BA OPERATIONS MANAGEMENT

Transcription

1 Project Management Scheduling Techniques, PERT, CPM; Scheduling - work centers nature, importance; Priority rules and techniques, shop floor control; Flow shop scheduling Johnson s Algorithm Gantt charts; personnel scheduling in services. Contents 5.1 PROJECT MANAGEMENT (8MARKS) SCHEDULING TECHNIQUES (16 MARKS)... 3 SCHEDULING... 3 SCHEDULING TECHNIQUES... 5 PROJECT NETWORK PERT - PROGRAM EVALUATION AND REVIEW TECHNIQUE (8MARKS)... 9 Three-Time Estimate... 9 PERT ANALYSIS Sample Problem PERT (8 marks) CPM CRITICAL PATH METHOD (16 MARKS) FORWARD PASS BACKWARD PASS CPM ANALYSIS CRASHING CPM NETWORKS METHOD FOR CRASHING A PROJECT CPM sample problem ( 16 marks ) BENEFITS OF CPM/PERT LIMITATIONS TO CPM/PERT (2 MARKS) This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

2 5.1 PROJECT MANAGEMENT (8MARKS) Project: Unique one-time operations designed to accomplish a specific set of objectives in a limited time frame. PROJECT LIFE CYCLE (2 MARKS) The life cycle through which a project passes. Its various phases are 1. The concept phase, 2. Feasibility phase, 3. Detailed planning phase, 4. Organization phase, 5. Execution phase and 6. Termination phase. CHARACTERISTIC OF A PROJECT (2 MARKS) A unique, one-time operational activity or effort Requires the completion of a large number of interrelated activities Established to achieve specific objective Resources, such as time and/or money, are limited Typically has its own management structure Need leadership EXAMPLES OF PROJECT constructing houses, factories, shopping malls, athletic stadiums or arenas developing military weapons systems, aircrafts, new ships launching satellite systems constructing oil pipelines developing and implementing new computer systems planning concert, football games, or basketball tournaments introducing new products into market WHAT IS PROJECT MANAGEMENT? The application of a collection of tools and techniques to direct the use of diverse resources towards the accomplishment of a unique, complex, one time task within time, cost and quality constraints. Its origins lie in World War II, when the military authorities used the techniques of operational research to plan the optimum use of resources. One of these techniques was the use of networks to represent a system of related activities PROJECT MANAGEMENT PROCESS Project planning Project scheduling 2 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

3 Project control Project team o made up of individuals from various areas and departments within a company Matrix organization o a team structure with members from functional areas, depending on skills required Project Manager o most important member of project team Scope statement o a document that provides an understanding, justification, and expected result of a project Statement of work o written description of objectives of a project Organizational Breakdown Structure o a chart that shows which organizational units are responsible for work items Responsibility Assignment Matrix o shows who is responsible for work in a project WORK BREAKDOWN STRUCTURE A method of breaking down a project into individual elements ( components, subcomponents, activities and tasks) in a hierarchical structure which can be scheduled and cost It defines tasks that can be completed independently of other tasks, facilitating resource allocation, assignment of responsibilities and measurement and control of the project It is foundation of project planning It is developed before identification of dependencies and estimation of activity durations It can be used to identify the tasks in the CPM and PERT PROJECT PLANNING Resource Availability and/or Limits Due date, late penalties, early completion incentives Budget Activity Information Identify all required activities Estimate the resources required (time) to complete each activity Immediate predecessor(s) to each activity needed to create interrelationships SCHEDULING TECHNIQUES (16 MARKS) SCHEDULING Operation s scheduling and workplace planning is implemented during transformation of input to output. Scheduling deals with production of required quantity of product within the required 3 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

4 time frame. Workplace planning deals with allocation of resources with priority to work job with first delivery date. Scheduling is considered to be an important activity because if this activity is not carried out properly, there is more waiting time that results in delayed delivery time which in turn affects the customer satisfaction. The through put time increases because of the more waiting time. Thus the longest through put time may be due to the more waiting time of the product for the operation because the work center where the process is demanded is engaged by the other product. The above situation paves the way for more work in progress (WIP) inventory. Thus the scheduling activities determine many important objectives of the organization. So, this is the activity which is getting lot of importance nowadays. Scheduling deals with both time allocations as well resource allocation for production of required quantity. Operations planning is done as part of short term planning. High level objective of operation s planning is to decide the best way of allocation of labor and equipment as to find balance between time and use of limited resources within the organization. In modern age of competition and global market importance is given to Just In Time and the lean production concepts. This has led to importance of operation s scheduling. There are three important task performed by operations scheduling: Allocation of resources Workforce scheduling Production equipment scheduling Operations planning ensures that proper workflow is established by ensuring allocation of job on appropriate machines before the advent of production activities. Scheduling is production timetable highlighting sequence of job, timing and quantity for allocation of resources as to help an organization in cash flow planning. Therefore, there are three main objectives of production scheduling: Due importance to delivery date and avoiding delays in completion Reducing time of job on machines Proper utilization of work centers Operation scheduling is arrived at base on the following principles. Ensure continuous job schedule End to end completion of job Remove the bottleneck Ensure feedback as to make adjustment Skill set of workforce 4 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

5 Enhancement of product and process Scheduling helps in capacity planning as to reduce bottlenecks. Scheduling helps in streamlining order production based on due date. Scheduling helps in sequencing of various job works. Scheduling is done with two approaches, and they are as follows: Forward scheduling is type of scheduling where the planner considers order received date as the starting point for forward planning of all the activities. Backward scheduling is type of scheduling where the planner considers the order delivery date as the starting point and does backward planning of all activities. SCHEDULING TECHNIQUES The common project Scheduling techniques are: Program Evaluation and Review Technique (PERT) Critical Path Method (CPM) GANTT CHART PERT techniques is a applied mainly for new project at which you don t have any experience that is why the time estimate for each activity of the project revolves around three time estimate (e.g.) PERT usually applied for the following projects, - Planning and scheduling of new product. - Development of missile. - Development of launching of rockets. CPM is applied for known projects like - The construction of building. - The manufacture and assembly of motors. - The maintenance project. DIFFERENCE BETWEEN PERT AND CPM 5 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

6 A project as already mentioned consists of many activities. The activities are interlinked together to achieve the common objectives like time, cost and standard of performance. CPM and PERT techniques are considered to be project management techniques which enable the project manager to plan and schedule the project. They are also called project network planning and scheduling technique. In the next section you can know about the network planning and scheduling. HISTORY OF CPM/PERT Critical Path Method (CPM) E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-down Deterministic task times Activity-on-node network construction Repetitive nature of jobs Project Evaluation and Review Technique (PERT) U S Navy (1958) for the POLARIS missile program Multiple task time estimates (probabilistic nature) Activity-on-arrow network construction Non-repetitive jobs (R & D work) PROJECT NETWORK Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects USE OF NODES AND ARROWS Arrows An arrow leads from tail to head directionally -Indicate ACTIVITY, a time consuming effort that is required to perform a part of the work. Nodes A node is represented by a circle - Indicate EVENT, a point in time where one or more activities start and/or finish. Activity A task or a certain amount of work required in the project Requires time to complete Represented by an arrow Dummy Activity Indicates only precedence relationships Does not require any time of effort 6 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

7 Event Signals the beginning or ending of an activity Designates a point in time Represented by a circle (node) Network Shows the sequential relationships among activities using nodes and arrows Activity-on-arrow (AOA) - arrows represent activities and nodes are events for points in time Example: AOA Project Network for House Activity-on-node (AON) - nodes represent activities, and arrows show precedence relationships Example AON Project Network for House Dummy Activity (2 marks) Dummy activities is used to identify precedence relationships correctly and to eliminate possible confusion of two or more activities having the same starting and ending nodes 7 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

8 Dummy activities have no resources (time, labor, machinery, etc) purpose is to PRESERVE LOGIC of the network Situations in Network diagram Network example Illustration of network analysis of a minor redesign of a product and its associated packaging. 8 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

9 For clarity, this list is kept to a minimum by specifying only immediate relationships, that is relationships involving activities that "occur near to each other in time". This is an example of network analysis PERT - PROGRAM EVALUATION AND REVIEW TECHNIQUE (8MARKS) PERT is based on the assumption that an activity s duration follows a probability distribution instead of being a single value Three time estimates are required to compute the parameters of an activity s duration distribution: Three-Time Estimate pessimistic time (t p ) - the time the activity would take if things did not go well most likely time (t m ) - the consensus best estimate of the activity s duration 9 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

10 optimistic time (t o ) - the time the activity would take if things did go well PERT ANALYSIS Draw the network. Analyze the paths through the network and find the critical path. The length of the critical path is the mean of the project duration probability distribution which is assumed to be normal The standard deviation of the project duration probability distribution is computed by adding the variances of the critical activities (all of the activities that make up the critical path) and taking the square root of that sum Probability computations can now be made using the normal distribution table. Sample Problem PERT (8 marks) Example Immed. Optimistic Most Likely Pessimistic Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.) A B C A D A E A F B,C G B,C H E,F I E,F J D,H K G,I PERT Network 10 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

11 Solution: Formula to calculate expected time and variance: Activity Expected Time Variance A 6 4/9 B 4 4/9 C 3 0 D 5 1/9 E 1 1/36 F 4 1/9 G 2 4/9 H 6 1/9 I This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

12 J 3 1/9 K 5 4/ CPM CRITICAL PATH METHOD (16 MARKS) Critical Path Method is a commonly used for those projects which are repetitive in nature & where one has prior experience of handling similar projects. It is a deterministic model & places emphasis on time & cost for activities of a project. CRITICAL PATH METHOD Path A connected sequence of activities leading from the starting event to the ending event Critical Path The longest path (time); determines the project duration Critical Activities All of the activities that make up the critical pat FORWARD PASS Earliest Start Time (ES) earliest time an activity can start ES = maximum EF of immediate predecessors Earliest finish time (EF) earliest time an activity can finish earliest start time plus activity time EF= ES + t BACKWARD PASS It is the process of tracing the network starting from LAST node & moving backward. Latest Start Time (LS) Latest time an activity can start without delaying critical path time LS= LF - t Latest finish time (LF) latest time an activity can be completed without delaying critical path time LS = minimum LS of immediate predecessors CPM ANALYSIS Draw the CPM network Analyze the paths through the network Determine the float for each activity Compute the activity s float float = LS - ES = LF - EF 12 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

13 Float is the maximum amount of time that this activity can be delay in its completion before it becomes a critical activity, i.e., delays completion of the project Find the critical path is that the sequence of activities and events where there is no slack i.e.. Zero slack Longest path through a network Find the project duration is minimum project completion time CRASHING CPM NETWORKS Crashing is the process of fine-tuning your project schedule to shorten delivery time. It is a possible solution when stakeholders ask for a faster delivery while not willing to reduce the scope of work. So, how does crashing work? Simple. Reduce the time to complete the tasks in the critical path. Note that crashing works only on tasks in the critical path because reducing time on noncritical tasks will not affect the project delivery time. Do not waste your time crashing non-critical path tasks; instead, crash on tasks in the critical path to get immediate results. You can think of several ways to crash a task. You can put two resources to work in parallel and have the task completed in half the time. Or you can assign a more productive resource who can finish the work earlier. In any case, make sure you assess the risks. There are tasks that cannot be performed by two persons, like installing software or hammering a nail. Also, make sure you are not over-assigning critical tasks to your best resource, because he can only be 100% productive and anything above it will be counter-productive. It is mindless to assume that your best resource can work 16 hours a day for the next three weeks METHOD FOR CRASHING A PROJECT Step 1: Assess the cost-effectiveness of crashing activities on the critical paths (it may be necessary to crash more than one activity to have an effect). If no set of crashes leads to a net gain, stop; Step 2: Implement the most cost-effective crash until it is no longer cost effective or the paths involved are no longer critical; Step 3: A crash in step (2) may create new critical paths. Revise the network and identify the new critical paths. Return to step (1) CPM sample problem ( 16 marks ) Compute the Critical path of the following network 13 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

14 Solution: Calculate the Early start time and Early finish time ES= maximum EF of immediate predecessors EF= ES + t Calculate the Latest start time and Latest finish time LS= LF t 14 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

15 LS = minimum LS of immediate predecessors Calculate the float (or) stack Determine the float for each activity Float = LS - ES = LF - EF CRITICAL PATH 15 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

16 Thus the critical path for the given problem is computed. The critical path is identified as B,D and J. IMPORTANCE OF FLOAT (SLACK) AND CRITICAL PATH 1. Slack or Float shows how much allowance each activity has, i.e. how long it can be delayed without affecting completion date of project 2. Critical path is a sequence of activities from start to finish with zero slack. Critical activities are activities on the critical path. 3. Critical path identifies the minimum time to complete project 4. If any activity on the critical path is shortened or extended, project time will be shortened or extended accordingly 5. So, a lot of effort should be put in trying to control activities along this path, so that project can meet due date. If any activity is lengthened, be aware that project will not meet deadline and some action needs to be taken. 6. If can spend resources to speed up some activity, do so only for critical activities. 7. Don t waste resources on non-critical activity, it will not shorten the project time. 8. If resources can be saved by lengthening some activities, do so for non-critical activities, up to limit of float. 9. Total Float belongs to the path BENEFITS OF CPM/PERT Useful at many stages of project management Mathematically simple Give critical path and slack time Provide project documentation Useful in monitoring costs 16 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

17 CPM/PERT CAN ANSWER THE FOLLOWING IMPORTANT QUESTIONS: How long will the entire project take to be completed? What are the risks involved? Which are the critical activities or tasks in the project which could delay the entire project if they were not completed on time? Is the project on schedule, behind schedule or ahead of schedule? If the project has to be finished earlier than planned, what is the best way to do this at the least cost? LIMITATIONS TO CPM/PERT (2 MARKS) Clearly defined, independent and stable activities Specified precedence relationships Over emphasis on critical paths Deterministic CPM model Activity time estimates are subjective and depend on judgment PERT assumes a beta distribution for these time estimates, but the actual distribution may be different PERT consistently underestimates the expected project completion time due to alternate paths becoming critical WORK CENTER Section of a production facility where all tasks associated with a particular process (such as assembling, painting, welding) are performed. SHOP FLOOR CONTROL Shop Floor Control module provides real-time labor and production reporting for online production visibility throughout the enterprise. The shop floor menu was designed for use with touch screen technology and handheld devices. Shop Floor Control provides access to all of the activities that generally take place in the shop. Users can log onto or off of operations manually or they can use the built-in bar-coding functionality to scan work order numbers and work order steps for automatic logons. The logon and logoff activities include easy-to-use look-ups and number pads for data entry. A current activity report and inquiry are provided to show which employees are currently logged on to a job at any manufacturing facility providing enterprise wide visibility. The Shop Floor Control menu is easily customized to include virtually any activity, maintenance function, report, or inquiry you need to run your shop floor. SCHEDULING DEFINITIONS Routing: The operations to be performed, their sequence, the work centers, & the time standards Bottleneck: A resource whose capacity is less than the demand placed on it Due date: 17 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

18 When the job is supposed to be finished Slack: The time that a job can be delayed & still finish by its due date Queue: A waiting line HIGH-VOLUME OPERATIONS High-volume, also called flow operations, like automobiles, bread, and gasoline can be repetitive or continuous High-volume standard items; discrete or continuous with smaller profit margins Designed for high efficiency and high utilization High volume flow operations with fixed routings Bottlenecks are easily identified Commonly use line-balancing to design the process around the required tasks LOW-VOLUME OPERATIONS Low-volume, job shop operations, is designed for flexibility. Use more general purpose equipment Customized products with higher margins Each product or service may have its own routing (scheduling is much more difficult) Bottlenecks move around depending upon the products being produced at any given time Low-Volume Tool Gantt Charts Developed in the early 1900 s by Henry Gantt Load charts (see below Figure 15-1) Illustrates the workload relative to the capacity of a resource Shows today s job schedule Progress charts: Illustrates the planned schedule compared to actual performance Brackets show when activity is scheduled to be finished. Note that design and pilot run both finished late and feedback has not started yet. 18 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

19 Scheduling Work - Work Loading Infinite loading: Ignores capacity constraints, but helps identify bottlenecks in a proposed schedule to enable proactive management Finite loading: Allows only as much work to be assigned as can be done with available capacity but doesn t prepare for inevitable slippage How to Sequence Jobs 19 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

20 Which of several jobs should be scheduled first? Techniques are available to do short-term planning of jobs based on available capacity & priorities Priority rules: Decision rules to allocate the relative priority of jobs at a work center Local priority rules: determines priority based only on jobs at that workstation Global priority rules: also considers the remaining workstations a job must pass through Commonly Used Priorities Rules First come, first served (FCFS) Last come, first served (LCFS) Earliest due date (EDD) Shortest processing time (SPT) Longest processing time (LPT) Critical ratio (CR): (Time until due date)/(processing time) Slack per remaining Operations (S/RO) Slack /(number of remaining operations) Example Using SPT, EDD Example Using SPT and EDD at Jill's Machine Shop-Work Center 101 Job Time Days to SPT Rule EDD Rule Job Number (includes Setup & Run Time) Due Date Sequence Sequence AZK111 3 days 3 EZE101 AZK111 BRU872 2 days 6 BRU872 EZE101 CUF373 5 days 8 AZK111 DBR664 DBR664 4 days 5 DBR664 BRU872 EZE101 1day 4 FID448 CUF373 FID448 4 days 9 CUF373 FID448 How to U 1. Decide which priority rule to use 2. List all jobs waiting to be processed with their job time 3. Using priority rule determine which job has highest priority then second, third and so on Measuring Scheduling Performancese Priority Rules Job flow time: Time a job is completed minus the time the job was first available for processing; avg. flow time measures responsiveness Average # jobs in system: 20 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

21 Measures amount of work-in-progress; avg. # measures responsiveness and work-in-process inventory Makespan: The time it takes to finish a batch of jobs; measure of efficiency Job lateness: Whether the job is completed ahead of, on, or behind schedule; Job tardiness: How long after the due date a job was completed, measures due date performance JOHNSON'S ALGORITHM FOR SCHEDULING In the notes below, I shall try to present some intuition about Johnson's algorithm, and why it works for scheduling of manufacturing systems. At the end of it all, we shall see what kind of systems it can be usefully applied to. Johnson s Rule 1. List all jobs and times for each work center 2. Choose the job with the shortest activity time. If that time is in the first work center, schedule the job first. If it is in the second work center, schedule the job last. 3. Once a job is scheduled, it is eliminated from the list 4. Repeat steps 2 and 3 working toward the center of the sequence One Machine, Two Jobs We begin the discussion with the simplest scheduling problem: You go to Park 'n Shop to buy a can of Coke. At the check-out counter, just before you, is a lady with a large basket of groceries. The lady allows you to go ahead of her, pay for your coke in 1/2 min, and then presents her basket to the clerk who takes 5 min to check and bag her order. This lady was using a well known rule for scheduling single processor systems: Scheduling shortest job first will result in minimum average (and total) waiting time. In the example above, if the system worked as First-Come, First-Served, then the total waiting time would be = 0 min for the lady + 5 min for you = 5 min. If you go first, then the total waiting time = 0 min for you + 1/2 min for her = 1/2 min! One machine, N Jobs In fact, this logic easily extends to the case for 1 Machine (or server), and N Jobs. By scheduling the jobs in the sequence of shortest time... longest time, you are guaranteed to get the minimum waiting time (total, or average). 21 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

22 Proving this is quite simple: try it! [Hint: You can use mathematical induction.] Notes: While the above example is simple, it can give a few lessons. An important lesson is: Know your objectives! For instance, if your aim is to minimize the makespan (which is defined as the time between the moment you start the first Job, till the time you end the last Job), then it does not matter how you schedule a single server system! However, if your objective is to minimize average waiting time, then the Shortest Job first rule is optimum (this rule is called the SPT rule, or the Shortest Processing Time rule). Two Machine Cases: The mathematics is much more difficult as soon as we start to schedule two machine systems. We start with the following system: There are three parts, P1, P2, and P3. Each needs to be processed first on Machine M1, then on Machine M2. The processing times are as follows: Parts Machines P1 P2 P3 M M We could have 6 possible sequences for the parts: 1-2-3, 1-3-2, 2-1-3, 2-3-1, 3-1-2, and For any sequence, Machine 1 will start working at T=0, and work till T= = 16. Notice, however, the utilization of M2: 1. It will not work at the initial period when M1 is doing its first scheduled job. This hints that we should try to do the shortest job on M1 first! 2. What happens if the Second operation (operation on M2) for a part is very short? In this case, M2 will finish this part, while M1 is still working on the first operation of the next part. This will make M2 idle for some time. This hints that we should try to place jobs that have LONG 2 nd operations in the beginning. [Think about this carefully it is the essential part of Johnson's logic]. 22 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or

23 Of course, in the above example, I deliberately chose all 2 nd operations of equal length, to make it easy to identify the optimal sequence [Which one is it?] [Hint: it uses SPT for Machine 1]. Now let s look at this more carefully, using Gantt charts. Note: whatever sequence we use, it is clear that Machine 1 will begin at T=0, and be fully utilized for the duration = sum of Operation 1 durations for all parts. This is ALWAYS true! Therefore, all scheduling of Parts we perform must concentrate on trying to make the Gantt chart for Machine 2 as compact as possible 23 This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or