pert1.ppt

Project ManagementProject Management

A Short Introduction and A Short Introduction and HistoryHistory

URBS 609 PERT, Unit 1

Urban and Regional Studies Institute Urban and Regional Studies Institute 22

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This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004


Training Module PreviewTraining Module Preview

• This module will provide:This module will provide:– A basic history of Project ManagementA basic history of Project Management– Introduction to key terms Introduction to key terms – Introduction to key conceptsIntroduction to key concepts– Introduction to traditional methodologiesIntroduction to traditional methodologies– Introduction to logical task sequenceIntroduction to logical task sequence

• This module is constructed as the first This module is constructed as the first block in a building block approachblock in a building block approach


What Is Project What Is Project Management?Management?

• Management of Management of resourcesresources & & constraintsconstraints to to meet a goal in as efficient a manner as meet a goal in as efficient a manner as possiblepossible– Resources: Time, money, people, equipmentResources: Time, money, people, equipment– Constraints: preceding task completionConstraints: preceding task completion

• A science or an art? A science or an art? BothBoth– Science: based on statistical means & normsScience: based on statistical means & norms– Art: based on intuition into human behaviorArt: based on intuition into human behavior– Both: balancing the known and unknown to achieve Both: balancing the known and unknown to achieve

a more predictable resulta more predictable result


The Unbroken Thread of The Unbroken Thread of TimeTime

• Project Management (PM) is Project Management (PM) is notnot new new– Used in some form for centuriesUsed in some form for centuries

• Pyramids, sphinx, coliseum – intricate plansPyramids, sphinx, coliseum – intricate plans

• Active management of Active management of resourcesresources to meet a goal to meet a goal

– Value: listing and tracking complex tasksValue: listing and tracking complex tasks– Value: Provides a focus for project Value: Provides a focus for project

communicationcommunication

• Based on a quest for Based on a quest for efficiency efficiency – Arranging tasks and resources for most Arranging tasks and resources for most

efficient and productive resultefficient and productive result


A Philosophy, not a A Philosophy, not a TechniqueTechnique

• PM is a management philosophyPM is a management philosophy– Efficient management yields effective resultsEfficient management yields effective results

• Often mistaken as a techniqueOften mistaken as a technique– PM contains many techniques – flexiblePM contains many techniques – flexible

•Adaptable techniques that are industry specificAdaptable techniques that are industry specific•Techniques work in some industries and not othersTechniques work in some industries and not others

– PM techniques evolve within the philosophyPM techniques evolve within the philosophy

• Many techniques, many tools, Many techniques, many tools, one goalone goal


Project Management Project Management DefinitionsDefinitions

• There are several There are several keykey PM terms PM terms– Critical PathCritical Path: : The longest time path through the task network.The longest time path through the task network. The The

series of tasks (or even a single task) that dictates the calculated finish 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 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 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) to the completion of a project. If shortened, it would shorten the time it takes to complete the project. Activities off the critical path time it takes to complete the project. Activities off the critical path would not affect completion time even if they were done more quickly. would not affect completion time even if they were done more quickly.

– Slack TimeSlack Time:: The amount of time a task can be delayed before the The amount of time a task can be delayed before the project finish date is delayed. Total slack can be positive or negative. If 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 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 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 indicates the amount of time that must be saved so that the project finish date is not delayed. finish date is not delayed. Total Slack = Latest Start - Earliest Start.Total Slack = Latest Start - Earliest Start. By By default and by definition, a task with 0 slack is considered a default and by definition, a task with 0 slack is considered a critical taskcritical task. If a critical task is delayed, the project finish date is also . If a critical task is delayed, the project finish date is also delayed. delayed. (Also known as float time )(Also known as float time )

http://en.wikipedia.org/wiki/Schedule



• More More keykey PM terms: PM terms:– CrashingCrashing: Shifting resources to reduce slack time so the : Shifting resources to reduce slack time so the

critical path is as short as possible. Always raises project critical path is as short as possible. Always raises project costs and is typically disruptive – costs and is typically disruptive – a project should be a project should be crashed with cautioncrashed with caution..

– Dummy activityDummy activity:: An imaginary activity with no duration, An imaginary activity with no duration, used to show either an indirect relationship between 2 used to show either an indirect relationship between 2 tasks or to clarify the identities of the tasks . In CPM, each tasks or to clarify the identities of the tasks . In CPM, each activity must be uniquely defined by its beginning and activity must be uniquely defined by its beginning and ending point. When two activities begin and end at the ending point. When two activities begin and end at the same time, a dummy activity (an activity which begins same time, a dummy activity (an activity which begins and ends at the same time) is inserted into the model to and ends at the same time) is inserted into the model to distinguish the two activities. distinguish the two activities.



•Even more Even more keykey PM terms: PM terms:– Gantt ChartGantt Chart: A bar chart. While visually : A bar chart. While visually

appealing on a task/duration basis, it is limited appealing on a task/duration basis, it is limited because it does not show task or resource because it does not show task or resource relationships well. Strength: easy to maintain and relationships well. Strength: easy to maintain and read.read.

– Network DiagramNetwork Diagram:: A wire diagram, Also known A wire diagram, Also known as a PERT network diagram. A diagram that as a PERT network diagram. A diagram that shows tasks and their relationships. Limited shows tasks and their relationships. Limited because it shows only task relationships. because it shows only task relationships. Strength: easy to read task relationships.Strength: easy to read task relationships.



•Yet more Yet more keykey PM terms: PM terms:• DependenciesDependencies: Links : Links betweenbetween project tasks. There are 3 project tasks. There are 3

types of dependencies:types of dependencies:– CausalCausal, where 1 task must be completed before another can , where 1 task must be completed before another can

begin (have to bake bread before you can make a sandwich)begin (have to bake bread before you can make a sandwich) critical path schedulescritical path schedules are based are based onlyonly on causal on causal

dependencies dependencies – ResourceResource, where a task is limited by availability of resources , where a task is limited by availability of resources

(more bread can be baked by 2 bakers, but only 1 is (more bread can be baked by 2 bakers, but only 1 is available)available)

– Discretionary,Discretionary, optional task sequence preferences that, optional task sequence preferences that, though not required, may reflect organizational preferencesthough not required, may reflect organizational preferences

– MilestoneMilestone:: A A significant task which significant task which represents a key accomplishment within the represents a key accomplishment within the project. Typically requires special attention project. Typically requires special attention and control.and control.



•Yet more Yet more keykey PM terms: PM terms:– WBSWBS: a : a work breakdown structurework breakdown structure ((WBSWBS)) is a is a

detailed, hierarchical (from general to specific) tree detailed, hierarchical (from general to specific) tree structure of deliverables and tasks that need to be structure of deliverables and tasks that need to be performed to complete a project.performed to complete a project.

– The purpose of a WBS is to identify the actual tasks The purpose of a WBS is to identify the actual tasks to be done in a project. WBS serves as the basis for to be done in a project. WBS serves as the basis for much of project planning.much of project planning.

– Work breakdown structure is, perhaps, the most Work breakdown structure is, perhaps, the most common project management tool, it was created common project management tool, it was created by the US military in the 1960s as an extension to by the US military in the 1960s as an extension to PERT. PERT.



•Yet more Yet more keykey PM terms: PM terms:– DurationDuration: The time it takes for an activity to be : The time it takes for an activity to be

completed, given the planned amount of completed, given the planned amount of material, labor and equipment. material, labor and equipment.

– EffortEffort: The amount (not duration) of work : The amount (not duration) of work required to complete a task. Duration may required to complete a task. Duration may decrease by adding resources but the effort decrease by adding resources but the effort required will remain the same.required will remain the same.

– Scope: Scope: A A specificspecific definition of what the project definition of what the project does and does not entail. Critical to managing does and does not entail. Critical to managing expectations of customers and workers alike.expectations of customers and workers alike.


Project Management Project Management DefinitionsDefinitions• Final Final keykey PM terms: PM terms:

– Constraints:Constraints: Restrictions set on the start or finish date of a task. You 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 can specify that a task must start on or finish no later than a particular date. Constraints can be flexible (date. Constraints can be flexible (notnot tied to a specific date) or tied to a specific date) or inflexible (tied to a specific date) inflexible (tied to a specific date)

• Flexible constraintsFlexible constraints such as As Soon As Possible (ASAP) and As Late As such as As Soon As Possible (ASAP) and As Late As Possible (ALAP) do not have specific dates associated with them. Setting 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 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 possible with the task ending before the project finish, given other constraints and task dependencies in the schedule.constraints and task dependencies in the schedule.

• Inflexible constraintsInflexible constraints such as Must Start On (MSO) and Must Finish On such as Must Start On (MSO) and Must Finish On (MFO) require an associated date, which controls the start or finish date of (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 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 take into account external factors, such as the availability of equipment or resources, deadlines, contract milestones, and start and finish dates. resources, deadlines, contract milestones, and start and finish dates.

• There are many more PM Terms, but these are There are many more PM Terms, but these are the basics – it is important to know these the basics – it is important to know these conceptsconcepts


Project Management Project Management AssumptionsAssumptions

• PM makes several PM makes several keykey assumptions assumptions– All tasks have distinct begin and end pointsAll tasks have distinct begin and end points– All estimates can be mathematically derivedAll estimates can be mathematically derived– Tasks must be able to be arranged in a defined Tasks must be able to be arranged in a defined

sequence that produces a pre-defined resultsequence that produces a pre-defined result– Resources may be shifted to meet needResources may be shifted to meet need– Cost and time share a direct relationship (Cost Cost and time share a direct relationship (Cost

of each activity is evenly spread over time)of each activity is evenly spread over time)– Time, of itself, has no valueTime, of itself, has no value

• These assumptions make PM controversialThese assumptions make PM controversial


THETHE PM Concept PM Concept AssumptionAssumption

A Critical Path ExistsA Critical Path Exists• The Key Concept used by CPM/PERT is that a The Key Concept used by CPM/PERT is that a

small set of activities, which make up the small set of activities, which make up the longest longest pathpath through the activity network control the through the activity network control the entire project. If these "entire project. If these "criticalcritical" activities could be " activities could be identified and assigned to responsible persons, identified and assigned to responsible persons, management resources could be optimally used management resources could be optimally used by concentrating on the few activities which by concentrating on the few activities which determine the fate of the entire project. By determine the fate of the entire project. By contrast, non-critical activities can be re-planned, contrast, non-critical activities can be re-planned, rescheduled and resources for them can be rescheduled and resources for them can be reallocated flexibly, without affecting the whole reallocated flexibly, without affecting the whole project. (Wiest, 1974)project. (Wiest, 1974)


The Emergence of The Emergence of Standardized PMStandardized PM

• Organized as a formal Discipline in Organized as a formal Discipline in 19171917– Henry Gantt introduced standardized PM tools Henry Gantt introduced standardized PM tools

•Gantt Chart – visual tracking of tasks and Gantt Chart – visual tracking of tasks and resources resources

•Depiction of Depiction of relationshipsrelationships between tasks between tasks•Depiction of Depiction of constraintsconstraints between tasks between tasks•First Widespread acceptance of a single techniqueFirst Widespread acceptance of a single technique

– Created out of need and frustration as Created out of need and frustration as industrialization became ever more complexindustrialization became ever more complex

• Little change to PM for another Little change to PM for another 40 years40 years


The Birth of PM as We Know The Birth of PM as We Know ItIt• Two main (complementary) techniques within PMTwo main (complementary) techniques within PM

– PERTPERT (Program Evaluation and Review Technique) – (Program Evaluation and Review Technique) – introduced by US military in 1958introduced by US military in 1958• US Navy needed tools to control costs and schedules for US Navy needed tools to control costs and schedules for

Polaris Submarine constructionPolaris Submarine construction– CPM CPM (Critical Path Method) – introduced by US industry in (Critical Path Method) – introduced by US industry in

1958 (DuPont Corporation and Remington-Rand)1958 (DuPont Corporation and Remington-Rand)• Industry needed to control costs and schedules in Industry needed to control costs and schedules in

manufacturingmanufacturing– Common weakness to both: ignores most dependenciesCommon weakness to both: ignores most dependencies

• Considers only completion of a preceding required taskConsiders only completion of a preceding required task

• Both rely on a Both rely on a logical sequencelogical sequence of tasks of tasks– Organized visually (Charts), tabular or simple listsOrganized visually (Charts), tabular or simple lists


An Example of a Logical An Example of a Logical SequenceSequence

Making a simple list of tasksMaking a simple list of tasks• Planting trees with Planting trees with

flowers and edging flowers and edging around them – tasks around them – tasks required to complete required to complete this project:this project:1.1. Mark utilitiesMark utilities2.2. Dig HolesDig Holes3.3. Buy treesBuy trees4.4. Buy flowersBuy flowers5.5. Plant treesPlant trees6.6. Plant flowersPlant flowers7.7. Buy edgingBuy edging8.8. Install edgingInstall edging

• This list does not This list does not reflect time or moneyreflect time or money

• This list does not This list does not reflect task reflect task relationshipsrelationships

• This list is a simple This list is a simple sequence of logical sequence of logical eventsevents

• This list does not This list does not provide an easy provide an easy project “snapshot”project “snapshot”

• Hard to see conflictsHard to see conflicts



Visual Visual - - Using a PERT Chart (Network Using a PERT Chart (Network Diagram)Diagram)

Planting trees with flowers and edging around Planting trees with flowers and edging around themthem

Visual – task relationships are clear – good Visual – task relationships are clear – good snapshotsnapshot

Created using RF Flow or Visio

Plant TreesMark Utilities Dig Holes

Buy Flowers

Buy Trees

Buy Edging

FinishStart

2 6

7

8Install EdgingPlant Flowers

5

4

1

3



Tabular Tabular – – including time and cost dataincluding time and cost dataTask Name 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

TOTALS 10 6 400 675

NOTE: Shaded areas are concurrent tasks that are completed along the timeline- they contribute to overall cost but not overall duration


PERT and CPM – The BasicsPERT and CPM – The Basics

• PERTPERT– Weighs and estimates task and project timing Weighs and estimates task and project timing

based on based on probabilisticprobabilistic norms and averages norms and averages•Optimistic, expected, pessimistic Optimistic, expected, pessimistic inputinput estimates estimates•Derives Derives probableprobable completion dates based on a completion dates based on a

formula (does not consider constraints)formula (does not consider constraints)– (Optimistic x1 + expected x4 + pessimistic x1) / 6(Optimistic x1 + expected x4 + pessimistic x1) / 6

•The derived dates are estimates (educated guess)The derived dates are estimates (educated guess)•The analysis yields a The analysis yields a best-case datebest-case date, , worst-case worst-case

datedate, and , and duedue (derived expected) date (derived expected) date



• PERTPERT (continued) (continued)

• Manipulating these estimates provides:Manipulating these estimates provides:– Likely (estimated) completion datesLikely (estimated) completion dates– Probability of meeting estimated datesProbability of meeting estimated dates

• Best case dateBest case date

• Expected (due) dateExpected (due) date

• Worst case dateWorst case date

• ALLALL PERT dates are estimates ( PERT dates are estimates (ALWAYSALWAYS))

• Preferred choice in Social & Behavioral Preferred choice in Social & Behavioral SciencesSciences



• CPMCPM– Unlike PERT, analyzes Unlike PERT, analyzes onlyonly the longest the longest

likely chain of activitieslikely chain of activities• The The earliestearliest time a project can be time a project can be

completed when using the completed when using the longestlongest possible possible task durationstask durations

– DeterministicDeterministic, not probabilistic, not probabilistic•Events will be determined by preceding Events will be determined by preceding

events, not probabilityevents, not probability

– Derives a “normal” completion timeDerives a “normal” completion time



• CPM (Continued)CPM (Continued)• CPM assumes projects may be CPM assumes projects may be “crashed”“crashed”

– Completing a task or project in a shorter amount Completing a task or project in a shorter amount of time by using extra resourcesof time by using extra resources

– May be crashed for time but does not directly May be crashed for time but does not directly consider any impact other than cost/timeconsider any impact other than cost/time• Impact on shared resources (with other projects)Impact on shared resources (with other projects)• Impact on other projects (resources, timing)Impact on other projects (resources, timing)• Impact on quality or reliabilityImpact on quality or reliability

• Preferred choice in industry and Preferred choice in industry and construction – tasks and outcomes are more construction – tasks and outcomes are more finite and tangiblefinite and tangible



• PERT and CPM can be used TogetherPERT and CPM can be used Together– Provides benefits of eachProvides benefits of each

• Time estimates – a range (PERT)Time estimates – a range (PERT)

• Time estimates – likely (CPM)Time estimates – likely (CPM)

• Cost estimates (CPM)Cost estimates (CPM)

• Time and cost if crashed (CPM)Time and cost if crashed (CPM)

• Probability of completion “on time” (PERT)Probability of completion “on time” (PERT)

– Used together: valuable management toolsUsed together: valuable management tools– PERT and CPM have remained unchanged since PERT and CPM have remained unchanged since

19581958



• Valuable planning tools Valuable planning tools but:but:– Only consider Only consider logicallogical (causal) dependencies (causal) dependencies

• Completion of a preceding required taskCompletion of a preceding required task

– Does Does notnot consider resource or discretionary consider resource or discretionary dependenciesdependencies• Availability of a worker, money, or machinesAvailability of a worker, money, or machines

• Task sequence that best fits the bigger pictureTask sequence that best fits the bigger picture

• Relies on clearly defined tasks and goalsRelies on clearly defined tasks and goals

• Provides estimates, not guaranteesProvides estimates, not guarantees


PM Today – Necessary?PM Today – Necessary?

• Frustration with cost & schedule overrunsFrustration with cost & schedule overruns• Frustration with reliability of production estimatesFrustration with reliability of production estimates• Management challenges exist today:Management challenges exist today:

– Only Only 44%44% of projects are completed on time of projects are completed on time– On average, projects are On average, projects are 189%189% over-budget over-budget– 70%70% of completed projects do not perform as expected of completed projects do not perform as expected– 30%30% of projects are canceled before completion of projects are canceled before completion– On average, projects are On average, projects are 222%222% longer than expected longer than expected

• PM has been shown to improve this performancePM has been shown to improve this performanceThese statistics were compiled by an independent monitoring group, The These statistics were compiled by an independent monitoring group, The

Standish Group, and represent the US national average for 1998 Standish Group, and represent the US national average for 1998


PM OverviewPM Overview

• Valuable tools for planning and trackingValuable tools for planning and tracking– A good way to explore “what if” before a A good way to explore “what if” before a

project ever beginsproject ever begins• How much it could cost - How much it could cost - moneymoney• What it could entail – What it could entail – taskstasks• How long it could take - How long it could take - timetime• Probabilities of success - Probabilities of success - risksrisks• How much resource needed– How much resource needed– people & equipmentpeople & equipment

• AA good way to get and stay organizedgood way to get and stay organized• Provides estimates, not guaranteesProvides estimates, not guarantees


Resources Used in This UnitResources Used in This Unit

• Dr. Anthony FilipovitchDr. Anthony Filipovitch• Goldratt, Eli, Dr., The Goal: A Goldratt, Eli, Dr., The Goal: A

Process of Ongoing Process of Ongoing Improvement, Great Improvement, Great Barrington: New River Press, Barrington: New River Press, 19961996

• MS Project, by Microsoft MS Project, by Microsoft CorporationCorporation

• PM Body of Knowledge PM Body of Knowledge (PMBOK), Philadelphia: PMI, (PMBOK), Philadelphia: PMI, 20002000

• Project Management Institute Project Management Institute (PMI) Resource Center(PMI) Resource Center– Project Management Institute Project Management Institute

WebsiteWebsite

• Render, Barry and Stair Jr., Render, Barry and Stair Jr., Ralph M. - Quantitative Analysis Ralph M. - Quantitative Analysis for Management, for Management, Massachusetts: Allyn & Bacon Massachusetts: Allyn & Bacon Inc., 1982 Inc., 1982

• US National Performance US National Performance Survey, The Standish Group, Survey, The Standish Group, 19981998

• Verma, Vijay K., Managing the Verma, Vijay K., Managing the Project Team: The Human Project Team: The Human Aspects of Project Management, Aspects of Project Management, Philadelphia: PMI, 1997Philadelphia: PMI, 1997

• Wiest, Jerome D., and Levy, Wiest, Jerome D., and Levy, Ferdinand K., A Management Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Guide to PERT/CPM, New Delhi: Prentice-Hall of India Private Prentice-Hall of India Private Limited, 1974Limited, 1974

http://www.pmi.org/

http://www.pmi.org/


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URBS 609 PERT Unit 1

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This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004

pert1.ppt

Business

project communication

project costs

terms of time

task relationships

project finish date

task network

slack time

asignificant task