( BME-1 )

Managing Projects

Topic 3
Learning Objectives
Discuss the importance of project
01 management..

02 Use Gantt chart for scheduling.

03 Understand the concept of PERT-CPM.

04 Draw AOA and AON networks.

INTRODUCTION
 A growing project complexity and collapsing
product/service life cycles is inevitable. This change stems
from awareness of the strategic value of time-based
competition and a quality of mandate for continuous
improvement. Each new product/service introduction is a
unique event—a project.
ACTIVITY
 Activity # 3
( PUZZLE)
Instruction:
Search a word in the puzzle that relates to marketing
environment and try to figure out its meaning. 5 points will be
given to each student who can guess and give the meaning of
each word.
P R O J E C T P L A N N I N G A N G A
D O M E A O N A T U R A L A A M B E P
U M B R E N E T W O R K D E N E X T P
M O P E R T A N G L E E I A T O O R R
M Y C I N R A W R O O T A N T H A N O
Y A W N A O N U M B E E G O C P M E A
A M B A G L O V E M O T R O H A N D C
K U L T O L E V I T A T A R A M B E H
U X B E K I Z A M E D E M A R A M P E
L E X U S N A M I B I A S A T U R N S
T O L O V G E R M A N Y O R K O R A N
W O R K B R E A K D O W N A M A S T E
P R O J E C T P L A N N I N G A
D A O N A P
U N E T W O R K D N P
M P E R T I T R
M R A T O
Y A O N G C P M A
L R H C
L A A H
I M R E
N S T S
G
W O R K B R E A K D O W N
DISCUSSION
Disclaimer
The Importance of Project
Management
 Projects are a common part of our every day life. We may
be planning a wedding or a surprise birthday party,
remodeling a house or preparing a semester-long class
project.
Scheduling projects is a difficult challenge for operations
manager. The stakes in project management are high. Cost
overruns and unnecessary delays due to poor scheduling
and poor controls.
Projects that take months or years to complete are
usually developed outside the normal production system.
Project organizations within the firm may be set up to
handle such jobs and are disbanded when the project is
complete.
Phases of Project
Management
1. Project Planning
 This phase includes
goal setting, defining
the project and team
organization.
 Projects can be
defined as a series of
related tasks directed
toward a major
output.
 Project Planning
Work-breakdown Structure (WBS)
Defines the project by dividing
it into its major subcomponents
(tasks), which are then subdivided
into more detailed components and
finally into a set of activities and
Project Organization
their related costs.
An organization formed to
The division of the project into
ensure that projects receive the
smaller task can be difficult but it
proper management and
is critical to managing the project
attention and is developed to
and to scheduling success.
make sure existing programs
Gross requirements of people,
continue to run smoothly on a
suppliers and equipment's are also
day-to-day basis.
estimated in this planning phase.
2. Project Scheduling
 This phase relates to
people, money and
sup[plies to specific
activities and relates
activities to each
other.
 Involves sequencing
and allotting time to
all project activities.
2. Project Scheduling
 At this stage,
managers decide how
long each activity will
take and compute how
many people and
materials will be
needed at each stage
of production.
 Project Scheduling through Gantt Chart
2. 3.
Order of performance is Activity time estimates
documented. are recorded.

4.
1. Over-all project time is
Activities are developed
planned.
Project Scheduling through Gantt Chart
 Purpose of Project Scheduling
Identifies the precedence Encourages the setting of
relationships among realistic time and cost
activities. estimates for each activity.

Helps make better use of people,

Shows the relationship of each money and material resources by
activity to others and to the identifying critical bottlenecks in
whole project. the project.
3. Project Controlling
 The control of projects
like the control of any
other management
system involves close
monitoring of
resources, costs,
quality and budgets.
3. Project Controlling
 Control also means using a feedback loop to revise
the project plan and having the ability to shift
resources to where they are needed most.
Project Management Techniques:
PERT & CPM
 Program evaluation and review technique (PERT)
and the critical path method (CPM) were both
developed in the 1950s to help managers schedule,
monitor and control large and complex projects.
CPM arrived first in 1957 as a tool developed by
J.E. Kelly of Remington Rand and M.E. Walker of
duPont to assist in the building and maintenance of
chemical plants t duPont. Independently, PERT was
developed in 1958 by Booz, Allen and Hamilton for
the U.S. Navy.
 Key Terms
PERT CPM Critical Path
(Program (Critical Path Method)
Evaluation & The computed
Review Technique) A project longest time
management technique path(s) through
A project that uses only one time a network.
management factor per activity,
technique that
employs three time
estimates for each
activity.
Framework of PERT 2. Develop the
relationships among the

& CMP activities. Decide which

activities must be
preceded and which
must follow others.

3. Draw the network

1. Define the project and connecting all the
prepare the work activities.
breakdown structure.

PERT & CPM both follow this six basic steps.

Framework of PERT 5. Compute the longest
time path through the

& CMP network. This is called

critical path.

6. Use the network to

4. Assign time and/or help plan, schedule,
cost estimates to each monitor and control the
activity. project.

PERT & CPM both follow this six basic steps.

 Importance of PERT & CPM
PERT & CPM can help answer the following questions:

2. What are the critical 3. Which are the non-critical

activities or tasks in the activities—the ones that can
project-that is which run late without delaying the
activities will delay the whole project’s completion?
entire project if they are
late?

4. What is the probability that the

1. When will the entire project project will be completed by a
be completed? specific date?
 Importance of PERT & CPM
PERT & CPM can help answer the following questions:

6. On any given date, 7. Are there enough

is the money spent resources available to
equal to, less than or finish the project on time?
greater than the
budgeted amount?

8. If the project is to be
5. At any particular date, is finish in a shorter amount
the project on schedule, of time, what is the best way
behind schedule or ahead of to accomplish this goal at
schedule? the least cost?
Network Diagrams & Approaches
 The first step in a PERT or CPM network is to
divide the entire project into significant activities in
accordance with the work breakdown structure.
There are two approaches for drawing a project
network: Activity on Node (AON) and Activity on
Arrow (AOA).
1. Activity-on-node (AON)
 A network diagram in
which nodes
designate activities.
2. Activity-on-arrow (AOA)
 A network diagram in
which arrows
designate activities.
 The nodes represent
the starting and
finishing times of an
activity and are also
called events.
Activity-on-Node (AON)
&
Activity-on-Arrow (AOA)
EXERCISE
ACTIVITY
PROBLEM #1 – Event/Banquet
DESCRIPTION OF ACTIVITY IMMEDIATE DURATION
PREDECESSOR (HOURS)
A Transporting the required number of tables and chairs from store - 1.5
and assembling in hall.
B Collect the required number of table cloths from laundry and A 0.30
décor tables.
C Beautifying the hall and making necessary layout. B 1
D Placing spoon, knife, glasses, and fork on the table. C 0.90
E Setup the kitchen equipment. - 0.60
F Arrange and start cooking the main course. E 3.5
G Arranging the side dish. - 1.25
H Welcoming and seating the guests. D 0.60
I Bowl side dishes. G, H 1
J Bowl dinner and serve F, I 1.5
 PROBLEM #2 - Manufacturing
Immediate Duration
Activity Description
Predecessor (weeks)
A Develop product specifications None 4
B Design manufacturing process A 6
C Source & purchase materials A 3
D Source & purchase tooling & equipment B 6
E Receive & install tooling & equipment D 14
F Receive materials C 5
G Pilot production run E&F 2
H Evaluate product design G 2
I Evaluate process performance G 3
J Write documentation report H&I 4
K Transition to manufacturing J 2
 PROBLEM #3 – Student’s Business Plan
ACTIVITY DESCRIPTION OF ACTIVITY IMMEDIATE DURATION
PREDECESSOR (WEEKS)

A Brainstorming - 2
B Market Research - 3
C Product Development A 2
D Demand Forecasting and Marketing B 4
E Resource Planning and Organization C 4
F Socio-economic Impact C 3
G Financial Statements D, E 5
H Preparation for Defense F, G 2
 PROBLEM #4 – Setting Up of Business
ACTIVITY DESCRIPTION OF ACTIVITY IMMEDIATE DURATION
PREDECESSOR (WEEKS)
A Select Office Site - 2
B Create Organizational and Financial Plan - 4
C Determine Personnel Requirements B 1
D Design Facility A, C 3
E Construct Interior D 3
F Select Personnel to Move C 1
G Hire New Employees F 2
H Move Records, Key Personnel, etc. F 1
I Make Financial Arrangements with Institutions B 2
J Train New Personnel H, E, G 2