PROJECT MANAGEMENT
Objectives:
By the end of the chapter the student should be able to:
(i) Define the term project
(ii) Explain the project management activities
(iii) Draw a project network diagram
(iv) Draw a project Gantt chart
Introduction
A project is an interrelated set of activities with a definite starting and ending point, which results in a unique
outcome for a specific allocation of resources. The complexity of the project will increase with the size and
number of activities within the project. Extensive planning and co-ordination activities are required for larger projects
to ensure that the project aims are met. Examples of projects include installing an IT system, building a bridge or
introducing a new service or product to the market.
Project Management Activities
The project management processincludesthe following main elements:
(i) Feasibility Analysis: Thisstep involves evaluating the expected cost of resources needed to execute the
project and compare these to expected benefits. At the start of the project a plan of the resources
required to undertake the project activities is constructed. If there is a limit on the amount of resources
available then the project completion date may have to be set to ensure the resources are not overloaded.
This is a resource-constrained approach. Alternatively the need to complete the project by a specific
date may take precedence. In this case an alternative source of resources may have to be found, using
sub- contractorsfor example, to ensure timely project completion. Thisis called a time-constrained
approach.
(ii) Plan: Thisstage estimatesthe amount and timing of resources needed to achieve the project objectives.
The project management method uses a systems approach to dealing with a complex task in that the
components of the project are broken down repeatedly into smaller tasks until a manageable chunk is
defined. Each task is given its own cost, time and quality objectives. It is then essential that
responsibility is assigned to achieving these objectives for each particular task. This procedure should
produce a work breakdown structure (WBS) which shows the hierarchical relationship between the
project tasks.
(iii) Control: This stage involves the monitoring the progress of the project as it executes over time. This
is important so that any deviationsfrom the plan can be addressed before it istoo near the project
completion date to take corrective action. The point at which the project progressis assessed istermed a
Milestone. The two main methods of reporting the progress of a project are by written reports and
verbally at meetings of the project team. It isimportant that a formalstatement of progressis made in
written form, preferably in a standard report format, to ensure that everyone is aware of the current
projectsituation. Thisis particularly important when changesto specificationsaremadeduringthe
project.Inordertofacilitatetwo-waycommunicationbetweenteammembersandteam management,
regularmeetingsshould be arranged by the projectmanager.Thesemeetings canincrease the commitment
ofteam members by allowing discussion of points ofinterest and dissemination ofinformation on how
each team‟s effort is contributing to the overall progression of the project.
Network Analysis
Network analysis/Project Evaluation and Review Technique (PERT) is a method to analyze the
involved tasks in completing a given project, especially the time needed to complete each task,
and to identify the minimum time needed to complete the total project. PERT was developed
primarily to simplify the planning and scheduling of large and complex projects. It was
developed for the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy’s Polaris
nuclear submarine project. It was able to incorporate uncertainty by making it possible to
schedule a project while not knowing precisely the details and durations of all the activities. It is
more of an event-oriented technique rather than start- and completion-oriented, and is used more
in projects where time is the major factor rather than cost. It is applied to very large-scale, onetime, complex, non-routine infrastructure and Research and Development projects
Terminology
PERT event: a point that marks the start or completion of one or more activities. It
consumes no time and uses no resources. When it marks the completion of one or more
activities, it is not “reached” (does not occur) until all of the activities leading to that event
have been completed.
predecessor event: an event that immediately precedes some other event without any other
events intervening. An event can have multiple predecessor events and can be the
predecessor of multiple events.
successor event: an event that immediately follows some other event without any other
intervening events. An event can have multiple successor events and can be the successor of
multiple events.
PERT activity: the actual performance of a task which consumes time and requires
resources (such as labor, materials, space, machinery). It can be understood as representing
the time, effort, and resources required to move from one event to another. A PERT activity
cannot be performed until the predecessor event has occurred.
PERT sub-activity: a PERT activity can be further decomposed into a set of sub-activities.
For example, activity A1 can be decomposed into A1.1, A1.2 and A1.3 for example. Subactivities have all the properties of activities, in particular a sub-activity has predecessor or
successor events just like an activity. A sub-activity can be decomposed again into finergrained sub-activities.
optimistic time (O): the minimum possible time required to accomplish a task, assuming
everything proceeds better than is normally expected
pessimistic time (P): the maximum possible time required to accomplish a task, assuming
everything goes wrong (but excluding major catastrophes).
most likely time (M): the best estimate of the time required to accomplish a task, assuming
everything proceeds as normal.
expected time (TE): the best estimate of the time required to accomplish a task, accounting
for the fact that things don’t always proceed as normal (the implication being that the
expected time is the average time the task would require if the task were repeated on a
number of occasions over an extended period of time).
TE = (O + 4M + P) ÷ 6
float or slack is a measure of the excess time and resources available to complete a task. It is
the amount of time that a project task can be delayed without causing a delay in any
subsequent tasks (free float) or the whole project (total float). Positive slack would
indicate ahead of schedule; negative slack would indicate behind schedule; and zero slack
would indicate on schedule.
critical path: the longest possible continuous pathway taken from the initial event to the
terminal event. It determines the total calendar time required for the project; and, therefore,
any time delays along the critical path will delay the reaching of the terminal event by at
least the same amount.
critical activity: An activity that has total float equal to zero. An activity with zero float is
not necessarily on the critical path since its path may not be the longest.
Lead time: the time by which a predecessor event must be completed in order to allow
sufficient time for the activities that must elapse before a specific PERT event reaches
completion.
lag time: the earliest time by which a successor event can follow a specific PERT event.
fast tracking: performing more critical activities in parallel
crashing critical path: Shortening duration of critical activities
Network analysis involves the following steps:
(i) Identifying project activities
(ii) Estimating activity durations
(iii) Identifying activity relationships
(iv) Drawing the network diagram
Identifying Project Activities
In orderto undertake network analysisit is necessary to break down the project into a number of identifiable activities
or tasks. This enables individuals to be assigned responsibility to particular tasks which have a well-defined start
and finish time. Financial and resource planning can also be conducted at the task level and co-ordinated by the
project manager who must ensure that each task manager is working to the overall project objectives and not
maximising the performance of particular task at the expense of the whole project. Activities consume time and/or
resources. The first stage in planning a project is to break down the project into a number of identifiable activities with
a start and end. Performance objectives of time, cost and quality can be associated with each activity. The project is
broken down into these tasks using a work breakdown structure. This is a hierarchical tree structure which shows the
relationship between the tasks as they are further sub-divided at each level.
Identifying Project Activities
In orderto undertake network analysisit is necessary to break down the project into a number of identifiable activities
or tasks. This enables individuals to be assigned responsibility to particular tasks which have a well-defined start
and finish time. Financial and resource planning can also be conducted at the task level and coordinated by the
project manager who must ensure that each task manager is working to the overall project objectives and not
maximising the performance of particular task at the expense of the whole project. Activities consume time and/or
resources. The first stage in planning a project is to break down the project into a number of identifiable activities with
a start and end. Performance objectives of time, cost and quality can be associated with each activity. The project is
broken down into these tasks using a work breakdown structure. This is a hierarchical tree structure which shows the
relationship between the tasks as they are further sub-divided at each level.
Estimating Activity Durations
The next stage is to retrieve information concerning the duration of the tasks involved in the project. he can be
collated from a number ofsources,such as documentation, observation, interviewing etc. Obviously the accuracy of
the project plan will depend on the accuracy of these estimates. There is a trade-off between the cost of
collecting information on task duration‟sand the cost of aninaccurate project plan.
Identifying Activity Relationships
It is necessary to identify any relationships between tasks in the project. For instance a particular task may not be able
to begin until another task has finished. Thus the task waiting to begin is dependent on the former task. Other tasks
may not have a dependent relationship and can thus occur simultaneously. Critical path diagrams are used
extensively to show the activities undertaken during a project and the dependencies between these activities. Thus
it is easy to see that activity C for example can only take place when activity A and activity B has completed. Once a
network diagram has been constructed it is possible to follow a sequence of activities, called a path, through the
network from start to end. The length of time it takes to follow the path is the sum of all the durations of activities on
that path. The path with the longest duration gives the project completion time. This is called the critical path
because any change in duration in any activities on this path will cause the whole project duration to either become
shorter or longer. Activities not on the critical path will have a certain amount of slack time in which the activity
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can be delayed or the duration lengthened and not affect the overall project duration. The amount of slack is a
function of the difference between the path duration the activity is on and the critical path duration. By definition
all activities on the critical path have zero slack. It is important to note that there must be at least one critical path for
each network and there may be several.
Drawing the Network Diagram
For the activity-on-node notation each activity task is represented by a node with the following format. hus a
completed network will consist of a number of nodes connected by lines, one for each task, between a start and end
node.
Calculating the Earliest Start/Finish times (forward pass): From the duration of each task and the
dependency relationship between the tasks it is possible to estimate the earliest start and finish time for each task as
follows. You move left to right along the network, forward through time.
1. Assume the start (i.e. first) task begins at time = 0.
2. Calculate the earliest finish time where: EarliestFinish=Earliest Start + Duration
3. Calculate the earliest start time of the next task where:-EarliestStart=EarliestFinishoftaskimmediately before: If
there is more than one task immediately before take the task with the latest finish time to calculate the earliest
start time forthe current task.
4. Repeat steps 2 and 3 for all tasks
Calculating the Latest Start/Finish times (backward pass): It is now possible to estimate the latest start and
finish time for each task as follows. You move right to left along the network, backward through time.
1. Assume the end (i.e. last) task end time is the earliest finish time (unless the project end time is given).
2. Calculate the latest start time where:- Latest Start = Latest Finish – Duration
3. Calculate the latest finish time ofthe previoustask where: Latest Finish = Latest Start oftask immediately after. If
there ismore than one task immediately aftertake the task with the earlieststart time to calculate the latestfinish
time forthe currenttask.
4. Repeat steps 2 and 3 for all tasks
Calculating the slack/float times: The slack or float value is the difference between the earliest start and latest
start (or earliest finish and latest finish) times for each task.Tocalculate the slack time
1. Slack = Latest Start – Earliest Start OR Slack = Latest Finish – Earliest Finish
2. Repeat step 1 for all tasks.
Identifying the Critical Path: Any tasks with a slack time of 0 must obviously be undertaken on schedule at the
earliest start time. The critical path is the pathway connecting all the nodes with a zero slack time. There must be at
least one critical path through the network, but there can be more than one. The significance of the critical path is
that if any node on the path finishes later than the earliest finish time, the overall network time will increase by the
same amount, putting the project behind schedule. Thus any planning and control activitiesshould focus on ensuring
tasks on the critical path remain within schedule.
Example:
Consider a small project that involves the following activities.
By simple enumeration one finds that the critical path is A-C-D.
CP =A-C-D and the mean critical path duration is dcp = 6 + 14 + 4 = 24.
Gantt charts
Although network diagrams are ideal for showing the relationship between project tasks, they do not provide a clear
view of which tasks are being undertaken over time and particularly how many tasks may be undertaken in parallel at
any one time. The Gantt chart provides an overview for the Project Manager to allow them to monitor project
progress against planned progress and so provides a valuable information source for project control. A Gantt
chart is a type of bar chart, developed by Henry Gantt in the 1910s, that illustrates a project
schedule. Gantt charts illustrate the start and finish dates of the terminal elements and
summary elements of a project. Terminal elements and summary elements comprise the work
breakdown structure of the project.
To draw a Gantt Chart manually undertake the following steps:
– Draw a grid with the tasks along the vertical axis and the time-scale (up to the project duration) along
the horizontal axis.
– Draw a horizontal bar acrossfrom the task identifier along the left of the chartstarting at the earliest
start time and ending at the earliest finish time.
– Indicate the slack amount by drawing a line from the earliest finish time to the latest finish time.
Example
The following activities relate to a particular project
Review questions
1. Define the term project
2. Explain the three main project activities
3. Explain the origin of network analysis
4. Describe the process of drawing a project network
5. Discuss the process of drawing a Gantt chart
References
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Fitzsimmons,J.A. andFitzsimmons,M.J.(2008) Service Management:Operations, Strategy and
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Slack, N. and Lewis, M. (2011) Operations Strategy, 3
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Harlow.
Suri, R. (2010) It’s About Time: he Competitive Advantage of Quick Response
Manufacturing,ProductivityPress,NewYork.
Vonderembse, M.A. and White, G.P. (2004) Core Concepts of Operations Management, John
WileyandSonsLtd.,Chichester.