PROJECT MANAGEMENT
Objectives:
By the end of the chapter the student should be able to:
(i) Define the term project
(ii) Explain the project management activities
(iii) Draw a project network diagram
(iv) Draw a project Gantt chart
Introduction
A project is an interrelated set of activities with a definite starting and ending point, which results in a unique outcome for a specific allocation of resources. The complexity of the project will increase with the size and number of activities within the project. Extensive planning and co-ordination activities are required for larger projects to ensure that the project aims are met. Examples of projects include installing an IT system, building a bridge or introducing a new service or product to the market.
Project Management Activities
The project management processincludesthe following main elements:
(i) Feasibility Analysis: Thisstep involves evaluating the expected cost of resources needed to execute the project and compare these to expected benefits. At the start of the project a plan of the resources required to undertake the project activities is constructed. If there is a limit on the amount of resources available then the project completion date may have to be set to ensure the resources are not overloaded.
This is a resource-constrained approach. Alternatively the need to complete the project by a specific date may take precedence. In this case an alternative source of resources may have to be found, using sub- contractors for example, to ensure timely project completion. This is called a time-constrained approach.
(ii) Plan: This stage estimate sthe amount and timing of resources needed to achieve the project objectives.
The project management method uses a systems approach to dealing with a complex task in that the components of the project are broken down repeatedly into smaller tasks until a manageable chunk is defined. Each task is given its own cost, time and quality objectives. It is then essential that responsibility is assigned to achieving these objectives for each particular task. This procedure should produce a work breakdown structure (WBS) which shows the hierarchical relationship between the project tasks.
(iii) Control: This stage involves the monitoring the progress of the project as it executes over time. This is important so that any deviations from the plan can be addressed before it is too near the project completion date to take corrective action. The point at which the project progress is assessed is termed a Milestone. The two main methods of reporting the progress of a project are by written reports and verbally at meetings of the project team. It is important that a formal statement of progress is made in written form, preferably in a standard report format, to ensure that everyone is aware of the current project situation. This is particularly important when changes to specifications are made during the project.Inordertofacilitatetwo-waycommunicationbetweenteammembersandteam management, regular meetings should be arranged by the project manager. These meetings can increase the commitment of team members by allowing discussion of points of interest and dissemination of information on how each team‟s effort is contributing to the overall progression of the project.
Network Analysis
Network analysis/Project Evaluation and Review Technique (PERT) is a method to analyze the involved tasks in completing a given project, especially the time needed to complete each task, and to identify the minimum time needed to complete the total project. PERT was developed primarily to simplify the planning and scheduling of large and complex projects. It was developed for the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy’s Polaris nuclear submarine project. It was able to incorporate uncertainty by making it possible to schedule a project while not knowing precisely the details and durations of all the activities. It is more of an event-oriented technique rather than start- and completion-oriented, and is used more in projects where time is the major factor rather than cost. It is applied to very large-scale, one time, complex, non-routine infrastructure and Research and Development projects
Terminology
PERT event: a point that marks the start or completion of one or more activities. It consumes no time and uses no resources. When it marks the completion of one or more activities, it is not “reached” (does not occur) until all of the activities leading to that event
have been completed. predecessor event: an event that immediately precedes some other event without any other events intervening. An event can have multiple predecessor events and can be the predecessor of multiple events. successor event: an event that immediately follows some other event without any other intervening events. An event can have multiple successor events and can be the successor of
multiple events.
PERT activity: the actual performance of a task which consumes time and requires resources (such as labor, materials, space, machinery). It can be understood as representing the time, effort, and resources required to move from one event to another. A PERT activity cannot be performed until the predecessor event has occurred.
PERT sub-activity: a PERT activity can be further decomposed into a set of sub-activities.
For example, activity A1 can be decomposed into A1.1, A1.2 and A1.3 for example. Sub activities have all the properties of activities, in particular a sub-activity has predecessor or successor events just like an activity. A sub-activity can be decomposed again into finer grained sub-activities.
optimistic time (O): the minimum possible time required to accomplish a task, assuming everything proceeds better than is normally expected pessimistic time (P): the maximum possible time required to accomplish a task, assuming everything goes wrong (but excluding major catastrophes). most likely time (M): the best estimate of the time required to accomplish a task, assuming everything proceeds as normal. expected time (TE): the best estimate of the time required to accomplish a task, accounting
for the fact that things don’t always proceed as normal (the implication being that the expected time is the average time the task would require if the task were repeated on a number of occasions over an extended period of time).
TE = (O + 4M + P) ÷ 6
float or slack is a measure of the excess time and resources available to complete a task. It is the amount of time that a project task can be delayed without causing a delay in any subsequent tasks (free float) or the whole project (total float). Positive slack would
indicate ahead of schedule; negative slack would indicate behind schedule; and zero slack would indicate on schedule. critical path: the longest possible continuous pathway taken from the initial event to the terminal event. It determines the total calendar time required for the project; and, therefore, any time delays along the critical path will delay the reaching of the terminal event by at least the same amount. critical activity: An activity that has total float equal to zero. An activity with zero float is not necessarily on the critical path since its path may not be the longest. Lead time: the time by which a predecessor event must be completed in order to allow sufficient time for the activities that must elapse before a specific PERT event reaches completion.
lag time: the earliest time by which a successor event can follow a specific PERT event. fast tracking: performing more critical activities in parallel crashing critical path: Shortening duration of critical activities
Network analysis involves the following steps:
(i) Identifying project activities
(ii) Estimating activity durations
(iii) Identifying activity relationships
(iv) Drawing the network diagram
Identifying Project Activities
In order to undertake network analysis it is necessary to break down the project into a number of identifiable activities or tasks. This enables individuals to be assigned responsibility to particular tasks which have a well-defined start and finish time. Financial and resource planning can also be conducted at the task level and co-ordinated by the project manager who must ensure that each task manager is working to the overall project objectives and not maximising the performance of particular task at the expense of the whole project. Activities consume time and/or resources. The first stage in planning a project is to break down the project into a number of identifiable activities with a start and end. Performance objectives of time, cost and quality can be associated with each activity. The project is broken down into these tasks using a work breakdown structure. This is a hierarchical tree structure which shows the relationship between the tasks as they are further sub-divided at each level.
Identifying Project Activities
In order to undertake network analysis it is necessary to break down the project into a number of identifiable activities or tasks. This enables individuals to be assigned responsibility to particular tasks which have a well-defined start and finish time. Financial and resource planning can also be conducted at the task level and coordinated by the project manager who must ensure that each task manager is working to the overall project objectives and not maximising the performance of particular task at the expense of the whole project. Activities consume time and/or resources. The first stage in planning a project is to break down the project into a number of identifiable activities with a start and end. Performance objectives of time, cost and quality can be associated with each activity. The project is broken down into these tasks using a work breakdown structure. This is a hierarchical tree structure which shows the relationship between the tasks as they are further sub-divided at each level.
Estimating Activity Durations
The next stage is to retrieve information concerning the duration of the tasks involved in the project. he can be collated from a number ofsources, such as documentation, observation, interviewing etc. Obviously the accuracy of the project plan will depend on the accuracy of these estimates. There is a trade-off between the cost of collecting information on task duration‟ sand the cost of an inaccurate project plan.
Identifying Activity Relationships
It is necessary to identify any relationships between tasks in the project. For instance a particular task may not be able to begin until another task has finished. Thus the task waiting to begin is dependent on the former task. Other tasks may not have a dependent relationship and can thus occur simultaneously. Critical path diagrams are used extensively to show the activities undertaken during a project and the dependencies between these activities. Thus it is easy to see that activity C for example can only take place when activity A and activity B has completed. Once a network diagram has been constructed it is possible to follow a sequence of activities, called a path, through the network from start to end. The length of time it takes to follow the path is the sum of all the durations of activities on that path. The path with the longest duration gives the project completion time. This is called the critical path because any change in duration in any activities on this path will cause the whole project duration to either become shorter or longer. Activities not on the critical path will have a certain amount of slack time in which the activity can be delayed or the duration lengthened and not affect the overall project duration. The amount of slack is a function of the difference between the path duration the activity is on and the critical path duration. By definition all activities on the critical path have zero slack. It is important to note that there must be at least one critical path for
each network and there may be several.
Drawing the Network Diagram
For the activity-on-node notation each activity task is represented by a node with the following format. hus a completed network will consist of a number of nodes connected by lines, one for each task, between a start and end node. Calculating the Earliest Start/Finish times (forward pass): From the duration of each task and the dependency relationship between the tasks it is possible to estimate the earliest start and finish time for each task as follows. You move left to right along the network, forward through time.
1. Assume the start (i.e. first) task begins at time = 0.
2. Calculate the earliest finish time where: Earliest Finish=Earliest Start + Duration
3. Calculate the earliest start time of the next task where:-Earliest Start=Earliest Finish oft ask immediately before: If there is more than one task immediately before take the task with the latest finish time to calculate the earliest start time for the current task.
4. Repeat steps 2 and 3 for all tasks
Calculating the Latest Start/Finish times (backward pass): It is now possible to estimate the latest start and finish time for each task as follows. You move right to left along the network, backward through time.
1. Assume the end (i.e. last) task end time is the earliest finish time (unless the project end time is given).
2. Calculate the latest start time where:- Latest Start = Latest Finish – Duration
3. Calculate the latest finish time of the previous task where: Latest Finish = Latest Start of task immediately after. If
there is more than one task immediately after take the task with the earliest start time to calculate the latest finish time for the current task.
4. Repeat steps 2 and 3 for all tasks
Calculating the slack/float times: The slack or float value is the difference between the earliest start and latest start (or earliest finish and latest finish) times for each task. To calculate the slack time
1. Slack = Latest Start – Earliest Start OR Slack = Latest Finish – Earliest Finish
2. Repeat step 1 for all tasks.
Identifying the Critical Path: Any tasks with a slack time of 0 must obviously be undertaken on schedule at the earliest start time. The critical path is the pathway connecting all the nodes with a zero slack time. There must be at least one critical path through the network, but there can be more than one. The significance of the critical path is that if any node on the path finishes later than the earliest finish time, the overall network time will increase by the same amount, putting the project behind schedule. Thus any planning and control activities should focus on ensuring tasks on the critical path remain within schedule.
Example:
Consider a small project that involves the following activities.
By simple enumeration one finds that the critical path is A-C-D.
CP =A-C-D and the mean critical path duration is dcp = 6 + 14 + 4 = 24.
Gantt charts
Although network diagrams are ideal for showing the relationship between project tasks, they do not provide a clear view of which tasks are being undertaken over time and particularly how many tasks may be undertaken in parallel at any one time. The Gantt chart provides an overview for the Project Manager to allow them to monitor project progress against planned progress and so provides a valuable information source for project control. A Gantt chart is a type of bar chart, developed by Henry Gantt in the 1910s, that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project. Terminal elements and summary elements comprise the work breakdown structure of the project.
To draw a Gantt Chart manually undertake the following steps:
– Draw a grid with the tasks along the vertical axis and the time-scale (up to the project duration) along the horizontal axis.
– Draw a horizontal bar acrossfrom the task identifier along the left of the chartstarting at the earliest start time and ending at the earliest finish time.
– Indicate the slack amount by drawing a line from the earliest finish time to the latest finish time.
Example
The following activities relate to a particular project
Review questions
1. Define the term project
2. Explain the three main project activities
3. Explain the origin of network analysis
4. Describe the process of drawing a project network
5. Discuss the process of drawing a Gantt chart
References
Hill, T 2005, Operations Management, 2 nd edn, Palgrave Macmillan, Basingstoke
Fitzsimmons ,J.A. and Fitzsimmons, M.J.(2008) Service Management: Operations, Strategy and
Information Technology, 6th edn, McGraw-Hill.
Slack, N. and Lewis, M. (2011) Operations Strategy, 3 rd edn, Pearson Education Limited, Harlow.
Suri, R. (2010) It’s About Time: he Competitive Advantage of Quick Response
Manufacturing, Productivity Press, NewYork.
Vonderembse, M.A. and White, G.P. (2004) Core Concepts of Operations Management, John
Wiley and Sons Ltd., Chichester.
