Operations CASE, SLP and TD

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3 – *

Strategic Importance of
Project Management

Bechtel Kuwait Project:

8,000 workers

1,000 construction professionals

100 medical personnel

2 helicopter evacuation teams

6 full-service dining halls

27,000 meals per day

40 bed field hospital

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3 – *

Strategic Importance of
Project Management

Microsoft Windows Longhorn Project:

hundreds of programmers

millions of lines of code

millions of dollars cost

Ford Redesign of Mustang Project:

450 member project team

Cost $700-million

25% faster and 30% cheaper than comparable project at Ford

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3 – *

Single unit

Many related activities

Difficult production planning and inventory control

General purpose equipment

High labor skills

Project Characteristics

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3 – *

Examples of Projects

• Building Construction

• Research Project

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3 – *

Project Organization
Works Best When

Work can be defined with a specific goal and deadline

The job is unique or somewhat unfamiliar to the existing organization

The work contains complex interrelated tasks requiring specialized skills

The project is temporary but critical to the organization

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3 – *

Management of Projects

Planning - goal setting, defining the project, team organization

Scheduling - relates people, money, and supplies to specific activities and activities to each other

Controlling - monitors resources, costs, quality, and budgets; revises plans and shifts resources to meet time and cost demands

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3 – *

• Planning
• Objectives
• Resources
• Work break-down schedule
• Organization

• Scheduling
• Project activities
• Start & end times
• Network

• Controlling
• Monitor, compare, revise, action

Project Management Activities

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3 – *

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project During

project Timeline project

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3 – *

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project During

project Timeline project

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3 – *

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project During

project Timeline project

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3 – *

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project During

project Timeline project

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3 – *

Project Planning, Scheduling, and Controlling

Figure 3.1

Before Start of project During

project Timeline project

Budgets

Delayed activities report

Slack activities report

Time/cost estimates

Budgets

Engineering diagrams

Cash flow charts

Material availability details

CPM/PERT

Gantt charts

Milestone charts

Cash flow schedules

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3 – *

Establishing objectives

Defining project

Creating work breakdown structure

Determining
resources

Forming organization

Project Planning

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3 – *

Often temporary structure

Uses specialists from entire company

Headed by project manager

Coordinates activities

Monitors schedule
and costs

Permanent
structure called
‘matrix organization’

Project Organization

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3 – *

A Sample Project Organization

Figure 3.2

Test

Engineer

Mechanical

Engineer

Project 1

Project

Manager

Technician

Technician

Project 2

Project

Manager

Electrical

Engineer

Computer
Engineer

Marketing

Finance

Human

Resources

Design

Quality

Mgt

Production

President

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3 – *

Matrix Organization

Marketing Operations Engineering Finance

Project 1

Project 2

Project 3

Project 4

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3 – *

The Role of
the Project Manager

Highly visible

Responsible for making sure that:

• All necessary activities are finished in order and on time
• The project comes in within budget
• The project meets quality goals
• The people assigned to the project receive motivation, direction, and information

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3 – *

The Role of
the Project Manager

Highly visible

Responsible for making sure that:

• All necessary activities are finished in order and on time
• The project comes in within budget
• The project meets quality goals
• The people assigned to the project receive motivation, direction, and information

Project managers should be:

Good coaches

Good communicators

Able to organize activities from a variety of disciplines

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3 – *

Ethical Issues

• Bid rigging – divulging confidential information to give some bidders an unfair advantage
• “Low balling” contractors – try to “buy” the project by bidding low and hope to renegotiate or cut corners
• Bribery – particularly on international projects
• Expense account padding
• Use of substandard materials
• Compromising health and safety standards
• Withholding needed information
• Failure to admit project failure at close

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3 – *

Work Breakdown Structure

Level

• Project
• Major tasks in the project
• Subtasks in the major tasks
• Activities (or work packages)
  to be completed

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3 – *

Work Breakdown Structure

Figure 3.3

Level ID
Level Number Activity

1 1.0 Develop/launch Windows Longhorn OS

2 1.1 Development of GUIs

2 1.2 Ensure compatibility with earlier
Windows versions

3 1.21 Compatibility with Windows ME

3 1.22 Compatibility with Windows XP

3 1.23 Compatibility with Windows 2000

4 1.231 Ability to import files

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3 – *

Identifying precedence relationships

Sequencing activities

Determining activity times & costs

Estimating material and worker requirements

Determining critical activities

Project Scheduling

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Purposes of Project Scheduling

Shows the relationship of each activity to others and to the whole project

Identifies the precedence relationships among activities

Encourages the setting of realistic time and cost estimates for each activity

Helps make better use of people, money, and material resources by identifying critical bottlenecks in the project