1. OPSM 301 Operations Management Class 8: Project Management: Introduction and CPM Koç University Zeynep Aksin zaksin@ku.edu.tr

2. New module: outline Chapter 3 from textbook: will skip parts on AOA networks Two sessions on theory Two sessions applications and Microsoft Project MS Project available in SOS Z15 computer lab

3. Why project management? Competition through new product development Information-intensive products: costly to produce, cheap to reproduce Flatter organizations Systems approach Project approach

4. Project A single product is obtained from the completion of a project The differentiating characteristic of projects from processes is the intense uncertainty in projects Two types of project –With absolute deadline: olympic stadium –With relative deadline : new product development project Successful project management: To finish on time without going over budget and without sacrificing from the scope of the project

5. Project Management Examples –Construction –R & D –Computer system implementation –Product development –Advertising campaign –Business Plan

6. Project Life Cycle: A Facility Construction Example Feasibility: project formulation, feasibility studies, strategy design etc. A go/no-go decision is made at the end of this phase Planning and design: base design, cost and schedule, contract terms, and detailed planning Production: manufacturing, installation and testing. The facility is substantially completed at the end of this phase Turnover and start-up: final testing and maintenance. The facility is in full operation at the end of this phase

7. Project Management Resources Budget Scope Schedule

8. Some observations Most projects –Either go over time –or over budget –or the promised content cannot be delivered Littles law: more projects in the system (WIP), longer completion times

9. Modern Project Management The process of project management has two dimensions: the science and the art of project management –Technical: defining, planning and controlling –Socio-Cultural: stimulating teamwork and personal motivation identifying and resolving problems shaping customer expectations sustaining political support of top management monitoring subcontractors negotiating with functional managers

10. Project Planning, Scheduling, and Controlling

11. Structuring Projects: Pure Project 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. Duplication of resources. Organizational goals and policies are ignored. Lack of technology transfer. Team members have no functional area "home." Advantages Disadvantages

12. Structuring Projects Functional Project President Research and Development EngineeringManufacturing Project A Project B Project C Project A Project B Project C Project A Project B Project C

13. Structuring Projects Functional Project 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. Aspects of the project that are not directly related to the functional area not done well enough. Motivation of team members is often weak. Needs of the client are secondary and are responded to slowly. Advantages Disadvantages

14. Structuring Projects Matrix Project: Organization Structure President Research and Development Engineering Manufacturing Marketing Manager Project A Manager Project B Manager Project C

15. Structuring Projects Matrix Enhanced interfunctional communications. Pinpointed responsibility. Duplication of resources is minimized. Functional home for team members. Policies of the parent organization are followed. Too many bosses. Depends on project managers negotiating skills. Potential for suboptimization. Advantages Disadvantages

16. Work Breakdown Structure 1.Project 2. Major tasks in the project 3.Subtasks in the major tasks 4. Activities (or work packages) to be completed

17. The Work Breakdown Structure 1. House 1.2 Heating System WP-F1 WP-F2 WP-P1 WP-P2 WP-P3 1.2.3 Fuel Tank1.2.2 Furnace 1.2.1 Piping 1.3 Interior Design 1.1 Building/St ructure 1.4 Garden/P arking 1.2.4 Solar Panels WP-FT1 WP-FT2 WP-FT3 WP-SP1 WP-SP4 WP-SP2 WP-SP5 WP-SP3

18. Time planning: activity list Activity A B C D E F Predecessor- A B, D- D E

19. Activity-on-node network diagram (or PERT diagram) Start A, 3 D, 2 C, 3 E, 2 B, 5 Finish F, 5

20. Developing Project Network 1 2 4 5 6 7 3 8 9 10 11 0 Rules: Draw networks from left to right Each activity has a unique identification number An activitys identification number should be larger than that of the activities preceding it Loops (cycles) are not allowed Conditional statement (e.g., if this happens then …) are not allowed If there are multiple start or finish activities, a common start or finish node is used

21. Gantt chart: Early start Time Activity A D B E C F Start A, 3 D, 2 C, 3 E, 2 B, 5 Finish F, 5

22. Gantt chart: Late start Time Activity A D B E C F Start A, 3 D, 2 C, 3 E, 2 B, 5 finish F, 5

23. PERT/CPM Network Diagrams Advantages –Allows visualization of task relationships –Facilitates calculation of critical path –Clarifies impact of decisions on downstream activities Disadvantages –Complex, not easy to comprehend at a glance –Charts dont readily depict durations, dates, and progress

24. Gantt Charts Advantages –Easy to understand –Easy to show progress and status –Easy to maintain –Most popular view to communicate project status to client and/or senior management Disadvantages –Can be superficial –Not always easy to visualize precedence relationships JAN FEBMAR 1815222951219265121926

25. Terminology The early start (ES) time for an activity is equal to the maximum early finish (EF) times of all of its predecessor activities –ES=max (EF) of predecessors The early finish (EF) time for an activity is equal to the early start (ES) time plus the expected activity duration (ET) for the activity EF=ES+ET

26. Terminology The late finish (LF) time for an activity is equal to the minimum late start (LS) times of all of its successor activities –LF=min(LS) of successors The late start (LS) time for an activity is equal to the late finish (LF) time minus the expected activity duration (ET) for the activity –LS=LF-ET Total slack (TS) time of an activity: –TS = LS-ES=LF-EF

27. Latest Start and Finish Steps Latest Finish ES LS EF LF Earliest Finish Latest Start Earliest Start Activity Name Activity Duration

28. Finding the Critical Path A D C B 4 3 5 2 04 4 4 7 9 9 11 9 9 9 6 4 40 Activity Slack: S = LS-ES, or S = LF-EF Start at time t=0 ES LS EF LF

29. Finding the Critical Path A D C B 4 3 5 2 04 4 4 7 9 9 11 9 9 9 6 4 40 S=0 S=2 Critical Path: Path with zero activity slacks Activity Slack: S = LS-ES, or S = LF-EF

30. Finding the Critical Path 1.Start from the left (start node). For node 0: ES=0,EF=0 2.For each activitity find Early Start (ES) by checking all immediate predecessors Early Finish times. ES of activitiy=max(EF) of all predecessors. EF of activity=ES+Activity time 3.For the late start and late finish, start calculations from the end node. 4.For each activity find Late Finish(LF) by checking all immediate successors of the activity: LF of activity=min(LS) of all successors LS=LF-Activity time 5. Find Slack times for all activities, S=EF-ES=LF-LS 6. All activities with S=0 are on the critical path (there can be more than one critical paths)

31. AON Network for Milwaukee General Hospital Slack=0 Start A B C D F F G H H 13 2 15 H G 8 8 5 13 H F 4 10 3 7 13 H C 2 2 2 4 4 H E 4 4 4 8 8 H D 3 4 4 7 8 H B 0 1 3 3 4 H A 0 0 2 2 2 H 0 0 0 0 0 Slack=0 Slack=6 Slack=1 Start