Chapter 3 Project Management

©2006PrenticeHall,Inc.3–1OperationsManagementChapter3–ProjectManagement©2006PrenticeHall,Inc.PowerPointpresentationtoaccompanyHeizer/RenderPrinciplesofOperationsManagement,6eOperationsManagement,8e©2006PrenticeHall,Inc.3–2OutlineGlobalCompanyProfile:BechtelGroupTheImportanceOfProjectManagementProjectPlanningTheProjectManagerWorkBreakdownStructureProjectScheduling©2006PrenticeHall,Inc.3–3Outline-ContinuedProjectControllingProjectManagementTechniques:PERTAndCPMTheFrameworkOfPERTAndCPMNetworkDiagramsAndApproachesActivity-on-NodeExampleActivity-on-ArrowExample©2006PrenticeHall,Inc.3–4Outline-ContinuedDeterminingTheProjectScheduleForwardPassBackwardPassCalculatingSlackTimeAndIdentifyingTheCriticalPath(s)VariabilityInActivityTimesThreeTimeEstimatesInPERTProbabilityOfProjectCompletion©2006PrenticeHall,Inc.3–5Outline-ContinuedCost-timeTrade-offsAndProjectCrashingACritiqueOfPERTAndCPMUsingMicrosoftProjectToManageProjectsCreatingAProjectScheduleUsingMSProjectTrackingProgressAndManagingCostsUsingMSProject©2006PrenticeHall,Inc.3–6LearningObjectivesWorkbreakdownstructureCriticalpathAOAandAONNetworksForwardandbackwardpassesVariabilityinactivitytimesWhenyoucompletethischapter,youshouldbeableto:IdentifyorDefine:©2006PrenticeHall,Inc.3–7LearningObjectivesTheroleoftheprojectmanagerProgramevaluationandreviewtechnique(PERT)Criticalpathmethod(CPM)CrashingaprojectTheuseofMSProjectWhenyoucompletethischapter,youshouldbeableto:DescribeorExplain:©2006PrenticeHall,Inc.3–8BechtelProjectsRestoringover650oilwellsinKuwaitleftablazeoruncappedafterDesertStormBuilding26massivedistributioncentersinjusttwoyearsfortheinternetcompanyWebvanGroupConstructing30high-securitydatacentersworldwideforEquinix,Inc.BuildingandrunningaraillinebetweenLondonandtheChannelTunnel($4.6billion)DevelopinganoilpipelinefromtheCaspianSearegiontoRussia($850million)©2006PrenticeHall,Inc.3–9BechtelProjectsExpandingtheDubaiAirportintheUAE($600million),andtheMiamiAirportinFlorida($2billion)BuildingliquidnaturalgasplantsinYemen$2billion)andinTrinidad,WestIndies($1billion)BuildinganewsubwayforAthens,Greece($2.6billion)ConstructinganaturalgaspipelineinThailand($700million)BuildingahighwaytolinkthenorthandsouthofCroatia($303million)©2006PrenticeHall,Inc.3–10StrategicImportanceofProjectManagementBechtelKuwaitProject:8,000workers1,000constructionprofessionals100medicalpersonnel2helicopterevacuationteams6full-servicedininghalls27,000mealsperday40bedfieldhospital©2006PrenticeHall,Inc.3–11StrategicImportanceofProjectManagementMicrosoftWindowsLonghornProject:hundredsofprogrammersmillionsoflinesofcodemillionsofdollarscostFordRedesignofMustangProject:450memberprojectteamCost$700-million25%fasterand30%cheaperthancomparableprojectatFord©2006PrenticeHall,Inc.3–12SingleunitManyrelatedactivitiesDifficultproductionplanningandinventorycontrolGeneralpurposeequipmentHighlaborskillsProjectCharacteristics©2006PrenticeHall,Inc.3–13ExamplesofProjectsBuildingConstructionResearchProject©2006PrenticeHall,Inc.3–14ProjectOrganizationWorksBestWhenWorkcanbedefinedwithaspecificgoalanddeadlineThejobisuniqueorsomewhatunfamiliartotheexistingorganizationTheworkcontainscomplexinterrelatedtasksrequiringspecializedskillsTheprojectistemporarybutcriticaltotheorganization©2006PrenticeHall,Inc.3–15ManagementofProjectsPlanning-goalsetting,definingtheproject,teamorganizationScheduling-relatespeople,money,andsuppliestospecificactivitiesandactivitiestoeachotherControlling-monitorsresources,costs,quality,andbudgets;revisesplansandshiftsresourcestomeettimeandcostdemands©2006PrenticeHall,Inc.3–16PlanningObjectivesResourcesWorkbreak-downscheduleOrganizationSchedulingProjectactivitiesStart&endtimesNetworkControllingMonitor,compare,revise,actionProjectManagementActivities©2006PrenticeHall,Inc.3–17ProjectPlanning,Scheduling,andControllingFigure3.1BeforeStartofprojectDuringprojectTimelineproject©2006PrenticeHall,Inc.3–18ProjectPlanning,Scheduling,andControllingFigure3.1BeforeStartofprojectDuringprojectTimelineproject©2006PrenticeHall,Inc.3–19ProjectPlanning,Scheduling,andControllingFigure3.1BeforeStartofprojectDuringprojectTimelineproject©2006PrenticeHall,Inc.3–20ProjectPlanning,Scheduling,andControllingFigure3.1BeforeStartofprojectDuringprojectTimelineproject©2006PrenticeHall,Inc.3–21ProjectPlanning,Scheduling,andControllingFigure3.1BeforeStartofprojectDuringprojectTimelineprojectBudgetsDelayedactivitiesreportSlackactivitiesreportTime/costestimatesBudgetsEngineeringdiagramsCashflowchartsMaterialavailabilitydetailsCPM/PERTGanttchartsMilestonechartsCashflowschedules©2006PrenticeHall,Inc.3–22EstablishingobjectivesDefiningprojectCreatingworkbreakdownstructureDeterminingresourcesFormingorganizationProjectPlanning©2006PrenticeHall,Inc.3–23OftentemporarystructureUsesspecialistsfromentirecompanyHeadedbyprojectmanagerCoordinatesactivitiesMonitorsscheduleandcostsPermanentstructurecalled‘matrixorganization’ProjectOrganization©2006PrenticeHall