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344SAMLecture6-ManagingResources.pptx

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344SAM Project Management L6: Managing Project Resources

Learning Outcomes

By the end of this lecture you should:

Understand the importance of resource requirements as part of the project planning stage

Consider critical chain project management

Project planning – the story so far

Earlier lectures have focussed on…

Defining the project using a business case (Project Initiation)

Identifying the project activities and tasks - preparing a Work Breakdown Structure

Identifying dependencies between activities - preparing a network diagram

Identifying the critical path and the earliest project finish date (using CPA or Gantt Chart method)

….. BUT Gantt charts are meaningless unless the project has adequate resources

What are resources?

Key questions

Will there be sufficient quantities of people, equipment and materials available?

Will they be available when they are needed (according to the project plan)?

Will outside contractors have to be used?

Are there any unforeseen resource dependencies?

Is the original completion deadline achievable?

Don’t start the project without checking if all resources are available…

Resource planning

Allocating resources can affect your plans because of resource availability

To plan the project, resource availability needs to be understood in terms of dates/days and % time

Critical path may be compromised

What’s the priority?

Is the project:

Time-constrained: must complete by an imposed date

Resource-constrained: must be completed using a given level of resources

Trade-off decisions need to be completed

Resource Smoothing (Time Constrained Projects)

“A scheduling calculation that involves utilising float or increasing or decreasing the resources required for specific activities, such that any peaks and troughs of resource usage are smoothed out. This does not affect the overall duration.”

APM (2013)

“

A simple network diagram for publishing a book

Earliest Finish = 36 days

Resourcing the plan

3 people are needed w/c 29th September

NOTE:

2 people needed 29/9/13 to 7/10/13 if finish date is to be held.

Slack on “design cover” task reduced by 5 days

Activity delayed to reduce demand peak

Resource Levelling

(Resource Constrained Projects)

“Prioritising and allocating resources to minimise project delay without exceeding the resource limit or altering the technical relationships”

Larson and Gray (2011)

“

Where only one person available, project finish date needs to be extended by 7 days.

Rescheduling activities has used up all slack – all activities now on critical path

Resourcing the plan (after resource levelling)

The heuristics approach

Even modest-sized projects with only a few resource types may have thousands of feasible solutions

Heuristics (rules of thumb) used to allocate resources and schedule activities

Parallel method most common

Resources allocated to activities with:

Minimum slack

Smallest duration

Lowest activity ID

Critical Chain Project Management

The Critical Chain (Goldratt, 1997)

Questions the critical path!

All goals are based on estimates

Estimates contain safety margin

Late start tasks become critical!

Delay in one step is passed onto the next

Notifying the project manager

“Student syndrome”

Critical Chain Project Management (Goldratt’s Solution)

Don’t build safety margins into estimates

Estimate based on 50% chance on completing within that time

Add single block of safety time to end of Critical Chain

Schedule activities based on latest not earliest start

Buffer

50% of CC

Gardiner, P. (2005)

Suppliers as Resources

Contracts

Many organisations have not got the skills or resources to deliver a project themselves.

They choose to use sub-contractors

Contracts

Why sub-contract?:

Reduces risk (if contractor is a specialist)

Increases capacity

Increases (your visible) skills

Delays payments – helps cash flow

Need something urgently

Contracts

Reasons not to sub-contract:

Reduces risk – easier to control

Commercial confidentiality

Increases internal skills

Otherwise:

Skills go to sub-contractors

Become dependent on sub-contractors

Contracts

What relationship do you want with your sub-contractor?

Temporary

Permanent

Fixed price contracts

Firm Fixed Price

Contractor agrees to perform work for a fixed price

Once contract agreed, price cannot be changed

Preferred when scope of project well defined and implementation risk low

Cost reimbursement contracts

Cost Plus Fixed Fee

Contractor is paid for costs in carrying out the work

Contractor is also paid a fixed fee on successful completion

Suitable when risks are high or when client requires high level of control over the contractor's work

Incentive contracting

Shared risk / shared reward partnership between client and contractor

Rewards performance:

Cost savings shared between client and contractor

Contractors use their best staff on projects to improve performance and increase profits