Lecture Outline I. Introduction What is a project Meaning of Project Management (PM) History of PM Role of PM Strategic Importance of PM 2. Project Planning Work Breakdown Structure (WBS) Activities, Events, and Networks Dummy Activities AOA and AON Networks

3. Project Scheduling Critical path method (CPM) - Drawing project networks - Forward and backward passes - Determine critical path & slack Program Evaluation and Review Technique (PERT) - Probabilistic activity Time Estimates - Compute project probabilities 4. Resource Allocation and resource levelling 5. Project Crashing and Time-Cost Trade-off

What is a Project? Organizations perform either Operations, or Projects –“Operations” are ongoing and repetitive –“Projects” are temporary and unique > Temporary : definite beginning and ending > Unique: different in some characteristic = Unique, one-time operation designed to achieve an objective in a limited time. = Series of related jobs focused on the completion of an objective.

Project Management (PM) - Planning, directing, and controlling “resources” to meet technical, cost, and time constraints of project - Application of knowledge, skills, tools, and techniques to project activities to meet or exceed customer needs and expectations from a project - Initiation, execution, and termination of projects in formal, directed and intelligent way

What is a project? Definite objective Takes time Consumes resources Definite starting date Definite stopping date Consist of processes Utilizes teams

Examples of projects : - Building houses, factories, stadiums - Making aircrafts, new ships - Launching satellite systems - Constructing oil pipelines - Planning concert or a tournaments - Introducing new products into market - Marketing campaigns - Running a political campaign

Things which are done poorly in projects Planning the project Establishing requirements Estimating activity durations Budgeting Executing –Not knowing management –Not communicating Managing subcontractors Monitoring project progress

PM involves : Planning - goal setting, project definition, team organization Scheduling - relating people, money and supplies to specific activities Controlling - Monitoring resources and costs; revising plans and shifting resources to meet time and cost demands but, keeping budget constraints in mind

Kuwait Project: Rebuilding after Desert Storm 650 wells ablaze, others uncapped No water, electricity, food or facilities Land mines! Bombs! Grenades! Many fires inaccessible (oil-covered roads) Strategic Importance of PM Project required: – Storage and docking facilities at Dubai – 125,000 tons of equipment and supplies – 150 kilometers of pipeline capable of delivering 20,000,000 gals of water/day to fire site – more than 200 lagoons with 1,000,000 gals of seawater

– 8,000 workers - 1,000 construction professionals – 100 medical personnel - 40 bed field hospital – 6 full-service dining halls- 27,000 meals per day – 2 helicopter evacuation teams Microsoft Windows 98 Project: – hundreds of programmers - millions of lines of code – millions of dollars cost Ford Redesign of Mustang Project: – 450 member project team- Cost $700-million

Acct. Eng. Mkt. Mgr. Project Organization temporary structure Uses specialists from entire company Headed by project manager Named ‘matrix organization’

Matrix Organization PM Knowledge Areas Cost Management Communications Management Human Resources Management Time Management Quality Management Risk Management Procurement Management

PM activities : 1. planning and defining activities 2. implementation and control activities - Deciding and Doing Criteria for success in PM Completion : on time within budget with functionality With Customer Satisfaction PM is about managing trade-offs between these three objectives.

Project Management Drivers Expanding size of projects Expansion of knowledge –Different disciplines contribute to solution Demand for complex, customized products Worldwide markets for production of goods Competition forced by economic system –Decreasing time-to-market.

History of Project Management Pyramids * Roman aqueducts Great Wall * Inca / Mayan temples and cities Late 1800’s - Industrialization from agrarian to industrial organizations evolving management concepts 1900’s - Large-scale plants and organizations

World War I (logistics) Henry Gantt scheduling and monitoring Gantt chart Large and complex R&D projects by US military Apollo space program Automotive and airline industry Since then, non-military public sector, private and volunteer organizations use PM

1940’s World War II –Importance of critical scheduling –Process flow diagrams 1950’s - Scheduling tools –Dupont - to study scheduling –1957 CPM (Critical Path Method) no fundamental changes to date

PERT Program Evaluation and Review Technique - U.S. Navy Polaris missile program - Lockheed Missile System 1960’s - Large scale applications - Large government contracts (nuclear power plants) - Required computer aided planning and control IBM first to use PM commercially

1980’s - Computerization Computers make PM tools near to smaller firms Technology added complexity to projects 1990’s Demand for better, faster, cheaper projects Towards leaner, quicker, responsive businesses Clients want it “On time, on budget”

Project Plan Basics Definition of work and Tasks Precedence – interrelatedness of tasks Schedule Dates – end point, duration Resource requirements – equipment, facilities, and people Cost estimates