OPERATIONS MANAGEMENT ASSIGNMENT 6 1 Human resources, project management and operations management are all equally vital to a business's success. Each of these focuses on different areas of the organization and lean on each other through their principles to promote efficiency and profitability. Examining the principles of each can give you an insight as to why they are all important. Human Resource Management \"SHRM (Society for Human Resource Management) is the world's largest HR membership organization devoted to human resource management\" (SHRM, 2014). According to SHRM, there are codes of ethics which are needed to be followed. They can be viewed as principles of human resource management as well. The first core principle is professional responsibility. As a professional of HR, you must add value to the organization you represent and make sure ethics is top of mind. \"Building respect, credibility and strategic importance for the HR profession within the organization, the business community, and the communities which are worked is part of this responsibility\" (SHRM, 2014). Having professional development will make sure the highest standards of competence and will make sure you understand how the organization function and work. Ethical leadership is something that all HR professionals are expected to have. They are a role model and must set the example for the other in the company and organization to follow. Along with being ethical, fairness and justice are also important. They must make sure all employees of the organization have an environment that encourages them to be positive and productive. Respect is a huge factor. In the event of conflicts of interest, HR professionals must make sure they \"protect the interest of the stakeholders\" (SHRM, 2014). HR professionals must make sure to avoid any activity that can look like a conflict with the code of ethics. This can include using your position for personal or financial benefit. With that being said, the use of information is important. HR OPERATIONS MANAGEMENT ASSIGNMENT 6 2 professionals must protect the right of individuals and remain truthful. Protecting confidential information will maintain a safe environment. Project Management Principles \"PMI or Project Management Institute is the world's leading not-for-profit professional membership association for the project, program and portfolio management profession\" (PMI, 2015). PMI has core values which they like to act upon and believe in. These influence the stakeholder and are not subject to change. They believe that project management impact is \"critical competence that has a positive influence on organization results and society\" (PMI Core Values, 2015). Professionalism is necessary and needed when being accountable and having ethical behavior. This will get the commitment from the stakeholders. Volunteerism is important and the best way to achieve goals and objectives. Having a community and \"bringing members of the global project management community together is the best way to advance the project management profession and facilitate their growth\" (PMI Core Values, 2015). Finally, engagement is important. Allowing diverse views will allow all be engaged and actively participate. This will work with the respect and make sure you are in compliance with the core values of PMI. . Operations Management Principles \"Operations management is the area concerned with the efficiency and effectiveness of the operations in support and development of the firm's strategic goals. Operations management is the planning, scheduling, and control of the activities that transform input into output (Operations Management, 2015). Operations management principles include a variety of activities which are similar to human resource management and project management principles. One thing that is important is the facilities and layout. They must be effective in making sure they are getting the best use of workers and equipment. They do the scheduling and manage OPERATIONS MANAGEMENT ASSIGNMENT 6 3 inventory. Making sure they assure quality and have an emphasis of safety is important when dealing with customers. This will ensure that they are efficient and courteous (Russell, 2014). Motivating and training employees is something that seems to come up in many principles. Doing all of this while maintaining the ethical conduct of the business is necessary. While making decisions, they must be aware of how their decisions will affect shareholders, management, employees, the environment and customers. This also is important with operations management. Operations interacts a lot of roles within the organization. They typically consist of legal, public relations, HR, accounting and management information systems (Russell, 2014). In conclusion, I found that the principles of operations management, human resource management and project management are all focused on promoting business ethically. Ethical behavior is an integral part of good management practice. Human resources deal with the fair and ethical treatment of people. When projects are being designed, all impacts including ethical impacts need to be taken into consideration. Operations management can't ignore ethics to promote efficiency. References Russell, R., & Taylor, B. (2014). Operations and supply chain management (Eighth ed.). Hoboken, NJ: John Wiley & Sons. OPERATIONS MANAGEMENT ASSIGNMENT 6 4 SHRM Code of Ethical and Professional Standards in Human Resource Management. (2014, November 21). Retrieved August 26, 2015, from http://www.shrm.org/about/pages/codeof-ethics.aspx Project Management Certificate Program. (2015). Retrieved August 26, 2015, from http://www.kaplanfinancial.com/pdc/certificate-programs/project-management/ PMI Core Values. (2015). Retrieved August 26, 2015, from http://www.pmi.org/AboutUs/About-Us-Core-Values.aspx Operations Management. (2015). Retrieved August 26, 2015, from http://www.referenceforbusiness.com/management/Ob-Or/Operations-Management.html Chapter 9 Project Management Russell and Taylor Operations and Supply Chain Management, 8th Edition Lecture Outline Project Planning - Slide 5 Project Scheduling - Slide 18 Project Control - Slide 21 CPM/PERT - Slide 22 Probabilistic Activity Times - Slide 34 Microsoft Project - Slide 46 Project Crashing and Time-Cost Trade-off - Slide 56 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-2 Learning Objectives Discuss the project planning process, including planning tools, evaluation methods, and key elements Discuss the benefits of and strategies for dealing with diverse project groups Explain the basics of project scheduling and the use of Gantt charts Define enterprise project management and discuss the key elements in project control 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-3 Learning Objectives Define enterprise project management and discuss the key elements in project control Develop and analyze both deterministic probabilistic and project networks Use Microsoft Project for network analysis Determine and explain project crashing and time-cost tradeoffs 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-4 Project Planning Project has unique purpose not repetitive relatively short period of time one-time operational activity or effort draws resources from multiple departments 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-5 Project Management Process 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-6 Project Management Process 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-7 Project Management Process 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-8 Elements of a Project Plan Objective Scope Contract requirements Schedules Resources Personnel Control Risk and problem analysis 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-9 Project Return Project requires positive gain or benefit ROI is one measure, but not always applicable \"Soft\" returns Projects for public good (Gain from project - cost of project) ROI = Cost of project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-10 Project Team and Project Manager Project team made up of individuals from various areas and departments within a company Matrix organization a team structure with members from functional areas, depending on skills required Project manager most important member of project team 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-11 Scope Statement Scope statement a document that provides an understanding, justification, and expected result of a project Statement of work written description of objectives of a project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-12 Work Breakdown Structure Organizes the work in a project Breaks project into components, subcomponents, activities, and tasks Start at the top and work down Brainstorm project activities 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-13 Work Breakdown Structure for Computer Order Processing System Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-14 Responsibility Assignment Matrix Organizational Breakdown Structure (OBS) a chart that shows which organizational units are responsible for work items Responsibility Assignment Matrix (RAM) shows who is responsible for the work in a project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-15 Responsibility Assignment Matrix 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-16 Global Cultural and Diversity Issues in Project Management Global project teams are formed from different genders, cultures, ethnicities, etc. Diversity among team members can add an extra dimension to project planning Cultural research and communication are important elements in the planning process 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-17 Project Scheduling Steps - - - - Define activities Sequence activities Estimate time Develop schedule 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e Techniques - Gantt chart - CPM/PERT Software - Microsoft Project 9-18 Gantt Chart Graph or bar chart Bars represent the time for each task Bars also indicate status of tasks Provides visual display of project schedule Shows precedence - sequence of tasks Slack - amount of time an activity can be delayed without delaying the project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-19 A Gantt Chart 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-20 Project Control Time management Cost management Quality management Performance management Communication Enterprise project management 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-21 CPM/PERT Critical Path Method (CPM) DuPont & Remington-Rand Deterministic task times Activity-on-node network construction Project Evaluation and Review Technique (PERT) US Navy and Booz, Allen & Hamilton Probabilistic task time estimates Activity-on-arrow network construction 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-22 Project Network Activity-on-node (AON) - nodes represent activities - arrows show precedence relationships Activity-on-arrow (AOA) - arrows represent activities - nodes are events for points in time Event - completion or beginning of an activity in a project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-23 AOA Project Network for a House 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-24 Concurrent Activities Dummy activity two or more activities cannot share same start and end nodes add dummy activity to show correct precedence 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-25 AON Network for House Building Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-26 Activity Start Times A: B: C: D: 1-2-4-7 3 + 2 + 3 + 1 = 9 months 1-2-5-6-7 3 + 2 + 1 + 1 + 1 = 8 months 1-3-4-7 3 + 1 + 3 + 1 = 8 months 1-3-5-6-7 3 + 1 + 1 + 1 + 1 = 7 months 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e Critical path Longest path through a network Minimum project completion time 9-27 Activity Scheduling Earliest start time (ES) earliest time an activity can start ES = maximum EF of immediate predecessors Forward pass starts at beginning of CPM/PERT network to determine earliest activity times Earliest finish time (EF) earliest time an activity can finish earliest start time plus activity time EF= ES + t 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-28 Node Configuration 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-29 Earliest Activity Start and Finish Times 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-30 Activity Scheduling Latest start time (LS) Latest time an activity can start without delaying critical path time LS= LF - t Latest finish time (LF) latest time an activity can be completed without delaying critical path time LF = minimum LS of immediate predecessors Backward pass Determines latest activity times by starting at the end of CPM/PERT network and working forward 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-31 Latest Activity Start and Finish Times 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-32 Activity Slack Activity LS ES LF EF Slack S *1 0 0 3 3 0 *2 3 3 5 5 0 3 4 3 5 4 1 *4 5 5 8 8 0 5 6 5 7 6 1 6 7 6 8 7 1 *7 8 8 9 9 0 * Critical Path 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-33 Probabilistic Activity Times Beta distribution probability distribution traditionally used in CPM/PERT Mean (expected time): Variance: a + 4m + b t= 6 2 b-a = 6 2 where a = optimistic estimate m = most likely time estimate b = pessimistic time estimate 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-34 Examples of the Beta Distribution 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-35 Project with Probabilistic Time Estimates 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-36 Activity Time Estimates TIME ESTIMATES (WKS) ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 MEAN TIME VARIANCE a m b t 2 6 3 1 2 2 3 2 3 2 1 1 8 6 3 4 3 4 2 7 4 4 10 10 9 5 12 4 5 2 11 6 7 13 8 6 3 5 3 4 2 7 4 4 9 0.44 1.00 0.44 2.78 0.11 0.11 0.00 1.78 0.44 1.00 4.00 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-37 Activity Early, Late Times & Slack ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 t ES EF LS LF S 8 6 3 5 3 4 2 7 4 4 9 0.44 1.00 0.44 2.78 0.11 0.11 0.00 1.78 0.44 1.00 4.00 0 0 0 8 6 3 3 9 9 13 16 8 6 3 13 9 7 5 16 13 17 25 1 0 2 16 6 5 14 9 12 21 16 9 6 5 21 9 9 16 16 16 25 25 1 0 2 8 0 2 11 0 3 8 0 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-38 Earliest, Latest Times, and Slack 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-39 Total Project Variance 2 = 22 + 52 + 82 + 112 = 1.00 + 0.11 + 1.78 + 4.00 = 6.89 weeks 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-40 CPM/PERT With OM Tools 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-41 Probabilistic Network Analysis Determine probability that project is completed within specified time Z= where = = x= Z= x- tp = project mean time project standard deviation proposed project time number of standard deviations that x is from the mean 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-42 Normal Distribution of Project Time 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-43 Southern Textile - 30 weeks 2 = 6.89 weeks = 6.89 = 2.62 weeks Z= = x- 30 - 25 2.62 = 1.91 From Table A.1, (appendix A) a Z score of 1.91 corresponds to a probability of 0.4719. Thus P(30) = 0.4719 + 0.5000 = 0.9719 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-44 Southern Textile - 22 weeks 2 = 6.89 weeks = 6.89 = 2.62 weeks Z= = x- 22 - 25 2.62 = -1.14 From Table A.1, (appendix A) a Z score of 1.14 corresponds to a probability of 0.3729. Thus P(22) = 0.5000 - 0.3729 = 0.1271 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-45 Microsoft Project Popular software package for project management and CPM/PERT analysis Relatively easy to use House-building example 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-46 Microsoft Project Click on \"Tasks\" First step; Start Date 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-47 Microsoft Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-48 Microsoft Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-49 Microsoft Project - Zoom View 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-50 PERT Analysis with Microsoft Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-51 PERT Analysis with Microsoft Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-52 PERT Analysis with Microsoft Project 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-53 Project Crashing Crashing reducing project time by expending additional resources Crash time an amount of time an activity is reduced Crash cost cost of reducing activity time Goal reduce project duration at minimum cost 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-54 Normal Time and Cost vs. Crash Time and Cost $7,000 - $6,000 - Crash cost $5,000 - Crashed activity Slope = crash cost per week $4,000 - $3,000 - $2,000 - Normal activity Normal cost $1,000 - Normal time Crash time - 0 | 2 | 4 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e | 6 | 8 | 10 | 12 | 14 Weeks 9-55 Project Network - Building a House 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-56 Project Crashing ACTIVITY 1 2 3 4 5 6 7 NORMAL TIME (WEEKS) CRASH TIME (WEEKS) NORMAL COST 12 8 4 12 4 4 4 7 5 3 9 1 1 3 $3,000 2,000 4,000 50,000 500 500 15,000 $5,000 3,500 7,000 71,000 1,100 1,100 22,000 $75,000 $110,700 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e CRASH COST TOTAL ALLOWABLE CRASH TIME (WEEKS) 5 3 1 3 3 3 1 CRASH COST PER WEEK $400 500 3,000 7,000 200 200 7,000 9-57 Weekly Crash Costs - Fig 9-16a 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-58 Project Crashed to 31 Weeks Fig 9-16b 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-59 Time-Cost Relationship Crashing costs increase as project duration decreases Indirect costs increase as project duration increases Reduce project length as long as crashing costs are less than indirect costs 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-60 Time-Cost Tradeoff Minimum cost = optimal project time Total project cost Cost ($) Indirect cost Direct cost Crashing Time Project duration 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 9-61 Copyright 2014 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein. 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 6-62 PRINTED BY: irisgarcia3@student.kaplan.edu. Printing is for personal, private use only. No part of this book Title: Operations and Supply Chain Management, 8th edition may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Author(s): Roberta S. Russell and Bernard W. Taylor III Physical Text ISBN: 978-1-118-73854-2 CHAPTER 9: Project Management BanksPhotos/Istock photo LEARNING OBJECTIVES Yurchyks/Shutterstock AFTER READING THIS CHAPTER, YOU WILL BE ABLE TO: Discuss the project planning process, including planning tools, evaluation methods, and key elements. Discuss the benefits of and strategies for dealing with diverse project groups. Explain the basics of project scheduling and the use of Gantt charts. Define enterprise project management and discuss the key elements in project control. Develop and analyze both deterministic probabilistic and project networks. Use Microsoft Project for network analysis. Determine and explain project crashing and timecost tradeoffs. WEB RESOURCES FOR THIS CHAPTER INCLUDE OM TOOLS SOFTWARE ANIMATED DEMO PROBLEMS INTERNET EXERCISES ONLINE PRACTICE QUIZZES MICROSOFT PROJECT LECTURE SLIDES IN POWERPOINT VIRTUAL TOURS COMPANY AND RESOURCE WEBLINKS PROJECTS TO ACHIEVE SUSTAINABILITY IN DENIM JEANS PRODUCTION Sustainability is currently one of the most popular areas for project development and management among companies in the denim jeans industry. There are significant opportunities to engage in projects aimed at achieving sustainability goals throughout the denim jeans supply chain from cotton growers to denim jeans customers, and beyond. Cotton growers have undertaken projects to reduce water consumption for irrigation, use beneficial insects instead of chemical insecticides to control pests, improve farming practices to reduce the amount of chemicals used to grow cotton, and use farmland more productively to reduce the land area required to meet world cotton demand. Textile production consumes over 2.5 percent of the world's total water use. Environmentally conscious denim companies have engaged in projects to conserve water and reduce water pollution among its global denim suppliers. Levi Strauss, the first denim jeans company to establish global waterquality guidelines for its suppliers, has undertaken a number of sustainability projects aimed at water conservation and reducing water pollution, including projects encouraging customers to reduce water usage in cleaning their jeans, which accounts for almost 50 percent of the water used during the life cycle of a pair of jeans. Gap, Inc., has embarked on projects to reduce energy consumption and greenhouse gas emissions in its U.S. operations. It has developed a program that requires companies in its global supply chain that launder its denim in the finishing process to properly treat wastewater before it's discharged into the environment. At the end of the denim jeans supply chain, one of the most unique sustainability projects has been the recycling of old jeans into a green, clean, and effective insulation product. Recycled denim insulation can be used anywhere fiberglass insulation is used, but unlike fiberglass, denim does not end up in landfills, and since it's free of irritants, it doesn't require handlers to wear protective clothing. \"Green\" building and construction projects increasingly include recycled denim insulation. In this chapter we will learn how companies plan, manage, control, and schedule projects, including project management tools like CPM/PERT. Sources: The Levi Strauss & Company website at www.levistrauss.com/sustainability and, the Gap, Inc. website at www.gapinc.com In other chapters we discuss the scheduling of repetitive operations and activities, such as work scheduling and job scheduling, as an important aspect of managing an operation. Operational schedules are established to keep the flow of products or services through the supply chain on time. However, not all operational activities are repetitive some are unique, occurring only once within a specified time frame. Such unique, onetime activities are referred to as projects. Activity: individual job or work effort requiring labor, resources, and time, and subject to management control. Project: a unique, onetime operational activity or effort. Project management is the management of the work to develop and implement an innovation or change in an existing operation. It encompasses planning the project and controlling the project activities, subject to resource and budget constraints, to keep the project on schedule. Examples of projects include constructing facilities and buildings, such as houses, factories, a shopping mall, an athletic stadium, or an arena developing a military weapons system, new aircraft, or new ship launching a satellite system constructing an oil pipeline, developing and implementing a new computer system planning a rock concert, football bowl game, or basketball tournament and introducing new products into the market. Projects have become increasingly pervasive in companies in recent years. The nature of the global business environment is such that new machinery and equipment, as well as new production processes and computer support systems, are constantly evolving. This provides the capability of developing new products and services, which generates consumer demand for even greater product diversity. As a result, a larger proportion of total organizational effort now goes toward projectoriented activities than in the past. Thus, the planning and management of projects has taken on a more crucial role in operations management. In this chapter we focus on project management using CPM and PERT network scheduling techniques that are popular because they provide a graph or visual representation of the interrelationship and sequence of individual project activities. However, before presenting the CPM/PERT technique, we will discuss the primary elements of the project management processplanning, scheduling, and control. Project Planning The general management process is concerned with the planning, organization, and control of an ongoing process or activity such as the production of a product or delivery of a service. Project management is different in that it requires a commitment of resources and people to an important undertaking that is not repetitive and involves a relatively short period of time, after which the management effort is dissolved. A project has a unique purpose, it is temporary, and it draws resources from various areas in the organization as a result, it is subject to more uncertainty than the normal management process. Thus, the features and characteristics of the project management process tend to be unique. Figure 9.1 provides an overview of the project management process, which encompasses three other major processes planning, scheduling, and control. It also includes a number of the more prominent elements of these processes. In the remainder of this section, we will discuss some features of the project planning process, and in the following few sections we will discuss the scheduling and control processes. ELEMENTS OF A PROJECT PLAN Project plans generally include the following basic elements. Objectivesa detailed statement of what the project is to accomplish and how it will achieve the company's goals and meet the strategic plan and an estimate of when it needs to be completed, the cost and the return. Project scopea discussion of how to approach the project, the technological and resource feasibility, the major tasks involved, and a preliminary schedule includes a justification of the project and what constitutes project success. Contract requirementsa general structure of managerial, reporting, and performance responsibilities, including a detailed list of staff, suppliers, subcontractors, managerial requirements and agreements, reporting requirements, and a projected organizational structure. Schedulesa list of all major events, tasks, and subschedules, from which a master schedule is developed. Resourcesthe overall project budget for all resource requirements and procedures for budgetry control. Personnelidentification and recruitment of personnel required for the project team, including special skills and training. Controlprocedures for monitoring and evaluating progress and performance, including schedules and cost. Risk and problem analysisanticipating and assessing uncertainties, problems and potential difficulties that might increase the risk of project delays and/or failure and threaten project success. PROJECT RETURN In order for a project to be selected to be undertaken it typically has to have some kind of positive gain or benefit for the organization that is considering it. In a business, one of the most popular measures of benefit is return on investment (ROI). ROI is a performance measure that is often used to evaluate the expected outcome of a project or to compare a number of different projects. To calculate ROI, the benefit (return) of a project is divided by the cost of the project the result is expressed as a percentage or a ratio: If a project does not have a positive ROI, or if there are other projects with a higher ROI, then the project might not be undertaken. ROI is a very popular metric for project planning because of its versatility and simplicity. However, projects sometimes have benefits that cannot be measured in a tangible way with something like an ROI, what's referred to as a \"soft\" return. For example, a project that has raising employee satisfaction as its goal can result in real benefitsincreased productivity, improved quality, and lower coststhat are difficult to measure monetarily in the short run. A project by an Internet online retailer to install backup power generators to keep orders coming in and customers happy during a power outage is like insurance for something that may never happen, making an ROI difficult to determine. A \"green\" project may not have a tangible dollar ROI, but it can protect a company against regulatory infractions and improve its public image. In general, it may be more appropriate to measure a project's benefit not just in terms of financial return, but also in terms of the positive impact it may have on a company's employees and customers, that is, quality improvement. Figure 9.1: The Project Management Process Projects undertaken by government agencies or \"notforprofits\" typically do not have an ROItype benefit they are undertaken to benefit the \"public good.\" Examples of such projects are a project to fight AIDS in Africa (page 372), the reconstruction of the Pentagon after 9/11 (page 381), and the construction of the Olympic Stadium for the 2012 London Olympics (page 392). Cost containment is certainly an important consideration in such projects, but the actual benefit is not easy to measure in terms of dollars. THE PROJECT TEAM The project team is typically crossfunctional, consisting of a group of individuals selected from other areas in the organization or from outside the organization because of their special skills, expertise, and experience related to the project activities. Members of the engineering staff are often assigned to project work because of their technical skills, especially if the project is related to production processes or equipment. The project team may also include managers and staff personnel from specific areas related to the project. Workers can also be involved on the project team if their job is a function of the project activity. For example, a project team for the construction of a new loading dock facility might include truck drivers, forklift operators, dock workers, and staff personnel and managers from purchasing, shipping, receiving, and packaging, as well as engineers to assess vehicle flow, routes, and space considerations. Project teams are made up of individuals from various areas and departments within a company. The term matrix organization refers to a team approach to special projects. The team is developed from members of different functional areas or departments in the company. For example, team members might come from engineering, production, marketing, or human resources, depending on the specialized skills required by the project. The team members are, in effect, on loan from their home departments to work on a project. The term matrix is derived from the twodimensional characteristics of this type of organizational structure. On one dimension, the vertical, is the company's normal organizational structure for performing jobs, whereas the horizontal dimension is the special functional structure (i.e., the functional team members) required by the project. Matrix organization: a team structure with members from functional areas, depending on the skills required. Assignment to a project team is usually temporary, which can have both positive and negative repercussions. The temporary loss of workers and staff from their permanent jobs can be disruptive for both the employee and the work area. The employee must sometimes \"serve two masters,\" reporting to both the project manager and a regular supervisor. Since projects are usually exciting, they provide an opportunity to do work that is new and innovative, making the employee reluctant to report back to a more mundane, regular job after the project is completed. THE PROJECT MANAGER The most important member of the project team is the project manager. Managing a project is subject to lots of uncertainty and the distinct possibility of failure. Since a project is unique and usually has not been attempted previously, the outcome is not as certain as the outcome of an ongoing process would be. A degree of security is attained in the supervision of a continuing process that is not present in project management. The project team members are often from diverse areas of the organization and possess different skills, which must be coordinated into a single, focused effort to complete the project successfully. The project is subject to time and budgetary constraints that are not the same as normal work schedules and resource consumption in an ongoing process. There is usually more perceived and real pressure associated with project management than in a normal management position. However, there are potential opportunities, including demonstrating management abilities in a difficult situation, the challenge of working on a unique project, and the excitement of doing something new. The project manager is often under great pressure. ALONG THE SUPPLY CHAIN: A Project to Fight AIDS in Swaziland Swaziland in southern Africa has the highest rate of HIV infection in the world the HIV rate is 42% among pregnant women, which passes the virus from mother to baby. In 2004, the Elizabeth Glaser Pediatric AIDS Foundation started an $8.5 million project, as part of a larger program in 19 African countries, to help prevent mothertobaby transmission of the virus. Without intervention, approximately 40% of babies born to HIVpositive women can be infected during pregnancy, labor, and delivery or breastfeeding. A single dose of the drug nevirapine to mother and child can cut this rate in half, and a therapy program with a combination of drugs to stop HIV progression can reduce the rate to less than 2%. The project scope included expansion of the number of hospitals and clinics providing prevention services, and helping the government integrate comprehensive and sustainable HIV care and treatment into its health services. In addition to drug administration, the prevention program required a complex series of procedures including HIV testing and counseling, which required trained staff. The project team, working with the Swaziland Ministry of Health and with funding (and oversight) from the U.S. Agency for International Development, completed the project in 2010. The HIV mothertochild prevention program was extended to 60 healthcare facilities, with the potential to reach over 85% of pregnant women in Swaziland, preventing more than 60% of infant HIV infections and benefiting 90,000 HIVpositive pregnant women. Using the Internet, identify other diseaserelated projects. Source: Based on Susie Ma, \"Gift of Life,\" PM Network 25 (7) (July 2011), pp. 34-41. SCOPE STATEMENT The scope statement is a document that provides a common understanding of a project. It includes a justification for the project that describes which factors created a need within the company for the project. It also includes an indication of what the expected results of the project will be and what will constitute project success. The scope statement might also include a list of the types of planning reports and documents that are part of the project management process. Scope statement: a document that provides an understanding, justification, and expected result of a project. A similar planning document is the statement of work. In a large project, the statement of work is often prepared for individual team members, groups, departments, subcontractors, and suppliers. This statement describes the work in sufficient detail so that the team members responsible for it know what is required and whether they have sufficient resources to accomplish the work successfully and on time. For suppliers and subcontractors it is often the basis for determining whether they can perform the work and for bidding on it. Some companies require that a statement of work be part of an official contract with a supplier or subcontractor. Statement of work: a written description of the objectives of a project. WORK BREAKDOWN STRUCTURE The work breakdown structure (WBS) is a tool used for project planning. The WBS organizes the work to be done on a project. In a WBS, a project is broken down into its major components, referred to as modules. These components are then subdivided into detailed subcomponents, which are further broken down into activities and, finally, individual tasks. The end result is a project hierarchical organizational structure made up of different levels, with the overall project at the top of the structure and the individual tasks for each activity at the bottom level. The WBS format is a good way to identify activities and to determine the individual task, module, and project workloads and resources required. It also helps to identify relationships between modules and activities as well as unnecessary duplication of activities. Finally, it provides the basis for developing and managing the project schedule, resources, and modifications. Work breakdown structure (WBS): breaks down a project into components, subcomponents, activities, and tasks. There is no specific model to follow for the development of a WBS. It can be in the form of a chart or a table. It can be organized around project groups, project phases, or project tasks and events. However, experience has shown that there are two good ways for a project team to develop a WBS. One way is to start at the top and work one's way down, asking, \"What components constitute this level?\" until the WBS is developed in sufficient detail. The other way is simply to brainstorm the entire project, writing down each item on a sticky note and then organizing them together into the branches of a WBS. The upper levels of the WBS hierarchy tend to indicate the summary activities, major components, or functional areas involved in the project. They are typically described by nouns that indicate \"what\" is to be done. The lower levels of the WBS tend to describe the detailed work activities of the project required under the major components or areas. They are typically described by verbs that indicate \"how\" things are done. Figure 9.2: Work Breakdown Structure for a Computer Order Processing System Project Figure 9.2 shows a WBS for a project for installing a new computerized order processing system for a textile manufacturer that links customers, the manufacturer, and suppliers (see Example 9.1 on page 394). The WBS is organized according to the three major project categories for development of the systemhardware, software/system, and personnel. Within each of these categories the major tasks and activities under those tasks are detailed. For example, under hardware, a major task is \"installation,\" and activities required in installation include area preparation, technical/engineering layouts and configurations, and wiring and electrical connections. RESPONSIBILITY ASSIGNMENT MATRIX After the work breakdown structure is developed, which organizes the project work into smaller, manageable elements, the project manager assigns the work elements to organizational unitsdepartments, groups, individuals, or subcontractorsusing an organizational breakdown structure (OBS). The OBS is an organizational chart that shows which organizational units are responsible for work items. After the OBS is developed, the project manager can then develop a responsibility assignment matrix (RAM). The RAM shows who in the organization is responsible for doing the work in the project. Figure 9.3 on the next page shows a RAM for the \"Hardware/Installation\" category from the work breakdown structure for the computerized order processing project shown in Figure 9.2. Notice that there are three levels of work assignment in the matrix, reflecting who is responsible for the work, who actually performs the work, and those who perform support activities. As with the WBS, both the OBS and RAM can take many different forms depending on the needs and preferences of the company, project team, and project manager. Organizational breakdown structure (OBS): a chart that shows which organizational units are responsible for work items. Responsibility assignment matrix (RAM): shows who is responsible for the work in a project. Figure 9.3: A Responsibility Assignment Matrix PROJECT RISK Every project has risks of varying size and degree. A risk is any uncertain factor, event, or occurrence that might potentially interfere with the progress and successful completion of a project. A risk is not a problem it's the recognition that a problem might occur. By recognizing, understanding, and identifying potential problems in advance, and planning for them, the project team and manager can attempt to prevent them. It's the job of the project team and manager to manage and minimize the risk in their projects. Managing project risks is best addressed in the planning stage. A risk management plan documents how risks will be managed throughout the project. In addition to identifying potential risks, it specifies which team members are responsible for managing various areas of risk, how risks will be monitored throughout the project life cycle, how contingency plans for risks that materialize will be developed and implemented, and how project resources will be allocated to handle risk. The approach to, managing project risk is proactive. The first step is to identify all of the possible risks that can be anticipated in the project. This might include such things as resource changes, wrong assumptions, a change in company objectives and needs, technology changes, changes in the company's competitive environment, and anything new in the project, like technology. After as many risks as possible are identified, they should each be evaluated in terms of their impact and possible eventuality (i.e., probability), and possibly quantified. Although any kind of risk evaluation and measurement is obviously an estimate, the objective is to have a process to compare the risks to one another in order to prioritize them in terms of which ones will most threaten project success. The most important risks that are controllable can be mitigated, and strategies should be developed to mitigate those that can't be controlled. Successfully managing project risk can have a very positive impact it can keep projects within budget and save money, maintain project schedules, and result in the project success and quality results hoped for. ALONG THE SUPPLY CHAIN: Sustainability Projects Around the World Sustainability or \"green\" projects are increasing around the world, not simply because they are a \"good\" thing for the world's environment but also because they can positively affect a company's bottom line. Studies estimate that the global market for environmental products and services will approach $3 trillion by 2020. Most sustainability projects involve reducing energy consumption, resource use, and waste, and thus have costcutting implications. They uniquely mix cost cutting and savings with an inspiring sustainability message that appeals to both customers and stockholders they provide an opportunity to achieve multiple benefits. They benefit the larger community, they benefit the environment, and they benefit the bottom line. The New York-based Environmental Defense Fund reaches out to firms to engage them in environmentally focused projects, but knows companies won't undertake such projects out of the goodness of their heart. It requires businessoriented incentivesbottomline results and reduced regulatory risk. British Petroleum (BP) has a portfolio of solar, wind, and hydrogen energy projects, and plans to spend $8 billion on alternative and renewable energy projects in the coming decade. GE Energy China has invested $15 billion in clean energy projects, including coal, wind, solar, and biofuel in China. Foster's, the Australian brewer, invested $14 million in a water management project at one of its breweries that allowed it to double its brewing capacity with only a 10% increase in water consumption, making it the most waterefficient brewery in the world. The CocaCola Foundation has provided $1 million to support four water infrastructure projects in developing countries. Finnish telecom company Nokia Siemens Networks plans to decrease the energy consumption of its building by 6% and increase the use of renewable energy in company operations by 50% in the next few years, initiatives that will reduce carbon dioxide emissions by about 2 million tons annually. Denmark's DONG Energy's Horns Rev 2 209megawatt wind farm in the North Sea serves 200,000 households 20% of the total power in Denmark is generated by wind energy. Morocco recently opened Africa's largest wind farm as part of a program to meet more than 40% of the country's power needs with renewable energy by 2020. In the United States, over 3000 schools and almost 6000 universities have been certified by the Leadership in Energy and Environmental Design (LEED) program by undertaking sustainability projects such as solar panels or geothermal energy systems. Green schools save an average of $100,000 a year on operating costs by using 33% less energy and 32% less water. In Ohio, 250 LEED school projects are expected to save $1.4 billion over the next 40 years. (Plus, because schools are in use for many years, they have a much longer ROI payback period than private, commercial projects.) Hawaii's isolation in the Pacific makes it dependent on oil for 90% of its energy, and as a result makes it extremely vulnerable to price fluctuations and supply disruptions. To break itself of its oil dependency, it plans to launch sustainability projects requiring $20 billion in capital investment with a goal of using 70% clean energy for electricity and transportation by 2030. davee hughes uk/Flickr/Getty Images The Thanet Wind Farm 7 miles off the coast of England near Kent on the North Sea, is the world's third largest offshore wind farm covering 13.5 square miles and costing $1.4 billion to construct Food distributor U.S. Foodservice undertook a project to reduce fuel throughout its vehicle fleet and achieved fuel cost savings of $8.2 million, and a corresponding reduction in carbon dioxide emissions of 22,000 tons in just 3 months. At mattress manufacturer Sealy, in just 3 months sustainability projects in its manufacturing and delivery operations saved $1.2 million in fuel costs, reduced carbon dioxide emissions by 3000 tons, and saved $4 million in material costs while eliminating 650 tons of solid waste. A $450,000 project at the State University of New York at Buffalo to upgrade a quarter of its older computer servers with more energyefficient models saved $150,000 in annual energy costs while increasing computing capacity by 50%. Identify and discuss some potential \"green\" projects at your university. Sources: Based on Shawn Henry, \"Give and Take,\" PM Network 23 (8) (August 2009), pp. 28-33 Sarah Gale, \"Survival of the Greenest,\" PM Network 23 (4) (April 2009), pp. 14-15 Tegan Jones and Sarah Gale, \"Keeping the Faith,\" PM Network 23 (2) (February 2009), pp. 42-47 Sarah Gale, \"Sink or Swim,\" PM Network 23 (3) (March 2009), pp. 16-17 Sarah Gale, \"Measuring Up,\" PM Network 23 (7) (July 2009), pp. 14-15 Sarah Gale, \"Aloha to Sustainability,\" PM Network 24 (6) (June 2010), pp. 14-15 Sarah Gale, \"Little Green Schoolhouses,\" PM Network 26 (3) (March 2012), pp. 16-17 Sarah Gale, \"A Closer Look, DONG Energy, North Sea,\" PM Network 24 (4) (April 2010), pp. 34-37. Global Cultural and Diversity Issues in Project Management In the existing global business environment, project teams form a mosaic of different genders, cultures, ethnicities, nationalities, religions, and races. Only by acknowledging and embracing this diversity will companies be able to attract the best people and achieve project success. Diversity offers a significant business advantage by providing a more well rounded perspective on a project from team members with different views, experiences, and values. The project leader must focus on creating common goals and objectives for the project by using good communication techniques and developing a cooperative environment that identifies common values and fosters mutual respect for differences. However, while a globally diverse project team can have advantages, project success typically requires respect for cultural differences and a management style that acknowledges these differences. Global projects that involve companies and team members from different countries have expanded dramatically in recent years as a result of increased information and communication technology. Teamwork is a critical element in achieving project success, and in global projects diversity among international team members can add an extra dimension to project planning. For projects to be successful, cultural differences, idiosyncrasies, and issues must be considered as important parts of the planning process. The basics of project management tend to be universal, but cultural differences in priorities, nuances, and terminology can result in communication failures. Since English is used widely around the world, language is not necessarily an overriding problem. However, often it is not what people say that matters but what they mean. An example of one cultural difference that can play havoc with developing project schedules is the difference in work days and holidays in different countries. Southern Europeans take a lot of holidays, which can mess up a project schedule if they are not planned for. In the United States you can ask people to move their vacations or work while on vacation (via phone or Internet), but in countries like France or Italy, don't ask. In India, the work ethic is closer to the European than the U.S. model: when the day ends it's over, and weekends are inviolate. In some cultures, certain days are auspicious for starting a new venture or ending a task. Some cultures tend to be less aggressive than others, and team members will avoid confrontation so that when problems on a project occur (such as cost overruns or missed due dates) they will not be as aggressively addressed as they might be in the United States or in Germany, for example. Some team members in underdeveloped countries may bow to the perceived superiority of those from developed countries and not press their points aggressively even though they may be correct. Some people may simply have trouble working with others with cultural differences. Team members may think they do not understand team members from a foreign country, when it's actually their culture they don't understand. In Asian countries business typically employ a more methodical management style that values patience and building relationships. Project managers and team members in Japan consider establishing plans and providing direction to be more important managerial competencies than exist in the United States. What's considered to be micromanaging in the United States is the more common way of doing things in China. In Latin America a formal management style with specific managerial direction is a cultural trait. Business relationships are built slowly over time and they are based on trust and a sense of personal integrity. In Latin countries personal connections (that might include inquires into team members' personal lives) are often expected before business is transacted. In Malaysia a \"boss\" has almost absolute power over subordinates, whereas in Austria the perception is almost completely the opposite. The United States, Scandinavia, and many European countries fall somewhere in between. In countries like the United Kingdom, Sweden, and Denmark, people tend to cope with uncertainty and unexpected events much better than people in Italy and Portugal. As a result, the project manager must address the issue of cultural diversity up front in the planning process. Project managers have to approach diversity differently from country to country. The project manager should never assume that something that works at home will work abroad or that what will work in country A will work in country B. This makes cultural research and communication important elements in the planning process. The manager must determine what cultural faux pas must be avoidedthe things you don't do. It's important to discover at the start what holidays and cultural celebrations exist and the work ethic of team members. ALONG THE SUPPLY CHAIN: CrossCultural Project Teams In today's global economy, crosscultural project teams have become relatively common, but they still present unique situational problems that require an awareness of cultural differences on the part of U.S. team members and especially the project manager. In Saudi Arabia, Islam can play a significant role in a project religious beliefs strongly influence how Saudis interact with foreigners in a business setting. For example, Saudi workers take time out several times a day for prayer, which will affect work schedules and productivity. Since Saudi women don't work alongside Saudi men, foreign women team members may create an uncomfortable situation. Being respectful of the culture is essential thus, foreign women should always cover their heads. The Korean culture has a very strong work ethic, so foreign project team members should expect to work 16hour days, 7 days a week, whereas for the French, weekends and holidays are sacrosanct. In projects in China, Chinese team members will sometimes show more deference and politeness than Americans are used to, thus avoiding useful criticisms that are expected by U.S. team members. While U.S. companies value individualism, Chinese companies, reflecting 2000 years of traditional Confucian values, do not. Chinese project managers typically use a more collaborative leadership style than the more direct style of U.S. project managers. The Chinese word guanxi (gwanshee) refers to the strong reliance of business on social connections. A Chinese business partner with strong, wellplaced relationships can enhance project success. However, such relationships are developed slowly. The Chinese focus on the long term rather than the shortterm view prevalent in many Western companies. Patience is a respected virtue in China, where time is used as a competitive tool. \"Face\" or mianzi (meahnzee) is very important in China. Every conversation, meeting, meal, social, or business engagement is an opportunity for an individual to gain or lose stature. Rudeness, loudness, and anger have very negative consequences raising your voice to a Chinese manager will cause shame and embarrassment, and brand the offending person as a barbarian. (While in the United States, the \"squeaky wheel gets the grease,\" in China, the \"loudest duck gets shot.\") Rank is important in China people of high rank are given an extraordinary degree of deference. As such, instructions from leaders are respected and followed, and advice from junior team members is not generally expected or valued. Humility helps the U.S. way of doing business is not better than the Chinese way it's just different. Gifts are important in China, not so much for their intrinsic value as for their symbolic value of respect. They should reflect a degree of thoughtfulness and effortthat is, not just a logo tshirt. U.S. project team members should research the culture of their team members avoid stereotypes and not let them influence behavior develop and show an interest in cultural differences and learn about local traditions communicate effectively and not always assume you are being understood and listen carefully and empathetically. Project managers should develop a skill known as emotional intelligencethe ability to read facial, verbal, and physical cues that reveal how a person from another culture is feeling. Team members and project managers need to develop a cultural sensitivity and understanding to see how cultural differences may impact the project environment in order to work together effectively to achieve project success, on time and within the budget. Assume you are a project team member, and another team member is from a different country of your choice. Identify cultural differences between your two countries that you think might jeopardize project success. Source: Based on Bud Baker, \"When in China ...,\" PM Network 20 (6) (June 2006), pp. 24-25 Deborah Silver, \"Abroad Spectrum,\" PM Network 23 (1) (January 2009), pp. 62-68 and Michelle Bowles, \"Caution: Cultures Crossing,\" PM Network 25 (1) (January 2011), pp. 58-63. The project manager must often find team members who are particularly adept at bridging cultural differences. It may be helpful to identify a team associate who can keep the project manager and other team members informed of important cultural differences. Although longdistance communication via phone or email is very easy, the faceto face meeting is often better with someone with cultural differences, even with the added expense of travel. Project Scheduling The project schedule evolves from the planning documents we discussed in the previous section. It is typically the most critical element in the project management process, especially during the implementation phase (i.e., the actual project work), and it is the source of most conflict and problems. One reason is that frequently the single most important criterion for the success of a project is that it be finished on time. If a stadium is supposed to be finished in time for the first game of the season and it's not, there will be a lot of angry ticket holders if a school building is not completed by the time the school year starts, there will be a lot of angry parents if a shopping mall is not completed on time, there will be a lot of angry tenants if a new product is not completed by the scheduled launch date, millions of dollars can be lost and if a new military weapon is not completed on time, it could affect national security. Time is also a measure of progress that is very visible. It is an absolute with little flexibility you can spend less money or use fewer people, but you cannot slow down or stop the passage of time. Developing a schedule encompasses the following basic steps. First, define the activities that must be performed to complete the project second, sequence the activities in the order in which they must be completed next, estimate the time required to complete each activity and finally, develop the schedule based on this sequencing and time estimates of the activities. Because scheduling involves a quantifiable measure, time, several quantitative techniques, including the Gantt chart and CPM/PERT networks, are available that can be used to develop a project schedule. There are also various computer software packages that can be used to schedule projects, including the popular Microsoft Project. Later in this chapter we are going to discuss CPM/PERT and Microsoft Project in greater detail. For now, we are going to describe one of the oldest and most widely used scheduling techniques, the Gantt chart. THE GANTT CHART A Gantt chart (also called a bar chart) was developed by Henry Gantt, a pioneer in the field of industrial engineering, at the artillery ammunition shops of the Frankford Arsenal in 1914. The Gantt chart has been a popular project scheduling tool since its inception and is still widely used today. It is the direct precursor of the CPM/PERT technique, which we will discuss later. Gantt chart: a graph or bar chart with a bar for each project activity that shows the passage of time. Figure 9.4: A Gantt Chart The Gantt chart is a graph with a bar representing time for each activity in the project being analyzed. Figure 9.4 illustrates a Gantt chart of a simplified project description for building a house. The project contains only seven primary activities, such as designing the house, laying the foundation, ordering materials, and so forth. The first activity is \"design house and obtain financing,\" and it requires three months to complete, shown by the bar from left to right across the chart. After the first activity is finished, the next two activities, \"lay foundation\" and \"order and receive materials,\" can start simultaneously. This set of activities demonstrates how a precedence relationship works: the design of the house and the financing must precede the next two activities. Precedence relationship: the sequential relationship of project activities to each other. The activity \"lay foundation\" requires two months to complete, so it will be finished, at the earliest, at the end of month 5. \"Order and receive materials\" requires one month to complete, and it could be finished after month 4. However, observe that it is possible to delay the start of this activity one month until month 4. This delay would still enable the activity to be completed by the end of month 5, when the next activity, \"build house,\" is scheduled to start. This extra time for the activity \"order materials\" is called slack. Slack is the amount by which an activity can be delayed without delaying any of the activities that follow it or the project as a whole. The remainder of the Gantt chart is constructed in a similar manner, and the project is scheduled to be completed at the end of month 9. Slack: the amount of time an activity can be delayed without delaying the project. The Gantt chart provides a visual display of the project schedule, indicating when activities are scheduled to start, when they will be finished, and where extra time is available and activities can be delayed. The project manager can use the chart to monitor the progress of the activities and see which ones are ahead of schedule and which ones are behind schedule. The Gantt chart also indicates the precedence relationships between activities however, these relationships are not always easily discernible. This problem is one of the disadvantages of the Gantt chart method, and it sometimes limits the chart's use to smaller projects with relatively few activities. The CPM/PERT network technique does not suffer this disadvantage. Project Control Project control is the process of making sure the project progresses toward a successful completion. It requires that the project be monitored and progress be measured so that any deviations from the project plan, and particularly the project schedule, are minimized. If the project is found to be deviating from the planthat is, it is not on schedule, cost overruns are occurring, activity results are not as expected, and so onthen corrective action must be taken. In the rest of this section we will describe several key elements of project control, including time management, quality control, performance monitoring, and communication. TIME MANAGEMENT Time management is the process of making sure the project schedule does not slip and is on time. This requires the monitoring of individual activity schedules and frequent updates. If the schedule is being delayed to an extent that jeopardizes the project success, then the project manager may have to shift resources to accelerate critical activities. Some activities may have slack time, and resources can be shifted from them to activities that are not on schedule. This is referred to as time-cost tradeoff. However, this can also push the project cost above budget. In some cases, the work may need to be corrected or made more efficient. In other cases, original activity time estimates upon implementation may prove to be unrealistic, with the result that the schedule must be changed and the repercussions of such changes on project success evaluated. COST MANAGEMENT Cost management is often closely tied to time management because of the time-cost tradeoff occurrences that we mentioned previously. If the schedule is delayed, costs tend to increase in order to get the project back on schedule. Also, as the project progresses, some cost estimates may prove to be unrealistic or erroneous. Thus, it will be necessary to revise cost estimates and develop budget updates. If cost overruns are excessive, then corrective actions must be taken. QUALITY MANAGEMENT Quality management and control are an integral part of the project management process. The process requires that project work be monitored for quality and that improvements be made as the project progresses, just as in a normal production or manufacturing operation. Tasks and activities must be monitored to make sure that work is done correctly and that activities are completed correctly according to plan. If the work on an activity or task is flawed, subsequent act