MANAGEMENT SCIENCE

UNIT - IV

PROJECT MANAGEMENT

Project Management

Project Management is the art of managing all the aspects of a project from inception to closure
using a scientific and structured methodology.

A project in any organization is collaboration across departments to achieve a single well defined
objective. The process of planning, organizing and managing resources to achieve the
organizational objective is called project management.

Project management is very important in production of goods and services. Idea generation to final
production of product or service, each step can be categorized as individual projects. Any project
requires a project manager, who leads the project to its logical conclusion. Project manager is
responsible for appointing team members with different background but essential in completion of
the project.

Project Characteristics

A project is not normal day to day activity undertaken by organization rather it is specific, non-
routine activity of varying time frame and impact viability of the business in the long run. A typical
project has following characteristics:

 Timeline: A project has a definite timeline with measurable starting and end point.
 Resources: A project has limited resource of capital and manpower.

 Tools: Special type of tools and techniques are used for project management (Gantt Charts, etc.)

 Team: Project management requires diverse team stretching across departments and functions.

Project Life Cycle

A typical project is divided into following phases. Each phase of the project has its own importance
and impact on overall success of the project.

 Initiation Phase: In this phase of the project, feedback received from customers is analyzed and
brainstorming is done as to develop new product or modify existing product to meet the new
demands.
 Project Definition Phase: In this phase of the project efforts are made to define the solution for the
problem posed by customers.
  Feasibility Study: In this phase, planning of the project is made and definite milestones are
established.

 Project Execution: In this phase all activities and milestones established in the earlier phase are
executed in a timely and orderly manner. This phase utilizes maximum of all resources.

 Project Conclusion: This is the last phase of the project. In this phase, final product or service is
handed over to the operations team for commercial production.

Project Management Activities

Project management activities are mainly divided into three main categories Planning, Scheduling
and Controlling.

1. Planning: Planning activities include defining project objective, resource planning, etc.
2. Scheduling: Scheduling activities include developing detailed milestones and guidelines for the
project. These activities are performed typically before actual initiation of the project.

3. Controlling: Controlling activities include developing budget and finance control points, measuring
of scheduled tasks are performed.

Project Management Techniques

There are several techniques utilized for project management. Some of the techniques are as
follows, and they are mainly used for project scheduling.

 Gantt Charts: These charts are used to depict the project tasks against time. It monitors progress of
individual project tasks and also highlights dependency if any between those project tasks.
 Network Planning Techniques: These techniques show the relationship between project activities,
project duration, critical path, constraints of non-critical activities and resource utilization. There are
two types of network planning techniques Critical Path Method (CPM) and Program Evaluation and
Review Technique (PERT)

NETWORK

Breaking down a complex project's data into its component parts (activities, events,
durations, etc.) and plotting them to show their interdependencies and interrelationships.
Guidelines for Drawing Network Diagram

There are number of rules in connection with the handling of events and activities of a project
network which are given below:

a) Each activity is represented by one and only one arrow in the network. This implies that no
single activity can be represented twice in the network. This is to be distinguished from the
 case where one activity is broken into segments. In such a case each segment may be
represented by a separate arrow.
b) No two activities can be identified by the same beginning and end event. In such cases, a
dummy activity is introduced to resolve the problem.
c) In order to ensure the correct precedence relationship in arrow diagram following question must
be checked whenever any activity is added to a network.

 What activity must be completed immediately before this activity can start?
 What activities must follow this activity?

 What activities must occur simultaneously with this activity?

d) Thus a network should be developed on the basis of logical or technical dependence.

e) The arrows depicting various activities are indicative of logical precedence only; hence length and
bearing of the arrows are of no significance.

f) The flow of the diagram should be from left to right.

g) Two events are numbered in such a way that the event of higher number can happen only after the
event of lower number is completed.
h) Arrows should be kept straight and not curved. Avoid arrow which cross each other.
i) Avoid mixing two directions vertical and standing arrows may be used if necessary.

j) Use dummy activity freely in rough graph but final network should have only reluctant dummy.

k) The network has only one entry point called the start event and one point of emergence called end
event.

l) Angle between the arrows should be as large as possible.

ERROR IN DRAWING NETWORK

There are three types of errors which are common in network diagrams
Dangling error To disconnect an activity before the completion of all activities in a network
diagram is known as dangling.
 Dangling error
In Fig. the activity 5 to 8, 6 to 7 are known as dangling error. These are not last activities in the
network.
Looping error
Looping error is also known as cyclic error in the network. Drawing an endless loop in a network
diagram is known as error of looping as shown in Fig.

Appearance of a loop in the network

Reductancy error

Unnecessarily inserting the dummy activity in a network diagram is known as error of reductancy
as shown in Fig in which putting an dummy activity from 10 to 12 is a reductancy error.

Reductancy error
 CPM
CRITICAL PATH METHOD
The critical path method (CPM) is a step-by-step project management technique for process
planning that defines critical and non-critical tasks with the goal of preventing time-frame problems and
process bottlenecks. ... Create a flowchart or other diagram showing each task in relation to the others

Developed in the late 1950’s, Critical Path Method or CPM is an algorithm used for
planning, scheduling, coordination and control of activities in a project. Here, it is assumed that the
activity duration are fixed and certain. CPM is used to compute the earliest and latest possible start
time for each activity.

The process differentiates the critical and non-critical activities to reduce the time and avoid the
queue generation in the process. The reason behind the identification of critical activities is that, if
any activity is delayed, it will cause the whole process to suffer. That is why it is named as Critical
Path Method.

In this method, first of all, a list is prepared consisting of all the activities needed to complete a
project, followed by the computation of time required to complete each activity. After that, the
dependency between the activities is determined. Here, ‘path’ is defined as a sequence of activities
in a network. The critical path is the path with the highest length.

Advantages of CPM:

The important advantages of CPM technique are:

1. It helps in ascertaining the time schedule of activities having sequential relationship

2. It makes control easier for the management.

3. It identifies the most critical elements in the project. Thus, the management is kept alert and
prepared to pay due attention to the critical activities of the project.

4. It makes better and detailed planning possible.

Limitation of CPM:

The main limitations of the CPM are:

1. CPM operates on the assumption that there is a precise known time that each activity in the
project will take. But, it may not be true in real practice.

2. CPM time estimates are not based on statistical analysis.

3. It cannot be used as a controlling device for the simple reason that any change introduced will
change the entire structure of network. In other words, CPM cannot be used as a dynamic
controlling device.

PERT

Program evaluation and review technique ( PERT )

The program (or project) evaluation and review technique, commonly abbreviated PERT, is a
statistical tool, used in project management, which was designed to analyze and represent the tasks involved
in completing a given project. First developed by the United States Navy in the 1950s, it is commonly used
in conjunction with the critical path method (CPM).

PERT is a method of analyzing the tasks involved 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. [2] 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, one-time, complex, non-routine infrastructure and Research and Development projects. An
example of this was for the 1968 Winter Olympics in Grenoble which applied PERT from 1965
until the opening of the 1968 Games.[3]

This project model was the first of its kind, a revival for scientific management, founded by
Frederick Taylor (Taylorism) and later refined by Henry Ford (Fordism). DuPont's critical path
method was invented at roughly the same time as PERT.

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.

 Optimistic time (to):

the minimum possible time required to accomplish an activity (o) or a path (O),
assuming everything proceeds better than is normally expected

 Pessimistic time ( tp):

the maximum possible time required to accomplish an activity (p) or a path (P),
assuming everything goes wrong (but excluding major catastrophes).

 Most likely time ( tm):

the best estimate of the time required to accomplish an activity (m) or a path (M),
assuming everything proceeds as normal.
  Expected Time (te):

the best estimate of the time required to accomplish an activity (te) or a path (TE),
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
 standard deviation of time :

the variability of the time for accomplishing an activity (σte) or a path (σTE)

σte = (p - o) ÷ 6
 float or slack

it 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.

Advantages
 PERT chart explicitly defines and makes visible dependencies (precedence relationships)
between the work breakdown structure (commonly WBS) elements.
 PERT facilitates identification of the critical path and makes this visible.

 PERT facilitates identification of early start, late start, and slack for each activity.

 PERT provides for potentially reduced project duration due to better understanding of
dependencies leading to improved overlapping of activities and tasks where feasible.
  The large amount of project data can be organized and presented in diagram for use in
decision making.

 PERT can provide a probability of completing before a given time.

Disadvantages

 There can be potentially hundreds or thousands of activities and individual dependency

relationships.
 PERT is not easily scalable for smaller projects.

 The network charts tend to be large and unwieldy requiring several pages to print and
requiring specially sized paper.

 The lack of a timeframe on most PERT/CPM charts makes it harder to show status although
colours can help (e.g., specific colour for completed nodes).

DIFFERENCES BETWEEN THE PERT and CPM

Basis for Comparison PERT CPM

PERT is a project management technique, CPM is a statistical technique of project

Meaning used to manage uncertain activities of a management that manages well defined
project. activities of a project.

What is it? A technique of planning and control of time. A method to control cost and time.

Focus on Event Activity

Model Probabilistic Model Deterministic Model

Estimates Three time estimates One time estimate

Appropriate for High precision time estimate Reasonable time estimate

Management of Unpredictable Activities Predictable activities

Nature of jobs Non-repetitive nature Repetitive nature

Critical and Non-

No differentiation Differentiated
critical activities

Suitable for Research and Development Project Non-research projects like civil construction,
Basis for Comparison PERT CPM

ship building etc.

Crashing concept Not Applicable Applicable

PROJECT CRASHING
Project crashing is a method for shortening the project duration by reducing the time of one (or
more) of the critical project activities to less than its normal activity time. This reduction in the normal
activity time is referred to as crashing.
Project crashing can be necessary when:
 The programme planning has been inaccurate.
 When there have been unforeseen events which have caused delays, such as defects being
discovered.

 Or if the client has requested that the project, or a section of the project, is completed earlier
than previously specified, for example if there has been an extension of time, but the client
still wishes to achieve the original completion date (this is generally referred to as
acceleration).

Aim of crashing : The aim of crashing is to achieve the maximum decrease in schedule for
minimum additional cost. This can be done by:

 Addressing productivity issues being experienced by the current resources and trying to find
ways of increasing their efficiency.
 Increase the assignment of resources on critical path activities. These could be internal
resources or subcontracted recources.

 Adopting different techniques. This might include off-site prefabrication, extra scaffolding,
temporary weatherproofing and so on.

 Overlapping activities.

 Working longer hours.

 Additional supervision.

 Changes to design or specification (for example standardisation replacing bespoke

solutions)

 Reduction in scope (for example transferring work to a separate post-contract agreement for
occupational works).

 Making early appointments.

  Early procurement of items.

Many of these strategies will necessarily lead to some additional costs being incurred, or cost
uncertainty. Whilst the same number of tasks need to be performed, they are condensed into a
shorter period, and so are likely to require more resources. In addition, purchasing costs may be
higher due to time pressures, incomplete information and the complexity of managing the interfaces
between elements. A greater number of variations are also likely than on a traditional contract.

 It is important to be clear whether it is the client or the contractor that will bear these
additional costs.