Our society produces buildings, roads, dams, missiles, ships, and other products of large scale projects. The problems of planning and managing such projects stem from their great complexity and the interdependent nature of the activities that must be performed to complete them. Some projects are one of a kind, such as planning from the first space shuttle mission, whereas others are repeatable, such as building an apartment complex. Even repeatable projects may have many features that are custom designed and therefore lead to significant differences in the required activities from one project to the next. Thus, the focus of the managerial effort in project systems is on the detailed planning, scheduling and control of each major activity with respect to the project as a whole. In this article, we will discuss methods of project management that provide managers with the crucial information they need to complete a project successfully.
Project planning methods, also called network planning methods, were initially developed independently by two different groups. As an internal project of the DuPont Company, Critical Path Methods (CPM) were developed to plan and control the maintenance of chemical plants. They were subsequently widely used by DuPont for many engineering functions.
Parallel efforts were undertaken by the US Navy at about the same time to develop methods for planning and controlling the Polaris missile project. This project involved 3000 separate contracting organizations and was regarded as the most complex project undertaken to the date. The result was the development of the Performance Evaluation and Review Technique (PERT) methodology.
The immediate success of both the CPM and PERT methodologies may be gauged by the following facts. DuPont’s application of the CPM technique to a maintenance project in their Louisville works resulted in a reduction in downtime for maintenance from 125 to 78 hours. The PERT technique was widely credited with helping to shorten by two years the time originally estimated for the completion of the engineering and development program for the Polaris missile.
PERT and CPM are based substantially on the same concepts. As originally developed, PERT was based on probabilistic estimates of activity times that resulted in a probabilistic path through a network of activities and a probabilistic path through a network of activities and a probabilistic project completion time. CPM in contrast assumed constant or deterministic activity times. Actually, both the probabilistic and the deterministic cases are equally applicable to and usable wit either technique.
PERT / CPM Planning Methods:
We will use a relatively simple example, the introduction of a new product, to develop the methods used in generating a network representation of a project. The development of a project network may be divided into (1) activity analysis, (2) arrow diagramming and (3) node numbering.
The smallest unit of productive effort to be planned, scheduled and controlled is called an activity. For large projects, it is possible to overlook the need for some activities because of the great complexity. Therefore, although professional planning personnel are commonly used, the generation of the activity list is often partially done in meetings and round table discussions that include managerial and operating personnel. Table below is an activity list for the introduction of a new product.
A network is developed that takes account of the precedence relationships among the activities; it must be based on a complete, verified, and approved activity list.
Precedence Chart showing activities, their required sequence, and time requirements for the new product introduction project
Activity Code Description Immediate Predecessor Activity Time
A Organize sales office — 6
B Hire salespeople A 4
C Train salespeople B 7
D Select advertising agency A 2
E Plan advertising campaign D 4
F Conduct advertising campaign E 10
G Design package — 2
H Set up packaging facilities G 10
I Packages initial stocks H, J 6
J Order stock from manufacturer — 13
K Select distributors A 9
L Sell to distributors C, K 3
M Ship stock to distributors I,K 5
Activities will be diagrammed as occurring on the arcs or arrows. An alternate network diagramming procedure, where activities occur at the nodes, is beyond the scope of this article. We can refer to the first as an arcs network and the second as a “nodes” network.
The important information required for these network diagrams is generated by the following three questions:
1. Which activities must be completed before each activity can be started?
2. Which activities can be carried out in parallel?
3. Which activities immediately succeed other activities?
The common practice is simply to work backwards through the activity list, generating the immediate predecessors for each activity listed, as shown in Table above, the estimated time for each activity is also shown in table. The network diagram may then be constructed to represent the logical precedence requirements shown in Table above.