Chapter 7 - Projects

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Success in project management is an activity that requires careful control of CRITICAL RESOURCES

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true

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A firm should have a mix of products that support its overall strategy

Back 2

true

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3 Types of development Projects

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<b>Breakthrough</b>:Major changes that create entirely new markets<br><b>Platform</b>: Fundamental improvements to existing products<br>Derivative</b>:Incremental changes (i.e. new product packaging)

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Projects can be categorized in 4 major areas

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Product Change<br>Process Change<br>Research<br>R&D<br> Alliance & Partnership

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Project Management

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Planning directing and controlling resources (ppl equipment material) to meet the technical cost and time constraints of a project

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Project

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defined as a series of related jobs usually directed toward some major output and requiring a significant period of time to perform

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Before a project starts-senior management must decide which of the 3 organizational structures will be used to tie the project to the parent firm

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True<br>Pure Project<br>Functional Project<br>Matrix Project

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Pure Projects (Skunkworks)

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When a self-contained team works full time on the project

<b>Advantages</b>: The project mngr has full authority over the project-Team members report to one boss-Lines of communication are shortened-Team pride motivation and commitment are high

<b>Disadvantages</b>:Duplication of resources-Organizational goals & policies are ignored-The organization falls behind in its knowledge of new technology-team members have no functional area home resulting in anxiety about the project ending

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Functional Project

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Housing the project within a functional division (i.e. R&D-engineering-Mfg-S&M

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Matrix Project

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Attempts to blend properties of functional and pure project structures (review pg. 184)<br>

<b>Advantages</b>:Communication between functional divisions is enhance-A project manager is held responsible for success-duplication of resources is minimized-team members have a functional home-policies of parent organization are followed

<b>Disadvatages</b>...

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Work Breakdown Structure

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--

Front 12

A project starts as a statement of Work (SOW)

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True<br>

The SOW may be a written description of the objectives to be achieved-can contain start and completion dates-specific performance measurements<br>

<b>Task</b>: A further subdivision of a project—usually not longer than several months in duration and is performed by one group or organization

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Work Package

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A group of activities combined to be assignable to a single organizational unity—involves a description of what is to be done—when to start and stop—etc.

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Project Milestones

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budget measures of performance specific events to be reached at a certain point in time. Typical milestones include completion of design the production of a prototype the completed testing of prototype and approval of pilot run

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Work Breakdown Structure (WBS)

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defines the hierarchy of project tasks subtasks and work packages—completion of one or more work pachages results in the completion of a subtask—completion of subtasks is the completion of a task—completion of tasks is required to complete a project—REVIEW FIG. 7.2

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Activities

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defined within the context of the work breakdown structure and are pieces of work that consume time

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Project Control Charts

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--

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Gantt Chart

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sometimes referred to as a bar chart—shows the amount of time involved and the sequence in which activities can be performed. REVIEW FIG. 7.4

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Earned Value Management

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Technique for measuring project progress in an objective manner. Has the ability to combine measurements of scope-schedule-and cost in a project—also provides a method for evaluating the relative success of a project at a given time

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Essential Features of Earned Value Management(EVM)

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A project plan that identifies activities to be accomplished<br>A valuation of each activity work<br>Predetermined earning or costing rules to quantify the accomplishment of work

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True understanding of cost performance and schedule performance relies first on…

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Measuring technical performance objectively –This is the foundation of Earned Value Management (EVM)

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Network Planning Models

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--

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The 2 best known network-planning models

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<b>The Critical Path Method (CPM)</b>: Developed for scheduling maintenance shutdowns at chemical processing plants—based on the assumptions that project activity times can be estimated accurately and that they do not vary<br>

<b>The Program Evaluation and Review Technique (PERT)</b>: clumped in with Critical Path Management (CPM)

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Gantt Charts should NOT be used when…

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There are MORE than 25 projects

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Critical Path

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the <b>critical path</b> of activities in a project is the sequence of activities that form the longest chain in terms of their time to complete—if any one of the activities in the critical path is delayed then the ENTIRE project is delayed—there CAN be multiple critical paths

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Immediate Predecessors

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Activities that need to be completed immediately BEFORE an activity--

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Critical Path Method (CPM)

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Identify each activity to be done in the project and estimate how long it will take<br> Determine the required sequence of activities and construct a network reflecting the precedence relationships<br> Determine the Critical Path<br>Determine the early start/finish and late start/Finish schedule

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Slack Time

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Leeway in when an activity can start or finish

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For each activity we can calculate 4 points in time

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Early start-Early Finish-Late Start-Late Finish

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Review Examples 7.1 & 7.2

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NOW!!

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Early Start Schedule

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one that lists all of the activities by their early start times

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Late Start Schedule

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lists all the activities to start as LATE as possible without delaying the completion of the project

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Time Cost Models

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extensions of the basic critical path method—attempt to develop a minimum cost schedule for an entire project and to control expenditures during the project—Review pg. 198-199

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Lecture

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I-15 core project

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more than 70% complete

10 interchanges + 63 bridges

35 months for a full interstate system reconstruction

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Project

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series of related jobs usually directed toward some major OUTPUT and requiring a significant PERIOD OF TIME to perform.

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Project Management

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the management activities of planning, directing, and controlling resources (peopl, equipment, material, FINANCES) to meet the technical, cost, and time constraints of a project

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Workers find themselves INCREASINGLY INVOLVED in a variety of SIMULTANEOUS projects

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-Diversified Resources
-Explicit Communication

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Renting a cruise ship and managing the event

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Derivitive project + Alliance & Partnership = Incremental Change

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Re-designing a warehouse floor plan

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Platform Project + Product change +Process Change + R&D = Additional products, Process upgrade, Technology upgrade

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Structuring Projects

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<b>Pure Project</b>
-lockheed/ideo
-greatest challenge:Communication and "acceptance" between functional heads and project heads

<b>Functional Project</b>--Held within the functional unit (sales, marketing, supply chain, engineering, etc.)
-Greatest limitation: LIttle to no cross utilization of resources

<b>Matrix (mixed) Project</b>
-when you have a team/project leader that actually pulls people from functional areas
Greatest Challenge: Agreement on the strength of the relationship or who owns the human resource

I-15 Core Project

Front 42

Statement of Work

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objectives
timeline
milestones

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Gantt Charts

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a bar chart showing the TIME involved and the activities (SCOPE)

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Earned Value Management (EVM)

**Example 7.1 WILL BE ON THE MIDTERM

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Better than Gantt because it also incorporates the cost management aspect of a project.

Scope
Time
Cost/Budget

Front 45

Network-Planning Models

CRITICAL PATH METHOD (CPM)

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A project made up of a sequence of activities that form a network representing a project

<b>The path taking LONGEST time</b> through this network of activities is called the "critical path"

The critical path provides a wide range of scheduling info. useful in managing a project

Critical path method (CPM) helps to identify the critical path(s) in the project networks

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Critical Path Method (CPM)

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1. identify each activity to be done estimate time to comlete

2. determine the required sequences and construct a network diagram

3. determine the critical path

4. determine early start and late start finish

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KNOW EXAMPLE 7.2

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FOR MIDTERM!!

REVIEW NOW!

Front 48

lecture summary

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types of dev. projects
-breakthrough, platform derivative

Sturcutirng of projects
-pure, functional, matrix (most)

WBS Work Breakdown Structure

Gantt & EVM

CPM

Front 49

mid term review--go over word document

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REview all powerpoints!!

Chapter 1

Chapter 2
-Productivity Ratio

Chapter 3
-Capacity Utilization Rate

Chapter 4
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