OPERATIONS MANAGEMENT

CHAPTER 3
MANAGING
PROJECTS

THE PROJECT LIFECYCLE

Initiating : refine the project goals, review the

expectations of all stakeholders, determine
assumptions and risk in the project.
Planning : detail the project outcome, team
members, schedules, resources, scope,
costs.
Executing : controlling and monitoring (do
not deviate from initial plan and scope)
Closing : evaluation (performance with cost,
schedule, outcome)

PROJECT PLANNING

Set the goals : define the project (outcome),

quality, cost, time (start end date).
Set the structure team organization, based
on experiences, background, specialized
skill (civil eng., architect eng., mechanical
eng., plumbing eng., electrical eng., etc).
Identify team (man power) and resources
(raw material, batching plant, etc).

PROJECT SUCCESS
CRITERIA

Delivers the outcome with an agreed

upon quality.
Does not overrun its end date.
Remains within budget (cost of
resources).
Outcome Time Budget.

RESPONSIBILITY OF PROJECT
MANAGER
Make sure all necessary activities are
finished in porper sequence and on time.
Make sure the project comes in within
budget (BQ, Contracts, etc).
Make sure the project meets its quality
goals.
Can give the people motivation, direction,
and information needed to do their jobs.

ETHICAL ISSUES

Offers of gifts from Contractors.

Preasure to alter status reports to mask
the reality of delays.
False reports for charges of time and
expenses.
Preasure to compromise quality to meet
bonuses or avoid penalties related to
schedule.

PROJECT SCHEDULING

Involves sequencing and alloting time to all project

activites.
Decide how long each activity will take and
compute the resources needed at each stage of
production.
Separate schedules for personel needs by type of
skill and material needs.
Activities are planned.
Order of performance is documented.
Activity time estimates are recorded.
Overall project time is developed.

PURPOSE OF PROJECT
SCHEDULING

Shows the relationship of each activity

to others and the whole project.
Identifies the precedence relationship
among activity.
Encourages the setting of realistic time
and cost estimates for each activity.
Make better use of people, money, and
material resources by identifying critical
bottlenecks in the project.

PROJECT SCHEDULLING

Renegotiate the deadline (delay).

Employ additional resources (increased
cost).
Reduce the scope of the project (less
delivered).

PROJECT CONTROLLING

Monitoring resources, costs, quality, budgets.

Detailed cost breakdown for each task.
Labor curves.
Cost distribution.
Functional cost and hour summaries.
Raw material and expenditure forecasts.
Time analysis.
Work status.
Review meetings to control project progress.
Problem solving.

THE CAUSES OF PROJECT

PROBLEMS

Poor scoping : scope and objectives are

vague. Stakeholders never really read
the scope requirements.
Poor planning : activities are unclear, not
well-documented, risk have not been
well identified and prepared for, PM
lacks experience, ineffective project
communications, design changed by
owner.

SUPPORTING PLANS

Human resources plan : describe the roles

and responsibilities on the project.
Communications plan : weekly / monthly
progress report, describbing how the
project is performing.
Risk management plan : time and cost
estimates too optimistic, unexpected
budget
cuts,
unclear
roles
and
responsibilities,
lack
of
resource
commitment.

PROJECT MANAGEMENT
TECHNIQUES

PERT (Program Evaluation and Review

Technique).
CPM (Critical Path Method).
Help managers schedule, monitor,
control and complex project.

PERT & CPM

When will the entire project be completed?

What are the critical activities or tasks in the project?
Which are the noncritical activities?
What is the probability that the project on schedule,
behinde schedule, ahead of schedule?
On any given date, money spent equal to, less than, or
greater than the budgeted amount?
Are there enough resources available to finish the
project on time?
If the project is to be finished in a shorter amount of
time, what is the best way to accomplish this goal at
least cost?

ADVANTAGES OF PERT &

CPM

Useful when scheduling and controlling large

projects.
Straightforward concept and not mathematically
complex.
Relationships among project activities.
Critical path and slack time analyses help pinpoint
activities that need to be closely watched.
Project documentation and graphs point out who is
responsible for various activities.
Applicable to a wide variety of projects.
Monitoring not only schedules but costs as well.

3 TIMES ESTIMATES IN
PERT

Optimistic time : time an activity will take

if everything goes as planned.
Pessimistic time : time an activity will
take
assuming
very
unfavorable
conditions.
Most likely time : most realistic estimate
of the time required to complete an
activity.

DETERMINING
THE PROJECT SCHEDULE

Earliest Start : earliest time at which an activity can

start, assuming all predecessors have been
completed.
Earliest Finish : earliest time at which an activity can
be finished.
Latest Start : latest time at which an activity can start
so as to not delay the completion time of the entire
project.
Latest Finish : latest time at which an activity has to
finish so as to not delay the completion time of the
entire project.
Slack time : free time for an activity.

MICROSOFT PROJECTTO
MANAGE PROJECTS