Petersen General Contractors
Case 8-1
Chapter 8
PERT, CPM, Resource Allocation and GERT
On-line MS Project Tutorials
http://webcampus.stthomas.edu/s3c/Software/Project/ProjectEC_1a.html
Team Alternative
• Form teams of five or fewer
– Identify the task of each team member
– Rate the contribution of each member
Teams 2,3,and 4
Team 1
Real World Considerations
• Other concurrent projects (size of total
commitments)
• Coordinating with other companies (structure)
• Have you ever built a TV Tower? (technology)
• What is the basis for the estimators estimate?
– Is company experience still valid?
– Is 15% for contingencies still appropriate?
Structure
Technology
Thankfully this is not the real world.
Size
Tasks with MS Project
Team One
• Manage the other teams
• Do a post mortem
– Identify the benefits of a team
approach
– Identify the issues encountered
– Characterize your team
Team Two - At normal rate
• In how many days can the job be
completed?
• What bid will yield a 10% pre tax
profit?
• To reduce risk, what are the key
tasks to watch?
Team Three - At the fastest time:
• In how many days can the job be
completed
• What bid will yield a 10% pre tax
profit?
• To reduce risk, what are the key tasks
to watch?
Team four • If cost is not a consideration, what
else can be done to shorten the
project?
• Address real world issues
Deliverables
short written reposts
•
•
•
Team One - Reality of managing this project
Teams Two and Three - MS Project based appropriate network
diagrams for each time scenario identifying:
– Key events
– Dependencies
– Cost estimates for each time scenario
Team Four
– Using team one and two's analysis, provide a list of alternatives for:
• Shortening the project if cost is not an object
• Further reducing costs
– Address the real world issues
FAQs
• Yes, you will work in teams
• Yes, this is a project within a project
•
•
• Others?
Petersen General Contractors
Case 8-1
the book answer
At a Normal Rate
• Time
– The critical path, a a-f-h-i-v-k-cc-ee = 224 days
– Next longest path is a-b-c-l-n-m-p-q-r-s-u-ee = 200 days
At a Normal Rate
$500
Direct
cost are
50%
Costs
– Total direct costs = $364,050
• Direct labor = $206,280
• Direct material = $157,770
– + Indirect costs @ 65% of direct cost = $600,682.50
– + Contingency @ 15% of direct plus indirect cost =
$690,784.87
– + Bid with 10% profit = $759,863.35
Shortest Possible Time
same path new time
29
25
4
25
4
30
• Time
– The critical path, a a-f-h-i-v-k-cc-ee = 191 days
– Second critical path is a-b-c-l-n-m-p-q-r-s-u-ee = 191 days
3
14
Shortest Possible Time
same path new time, new cost
Time is money
Costs
– Total direct costs = $383,813.20
• Direct labor = $226,043.20
– Activities on the critical path increase = $16,320
– Activities on the second critical path = $3443.20
• Direct material = $157,770
– + Indirect costs and contingency = $728,285.54
– + Bid with 10% profit = $801,114.10
(plus $41,250.25 for 35 days)
What to Supervise More Carefully
•
•
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•
•
Near critical paths
Areas of new technology or technique
New staff
High risk items
Any “high visibility” items
Others
Glass, china and reputation are easily broken
And never well mended.
Ben Franklin
If “Shortest” is Still Too Long
• Sub contract sub assemblies
• Buy a tower and transport it
• Others?
Think out of the box
Some Leading Authors
Idea-Based Leadership
Yes
No
• Ensure the presence and
respect for idea practitioners
• Set forth an idea strategy in a
idea-friendly culture
• Be open to ideas and the
people who suggest them
• Reward the practitioners
• Signal the importance of ideas
How does your organization rate and why
Source: What’s the Bid Idea
Thomas Davenport, and
Laurence Prusak with
H. James Wilson
Breaking Through to Innovation
• Technology = arrangement of objects, ideas and people to accomplish
a goal
• Technology brokering = exploiting existing technologies to create
new ones
• Innovation is not breaking free of the past; it is harnessing the past in
new ways
Your
perspective
and
knowledge
Others
perspective
and
knowledge
Source:
How Breakthroughs Happen
Andrew Hargadon
Deep
Shallow
Depth
The Balancing Act
New Ideas
Actionable
Dogma
Networking
Jack of all trades
Master of none
Inside
Outside
Source:
How Breakthroughs Happen
Andrew Hargadon
Breath
"Knowledge" is both the raw material for innovation and
"comfort" that inhibit seeking new opportunities outside of your comfort zone.
The Rules
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Never forget the future is already here.
Analogy trumps invention
Find your discomfort zone
Divided we innovate.
Bridge to your strengths
Build to your weakness
Build teams
As goes the individual, so goes the organization
Source:
Rip, mix and burn
How Breakthroughs Happen
Andrew Hargadon
Efficiency – Innovation
Dichotomy
Efficiency
Stay in
Business
Innovation
Today’s Business
Climate
Source:
Creating the Innovation Culture
Frances Hribe
Honoring the Dissenters Foster
Innovation
• Dissenters offer new ideas
• Force others to challenge their assumptions
• Dissent can:
– Kill wrong or out of date ideas
– Tap into peoples tacit (gut) knowledge
– Break you out of a think rut
SOW
Source:
Creating the Innovation Culture
Frances Hribe
How to Kill Dissent (Innovation)
Without Really Trying
• Best practices – make the status quo better
• Treat everybody equally – no one is a
valuable resource who's ideas count
• Hire a mini me – all run down the same
train of thought
• Design a process for innovation –
oxymoronic?
Source:
Creating the Innovation Culture
Frances Hribe
How to Foster Innovation
•
•
•
•
•
Speak last in meetings
Seek out dissenter’s view
Protect the dissenter
Help dissenter be heard
Challenge the Status Quo
Source:
Creating the Innovation Culture
Frances Hribe
80 /20 and You
19th Century – Vilfredo Pareto
• A small minority
(20%) account for a
majority (80%) of the
wealth
20th Century – Joseph Juran
• Solving quality
problems depends on
differentiation the vital
few cause from the
trivial many.
Every job should leverage your 20% genius 80% of the time
Source:
Richard Koch
80/20 Individual
Out of the Box Thinking
Problems Looking for a Solution
•If resources were no object
•Walk in the others shoes
•Budgets and Schedules
•Self Interest
•Silos and Turf
•Good Enough
Solutions Looking for a Problem
•Where else would it fit
•Do it the opposite way
Source:
Why Not
Bary Nalebuff and Ian Ayres
Selling your Ideas
•
•
•
•
Elevator pitch
KISS – keep is similar silly
Know to whom to pitch
Make it their idea
Source:
Why Not
Bary Nalebuff and Ian Ayres
The Capability to Innovate
•
•
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•
Process
People
Strategy and Customers
Technology
Measures and Performance
Source: 24/7 Innovation
Stephen M. Shapiro
Process
The “re’s”
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•
Rethink
Reconfigure
Re-sequence
Relocate
Reduce
Reassign
Retool
Phrase Problems in Ways They
Can Be Solved…
•
•
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•
How to…………. (H2)
How might……….. (HM)
In what ways might…….(IWWM)
What might………….(WM)
Do it globally
Source: Dave Labno
Innovation Consultant
Slides not Used
Who Moved My
Cheese
Source:
Spencer Johnson
Who Moved My Cheese
What would
you do if you
weren’t
afraid?
We all approach EC
Change Differently
• Sniff – Sniffs out the situation and sees
early
• Scurry – Goes into action immediately
• Hem – Does not want to deal with change
and stays in familiar territory
• Haw - Sees what he is doing is wrong,
laughs at himself, and finally changes
Haw’s Writing on the Wall
• Change happens, they keep moving the cheese
• Anticipate change – get ready for the cheese to
move
• Monitor change – smell the cheese often
• Adapt to change quickly
• Enjoy change – savor the adventure
• Be ready to change quickly and enjoy it again.
They keep moving the cheese
Known
Hidden
Tell
Open
Unknown
Ask
Know to Self
The Johari Window
Unknown
Unknown
Blind
Known
Known to Others
Pareto – Yesterday and Today
Managerial Capitalism
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Individualism
Corporations created wealth
Jobs are repetitive & labor
intensive
Managers – Theory X
Shareholders consume wealth
•
•
Capital is king
Centralized planning yields
strategic goals
Economies of scale and mass
production
Mangers are focus of power
•
•
•
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•
Individuals create wealth
Few employees &creative
imagination
Coaches - Theory Y and Z
Venture capitalist and
entrepreneurs share the wealth
Creativity is critical element
Agility & contractual relationships
Mass customization
Companies reunite ownership and
control
Source:
Richard Koch
80/20 Individual
Customer Strategies
•
•
•
•
Add more value
Listen
Serve
Hire
Creating a Culture of Innovation
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•
•
•
Envision
Enable
Explode
“EmpowerTool”
Technology and Innovation
•
•
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•
•
Create a virtual enterprise
Change the rules of the game
Collaborate across the value chain
Increase the knowledge of employees
Launch new businesses
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Alliance Based
Capability Bases
Process Dominated
Process Driven
Process Sensitive
Functionally Bound
Stages
Getting There