Operations Management: Sustainability and Supply Chain Management PDF

Operations Management: Sustainability and Supply Chain Management Fourth Canadian Edition Chapter 3 Project Management Copyright © 2023 Pearson Canada Inc. 3-1 Outline (1 of 2) G...

Operations Management: Sustainability and Supply Chain Management Fourth Canadian Edition Chapter 3 Project Management Copyright © 2023 Pearson Canada Inc. 3-1 Outline (1 of 2) Global Company Profile: Project Management Is a Core Strength for EllisDon The Importance of Project Management Project Planning Project Scheduling Project Controlling Project Management Techniques: PERT and CPM Determining the Project Schedule Copyright © 2023 Pearson Canada Inc. 3-2 Learning Objectives (2 of 2) When you complete this chapter, you should be able to: 5. Calculate the variance of activity times 6. Crash a project Copyright © 2023 Pearson Canada Inc. 3-3 EllisDon Projects Project Manager for the property development of the Palm Jumeirah project, Dubai, UAE Increased expansion at the Calgary Airport Union Station (Toronto) renovation and expansion Designer-builder for the Halifax 4-Pad Arena Construction Manager for George Brown College’s Waterfront Campus Copyright © 2023 Pearson Canada Inc. 3-4 The Importance of Project Management EllisDon Project Management: – Palm Jumeirah project is so large it can be seen from space – Mobilization of large force of subcontractors, workers, construction professionals, and engineers – Ongoing access to physical resources and supplies Hard Rock Café Rockfest Project: – 100,000+ fans – Planning began 9 months in advance Copyright © 2023 Pearson Canada Inc. 3-5 Project Characteristics Start and finish Many related activities Difficult planning, inventory control, supply chain Different types of personnel resources Many types of equipment and labour Copyright © 2023 Pearson Canada Inc. 3-6 Examples of Projects Construction of buildings, roads, bridges Research projects Information system implementations Wedding planning Trip planning Improvement projects Copyright © 2023 Pearson Canada Inc. 3-7 Management of Projects 1. Planning - goal setting, defining the project, team organization 2. Scheduling - relates people, money, and supplies to specific activities and activities to each other 3. Controlling - monitors resources, costs, quality, and budgets; revises plans and shifts resources to meet time and cost demands Copyright © 2023 Pearson Canada Inc. 3-8 Project Planning 1. Establishing objectives 2. Defining project 3. Creating work breakdown structure 4. Determining resources 5. Forming organization Copyright © 2023 Pearson Canada Inc. 3-9 Project Organization Often temporary structure Uses specialists from entire company Headed by project manager – Coordinates activities – Monitors schedule and costs Permanent structure called “matrix organization” Copyright © 2023 Pearson Canada Inc. 3 - 10 The Role of the Project Manager Highly visible Responsible for making sure that: 1. All necessary activities are finished in order and on time 2. The project comes in within budget 3. The project meets quality goals 4. The people assigned to the project receive motivation, direction, and information Copyright © 2023 Pearson Canada Inc. 3 - 11 Ethical Issues Project manager face many ethical decisions on a daily basis The Project Management Institute has established an ethical code to deal with problems such as: – Offers of gifts from contractors – Pressure to alter status reports to mask delays – False reports for charges of time and expenses – Pressure to compromise quality to meet schedules Copyright © 2023 Pearson Canada Inc. 3 - 12 Work Breakdown Structure (1 of 2) Level 1. Project 2. Major tasks in the project 3. Subtasks in the major tasks 4. Activities (or work packages) to be completed Copyright © 2023 Pearson Canada Inc. 3 - 13 Project Scheduling LO1: Use a Gantt chart for scheduling Identifying precedence relationships Sequencing activities Determining activity times and costs Estimating material and worker requirements Determining critical activities Copyright © 2023 Pearson Canada Inc. 3 - 14 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 Copyright © 2023 Pearson Canada Inc. 3 - 15 Project Management Techniques: PERT and CPM Gantt chart Critical Path Method (CPM) Program Evaluation and Review Technique (PERT) Copyright © 2023 Pearson Canada Inc. 3 - 16 PERT and CPM Network techniques Developed in 1950s – CPM by DuPont for chemical plants (1957) – PERT by Booz, Allen & Hamilton with the U.S. Navy for Polaris missile (1958) Consider precedence relationships and interdependencies Each uses a different estimate of activity times Copyright © 2023 Pearson Canada Inc. 3 - 17 Questions PERT and CPM Can Answer (1 of 2) 1. When will the entire project be completed? 2. What are the critical activities or tasks in the project? 3. Which are the noncritical activities? 4. What is the probability the project will be completed by a specific date? 5. Is the project on schedule, behind schedule, or ahead of schedule? Copyright © 2023 Pearson Canada Inc. 3 - 18 Questions PERT and CPM Can Answer (2 of 2) 6. Is the money spent equal to, less than, or greater than the budget? 7. Are there enough resources available to finish the project on time? 8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost? Copyright © 2023 Pearson Canada Inc. 3 - 19 A Comparison of AON and AOA Network Conventions (2 of 3) Figure 3.5 (continued) Copyright © 2023 Pearson Canada Inc. 3 - 20 AON Example Table 3.1 Hamilton Paper Manufacturing’s Activities and Predecessors Activity Description Immediate Predecessors A Build internal components — B Modify roof and floor — C Construct collection stack A D Pour concrete and install frame A, B E Build high-temperature burner C F Install pollution control system C G Install air pollution device D, E H Inspect and test F, G INSIGHT To complete a network, all predecessors must be clearly defined. LEARNING EXERCISE What is the impact on the sequence of activities if provincial approval is required after Inspect and test? [Answer: The immediate predecessor for the new activity would be H, Inspect and test, with Provincial approval as the last activity, I.] Copyright © 2023 Pearson Canada Inc. 3 - 21 Determining the Project Schedule (1 of 4) LO3: Complete forward and backward passes for a project Perform a Critical Path Analysis The critical path is the longest path through the network The critical path is the shortest time in which the project can be completed Any delay in critical path activities delays the project Critical path activities have no slack time Copyright © 2023 Pearson Canada Inc. 3 - 22 Determining the Project Schedule (3 of 4) Perform a Critical Path Analysis Earliest start (ES) = earliest time at which an activity can start, assuming all predecessors have been completed Earliest finish (EF) = earliest time at which an activity can be finished Latest start (LS) = latest time at which an activity can start so as not to delay the completion time of the entire project Latest finish (LF) = latest time by which an activity has to finish so as not to delay the completion time of the entire project Copyright © 2023 Pearson Canada Inc. 3 - 23 Forward Pass (2 of 2) 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 Copyright © 2023 Pearson Canada Inc. 3 - 24 Backward Pass (2 of 2) 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 Copyright © 2023 Pearson Canada Inc. 3 - 25 Computing Slack Time (1 of 2) LO4: Determine a critical path After computing the ES, EF, LS, and LF times for all activities, compute the slack or free time for each activity Slack is the length of time an activity can be delayed without delaying the entire project Slack = LS − ES or Slack = LF − EF Copyright © 2023 Pearson Canada Inc. 3 - 26 Variability in Activity Times (2 of 4) Three-time estimates are required – Optimistic time (a) – if everything goes according to plan – Pessimistic time (b) – assuming very unfavourable conditions – Most likely time (m) – most realistic estimate Copyright © 2023 Pearson Canada Inc. 3 - 27 Factors to Consider When Crashing a Project The amount by which an activity is crashed is, in fact, permissible Taken together, the shortened activity durations will enable us to finish the project by the due date The total cost of crashing is as small as possible Copyright © 2023 Pearson Canada Inc. 3 - 28 Steps in Project Crashing (1 of 3) 1. Compute the crash cost per time period. If crash costs are linear over time: (Crash cost - Normal cost) Crash cost per period = (3-11) (Normal time - Crash time) 2. Using current activity times, find the critical path and identify the critical activities Copyright © 2023 Pearson Canada Inc. 3 - 29 Project Management Software There are several popular packages for managing projects: – Primavera – MacProject – Pertmaster – VisiSchedule – Time-Line – Microsoft Project Copyright © 2023 Pearson Canada Inc. 3 - 30 Summary Project Management is useful for both large and small projects The different steps of Project Management should be followed in sequence The Project Manager has a huge responsibility in making sure that the project is completed on time, with the right quality, and within budget Copyright © 2023 Pearson Canada Inc. 3 - 31