1 8.0 Definition of Project Management Project  Series of related jobs or tasks focused on the completion of an overall objective. Project Management  Planning, directing, and controlling resources to meet the technical, cost, and time constraints of the project. Program  Synonym for a project, although it also can consist of several interrelated projects.

2 8.1 Project Management: Key Terms Task (Activity)  A subdivision of a project perform by one group or organization. Subtask  Used to break a project into more meaningful pieces. Work Package  A group of activities combined to be assignable to a single organizational unit. Milestones  Specific events to be reached at points in time.

3 8.1 Work Breakdown Structure Work Breakdown Structure  Method by which a project is divided into tasks and subtasks. Level 1Program 2Project 3Task 4Subtask 5Work Package

4 Exhibit 15.1

5 8.1 Key Factors in a Breakdown Structure Allow the activities to be worked on independently. Make them of manageable size. Give authority to carry out the program. Monitor and measure the program. Provide the required measures.

6 8.2 Critical Path Scheduling PERT (Program Evaluation and Review Technique)  The technique developed by the U.S. Navy for planning the Polaris missile project. CPM (Critical Path Method)  Technique developed by J. E. Kelly and M. R.Walker to schedule preventative maintenance shutdowns of chemical processing plants. Identifies the longest time-consuming path through a network of tasks required to complete a project (i.e., the shortest time in which the project can be completed).

7 8.2 Critical Path Scheduling Project Characteristics  Well-defined jobs or tasks indicating completion of the project.  Tasks must be independent of each other.  Job or tasks are ordered such that each must follow a particular or given sequence.

8 8.2 CPM Key Terms Slack Time  The amount of time the starting of an activity can be delayed without affecting the earliest completion date of the overall project. Early start (ES): the earliest possible time an activity can begin. Early finish time (EF): the early start time plus the time need to complete the activity. Late finish time (LF): the latest time an activity can end without delaying the project. Late start time (LS): the late finish time minus the time needed to complete the activity.

9 CPM with a Single Time Estimate Step 1:Identify all project activities. Step 2:Sequence activities and construct network. Step 3:Determine the critical path. Step 4:Determine slack times. Step 4.1: Find the EF and ES for each activity. Step 4.2: Find the LS and LF for each activity. Step 4.3: Determined the total slack time for each activity.

10 CPM Network for Computer Design Project Exhibit 15.3

11 CPM Key Terms (cont’d) Early Start Schedule  The earliest time that each activity in the project can be started. Late Start Schedule  The latest start time that each activity can be started without affecting the overall completion time.

12 CPM Network for Computer Design Project Exhibit15.4

Cost and Performance Tracking Schedule Exhibit 15.2D

Time-Cost Trade-off Models Time-Cost Trade-off Model  A model that develops the relationship between direct project costs, indirect costs, and time to complete the project by minimizing the sum of direct and indirect costs. Crash Costs  The additional costs of an activity when time to complete it is shortened. Assumptions – expediting a project or lengthening a project both add to the costs!

Plot of Costs and Minimum Cost Schedule Exhibit 15.13

16 Summary Project management is a vital component of many organizations. Its importance has increased in recent years as the time to market is being reduced and as the product life cycle shortens. To assist in combating these problems, project management techniques are being employed, especially in the area of new product and development. This unit examines both the people side and the methods side of project management.

17 Major Points of Unit A project is a series of related jobs that are directed to a major outcome over a significant period of time. The Work Breakdown Structure (WBS) divides a project into smaller and smaller components. These include (from largest to smallest) program, project, task, subtask, and work package. Project managers in many cases cross functional lines to obtain the resources for their project, in some cases without formal authority. Therefore, a project manager must rely on his social skills, as well as his technical skills. Variables that are needed for successful project teams can be categories as task-related, people-related, leadership, and organizational. CPM and PERT are graphical techniques used for planning and control of projects. They focus on the longest time-consuming set of activities (path) in the project network.

18 Review and Discussion Questions Define project management?  The planning, directing and controlling of resources (people, equipment, material) to meet the technical, cost, and time constraints of the project. Describe or define work breakdown structure, program, project, task, subtask, and work package?  The work breakdown structure specifies which organizational units are responsible for each activity required by the project. When the proposed work is a large endeavor, it is called a program. A project is a statement or proposal of something to be done. A task is a subdivision of a project. A subtask is a further subdivision of a project into more meaningful pieces. A work package is a group of activities, which are combined for purposes of budgetary control.

19 Review and Discussion Questions How does the role of project manager differ from that of a traditional functional manager?  A project manager's role differs in that they are typically working with a cross- functional team. This requires the project manager to understand the different functional areas and how they interrelate with each other. Additionally, the project manager will not have the technical expertise in all functional areas, where as a functional manager is generally an expert in their field. Many project managers must negotiate resources for their project as formal authority may not exist to acquire them. This requires that the project manager must be able to obtain cooperation from a variety of people. Moreover, the project is designed to end at some point in time. Thus, the project manager will be assigned to new activities or projects at the completion of the project. What are some of the key characteristics of high performance work teams?  Characteristics of high performance work teams can be classified as task- related (ability to produce high quality results within budget and on time), people-related (good communications skills, mutual trust, etc.), leadership (ability to organize, facilitate group discussion, etc.), and organizational (policies, procedures, regulations, cultures, etc.).

20 Review and Discussion Questions What are some reasons project scheduling is not done well?  The uncertainties inherent in the activities comprising the network of any project make it necessary to update the schedule on a regular basis. Maintaining accurate time and cost estimates is often difficult and frustrating. Managing this evolving process requires a discipline that is not always available. Which characteristics must a project have for critical path scheduling to be applicable? What types of projects have been subjected to critical path analysis?  Project characteristics necessary for critical path scheduling to be applicable are:  Well-defined jobs whose completion marks the end of the project.  The jobs or tasks are independent in that they may be started, stopped, and conducted separately within a give sequence.  The jobs or tasks are ordered in that they must follow each other in a given sequence.  An activity once started is allowed to continue without interruption until it is completed. What are the underlying assumptions of minimum-cost scheduling? Are they equally realistic?  The underlying assumptions of minimum cost scheduling are that it costs money to expedite a project activity and it cost money to sustain or lengthen the completion time of the project.  While both assumptions are generally realistic, it often happens that there are little or no out-of-pocket costs associated with sustaining a project. Personnel are often shifted between projects, and in the short run there may be no incentive to compete a project in “normal time.”

21 Review and Discussion Questions “Project control should always focus on the critical path.” Comment.  In many project situations, it is not the activities on the critical path which cause problems, but rather noncritical activities, which, for various reasons, become critical. In the context of PERT, it may turn out that the activities on the critical path have small variances associated with them and can be treated as near certain. At the same time, activities not on the critical path may have extremely large variances and, in fact, if not closely monitored, may delay the project. Thus, while project control must keep track of critical path activities, it may be more useful to focus on those activities which are not on the critical path but, for one reason or another, have a high degree of uncertainty associated with them.  Along these lines, some authors have suggested that the critical path approach should be replaced by a critical activity approach in which simulation is used to estimate which activities are likely to become sources of project delay. These activities rather than critical path would become the focus of managerial control. Why would subcontractors for a government project want their activities on the critical path? Under what conditions would they try to avoid being on the critical path?  A subcontractor might want his activities on the critical path in situations where cost incentives are provided for early project completion. Since the critical path ultimately determines project length, it stands to reason that activities on the path would be the ones that would draw additional funds to expedite completion. A subcontractor might want his activities off the critical path because of some error on his part or because he doesn’t want to be bothered by the close monitoring of progress which often goes with critical path activities. What is meant by "Crashing a project," and when do you do this?  Crashing a project refers to shortening the project completion time. This is normally done by expediting certain activities. When expediting an activity, additional costs are generally incurred. These are referred to as "crash costs." One reason to crash a project is to find the minimum time-cost trade-off model, which attempts to find the minimum -cost schedule.