1. Team 7 David D. Cho Minyoung Kim Bin (Raymond) Xiao Hua Zhang

2.  The Company: Genemodem  Impressive Track Record: Profits growth in 6 consecutive years  CEO: Daniel Pullman (fully supported product development project)  VP of Engineering: Issac Levy (insisted on hiring a consulting firm to do an in-depth analysis of Genemodem’s product development)

3.  The Challenges: 1. Short product life-span (like a triangle, only six months, continue to shrink) 2. Long product development time (roughly twenty four months)  Resolution: Drastically cut development time

4.  Target: Drastically cut development time  Think tank: Mark Kowalski, Ruth Emerson and Fred Romero  Test ground: A226  Time span: Before A226 is ready (roughly 16 months)  Resources: No budget restrictions  Incentives: 10,000 shares each (current price $62.48, 62.48*10,000=$624,800)

5. Issac Levy VP of Engineering Ruth Emerson Marketing / Brand Man ager Fred Romero Finance / Project Audit or Mark Kowalski Group Leader / Project Leader of the A226

6.  Place : University (Business school)  Characters : Rick Silver (Associate Professor), Jim Wilson (Full Professor)  Main Event: - Mr. Rick Silver is newly assigned to teach a course in the Executive MBA. - He is recommended by Jim Wilson, due to his unique style of ‘teaching through open discussion’. - Jim Wilson suggests Rick Silver to teach ‘Project Management’ course and also he needs Rick Silver in finishing some interesting research.

7.  Place : A dinner event for Universities Presidents  Characters : Ms. BJ von Braun and 4 other presidents  Main Event: - Ms. BJ initiated conversation with other presidents about recent decrease in the number of MBA applicants. - Presidents are sharing about their ideas of that reasons for the decrease could be both ‘over capacity of business schools’ and ‘less demand of MBA degree’. - They also talks about that Ivy leagues are not experiencing any decrease due to their reputation and strong financial ability to attract academic calibers.

8. Chapters 4-6

9. Textbook definition: “ A set of activities aimed to achieve a specific objective and have a clear start, middle and end”. Professor Silver’s definition: A complex initiative that needs pictures, diagrams, time charts, or showing sequential or parallel steps in order to manage it.

10. Regardless of industry or project type, there are three common problems to all projects: Budget overruns Time overruns Compromising content

11. B.J Von Braun - President of University Saturating demand for new MBAs Overextending capacity Large fixed overhead for business program that might potentially decline Christopher Page – Dean of Business School Demand will not taper off Need investments to maintain talent in the business schools Talent will bring increase reputation and increase demand

12. Agreements: Ability of graduates to get jobs as indicators of demand Use of survey tool as measurement BJ VonBraun already has the results – she gets Page to agree to the decision-making conditions, then shares results with him.

13. Sacred cow project for CEO Project is grossly over budget and significantly late Payback period pushed from 3 to 5 years, which still seems unrealistic All use uncertainty as reasons for delay - Upper management blames external environment and lower ranks blames internal sources

14. Most problems in projects are direct or indirect results of uncertainty Most individuals add a safety margin to any deadline, usually around 80%

15. IOM580 Project Management Team 6 Leon Tseng, Jasmine Yeh, Troy Yu, Hiroshi Harima

16.  Scene 1: Conversation between B.J. and Chris Page Trim the budget according to the f orecast!! We shouldn’t cha nge with such sm all fluctuation

17.  Scene 2: Conversation between B.J. and Bernard Business schools fail to deliver the markets!! Management is a rt. It cannot be ta ught as a science ……………

18.  Rick and Jim talk about the research subject: Overdue and Overruns The budget overruns are not the main reas ons for the extended payback period It is caused by the delays in completi ng projects Agree, but….

19.  Rick explains PERT and Gantt techniques to students Critical path is … It’s an optimizatio n problem!! Should postpone t he investments un til really necessary Make an early start a nd keep the slack!!

20.  Class discussion gets heated The issue must be addressed fr om management’s point of view, too!! if starting too many things managers wo uld be bound to lose focus Using late starts, we l ose slacks and everyt hing becomes import ant The control mechanism measures the progress of the p roject. The problem is that by the time the progress rep ort indicates something is wrong, it’s usually too late.

22.  Early vs. Late Start of Critical Path  A waste of time  Concentration on minor considerations and neglect the major ones  The main thing is for the project manager to focus ◦ Both early and late start jeopardize the ability to focus, even though to different degrees  Measuring Progress of Projects  Measurement should induce the parts to do what is good for the system as a whole  Measurement should direct managers to the point that needs their attention

23.  Manage for Cost or Manage for Throughput  Theory of Constraints (TOC) ◦ Only one or two true constraints in system  TOC says that conflict implies a faulty assumption and that must be corrected ◦ Example: The only way to achieve good cost performance is through good local performance everywhere (Sub-Optimization) ◦ Incorrect assumption and root of problems in many organizations  Strengthening the Chain ◦ 1) IDENTIFY, 2) EXPLOIT, 3) SUBORDINATE, 4) ELEVATE

24.  Prime Measurement  Again, there is only one (or two) constraints in a system ◦ Identification of the system constraint should drive identification of the Prime Measurement  The main reason for an operational measurement is to induce the departments to do what is good for the company as a whole  “Tell me how you measure me and I’ll tell you how I’ll behave.”  Book examples changes at a steel mill

25. Group 5 Regina Anderson Ken Fong Brent Hawkins Jianhua Zhang

26.  Lots of safety in typical estimates (at both the project and task levels) ◦ Estimates usually given at 80% conf. levels ◦ Equates to 200% margin of safety  But why do tasks and project still overrun!?

27.  The student syndrome ◦ No rush to start, wait until the last minute ◦ Leave just enough time (the ‘true’ estimate) ◦ Consequence:  No margin for errors, delays, or the unexpected  Safety already spent during the initial start delay

28.  Multitasking ◦ Results in increased lead times

29.  Dependencies ◦ Causes delays to accumulate while wasting away the advances ◦ Example: 4 dependent tasks, 3 finishes ahead (-5 days), 1 finishes behind (+15 days)  Statistically, gainers average out the laggards  In reality, the advances are lost, early finishes are rarely reported  Results in a net delay of 15 days

30.  Ex: soldiers in a line building a road ◦ Lead time and WIP inventory interchangeable  Represented by the distance between the soldiers ◦ Differences in production rates cause soldiers to move at different paces, i.e. creates gaps  Soldiers will eventually spread out, with the largest gap at the bottleneck

31.  Solutions ◦ Chain them all together tightly, aka assembly line / conveyor belt method  Throughput suffers, everyone moves at the pace of the slowest producer ◦ Chain them together with some slack = J.I.T.  Similar to conveyor belt example  Introduces containers which allows for a limited input buffer to accumulate  Creates additional inventory however

32.  A better solution ◦ Chain the leader to the bottleneck  Leader moves at the pace of the bottleneck  Length of chain from leader to bottleneck = buffer  Eliminates need for excess buffers / WIP inventory  Keeps a buffer only at where it is needed, the bottleneck

33. Critical Chain: Chapters 16 thru 18 Group 3 Katelyn Fang ∙ Sherry Liu ∙ Kevin Nagatori ∙ Adam Terry IOM 580 Dr. Ardavan Asef-Vazir Spring 2009

34. Chapter 16  Pitfalls of Managing a Program: 1.Pad each step’s completion dates. 2.Pad each step with a lot of safety time 3.Waste safety time:  Student Syndrome  Multi-Tasking  Delays accumulate and advances do not

35. Chapter 16 (cont)  Bottleneck: a resource with capacity that is not sufficient to produce the quantities that the market demands.  Critical Path: the constraint of the project.  Feeding Buffer: a buffer used by the non- critical path so that it does not affect the critical path.

36. Chapter 16 (cont) #A1 FB #B1#B2 FB Project Plan with buffer at each step Project Plan with buffer at Critical Path and F eeder Buffers for Non-Critical Path Before / Most Common After / Best Way

37. Chapter 17  Monitoring Progress ◦ Before => Monitor critical path by % complete ◦ After => Adding feeding buffer monitoring  Days consumed on feeding buffer  Days consumed compared with original buffer days  Days left on feeding buffer ◦ Conclusion => Focus on continuous monitoring

38. Chapter 18  2 Types of Projects ◦ Projects done solely by the company  Reduce lead time estimates  Eliminate milestones  Frequent reporting ◦ Projects done by vendors and subcontractors  Talk their language  Pay for vendor responsiveness  Penalty for not finishing a project on time ◦ Cash Flow ◦ Sales ◦ Market Share ◦ Stock Value

39. Group 2 Chapters 19-21

40.  Student (Ted) looks at the relationship between contractors and owners  Lose-Lose: ◦ Contractor bids low to obtain contract ◦ Contractor makes more money off of changes and delays ◦ Owner pays high price for changes ◦ No incentives for contractor to complete the project on time

41.  The Win-Win relationship: ◦ Owner benefits from a project which is completed early ◦ Owner shares this benefit with contractor in incentive bonus for finishing early ◦ Owner punishes contractor for finishing late with heavy penalties ◦ Contractors no longer bid on price but ability to complete project faster

42. Chapter 21-25  Team 1 – Nick Stoisor, Petricia Wijono, Kevin Stone, Joyce Limbo   At the end of Chapter 21, we leave off with Richard giving a speech at the YPO meeting, with B.J. present. They make headway in bringing the respective heads of organizations on board with the idea of pushing for more MBA’s. Richard’s career is starting to take a change for the better. 

43. Chapter 22  Richard is back in class on a Saturday – this time Jim and Charlene are present as well. Ruth poses a problem that immediately delves into deep discussion. She has a conceptual problem relating to “one or more feeding paths running so overdue that they exhaust the entire feeding buffer and start to penetrate the project buffer”. 

44. Chapter 22  Ted now adds a twist to this problem where a specific resource that is to be allocated for a noncritical path is not available – this resource is currently working on another noncritical path which is also running late.   Critical Path: The longest chain of dependent steps, the longest in time. 

45. Chapter 22  The limited capacity of X (resource) makes it so that multiple noncritical steps cannot be performed at the same time in parallel, but have to be performed sequentially. This creates dependency. Dependencies between steps can be a result of a path or a result of a common resource.  The group determines to use the term “Critical Chain” to define the true Critical Path that takes into account all the constraints. They also determine that the order in which the X steps are performed is mostly irrelevant, since the project buffer is used to dampen any uncertainty happening along the way.  Additionally, they determine that X’s work can be shifted around, at earlier and later times, as well as split up into necessary and ancillary activities. 

46. Chapter 23  Christopher (Dean), B.J. (president), Richard, Jim are brainstorming how to attract new MBA candidates. They come up with the idea of having companies only pay for the education if their employees achieve $100k worth of benefit from the program. Chris is against the idea; he has an old academician mentality. They part deciding to research the idea further and talk to presidents of companies and get feedback. 

47. Chapter 23  Johnny Fisher calls Don Pederson, an executive at UniCo, the large oil conglomerate. We start to find out the details of the relationship being fomented between UniCo and the University. UniCo has invested in 5 professors from 5 branches of the University (Business, Engineering, & Human Resources are the 3 mentioned) to streamline the educational system so that it is on par with the desired curriculum and skill-sets that UniCo would like to see in its employees. Don likes what he hears is happening thus far. We also learn that if all goes according to plan, UniCo will invest heavily in the University, which will gain the University national acclaim. 

48. Chapter 24  This is the last class of the semester – special session. Richard asks Mark to give a debriefing of the project he’s been involved with, along with the Think Tank. He explains that while the A226 modem has been a huge success at Genemodem, they are charged with shrinking the development time of all products at Genemodem. Lately, they’ve been facing a problem relating to resource contention – not within the same project, but across multiple projects. On one hand they had to consider contentions (so as to prevent problems), but on the other hand, if they did, it would cause a nightmare in trying to shift things around across multiple projects. The solution to the problem was resolved by Richard: Identify the bottleneck, exploit the bottleneck (schedule the sequence of work for the bottleneck), subordinate all other resources to the bottleneck. This goes in line with the actual theory of constraints invented by Eli Goldratt and published in his book ‘The Goal’ (and which the character Johnny discusses during the symposium event): 

49. Chapter 24  1. Identify the constraint (the resource/policy that prevents the organization from obtaining more of the goal)  2. Decide how to exploit the constraint (make sure the constraint's time is not wasted doing things that it should not do)  3. Subordinate all other processes to above decision (align the whole system/organization to support the decision made above)  4. Elevate the constraint (if required/possible, permanently increase capacity of the constraint; "buy more")  5. If, as a result of these steps, the constraint has moved, return to Step 1. Don't let inertia become the constraint)  In the latter part of the chapter, we find out that Richard is in New York, shopping with his wife Judith. He’s now a tenured professor, making more money, and they are spending that money with glee. It is here that they talk about, and seemingly decide, to go with surrogate mother to have children and start their family.   Chapter 25   This next chapter brings us to a round table discussion between the members of faculty and Don Pederson – a one-day session that he requested to have with the faculty. During this session, we get a lesson about how time value of money is not always the best determinant of the value of an investment. This is because if the availability of money is the constraint, then TVM (which takes into account interest and inflation) is not the appropriate measurement tool. Payback period is also not a good determinant either because it only gives the answer in terms of time, with no other stipulations.   Charlene proposes a combination of methods she calls “flush”, which is a multiplication of payback period (time) and TVM (money). She gives the example of the rocks in the garden, and even the 2 dollars invested for 11 days, followed by a 3 dollar investment on the last day and a payback of only 5 dollars. This prompts Don to suggest that money and investments are truly not synonymous and that they don’t use the same unit of measure – a topic for another day.  2 Types of Projects ◦ Projects done solely by the company  Reduce lead time estimates  Eliminate milestones  Frequent reporting ◦ Projects done by vendors and subcontractors  Talk their language  Pay for vendor responsiveness  Penalty for not finishing a project on time ◦ Cash Flow ◦ Sales ◦ Market Share ◦ Stock Value

50. Chapter 25  This next chapter brings us to a round table discussion between the members of faculty and Don Pederson – a one- day session that he requested to have with the faculty. During this session, we get a lesson about how time value of money is not always the best determinant of the value of an investment. This is because if the availability of money is the constraint, then TVM (which takes into account interest and inflation) is not the appropriate measurement tool. Payback period is also not a good determinant either because it only gives the answer in terms of time, with no other stipulations. 

51. Chapter 25  Charlene proposes a combination of methods she calls “flush”, which is a multiplication of payback period (time) and TVM (money). She gives the example of the rocks in the garden, and even the 2 dollars invested for 11 days, followed by a 3 dollar investment on the last day and a payback of only 5 dollars. This prompts Don to suggest that money and investments are truly not synonymous and that they don’t use the same unit of measure – a topic for another day.

52. Chapter 25  2 Types of Projects ◦ Projects done solely by the company  Reduce lead time estimates  Eliminate milestones  Frequent reporting ◦ Projects done by vendors and subcontractors  Talk their language  Pay for vendor responsiveness  Penalty for not finishing a project on time ◦ Cash Flow ◦ Sales ◦ Market Share ◦ Stock Value