1. Chapter 13. Project Management Time in Weeks Activities 4 8 12 16 2024 28 32 36 40 44 48 52 56 60 64 A B C D E F G H
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Chapter 13: Project Management 1

2. Outline The Characteristics of Projects The Project Manager
Managing Teams and Relationships on Projects
Planning and Scheduling with Gantt Charts
The Gantt Chart
Pert & CPM
The Network
Deterministic Approach- Critical Path Method
Probabilistic Approach
Project Compression (Crashing or time reduction in project length)
Project Management Applications in Clinical Pathways
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Chapter 13: Project Management

3. The Characteristics of Projects
Projects are unique and non-routine endeavors, designed to accomplish a specified set of objectives (to create new products and services) in a limited time.
Typical examples of such non-routine projects are moving a hospital to a new location by a certain date, or renovating an outpatient facility to meet changing demand patterns.
Projects like those have considerable costs. They involve a large number of activities that must be carefully planned and coordinated to achieve the desired results, and may take a long time to complete.
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Chapter 13: Project Management

4. The Characteristics of Projects
Life-cycle concept -- projects go through a series of stages including, formulation and analysis, planning, implementation, and termination.
Projects bring together personnel with diverse knowledge and skills, as their contributions are necessitated by the projects
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Chapter 13: Project Management

5. The Project Manager. . .
. . . Bears the ultimate responsibility for completion of the project.
The pros and cons of working on projects include:
The effect of expert full-time employees assigned to a project
Working for two bosses
Dynamic environment, thriving factor
Working with new people, team spirit
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Chapter 13: Project Management

6. Figure 13.1 Gantt Chart for Launching a New Radiation Oncology Service
Activity
Time
A. Land acquisition
4 weeks
B. Hire a radiation oncologist
16 weeks
C. Select contractor and develop a construction plan
8 weeks
D. Build the facility
24 weeks
E. Acquire equipment
28 weeks
F. Hire technical staff
G. Purchase and set up information systems and software
H. Testing of equipment
Time in Weeks
Activities 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 A B C D E F G H

7. PERT/CPM
Program Evaluation and Review Technique (PERT) and the Critical Path Method (CPM) are tools for planning and coordinating large projects
Using PERT/CPM managers can obtain:
A graphical display of project activities
An estimate of how long the project will take
An indication of which activities are the most critical to timely project completion
An indication of how long any activity can be delayed without lengthening the project.
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Chapter 13: Project Management

8. Activity Predecessor A B C A,B D E F D,E G H F,G
Table 13.1 Activity Precedence Relationships
Activity
Predecessor A B C
A,B D E F
D,E G H
F,G
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Chapter 13: Project Management

9. The Network (precedence) Diagram
The network diagram is a diagram of project activities that shows the sequential relationships by use of arrows and nodes.
NODE
ARROW
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Chapter 13: Project Management 9

10. Figure 13.2 Network Representations
Activity A
(a)
Activity C
Activity B
Activity on Arc
Activity on Node
Dummy Activity A
Activity A C
(b)
(c)
Activity B
Activity C B
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Chapter 13: Project Management

11. The Network Diagram, cont. A glossary of terms
Activity-on-Arrow (A-O-A). Network convention in which arrows designate activities.
Activity-on-Node (A-O-N). Network convention in which nodes designate activities.
Activities. Project steps that consume resources and/or time
Events. The starting and finishing of activities, designated by nodes in the A-O-A convention.
Path. A sequence of activities that leads from the starting node to the finishing node.
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Chapter 13: Project Management

12. The Network Diagram, cont. A glossary of terms
Critical Path. The longest path equaling the expected project duration.
Critical Activities. All the activities on the critical path.
Slack. Allowable slippage (time) for a path; the difference between the length of a path and the length of the critical path.
ES, EF, LS, LF. E (earliest); L (latest); S (start); F (finish) times of each activity.
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Chapter 13: Project Management

13. Critical Path Method (CPM)
Figure 13.3 AON Network Diagram for Radiation Oncology A D F
Start C H
End B E G
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Chapter 13: Project Management

14. ES LS Activity Name LF EF Figure 13.4 Activity Start and Finish Times
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Chapter 13: Project Management

15. Critical Path Method (CPM)
Table 13.2 Path Lengths for the Radiation Oncology Project
Paths and activities
Path time length
1) A-C-D-F-H
= 44 weeks
2) A-C-D-G-H
= 48 weeks
3) A-C-E-F-H
= 48 weeks
4) A-C-E-G-H
= 52 weeks
5) B-C-D-F-H
= 56 weeks
6) B-C-D-G-H
= 60 weeks
7) B-C-E-F-H
= 60 weeks
8) B-C-E-G-H
= 64 weeks
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Chapter 13: Project Management

16. Figure 13.5.  EXCEL SETUP AND SOULTION to the Radiation Oncology Project, CPM Version

17. Time Estimates
Deterministic Time Estimates -- estimates for each activity are fairly certain.
Probabilistic Time Estimates -- estimates for each activity are subject to variation.
Optimistic Estimate -- Length of time required under optimum conditions (o).
Pessimistic Estimate -- length of time required under worst conditions (p).
Most likely time estimate -- the most probable length of time required (m).
Beta Distribution -- A distribution which describes the inherent variability in the time estimates.
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Chapter 13: Project Management

18. Critical Path Method (CPM)
Mean
Variance
Beta Distribution
Path
Standard Deviation
Mean
tpath = Σte
path =
Assumption: path duration times are independent of each other; requiring that activity times be independent, and that each activity is on only one path.
Invoke Central Limit Theorem to use normal distribution.
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Chapter 13: Project Management

19. The Normal Distribution:
Probabilistic Time Estimates, cont.
The Normal Distribution:
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Chapter 13: Project Management

20. Activity Optimistic (o) Most Likely (m) Pessimistic (p) A 2 4 8 B 16
Example 13.1
In planning for a new radiation oncology clinic, project managers determined that due to the nature of some of the activities, time estimates vary. After consulting with experts in each of the activity areas, they have calculated the optimistic, pessimistic and most likely time estimates, in weeks, as shown in the Table below:
Activity
Optimistic
(o)
Most Likely
(m)
Pessimistic
(p) A 2 4 8 B 16 24 C D 12 36 E 28 F G H 6

21. Paths
Activities o m p
tpath = Σte
Σσ2
σpath 1 A 2 4 8
4.33
1.00 C 16
8.67
4.00 D 12 24 36
24.00
46.00
16.00
24.22
4.92 F
5.00
2.78 H 6
0.44
49.00
23.22
4.82 G
8.00
1.78 3 E 28
27.33
49.33
11.11
19.33
4.40
52.33
18.33
4.28 5 B
7.11
57.67
30.33
5.51
60.67
29.33
5.42 7
61.00
25.44
5.04
64.00
24.44
4.94
Table 13.4 Calculation of Expected Time and Standard Deviations on Each Path for the Radiation Oncology Project

22. Table 13.5 Path Completion Probabilities for 65 Weeks
tpath
σpath
1) ACDFH
46.00
4.92
3.86
2) ACDGH
49.00
4.82
3.32
3) ACEFH
49.33
4.40
3.56
4) ACEGH
52.33
4.28
2.96
5) BCDFH
57.67
5.51
1.33
6) BCDGH
60.67
5.42
0.80
7) BCEFH
61.00
5.04
0.79
8) BCEGH
64.00
4.94
0.20
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Chapter 13: Project Management

23. Figure 13.6 Project Completion Probabilities by the Specified Time
84%
50%
50% te ts
Weeks
(1σ = 5) 64 69 z 1 2
2.5
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Chapter 13: Project Management

24. Figure 13.7 Completion Probabilities for 65 Weeks
5) BCDFH
57.7
6) BCDGH
p =
60.7
7) BCEFH
p = 61
8) BCEGH
p = 64
Completion time in weeks

25. Path Completion Probabilities
The last step in the analysis is the computation of joint probability, that is, we are interested in the joint effect of all the paths on the completion of the project. This is a simple multiplication of the completion probabilities of the significant paths (paths 5 through 8).
The probability of completion of this project within 65 weeks is:
P (completion by 65th week) = * * * = or 32.5%.
Similarly, one can compute the probability of completion for other target days such as 66, 67 and 70 weeks.
P (completion by 66th week) = * * * = or 43.9%.
P (completion by 67th week) = * * * = or 55.3%.
P (completion by 70th week) = * * * = or 80.7%.
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Chapter 13: Project Management

26. Desired completion time in weeks
Table 13.6 Path Completion Probabilities
Desired completion time in weeks
Critical Path
Probability 64
B-C-E-G-H
0.5000 65
0.5801 66
0.6571 67
0.7280 68
0.7908 69
0.8441 70
0.8876 71
0.9216 72
0.9472 73
0.9656 74
0.9784 75
0.9869 76
0.9924
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27. FIGURE 13.8.  EXCEL SETUP AND SOLUTION TO THE PROBABILISTIC RADIATION ONCOLOGY PROJECT.
Chapter 13: Project Management
Yasar A. Ozcan

28. Project Compression: Trade-Offs Between Reduced Project Time and Cost
In order to crash, need information on:
Regular time and crash time estimates for each activity.
Regular costs and crash cost estimates for each activity.
A list of activities that are on the critical path.
Crash only those activities that are on the critical path
to obtain reduction on project completion time.
Yasar A. Ozcan
Chapter 13: Project Management

29. Figure 13.9 Project Duration and Compression (Crashing) Costs
Total Cost (TC)
Minimum TC
Cost
Overhead and indirect costs
Cumulative (Direct) Cost of Compression
Compression of Time (Crashing)
Maximum Compression Time
Optimal Solution
Minimum Compression or
Normal Finish Time

30. Project Compression with Total Costs Approach
A general algorithm for project compression with total costs approach can be summarized as follows:
Compute path lengths and identify the critical path.
Rank the activities on critical path according to their compression costs.
Shorten the activity with the least compression cost and the critical path.
Calculate total costs.
Compare the total cost of the current compressed time to that of the previous compression time; if total cost has decreased, perform steps 1 through 4 again. Otherwise stop because optimum compression time has been achieved.
Project compression with total cost approach using this algorithm is illustrated in Example 13.2.
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Chapter 13: Project Management

31. Find optimal earlier project completion time.
Example 13.2:
The indirect costs for design and implementation of a new health information system project are $8,000 per day.
The project activities (A through I), their normal durations and compressed durations, and also the direct compression, or crashing, costs are shown in Figure 13.9.
Find optimal earlier project completion time.
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Chapter 13: Project Management

32. Direct Compression Costs per Day (in 000)
Figure Project Compression C D F
Finish
Start H I A B E G
Activity
Normal Time
Compressed Time
Direct Compression Costs per Day (in 000) A 20 19 11 B 75 74 8 C 42 40 6 D 45 44 10 E 28 26 7 F 21 18 G H I
Yasar A. Ozcan

33. Solution
We apply the algorithm shown earlier to this example in successive iterations to find the solution for the optimal earlier project completion time.
Iteration 1
Step 1: There are three paths. Adding the times of the activities, we obtain the path times. Since ABEGHI is the longest time path, with 203 days, it is the critical path.
Paths
Path time
ABCFHI
198
ABDFHI
201
ABEGHI
203*
Since activity G is not available for compression, it is not shown in the rankings. Among the remaining activities on the critical path, activity E has the lowest compression cost, and thus it is selected for time reduction.
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Chapter 13: Project Management

34. Step 2: Rank critical activities according to their costs.
Solution
Iteration 1
Step 2: Rank critical activities according to their costs.
Critical
activities
Compression
cost
Rank A 11 3 B 8 2 E 7 1 G
n/a H 18 4 I 20 5
Step 3: Since we can reduce this activity by two days, the
new completion time considered for the project becomes
(203-2 = 201) 201 days.
Step 4: The cost of compression for two days for activity E
is 2 * $7,000 = $14,000.
The indirect project cost for 201 $8,000 per day amounts to $1,608,000 (201*8,000 = $1,608,000).
The total cost for 201 days then is equivalent to $1,622,000 (14, ,608,000).
Step 5: Without compressing the project, we would incur only the indirect costs, which would be for 203 days without the time reduction.
The total cost for 203 days then would be $1,624,000 (203 * $8,000). Comparing that to the total cost for 201 days (see step 4): $1,624,000 to $1,622,000, we observe a decrease. Thus we can continue compressing the project.
Yasar A. Ozcan
Chapter 13: Project Management

35. Step 2: Rank critical activities according to their costs.
Solution
Iteration 2
Step 1: After compression of two days in iteration 1, among the three paths we now have two paths with equivalent path times. Both ABDFHI and ABEGHI are the longest paths, with 201 days; thus both are critical paths.
Paths
Path time
ABCFHI
198
ABDFHI
201*
ABEGHI
Step 2: Rank critical activities according to their costs.
Critical
Activities
Compression
Cost
Rank
activities
cost A 11 2 3 B 8 1 E 7
n/a D 10 G F 20 5 H 18 4 I
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Chapter 13: Project Management

36. Iteration 2
Now we are considering critical activities from both paths simultaneously.
In the ABEGHI path, we have exhausted compression time for activity E; hence it is no longer available for compression and is not shown in the rankings. Among the remaining activities on both critical paths, the activity B has the lowest compression cost, so it is selected for time reduction.
Step 3: Since we can reduce activity B by only one day, the new completion time to consider for the project becomes 200 (201-1) days.
Step 4: The cost of compression for activity B for one day is 1 * $8,000 = $8,000. The indirect cost for the project for 200 $8,000 per day amounts to $1,600,000 (200*8,000 = $1,600,000).
The total cost for 200 days, then, is equivalent to $1,622,000 (14, ,000+ 1,600,000). Please note that the direct compression costs should be added in cumulatively; that is, for all 3 days of compression the project incurred $22,000 (14, ,000).
Step 5: From iteration 1, the total cost for 201 days was $1,622, Comparing that to the total cost for 200 days (see step 4): $1,622,000 to $1,622,000, we observe no change. Thus we can still continue compressing the project.
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Chapter 13: Project Management

37. Step 2: Rank critical activities according to their costs.
Solution
Iteration 3
Step 1: After compression by one day in iteration 2, of the three paths we still have two paths, ABDFHI and ABEGHI, with 200 days each; both are critical paths. Step 1: After compression by one day in iteration 2, of the three paths we still have two paths, ABDFHI and ABEGHI, with 200 days each; both are critical paths.
Paths
Path time
ABCFHI
198
ABDFHI
200*
ABEGHI
Step 2: Rank critical activities according to their costs.
Critical
Activities
Compression
cost
Rank A 11 1 2 B 8
n/a E 7 D 10 G F 20 4 H 18 3 I
Step 5: cost is $1,625,000; hence stop compression.
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Chapter 13: Project Management

38. FIGURE 13.11. Total Cost of Compression
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Chapter 13: Project Management

39. FIGURE 13.13. Excel Template Solution to Compression Cost CPM
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Chapter 13: Project Management

40. Project compression: Incentive Approach
Assessment of the trade-off between cumulative compression costs and cumulative monetary incentives is another approach to reducing project length.
The algorithm for this approach is similar to the total cost approach in the first three steps, only steps four and five evaluate different metrics as shown below:
Compute path lengths and identify the critical path.
Rank the activities on critical path according to their compression costs.
Shorten the activity with the least compression cost and the critical path.
Calculate the cumulative compression cost and the cumulative incentive.
Calculate net benefit by subtracting cumulative incentive from cumulative compression cost; if net benefit is positive (or zero) compared to previous compression time, perform steps 1 through 4 again. If net benefit is negative stop because there is no gain by further reduction in project compression.
Project compression with incentive approach using this algorithm is illustrated in Example 13.3.
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Chapter 13: Project Management

41. Example 13.3:
A healthcare organization is creating a new patient-centered care system by redesigning a floor of the existing facility. The new system involves changes in information systems, nurse responsibilities, various policies, and equipment. In sum, seven major tasks must be undertaken. A PERT network diagram of the project is given below. A C
Start D B E G
End F
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Chapter 13: Project Management

42. Optimistic, most likely, and pessimistic times (in weeks) for each activity are estimated and given below.
Activity
Predecessor
Optimistic
Most Likely
Pessimistic
Maximum Weeks of Compression Allowed
Weekly Compression Costs A 11 13 15  2 25 B 8 12 16 80 C 9 40 D 18 1 30 E
C,D 2 90 F 17 4 70 G
E,F 6 65
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Chapter 13: Project Management

43. First, calculate the expected times for each activity.
Solution
First, calculate the expected times for each activity.
Next, identify the paths.
Finally, apply the algorithm for incentive approach to this example in successive iterations to find the solution for the best project compression time
Activity
Expected Time A 13 B 12 C D 15 E F G 6
Paths
ACEG
BDEG
BFG
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Chapter 13: Project Management

44. Iteration 1
Step 1. Calculate path expected completion times, and identify the critical path.
*Critical path
Step 2. Rank the activities on critical path according to their compression costs.
Step 3. Shorten the activity with the least compression cost activity and the critical path. Since activity D is the lowest cost but has only one-week compression allowance, the compressed project time is now 44 weeks.
Step 4. The cumulative compression cost at this iteration is 30, and cumulative incentive is 60.
Step 5. Net benefit is 30 (60-30 = 30). Since net benefit is positive, we can further compress the project.
Paths
Path Time
ACEG 43
BDEG
45*
BFG 33
Critical Activity
Maximum Weeks of Compression Allowed
Weekly Compression Costs
Rank B 2 80 3 D 1 30 E 90 4 G 65
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Chapter 13: Project Management

45. Iteration 2
Step 1. Calculate path expected completion times, and identify the critical path.
*Critical path
Step 2. Rank the activities on critical path according to their compression costs.
Step 3. Shorten the activity with the least compression cost activity and the critical path. Since activity G is the lowest cost (65) but has only one-week compression allowance, thus the compressed project time is now 43 weeks.
Step 4. The cumulative compression cost at this iteration is 95 ( = 95), and cumulative incentive is 120 (60 * 2 =120).
Step 5. Net benefit is 25 ( = 25). Since net benefit is positive, we can further compress the project.
Paths
Path Time
ACEG 43
BDEG
44*
BFG 33
Critical Activity
Maximum Weeks of Compression Allowed
Weekly Compression Costs
Rank B 2 80 D 30 - E 90 3 G 1 65
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Chapter 13: Project Management

46. Iteration 3
Step 1. Calculate path expected completion times, and identify the critical path.
*Critical path
Note that all three paths are reduced by one week, and path BDEG with 43 weeks is still the critical path at this iteration.
Step 2. Rank the activities on critical path according to their compression costs.
Step 3. Shorten the activity with the least compression cost activity and the critical path. Activity B is the lowest cost, hence the candidate for compression at a cost of $80.
Step 4. The cumulative compression cost at this iteration is 180 ( = 180), and cumulative incentive is 180 (60 * 3 =180).
Step 5. Net benefit in this situation is 5 ( = 5), hence project compression can continue.
Paths
Path Time
ACEG 42
BDEG
43*
BFG 32
Critical Activity
Maximum Weeks of Compression Allowed
Weekly Compression Costs
Rank B 2 80 1 D 30 - E 90 G 65

47. Note that there are two critical paths, ACEG and BDEG with 42 weeks.
Iteration 4
Step 1. Calculate path expected completion times, and identify the critical path.
*Critical paths
Note that there are two critical paths,
ACEG and BDEG with 42 weeks.
Step 2. Rank the activities on both critical paths according to their compression costs.
Step 3. Shorten both critical paths with the least compression cost activities. The activity A has the lowest compression cost on ACEG path, while activity B is the lowest cost on BDEG path and has an additional week of permissible compression. Compression cost of both activities would be 105 ( = 105). On the other hand, compression cost of activity E, which is a common activity to both paths, is $90. Hence reducing E by one week is more economical than reducing A and B at the same time.
Step 4. The cumulative compression cost at this iteration is 180 ( = 265), and cumulative incentive is 180 (60 * 4 =240).
Step 5. Net benefit is -25 ( = -25). This situation yields negative net benefit, hence project compression should stop, and the project should be compressed only for 3 weeks, to be completed at 42 weeks.
Paths
Path Time
ACEG
42*
BDEG
BFG 32
Critical Activity
Maximum Weeks of Compression Allowed
Weekly Compression Costs
Rank A  2 25 1 C 40 2 E 90 3 G 65 -
Critical Activity
Maximum Weeks of Compression Allowed
Weekly Compression Costs
Rank B 2 80 1 D 30 - E 90 G 65

48. The table below shows the summary of the iterations for Example 13.3.
Summary of Iterations
(1)
(2)
(3)
(4)
(5)
(6)
(7)=(6)-(5)
Iteration
Total Weeks for Completion
Compressed Activities
Cost of Compression
Cumulative Compression Cost
Cumulative Incentive
Net Benefit 1 44 D 30 60 2 43 G 65 95
120 25 3 42 B 80
175
180 5 4 41 E 90
265
240
-25
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Chapter 13: Project Management

49. FIGURE 13.13. Excel Template Solution to Compression Incentive PERT.
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Chapter 13: Project Management

50. Project Management Applications in Clinical Settings: Clinical Pathways
“Clinical Pathway” is a tool generally deployed for variance reduction in delivery of health care.
Clinical pathways:
Require identification of tasks of care delivery for a specific disease. This involves a multi-professional team including physicians, nurses, various therapists and/or health technologist, etc. (Ozcan, Tanfani, Testi, 2013).
Provide therapeutic guidelines for each phase of a patient’s healing process and organize the sequence of therapies, surgery, etc. with logical phases.
Are an operational tool in the clinical treatment of diseases, providing an efficient flow process to improve the patients’ healthcare.
Yasar A. Ozcan
Chapter 13: Project Management

51. Project Management Applications in Clinical Settings: Clinical Pathways
Clinical pathways used with project management is a new way of thinking for disease management.
As in steps of project management, identifying the tasks, task relationships as well as task times in a clinical flow process, and conceptualizing each patient as a project are innovative way to organize and deliver healthcare.
An application of clinical pathways using the project management tool is presented in example (This example is adapted from the work of Ozcan, Tanfani, and Testi, 2013.)
Yasar A. Ozcan
Chapter 13: Project Management

52. Example 13.3:
The clinical information for thyroid treatment process identified with various activities is listed in the table below. The data was collected by interviews with the team (surgeons, nurses, and anesthesiologists) involved in thyroid treatment at the Endocrine Surgery Unit involved in this study. The execution times to perform the main activities involved in the process have been collected on 100 patients. The table shows the tasks and activity relationships, as well as corresponding time estimates for the task durations. All recorded times are in minutes, thus the hospital stay estimates correspond to 2–3 days. Furthermore, the time spent in post-intervention care (medications, treatment for complications) activity is subtracted from hospital stay since this activity is completed during the stay (Ozcan, Tanfani, Testi, 2013).
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Chapter 13: Project Management

53. Tasks, Activity relationships, and Time Estimates for Example 13.3
(Source : Ozcan, Tanfani, Testi, 2013)
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Chapter 13: Project Management

54. The PERT solution to this problem is presented below.
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Chapter 13: Project Management

55. Solution
The critical path dictates the thyroid treatment completion time as 3,163 minutes or 52.7 hours, or 2.2 days.
Furthermore, this reflects the average completion time in hours is only 50%.
Often managers would be interested in higher probability of completion times.
Using the template one can target the probability to higher levels, and this would yield a new completion time.
For example, if we change the target probability to 95%, the new solution would be approximately 64.7 hours, which is an additional 12 hours of process time for the thyroidectomy pathway.
Yasar A. Ozcan
Chapter 13: Project Management

56. Solution
While the goal is to reduce the variability, introducing variability into the project would help managers to understand where the variability is coming from, so that they can work on reducing the gap on optimistic and pessimistic time estimates, or altogether standardize the activities to lower pessimistic time estimates (Ozcan, Tanfani, Testi, 2013).
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Chapter 13: Project Management

57. Applications Clinical Health Applications (Clinical Paths)
Administrative Applications
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Chapter 13: Project Management

58. Project Management Software
Software examples include:
CA Super Project
Harvard Total Manager
MS Project
Sure Track Project Manager
Time Line
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Chapter 13: Project Management

59. Advantages of PM Software
Imposes a methodology
Provides logical planning structure
Enhances team communication
Flag constraint violations
Automatic report formats
Multiple levels of reports
Enables what-if scenarios
Generates various chart types
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Chapter 13: Project Management

60. The End
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Chapter 13: Project Management 60