Pinto - pm2 - Session 5 - Shared Slides

Project Management
(SBOM207)
American University in Cairo

CDD/SCE
Session #5
Instructor: Abeer Iskander, PMP
1-1
Let’s Recap …
1-2
Critical Chain Project
Scheduling
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11-3

Theory of Constraints &
Critical Chain Project Scheduling
Identify
constrain
t A constraint limits any
system’s output.
Exploit The Goal –

Repeat Goldratt
constrain
process
t
Elevate Subordin
constrain ate
t system
Copyright © 2010 Pearson Education, Inc. 11-4

Publishing as Prentice Hall
Critical Chain Method (CCM) vs.
Critical Path Method (CPM)
CPM focuses
on TASKS CCM focuses on
RESOURCES
1-5
Psychological Aspects - CCM
Parkinson’s law/student syndrome

• Work expands to fill the time allocated for
its completion.
Multi-tasking
• More waste and less quality
Relay Race Culture

1-6
Copyright - Abeer Iskander PMP
Parkinson’s Law
• 'Work expands so as to fill the time available for
its completion.'
• Which means that if you have an assignment
due to next week, the assignment will only be
finished next week. But if you're given 2 months
time for the same assignment, then the
assignment will take 2 months to complete.
• 'If you wait until the last minute, it only takes a
minute to do.'
1-7
CCM Mechanism
• Uses identified Critical Path
• Wastes extra safety margin(estimate of 50%
probability only)
• Add buffers to protect the project path
• Allocate resources to activities
• Identify resource constraints in terms of number
and availability
• Identify critical chain
• Add resource buffers where needed
• Monitor buffer usage vs. progress of project
1-8
Identify the Critical Path
9 6
4
0 A 4 4 E 13 13 G 19
0 4 4 13 13 19
0 0 0 E
S 8 4
0 B8 8 F 12
7 15 15 19
7 7
ES & EF
Critical Path is Start AEG End
LS & LF
Float/slack
Copyright © 2013 RMC Publications, Inc 1-9

Waste Extra Safety Margin
Start End
A E G Traditional Way
0 4D 4 4 9D 13 13 6D 19 Project ends in 19
0 4 4 13 13 19 Days with all safety
margins built in
0 8D 8 8 4D 12
7 15 15 19
B F
Start End
A E G
2D 4.5D 3D Applying CCM
Activity durations total
up to 9.5 days with
50% Probability that it
4D 2D will take that duration
B F 1-10
Adding Project Buffers
Applying CCM
Since this is 50%
Start End probability then we
A E G need to protect the
2D 4.5D 3D 5D project timings
Project Buffer with a buffer in
case delays
4D 2D happen
Usually 50% of
B F the reduced
timings is added
as buffer so now
project ends in
14.5 days saving
1-11
Copyright - Abeer Iskander PMP 2.5 days
Adding Feeding Buffers
(non-critical paths)
Start End
A E G Feeding buffers
2D 4.5D 3D 5D from paths
Project Buffer
merging with
critical path is also
4D 2D 3D
Feeding Buffer recommended to
B F protect durations
of these activities
1-12
Allocating Resources
Start End
A E G
2D 4.5D 3D 5D
Project Buffer
4D 2D 3D
Feeding Buffer
B F End
Start
A-Bob E-Mike G- Jack
2D 4.5D 3D 5D
Project Buffer
4D 2D 3D 1-13
Feeding Buffer
B - Mike F-Jane

Resource Buffers and critical
Start
Chain identification End
A E G
2D 4.5D 3D 5D
Project Buffer
4D 2D 3D
Feeding Buffer
B F End
Start
2D 4.5D 3D 5D
Project Buffer
4D 1.5 2D 3D
Feeding Buffer
RB
B - Mike F-Jane

Critical Chain Identification
Start End
A E G
2D 4.5D 3D 5D
Project Buffer
4D 2D 3D
Feeding Buffer
B F End
Start
2D 4.5D 3D 5D
Project Buffer
4D 1.5 2D 3D
Feeding Buffer
RB
B - Mike F-Jane

Fever Chart – Buffer vs.
Progress
1-16
CCPM Changes
 Due dates & milestones eliminated
 Realistic estimates – 50% level not 90%
 “No blame” culture
 Subcontractor deliveries & work scheduled ES
 Non critical activities scheduled LS
 Factor the effects of resource contention
 Critical chain usually not the critical path
 Solve resource conflicts with minimal disruption
Resource Loading
The amounts of individual resources that a schedule requires during
specific time periods.
Resource loading table
Resource Name Work Details 5/5 5/12 5/19 5/26
Tom 40 hrs Work 8h 32h
Assign Bids 40 hrs Work 8h 32h
Jeff 40 hrs Work 8h 32h
Calculate Cost 40 hrs Work 8h 32h
Sue 40 hrs Work 8h 32h
Select Bid 40 hrs Work 8h 32h
Carol 8 hrs Work 8h
PR Campaign 8 hrs Work 8h
Resource Leveling (Smoothing)
Objectives
• To determine the resource requirements so that
they will be available at the right time
• To allow each activity to be scheduled with the
smoothest possible transition across resource
usage levels

General Procedure for Leveling
1. Create a project activity network diagram
2. Develop resource loading table
3. Determine activity late finish dates
4. Identify resource over allocation
5. Level the resource loading table

Example of leveling Overloaded
Resources
1-22
Project Information
Task Name Predecessor Duration # of Resources
A - 4 2
B - 4 1
C - 4 2
D A 2 5
E B 3 2
F C 2 2
G D 3 5
H G 5 3
1-23
Schedule Network Diagram
A D G H
2 3 5
4
S B E E
4 3
C F
4 2
1-24
Allocate # Resources over time
PATHS
Start ADGH End A (2) D (5) G (5) G (3)
Start BE End B (1) E (2)
Start CF End C (2) F (2)
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14
# of Resources - original 5 5 5 5 9 9 7 5 5 3 3 3 3 3
1-25
After 1st Attempt of Leveling
PATHS
1st Change
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14
# of Resources - after 1st change 5 5 5 5 7 7 5 5 5 3 3 5 5 5
1-26
Leveled Resources After 2nd attempt
PATHS
1st Change
2nd Change
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14
# of Resources - after 1st change 5 5 5 5 7 7 5 5 5 3 3 5 5 5 1-27
# of Resoures - after 1st & 2nd change 5 5 5 5 5 5 5 5 5 5 5 5 5 5
Creating Resource Loading Charts (1/4)
Display the amount of resources required as a

function of time.
4 B 5 5 D 9 9 E 11
Res = 2 Res = 7 Res = 3
1. Start with a
0 A 4 network diagram
Res = 6 11 F 12
Res = 6
4 C 7
Res = 2
Creating Resource Loading Charts 2/4
Activity Resource Duration ES Slack LF

A 6 4 0 0 4
B 2 1 4 0 5
C 2 3 4 4 11
D 7 4 5 0 9
E 3 2 9 0 11
F 6 1 11 0 12
2. Produce a table that shows the duration,

early start, late finish, slack, and
resource(s) required for each activity.
3. Draw an initial loading chart with
8 each activity scheduled at its ES.
Resources
6
Resource
4 imbalance
A D F
B
2 E
C
2 4 6 8 10 12 14
Project Days
4. Rearrange activities within their slack
to create a more level profile. Splitting
8 C creates a more level project.
Resources
4 C
A D F
B
2 E
C
2 4 6 8 10 12 14
Project Days
Solutions to Resource Leveling
Assign a
Delay certain Change task
different
tasks dependencies
resource
Remove tasks Add tasks

CCPM Critiques
 No milestones used
 Not significantly different from PERT
 Unproven at the portfolio level
 Anecdotal support only
 Incomplete solution
 Overestimation of activity duration padding
 Cultural changes unattainable
Let’s Role- Play
1-42
Where are we so far
Introduction to Effect of Project Initiation & Leading Project

Project mgmt. Organizational Scope Mgmt. Teams & managing
SSC on projects Stakeholders
Risk
Management
Scheduling
Effective Cost
Techniques &
estimations
its challenges
Project Evaluation and Control

The Project Control Cycle
1. Setting a Goal
4. Taking Action 2. Measuring

and Recycling Progress
the Process
3. Comparing Actual
with Planned
Milestone Analysis
Milestones are events or stages of the project
that represent a significant accomplishment.
Milestones
…show completion of important steps
…signal the team and suppliers
…can motivate the team
…offer reevaluation points
…help coordinate schedules
…identify key review gates
…delineate work packages
Tracking Gantt Chart
Project status is updated by

linking task completion to the
schedule baseline
Monitor & Control Documents
Work Performance data
Work Performance
Information
Work Performance
Reports
Earned Value Technique (EVT)
As of today what
is the estimated As of today what
value of work is the estimated
planned to be Cost of value of work
done?
Cost of work actually
work Earned accomplished?
scheduled
EV
PV
Actual Cost of
Work done
AC As of today what is
the actual cost
incurred of the work
1-56
accomplished?
Earned Value Terms & Indices
• Schedule Variance (SV)
• Measure of schedule performance on a project.
SV = ( EV – PV )
• Schedule performance index (SPI)
SPI = EV/PV
• Cost Variance (CV)
• Measure of cost performance on a project.
• CV = ( EV – AC )
• Cost performance index (CPI)
CPI = EV/AC
Let’s think a step further…
1-58
SV & CV
• What does negative SV mean concerning
project progress?
• What does positive CV mean concerning project
progress?
• If SPI >1, is this a good indication?
• If CPI is <1, is this a good indication?
1-59
Completion & Forecasting
Estimated At Completion (EAC)
What do we currently expect the Total project to
cost?
Estimate to Complete (ETC)

From this point on how much do we expect it to
cost till we finish?
Budgeted cost at completion (BAC)

How much did we budget for the whole project effort?
1-60
Steps in Earned Value Management
1. Clearly define each activity including its

resource needs and budget
2. Create usage schedules for activities and

resources
3. Develop a time-phased budget (PV)
4. Total the actual costs of doing each task (AC)
5. Calculate both the budget variance (CV) and

schedule variance (SV)
Let’s look at an Example
• You have a project to build a new fence.
• Fence has four equal sides.
• Each side takes one day to build and they will be built
one after the other.
• $1000 has been budgeted for each side.
• Today is the end of Day 3 and the following is the
progress:
– Side 1 : 100% completed at $1000
– Side 2: 100% completed at $1,200
– Side 3: 50% completed at $600
– Side 4: not started
• $1000 has been budgeted for each side.

• What is the PV, EV, SV & CV and finally is it good
progress or not?
1-62
Copyright © 2013 RMC Publications, Inc
Earned Value Milestones
AC
Actual
Cost Overspend
PV EV
Budget
Slip
Schedule Performed
Schedule
Project Performance Management
Cost
EAC
Data date
BAC
AC
PV CV= EV - AC
SV= EV - PV
EV
Time
64
GROUP WORK
1-70
Exercise
.
71
Example - Wall
Construction
Wall Construction
Time = 1 week per wall
Cost = $ 1,000 per wall,
materials and labor
Total Schedule = 4 weeks
Total Cost = $ 4,000
Working days 5 day per week

starting on Sunday and finish on
Thursday by 5 PM 72
Progress to date
5 pm Wednesday, Week 2
10 % So far….
Wall 1 100% is complete
EARNED Wall 2 50% is complete

Wall 3 10% is complete
Wall 4 0%
50 %
Actual costs so far are :

$2,250 73
How good are we doing?
Are we on time as per the schedule?
Are we on budget, or are we over or

underspending?
1-74
Planned Value
How much work should

have been completed -
PV?
PLANNED
Wall 1 100% = $
1,000
Wall 2 80% = $
800
Wall 3 0% = 0
Wall 4 0% = 0
75
PV = $ 1,800
Earned Value
10 % What is the budgeted

value of actual work -
EV?
EARNED
Wall 1 100% = $ 1,000
Wall 2 50% = $ 500
Wall 3 10% = $100
50 %
Wall 4 0% = 0
Total = $1,600
76
Schedule & Cost Variance
Earned Value
PV $1,800
EV $1,600
AC $2,250
Schedule Variance = EV - PV
= $1,600 -
$1,800
= ($200)
Cost Variance = EV - AC
= $1,600 -
$2,250
77
= ($650)
SPI & CPI
Performance Indices
PV $1,800
EV $1,600
AC $2,250
SPI = EV / PV
= $1,600 /
$1,800
= .9
78
CPI = EV / AC
= $1,600 /
$2,250
= .7
Where are we so far
Introduction to Effect of Project Initiation & Leading Project

Project mgmt. Organizational Scope Mgmt. Teams & managing
SSC on projects Stakeholders
Project
Monitor/Control
in execution & Risk
Closing Management
Scheduling
Effective Cost
Techniques &
estimations
its challenges
1-80
Project Close-Out and
Termination

Project Termination
All activities consistent with closing out the project
Extinction
Addition
Integration
Starvation

Elements of Project
Closeout Management
Gaining Harvesting
Finishing Handing
Over the Acceptance the Benefits
The Work
Product for the Reviewing
Product How
It All Went
Putting it All to Bed
Disbanding the Team

Lessons Learned Meetings
Common Errors
 Misidentifying systematic errors
 Misinterpreting lessons based on events
 Failure to pass along conclusions
Meeting Guidelines
 Establish clear rules of behavior
 Describe objectively what occurred
 Fix the problem, not the blame

Closeout Paperwork
• Documentation
• Legal
• Cost
• Personnel

Why are Closeouts Difficult?
 Project sign off can be a de-motivator
 Constraints cause shortcuts on back-end
 Low priority activities
 Lessons learned analysis seen as bookkeeping
 Unique view of projects

Early Warning Signs of Project Failure
• Lack of viable commercial objectives

• Lack of sufficient authority to make decisions
• New product developed for stable market
• Low priority assigned to the project by
management

Early Termination Decision
Rules
 Costs exceed business benefits
 Failure to meet strategic fit criteria
 Deadlines continue to be missed
 Technology evolves beyond the project’s scope

Final Report Elements
Project performance
Administrative performance
Organizational structure
Team performance
Project management techniques
Benefits to the organization and customer

COMING to the END…
HAVE DO
 Project Management Plan Close Suppliers’ Contracts
 Final deliverable Close Project Team Contracts
 Approval from stakeholders Finalize release plans
on final deliverable Record lessons learnt from
 Suppliers’ Contracts failures & Successes
 Project Team Contracts Prepare internal closure
documents (customized as per
 Reports on successes and your organization)
failures

Organizational Skills
Being organized & structured

Organizational Skills
Documentations
Contracts &
Vendor Quotes
Project Status
Project Plans
Reports
Documents
Personnel Requirements
records Info
Meeting Minutes

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Project Management

American University in Cairo

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11-3

Exploit The Goal –

Copyright © 2010 Pearson Education, Inc. 11-4

Parkinson’s law/student syndrome

Relay Race Culture

Copyright © 2013 RMC Publications, Inc 1-9

Copyright - Abeer Iskander PMP

Copyright - Abeer Iskander PMP

Copyright - Abeer Iskander PMP

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 12-20

2. Develop resource loading table

3. Determine activity late finish dates

4. Identify resource over allocation

5. Level the resource loading table

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 12-21

Start ADGH End A (2) D (5) G (5) G (3)

Start BE End B (1) E (2)

Start CF End C (2) F (2)

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14

Start ADGH End A (2) D (5) G (5) G (3)

Start BE End B (1) E (2)

Start CF End C (2) F (2)

Start BE End B (1) E (2)

Start CF End C (2) F (2)

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14

Start ADGH End A (2) D (5) G (5) G (3)

Start BE End B (1) E (2)

Start CF End C (2) F (2)

Start BE End B (1) E (2)

Start CF End C (2) F (2)

Start BE End B (1) E (2)

Start CF End C (2) F (2)

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14

Display the amount of resources required as a

Activity Resource Duration ES Slack LF

2. Produce a table that shows the duration,

Remove tasks Add tasks

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-32

Introduction to Effect of Project Initiation & Leading Project

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13-49

4. Taking Action 2. Measuring

Project status is updated by

Work Performance data

Estimate to Complete (ETC)

Budgeted cost at completion (BAC)

1. Clearly define each activity including its

2. Create usage schedules for activities and

5. Calculate both the budget variance (CV) and

• $1000 has been budgeted for each side.

Working days 5 day per week

EARNED Wall 2 50% is complete

Actual costs so far are :

Are we on time as per the schedule?

Are we on budget, or are we over or

How much work should

10 % What is the budgeted