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Topic outline

  • Unit 10: Project Management

    Project management provides the framework and methodology for successfully addressing the complexities associated with supply chain management. This unit covers the principles of and different techniques used in project management. These include analyzing project structure and breaking projects into constituent work units and activity milestones. Also covered are activity-planning optimizing methods for work scheduling, along with methods to track overall project progress. 

    Completing this unit should take you approximately 10 hours.

    • Upon successful completion of this unit, you will be able to:

      • explain the role of project management within operations management;
      • create Gantt chart schedules to indicate the link between work structures and activities in a project;
      • perform an earned value management analysis of a given project; and
      • perform a critical path analysis to "crash" a given project.

    • 10.1: Principles and Goals of Project Management

      Project management is a strategic and disciplined process of organizing, planning, managing, and securing resources to achieve defined objectives. Principles can include things such as vision, mission, objectives, organizational alignment, and measuring accountability. Some goals may include increasing quality, coming in under budget, and adhering to time constraints.
      • Read this chapter. It discusses how projects should be managed and explains the project management process along with associated project constraints. Why are interpersonal skills important in managing organizational projects?

    • 10.2: Project Structures

      Projects can generally be classified into three organizational structures: functional, matrix, and projectized. Each differs in their allocation of resources, supervision, and coordination of individual project team members with project management. Creating a structure establishes formal relationships among managers, team members, and stakeholders across the overall project.

      • Watch this video. A comparison is made between the three general structures and what they mean. Why would a business restructure its entire organization for a project?

    • 10.3: Work Breakdown Structures, Project Control Charts, and Earned Value Management

      Project-related work should clearly define the tasks or activities needed to be carried out to complete a project on time. Specifically, a work breakdown structure is a tool used to deconstruct the project scope into smaller, easily digestible milestones that are more easily assigned and tracked. Moreover, this tool can visually lay out working teams, identify individual or resource dependencies, or even contingency strategies. Control charts are quality management tools used to understand predictability, behavior, and stability in a process for a duration of time. This approach visually displays data against controlled limits to reflect minimal and maximum specifications. Over time the charts illustrate how a process behaves so adjustments can be made if results are above or below desired limits.

      • This video intends to show how control charts can be used to detect problems in a process. When would a control chart be most appropriate to use?

      • 10.3.1: Earned Value Management (EVM)

        Earned value management is an important project management tool required for completing a project on time. EVM provides a framework that measures and monitors progress in terms of cost, time, technical, and physical achievements. Some key advantages are that it provides a view of work progress and assists in estimating eventual cost savings or deficits. 

        • Read this article. Despite the 10 steps listed along with explanations, the authors question whether this tool is a worthwhile endeavor because of the time it takes to produce. After going through each step, what benefits can a business reap from conducting this analysis?
      • 10.3.2: EVM Calculations

        Calculating earned value management helps a company forecast future performance related to cost, time, and scope. Specific considerations are given to dividing projects into tasks, then assigning each task a beginning and end date. From there each task is given a budget along with a project status update period.

        • Watch this video. It includes a demonstration of calculating an EVM for a specific project. What departments in a business do you think need to participate in generating the numerical and time values?

      • 10.3.3: EVM Charts

        An earned value management chart is the visual representation of all calculations included in the analysis. The horizontal line represents the time constraints from the start date, including the current date, all the way to the anticipated completion date. The vertical line represents the dollar values of costs associated with a project along with reserves and over-budget areas.
        • Read this paper, which describes the most common project management tools and then presents a hybrid model combing different elements from each. It then uses the model in a case study analysis. Think about how the hybrid simultaneously controls for model parameters. How does this increase project sustainability and efficiency in the case study?

        • Watch this video. It focuses on creating charts from data inputs. What inferences can you quickly draw by simply looking at an EVM chart?

    • 10.4: Planning Models

      A project planning model generally consists of an established number of steps or stages to progress through for successful completion. Different models are used for different purposes and offer different perspectives. What is important to note is that no single model can address all issues an organization will encounter.
      • Read this article. It provides an overview of planning models. Pay particular attention to Figure 1 as it visually provides a global view of planning models. Then review Figures 2 -17 for more in-depth visual planning processes.

      • 10.4.1: The Critical Path Method (CPM) and CPM Sensitivity Analysis

        The Critical Path Method provides an algorithm for the purpose of scheduling project activities. To construct this model, there needs to be a list of all required tasks, dependencies between each task, and the estimated time each activity will take to finish. With this information, a critical path can be determined through the identification of the longest stretch of activities dependent on one another. CPM planning assumes that one activity delay may affect and delay another activity. The essence of performing a sensitivity analysis on one specific activity is to measure the effects of such delays. If there are multiple critical paths on the project, the project manager can then understand how sensitive the network is if a single critical activity changes.

        • Read this article. The study develops a comprehensive evaluation strategy for project management. Section 2.1, Schedule Method-CPM/PERT, suggests that CPM does not consider risk or uncertainty. What would you add to a sensitivity analysis such that it could address risks or uncertainties?

      • 10.4.2: Cost-Time Considerations and Project Crashing

        Multi-phased projects can magnify cost and scheduling uncertainties. Sometimes the duration of certain activities can be shortened but at the expense of increased cost. Crashing a project attempts to compress the scheduling of a project by adding additional resources in an effort to finish early or on time.
        • Watch this video. The presentation demonstrates how this tool can address cost control and time constraints along with the pros and cons of project crashing in general. What other pros and cons can you add?

    • 10.5: Evaluating Tradeoffs Using Probability and Confidence Estimates

      Every project involves critical areas related to time, quality, and cost. The complexities, interdependencies, changes, and overall uncertainty involved forces project managers to make tradeoffs between these critical areas. In essence, if time frames are shortened, costs are added to compensate for speeding up progress.

      • Read this article. The paper presents an optimization model that enables managers to effectively evaluate trade-offs related to time, cost, and other competing priorities. Pay particular attention to Section 6 as it provides an illustrated example of building a home.
    • 10.6: Probability and Confidence Estimates of Project Completion

      A confidence estimate attempts to determine the probability that an event or issue will delay project completion. The confidence level of these estimates addresses ways to discover, manage, and reduce risk. Anticipating overall project risks increases the likelihood that a project will be completed on time and within budget.
      • Read this article. Based on the authors' research, risks related to procurement and suppliers are identified. Focus on Table 1, the hierarchical structure of supply chain risks in 3 levels, and Table 2, risk evaluation criteria.
    • Unit 10 Study Resources

      This review video is an excellent way to review what you've learned so far and is presented by one of the professors who created the course.

      • Watch this as you work through the unit and prepare to take the final exam.

      • We also recommend that you review this Study Guide before taking the Unit 10 Assessment.

    • Unit 10 Assessment

      • Take this assessment to see how well you understood this unit.

        • This assessment does not count towards your grade. It is just for practice!
        • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
        • You can take this assessment as many times as you want, whenever you want.