Koç University
OPSM 301 Operations Management
Class 8:
Project Management:
Introduction and CPM
Zeynep Aksin
zaksin@ku.edu.tr
New module: outline
 Chapter 3 from textbook: will skip parts on
AOA networks
 Two sessions on theory
 Two sessions applications and Microsoft
Project
 MS Project available in SOS Z15
computer lab
Why project management?
 Competition through new product
development
 Information-intensive products: costly to
produce, cheap to reproduce
 Flatter organizations
 Systems approach
 Project approach
Project
 A single “product” is obtained from the
completion of a project
 The differentiating characteristic of projects from
processes is the intense uncertainty in projects
 Two types of project
– With absolute deadline: olympic stadium
– With relative deadline : new product development
project
 Successful project management: To finish on
time without going over budget and without
sacrificing from the scope of the project
Project Management
 Examples
– Construction
–R&D
– Computer system implementation
– Product development
– Advertising campaign
– Business Plan
Project Life Cycle:
A Facility Construction Example
 Feasibility: project formulation, feasibility
studies, strategy design etc. A go/no-go
decision is made at the end of this phase
 Planning and design: base design, cost and
schedule, contract terms, and detailed
planning
 Production: manufacturing, installation and
testing. The facility is substantially completed
at the end of this phase
 Turnover and start-up: final testing and
maintenance. The facility is in full operation at
the end of this phase
Project Management
Resources
Schedule
Some observations
 Most projects
– Either go over time
– or over budget
– or the promised content cannot be delivered
 Little’s law: more projects in the system
(WIP), longer completion times
Modern Project Management
 The process of project management has
two dimensions: the “science” and the “art”
of project management
– Technical: defining, planning and controlling
– Socio-Cultural:
•
•
•
•
•
•
stimulating teamwork and personal motivation
identifying and resolving problems
shaping customer expectations
sustaining political support of top management
monitoring subcontractors
negotiating with functional managers
Project Planning, Scheduling, and
Controlling
Structuring Projects:
Pure Project
Advantages
Disadvantages

The project manager has full authority over the
project.

Team members report to one boss.

Shortened communication lines.

Team pride, motivation, and commitment are high.

Duplication of resources.

Organizational goals and policies are ignored.

Lack of technology transfer.

Team members have no functional area "home."
Structuring Projects
Functional Project
President
Research and
Development
Project Project Project
A
B
C
Engineering
Project Project Project
A
B
C
Manufacturing
Project Project Project
A
B
C
Structuring Projects
Functional Project

A team member can work on several projects.

Technical expertise is maintained within the functional
area.

The functional area is a “home” after the project is
completed.

Critical mass of specialized knowledge.

Aspects of the project that are not directly related to the
functional area not done well enough.

Motivation of team members is often weak.

Needs of the client are secondary and are responded to
slowly.
Advantages
Disadvantages
Structuring Projects Matrix Project:
Organization Structure
President
Research and
Development
Manager
Project A
Manager
Project
B
Manager
Project C
Engineering
Manufacturing
Marketing
Structuring Projects
Matrix
Advantages

Enhanced interfunctional communications.

Pinpointed responsibility.

Duplication of resources is minimized.

Functional “home” for team members.

Policies of the parent organization are followed.

Too many bosses.

Depends on project manager’s negotiating skills.

Potential for suboptimization.
Disadvantages
Work Breakdown Structure




1. Project
2.
Major tasks in the project
3.
Subtasks in the major tasks
4.
Activities (or work packages) to
be completed
The Work Breakdown Structure
1. House
1.3
Interior
Design
1.2.1 Piping
WP-P1
WP-P2
WP-P3
1.2
Heating
System
1.2.2
Furnace
WP-F1
WP-F2
1.1
Building/St
ructure
1.2.3 Fuel Tank
WP-FT1
WP-FT2
WP-FT3
1.4
Garden/P
arking
1.2.4 Solar Panels
WP-SP1 WP-SP4
WP-SP2 WP-SP5
WP-SP3
Time planning: activity list
Activity
A
B
C
D
E
F
Predecessor
-A
B, D
-D
E
Activity-on-node network diagram (or PERT
diagram)
A, 3
B, 5
C, 3
Start
Finish
D, 2
E, 2
F, 5
Developing Project Network
1
3
0
5
7
2
9
8
11
4
6
Rules:
• Draw networks from left to right
• Each activity has a unique identification
number
• An activity’s identification number should
be larger than that of the activities’
preceding it
10
• Loops (cycles) are not allowed
• Conditional statement (e.g., if this
happens then …) are not allowed
• If there are multiple start or finish
activities, a common start or finish
node is used
Gantt chart: Early start
A, 3
B, 5
C, 3
Start
Finish
D, 2
E, 2
A
Activity
B
C
D
E
F
Time
F, 5
Gantt chart: Late start
A, 3
B, 5
C, 3
Start
finish
D, 2
E, 2
F, 5
A
Activity
B
C
D
E
F
Time
PERT/CPM Network Diagrams
 Advantages
– Allows visualization of task relationships
– Facilitates calculation of critical path
– Clarifies impact of decisions on downstream
activities
 Disadvantages
– Complex, not easy to comprehend at a glance
– Charts don’t readily depict durations, dates, and
progress
JAN
FEB
MAR
Gantt Charts
1
8 15 22 29 5 12 19 26 5 12 19 26
 Advantages
–
–
–
–
Easy to understand
Easy to show progress and status
Easy to maintain
Most popular view to communicate project status to
client and/or senior management
 Disadvantages
– Can be superficial
– Not always easy to visualize precedence relationships
Terminology
 The early start (ES) time for an activity is equal to
the maximum early finish (EF) times of all of its
predecessor activities
– ES=max (EF) of predecessors
 The early finish (EF) time for an activity is equal to
the early start (ES) time plus the expected activity
duration (ET) for the activity
EF=ES+ET
Terminology
 The late finish (LF) time for an activity is equal to the
minimum late start (LS) times of all of its successor
activities
– LF=min(LS) of successors
 The late start (LS) time for an activity is equal to the
late finish (LF) time minus the expected activity
duration (ET) for the activity
– LS=LF-ET
 Total slack (TS) time of an activity:
– TS = LS-ES=LF-EF
Latest Start and Finish Steps
Latest
Start
LS
Activity
Duration
ES
Activity
Name
Earliest
Start
EF
Earliest
Finish
LF
Latest
Finish
Finding the Critical Path
Start at
time t=0
4 B 7
6 3 9
0 A 4
0 4 4
Activity Slack:
S = LS-ES, or
S = LF-EF
ES
EF
LS
LF
9 D
9 2
4 C 9
4 5 9
11
11
Finding the Critical Path
Activity Slack:
S = LS-ES, or
S = LF-EF
S=0
4 B 7 S=2
6 3 9
0 A 4
0 4 4
Critical Path:
Path with zero
activity slacks
S=0
9 D
9 2
4 C 9
4 5 9 S=0
11
11
Finding the Critical Path
1.
2.
3.
4.
5.
6.
Start from the left (start node). For node 0: ES=0,EF=0
For each activitity find Early Start (ES) by checking all
immediate predecessors Early Finish times.
ES of activitiy=max(EF) of all predecessors.
EF of activity=ES+Activity time
For the late start and late finish, start calculations from the end
node.
For each activity find Late Finish(LF) by checking all immediate
successors of the activity:
LF of activity=min(LS) of all successors
LS=LF-Activity time
Find Slack times for all activities, S=EF-ES=LF-LS
All activities with S=0 are on the critical path (there can be
more than one critical paths)
AON Network for Milwaukee General
Hospital
A
0 H 2
0 A 2
2
Slack=0
0 HStart
0
0
0
0
BB
Start
0 H 3
4
1
3
Slack=1
C
2 H 4
2 C4
2
Slack=0
DD
3 H 7
8
4
4
Slack=1
FF
4 H 7
13
10
3
E
Slack=6
4 H
8
F
8
4
4
Slack=0 G
8 G
H 13
13
8
5
Slack=0
H
13 H 15
15
13
2
Slack=0