case study 10

ashersdad92

bozarth_opscm4_ppt_141.pptx

Home >Business & Finance homework help >Operations Management homework help >case study 10

Chapter 14

Managing Projects

Chapter Objectives

Be able to:

Explain the difference between routine business activities and projects.

Describe the five major phases of a project.

Construct a Gantt chart or project network diagram, and use these tools to manage a project.

Describe some of the key features and advantages of project management software.

Describe what the Project Management Institute is, and what type of information can be found in the Institute’s Project Management Body of Knowledge (PMBOK ®)

14-2

Introduction

Project – A temporary endeavor undertaken to create a unique product, service, or result.

Projects have clear starting and ending points after which the people and resources dedicated to the project are reassigned.

Projects are non-routine, can be large or small, and may be difficult to manage.

Projects typically require significant levels of cross-functional and interorganizational coordination.

14-3

The Growing Importance of Project Management

Project Management – The application of knowledge, skills, tools, and techniques to project activities to meet project requirements.

Project Management is gaining importance as a management discipline due to:

Companies accepting the fact that complex projects can be managed well.

Professional organizations such as the Project Management Institute have emerged.

The pace of strategic change has quickened.

The traditional role of middle management has shrunk.

14-4

Project Phases

Concept Phase

Project Definition Phase

Planning Phase

Performance Phase

Postcompletion Phase

Figure 14.1

14-5

Project Phases

Concept Phase

The first of five phases of a project where project planners develop a broad definition of what the project is and what its scope will be.

Outputs – initial budget estimates, estimates of personnel needed, and required completion dates.

Project Definition Phase

The second of five phases of a project where project planners identify how to accomplish the work, how to organize for the project, the key personnel and resources required to support the project, tentative schedules, and tentative budget requirements.

14-6

Project Phases

Planning Phase

The third of five phases of a project where project planners prepare detailed plans that identify activities, time and budgets targets, and the resources needed to complete each task, while also putting into place the organization that will carry out the project.

Performance Phase

The fourth of five phases of a project where the organization actually starts to execute the plan.

Postcompletion Phase

The fifth of five phases of a project where the project manager or team confirms the final outcome, conducts a postimplementation meeting to critique the project and personnel, and reassigns project personnel.

14-7

Project Management Tools

Gantt charts – A graphical tool used to show expected start and end times for project activities and to track actual progress against these time targets.

Network Diagrams – A graphical tool that shows the logical linkages between activities in a project.

14-8

Example 14.1 - Courter Corporation

Courter Corporation makes high-end speakers that are used with home entertainment systems.

Courter has designed a new speaker, the Gina3000, which is louder and more reliable than Courter’s earlier model.

Management has outlined 10 activities that must be completed before the Gina3000 speakers can be released for regular production.

14-9

Example 14.1 - Courter Corporation

14-10

Figure 14.2

Table 14.2

List of Activities

Gantt Chart

Example 14.1 - Courter Corporation

As time goes on, Courter can use a Gantt chart to check its progress against the plan.

The shading represents how much of each activity has been completed.

14-11

Figure 14.3

Project Management Tools

Network Diagrams

Critical-path method – A network-based technique in which there is a single time estimate for each activity.

Program evaluation and review technique (PERT) – A network-based technique in which there are multiple time estimates for each activity.

14-12

Project Management Tools

Constructing a Network Diagram

Identify each unique activity in a project by a capital letter that corresponds only to that activity.

Represent each activity in the project by a node that shows the estimated length. This style of network diagram is know as an activity on node (AON) diagram.

If an activity has an immediate predecessor(s), show the relationship by connecting the two activities with an arrow. The network diagram consists of all the activity nodes and arrows linking them together.

Determine the earliest start time (ES) and earliest finish time (EF) for each activity by performing a forward pass.

Determine the latest finish time (LF) and latest starting time (LS) for each activity by doing a backward pass.

Determine the critical activities and path(s) in the project.

14-13

Project Management Tools

Constructing a Network Diagram

Critical activity – Project activity for which the earliest start time and latest start time are equal. A critical activity cannot be delayed without lengthening the overall project duration.

Network path – A logically linked sequence of activities in a network diagram.

Critical path – A network path that has the longest, or is tied for the longest, linked sequence of activities.

14-14

Project Management Tools

Forward Pass

The determination of the earliest start and finish times for each project activity.

Earliest Start Time (ES)

The earliest an activity can be started, as determined by the earliest finish time for all immediate predecessors

ES = Latest EF for all immediate predecessors

Earliest Finish Time (EF)

The earliest an activity can be finished, calculated by adding the activity’s duration to its earliest start time.

EF = ES + activity’s duration

14-15

Project Management Tools

Backward Pass

The determination of the latest finish and start times for each project activity.

Latest Finish Time (LF)

The latest an activity can be finished and still finish the project on time, as determined by the latest start time for all immediate successors.

LF = Earliest LS for all immediate successors

Latest Start Time (LS)

The latest an activity can be started and still finish the project on time, calculated by subtracting the activity’s duration from its latest finish time.

LS = LF – activity’s duration

Slack = amount of allowable delay in an activity

Slack = LS - ES

14-16

Example 14.2 - Courter Corporation

Courter Corporation decides to follow the six steps to create a network diagram of the Gina3000 project.

Step 1: Identify each unique activity in a project by a capital letter that corresponds only to that activity

See Table 14.2

Step 2: Represent each activity in the project by a node that shows the estimated length

14-17

Example 14.2 - Courter Corporation

Courter Corporation decides to follow the six steps to create a network diagram.

Step 3: If an activity has an immediate predecessor, show that relationship by connecting the two activities with an arrow

14-18

Figure 14.4

Example 14.2 - Courter Corporation

Courter Corporation decides to follow the six steps to create a network diagram.

Step 4: Determine the earliest start time (ES) and earliest finish time (EF) for each activity.

14-19

Table 14.3

Example 14.2 - Courter Corporation

Courter Corporation decides to follow the six steps to create a network diagram.

Step 5: Determine the latest finish time (LF) and latest start time (LS) for each activity.

14-20

Table 14.4

Example 14.2 - Courter Corporation

Courter Corporation decides to follow the six steps to create a network diagram.

Step 6: Determine the critical activities and path(s) in the project.

14-21

ACFGJ = 13 weeks

ACDEGJ = 17 weeks

ACDEHJ = 17 weeks

ACDEIJ = 17 weeks

BCFGJ = 14 weeks

BCDEGJ = 18 weeks

BCDEHJ = 18 weeks

BCDEIJ = 18 weeks

The activities in these critical paths have no slack.

The project should be completed in 18 weeks.

Project Management Tools

Crashing a Project – Shortening the overall duration of a project by reducing the time it takes to perform certain activities.

List all network paths and their current lengths and mark all activities that can be crashed.

Focus on the critical path or paths. Working one period at a time, choose the activity or activities that will shorten all critical paths at the least cost. The one rule is this: Never crash an activity that is not on a critical path, regardless of the cost. Doing so will not shorten the project; it will only add costs.

Recalculate the lengths of all paths and repeat step 2 until the target project completion time is reached or until all options have been exhausted.

14-22