5 Project Planning and Control

16.
Project Planning & Control
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 16
16.2
Chapter Coverage
• What is a project?
• The project planning and control process
• Network planning – Critical Path Method (CPM)
16.3
Projects:
A project is a set of activities with a define start
point and a define end state, which pursues a
defined goal and uses a define set of resources.
16.4
Stages in project management
Stage 1
Understanding
the project
environment
Stage 2
Project Changes
definition
Stage 3
Project Corrective action
planning
Stage 4 Stage 5
Technical Project
execution control
16.5
Stage 1: Understanding project environment

The project environment comprises the
factors which may affect the project during
its life. See slide 16.6
16.6
Geo-social environment Econo-political environment
• Geography • Economy
• National culture • Government
The Project
Business environment Internal environment

• Customers • Company strategy
• Competitors • Resources
• Suppliers/sub-contractors • Other projects
Examples of factors that may affect the project

environment
16.7
Stage 2: Project definition

Three different elements define a project:
• Its objective: the end state that project
management is trying to achieve
• Its scope: the exact range of the responsibilities
taken on by the project management.
• Its strategy: how project management is going to
meet its objective.
16.8
Project objectives
The hierarchy of objectives:
• At the top of the hierarchy is the overall
objective or goal of the project, lower levels of
the hierarchy are the objectives of each part of the
project (big projects consists of many parts).
• Objectives of each part must be related to its
overall objective.
16.9
Objectives must be clear:

Good objectives are those which are clear, measurable and,
preferably, quantifiable.
One method of clarifying objectives is to break down project
objectives into three categories:
– Purpose: to prevent production from failing to meet
output as forecast.
– End result: a report which identifies the causes of lost
production, and which recommends how the target output
can be met.
– Success criteria: the report should be completed by 30
June. The recommendations should enable output to reach
at east 70 tonnes per year. Cost of the recommendations
should not exceed RM200,000.
16.10 The three project performance objectives
Quality
New aircraft
project
Fixed grant Music

research festival
project
Cost Time
16.11
Project scope
- Identifies the work content and the outcomes.
- Boundary setting exercise – divides work
content for each part of the project.
- Important for managing contractors –
commercial and legal aspect of the scope of
supply.
- Can change during the course of the project.
16.12
Project strategy
- Defines in general how the organization is
going to achieve its project objectives and
meet the related measure of performance.
- Two ways:
1) Define phases (time based sections) of the
project.
2) Set milestones at which specific reviews of time,
cost and quality are made.
16.13
Stage 3: Project planning

Fulfills four distinct purpose, it determines:
1. The cost and duration of the project.
2. The level of resources needed.
3. Helps to allocate work and monitor progress.
4. Helps to assess the impact of changes to the
project.
There are five steps…
16.14
Stages in the project planning process
Adjust as necessary
Identify Estimate Identify the Identify Fix the

the the times relationships time and schedule
activities and and resource for time
in the resources dependencies schedule and
project for between the constraints resources
activities activities
1 2 3 4 5
16.15 1. Identify activities: Work breakdown structure
1. Serve
breakfast in bed
2. Pour juice 5. Place 11. Butter 16. Arrange

in glass boiled egg in the toast tray
egg cup
12. Toast 17. Fetch

15. Fetch
3. Fetch 4. Fetch bread tray, plates
6. Boil egg 10. butter
juice glass and cutlery
Fetch
egg cup
13. Slice
bread
8. Bring
7.
water to
Fetch 14.
boil
egg Fetch
bread
9. Fill pan
with water
16.16 2. Estimate times and resources
Table 16.1
Time and resources estimates for a breakfast-in-bed” project
No Activity Effort (person) Duration (secs)
1 Serve breakfast in bed 1 120
2 Pour juice in glass 1 5
3 Fetch juice 1 10
4 Fetch glass 1 10
5 Place boiled egg in egg cup 1 3
6 Boil egg 0 240
7 Fetch egg 1 10
8 Bring water to boil 0 180
9 Fill pan with water 1 8
10 Fetch egg cup 1 10
11 Butter the toast 1 10
12 Toast bread 0 30
13 Slice bread 1 30
14 Fetch bread 1 10
15 Fetch butter 1 10
16.17 Typical subjective probability distribution
for an activity time estimate
Accuracy of estimates
comes with experience!
Probability
3 5 6 Activity duration 13
Optimistic time Expected time
Most likely time Pessimistic time
16.18
3. Identify relationship and dependencies
• All activities will have some relationship with

one another.
• Dependent or series relationship or
1 Slice bread Toast bread Butter toast
2 Fill pan with water Bring water to boil Boil egg
• Parallel relationship 1 & 2
16.19
4. Identify schedule constraints
• Resource constrained – only the available

resource level are used in resource scheduling
and are never exceeded hence, project
completion might slip.
• Time constrained – priority is to complete the
project within a given time.
16.20 “Making breakfast” - Do activities at
earliest time
Time (mins)
0 1 2 3 4 5 6 7 8 9
Orange
Activities requiring
operator time
Bread Toast Butter
Boil water Boil egg Bed

Water
room
Tray
4
Staff required
3
2
1
0
0 1 2 3 4 5 6 7 8 9
Time (mins)
16.21 “Making breakfast” – Minimizing staff
requirements
Time (mins)
0 1 2 3 4 5 6 7 8 9
Orange
Bread Toast Butter

Water
room
Tray
4
Staff required
3
2
1
0
0 1 2 3 4 5 6 7 8 9
Time (mins)
16.22 5. Fix the schedule
“Making breakfast” – Maximizing toast
quality
Time (mins)
0 1 2 3 4 5 6 7 8 9
Orange
Bread Toast Butter

Water
room
4 Tray
Staff required
3
2
1
0
0 1 2 3 4 5 6 7 8 9
Time (mins)
16.23
Stage 5: Project control

1. Project monitoring: current expenditure to date, amount of
overtime authorized, inspection failure, progress of activities
etc.
2. Assessing project performance: Compare planned and

actual expenditure
3. Intervene to change the project: when the project is out of

control in the sense of cost, quality levels or time,
intervention is required.
16.24
Network planning
1. Use of Gantt chart is the simplest technique that
supports project planning and control.
2. More elaborate and detailed techniques are

collectively called network analysis.
3. We will consider a network analysis method called

Critical Path Method (CPM)
16.25
Critical Path Method

1. Represents the project activities diagrammatically.
2. Project activities are represented by arrows (See 16.26).
3. At the tail (start) and head (finish) of each activity is a circle
which represents and event (See 16.27).
Rules for drawing a network diagram:
1. An event cannot be reached until all activities leading to it
are complete - (16.27 – event 5 is not reached until c and e
are completed).
2. No activity can start until its tail event is reached - (16.27 –
activity f cannot start until event 5 is reached).
3. No two activities can have the same heat and tail events
(16.28 – activities x and y cannot be drawn as first shown,
they must be drawn using a dummy activity (no duration and
shown as a dotted line)
16.26 Activities and network for a simple project
Immediate Activity duration

Activity (in days)
predecessors
a Remove furniture None 1
b Prepare bedroom a 2
c Paint bedroom b 3
d Prepare kitchen a 1
e Paint kitchen d 2
f Replace furniture c, e 1
Remove furniture Replace furniture
16.27 Network diagram for simple decorating project
EET – the very earliest the event could possibly
Activity reference a occur if all preceding activities are completed as
early as possible.
Activity duration 1
LET – the latest time that the event could possibly
1
take place without delaying the whole project
Event number
3
An Event
b c
2 3
1 a 2 5 f 6
1 1
d e
Earliest Event Latest Event
1 2
Time (EET) Time (LET) 4
16.28 Activity on arrow – Using “dummy”
activities
2
x
x
1 2 1 3
y
1 3 5
2 4 6
16.29
Critical Path
– Network diagrams have more that one sequence of
activities which will lead from the start to the end of the
project – these sequence are called paths.
– Each path has a total duration which is the sum of all its
activities.
– The path which has the longest sequence of activities is

called the critical path.
– It is called the critical path because any delay in and of the

activities on this path will delay the whole project.
16.30
Network analysis for simple decorating project
With earliest and latest event times
3
3 3
b c
2 3
1 a 2 5 f 6
0 0 1 1 1 6 6 1 7 7
d e
1 2
4
2 4
Chapter 16, Page 575
16.31
Worked Example
• The chief surveyor of a firm that moves earth

in preparation for the construction of roads has
identified the activities and their durations for
each stage of an operation to prepare a difficult
stretch of motorway (see table below). The
surveyor needs to know how long the project
will take and which are the critical activities.
16.32 Road Construction Activities
Activity Duration Preceding activities
A 5 -
B 10 -
C 1 -
D 8 B
E 10 B
F 9 B
G 3 A, D
H 7 A, D
I 4 F
J 3 F
K 5 C, J
L 8 H, E, I, K
M 4 C, J
16.33
Network Diagram For Motorway Project
18 20 G
A
H 3
5 D
8 7
B E L
0 0 10 10 27 27 35 35
10 10 8
F I
9
C 4
K M
1 19 19 5
4
3J
22 22
16.34
The End

5 Project Planning and Control

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16.

Project Planning & Control

Stage 1: Understanding project environment

Business environment Internal environment

Examples of factors that may affect the project

Stage 2: Project definition

Objectives must be clear:

Fixed grant Music

Stage 3: Project planning

There are five steps…

Stages in the project planning process

Identify Estimate Identify the Identify Fix the

2. Pour juice 5. Place 11. Butter 16. Arrange

12. Toast 17. Fetch

• All activities will have some relationship with

• Resource constrained – only the available

Boil water Boil egg Bed

Bread Toast Butter

Boil water Boil egg Bed

Bread Toast Butter

Boil water Boil egg Bed

Stage 5: Project control

2. Assessing project performance: Compare planned and

3. Intervene to change the project: when the project is out of

2. More elaborate and detailed techniques are

3. We will consider a network analysis method called

Critical Path Method

Immediate Activity duration

Remove furniture Replace furniture

– The path which has the longest sequence of activities is

– It is called the critical path because any delay in and of the

• The chief surveyor of a firm that moves earth

Network Diagram For Motorway Project

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