1 eo - 702 emba-2, bup m. asad operations management for competitive advantages
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1EO - 702
EMBA-2, BUP
M. ASAD
Operations Management for Competitive Advantages
Major Asad
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EMBA-2, BUP
M. ASAD
Chapter 3 (A+B)
Project Management
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Project Management
What is a Project? a coherent set of actions aiming to well
defined results in a restricted period of time
A project is characterized as: unique and one-time operation designed to accomplish a series of related
jobs activities are accomplished in a order requiring a significant period of time to
perform usually directed toward some major output finally, has a beginning and ending time point
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Project Management What is Project Management ? are the management activities of planning,
directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project.
Project manager is responsible for : The work activities - accomplishing in
desired sequence to meet performance goal.
Directing and motivating human resources Communications Quality Time Cost
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Project Life Cycle and Structure
Project Life Cycle:
Organizational Structure of the Project Pure project Functional project Matrix project
Conception Planning Execution Terminatio
n
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Pure ProjectA pure project is where a self-contained team works full-time on the projectAdvantages Project manager has full authority over the
project Team members report to one boss Shortened communication lines Team pride, motivation, commitment are high
Disadvantages Organizational goals and policies are ignored Lack of technology transfer Team members have no functional area "home" Duplication of resources
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Functional Project
Advantages A team member can work on several projects Technical expertise is maintained within the
functional area Functional area is a ‘home’ after project
completes Critical mass of specialized knowledge
Disadvantages Motivation of team members is often weak Needs of other part are responded to slowly Decision for aspects of the project that are
not directly related to the functional area suffers
This project is housed within a functional division
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Matrix Project
Advantages Better communications between functional
areas Pinpointed responsibility for project manager Duplication of resources is minimized Functional “home” for team members Policies of the parent organization are
followed Disadvantages Too many bosses Depends on project manager’s negotiating
skills Potential for sub-optimization
This project attempts to blend properties of both functional and pure projects
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Build-Own-Operate-Transfer (BOOT)
Project A BOOT funding model involves a
single organization, (BOOT provider) designing, building, funding, owning and operating the scheme for a defined period of time and then transferring this ownership across to an agreed party.
Customers enter into long term supply contracts with the BOOT operator and are charged accordingly for the service delivered. The service charge includes capital and operating cost recovery and project profit.
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Turn-key Project A turn-key project is a type of project that is
constructed by a developer and sold or turned over to a buyer in a ready-to-use condition.
Turn-key refers to something that is ready for immediate use, generally used in the sale or supply of goods or services. The term is common in the construction industry, for instance, in which it refers to the bundling of materials and labor by sub-contractors.
Everything is done by General Contractor and client have to pay only payment. Client is not affected by market rise. Owner put minimum efforts for his project so he has less stress.
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SOW, WBS, Milestones SOW (Statement of Work)- form of a formal
written description of objectives, brief statement of the work, works to be done, project time frame and etc
Work Breakdown Structure - is a method for project planning. In a WBS, a project is broken down into major components- Task / Modules subcomponents (Sub Task) Finally – Individual task / Activities
Project Milestone – Completion of any event in activities. i.e. completion of design, completion of production of a prototype, completion of testing of prototype, Approval of pilot run
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Project Control Charts
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Network-Planning Models A project is made up of a sequence of
activities that form a network representing a project.
Two best known network models are: CPM PERT
By using PERT or CPM, managers are able to obtain:•A graphical display of project activities•An estimate of how long the project will take.•An indication of which activities are the most critical to timely project completion.•An indication of how long any activity can be delayed without delaying the project.
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Salient Features of CPM and PERT
Item CPM PERTTime estimation Used
Single, Multiple
Multiple
Activity time estimation
Fairly certain, Uncertain
Uncertain / Probabilistic
Activities represented as
Arrowed lines or Nodes
Network construction approach
Activity on Arrow (AOA) orActivity on Node (AON)
Use of Dummy activity
Yes No
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Network-Planning Models Early Start Early Finish Backward pass Late Start Late Finish
Path Critical path Critical activities Dummy activity Forward pass
Slack – is the amount of time an activity can be delayed without delaying the project.
Slack = LS-ES or LF-EF
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Preparing/Scheduling Project Network
Single Time Estimate (using CPM) Used when activity times are known with certainty Used to determine timing estimates for the
project, each activity in the project, and slack time
Three Activity Time Estimates (using CPM / PERT ) Used when activity times are uncertain Used to obtain probability information
Time-Cost Models (using CPM / PERT ) Used when cost trade-off information is a major
consideration in planning To determine least cost in reducing total project
time
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Steps in the CPM with Single Time Estimate
1. Activity Identification2. Activity Sequencing and Network
Construction3. Determine the critical path4. Determine ES /EF and LS / LF to
determine Slack Time
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CPM with Single Time Estimate Step-1: Activity identification
Consider the following internship project:Activity DesignationImmed. Pred.Time (Weeks)
Submit proposal to org supervisor
A None 2
Submit proposal to faculty supervisor B A 1
Obtain approval C B 1
Submit org part completed D C 2
Carry out survey & write research partE C 5
Submit draft paper F D, E 5
Submit final internship paper G F 1
Draw and find its critical path, total duration and activities having slack time
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Critical Path & Slack
LS=4LF=9 Duration = 15 weeks
ES=9EF=14
ES=14EF=15
ES=0EF=2
ES=2EF=3
ES=3EF=4
ES=4EF=9
ES=4EF=6
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
LS=14LF=15
LS=9LF=14
LS=7LF=9
LS=3LF=4
LS=2LF=3
LS=0LF=2
Slack=(7-4)=(9-6)= 3 Wks
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Three Activity Time Estimates
When single estimate of time is not reliable. Activity times are unknown and subject to
variation. This approach involves weighted average
method of three time estimates:
a=Optimistic time : min reasonable time to complete the activity. (error 1%)
b=Pessimistic time : max reasonable time to complete the activity. (error 1%)
m=Most likely time : The best guessed time to complete the activity. (mode of beta distribution )
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Three Time Estimates
1. Activity Identification 2. Activity Sequencing3. Calculation of Expected time from 3 time
estimates
4. Network Construction and determining Critical Path
5. Determine activity variance
6. Determine probability of completing on a given date
Expected Time = Opt. Time + 4(Most Likely Time) + Pess. Time
6Expected Time =
Opt. Time + 4(Most Likely Time) + Pess. Time
6
22 )
6
Optim. - Pessim.( = ariance,Activity v
22 )
6
Optim. - Pessim.( = ariance,Activity v
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Step 1 and 2 : Activity identification, Sequencing
TaskImmediate
Predecesors Optimistic Most Likely PessimisticA None 3 6 15B None 2 4 14C A 6 12 30D A 2 5 8E C 5 11 17F D 3 6 15G B 3 9 27H E,F 1 4 7I G,H 4 19 28
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Step 6 : Probability Exercise
What is the probability of finishing this project in less than 53 days?What is the probability of finishing this project in less than 53 days?
Z = D - TE
cp2
Z = D - TE
cp2
p(t < D)
TE = 54t
D=53