URBS 609 PERT, Unit 1

Project Management
A Short Introduction and History

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This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004

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Training Module Preview

This module will provide:
A basic history of Project Management Introduction to key terms Introduction to key concepts Introduction to traditional methodologies Introduction to logical task sequence

This module is constructed as the first block in a building block approach

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What Is Project Management?

Management of resources & constraints to meet a goal in as efficient a manner as possible
Resources: Time, money, people, equipment Constraints: preceding task completion

A science or an art? Both

Science: based on statistical means & norms Art: based on intuition into human behavior Both: balancing the known and unknown to achieve a more predictable result

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The Unbroken Thread of Time

Project Management (PM) is not new
Used in some form for centuries
Pyramids, sphinx, coliseum intricate plans Active management of resources to meet a goal

Value: listing and tracking complex tasks Value: Provides a focus for project communication

Based on a quest for efficiency

Arranging tasks and resources for most efficient and productive result
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A Philosophy, not a Technique

PM is a management philosophy
Efficient management yields effective results

Often mistaken as a technique

PM contains many techniques flexible
Adaptable techniques that are industry specific Techniques work in some industries and not others

PM techniques evolve within the philosophy

Many techniques, many tools, one goal

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Project Management Definitions

There are several key PM terms
Critical Path: The longest time path through the task network. The series of Path: tasks (or even a single task) that dictates the calculated finish date of the project (That is, when the last task in the critical path is completed, the project is completed) The "longest" path (in terms of time) to the completion of a project. If shortened, it would shorten the time it takes to complete the project. Activities off the critical path would not affect completion time even if they were done more quickly. Slack Time: The amount of time a task can be delayed before the project finish Time: date is delayed. Total slack can be positive or negative. If total slack is a positive it indicates the amount of time that the task can be delayed without delaying the project finish date. If negative, it indicates the amount of time that must be saved so that the project finish date is not delayed. Total Slack = Latest Start Earliest Start. By default and by definition, a task with 0 slack is considered a critical task. If a critical task is delayed, the project finish date is also delayed. task. (Also known as float time )

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Project Management Definitions

More key PM terms:
Crashing: Crashing: Shifting resources to reduce slack time so the critical path is as short as possible. Always raises project costs and is caution. typically disruptive a project should be crashed with caution. Dummy activity: An imaginary activity with no duration, used activity: to show either an indirect relationship between 2 tasks or to clarify the identities of the tasks . In CPM, each activity must be uniquely defined by its beginning and ending point. When two activities begin and end at the same time, a dummy activity (an activity which begins and ends at the same time) is inserted into the model to distinguish the two activities.

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Project Management Definitions

Even more key PM terms:
Gantt Chart: A bar chart. While visually appealing Chart: on a task/duration basis, it is limited because it does not show task or resource relationships well. Strength: easy to maintain and read. Network Diagram: A wire diagram, Also known as Diagram: a PERT network diagram. A diagram that shows tasks and their relationships. Limited because it shows only task relationships. Strength: easy to read task relationships.
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Project Management Definitions

Yet more key PM terms:
Dependencies: Dependencies: Links between project tasks. There are 3 types of dependencies:
Causal, where 1 task must be completed before another can Causal, begin (have to bake bread before you can make a sandwich)  critical path schedules are based only on causal dependencies Resource, where a task is limited by availability of resources Resource, (more bread can be baked by 2 bakers, but only 1 is available) Discretionary, optional task sequence preferences that, though not required, may reflect organizational preferences

Milestone: Milestone: A significant task which represents a key accomplishment within the project. Typically requires special attention and control.
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Project Management Definitions

Yet more key PM terms:
WBS: WBS: a work breakdown structure (WBS) is a WBS) detailed, hierarchical (from general to specific) tree structure of deliverables and tasks that need to be performed to complete a project. The purpose of a WBS is to identify the actual tasks to be done in a project. WBS serves as the basis for much of project planning. Work breakdown structure is, perhaps, the most common project management tool, it was created by the US military in the 1960s as an extension to PERT.
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Project Management Definitions

Yet more key PM terms:
Duration: The time it takes for an activity to be Duration: completed, given the planned amount of material, labor and equipment. Effort: The amount (not duration) of work required to Effort: complete a task. Duration may decrease by adding resources but the effort required will remain the same. Scope: A specific definition of what the project does and does not entail. Critical to managing expectations of customers and workers alike.
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Project Management Definitions

Final key PM terms:
Constraints: Restrictions set on the start or finish date of a task. You can specify that a task must start on or finish no later than a particular date. Constraints can be flexible (not tied to a specific date) or inflexible (tied to a (not specific date)
Flexible constraints such as As Soon As Possible (ASAP) and As Late As Possible (ALAP) do not have specific dates associated with them. Setting these constraints allows you to start tasks as early as possible or as late as possible with the task ending before the project finish, given other constraints and task dependencies in the schedule. Inflexible constraints such as Must Start On (MSO) and Must Finish On (MFO) require an associated date, which controls the start or finish date of the task. These constraints are useful when you need to make your schedule take into account external factors, such as the availability of equipment or resources, deadlines, contract milestones, and start and finish dates.

There are many more PM Terms, but these are the basics it is important to know these concepts

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Project Management Assumptions

PM makes several key assumptions
All tasks have distinct begin and end points All estimates can be mathematically derived Tasks must be able to be arranged in a defined sequence that produces a pre-defined result preResources may be shifted to meet need Cost and time share a direct relationship (Cost of each activity is evenly spread over time) Time, of itself, has no value

These assumptions make PM controversial

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THE PM Concept Assumption

A Critical Path Exists
The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest path through the activity network control the entire project. If these critical" "critical" activities could be identified and assigned to responsible persons, management resources could be optimally used by concentrating on the few activities which determine the fate of the entire project. By contrast, non-critical activities can be re-planned, nonrerescheduled and resources for them can be reallocated flexibly, without affecting the whole project. (Wiest, 1974)
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The Emergence of Standardized PM

Organized as a formal Discipline in 1917
Henry Gantt introduced standardized PM tools
Gantt Chart visual tracking of tasks and resources Depiction of relationships between tasks Depiction of constraints between tasks First Widespread acceptance of a single technique

Created out of need and frustration as industrialization became ever more complex

Little change to PM for another 40 years

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The Birth of PM as We Know It

Two main (complementary) techniques within PM
PERT (Program Evaluation and Review Technique) by US military in 1958 introduced
US Navy needed tools to control costs and schedules for Polaris Submarine construction

CPM (Critical Path Method) introduced by US industry in 1958 (DuPont Corporation and Remington-Rand) RemingtonIndustry needed to control costs and schedules in manufacturing

Common weakness to both: ignores most dependencies

Considers only completion of a preceding required task

Both rely on a logical sequence of tasks

Organized visually (Charts), tabular or simple lists
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An Example of a Logical Sequence

Making a simple list of tasks
Planting trees with flowers and edging around them tasks required to complete this project:
1. 2. 3. 4. 5. 6. 7. 8. Mark utilities Dig Holes Buy trees Buy flowers Plant trees Plant flowers Buy edging Install edging

This list does not reflect time or money This list does not reflect task relationships This list is a simple sequence of logical events This list does not provide an easy project snapshot Hard to see conflicts

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An Example of a Logical Sequence Visual - Using a PERT Chart (Network Diagram)

Planting trees with flowers and edging around them Visual
seerT yuB

task relationships are clear

gnig dE yuB

good snapshot

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Created using RF Flow or Visio

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An Example of a Logical Sequence

Tabular
Task Name Mark Utilities Dig Holes Buy Trees Buy Flowers Plant Trees Plant Flowers Buy Edging Install Edging TOTALS 3 2 .5 .5 2 1 .5 1

including time and cost data

Crashed Time (Days) 3 1 .5 .5 1 .5 .5 .5 Normal Cost ($) 0 100 50 50 100 50 25 25 Crashed Cost ($) 0 200 50 50 200 100 25 50

Normal Time (Days)

10

400

675

NOTE: Shaded areas are concurrent tasks that are completed along the timeline- they contribute to overall cost but not overall duration Urban and Regional Studies Institute 20

PERT and CPM

PERT

The Basics

Weighs and estimates task and project timing based on probabilistic norms and averages
Optimistic, expected, pessimistic input estimates Derives probable completion dates based on a formula (does not consider constraints)
(Optimistic x1 + expected x4 + pessimistic x1) / 6

The derived dates are estimates (educated guess) The analysis yields a best-case date, worst-case bestdate, worstdate, date, and due (derived expected) date
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PERT and CPM

The Basics

PERT (continued) Manipulating these estimates provides:

Likely (estimated) completion dates Probability of meeting estimated dates
Best case date Expected (due) date Worst case date

ALL PERT dates are estimates (ALWAYS) (ALWAYS) Preferred choice in Social & Behavioral Sciences
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PERT and CPM

CPM

The Basics

Unlike PERT, analyzes only the longest likely chain of activities

The earliest time a project can be completed when using the longest possible task durations

Deterministic, not probabilistic Deterministic,

Events will be determined by preceding events, not probability

Derives a normal completion time

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PERT and CPM

The Basics

CPM (Continued) CPM assumes projects may be crashed

Completing a task or project in a shorter amount of time by using extra resources May be crashed for time but does not directly consider any impact other than cost/time
Impact on shared resources (with other projects) Impact on other projects (resources, timing) Impact on quality or reliability

Preferred choice in industry and construction tasks and outcomes are more finite and tangible
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PERT and CPM

Provides benefits of each

The Basics

PERT and CPM can be used Together

Time estimates a range (PERT) Time estimates likely (CPM) Cost estimates (CPM) Time and cost if crashed (CPM) Probability of completion on time (PERT)

Used together: valuable management tools PERT and CPM have remained unchanged since 1958

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PERT and CPM

Valuable planning tools but:

The Basics

Only consider logical (causal) dependencies

Completion of a preceding required task

Does not consider resource or discretionary dependencies

Availability of a worker, money, or machines Task sequence that best fits the bigger picture

Relies on clearly defined tasks and goals Provides estimates, not guarantees
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PM Today

Necessary?

Frustration with cost & schedule overruns Frustration with reliability of production estimates Management challenges exist today:
Only 44% of projects are completed on time On average, projects are 189% over-budget over70% of completed projects do not perform as expected 30% of projects are canceled before completion On average, projects are 222% longer than expected

PM has been shown to improve this performance

These statistics were compiled by an independent monitoring group, The Standish Group, and represent the US national average for 1998
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PM Overview
Valuable tools for planning and tracking
A good way to explore what if before a project ever begins
How much it could cost - money What it could entail tasks How long it could take - time Probabilities of success - risks How much resource needed people & equipment

A good way to get and stay organized Provides estimates, not guarantees
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Resources Used in This Unit

Dr. Anthony Filipovitch Goldratt, Eli, Dr., The Goal: A Process of Ongoing Improvement, Great Barrington: New River Press, 1996 MS Project, by Microsoft Corporation PM Body of Knowledge (PMBOK), Philadelphia: PMI, 2000 Project Management Institute (PMI) Resource Center
Project Management Institute Website

Render, Barry and Stair Jr., Ralph M. - Quantitative Analysis for Management, Massachusetts: Allyn & Bacon Inc., 1982 US National Performance Survey, The Standish Group, 1998 Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997 Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: PrenticePrentice-Hall of India Private Limited, 1974

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You have completed URBS 609 PERT Unit 1 Please proceed to URBS 609 PERT Unit 2
This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004

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