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
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
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.
(Also known as float time )
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Project Management Definitions
• More key PM terms:
– Crashing: Shifting resources to reduce slack time so the critical
path is as short as possible. Always raises project costs and is
typically disruptive – a project should be crashed with caution.
– Dummy activity: An imaginary activity with no duration, used
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
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
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: Links between project tasks. There are 3
types of dependencies:
– Causal, where 1 task must be completed before another can
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
(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: 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: a work breakdown structure (WBS) is a
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
completed, given the planned amount of material,
labor and equipment.
– Effort: The amount (not duration) of work required to
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
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
– Resources 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" 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,
rescheduled 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) – introduced by
US military in 1958
• 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)
• Industry 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 – task relationships are clear – good snapshot
7
Buy Edging
3
Buy Trees
1
Start
Mark Utilities
2
5
Dig Holes
Plant Trees
6
Plant Flowers
4
8
Install Edging
Finish
Created using RF Flow or Visio
Buy Flowers
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An Example of a Logical Sequence
Tabular – including time and cost data
Normal Time
(Days)
Crashed Time
(Days)
Normal Cost
($)
Crashed Cost
($)
Mark Utilities
3
3
0
0
Dig Holes
2
1
100
200
Buy Trees
.5
.5
50
50
Buy Flowers
.5
.5
50
50
Plant Trees
2
1
100
200
Plant Flowers
1
.5
50
100
Buy Edging
.5
.5
25
25
Install Edging
1
.5
25
50
10
6
400
675
Task Name
TOTALS
NOTE: Shaded areas are concurrent tasks that are completed along the
timeline- they contribute to overall cost but not overall duration
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PERT and CPM – The Basics
• PERT
– 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
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)
• Preferred choice in Social & Behavioral Sciences
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PERT and CPM – The Basics
• CPM
– 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
• 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 – The Basics
• PERT and CPM can be used Together
– Provides benefits of each
• 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 – The Basics
• Valuable planning tools but:
– 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
70% 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:
Prentice-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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