Introduction

Management is continually seeking new and better control techniques to cope with the complexities, masses of data, and tight deadlines that are characteristic of highly competitive industries. Managers also want better methods for presenting technical and cost data to customers.

Scheduling techniques help achieve these goals. The most common techniques are:

• Milestone charts

*Case Study also appears at end of chapter.

• Line of balance1

• Program Evaluation and Review Technique (PERT)

• Arrow Diagram Method (ADM) [Sometimes called the Critical Path Method (CPM)]2

• Precedence Diagram Method (PDM)

• Graphical Evaluation and Review Technique (GERT)

Advantages of network scheduling techniques include:

• They form the basis for all planning and predicting and help management decide how to use its resources to achieve time and cost goals.

• They provide visibility and enable management to control "one-of-a-kind" programs.

• They help management evaluate alternatives by answering such questions as how time delays will influence project completion, where slack exists between elements, and what elements are crucial to meet the completion date.

• They provide a basis for obtaining facts for decision-making.

• They utilize a so-called time network analysis as the basic method to determine manpower, material, and capital requirements, as well as to provide a means for checking progress.

• They provide the basic structure for reporting information.

• They reveal interdependencies of activities.

• They facilitate "what if' exercises.

• They identify the longest path or critical paths.

• They aid in scheduling risk analysis.

PERT was originally developed in 1958 and 1959 to meet the needs of the "age of massive engineering" where the techniques of Taylor and Gantt were inapplicable. The Special Projects Office of the U.S. Navy, concerned with performance trends on large military development programs, introduced PERT on its Polaris Weapon System in 1958, after the technique had been developed with the aid of the management consulting firm of Booz, Allen, and Hamilton. Since that time, PERT has spread rapidly throughout almost all industries. At about the same time, the DuPont Company initiated a similar technique known as the critical path method (CPM), which also has spread widely, and is particularly concentrated in the construction and process industries. In the early 1960s, the basic requirements of PERT/time as established by the Navy were as follows:

• All of the individual tasks to complete a program must be clear enough to be put down in a network, which comprises events and activities; i.e., follow the work breakdown structure.

• Events and activities must be sequenced on the network under a highly logical set of ground rules that allow the determination of critical and subcritical paths. Networks may have more than one hundred events, but not fewer than ten.

1. Line of balance is more applicable to manufacturing operations for production line activities. However, it can be used for project management activities where a finite number of deliverables must be produced in a given time period. The reader need only refer to the multitude of texts on production management for more information on this technique.

2. The text uses the term CPM instead of ADM. The reader should understand that they are interchangeable.

• Time estimates must be made for each activity on a three-way basis. Optimistic, most likely, and pessimistic elapsed-time figures are estimated by the person(s) most familiar with the activity.

• Critical path and slack times are computed. The critical path is that sequence of activities and events whose accomplishment will require the greatest time.

A big advantage of PERT lies in its extensive planning. Network development and critical path analysis reveal interdependencies and problems that are not obvious with other planning methods. PERT therefore determines where the greatest effort should be made to keep a project on schedule.

The second advantage of PERT is that one can determine the probability of meeting deadlines by development of alternative plans. If the decision maker is statistically sophisticated, he can examine the standard deviations and the probability of accomplishment data. If there exists a minimum of uncertainty, one may use the single-time approach, of course, while retaining the advantage of network analysis.

A third advantage is the ability to evaluate the effect of changes in the program. For example, PERT can evaluate the effect of a contemplated shift of resources from the less critical activities to the activities identified as probable bottlenecks. PERT can also evaluate the effect of a deviation in the actual time required for an activity from what had been predicted.

Finally, PERT allows a large amount of sophisticated data to be presented in a well-organized diagram from which contractors and customers can make joint decisions.

PERT, unfortunately, is not without disadvantages. The complexity of PERT adds to implementation problems. There exist more data requirements for a PERT-organized reporting system than for most others. PERT, therefore, becomes expensive to maintain and is utilized most often on large, complex programs.

Many companies have taken a hard look at the usefulness of PERT on small projects. The result has been the development of PERT/LOB procedures, which can do the following:

• Cut project costs and time

• Coordinate and expedite planning

• Eliminate idle time

• Provide better scheduling and control of subcontractor activities

• Develop better troubleshooting procedures

• Cut the time required for routine decisions, but allow more time for decision-making

Even with these advantages, many companies should ask whether they actually need PERT because incorporating it may be difficult and costly, even with canned software packages. Criticism of PERT includes:

• Time and labor intensive

• Decision-making ability reduced

• Lacks functional ownership in estimates

• Lacks historical data for time-cost estimates

• Assumes unlimited resources

• Requires too much detail

An in-depth study of PERT would require a course or two by itself. The intent of this chapter is to familiarize the reader with the terminology, capability, and applications of networks.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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