4Q Basic Project Management on time and on cost.

ABB Basic Quality Tools Series
4Q Basic Project Management
Tools to assist completion of 4Q Project objectives
on time and on cost.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 1
4Q Basic Project Management Tools - Content
What is it for?
• 4Q Project Management tools allow projects to be managed and
controlled to deliver agreed objectives on time and to cost.
• To support execution of multiple tasks to implement and sustain the
4Q solutions
Where could I use them?
•
•
•
•
•
•
•
•
At phases throughout a 4Q project
Charter – before Q1
Work Breakdown Structure – Q3 & Q4
SMART Action lists – throughout the project
4Q Process
PERT Plan – Q3 & Q4
Gantt Chart – Q3 & Q4
Project Control – Q3 & Q4
Risk Management – Q3 & Q4
How do I use them?
• Develop and agree Project Charter
• Agree & Select PM tools to be used
• Use each tool appropriately in the 4Q project
Examples
© ABB Group 9AKK105151D0119
15 July 2010, Slide 2
Q1 - Measure
Define opportunity.
Investigate to understand
the current state in detail.
Q4 - Sustain
Maintain the improvements
by standardizing the work
methods or processes.
Q2 - Analyze
Identify and confirm root
causes of the problem.
Q3 - Improve
Develop, pilot, and
implement solutions that
eliminate root causes.
4Q Basic Project Management Tools
4Q Process
Q1 - Measure
Define opportunity. Investigate
to understand the current state
in detail.
Q4 - Sustain
Maintain the improvements by
standardizing the work
methods or processes.
Charter
Q2 - Analyze
Identify and confirm root
causes of the problem.
Q3 - Improve
Develop, pilot, and implement
solutions that eliminate root
causes.
Work Breakdown Structure
Reduce Raw
Material Stock-Out
Identify raw materials Calculate the ideal
that safety stock is safety stock level for
needed
each type of material
Review demand variation
in last 6 months for each
type of material
Build the
safety stock
Review the suppliers
performance in last 6 months
for each type of material
Gantt Chart
PERT
© ABB Group 9AKK105151D0119
15 July 2010, Slide 3
Track the actual
consumption on safety
stock for 1 month
Modify the safety stock
level according to the
actual consumption
4Q Basic Project Management - What is it for?
Uses of these tools:
• 4Q Basic Project Management ensures that project objectives are defined, agreed and completed
on time and to cost.
• Several tools Project Management Tools are available to support this aim:
• Charter – ensures a 4Q project is clearly scoped and resourced with SMART objectives and
that these are agreed with and supported by the Project Sponsor.
• SMART Action lists – ensures clearly defined task lists are developed and monitored.
• Work Breakdown Structure – a tool which helps to divide the project tasks into a manageable
structure
• PERT Plan – Describes task sequencing
• Gantt Chart – provides a timeline of tasks to be complete and allows them to be tracked
clearly.
• Project Control – allows regular review of the plan with associated responses.
• Risk Management – facilitates consideration of risks to project objectives and responses.
Expected Benefits:
• Project objectives are clearly defined and agreed at the start.
• Project activities are organised, clear for all to see.
• Progress can be tracked and deviations from the plan can be responded to immediately as
appropriate.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 4
Project Charter - Overview
Background:
Uses:
• The use of Project Charters is important for
stating the goal for a 4Q project – what is
trying to be addressed, why, how, when and
by whom.
• Used to state and confirm the problem to be
addressed, the scope and objectives.
• Used to seek agreement and approval with the
Project Sponsor prior to start (Q1).
• Used to review project
How to use it:
Benefits:
• Document the Problem description, scope,
project goal and schedule. - use techniques
such as SMART
• Helps to clarify the problem being addressed.
• Document major assumptions, and specific
requirements.
• If a budget is assigned, this needs to be
indicated.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 5
• Ensures agreement and approval of project scope
and objectives with the sponsor.
• Ensures expected resources (including team),
timelines and costs are clear and understood at
the start.
Project Charter
4Q Project Charter
Problem Description
Project Goal
Major Assumption
eg. production volume is 100 pcs/day
(optional)
Requirement
(optional)
eg. data to be retrieved from SAP system
Budget
(if any)
Schedule
Start date:
End date:
Project Team
Role
Project Sponsor
Project Leader
Team Members
© ABB Group 9AKK105151D0119
15 July 2010, Slide 6
Name
Title/Department
Work Breakdown Structure (WBS) - Overview
Background:
Uses:
• The concept of Work Breakdown Structure
developed with the PERT (see later) in the
US Department of Defense.
• Use WBS to help to convert a project into many
specific tasks at different levels.
• In 1968, the DoD issued a military standard
requiring the use of work breakdown
structures across the DoD.
• It helps to organize and define the total work
scope of the project.
• For Basic 4Q projects, usually measurement and
analysis is simple and quick to complete. WBS
will be used in Q3 and Q4.
How to use it:
Benefits:
• Draw as a Tree Diagram with Project Goal at
the top
• Gives a clear way of representing the work/tasks
to be completed
• Use items in the action list created in Q3
• The WBS should include all of the work
defined by the project scope and captures all
outputs/deliverables.
• Detailed tasks needed to get actions done.
Brainstorm and use Post-it Notes to
assemble the WBS to everyone's agreement.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 7
Work Breakdown Structure - Example
Reduce Raw
Material Stock-Out
Identify raw materials Calculate the ideal
that safety stock is safety stock level for
needed
each type of material
Review demand variation
in last 6 months for each
type of material
Build the
safety stock
Track the actual
consumption on safety
stock for 1 month
Modify the safety stock
level according to the
actual consumption
Review the suppliers
performance in last 6 months
for each type of material
Example: WBS the work “reduce raw material stock-out”
WBS is a Tree Diagram
WBS helps to convert a project into many specific tasks at
different levels.
All tasks should be SMART.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 8
PERT - Overview
Background:
Uses:
• PERT stands for Program Evaluation &
Review Technique
• To plan, analyze and coordinate tasks within a
project
• PERT was developed by consultants at Booz
Allen Hamilton for the U.S. Navy in 1957 to
support the development of missile programs.
• Useful for organizing tasks and establishing time
frames, and for showing tasks that depend on
other tasks
• PERT chart is a task and event oriented
technique
• PERT is used in projects where time rather than
cost is the major consideration.
How to use it:
Benefits:
• From the WBS the project team decides
which tasks should be milestones, and also
decides their proper sequence.
• Gives a clear way of representing the
dependencies and order of work/tasks to be
completed
• Estimate the optimistic, normal and
pessimistic times for each task
• PERT is helpful to plan what tasks can go on
simultaneously to reduce time.
• A project can be roughly scheduled when not
knowing the precise durations of all tasks.
• Allows identification of the critical path and the
minimum time needed to complete the total
project.
• Draw the PERT Network Diagram
• Provides for potentially reduced project duration
due to better understanding of dependencies.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 9
PERT Chart - Example

Program Evaluation Review Technique (PERT) chart

To plan, analyze and coordinate tasks within a project

Useful for organizing tasks and establishing timeframes,
and for showing tasks that depend on other tasks
Example: PERT Chart for Safety Stock management
Q3
Q3
Q3
Q3
Q3
Q3
Q4
Task Name
Identify raw materials that safety stock is needed
Review demand variation in last 6 months for each type of material
Review supplier performance in last 6 months for each type of material
Calculate the ideal safety stock level for each type of material
Build the safety stock
Track the actual consumption on safety stock for 1 month
Modify the safety stock level according to the actual consumption
© ABB Group 9AKK105151D0119
15 July 2010, Slide 10
Estimated Time Resource
3 days
Ada
5 days
Mike
5 days
Ron
2 days
Ada
10 days
Ada
30 days
Ada
3 days
Ada
Gantt Chart - Overview
Background:
Uses:
• Gantt charts have become a common
technique for representing the activities of a
project , so they can be understood by a wide
audience.
• A Gantt Chart helps to visualize and plan project
tasks with start and finish dates, and then helps
to track execution progress.
• The chart is named after Henry Gantt, who
developed it between1910 and1915.
• Gantt Charts are able to show the dependency
relationships between tasks, the critical path, and
the current completion status.
How to use it:
Benefits:
• The project team coverts theWBS or PERT
into a time phased Gantt chart.
• Gives a clear way of representing the
dependencies and order of work/tasks to be
completed
• Several tools can be used for drawing Gantt
Charts – e.g. Microsoft Project, Excel or a
white board.
• Project progress is tracked on a regular basis
and modified as needed.
• The 4Q Project Gantt chart is owned by the
project leader and should be accessible to all
team members and sponsor
© ABB Group 9AKK105151D0119
15 July 2010, Slide 11
• Gantt is helpful to plan what tasks can go on
simultaneously to reduce time.
• Allows identification of the critical path and the
minimum time needed to complete the total
project.
• Allows both planning and monitoring/control
Gantt Chart - Example

Gantt Chart helps to visualize and plan project tasks with start and finish
dates, and then helps to track execution progress.
Example: Gantt Chart for Safety Stock management
Gantt Chart by Microsoft Project can show the dependency
relationships between tasks, critical path, and current status by
using %-complete.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 12
Project Control - Overview
Background:
Uses:
• Project Control is key to project management.
It supports the project management in
supervising and governing a project and it is
significant for the success of it.
• Project Control ensures that regular project
reviews occur to check KPI trends, the schedule
and budget.
• Project Control is linked to the foundation of
Project Management as a discipline.
• Important changes or decisions must be agreed
and documented into the plan
How to use it:
Benefits:
• Use the Gantt chart to tell if the project is on
schedule and KPIs to see if the project is
progressing in the right direction.
• Allows project progress monitoring & quick
response to change.
• Hold a regular project review (daily or weekly)
via meetings or reports.
• Document and act on any changes or
critical decisions such as changes on goals,
solution, team members, or schedule should
be documented in a standard format, and well
informed to relevant people.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 13
• Good communication leads to good projects.
• Motivates the team .
Project Control - Example
Project time schedule tracking
Project KPI tracking

Progress monitor and control is critical

Gantt chart to track the progress by
checking the task completion against
the schedule

Checklist, and measurements tracking
to tell if project is progressing on the
right track
© ABB Group 9AKK105151D0119
15 July 2010, Slide 14
Today
Safety
Stock
Level
Time
Project Control - Example

Regular project review to check KPI trends, the schedule and budget.

Important changes or decisions must be agreed and documented into the plan
Good communication leads to good projects.
Acknowledge team members’ contribution. Continuous motivation.
If change is difficult, find the “change agents”
8
10
The one progressing the fastest
4
2
0
2
4
behind schedule
6
10 8
Days of critical path
6
ahead of schedule
© ABB Group 9AKK105151D0119
15 July 2010, Slide 15
The one delayed the most
Risk Management - Overview
Background:
Uses:
• A risk is an uncertain event or set of events,
that if they occur, will have an effect on the
achievement of project objectives.
• Risk Management is the application of principles,
approaches and processes to the task of
identifying risks and then implementing risk
responses.
• Risk is measured as a combination of the
probability of a perceived threat and the
magnitude of its impact on objectives.
• Mitigation tasks are necessary for risk
management.
• Mitigation actions need to be included by Q3 or
Q4 in the plan.
How to use it:
Benefits:
• Consider all risks to the project which affect
project targets – e.g. cost, quality, benefits
and scope. Brainstorm with team.
• It allows the project to save money and time if you
deal with uncertain project events in a proactive
manner.
• Assess each risk in turn for consequence,
impact and probability of occurring.
• Minimises the impact of project threats.
• Identify appropriate mitigation tasks and
include in the project plan.
• Allows the project to be delivered on time, on
budget and with the quality results the project
sponsor expects.
• Anyone can raise a risk.
© ABB Group 9AKK105151D0119
15 July 2010, Slide 16
• Avoids "fire fighting.”
Risk Management - Example

If any risks are predicted in planning, they need to be addressed

Mitigation tasks are necessary
Risk
Consequence
To describe
the risk
To describe possible
consequences
Impact/ Cost
Probability
High /Medium
/Low
High /Medium
/Low
Mitigation
Mitigation plan 1
Mitigation plan 2……
Mitigation tasks must be included in the project plan.
e.g.. Demand fluctuation is a big risk for stock-out. One of mitigation is to update sales
forecast frequently and share the information of upcoming big orders with suppliers timely
Add the
mitigation
to the task
list
Q3
Q3
Q3
Q3
Q3
Q3
Q4
Q4
Q4
© ABB Group 9AKK105151D0119
15 July 2010, Slide 17
Task Name
Estimated Time Resource
Identify raw materials that safety stock is needed
3 days
Ada
Review demand variation in last 6 months for each type of material
5 days
Mike
Review supplier performance in last 6 months for each type of material
5 days
Ron
Calculate the ideal safety stock level for each type of material
2 days
Ada
Build the safety stock
10 days
Ada
Track the actual consumption on safety stock for 1 month
30 days
Ada
Modify the safety stock level according to the actual consumption
3 days
Ada
Retrieve the latest sales forecast from sales, and highlight large volume orders Every Fri afternoon
Mike
Share sales forecast of large volume orders with suppliers and request them to
Every Mon morning
Ada
be prepared