Managing Operations

MMBA8090

Lecture 10

Slack and Brandon-Jones Chapter 19

19) Project management

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Project management

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Key questions

key questions…

❑What is project management?

❑How are projects planned?
❑How are projects controlled?

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 Project planning and control

Supply Demand
Delivery of the
project on time, on
specification and to
budget
The operation The market
Required time,
quality and cost
of a project Customer requirements
Operations resources

Project planning and control manages the delivery of projects

on time, on specification and on budget

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 What is project management?

https://www.youtube.com/watch?v=9
LSnINglkQA 5
 Project characteristics
“A project is a complex, nonroutine, one-time effort;
limited by time, budget, resources, & performance
specifications, designed to meet customer needs.”
[Gray & Larson, 2005, p5]

– Established objectives/outcomes
– Defined life-span [beginning & end]
– Involves interrelated activities/functional departments/
professionals
– Specific time, cost and performance requirements

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Differentiating projects using their volume
and variety characteristics

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Differentiating projects by scale, complexity and uncertainty

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Differentiating projects using novelty, technology,
complexity and pace (using example of the development
of the Airbus 380 and the WHO malaria projects)

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 Project management

Project management involves:

• A set of knowledge, skills and techniques for
planning, implementing and managing specific
project objectives.
• A results-oriented, collaborative management style
• Balancing trade-offs between time, cost and
performance whilst satisfying the customer
 Stages in project management
Stage 1 Understanding
the project
environment
Stage 2
Project Changes
definition

Stage 3
Project Corrective action
planning

Stage 4 Stag e 5
Technical Project
execution control

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12
Project Governance Structure

Chair:

Stream:

Stakeholders:

IT SYSTEM PROJECT Business Project

MANAGER Manager

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 It is important to understand the
environment in which projects take place

The project environment consists of all the factors that can affect
the project

Geo-social Econo-political
environment environment
Geography, Economy
Demographic Government
The project
Business Internal environment
environment Company strategy
Customers Resources
Competitors Other projects
Suppliers/sub-
Stage 11
Understanding
contractors
the project
environment
Stage 2
Project Changes
definition

Stage 3
Project Corrective action
planning

Stage 4 Stage 55
Technical Project
execution control

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 Creating a project organisation
• The structure established for a project must also
support the parent organisational structure
❑ Balancing conflicting needs

Corporate Project’s
Project
needs
Org. Org.

Stage 11
Understanding
the project
environment
Stage 2
Project Changes
Team’s Individual
definition

Stage 3
Project Corrective action
needs needs
planning

Stage 44 Stage 5
Technical Project
execution control

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 Achieving project success
Success is measured in three major ways:
• Time (Schedule) – Was the project
completed on or before time?
• Cost (Budget) – Did the project come in or
under budget?
• Quality (Performance) – Did the project
meet the agreed-upon specifications to
Stage 11
Understanding
the project
the satisfaction of the customer?
environment
Stage 2
Project Changes
definition

Stage 33
Project Corrective action
planning

Stage 44 Stage 5
Technical Project
execution control

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 The ‘iron triangle’ of project
management
Performance objectives:
• Quality
• Speed Quality
• Dependability
• Flexibility New aircraft
• Cost project
Projects by their nature
are on-offs, therefore
flexibility is a given.

Music
Fixed grant
festival
Stage 11
research
Understanding
the project
environment project
Stage 2
Project Changes
definition Cost Time
Stage 33
Project Corrective action
planning

Stage 44 Stage 5
Technical Project
execution control

This is a combination of speed & dependability objectives

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 How projects can be defined

Project
strategy
The project

Project Phase 1 Phase 3

Project
scope Phase 4 objectives
Phase 2

Milestones
Stage 11
Understanding
the project
environment
Stage 2
Project Changes
definition

Stage 3
Project Corrective action
Objective: end state that PM tries to achieve
planning

Stage 55
Scope: exact range of responsibilities taken on by PM
Stage 4
Technical
execution
Project
control Strategy: how PM is going to meet objectives
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The (only partly joking) ‘laws of project management’
1.No major project is ever installed on time, within budget, or with the same staff that started
it. Yours will not be the first.

2.Projects progress quickly until they become 90 per cent complete, then they remain at 90
per cent complete forever.

3.One advantage of fuzzy project objectives is that they let you avoid the embarrassment of
estimating the corresponding costs.

4.When things are going well, something will go wrong. When things just cannot get any
worse, they will. When things appear to be going better, you have overlooked something.

5.If the project content is allowed to change freely, the rate of change will exceed the rate of
progress.

6.No system is ever completely debugged. Attempts to debug a system inevitably introduce
new bugs that are even harder to find.

7.A carelessly planned project will take three times longer to complete than expected; a
carefully planned project will take only twice as long.

8. Project teams detest progress reporting because it vividly manifests their lack of progress.
Stages in the planning process

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 Work Breakdown Structure (WBS)
• Defines the project content
– Identifies all work packages to be performed
• Defines the total scope of the project
– Clearly states what is in & what is not in the project.
• Provides a basis for estimation of effort, cost
and duration
• Provides a baseline for performance
measurement and control
• Enables resource allocation and assignment of
responsibilities
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 Work breakdown structure
Totality of work
and budget

Major Task 1 Major Task 2 Major Task 3 Major Task 4

… … …

More
Work … … … … decomposition
Break
Down Cost
Work Build
Package Up
… … …

Determine duration, effort Work Work Work

and cost of individual tasks Package Package Package

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A work breakdown structure for a simple
domestic project

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 “Making breakfast” - Do activities at
earliest time
Time (mins)
0 1 2 3 4 5 6 7 8 9

Orange
Activities requiring
Toast Butter operator time
Bread

Boil water Boil egg Bed

Water room

Tray

4
Staff required

3
2

1
0
0 1 2 3 4 5 6 7 8 9
Time (mins)
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Initial project plan for a simple project, with resources
 “Making breakfast” – Minimizing staff
requirements
Time (mins)
0 1 2 3 4 5 6 7 8 9

Orange

Bread Toast Butter

Boil water Boil egg Bed

Water room

Tray

4
Staff required

3
2
1
0
0 1 2 3 4 5 6 7 8 9
Time (mins)
Revised plan with leveled resources 23
 “Making breakfast” – Maximizing toast
quality
Time (mins)
0 1 2 3 4 5 6 7 8 9

Orange

Bread Toast Butter

Boil water Boil egg Bed

Water room

Tray

4
Staff required

3
2

1
0
0 1 2 3 4 5 6 7 8 9
Time (mins)

Revised plan with leveled resources and warm toast (OPTIMISED) 24

Gantt chart for the project to design an information
interface for a new sales knowledge management system
in an insurance company with latest and earliest start and
finish times indicated

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 Typical subjective probability distribution
for an activity time estimate
Probability

3 5 6 Activity duration 13
Optimistic time Expected time
Most likely time Pessimistic time
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Network planning
Activities and network for a simple project

Immediate Activity duration

Activity
predecessors (in days)
a Remove furniture None 1
b Prepare bedroom a 2
c Paint bedroom b 3
d Prepare kitchen a 1
e Paint kitchen d 2
f Replace furniture c, e 1

Remove furniture Replace furniture

The activities, relationships, durations and arrow diagram for the project ‘decorate apartment’
Network analysis for a simple decorating project
Activity reference a

Activity duration
1

Event number 1
3
An Event
b c

2 3
1 a 2 5 f 6
1 1
d e
1 2
4

A network diagram for the project ‘decorate apartment’

 Network analysis for simple decorating project
With earliest and latest event times (EET-LET)

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3 3
b c

2 3
1 a 2 5 f 6
0 0 1 1 1 6 6 1 7 7
d e
1 2
4
2 4
EET LET
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Critical path analysis for the project to design an
information interface for a new sales knowledge
management system in an insurance company

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 Enterprise Project Management
Scenario planning Critical activity analysis
Forecasting Float calculation
Risk management Work order management
Project
planning

Multi project analysis

Complex resource Integration Resource levelling
scheduling
Resource availability
Real-time reporting
Skills scheduling

Communi-
cation
Project portal
Web-based collaboration Budgeting
Document management Cost management
Email notification Earned value control

Some of the elements integrated in Enterprise Project Management systems

Is This London’s Most Complex
Construction Project (9 mins)
https://www.youtube.com/watch?v=8T1sYPrQqvY
 Operations Management
MMBA8090
Week 10

Lecture 10 - Class exercises & end of chapter cases

Slack et al Chapters 19
19) Project management

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Chapter 18 ‘end-of-chapter’ case

Slagelse Industrial Services (SIS)

Source: shutterstock.com: anyunov

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Slagelse Industrial Services (SIS)

Questions

1.What operational risks did SIS face when deciding to

become a strategic supplier for Alden Toys?

2.What control problems did SIS encounter in

implementing this strategy (pre and post investigation)?

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Slagelse Industrial Services (SIS) (Continued)

CAUSATIVE NEGATIVE
EVENT(S) CONSEQUENCES

The risk factors in this case (causative events) can be

categorized as Human, Organizational and Technological (the
so called, HOT) variables.

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Slagelse Industrial Services (SIS) – HOT variables
Human Organizational Technological causes
causes of risk causes of risk of risk
Legal argument whether In the midst of difficult The SIS received the
an individual engineer economic times and specification from Alden.
made the wrong design industrial restructuring, A team of engineers and
assumptions when they had been ‘strongly managers confirmed
responding to the original encouraged’ by their that the product could
brief. corporate parent to bid be made using an up-
Production challenge was for higher volume, lower scaled version of current
widely accepted as being margin work. production processes.
one of scale, (an opinion Similarly, Alden Toys Technical challenge
hared by Alden Toys and were an important appeared to be
Parent) it was left to one corporate client and accessing sufficient
specific senior engineer. there was clearly capacity.
pressure for SIS to help
further develop this
relationship.
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Slagelse Industrial Services (SIS)
Capacity Supply networks Process Development and
technology organization
As well as Underpinning It was superficial An assumed
allocating the decision to product similarity
dedicated invest heavily similarities that between existing
capacity to a with SIS was the led to an and new product
specific Alden Toys inappropriate lead to
customer, the decision to production insufficient
Alden Toys adopt a single process being exploration of
production source or employed. specific design
involved a shift ‘partnerships’ Ultimately brief. As a result
from low supply network however, it is the of design errors,
volumes and management process the quality
multiple initiative. technology that control systems
customers to stands accused introduced
high volume and of causing proved to be
single customer. health problems. inappropriate.

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41
1. Who do you think would be the main
stakeholders for the Workhouse project?
2. How might not involving them damage the
project?
3. How would involving them benefit the project?
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