1. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.1 Project Planning & Control

2. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.2 Chapter Coverage What is a project? The project planning and control process Network planning – Critical Path Method (CPM)

3. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.3 Projects: A project is a set of activities with a define start point and a define end state, which pursues a defined goal and uses a define set of resources.

4. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.4 Understanding the project environment Project definition Project planning Technical execution Project control Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Changes Corrective action Stages in project management

5. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.5 Stage 1: Understanding project environment The project environment comprises the factors which may affect the project during its life. See slide 16.6

6. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.6 Geo-social environment Geography National culture Econo-political environment Economy Government Business environment Customers Competitors Suppliers/sub-contractors Internal environment Company strategy Resources Other projects The Project Examples of factors that may affect the project environment

7. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.7 Stage 2: Project definition Three different elements define a project: Its objective: the end state that project management is trying to achieve Its scope: the exact range of the responsibilities taken on by the project management. Its strategy: how project management is going to meet its objective.

8. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.8 Project objectives The hierarchy of objectives: At the top of the hierarchy is the overall objective or goal of the project, lower levels of the hierarchy are the objectives of each part of the project (big projects consists of many parts). Objectives of each part must be related to its overall objective.

9. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.9 Objectives must be clear: Good objectives are those which are clear, measurable and, preferably, quantifiable. One method of clarifying objectives is to break down project objectives into three categories: –Purpose: to prevent production from failing to meet output as forecast. –End result: a report which identifies the causes of lost production, and which recommends how the target output can be met. –Success criteria: the report should be completed by 30 June. The recommendations should enable output to reach at east 70 tonnes per year. Cost of the recommendations should not exceed RM200,000.

10. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.10 Quality TimeCost New aircraft project Fixed grant research project Music festival The three project performance objectives

11. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.11 Project scope -Identifies the work content and the outcomes. -Boundary setting exercise – divides work content for each part of the project. -Important for managing contractors – commercial and legal aspect of the scope of supply. -Can change during the course of the project.

12. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.12 Project strategy -Defines in general how the organization is going to achieve its project objectives and meet the related measure of performance. -Two ways: 1)Define phases (time based sections) of the project. 2)Set milestones at which specific reviews of time, cost and quality are made.

13. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.13 Stage 3: Project planning Fulfills four distinct purpose, it determines: 1.The cost and duration of the project. 2.The level of resources needed. 3.Helps to allocate work and monitor progress. 4.Helps to assess the impact of changes to the project. There are five steps…

14. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.14 Identify the activities in the project Estimate the times and resources for activities Identify the relationships and dependencies between the activities Identify time and resource schedule constraints Fix the schedule for time and resources Adjust as necessary Stages in the project planning process 12345

15. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.15 1. Serve breakfast in bed 3. Fetch juice 4. Fetch glass 6. Boil egg10. Fetch egg cup 12. Toast bread 15. Fetch butter 17. Fetch tray, plates and cutlery 16. Arrange tray 11. Butter the toast 5. Place boiled egg in egg cup 2. Pour juice in glass 7. Fetch egg 8. Bring water to boil 14. Fetch bread 1. Identify activities: Work breakdown structure 13. Slice bread 9. Fill pan with water

16. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.16 2. Estimate times and resources Table 16.1 Time and resources estimates for a breakfast-in-bed” project No ActivityEffort (person)Duration (secs) 1 Serve breakfast in bed1120 2 Pour juice in glass15 3 Fetch juice110 4 Fetch glass110 5 Place boiled egg in egg cup13 6 Boil egg0240 7 Fetch egg110 8 Bring water to boil0180 9 Fill pan with water18 10 Fetch egg cup110 11 Butter the toast110 12 Toast bread030 13 Slice bread130 14 Fetch bread110 15 Fetch butter110

17. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.17 Typical subjective probability distribution for an activity time estimate Activity duration35136 Optimistic time Most likely time Expected time Pessimistic time Probability Accuracy of estimates comes with experience!

18. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.18 All activities will have some relationship with one another. Dependent or series relationship or Slice breadToast breadButter toast Fill pan with waterBring water to boilBoil egg Parallel relationship 3. Identify relationship and dependencies 1 2 12 &

19. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.19 Resource constrained – only the available resource level are used in resource scheduling and are never exceeded hence, project completion might slip. Time constrained – priority is to complete the project within a given time. 4. Identify schedule constraints

20. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.20 “Making breakfast” - Do activities at earliest time 0123467895 Orange Bread Water Tray Toast Boil waterBoil egg Bed room Staff required 0123467895 0 1 2 3 4 Butter Time (mins) Activities requiring operator time

21. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.21 “Making breakfast” – Minimizing staff requirements 0123467895 Orange Bread Water Tray Toast Boil waterBoil egg Bed room Staff required 0123467895 0 1 2 3 4 Butter Time (mins)

22. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.22 “Making breakfast” – Maximizing toast quality Staff required 0123467895 0 1 2 3 4 0123467895 Orange Water Tray Boil waterBoil egg Bed room BreadToast Butter Time (mins) 5. Fix the schedule

23. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.23 Stage 5: Project control 1.Project monitoring: current expenditure to date, amount of overtime authorized, inspection failure, progress of activities etc. 2.Assessing project performance: Compare planned and actual expenditure 3.Intervene to change the project: when the project is out of control in the sense of cost, quality levels or time, intervention is required.

24. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.24 Network planning 1.Use of Gantt chart is the simplest technique that supports project planning and control. 2.More elaborate and detailed techniques are collectively called network analysis. 3.We will consider a network analysis method called Critical Path Method (CPM)

25. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.25 Critical Path Method 1.Represents the project activities diagrammatically. 2.Project activities are represented by arrows (See 16.26). 3.At the tail (start) and head (finish) of each activity is a circle which represents and event (See 16.27). Rules for drawing a network diagram: 1.An event cannot be reached until all activities leading to it are complete - (16.27 – event 5 is not reached until c and e are completed). 2.No activity can start until its tail event is reached - (16.27 – activity f cannot start until event 5 is reached). 3.No two activities can have the same heat and tail events (16.28 – activities x and y cannot be drawn as first shown, they must be drawn using a dummy activity (no duration and shown as a dotted line)

26. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.26 Prepare bedroom Paint bedroom Prepare kitchen Paint kitchen Remove furnitureReplace furniture a Remove furnitureNone1 b Prepare bedrooma2 c Paint bedroomb3 d Prepare kitchena1 e Paint kitchend2 f Replace furniturec, e1 Activity Immediate predecessors Activity duration (in days) Activities and network for a simple project

27. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.27 Network diagram for simple decorating project a 1 b 2 d 1 c 3 e 2 f 1 1 2 5 6 3 4 a 1 1 Activity reference Activity duration Event number An Event Earliest Event Time (EET) Latest Event Time (LET) EET – the very earliest the event could possibly occur if all preceding activities are completed as early as possible. LET – the latest time that the event could possibly take place without delaying the whole project

28. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.28 1 2 1 3 1 35 2 46 2 x y x y Activity on arrow – Using “dummy” activities

29. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.29 Critical Path –Network diagrams have more that one sequence of activities which will lead from the start to the end of the project – these sequence are called paths. –Each path has a total duration which is the sum of all its activities. –The path which has the longest sequence of activities is called the critical path. –It is called the critical path because any delay in and of the activities on this path will delay the whole project.

30. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.30 Network analysis for simple decorating project a 1 b 2 d 1 c 3 e 2 f 1 2 5 6 3 4 1 00 11 66 77 42 33 With earliest and latest event times Chapter 16, Page 575

31. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.31 Worked Example The chief surveyor of a firm that moves earth in preparation for the construction of roads has identified the activities and their durations for each stage of an operation to prepare a difficult stretch of motorway (see table below). The surveyor needs to know how long the project will take and which are the critical activities.

32. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.32 Road Construction Activities ActivityDurationPreceding activities A5- B10- C1- D8B E B F9B G3A, D H7 I4F J3F K5C, J L8H, E, I, K M4C, J

33. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.33 Network Diagram For Motorway Project 00 20 18 10 19 22 27 35 A 5 B 10 C 1 D 8 E F 9 G 3 H 7 I 4 J 3 KM 5 4 L 8

34. © Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16 16.34 The End