completion. Key aspects of project management include identifying and sequencing tasks, determining the critical path, and using the critical path to schedule the project and identify slack times. Critical path methodology helps project managers optimize schedules and resources.
Introduction to Project Management
- 1. Chapter 3 Project Management
- 2. Definition of Project Management Work Breakdown Structure Project Control Charts Structuring Projects Critical Path Scheduling OBJECTIVES
- 3. Project Management Defined Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project
- 4. Project Control Charts: Gantt Chart Vertical Axis: Always Activities or Jobs Horizontal Axis: Always Time Horizontal bars used to denote length of time for each activity or job. Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time
- 5. Structuring Projects Pure Project: Advantages The project manager has full authority over the project Team members report to one boss Shortened communication lines Team pride, motivation, and commitment are high Pure Project Defined A pure project is where a self-contained team works full-time on the project
- 6. Structuring Projects Pure Project: Disadvantages Duplication of resources Organizational goals and policies are ignored Lack of technology transfer Team members have no functional area "home"
- 7. Functional Project Defined A functional project is housed within a functional division Example, Project “B” is in the functional area of Research and Development. President Research and Development Engineering Manufacturing Project A Project B Project C Project D Project E Project F Project G Project H Project I
- 8. Structuring Projects Functional Project: Advantages A team member can work on several projects Technical expertise is maintained within the functional area The functional area is a “home” after the project is completed Critical mass of specialized knowledge
- 9. Structuring Projects Functional Project: Disadvantages Aspects of the project that are not directly related to the functional area get short-changed Motivation of team members is often weak Needs of the client are secondary and are responded to slowly
- 10. Structuring Projects: Matrix Project Organization Structure President Research and Development Engineering Manufacturing Marketing Manager Project A Manager Project B Manager Project C
- 11. Structuring Projects Matrix: Advantages Enhanced communications between functional areas Pinpointed responsibility Duplication of resources is minimized Functional “home” for team members Policies of the parent organization are followed
- 12. Structuring Projects Matrix: Disadvantages Too many bosses Depends on project manager’s negotiating skills Potential for sub-optimization
- 13. Work Breakdown Structure Defined A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages Program Project 1 Project 2 Task 1.1 Subtask 1.1.1 Work Package 1.1.1.1 Level 1 2 3 4 Task 1.2 Subtask 1.1.2 Work Package 1.1.1.2
- 14. Network-Planning Models A project is made up of a sequence of activities that form a network representing a project The path taking longest time through this network of activities is called the “critical path” The critical path provides a wide range of scheduling information useful in managing a project Critical Path Method (CPM) helps to identify the critical path(s) in the project networks
- 15. Prerequisites for Critical Path Methodology A project must have: well-defined jobs or tasks whose completion marks the end of the project; independent jobs or tasks; and tasks that follow a given sequence.
- 16. Types of Critical Path Methods CPM with a Single Time Estimate Used when activity times are known with certainty Used to determine timing estimates for the project, each activity in the project, and slack time for activities CPM with Three Activity Time Estimates Used when activity times are uncertain Used to obtain the same information as the Single Time Estimate model and probability information Time-Cost Models Used when cost trade-off information is a major consideration in planning Used to determine the least cost in reducing total project time
- 17. Steps in the CPM with Single Time Estimate 1. Activity Identification 2. Activity Sequencing and Network Construction 3. Determine the critical path From the critical path all of the project and activity timing information can be obtained
- 18. Example 1. CPM with Single Time Estimate Consider the following consulting project: Develop a critical path diagram and determine the duration of the critical path and slack times for all activities. Activity Designation Immed. Pred. Time (Weeks) Assess customer's needs A None 2 Write and submit proposal B A 1 Obtain approval C B 1 Develop service vision and goals D C 2 Train employees E C 5 Quality improvement pilot groups F D, E 5 Write assessment report G F 1
- 19. Example 1. CPM with Single Time Estimate Consider the following consulting project: Develop a critical path diagram and determine the duration of the critical path and slack times for all activities. Activity Designation Immed. Pred. Time (Weeks) Assess customer's needs A None 2 Write and submit proposal B A 1 Obtain approval C B 1 Develop service vision and goals D C 2 Train employees E C 5 Quality improvement pilot groups F D, E 5 Write assessment report G F 1
- 20. Example 1: First draw the network A None 2 B A 1 C B 1 D C 2 E C 5 F D,E 5 G F 1 Act. Imed. Pred. Time A(2) B(1) C(1) D(2) E(5) F(5) G(1)
- 21. Example 1: Determine early starts and early finish times ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 C(1) Hint: Start with ES=0 and go forward in the network from A to G. ES=9 EF=14 ES=14 EF=15 A(2) B(1) D(2) E(5) F(5) G(1)
- 22. Example 1: Determine late starts and late finish times ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 C(1) LS=14 LF=15 LS=9 LF=14 LS=4 LF=9 LS=7 LF=9 Hint: Start with LF=15 or the total time of the project and go backward in the network from G to A. ES=9 EF=14 ES=14 EF=15 A(2) B(1) D(2) E(5) F(5) G(1) LS=3 LF=4 LS=2 LF=3 LS=0 LF=2
- 23. Example 1: Critical Path & Slack ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 C(1) D(2) E(5) LS=14 LF=15 LS=9 LF=14 LS=4 LF=9 LS=7 LF=9 Duration = 15 weeks ES=9 EF=14 ES=14 EF=15 A(2) B(1) F(5) G(1) LS=3 LF=4 LS=2 LF=3 LS=0 LF=2 Slack=(7-4)=(9-6)= 3 Wks
- 24. Example 2. CPM with Three Activity Time Estimates
- 25. Example 2. Expected Time Calculations ET(A)= 3+4(6)+15 6 ET(A)=42/6=7
- 26. Example 2. Expected Time Calculations ET(B)=32/6=5.333 ET(B)= 2+4(4)+14 6
- 27. Example 2. Expected Time Calculations ET(C)= 6+4(12)+30 6 ET(C)=84/6=14
- 28. Example 2. Network A(7) B (5.333) C(14) D(5) E(11) F(7) H(4) G(11) I(18) Duration = 54 Days
- 29. Example 2. Probability Exercise What is the probability of finishing this project in less than 53 days? p(t < D) T E = 54 t D=53
- 30. (Sum the variance along the critical path .)
- 31. There is a 43.8% probability that this project will be completed in less than 53 weeks. p(Z < -.156) = .438, or 43.8 % (NORMSDIST(-.156) T E = 54 p(t < D) t D=53
- 32. Example 2. Additional Probability Exercise What is the probability that the project duration will exceed 56 weeks?
- 33. Example 2. Additional Exercise Solution p(Z > .312) = .378 , or 37.8 % (1-NORMSDIST(.312)) t T E = 54 p(t < D) D=56
- 34. Time-Cost Models Basic Assumption: Relationship between activity completion time and project cost Time Cost Models : Determine the optimum point in time-cost tradeoffs Activity direct costs Project indirect costs Activity completion times
- 35. CPM Assumptions/Limitations Project activities can be identified as entities (There is a clear beginning and ending point for each activity.) Project activity sequence relationships can be specified and networked Project control should focus on the critical path The activity times follow the beta distribution, with the variance of the project assumed to equal the sum of the variances along the critical path Project control should focus on the critical path
- 36. End of Chapter 3