Approaches Applied by Project Managers in Incorporating Risks and Uncertainties in Project Schedules - Case Study Example

Project scheduling modeling A group of tasks that require completion within a certain period of time and incur some cost can be referred to as a project. Project scheduling mainly involves some sort of uncertainty where the basic inputs are never deterministic for each activity and are affected by a number of various uncertainty instances. In addition to that, there always exist a relationship between the project parameters and the uncertain sources. However, an instance such as the one stated above is not included in the current and most widely used techniques used for project planning and modelling. (Kerzner, 2001). In any project undertaken, the main aim is to ensure that the project is completed as soon as possible. This is effected by establishing the estimated time for starting the project and the time it will be completed. Therefore, calculations have to be done to ascertain that is possible to complete the project within a certain period of time and the cost to be incurred in completion of the project. Other objectives during this period include, finding out the possibility of delays in the project and what might cause such delays and also a progress control analysis to ascertain the amount of resources that will be required to carry out the project and their sources. (Lewis, 2000) Currently, there are tools that have been developed and are mostly used by project manager in undertaking projects. This tools are efficient in term of scheduling of projects. This paper will focus on methods applicable in project scheduling modelling and ways of handling uncertainty in project scheduling. Project scheduling involves designation of tasks. Tasks are activities that help in estimation of project completion and costs to be incurred in each activity. This therefore means that the amount of resources committed to a project are related to the activity completion time. In addition to that, the level in which specific data is applied is largely dependent on how intense the activity is. (Kerzner, 2001). One of the important aspects of project scheduling is the steps undertaken in completing the project. Therefore, the activities of the project need to be determined so as to help point out the optimal schedules and how the activity relations precede. Therefore, armed with such information, one can be able to fully undertake project control through application of the developed managerial tools. For instance, D-smart technologies is manufacturer of personal computers and is involved in a project of designing, manufacturing and marketing and new brand of probook personal computers. Therefore, project activities have to be identified and this will include three major tasks i.e. manufacturing of the new computers, training of staff and vendor representatives and advertise the new computers. (Kelley, 1991) To successfully execute the project activities, there is need by D-smart technologies to develop a chart that show how the relations precede i.e. a precedence relations chart. This chart gives a clear sequence of tasks to be completed and shows how these tasks precede each other. An example of such a chart will include; Activity Description Manufacturing Services M Design of prototype model N Materials for the project are purchased O The prototype model is manufactured P Proposed changes made on the design Q First batch of production starts Activities involving training of staff R Training of staff S Taking in view about the models T Training of salesmen and women Activities involving advertising of the product U Advertising campaigns before production V Advertising campaigns after production According to the chart above describing the chronological undertaking of each activity, one can be able to point out predecessor of certain activities. For example, task P is processor of S. This therefore means that P must be completed before S is undertaken. Therefore, from this, we can derive a precedence relationships chart as shown below. Activity Immediate predecessor Time for Completion M Null 80 N M 13 O N 4 P S 19 Q P 22 R M 24 S O, R 12 T P 27 U M 29 V P, U 43 Critical Path Method, (CPM) is the most common method applied in then managing projects. This is a deterministic technique since does not make any quantifications on uncertainties. Other techniques include critical chain scheduling (CCS), Monte Carlo simulation (MCS) and program evaluation and review technique (PERT). (Lock, 2007) PERT incorporates the aspect of distribution of probability in regard to each task in its incorporation of uncertainty. It approximates three different values in contrast to other methods. After the approximation of these three values, the critical path together with the time of project start and completion and established by just using the rules of probability. (Kelley, 1991) The Critical Chain (CC) Scheduling is based on “Goldratt’s Theory of Constraints (TOC) and for minimizing the impact of Parkinson’s Law i.e. jobs expand to fill the allocated time, it uses a 50% confidence interval for each task in project scheduling” (Kerzner, 2001, p.434). The time that remains is normally shifted to the longest chains so as to form a buffer. This technique is mostly based on “a fixed, right-skewed probability for activities that may be inappropriate and a sound estimation of project and activity duration is still essential” (Kelley, 1991, p.45) A survey by the Project Management Institute (2007) illustrates that approximately 20% of all the tools used in project management support the Monte Carlo Simulation. However, the Monte Carlo simulation has weaknesses since it assumes that an activity is independent in the whole duration of the project. In addition to that, it also is event-oriented i.e. the risks associated with project are assumed to be independent events hence meaning that the tools for implementation may not be able to point out the source and availability of uncertainties. Critical Path Method (CPM) is also another a deterministic tool that is used to establish the longest route taken by the network. It does this by comparing the task duration instances that are deterministic by the dependencies of the network. “The critical path can be identified by determining the following parameters for each activity i.e. Duration (D), latest start time (LS), earliest finish time (EF), latest finish time (LF) and earliest start time (ES).” (Lock, 2007, p.343) The appropriate time for starting and finishing a project can established by analyzing the network and then coming up with appropriate times in which the activities can be complete in correspondence with other activities. (Hutchings, 2004) Therefore, the critical path method provides important information in regard to the activities of a project. It can however not be used in real projects due to its assumption on single point estimates. In reference to above case study, the project schedule can be modelled as follows using both PERT and CPM approaches. These two approaches applies a network presentation in order to depict an activity with preceding relations and the time of completion. These approaches are applied so as to ensure that little is spent on a project as possible. Therefore, for the D-Smart Technologies’ project to be implemented successfully in a shortest period of time, the executive have to establish the convenient start and finish times of a project and its activities such that activities that have slack times in their schedules are least affected. (Lock, 2007) According to (Lewis, 2000), the earliest time the project can be started and be completed time in such a project can be determined by evaluating the network as below: Evaluating all the project’s activities that lack immediate predecessors. For instance; The earliest start time for an activity such as this is zero The time of finish can therefore be determined to be equal as the activation time. Therefore, the evaluation the project’s start and finish time for immediate activities has been determined. This implies that; The project start time is equal to finishing times for immediate predecessors. Therefore, the activity finish time is same as the sum of itself and then duration of the activity. For conclusive modelling results, normally the above process is repeated for all the nodes. Figure 1: Earliest start time and earliest finish forward pass (Source: Lewis, 2000) Consequently, the latest project’s start and finish times in such a project can be determined by making an evaluation of the network as below (Hutchings, 2004): Evaluating all the activities that immediately precede the finishing node. The project’s latest finish time (LF) refers to the minimal time for the completion of a project. The latest start time is found to be the difference of the project’s latest time of finish and the (LF) and activity duration. In order to evaluate the project’s latest time of finish for all the nodes, both the project’s latest time of finish and start time have to be determined as follows. Latest finish time (LF) = Minimum earliest time of start (LS) of all the immediate neighbors. The latest time of start (LS) = Latest time of finish (LF) – duration of the activity The above process is repeated until all nodes are evaluated. Figure 2: The latest start time and latest finish time backward pass (Source: Kerzner, 2001) The completion and start time of an activity may be delayed either deliberately or due to unforeseen circumstances. These project delays affect the duration of the whole project hence need for them to be assessed the effect they might on the whole project schedule. This can be carried out by calculating the slack time and finding out a critical path. The slack time in this context refers to the time of delay of an activity without any delays on the project completion date. This is done on assumptions that there will be no other delays affecting the project. It is calculated by the either establishing the difference between the project’s earliest start time and latest start time or earliest finish time and latest finish time. (Kerzner, 2001) Figure 3: Slack time in the project (Source: Kerzner, 2001) The term critical path refers to a group of activities of a project without slack time and connects both the START and FINISH nodes. A critical path in a network is established by the network’s critical activities. As illustrated in the diagram below, the activities’ completion time for all the project activities falling on the path is found out to be the least time required to complete the project. Figure 4: The critical path (Source: Vanhoucke, 2012) In such a project scheduling modelling, two types of delays can be observed i.e. single delays and multiple delays. Any delay of an activity in any kind leads to an experienced delay of the whole project being same whereas a delay in an activity that is non-critical will cause the delay project by the same magnitude as it exceeds the slack time. However, if the slack time exceeds the delay time, the project is not delayed at all. (Vanhoucke, 2012) Gantt Charts A Gantt chart is a tool applied in the controlling and monitoring of the progress of the projects. It is normally a graphical representation and indicates the time that the project is expected to be completed by listing activities on a vertical axis as shown in Figure 5. This charts are used establishing and following up progress of the activities of the project. The amount of work completed is depicted by shading the corresponding bar on the diagram. An appropriate percentage of a bar is shaded to document the completed work. Therefore, from the diagram, it is easy for the project manager to assess and establish how the project is going on and if it is keeping up with the stated schedule. (Vanhoucke, 2012) Figure 5: Gantt chart. (Source: Vanhoucke, 2012) It is important and the desire of any project manager to ensure that the resources allocated to the project are evenly distributed. Therefore methods for resource reveling and allocation are designed to help project managers in controlling how resources are allocated and utilized during project implementation. The project should be scheduled in a way that it ends within a stipulated time. The daily current expenses are minimized as possible by performing analysis cost estimates for each activity. (Kelley, 1991) In any project management task, how one handles uncertainties and risks associated with the project is one of very important issues. However, there are difficulties in terms of incorporating all that into the project. (Hutchings, 2004) Despite the available tools and ways that have been suggested by scholars, it is still a challenge is handling these issues. This is simply because the available tools and technologies for risk handling and uncertainty are mostly event-oriented and normally models risks based on the performance of the project. These tools ignore the fact that the parameters of a project are the causes of these uncertainties and do not evaluate all the uncertainty aspects of the project This scope of this paper has evaluated various approaches that can be applied by project managers in incorporating risks and uncertainties in project schedules. To be precise, it shows how the critical path method can be applied in identifying the resource indicators, uncertainties and risks. However, in order to incorporate and model this into real-life projects, the approach can be extended to include Object Oriented Bayesian Networks (BNs). Also, one should come up with methods of incorporating this BNs in the current and available scheduling models. References Hutchings, J. F. (2004). Project scheduling handbook. New York: Marcel Dekker. Kelley, J. E. (1991). Critical-Path Planning and Scheduling: Mathematical Basis. Operations Research, 9, 246-320. doi:10.1287/opre.9.3.296 Kerzner, H. (2001). Project management: A systems approach to planning, scheduling, and controlling. New York: John Wiley. Lewis, J. P. (2000). The project managers desk reference: A comprehensive guide to project planning, scheduling, evaluation, and systems. New York: McGraw-Hill. Lock, D. (2007). Project management. Aldershot, England: Gower. Vanhoucke, M. (2012). Project management with dynamic scheduling: Baseline scheduling, risk analysis and project control. Berlin: Springer. Read More