Learning Objectives

After completing our lectures 43 and 44, we should be able to understand the Behavioral aspects of projects in terms of project personnel and the project manager. We should be able to appreciate the nature and importance of work breakdown structure in Project Management. We should develop a working knowledge of PERT/CPM techniques. Construct simple network diagrams and try to assimilate the kind of information that a PERT or CPM analysis can provide. And last but not the least we should be able to analyze networks with probabilistic times and describe activity “crashing” and solve some problems.

production and operations management  PROJECT MANAGEMENT

Projects are unique, one-time (temporary) operations designed to accomplish a specific set of objectives in a limited time frame.

This property of being a temporary and a one-time venture contrast with operations, which are permanent or semi-permanent ongoing functional work to create the same product or service over-and-over again.

The management of these two systems is often very different and requires varying technical skills and philosophy, hence requiring the development of project management

Project Management

Project Management is the organizing and managing resources in such a way that these resources deliver all the work required to complete a project within defined scope, time, and cost constraints. A project is a temporary and one-time endeavor undertaken to create a unique product or service. Distinguishing characteristics of Project Management

1. How is it different?

  • Limited time frame
  • Narrow focus, specific objectives
  • Less bureaucratic

2. Why is it used?

  • Special needs
  • Pressures for new or improves products or services

3. Project Management has the following important key metrics

  • Time
  • Cost
  • Performance objectives

Key Success Factors

What are the Key Success Factors?

1.  Top-down commitment

2.  Having a capable project manager

3.  Having time to plan

4.  Careful tracking and control

5.  Good communications

Project Management has certain major administrative issues, such as

1.  Executive responsibilities

2.  Project selection

3.  Project manager selection

4.  Organizational structure

1.  Organizational alternatives

2.  Manage within functional unit

3.  Assign a coordinator

8. Use a matrix organization with a project leader Project Management normally involves the knowledge of Project management tools, Work breakdown structure, Network diagram, Gantt charts and Risk management.

Project Management: Hospital

We are given the task of setting up a hospital facility in our community. The plan is to set up both medicine and surgery facilities related to all important fields of medicine and surgery. The project Managers are required to list the possible activities in the form of Planning and Scheduling (Gantt Chart) and Network Diagram AON and AOA Activities

production and operations management  PROJECT MANAGEMENT
Project Management: Hospital Construction and Operation Activities include:

  • Locate new facilities
  • Interview staff
  • Hire and train staff
  • Select and order Machinery
  • Remodel and install phones
  • Start Patient Examination/startup

Network Diagrams and Conventions

production and operations management  PROJECT MANAGEMENT

Project Network – Activity on Arrow

production and operations management  PROJECT MANAGEMENT

Project Network – Activity on Node

production and operations management  PROJECT MANAGEMENT

  • Activity on Arrow: The Network diagram convention in which arrows designate activities.
  • Activity on Node: The Network diagram convention in which the nodes designate the activities.
  • Activities: Project steps that consume or utilize resources (and or time).
  • Events: The starting and finishing of activities designated by nodes in the Activity on Arrow notation.
  • Path: Sequence of activities that leads from the starting node to the finishing node
  • Critical path: The longest path; determines expected project duration
  • Critical activities: Activities on the critical path
  • Slack: Allowable slippage for path; the difference the length of path and the length of critical path

production and operations management  PROJECT MANAGEMENT

Project Life Cycle

The Project Life Cycle comprises of a new concept idea for a unique activity which is then evaluated through feasibility reports, planned with certain sequence of activities, execution of activities and terminated after the project has been completed or shelved due to certain unavoidable. What is important is to note that all stages of Project Life Cycle are administered and handled by competent Project Management team or Project Managers.

production and operations management  PROJECT MANAGEMENT

Planning and Scheduling involves the following key decisions:

  • Deciding which projects to implement
  • Selecting a project manager
  • Selecting a project team
  • Planning and designing the project
  • Managing and controlling project resources
  • Deciding if and when a project should be terminated

Responsibilities of a Project Manager

Project Manager is normally considered responsible for:

  • Project Management
  • Responsible for: Technical and Financial Analysis

Project Manager is normally considered to have qualification such as

• PMP certification

  • CFM, CFA and CFP certification Project Manager should be skilled enough to carryout or supervise the calculation of
  • Financial Evaluation and Investment Analysis
  • Cost Benefit Analysis Project Managers should be able to focus on Ethical Issues and avoid:
  • Temptation to understate costs
  • Withhold information
  • Misleading status reports
  • Falsifying records
  • Compromising workers’ safety
  • Approving substandard work

Work Breakdown Structure

A project is different that operations due to its unique nature. A good project management practice is to breakdown the project into sublevel or group of similar activities. These sublevel or group of similar activities is called Work Breakdown Structure. The work breakdown structure usually represents a Parent Child Activity with the relationship between a parent and child level being easily identifiable. The work break down structure allows a project manager to incorporate more administrative control over the project activities.

production and operations management  PROJECT MANAGEMENT


PERT: Program Evaluation and Review Technique CPM: Critical Path Method

1.  Graphically displays project activities

2.  Estimates how long the project will take

3.  Indicates most critical activities

4.  Show where delays will not affect project

Advantages of PERT

1.  Forces managers to organize

2.  Provides graphic display of activities

3.  Identifies

4.  Critical activities

5.  Slack activities

Limitations of PERT

1.  Important activities may be omitted

2.  Precedence relationships may not be correct

3.  Estimates may include a fudge factor

4.  May focus solely on critical path

Project Scope and Scope Creep

Project Scope refers to the total work needed out of a project. The primary tool required to describe Project Scope is the Work Breakdown Structure. Often projects suffer from an irritant known as scope creep. Scope creep is the unnecessary extension of project scope which does not allow the project to be completed within budget and with in the time limits. Organizations incorporate special management techniques to isolate and eliminate scope creep. Senior Management is advised and trained by outside consultants to avoid decisions which lead to increase in business scope creep or technical scope creep. Technical Scope creep (like Gold plating) is the unfortunate tendency of technical side to add certain avoidable and costly features in their products (services or softwares) to make their product or service more powerful and attractable to the customers. Business Scope creep (often called customer pleasing) is the tendency of the business managers to over do the customer relationship with their customers. A pragmatic strategy to avoid scope creep is to be judicious to the original project scope and religiously avoid uncalled for business or technical additions that may incorporate scope creep.


We learnt the Project Management concept to be different and unique from operations side. Operations represent a repetition of same activities while projects represent execution of unique activities. However there exist similarities which include administration of activities by project manager in a similar fashion to the activities performed by the operations manager. We discussed the Network Diagrams, an Hospital example Project in terms of Gantt Chart, Work Breakdown Structure and job responsibilities of a Project Manager.

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