Project Management
THE MANAGERIAL PROCESS
Clifford F. Gray
Eric W. Larson
Third Edition
Chapter 6
Developing a Project Plan
Copyright © 2006 The McGraw-Hill Companies. All rights reserved.
PowerPoint Presentation by Charlie Cook
2
Useful Abbreviations
• CPM - Critical Path Method
• PERT - Program Evaluation and Review
Technique
3
Background
• Schedule is the conversion of a project action
plan into an operating timetable
• Basis for monitoring a project
• One of the major project management tools
• Work changes daily, so a detailed plan is
essential
• Not all project activities need to be scheduled at
the same level of detail
4
Background Continued
• Most of the scheduling is at the WBS level, not
the work package level
• Only the most critical work packages may be
shown on the schedule
• Most of the scheduling is based on network
drawings
5
Network Scheduling Advantage
• Consistent framework
• Shows interdependences
• Shows when resources are needed
• Ensures proper communication
• Determines expected completion date
• Identifies critical activities
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Network Scheduling Advantage Continued
• Shows which of the activities can be delayed
• Determines start dates
• Shows which task must be coordinated
• Shows which task can be run parallel
• Relieves some conflict
• Allows probabilistic estimates
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Network Scheduling Techniques: PERT
(ADM) and CPM (PDM)
• PERT was developed for the Polaris
missile/submarine project in 1958
• CPM developed by DuPont during the same time
• Initially, CPM and PERT were two different
approaches
–CPM used deterministic time estimates and
allowed project crunching
–PERT used probabilistic time estimates
• Microsoft Project (and others) have blended
CPM and PERT into one approach
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Developing the Project Plan
• The Project Network
–A flow chart that graphically depicts the
sequence, interdependencies, and start and
finish times of the project job plan of activities
that is the critical path through the network.
• Provides the basis for scheduling labor and
equipment.
• Enhances communication among project
participants.
• Provides an estimate of the project’s
duration.
• Provides a basis for budgeting cash flow.
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From Work Package to Network
WBS/Work Packages to Network
FIGURE
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From Work Package to Network (cont’d)
WBS/Work Packages to Network (cont’d)
FIGURE 6.1
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Constructing a Project Network
• Terminology
–Activity: an element of the project that requires
time.
A
–Merge Activity: an activity that has two or more
preceding activities on which it depends.
B
D
–Parallel (Concurrent) Activities: Activities that
can occur independently and, if desired, not at
the same time.
C
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Constructing a Project Network (cont’d)
• Terminology
–Path: a sequence of connected, dependent
activities.
–Critical path: the longest path through the
activity network that allows for the completion
of all project-related activities; the shortest
expected time in which the entire project can
be completed. Delays on the critical path will
C
delay completion
of the entire project.
A
B
(Assumes that minimum of A + B >
D
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Constructing a Project Network (cont’d)
• Terminology
–Event: a point in time when an activity is
started or completed. It does not consume
time.
–Burst Activity: an activity that has more than
one activity immediately following it (more than
B
one dependency arrow flowing from it).
• Two Approaches
C
A
–Activity-on-Node (AON)
• Uses a node to depict an activity.
D
–Activity-on-Arrow (AOA)
• Uses an arrow to depict an activity.
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Basic Rules to Follow in Developing
Project Networks
• Networks typically flow from left to right.
• An activity cannot begin until all of its activities
are complete.
• Arrows indicate precedence and flow and can
cross over each other.
• Identify each activity with a unique number; this
number must be greater than its predecessors.
• Looping is not allowed.
• Conditional statements are not allowed.
• Use common start and stop nodes.
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Activity-on-Node Fundamentals
FIGURE
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Activity-on-Node Fundamentals (cont’d)
FIGURE 6.2
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Network Information
TABLE
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Koll Business Center—Partial Network
FIGURE
19
Koll Business Center—Complete Network
FIGURE
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Constructing Expected Time Estimates
Table 8-1
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The AON Network from the previous table
Figure 8-
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Calculating Activity Times
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The Results
Table 8-2
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'Normal' Practice in the planning phase
• We identify the tasks in the Project and specify
the resources needed for each one
• We allocate to each task sufficient time that we
are confident will allow it to be completed with
those resources. That is, the time the task should
take on average, plus some contingency to give
us the confidence we seek
• We apply task dependencies, and work out the
longest path of tasks in the Project
• The time along this path is the time-line of the
Project
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Normal practice in the execution phase
• As long as every task completes on time (within
its contingency), its successors will be started on
time
• As soon as any task finishes late (outside its
contingency), its successors will start late, and
this normally means they will finish late
• In order to rescue a Project which shows any
lateness, we have to squeeze the remaining
tasks in the Project
• Typically we have to compromise on time, cost or
scope and reschedule
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The Estimating Dilemma
• If I allow more time for every task in the plan,
each task is less likely to be late, but the Project
end date will be later...
• If I allow less time, the end date will be earlier,
but the Project is more likely to overrun
• BUT I have to deliver the Project on time
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How long should we allow in the plan for a
task ?
• Some staff work more quickly than others
• Sometimes staff are distracted or interrupted
• Sometimes necessary resources are delayed
• Some staff are risk-averse in their commitments
• Some organisations reinforce risk-aversion
•
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How long do we allow in the plan for a task
?
• The average time the task ought to take an
average performer who focuses on it
• PLUS The time we expect to be spent on
distractions
• PLUS A contingency time to take account of:
•
The spread between average and low
performers
•
Our uncertainty in the average time
•
Our uncertainty in the time for distractions
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Some simple math
• If we set our estimates so that we are 90% sure
that any one task will be completed on time
• If we have 20 tasks in our Project
• The Probability that all the tasks
• will be on time is: 0.920 = 12%
• For 50 tasks, the Probability of all on time is:
0.950 = 1%
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Emphasising
• Doing things by the text-book, with 20 tasks,
each of which we are 90% sure will complete on
time, we have an 88% probability of being late
for the Project
• With 50 tasks, its a lot worse: its a 99%
probability of being late for the Project
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What if we change our estimating to a 95%
confidence level ?
• NB This will inflate the time for every task maybe
by 25 - 50% because we will need more
contingency
• For 20 tasks the probability of being late is now
64% (was 88%)
• For 50 tasks we are late now 92% (was 99%)
We have very much extended our Project time-line, and
increased our chances of success from 12% to 36% for the
small Project, and from 1% to 8% for the large Project
We’ll look at a way to address this problem later today…
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Scheduling the network in time
• Once we’ve calculated the Expected Time (Te)
for each task, we can create a preliminary
schedule
• We’ll do this in two passes: Forward and
backward
• Both passes take into account tasks that have
multiple predecessors (merge tasks) or that
generate multiple tasks (burst tasks)
• Each of the two passes answers slightly different
questions
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Network Computation Process
• Forward Pass—Earliest Times
–How soon can the activity start? (early start—
ES)
–How soon can the activity finish? (early
finish—EF)
–How soon can the project finish? (expected
time—ET)
• Backward Pass—Latest Times
–How late can the activity start? (late start—LS)
–How late can the activity finish? (late finish—
LF)
–Which activities represent the critical path?
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Forward Pass Computation
• Add activity times along each path in the network
(ES + Duration = EF).
• Carry the early finish (EF) to the next activity
where it becomes its early start (ES) unless…
• The next succeeding activity is a merge activity,
in which case the largest EF of all preceding
activities is selected.
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Network Information
TABLE
36
Activity-on-Node Network
FIGURE
37
Activity-on-Node Network Forward Pass
FIGURE
38
Backward Pass Computation
• Subtract activity times along each path in the
network (LF - Duration = LS).
• Carry the late start (LS) to the next activity where
it becomes its late finish (LF) unless
• The next succeeding activity is a burst activity, in
which case the smallest LF of all preceding
activities is selected.
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Activity-on-Node Network Backward Pass
FIGURE
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Determining Slack (or Float)
• Slack (or Float)
–The amount of time an activity can be delayed
after the start of a longer parallel activity or
activities.
• Total slack
–The amount of time an activity can be delayed
without delaying the entire project.
• The critical path is the network path(s) that has
(have) the least slack in common.
• Slack for a task = Late Start - Early Start (LS-ES)
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Activity-on-Node Network with Slack
FIGURE
42
Practical Considerations
• Network Logic Errors
• Activity Numbering
• Use of Computers to Develop Networks
• Calendar Dates
• Multiple Starts and Multiple Projects
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Illogical Loop
FIGURE
44
Hammock Activities
• Hammock Activity
–An activity that spans over a segment of a
project.
–Duration of hammock activities is determined
after the network plan is drawn.
–Hammock activities are used to aggregate
sections of the project to facilitate getting the
right amount of detail for specific sections of a
project.
45
Hammock Activity Example
FIGURE
46
Extended Network Techniques
to Come Close to Reality
• Laddering
–Activities are broken into segments so the
following activity can begin sooner and not
delay the work.
• Lags
–The minimum amount of time a dependent
activity must be delayed to begin or end.
• Lengthy activities are broken down to
reduce the delay in the start of successor
activities.
• Lags can be used to constrain finish-tostart, start-to-start, finish-to-finish, start-to-
47
Example of Laddering Using
Finish-to-Start Relationship
FIGURE
48
Use of Lags
Finish-to-Start Relationship
Start-to-Start Relationship
FIGURE
6.13
FIGURE
49
Use of Lags Cont’d
Use of Lags to Reduce Detail
FIGURE
50
New Product Development Process
FIGURE
51
Use of Lags (cont’d)
Finish-to-Finish
Relationship
Start-to-Finish
Relationship
Combination
Relationship
FIGURE
6.17
FIGURE
6.18
FIGURE
6.19
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Network Using Lags
FIGURE
53
Introduction to Critical Chain planning
• We can reduce variability, but we cannot
eliminate it, because it is inherent to the nature of
a Project
We must manage the variability that remains
54
How we handle variability in Critical Chain
• We do not build in any contingency at the Task
level
• We move all the contingency to the Project level
- we call this the Completion Buffer
Individual Tasks can now be late without affecting the
completion date of the Project
The Project due date is protected as long as
the accumulated lateness along any one
chain is less than the completion buffer
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What difference does this make to our
probability of being late ?
• Under 'normal' practice, if any task is later than
its contingency allows, we have a problem
• Under Critical Chain, we only have a problem if
the total lateness exceeds the total contingency
• This second condition is much less likely than
the first [ Law of averages / Central limit theorem]
and increasingly so as the number of tasks
increases
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The Completion Buffer
• A Buffer is a block of time which protects a
deliverable from being affected by delays
upstream. The Completion Buffer protects the
Project completion date
• Over the course of the Project we expect our
buffers to be used up, in proportion to progress
made
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Scarcity of Resources
• In putting together the plan, we must take into
account scarcity of resources
• In particular, if two tasks want exclusive use of
the same resource, at the same time, they have
to be staggered
• This affects the plan in a similar way to the task
dependencies
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Scarcity of Resources
Task C depends on both A and B
Each task uses a different resource
Task A – 10 d
Task C – 10 d
Task B – 10 d
Project Time required - 20 d
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Scarcity of Resources
Task C depends on both A and B,
Both A and B need exclusive use of the same resource
Task A – 10 d
Resource conflict
Task C – 10 d
Task B – 10 d
Project Time required - 30 d
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The Critical Chain
• We identify the longest chain of dependent tasks
by resource through the Project - this is the
Critical Chain, at the end we place the
Completion Buffer
The time taken to complete the
Project is the time taken to complete
the Critical Chain
Any delay in the Critical Chain delays
the Project completion
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Completion Buffer
Task A
Completion Buffer
Task C
Task B
Committed end d
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In Practice
Task A
Task C
Task B
Project duration held constant
Task A
Completion Buffer
Task C
Task B
The buffer is 25-33% of
chain length
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Feeding Chains
• All the other chains of tasks we call Feeding
Chains , because each one at some point feeds
into the Critical Chain
• Every task in the Project is part of either the
Critical Chain or a Feeding Chain
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Feeding Buffers
• We must not allow anything to delay the Critical
Chain
• We must protect the critical chain from being
delayed by lateness in the Feeding Chains
• We start the feeding chains a little early, and
insert a block of time to decouple the Critical
Chain from each Feeding Chain
• We call these blocks of time Feeding Buffers
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Feeding Buffers
Task A
Completion Buffer
Task C
Task B
FB
Task D
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Planning Phase Summary
• There is no contingency at task level
• The Project due date is protected by the a block
of time called the Completion Buffer
• The Critical Chain is the longest chain of tasks
through the Project
• All other chains of tasks are Feeding Chains
• We place Feeding Buffers to decouple the
Critical Chain from the feeding chains
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Key Terms
Activity
Activity-on-arrow (AOA)
Activity-on-node (AON)
Burst activity
Concurrent engineering
Critical path
Early and late times
Gantt chart
Hammock activity
Lag relationship
Merge activity
Network sensitivity
Parallel activity
Slack/float—total and free
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