Petersen General ContractorsCase 8-1

Chapter 8PERT, CPM, Resource Allocation and GERT

On-line MS Project Tutorialshttp://webcampus.stthomas.edu/s3c/Software/Project/ProjectEC_1a.html

Team Alternative

• Form teams of five or fewer– Identify the task of each team member– Rate the contribution of each member

Teams 2,3,and 4

Team 1

Real World Considerations

• Other concurrent projects (size of total commitments)

• Coordinating with other companies (structure)• Have you ever built a TV Tower? (technology)• What is the basis for the estimators estimate?

– Is company experience still valid?– Is 15% for contingencies still appropriate?

Thankfully this is not the real world.Thankfully this is not the real world.Size

Stru

ctur

e Technology

Tasks with MS ProjectTeam One • Manage the other teams • Do a post mortem

– Identify the benefits of a team approach

– Identify the issues encountered– Characterize your team

Team Two - At normal rate• In how many days can the job be

completed?• What bid will yield a 10% pre tax profit?• To reduce risk, what are the key tasks to

watch?

Team Three - At the fastest time:• In how many days can the job be

completed• What bid will yield a 10% pre tax

profit?• To reduce risk, what are the key tasks

to watch?

Team four - • If cost is not a consideration, what

else can be done to shorten the project?

• Address real world issues

Deliverablesshort written reposts

• Team One - Reality of managing this project • Teams Two and Three - MS Project based appropriate network

diagrams for each time scenario identifying: – Key events – Dependencies – Cost estimates for each time scenario

• Team Four– Using team one and two's analysis, provide a list of alternatives for:

• Shortening the project if cost is not an object• Further reducing costs

– Address the real world issues

FAQs

• Yes, you will work in teams• Yes, this is a project within a project• • • Others?

Petersen General ContractorsCase 8-1

the book answer

At a Normal Rate

• Time– The critical path, a a-f-h-i-v-k-cc-ee = 224 days– Next longest path is a-b-c-l-n-m-p-q-r-s-u-ee = 200 days

At a Normal Rate

Costs– Total direct costs = $364,050

• Direct labor = $206,280 • Direct material = $157,770

– + Indirect costs @ 65% of direct cost = $600,682.50– + Contingency @ 15% of direct plus indirect cost =

$690,784.87– + Bid with 10% profit = $759,863.35

$500Direct cost are 50%

Shortest Possible Timesame path new time

• Time– The critical path, a a-f-h-i-v-k-cc-ee = 191 days– Second critical path is a-b-c-l-n-m-p-q-r-s-u-ee = 191 days

25

29

30 14

25 434

Shortest Possible Timesame path new time, new cost

Costs– Total direct costs = $383,813.20

• Direct labor = $226,043.20– Activities on the critical path increase = $16,320– Activities on the second critical path = $3443.20

• Direct material = $157,770 – + Indirect costs and contingency = $728,285.54 – + Bid with 10% profit = $801,114.10

(plus $41,250.25 for 35 days)

Time is money

What to Supervise More Carefully

• Near critical paths• Areas of new technology or technique• New staff• High risk items• Any “high visibility” items• Others

Glass, china and reputation are easily brokenAnd never well mended. Ben Franklin

If “Shortest” is Still Too Long

• Sub contract sub assemblies• Buy a tower and transport it• Others?

Think out of the box

Some Leading Authors

Idea-Based Leadership

• Ensure the presence and respect for idea practitioners

• Set forth an idea strategy in a idea-friendly culture

• Be open to ideas and the people who suggest them

• Reward the practitioners• Signal the importance of ideas

Yes No

How does your organization rate and whySource: What’s the Bid IdeaThomas Davenport, and Laurence Prusak with H. James Wilson

Breaking Through to Innovation• Technology = arrangement of objects, ideas and people to accomplish a goal• Technology brokering = exploiting existing technologies to create new ones• Innovation is not breaking free of the past; it is harnessing the past in new

ways

Source:How Breakthroughs HappenAndrew Hargadon

Your perspective

and knowledge

Othersperspective

and knowledge

The Balancing Act

ActionableDogma

Jack of all tradesMaster of none

"Knowledge" is both the raw material for innovation and "comfort" that inhibit seeking new opportunities outside of your comfort zone.

Inside Outside

Dee

pSh

allo

w

Breath

Dep

th

Networking

New Ideas

Source:How Breakthroughs HappenAndrew Hargadon

The Rules

• Never forget the future is already here. • Analogy trumps invention• Find your discomfort zone• Divided we innovate.• Bridge to your strengths • Build to your weakness • Build teams • As goes the individual, so goes the organization• Rip, mix and burn Source:

How Breakthroughs HappenAndrew Hargadon

Efficiency – Innovation Dichotomy

Efficiency InnovationStay inBusiness

Today’s BusinessClimate

Source:Creating the Innovation CultureFrances Hribe

Honoring the Dissenters Foster Innovation

• Dissenters offer new ideas• Force others to challenge their assumptions• Dissent can:

– Kill wrong or out of date ideas– Tap into peoples tacit (gut) knowledge– Break you out of a think rut SOW

Source:Creating the Innovation CultureFrances Hribe

How to Kill Dissent (Innovation) Without Really Trying

• Best practices – make the status quo better• Treat everybody equally – no one is a

valuable resource who's ideas count• Hire a mini me – all run down the same

train of thought• Design a process for innovation –

oxymoronic?Source:Creating the Innovation CultureFrances Hribe

How to Foster Innovation

• Speak last in meetings• Seek out dissenter’s view• Protect the dissenter• Help dissenter be heard • Challenge the Status Quo

Minorit

y Rep

ots ar

e

a go

od th

ing

Source:Creating the Innovation CultureFrances Hribe

80 /20 and You19th Century – Vilfredo Pareto

• A small minority (20%) account for a majority (80%) of the wealth

20th Century – Joseph Juran

• Solving quality problems depends on differentiation the vital few cause from the trivial many.

Every job should leverage your 20% genius 80% of the timeSource:Richard Koch80/20 Individual

                                   

                                   

Out of the Box Thinking

•Budgets and Schedules•Self Interest

•Silos and Turf•Good Enough

Problems Looking for a Solution•If resources were no object•Walk in the others shoes

Solutions Looking for a Problem•Where else would it fit•Do it the opposite way

Source:Why NotBary Nalebuff and Ian Ayres

Selling your Ideas

• Elevator pitch• KISS – keep is similar silly• Know to whom to pitch• Make it their idea

Source:Why NotBary Nalebuff and Ian Ayres

The Capability to Innovate

• Process• People• Strategy and Customers• Technology• Measures and Performance

Source: 24/7 InnovationStephen M. Shapiro

ProcessThe “re’s”

• Rethink• Reconfigure• Re-sequence• Relocate• Reduce• Reassign• Retool

Phrase Problems in Ways They Can Be Solved…

• How to…………. (H2)• How might……….. (HM)• In what ways might…….(IWWM)• What might………….(WM)

Source: Dave LabnoInnovation Consultant

Do it globallyDo it globally

Slides not Used

                                        

                   

What would you do if you

weren’t afraid?

Source:Spencer JohnsonWho Moved My Cheese

Who Moved My Cheese

                                        

                   

We all approach EC Change Differently

• Sniff – Sniffs out the situation and sees early

• Scurry – Goes into action immediately• Hem – Does not want to deal with change

and stays in familiar territory• Haw - Sees what he is doing is wrong,

laughs at himself, and finally changes

Haw’s Writing on the Wall

• Change happens, they keep moving the cheese• Anticipate change – get ready for the cheese to

move• Monitor change – smell the cheese often• Adapt to change quickly• Enjoy change – savor the adventure• Be ready to change quickly and enjoy it again.

They keep moving the cheese

                                        

                   

The Johari Window

Hidden

BlindUnknown

Open

Kno

w to

Sel

f

Known to Others

Unk

now

n

Unknown

Kno

wn

Known

TellA

sk

Pareto – Yesterday and Today

• Corporations created wealth• Jobs are repetitive & labor

intensive• Managers – Theory X• Shareholders consume wealth

• Capital is king• Centralized planning yields

strategic goals• Economies of scale and mass

production• Mangers are focus of power

• Individuals create wealth• Few employees &creative

imagination• Coaches - Theory Y and Z• Venture capitalist and

entrepreneurs share the wealth• Creativity is critical element• Agility & contractual relationships • Mass customization

• Companies reunite ownership and control

Managerial Capitalism Individualism

Source:Richard Koch80/20 Individual

Customer Strategies

• Add more value• Listen• Serve• Hire

Creating a Culture of Innovation

• Envision• Enable• Explode• “EmpowerTool”

Technology and Innovation

• Create a virtual enterprise• Change the rules of the game• Collaborate across the value chain• Increase the knowledge of employees• Launch new businesses

Getting There

• Alliance Based• Capability Bases• Process Dominated• Process Driven• Process Sensitive• Functionally Bound

Stag

es