Projects b. Assign a coordinator.

- Unique, one-time c. Use a matrix organization with a project

operations designed to accom- leader.
plish a specific set of objectives What are the main tools?
in a limited time frame 1. Work breakdown structure. An initial
planning tool that is needed to develop a list
PROJECT LIFE CYCLE of activities,
Definition - concept, feasibility analysis activity sequences, and a realistic budget.
Planning 2. Network diagram. A “big picture” visual
Execution aid that is used to estimate project duration,
Termination identify
activities that are critical for timely project
What is project management? A completion, identify areas where slack time
team-based approach for managing exists,
projects. and develop activity schedules.
How is it different from general operations 3. Gantt charts. A visual aid is used to plan
management? and monitor individual activities.
1. Limited time frame. 4. Risk management. Analyses of potential
2. Narrow focus, specific objectives. failures or problems, assessment of their
3. Less bureaucratic. likelihood and
Why is it used? consequences, and contingency plans.
1. Special needs that don’t lend themselves
to functional management. Key Decisions in Project Management
2. Pressures for new or improved products • Deciding which projects to implement.
or services, cost reduction. • Selecting the project manager.
What are the key metrics? • Selecting the project team.
1. Time. • Planning and designing the project.
2. Cost. • Managing and controlling project
3. Performance objectives. resources.
What are the key success factors? • Deciding if and when a project should be
1. Top-down commitment. terminated.
2. A respected and capable project
manager. Project manager responsible for:
3. Enough time to plan. Work
4. Careful tracking and control. Human resources
5. Good communications. Communications
What are the major administrative issues? Quality
1. Executive responsibilities: Time
a. Project selection. Cost
b. Selection of a project manager.
c. Organizational structure. (To whom will Project management triangle
the project manager report?) Quality -
2. Organizational alternatives: Cost
a. Manage within functional unit. Schedule
Performance objectives

Project champion A person Path A sequence of activities

who promotes and supports a that leads from the starting node
project. to the finishing node.
Critical path The longest path;
determines expected project
Work breakdown structure duration.
(WBS) A hierarchical listing Critical activities Activities
of what must be done during a on the critical path.
project. Slack Allowable slippage for a
path; the difference between the
PERT Program evaluation and length of a path and the length of
review technique, for planning the critical path.
and coordinating large projects.
CPM Critical path method, for
planning and coordinating large Activities Project steps that consume
projects. resources and/or time.

1. A graphical display of project activities.

2. An estimate of how long the project will
take.
3. An indication of which activities are the
most critical to timely project completion.
4. An indication of how long any activity can Activity-o Network diagram convention in
be delayed without delaying the project. n-arrow which arrows designate
(AOA) activities.
Network (precedence)
diagram Diagram of project
activities that shows sequential
relationships by use of arrows
and nodes.
Activity-on-arrow (AOA)
Network diagram convention Activity-o Network diagram convention in
n-node which nodes designate
in which arrows designate
(AON) activities.
activities.
Activity-on-node (AON)
Network diagram convention in
which nodes designate activities.
Activities Project steps that
consume resources and/or time.
Events The starting and finish- Beta Used to describe the inherent
ing of activities, designated by distributi variability in activity time
nodes in the AOA convention on estimates.
 Events The starting and finishing of
activities, designated by nodes
in the AOA convention.

CPM Critical path method, for

planning and coordinating large
projects.

Independ Assumption that path duration

ence times are independent of each
other; requiring that activity
times be independent, and that
each activity is on only one
path.
Crash Shortening activity durations.

Most The most probable length of

Critical Activities on the critical path. likely time that will be required.
activities time

Critical The longest path; determines Network Diagram of project activities

path expected project duration. (precede that shows sequential
nce) relationships by use of arrows
diagram and nodes.

Determin Time estimates that are fairly

istic certain.
Optimisti The length of time required
c time under optimal conditions.
 Projects Unique, one-time operations
designed to accomplish a
Path A sequence of activities that specific set of objectives in a
leads from the starting node to limited time frame.
the finishing node.

Slack Allowable slippage for a path;

PERT Program evaluation and review the difference between the
technique, for planning and length of a path and the length
coordinating large projects. of the critical path.

Pessimist The length of time required Virtual Some or all of the team
ic time under the worst conditions. project members are geographically
teams separated.

Probabili Estimates of times that allow

stic for variation. Work A hierarchical listing of what
breakdo must be done during a project.
wn
structure
(WBS)

Project A person who promotes and

champion supports a project. Microsoft project
°assign resources
•compare project plan version
Evaluate changes
Track performance

Time estimates
Deterministic it can be beneficial to examine the probable
Probabilistic reasons for the failure, and decide what
possible
decisions or actions, if any, might have
Probabilistic time estimates contributed to the failure. These become
Optimistic “lessons
Pessimistic learned” that may be applicable to future
Most likely time projects to decrease the likelihood of failure.

Projects can present both strategic Projects are composed of a unique set of
opportunities and strategic risks, so it is activities established to realize a given set
critical for man- of objectives in a
agement to devote adequate attention and limited time span. Projects go through a life
resources to projects. cycle that involves definition, planning,
Projects are often used in situations that execution, and
have some degree of uncertainty, which can delivery/termination. The nonroutine nature
result of project activities places a set of demands
in delays, budget overruns, and failure to on the project
meet technical requirements. To minimize manager that are different in many respects
the impact from those the manager of more routine
of these possibilities, management must operations activities
ensure that careful planning, wise selection experiences, both in planning and
of project coordinating the work and in the human
managers and team members, and problems encountered. Ethi-
monitoring of the project occur. cal conduct and risk management are
Computer software and tools such as among the key issues project managers
PERT can greatly assist project must deal with.
management. How- PERT and CPM are two commonly used
ever, care must be taken to avoid focusing techniques for developing and monitoring
exclusively on the critical path. The obvious projects.
reason Although each technique was developed
is that as the project progresses, other independently and for expressly different
paths may become critical. But another, less purposes, time and
obvious, practice have erased most of the original
reason is that key risk events may not be on differences, so that now there is little
the critical path. Even so, if they occur, they distinction between the
can two. Either provides the manager with a
have a major impact on the project. rational approach to project planning and a
It is not uncommon for projects to fail, graphical display
either completely or partially. When that of project activities. Both depict the
happens, sequential relationships that exist among
activities and reveal to
managers which activities must be 4. The project manager and the project
completed on time to achieve timely project team can be major factors in achieving
completion. Managers project goals.
can use that information to direct their 5. Work breakdown structures, Gantt
attention toward the most critical activities. charts, and precedence diagrams are useful
tools for managing
projects.
Two slightly different conventions can be
used for constructing a network diagram.
One designates Managers must carefully assess the costs
the arrows as activities; the other and benefits of various alternatives for
designates the nodes as activities. capacity of
The task of developing and updating service systems. Working to increase the
project networks quickly becomes complex processing rate may be a worthwhile option
for projects of even instead
moderate size, so computer software is of increasing the number of servers. New
important. Among the advantages of using processing equipment and/or processing
project management methods
software are the provision for a logical may contribute to this goal. One important
planning structure, enhanced factor to consider is the possibility of
communication, and automatically reducing
formatted charts and reports. variability in processing times by increasing
In some instances, it may be possible to the degree of standardization of the service
shorten, or crash, the length of a project by being
shortening one provided. In fact, managers of all services
or more of the project activities. Typically, would be wise to pursue this goal, not only
such gains are achieved by the use of for
additional resources, the benefits of reduced waiting times but
although in some cases, it may be possible also for benefits of standardizing server
to transfer resources among project training
activities. Generally, and hence reducing those costs and times,
projects are shortened to the point where and the potential for increased quality due
the cost of additional reduction would to the
exceed the benefit of decreased variety in service requirements.
additional reduction, or to a specified time. Other approaches might involve efforts to
KEY POINTS 1. Projects are unique, limited shift some arrivals to “off-times” by using
duration sets of tasks designed to res-
accomplish a set of objectives. ervations systems, “early-bird” specials,
2. The key project metrics are cost, time, senior discounts, or some of the
and performance. approaches used by
3. Table 17.1and Figure 17.1 provide Disney to manage customer waiting.
valuable insights into the nature of projects Analysis of waiting lines can be an
and project important aspect of the design of service
management. systems. Waiting lines
have a tendency to form in such systems Single-channel, constant service time. See
even though, in a macro sense, the system p. 804.
is underloaded. The Multiple-channel model. Use when there are
arrival of customers at random times and two or more independent servers, teams, or
variability of service times combine to create crews.
temporary over- See p. 805
loads. When this happens, waiting lines Multiple-priority model. Use when service
appear. By the same token, at other times order is based on priority class. See p. 813.
the servers are idle. Finite-Source Model. Use when entry to the
A major consideration in the analysis of system is restricted to system members.
queuing systems is whether the number of See p. 816.
potential custom-
ers is limited (finite source) or whether entry 1. Waiting line occur because there is an
to the system is unrestricted (infinite imbalance between supply and demand in
source). Five basic service systems.
queuing models are described, four dealing 2. One cause of imbalances is variability in
with infinite-source populations and one service times and/or customer arrival times.
dealing with finite- 3. Two important approaches to managing
source populations. In general, the models waiting lines are reducing variability where
assume that customer arrival rates can be possible by
described by a Pois- standardizing a process and/or altering the
son distribution and that service time can be perceived waiting time.
described by a negative exponential
distribution.
Choosing the Appropriate Model
Infinite-Source Model. Use when entry to
the system is unrestricted (open to the
public).

The basic relationship formulas can be used

with an infinite source model. There are
formulas for
system utilization, the average number or
average time waiting for service, the
average number being
served, and the average number or time in
the system. Refer to Figure 18.7 on p. 802
to help you connect
with the appropriate formula. The formulas
are on p. 802.
Single-channel model: Use when there is
one server, team, or crew. See p. 803.