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Lecture Project management: The managerial process (6/e) - Chapter 9: Reducing project duration

The need for reducing the project duration occurs for many reasons such as imposed duration dates, time-to-market considerations, incentive contracts, key resource needs, high overhead costs, or simply unforeseen delays. This chapter presented a logical, formal process for assessing the implications of situations that involve shortening the project duration. | Project Management 6e. 9–1 9–2 Where We Are Now Project Management 6e. 9–2 9–3 Rationale for Reducing Project Duration Time Is Money: Cost-Time Tradeoffs Reducing the time of a critical activity usually incurs additional direct costs. Cost-time solutions focus on reducing (crashing) activities on the critical path to shorten overall duration of the project. Reasons for imposed project duration dates: Time-to-market pressures Unforeseen delays Incentive contracts (bonuses for early completion) Imposed deadlines and contract commitments Overhead and public goodwill costs Pressure to move resources to other projects Project Management 6e. 9–3 9–4 Options for Accelerating Project Completion Resources Not Constrained Adding resources Outsourcing project work Scheduling overtime Establishing a core project team Do it twice—fast and then correctly Resources Constrained Fast-tracking Critical-chain Reducing project scope Compromise quality Project Management 6e. 9–4 9–5 Explanation of Project | Project Management 6e. 9–1 9–2 Where We Are Now Project Management 6e. 9–2 9–3 Rationale for Reducing Project Duration Time Is Money: Cost-Time Tradeoffs Reducing the time of a critical activity usually incurs additional direct costs. Cost-time solutions focus on reducing (crashing) activities on the critical path to shorten overall duration of the project. Reasons for imposed project duration dates: Time-to-market pressures Unforeseen delays Incentive contracts (bonuses for early completion) Imposed deadlines and contract commitments Overhead and public goodwill costs Pressure to move resources to other projects Project Management 6e. 9–3 9–4 Options for Accelerating Project Completion Resources Not Constrained Adding resources Outsourcing project work Scheduling overtime Establishing a core project team Do it twice—fast and then correctly Resources Constrained Fast-tracking Critical-chain Reducing project scope Compromise quality Project Management 6e. 9–4 9–5 Explanation of Project Costs Project Indirect Costs Costs that cannot be associated with any particular work package or project activity. Supervision, administration, consultants, and interest Costs that vary (increase) with time. Reducing project time directly reduces indirect costs. Project Direct Costs Normal costs that can be assigned directly to a specific work package or project activity. Labor, materials, equipment, and subcontractors Crashing activities increases direct costs. Project Management 6e. 9–5 9–6 Reducing Project Duration to Reduce Project Cost Compute total costs for specific durations and compare to benefits of reducing project time. Search critical activities for lowest direct-cost activities to shorten project duration. Identifying direct costs to reduce project time Gather information about direct and indirect costs of specific project durations. Project Management 6e. 9–6 9–7 Constructing a Project Cost–Duration Graph Find total direct costs for selected project durations. Find .