Project management is distinguished from production management primarily by the nonrepetitive nature of the work; a project is usually a one time effort. Although similar work may have been done previously, or may be done in the future. It is not usually repeated in the identical manner such as cars or TV sets being manufactured on a production line. The management of projects more complicated than the management of a production line due to the following characteristics, generally typical of all projects to a greater or lesser degree.
There are some formal tools to aid project management. Two of the best known tools that fill this need are PERT (Program Evaluation Review Technique) and CPM (Critical Path Method).
In order to explain the purpose, structure and operation of PERT and CPM, it is helpful to define the following terms:
Activity: An activity is an effort that
requires resources and takes a certain amount of time for
completion. Examples of activities are: studying for an
examination, designing a part, connecting bridge girders, or
training an employee.
Critical activity: A critical activity is an activity that, if even slightly de-layed, will hold up the scheduled completion date of the entire project.
Path: A path is a series of adjacent activities leading from one event to another.
Critical path: A critical path is the sequence of critical activities that forms a continuous path between the start of a project and its completion.
Event: An event is a specific accomplishment at a recognizable point in time; a milestone, a checkpoint; for example, passing a course at a university, submission of engineering drafts, completion of a span on a bridge, or the arrival of a new machine. Events do not have a time duration per se. To reach an event, all the activities that precede it must be completed. An event can be viewed as a goal attained, while the activities leading to it can be viewed as the means of achieving it.
Network: A network is a logical and chronological set of activities and events, graphically illustrating relationships among the various activities and events of the project.
Project: A project is a collection of activities and events with a definable beginning and a definable end (the goal). For example: getting a college degree, patenting an invention, building a bridge, or installing new machinery.
PERT and CPM are very similar in their approach; however, two distinctions are usually made. The first relates to the way in which activity duration are estimated. In PERT, three estimates are used to form a weighted average of the expected completion time, based on a probability distribution of completion times. Therefore, PERT is considered a probabilistic tool. In CPM, there is only one estimate of duration; that is, CPM is a deterministic tool. The second difference is that CPM allows an explicit estimate of costs in addition to time. Thus, while PERT is basically a tool for planning and control of time, CPM can be used to control both the time and the cost of the project. Extensions of both PERT and CPM allow the user to manage other resources in addition to time and money, to trade off resources, to analyze different types of schedules, and to balance the use of resources.
Due to the complex nature of most projects, it is very difficult to completely innate the delays and the cost overruns. However, with the appropriate management systems for planning, organizing, and controlling, it is possible reduce them to a reasonable level. The problem is that the cost of implementing and executing such systems can exceed their benefits because of the large amount of monitoring and reporting that is required.
The major purpose of PERT and CPM is to objectively identify these critical activities. Further, these techniques can tell us how close the remaining activities are to becoming critical. (This available delay is called slack or float.).
Detailed planning: The use of PERT and CPM
forces management to plan in detail and to define what must be
done to accomplish objectives on time.
Commitments and communications: Management is forced to plan and make commitments regarding execution times and completion dates. The tools also provide for better communication among the various departments in an organization and between suppliers and the client.
Efficient monitoring and control: The number of critical activities in a network (especially in a large one) is only a small portion of the total activities. Identification of the critical activities enables the use of an efficient monitoring system (mainly record-keeping and reports) concentrating only on the critical activities.
Identifying potential problem areas: The critical activities are also more likely to become problem areas. Once identified, contingency plans may be devised.
Proper use of resources: Employing PERT or CPM enables management to use resources more wisely by examination of the overall plan. Resources can he transferred to bottleneck or trouble areas from other activities.
Rescheduling: The tools enable management to follow up and correct deviations from schedule as soon as they are detected, thus minimizing delays.
Government contracts: Several government agencies require the submission of a PERT or CPM plan with bids.
Easily understood: CPM and PERT can be easily understood because they provide a method for visualizing an entire project. Therefore management can explain the tools to supervisors and employees in such a way that the chances of implementation are increased.
Adaptable to computers: PERT and CPM are easily adaptable to computer use. Large projects can be planned by computers in seconds is even capable of diagramming the networks.
Tools for decision making: PERT and CPM allow management to check the effectiveness and efficiency of alternative ways of executing projects by examining possible trade-offs among resources (usually time and cost).
Assess probability of completion (in PERT only): The probabilities of successfully meeting deadlines, finishing early, or finishing late can be assessed by the use of PERT.
Cost-time trade-offs (in CPM only): CPM enables management to evaluate trade-offs between the cost of executing a job in a normal way or expediting activities (called crashing) at a higher cost so as to finish earlier.
Some of the complated projects