Project Management Strategies and Techniques

Sizing Capacity Cushions

Capacity cushion is the amount of reserve capacity a process uses to handle sudden increases in demand or temporary losses of production capacity.

Capacity cushion = 100% - average utilization rate (%)

Timing and Sizing Expansion

Expansionist Strategy: Timing and sizing of expansion are related if demand is increasing and the time between increments increase

Wait-and-See Strategy: The conservative wait strategy is to expand in smaller increments, such as renovating existing facilities.

Combination of Strategies

Project

An interrelated set of activities with a definite starting and ending point, which results in a unique outcome from a specific allocation of resources.

The Three Main Goals

Complete the project on time, Do not exceed the budget, Meet the specifications to the satisfaction of the customer

Define the Project Objective Statement

Is the time frame and allocated resources in a project

Scope: Is the statement of project objectives that shows the desire project outcomes

Time Frame and Resources

Organization Project

Understanding of a project organization and how people work together

Project Life Cycle

Definition, planning, execution, and close out

Project Management

Systematized, phased approach to defining, organizing, planning, monitoring, and controlling projects.

Process Structure Is the resources needed and how they are split between them. Customer contact: extent to which the customer is involved.

There Are Five Steps to Planning Projects

Defining the work breakdown structure. Diagramming the network. Developing the schedule. Analyzing the cost-time trade-offs. Assessing risks

A Work Breakdown Structure Is

Statement of all work that has to be completed. An activity is the smallest unit of work effort consuming both time and resources that the project manager can schedule and control. Each activity must have an owner who is responsible for doing the work.

Diagramming the Network

Is a network planning method, design to depict the relation between activities that consist of nodes and arcs. Precedence relationships determine a sequence for undertaking activities, and specify that any given activity cannot start until a preceding activity has been completed. In the activity-on-node (AON) approach, nodes represent activities and arcs represent the relationships between activities.

Developing the Project

Estimate the completion time of a project by finding the critical path identify the start and finish time for each activity.

Developing the Schedule

Calculate the amount of slack time for each activity

The project team must make time estimates for each activity.

Activity Times May Be Risky, in which case a probability distribution can be used.

For this project the times will be certain.

The Critical Path Is the path that takes the longest time to complete.

Activity Slack Is the maximum length of time that an activity can be delayed without delaying the entire project.

Activities on the Critical Path Have zero slack and cannot be delayed without delaying the project completion

The Project Schedule Specifies start and finish times for each activity.

Earliest Start Time (ES) is the earliest finish time of the immediately preceding activities.

Earliest Finish Time (EF) is an activity’s earliest start time plus its estimated duration.  EF = ES + t

Latest Start Time (LS) is the latest finish time minus the activity’s estimated duration.

Latest Finish Time (LF) is the latest start time of the activities that immediately follow.  LS = LF – t

For simplicity, all projects start at time zero.

There Are Always Cost-Time Trade-Offs in project management.

You can complete a project early by hiring more workers or running extra shifts.

There Are Often Penalties if projects extend beyond some specific date, and a bonus may be provided for early completion.

Crashing a Project Means expediting some activities to reduce overall project completion time and total project costs.

The Total Project Costs Are the sum of direct costs, indirect costs, and penalty costs.

Direct Costs Include labor, materials, and any other costs directly related to project activities.

Indirect Costs Include administration, depreciation, financial, and other variable overhead costs that can be avoided by reducing total project time.

The Shorter the Duration of the Project, the lower the indirect costs will be.