PROJECT MANAGEMENT

Chapter 3

3 Phases of Project Management

1. Planning. This phase includes goal setting, defining the projects, and team organization.
2. Scheduling. This phase relates to people, money, and supplies to specific activities and relates activities to each
other.
3. Controlling. Here the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and
shifts resources to meet time and cost demands.

PROJECT PLANNING
Projects – defined as a series of related tasks directed toward a major output.
Project organization – an organization is formed to ensure that programs (projects) receive the proper management and
attention.
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.
 The project cuts across organizational lines.

Matrix organization – when a project organization is made permanent

The Project Manager

Project Manager’s Responsibilities
1. Making sure that all necessary activities are finished in proper sequence and on time.
2. The project comes in within budget.
3. The project meets its quality goals.
4. The people assigned to the project receive the motivation, direction, and information needed to do their jobs.

A Sample Project Organization

President

Human Marketing Finance Design Quality Production

Resources Mgt.

Project Project Mechanical Test Technician

No. 1 Manager Engineer Engineer

Project Project Electrical Computer Technician

No. 2 Manager Engineer Engineer

Ethical Issues Faced in Project Management

On the personal level:
1. Offers of gifts from contractors
2. Pressure to alter status reports to mask the reality of delays
3. False reports for charges of time and expenses
4. Pressures to compromise quality to meet bonus or penalty schedules
Other major problems in projects large and small:
 Bid rigging – divulging confidential information to some bidders to give them an unfair advantage.
 “Lowballing” contractors – who try to “buy” the project by bidding low with the hope of recovering costs later by
contract negotiations or by simply cutting corners.
 Bribery – particularly in international projects.
 Expense account padding, use of substandard materials, compromising health/safety standards, withholding needed
information.
 Failure to admit project failure at the close of the project.

Work Breakdown Structure (WBS) – Dividing a project into more and more detailed components.

PROJECT SCHEDULING – involves sequencing and allotting time to all project activities.

Gantt charts – planning charts used to schedule resources and allocate time.
Gantt charts are an example of a widely used , nonmathematical technique that is very popular with
managers because it is simple and visual.

Gantt Charts Help Managers to:

 Make sure that all activities are planned for
 Their order of performance is accounted for
 The activity time estimates are recorded
 The overall project time is developed

Gantt Chart of Service Activities for a PAL Jet during a 60-Minute Layover

Passengers Deplaning
Baggage claim
Baggage Container offload
Fuelling Pumping
Engine injection water
Cargo and mail Container offload
Galley servicing Main cabin door
Aft cabin door
Lavatory servicing Aft, center, forward
Drinking water Loading
Cabin cleaning First-class section
Economy section
Cargo and mail Container/bulk loading
Flight service Galley/cabin check
Received passengers
Operating crew Aircraft check
Baggage Loading
Passengers Boarding
0 15 30 45
Time, minutes

Importance of Project Scheduling

 It shows the relationship of each activity to others and to the whole project.
 It identifies the precedence relationships among activities.
 It encourages the setting of realistic time and cost estimates for each activity.
 It helps make better use of people, money, and material resources by identifying critical bottlenecks in the
project.
PROJECT CONTROLLING
The control of large projects, like the control of any management system, involves close monitoring of
resources, costs, quality, and budgets. Control also means using a feedback loop to revise the project plan and having
the ability to shift resources where they are needed most.

PROJECT MANAGEMENT TECHNIQUES: PERT AND CPM

Program Evaluation and Review Technique (PERT) – a project management technique that employs three times
estimates for each activity.
Critical Path Method (CPM) – a project management technique that uses only one time factor per activity.

Critical path – the computed longest time path(s) through a network.

6 Basic Steps in PERT and CPM

1. Define the project and prepare the work breakdown structures.
2. Develop the relationships among the activities. Despite which activities must precede and which must follow others.
3. Draw the network connecting all the activities.
4. Assign time and/or cost estimates to each activity.
5. Compute the longest time path through the network. This is called the critical path.
6. Use the network to help plan, schedule, monitor, and control the project.

Activity-on-Node (AON) – a network diagram in which nodes designate activities.

Nodes in an AON diagram represent activities.
Activity-on-Arrow (AOA) – a network diagram in which arrows designate activities.
Nodes in an AOA diagram represent the starting and finishing times of an activity and are also called events.
Nodes in AOA activities consume neither time nor resources.

Dummy activities – an activity having no time, inserted into the network to maintain the logic of the network.
A dummy activity consumes no time or resources, but is required when a network has two activities
with identical starting and ending events, or when two or more follow some, but not all, “preceding”
activities.

DETERMINING PROJECT SCHEDULE

Critical path analysis – helps determine the project schedule.

2-Pass Process
1. Forward pass – identifies all the earliest times.
2. Backward pass – finds all latest times.

Slack time – free time for an activity.

Total slack time –time shared among more than one activity.
Free slack – time associated with a single activity.

VARIABILITY IN ACTIVITY TIMES

Three Time Estimates in PERT
1. Optimistic time – the “best” activity completion time that could be obtained in a PERT network.
2. Pessimistic time – the “worst” activity time that could be expected in a PERT network.
3. Moat likely time – the most probable time to complete an activity in a PERT network.

Beta probability distribution – a mathematical distribution that may describe the activity time estimate distributions in a
PERT network.
Crashing – shortening activity time in a network to reduce time on the critical path so total completion time is reduced.