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Outline
Global Company Profile: Bechtel Group The Importance of Project Management Project Planning
The Project Manager Work Breakdown Structure
Project Scheduling
Outline - Continued
Project Controlling Project Management Techniques: PERT and CPM
The Framework of PERT and CPM Network Diagrams and Approaches Activity-on-Node Example Activity-on-Arrow Example
Outline - Continued
Determining the Project Schedule
Forward Pass Backward Pass Calculating Slack Time and Identifying the Critical Path(s)
Outline - Continued
Cost-Time Trade-Offs and Project Crashing A Critique of PERT and CPM Using Microsoft Project to Manage Projects
Creating a Project Schedule Using MS Project Tracking Progress and Managing Costs Using MS Project
Bechtel Projects
Building 26 massive distribution centers in just two years for the internet company Webvan Group ($1 billion) Constructing 30 high-security data centers worldwide for Equinix, Inc. ($1.2 billion) Building and running a rail line between London and the Channel Tunnel ($4.6 billion) Developing an oil pipeline from the Caspian Sea region to Russia ($850 million) Expanding the Dubai Airport in the UAE ($600 million), and the Miami Airport in Florida ($2 billion)
Bechtel Projects
Building liquid natural gas plants in Yemen $2 billion) and in Trinidad, West Indies ($1 billion) Building a new subway for Athens, Greece ($2.6 billion) Constructing a natural gas pipeline in Thailand ($700 million) Building 30 plants for iMotors.com, a company that sells refurbished autos online ($300 million) Building a highway to link the north and south of Croatia ($303 million)
Project Characteristics
Single unit Many related activities Difficult production planning and inventory control General purpose equipment High labor skills
Examples of Projects
Building Construction
Research Project
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
Scheduling
Project activities Start & end times Network
Controlling
Monitor, compare, revise, action
Before project
During project
Before project
During project
Before project
During project
Before project
During project
Project Planning
Establishing objectives Defining project Creating work breakdown structure Determining resources Forming organization
Project Organization
Often temporary structure Uses specialists from entire company Headed by project manager
Coordinates activities Monitors schedule and costs
Marketing
Finance
Design
Production
Project 1
Project Manager Mechanical Engineer Project Manager Electrical Engineer Computer Engineer Technician Test Engineer Technician
Project 2
Matrix Organization
Marketing Project 1 Operations Engineering Finance
Project 2
Project 3
Project 4
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
Project Scheduling
Identifying precedence relationships Sequencing activities Determining activity times & costs Estimating material & worker requirements Determining critical activities
Scheduling Techniques
1. Ensure that all activities are planned for 2. Their order of performance is accounted for 3. The activity time estimates are recorded 4. The overall project time is developed
Time A M J
10
20 30 Time, Minutes
40
Consider precedence relationships and interdependencies Each uses a different estimate of activity times
A (e) B
C D
A B
C
Dummy activity
A (f)
B C
A
Dummy activity
B C
AON Example
A Paper Manufacturing's Activities and Predecessors
Immediate Predecessors A A, B C C D, E F, G
Activity A B C D E F G H
Description Build internal components Modify roof and floor Construct collection stack Pour concrete and install frame Build high-temperature burner Install pollution control system Install air pollution device Inspect and test
Start
Start Activity
Start
Start
H G
Dummy Activity
H (Inspect/ Test)
LS 2
LF
Latest Finish
Activity Duration
Forward Pass
Begin at starting event and work forward
Earliest Start Time Rule: If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor If an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors ES = Max {EF of all immediate predecessors}
Forward Pass
Begin at starting event and work forward
Earliest Finish Time Rule: The earliest finish time (EF) of an activity is the sum of its earliest start time (ES) and its activity time
EF = ES + Activity time
ES 0
Start
EF = ES + Activity time 0
ES of A
0
Start
ES of B
EF of B = ES of B + 3
C 2
0 0 B 3 3
C 2
0 0 B 3
= Max (2, 3) 3
3
D 7 4
C 2
0 0 B 3 3 3 D 4 7
C 2
F 3
E 4
13
H 2
15
0 0 B 3 3 3 D 4 7
G 5
13
Backward Pass
Begin with the last event and work backwards Latest Finish Time Rule: If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows it If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it LF = Min {LS of all immediate following activities}
Backward Pass
Begin with the last event and work backwards Latest Start Time Rule: The latest start time (LS) of an activity is the difference of its latest finish time (LF) and its activity time
LS = LF Activity time
C 2
F 3
E 4
13 13
H 2
15 15
0 0 B 3 3 3 7
LS = LF Activity time D G
8 4 5
13
LF = EF of Project
C 2
4 10 E 4
F 3
7 13 H 2
0 0 B 3 3 3
13 13
15 15
13
2 2
C 2
4 4 E 4
4 10
F 3
7 13 H 2
4 4 B 3 D 4
8 8 G 5
13 13
15 15
0 0 3 3 7
8 8
13 13
0 0 0 0
Start
2 2
2 2
4 4 E 4
4 10
7 13 H 2
0 0 B 3 D 4
4 4
8 8 G 5
13 13
15 15
0 1
3 4
3 4
7 8
8 8
13 13
A B C D E F G H
0 0 2 3 4 4 8 13
2 3 4 7 8 7 13 15
0 1 2 4 4 10 8 13
2 4 4 8 8 13 13 15
0 1 0 1 0 6 0 0
0 0 0 0
Start
A 2
2 2
2 2
C 2
4 4 E 4
4 10
F 3
7 13 H 2
0 0 B 3 D 4
4 4
8 8 G 5
13 13
15 15
0 1
3 4
3 4
7 8
8 8
13 13
A Build internal components B Modify roof and floor C Construct collection stack D Pour concrete and install frame E Build hightemperature burner F Install pollution control system G Install air pollution device H Inspect and test
A Build internal components B Modify roof and floor C Construct collection stack D Pour concrete and install frame E Build hightemperature burner F Install pollution control system G Install air pollution device H Inspect and test
Probability
Activity Time Optimistic Time (a) Most Likely Time (m) Pessimistic Time (b)
Computing Variance
Optimistic
a
Activity
Most Likely
m
Pessimistic
b
Expected Time
t = (a + 4m + b)/6
Variance
[(b a)/6]2
A B C D E F G H
1 2 1 2 1 1 3 1
2 3 2 4 4 2 4 2
3 4 3 6 7 9 11 3
2 3 2 4 4 3 5 2
date
.72907
of completion
.74857
.75175
Where Z is the number of standard deviations the due date or target date lies from the mean or expected date
15 Weeks
16 Weeks
Time
From Appendix I
2.33
A B C D E F G H
2 3 2 4 4 3 5 2
1 1 1 2 2 2 2 1
Crash Crash Cost/Wk = = Crash Cost Normal Cost Normal Time Crash Time
$34,000 $30,000 31 $4,000 = = $2,000/Wk 2 Wks Normal | 1 Crash Time | 2 | 3 Normal Time
Normal Cost
Time (Weeks)
A 2
2 2
2 2
C 2
4 4 E 4
4 10
F 3
7 13 H 2
0 0
Slack = 0
Slack = 0
4 4
8 8
Slack = 6
13 13
15 15
0 1
B 3
3 4
3 4
D 4
7 8
Slack = 0 8 8
G 5
Slack = 0 13 13
Slack = 1
Slack = 1
Slack = 0
Advantages of PERT/CPM
1. Especially useful when scheduling and controlling large projects 2. Straightforward concept and not mathematically complex 3. Graphical networks help highlight relationships among project activities 4. Critical path and slack time analyses help pinpoint activities that need to be closely watched
Advantages of PERT/CPM
5. Project documentation and graphics point out who is responsible for various activities 6. Applicable to a wide variety of projects 7. Useful in monitoring not only schedules but costs as well
Limitations of PERT/CPM
1. Project activities have to be clearly defined, independent, and stable in their relationships 2. Precedence relationships must be specified and networked together 3. Time estimates tend to be subjective and are subject to fudging by managers 4. There is an inherent danger of too much emphasis being placed on the longest, or critical, path
End of Session