Today we have countless tools for project management, but it is only recently that operational problems associated with them have been analyzed by operational researchers. The disaggregated structure of the work, the work packages, the network diagrams, the Gantt diagrams, and the pert / cpm networks constitute necessary resources to complete the activity in the shortest possible time and with the minimum of failures.
In many projects, limitations in labor and equipment make scheduling difficult, but these methods help us identify the times in the project when these constraints will cause problems and according to the flexibility allowed by the slack times of the projects. noncritical activities, allows the manager to manipulate certain activities to alleviate these problems.
It is important that new administrators know all these aspects, since it is a very important success factor for organizations and guarantees that the project objectives are achieved on time and with the budget allocated, and understand that the administration of new Times must know how to face new challenges as individual projects are organized and controlled.
DEVELOPING
- Life cycle of a project.
The projects are finite: they have a well-defined beginning and end, and sometimes they seem to have a life of their own. Consequently, it is legitimate to think that a project has a natural life cycle that consists of four phases: conception, training, operation and completion.
CONCEPTION : During the conception phase, the idea of carrying out a project is studied. If it is beneficial and feasible, the idea is transformed into a project proposal, and then the decision is made to “do it” or “not do it”.
The proposal should include the expected benefits, the estimates of the required resources (people, capital, equipment, etc.) and the duration of the project. When the proposal is approved, the project goes into the training phase.
TRAINING : During the training phase of the project, the objectives are clearly defined, the type of organization is selected and the project administrator is assigned. Then, the proposal is transformed into a master project plan and programs, resource requirements and budgets are elaborated in detail.
Project planning is done in order to anticipate problems and ensure that appropriate resources are available at the right time. This means that everyone interested in the project must participate in the planning stage, which can be time consuming, difficult and expensive, especially if the details of the tasks to be carried out are not clearly explained.
OPERATION : In the operational phase, the project team must already be formed. At this point work on the project begins.
Carrying out the process of monitoring project progress, updating project plans, and closely monitoring the team are key administrative responsibilities at this stage. Dealing with proposed changes to work to be done or project goals is perhaps the most challenging task of all.
TERMINATION : In the completion phase, work on the project must have already been completed (or suspended prematurely). During this phase, the successes and failures of the project (including its organizational structure) are analyzed, a detailed report is prepared for future project teams, and team members are assigned new tasks.
Although projects tend to be unique in one respect or another, a careful post-examination can help administrators avoid past mistakes and take advantage of improved organizational forms, planning and control techniques, and diverse management styles. that companies design and manage equipment more effectively in the future (see table number 1).
- Disaggregated structure of work.
DEFINITION: A work breakdown structure separates the project into a set of main components, which in turn are isolated into smaller and smaller components.
The product-centered EDTs listed in section A of table number 2 are the most useful form of breakdown structure. In this way, the project is represented at the vertex of the pyramid and below are the main components of the project. This subdivision is repeated until the smallest or most measurable concrete element of the project is defined that catches the attention of the administrators for whom the EDT is carried out.
By looking at the project from vertex to bottom, instead of creating a simple list of activities, administrators may not leave out any component of the project and may more easily establish relationships between those components.
Section B of table number 2 shows an EDT focused on the process for the information systems project that appears in section A of the same. The project is analyzed within a series of broader processes (research, design and programming). A process-focused EDT groups tasks by type, not by project segment. Given the scope of the project, it is unlikely that all segments of the project will work simultaneously. Likewise, it is difficult to discover that some activity is missing. If any activity is omitted, the resources needed (and therefore costs) may be underestimated or, worse, a distortion in the sequence of activities may occur and, eventually, the completion date may be poorly set of the project.
Note: A process-focused EDT provides little or no help in planning and managing the activities to be performed. It will only be analyzed here as a wrong example of project breakdown.
As indicated before, EDT and the list of activities derived from it are developed for a certain level of administration, not necessarily for the entire project. For example, the EDT that appears in section A of table number 2 is adapted to the higher levels of administration of the Mayo Clinic, while the project manager of the main ledger prefers the EDT that appears more detailed in table number 3.
Subordinate managers must pool their products and activities to obtain higher quality products; this is essential for coordination and integration. Thus, each level of administration that is successful will have EDT and integrated networks with those that are above or below the administrative hierarchy.
- Work packages.
In Table 4, the products that make up the main ledger project are likely to be grouped into work packages. A work package is the set of activities assigned to a certain group of people.
The work packages not only describe the work to be done, but also include the estimated duration of the tasks and the resources (people, equipment and funds) necessary to complete the work in the scheduled time. Often the people assigned to the activity or the person in charge of it must make time estimates. The importance of establishing appropriate time estimates cannot be overestimated; poor time estimation is the most frequent cause of delayed programming.
The work package may also include deadlines or activities to be carried out, the person in charge of the work and some other information. Table 4 shows a work package for the programs in module 1 of the main ledger project.
- Network diagram.
When the project has been divided into a set of activities and work packages have been created, the project planners develop a preliminary program. In order to develop it, it is necessary to establish the precedence relationships between the project activities. These relationships indicate which activities must be completed before other activities begin, and which must be performed at the same time.
In the main ledger project, the system requirements must be completed before starting to work on the computer programs. When the computer programs have been developed, the user manual should be written and the training material prepared. If sufficient resources are available the user manual and training material can be developed at the same time. Drawing up a project network diagram can help project managers separate and understand these relationships. Network diagrams consist of a series of circles or nodes connected by arrows. Section A of Table 5 shows a node activity network (DAN) diagram showing the most important activities of the main ledger project.
DEFINITION: In a node activity network diagram each activity is represented by a circle or a node. The arrows between the nodes indicate the order in which the activities should be executed.
As an alternative, an arrow activity network (DAF) diagram can be drawn for the main ledger project (see section B of table number 5).
DEFINITION: In an activity arrow network diagram each activity is represented by an arrow connecting two nodes. In these networks there is only a beginning and an end for the project.
It is observed that in DAFs the company needs special activities to show that the training material must be completed before training the users, but it does not need to be completed before installing the new system. This type of activity is known as dummy activity.
DEFINITION: Dummy activities are entered into DAFs to preserve the logic of precedence or to ensure that each activity has only two nodes: the start and the end.
In practice, in a DAF, each activity is assigned only two nodes: the beginning and the end. This is essential if a computer is used to build the network. As shown in Table 6, dummy activities may be necessary to ensure that each activity has only one starting node and one ending node.
In a DAF the nodes are numbered from left to right. The numbering of the nodes in a simple diagram is progressive. A node numbering algorithm, such as the one illustrated in Table 7, is a very useful tool as diagrams get larger and more complex.
5. Gantt charts.
DEFINITION: The Gantt chart is a horizontal bar chart in which the activity list goes below the vertical axis and the dates are placed along the horizontal axis.
In the Horizontal axis it corresponds to the calendar, or time scale defined in terms of the most appropriate unit for the work to be carried out: hour, day, week, month, etc. The activities that make up the work to be performed are placed on the Vertical axis. Each activity is mapped to a horizontal line whose length is proportional to its duration at which the measurement is made relative to the scale defined on the horizontal axis as illustrated. Table 8 shows a Gantt chart representing the main ledger project.
Activities that start earlier are located at the top of the diagram, and activities that start later are placed progressively, starting with the one that starts first, on the vertical axis. In this way, the diagram looks like the side view of a current flowing from a mountain, which explains why Gantt diagrams are also known as “cascade” diagrams. Also, the flow from the top left to the bottom right can give the idea of sequence by placing the number or letter of the preceding activity immediately to the left of the end of the bar representing the activity.
Gantt charts are practical tools widely used in project management because they are not only inexpensive and easy to apply, but they also present a large amount of information, where the administrator can immediately discover which activities are advanced in programming and which are overdue.
In general, the larger the project, the more difficult it will be to develop and keep Gantt charts up to date. However, in large projects, they can be useful to represent the various tasks into which the activity is divided or to give a broad idea of the project. Another more serious disadvantage is that they do not indicate which activities can be delayed or delayed without affecting the duration of the project.
6. PERT and CPM networks.
Network-based programming tools, such as PERT and CPM, can be used in place of or in conjunction with Gantt charts. In 1958, the United States Navy Special Projects Office, along with Boaz, Allen, and Hamilton, developed PERT (Program Review and Evaluation Technique) to plan and control the Polaris missile program. In the 1950s, duPont and Remington Rand developed CPM (Critical Path Method) to assist in the construction and maintenance of chemical plants. Today, CPM and PERT are used interchangeably and are very similar to each other.
PERT and CPM network diagrams are better tools than Gantt's to illustrate the sequence of activities that must be performed. These indicate which activities can be carried out simultaneously and which cannot. Other information that can be derived from these network-based programming tools is as follows:
- The estimated completion date of the project.Activities that are critical (that will delay the entire project if not completed by the indicated date).Activities that are not critical. These activities can be delayed (if there are reasons) without affecting the completion of the project. Know if the project is up to date, delayed or advanced. Know if the capital invested to date is equal to, greater or less than the budgeted amount. Sufficient resources are available to complete the project on time. Know the best way to reduce the estimated duration of the project.
The following six steps are common to PERT and CPM:
- Define the project and all the important activities or tasks. Determine the relationships between the activities. Decide which activities should precede others and which should follow others. Outline a network connecting all activities. Assign time and / or estimated costs to each activity. Calculate the time required to complete activities on each route of the network. Employ the network to support the project plan, program, monitoring and control.
Currently the only difference between PERT and CPM is related to the estimated duration of each activity: CPM uses a time estimate of a single point of duration of the activity, while PERT uses three (very probable, probable, least probable)).
Although PERT and CPM can be valuable tools in project planning and control, they are not suitable for all types of projects. The project should consist of a series of well-defined activities, each of which can start and stop independently of the others. The precedence relationships between these activities must be known, and real time estimates must be available for each activity.
One of the most frequent criticisms made of PERT and CPM is due to the emphasis they place on critical routes. In practice, activities that are not on a critical path often force the entire project to be delayed. As previously stated, administrators must closely follow both critical and non-critical routes.
The use of three time estimates and the beta distribution has also been criticized. If it is often difficult for people to estimate the exact time for each project activity, it will be much more difficult to estimate three. Even if all three estimates are reasonably accurate, the expected time is only an approximation and is subject to errors on the order of 5-10%. If errors of this magnitude are important to the project, formulas that reduce statistical error can be used.
- Critical Path in a network.
DEFINITION: The critical path is the path that needs the longest time to travel the network. The slack time for activities on the critical path is zero.
- Relationship between a flow or process diagram and a network diagram.
Process flow diagrams represent the work done to make a product, and the sequence as it runs helps them understand and improve processes by combining, simplifying, rearranging, or eliminating tasks. Activities that do not add value can be easily detected. For example, a team at the GE plant in Evendale, Ohio, developed several process diagrams to show how the manufacture of an aircraft engine shaft can be improved. The original lines on the diagram reflected that the plant initially emphasized workers and machine efficiency. The team found that many of the existing practices detracted from the combined resource efficiency of the plant and consequently suggested modified lines for the diagram.The improved flow led to a time savings of 50%, a reduction of USD $ 4 million in inventories and a radical improvement in inventory turnover.
Both the network diagrams (in any of the representations) and the process diagrams are related because they link the activities and events of a project to each other to reflect the interdependencies between them. An activity or event can have interdependencies with successor, predecessor, or parallel activities or events.
- Less likely time.
DEFINITION: The least probable time (optimistic) is the time required to complete the activity under the most favorable conditions.
- Most likely time.
DEFINITION: The most likely (probable) time is the time it takes to complete the activity under normal conditions.
- Maximum probable time.
DEFINITION: The maximum probable time (pessimistic) is the time necessary to complete the activity in unfavorable conditions (see table number 9).
Section A of Table 10 lists the least probable time, probable time, and maximum probable time for each activity in the main ledger project. Using these data, you can calculate the expected time and the variance of the expected time for each activity.
The earliest start and end dates, and maximum start and end dates for each activity are then recalculated using the expected times shown in section A of Table 10. In the activity network diagram in arrow presented in section B of table number 10 can be found these revised times. It is observed that the expected duration of the project increases from 62 to 68.5 days. The standard deviation of the critical path is 7.79 days.
What is the probability of completing the main ledger project in 70 days? To answer this question, the standardized normal distribution table in appendix B is used. The z-score will be equal to the desired date minus the expected date divided by the standard deviation of the critical path of the project:
It is important to know what is the area under the normal curve related to the calculated z-score. If z = 0.19, the area under the normal curve is 0.5753. The probability of completing the project in 70 days is, then, 57.53%. Similarly, it can be shown that the probability of completing the project in 80 days is approximately 93%.
- Cash flow and / or cash flow related to the project plan (cash flow).
You need to go back to the main ledger project and focus again on Activity B: Computer Software Development. Section A of Table 11 shows the cost estimates for each of the 12 tasks that constitute Activity B. The daily cost related to each task was calculated by dividing the total cost of the task by the estimated duration.
Using the daily cost value, it is possible to create a cash flow diagram showing the cumulative cash flow if each task starts as early as possible. It is also feasible to develop a cash flow diagram showing cumulative cash flow, if each task that is not on the critical path (tasks B3, B4, B6, B7, B9, and B10) is delayed as long as possible. These cumulative cash flow scenarios (see section D of table 13) provide the framework within which costs are expected to shift.
If activity times are not known with certainty, starting at the earliest start date provides a margin of safety. However, this margin is not independent. The earlier large cash outflows occur, the more loans are required, and this increases the cost of project financing. In effect, the cost of project financing may be causing the project manager to delay activities as much as possible. The lender (or general manager) may require a cap on monthly expenses; This can lead to the early initiation of some activities and the displacement of others to distribute expenses more evenly during the project.
The cash flow allows the following to be analyzed in the project:
- Make the decision of the best short-term investment mechanism when there is a surplus of cash. Take the necessary measures to define the source of funding when there is a shortage of cash, such as managing the owner's resources, or where appropriate, initiating the procedures necessary to obtain loans that cover this shortfall and allow the continuous operation of the company. When and in what amount should previously acquired loans be paid. When to make significant disbursements of money to keep the company operating. pay additional benefits to employees such as bonuses, vacations, profit sharing, etc. With how much cash can be made available for personal affairs without affecting the normal operation of the company.
Cash flow monitoring. As the project progresses, costs must be monitored and compared to the budget. Costs that are above or below budget should be identified in order to implement the necessary corrections.
It is assumed that for 30 days the main ledger project has been worked on. It took just nine days to complete the system specifications, one day less than expected. Activity B (system programming) is already underway, but it seems that it takes more time than expected. The administrator has entered the data in section A of table 14.
Since tasks B1, B2, B3, and B4 have already been completed, it is easy to identify which costs are below or above budget, by comparing the actual amount spent on a task with the budget amount for that task. For example, task B1 has an extra cost of US $ 285.
What happens to tasks that have not yet been completed? For example, task B5 is 50% executed. Assuming that costs are incurred at the same rate that work is completed, the equations can be used to calculate whether task B5 is above (or below) budgeted costs.
Value of work executed
Extra cost / lower cost
Where: = value of work performed in activity i
= percentage of work executed for activity i
= budget for activity i
= extra cost (lower cost, if the value is negative)
= actual expenses in activity i
Section B of Table 14 shows the costs calculated above or below the budget for each task completed or in progress in the main ledger project. It is observed that four of the seven completed tasks exceeded costs and that the tasks whose progress is being carried out incur cost overruns. This worries. Although task B9 (which is on the critical path) should be complete, it is only 40% complete. Each additional day devoted to this task expands the duration of the project by one day. Re-channeling the project may require costly expenses on tasks B5, B8, B11, and B12 to speed up execution (or rethink) Activity B.
- Definition of direct, indirect and total costs. Graph.
Direct Costs: They are all those that can be identified in the manufacture of a finished product, are easily associated with it and represent the main cost of materials in the elaboration of a product.
Indirect Costs: They are those that are involved in the elaboration of a product, but have a relative relevance compared to the direct ones.
Totals: They are those incurred in the operation of a company during a given period, they are quantified by adding their fixed and variable costs, expressing this relationship as indicated below:
TOTAL COSTS = FIXED COSTS + VARIABLE COSTS
CONCLUSION
In many Latin American countries we have not been able to structurally use the tools described above. For several decades, we have dedicated ourselves, in many cases, to using methodologies and techniques that currently are no longer giving good results and that we should be willing to modify or change. Most companies believe that this will generate a huge cost, but what they do not know is that this will actually reduce their costs enormously, because the goals proposed in the projects will be achieved and with the required budget.
Support the way of doing business in our days, sharing with our people the responsibility for continuous improvement in productivity and quality, as an indispensable part of a job well done. On the other hand, we must be able to recover the value of the trade and the pride of doing things well, and this is not really difficult to achieve, since many people in our environment are willing to do it.
The key to this lies in involving as many of the organization as possible in solving operational problems that in one way or another have been blocking the company's productivity. To achieve this, we should be able to supply and develop sufficient skills in our people to solve problems in their daily work. By solving operational problems, we will automatically improve quality and increase the organization's productivity and competitiveness.
BIBLIOGRAPHY
- Noori, Hamid: "Operations and production planning" gestiopolis.commonografias.com
