International Operations Management
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| Project Management Much of the business world is becoming project oriented. 21 The success of an organization is very much dependent on projects being completed on time and within budget, something which becomes more crucial when organizations engage in international business. Project management is concerned with planning, scheduling, and controlling projects that consist of numerous tasks or activities performed by a variety of departments or individuals and using different resources. There are examples of several techniques which can be used to plan, schedule, and control projects. The two most well known ones are the Project Evaluation and Review Technique (PERT) and the Critical Path Method (CPM). The two techniques were developed independently in the late sand their main difference was that time estimates were assumed to be probabilistic for PERT and deterministic for CPM. In other words, PERT was designed to handle the uncertainties that existed in predicting the ............................................................................. ............................................................................. Elsevier US Job code KIB Chapter: Ch11-H7983 6-12-2006 9:22 p.m. Page:376 Trimsize:7.25 in in Fonts used Sabon & Frutiger Margins:Top:36 pt Gutter:66 pt Font Size pt Text Width PC Depth:43 Lines 376 International Business time necessary to compare various project activities, while CPM assumed that both time and costs were known with certainty. Operations managers today tend to use a combination of the best features of PERT and CPM and this has resulted in anew PERT/CPM technique. The PERT/CPM technique is a descriptive tool, which determines the completion time of a project and identifies those activities that are critical for its on-time completion. With this information, operations managers can work toward completing the project on time and within the budget. 22 The PERT/CPM technique uses simple networks in order to represent the activities that take place in a project, as well as how these activities interrelate. A PERT/CPM network is made up of activities and events. An activity is a task or job that consumes time and resources and is shown as a line on the network. An event is a project milestone, which occurs atone point in time and does not consume time or resources. Events are shown as nodes on the network. Consider the following example involving the opening of anew restaurant in France. Example 2 An Italian fast-food chain wants to open anew restaurant in Cannes in the South of France. The operations manager has compiled a list of activities that need to take place, together with an estimate of the expected time that each activity would take. All the activities, their preceding activities, and their expected durations (in weeks) are shown in the table below: Activity Description Preceding Activity Duration A Find location – 12 B Recruit staff – 6 C Make alterations A 6 D Order new equipment A 2 E Install equipment D 5 F Train staff B 3 G Open restaurant C, E, F 1 The operations manager wants to produce a network in order to represent the activities of this project and then estimate the project’s expected completion time. The resulting network is shown in Exhibit 11.6. ............................................................................. ............................................................................. Elsevier US Job code KIB Chapter: Ch11-H7983 6-12-2006 9:22 p.m. Page:377 Trimsize:7.25 in in Fonts used Sabon & Frutiger Margins:Top:36 pt Gutter:66 pt Font Size pt Text Width PC Depth:43 Lines International Operations Management 377 Download 340.14 Kb. Share with your friends:
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