STEPPROJECT MANAGEMENT GuideforScience,Technology, andEngineeringProjects
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Industrial Innovation Series Series Editor
Adedeji B. Badiru Department of Systems and Engineering Management Air Force Institute of Technology (AFIT) – Dayton, Ohio
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PUBLISHED TITLES Computational Economic Analysis for Engineering and Industry Adedeji B. Badiru & Olufemi A. Omitaomu Handbook of Industrial and Systems Engineering Adedeji B. Badiru Handbook of Military Industrial Engineering Adedeji B.Badiru & Marlin U. Thomas Industrial Project Management: Concepts, Tools, and Techniques Adedeji B. Badiru, Abidemi Badiru, and Adetokunboh Badiru Knowledge Discovery from Sensor Data Auroop R. Ganguly, João Gama, Olufemi A. Omitaomu, Mohamed Medhat Gaber, and Ranga Raju Vatsavai STEP Project Management: Guide for Science, Technology, and Engineering Projects Adedeji B. Badiru Systems Thinking: Coping with 21st Century Problems John Turner Boardman & Brian J. Sauser Techonomics: The Theory of Industrial Evolution H. Lee Martin Triple C Model of Project Management: Communication, Cooperation, Coordination Adedeji B. Badiru
FORTHCOMING TITLES Beyond Lean: Elements of a Successful Implementation Rupy (Rapinder) Sawhney Handbook of Industrial Engineerng Calculations and Practice Adedeji B. Badiru & Olufemi A. Omitaomu Industrial Control Systems: Mathematical and Statistical Models and Techniques Adedeji B. Badiru, Oye Ibidapo-Obe, & Babatunde J. Ayeni Modern Construction: Productive and Lean Practices Lincoln Harding Forbes Project Management: Systems, Principles, and Applications Adedeji B. Badiru Research Project Management Adedeji B. Badiru Statistical Techniques for Project Control Adedeji B. Badiru Technology Transfer and Commercialization of Environmental Remediation Technology Mark N. Goltz
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GuideforScience,Technology, andEngineeringProjects
AdedejiB.Badiru
Boca Raton London New York
CRC Press is an imprint of the Taylor & Francis Group, an informa business
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CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2009 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed in the United States of America on acid-free paper 10 9 8 7 6 5 4 3 2 1
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International Standard Book Number-13: 978-1-4200-7235-8 (Hardcover) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www.copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Badiru, Adedeji Bodunde, 1952STEP project management : guide for science, technology, and engineering projects / Adedeji B. Badiru. p. cm. -- (Industrial innovation series) Includes bibliographical references and index. ISBN 978-1-4200-7235-8 (hardcover : alk. paper) 1. Project management. 2. Science--Managment. 3. Technology--Management. 4. Engineering--Management. I. Title. II. Series. T56.8.B334 2009 658.4’04--dc22
2009006945
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Dedication To Abi, Ade, and Tunji who, along with their progeny, are charged with carrying on the torch of science, technology, and engineering.
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Contents Preface Acknowledgment Author
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Chapter 1
Science, Technology, and Engineering Project Methodology
Introduction to STEP Methodology Importance of General Project Management Knowledge Large Projects (Large Budget: Has High Visibility and External Consequences) Midsize Projects (Medium Budget: Has Average Visibility) Small Projects (No Formal Budget: Focused on an Internal Goal) Systems Engineering and Program Management Systems Architecture for Project Management Guide to Using This Book Building Blocks for STEP Methodology Engineering Challenges for Twenty-First Century STEM Initiatives and Project Conceptions Emergence of Project Management for STEP Project Definitions Project Management Knowledge Areas Components of the Knowledge Areas Project Management Processes Projects and Operations Factors of STEP Success or Failure Work Breakdown Structure Project Organization Structures Traditional Formal Organization Structures Functional Organization Projectized Organization Matrix Organization Structure Elements of a Project Plan General Applicability of Project Management Documenting Project Lessons Learned Marvels of STEPs Advancement of Society on the Back of STE Levels of Project Execution Categories of Project Outputs Unique Aspects of STEPs
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Integrated Systems Approach to STEPs STEP Project Management Steps Managing Project Requirements
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Chapter 2
STEP Integration
Project Integration: Step-by-Step Implementation Step 1: Developing Project Charter Definition of Inputs to Step 1 Definition of Tools and Techniques for Step 1 Definition of Output of Step 1 Step 2: Develop Preliminary Project Scope Statement Definition of Inputs to Step 2 Definition of Tools and Techniques for Step 2 Definition of Output of Step 2 Step 3: Develop Project Management Plan Definition of Inputs to Step 3 Definition of Tools and Techniques for Step 3 Definition of Output of Step 3 Step 4: Direct and Manage Project Execution Definition of Inputs to Step 4 Definition of Tools and Techniques for Step 4 Definition of Outputs of Step 4 Step 5: Monitor and Control Project Work Definition of Inputs to Step 5 Definition of Tools and Techniques for Step 5 Definition of Outputs of Step 5 Step 6: Integrated Change Control Definition of Inputs to Step 6 Definition of Tools and Techniques for Step 6 Definition of Outputs of Step 6 Step 7: Close Project Definition of Inputs to Step 7 Definition of Tools and Techniques of Step 7 Definition of Outputs of Step 7 Application of CMMI and Carpé Futurum Project OPR Project Sustainability Chapter 3
STEP Scope Management
Scope Definitions Scope Management: Step-by-Step Implementation Use of DMAIC for Scope Management Use of SIPOC Diagram for Scope Management Scope Feasibility Analysis Dimensions of Scope Feasibility
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Industry Conversion for Project Scoping Assessment of Local Resources and Work Force Developing Scope-Based Project Proposal Proposal Preparation Scope Technical Section of Project Proposal Management Section of Project Proposal Scope Budget Planning Scoping Top-Down Scoping Bottom-Up Zero-Base Scoping Project Scoping with WBS Project Scope Selection Criteria Criteria for Project Review Hierarchy of Selection Sizing of Projects Planning Levels Hammersmith’s Project Alert Scale: Red, Yellow, Green Convention Product Assurance Concept for Industrial Projects Chapter 4
STEP Time Management
Time Management: Step-by-Step Implementation CPM Network Scheduling Working with Activity Precedence Relationships Example of CPM Analysis CPM Forward Pass CPM Backward Pass Determination of Critical Activities Subcritical Paths Schedule Templates Gantt Charts Project Crashing Critical Chain Analysis Chapter 5
STEP Cost Management
Cost Management: Step-by-Step Implementation STEP Portfolio Management Project Cost Elements Basic Cash Flow Analysis Time Value of Money Calculations Calculations with Compound Amount Factor Calculations with Present Value Factor Calculations with Uniform Series Present Worth Factor Calculations with Uniform Series Capital Recovery Factor Calculations with Uniform Series Compound Amount Factor Calculations with Uniform Series Sinking Fund Factor
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Calculations with Capitalized Cost Formula Arithmetic Gradient Series Internal Rate of Return Benefit–Cost Ratio Analysis Simple Payback Period Discounted Payback Period Time Required to Double Investment Effects of Inflation on Project Costing Breakeven Analysis Profit Ratio Analysis Project Cost Estimation Optimistic and Pessimistic Cost Estimates Project Budget Allocation Top-Down Budgeting Bottom-Up Budgeting Budgeting and Risk Allocation for Types of Contract Cost Monitoring Project Balance Technique Cost and Schedule Control Systems Criteria Elements of Cost Control Contemporary Earned Value Technique Activity-Based Costing Chapter 6
STEP Quality Management
Quality Management: Step-by-Step Implementation Six Sigma and Quality Management Taguchi Loss Function Identification and Elimination of Sources of Defects Roles and Responsibilities for Six Sigma Statistical Techniques for Six Sigma Control Charts Types of Data for Control Charts X-Bar and Range Charts . Data Collection Strategies Subgroup Sample Size Frequency of Sampling Stable Process Out-of-Control Patterns Calculation of Control Limits Plotting Control Charts for Range and Average Charts Plotting Control Charts for Moving Range and Individual Control Charts Case Example: Plotting of Control Chart Calculations Trend Analysis
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Process Capability Analysis for Six Sigma Capable Process (Cp) Capability Index (Cpk) Possible Applications of Process Capability Index Potential Abuse of Cp and Cpk Lean Principles and Applications Applying Kaizen to a Process Lean Task Value Rating System Lean–Six Sigma within Project Management
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Chapter 7
STEP Human Resource Management
Aging Workforce in Science, Technology, and Engineering Knowledge Workers in STE Work Environment Elements of Human Resource Management Human Resource Management: Step-by-Step Implementation Managing Human Resource Performance Quantitative Modeling of Worker Assignment Resource Work Rate Analysis Model for Technical Human Resource Training A Conceptual Approach Extended Training Model Chapter 8
STEP Communications Management
Communications Management: Step-by-Step Implementation Complexity of Multiperson Communication Communicating through Triple C Model Typical Triple C Questions Triple C Communication SMART Communication Triple C Cooperation Triple C Coordination Conflict Resolution Using Triple C Approach Application of Triple C to STEPS DMAIC and Triple C Chapter 9
STEP Risk Management
Risk Definition Risk Management: Step-by-Step Implementation Project Decisions under Risk and Uncertainty Cost Uncertainties Schedule Uncertainties Performance Uncertainties Risk and Decision Trees
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Chapter 10 STEP Procurement Management Procurement Management: Step-by-Step Implementation Completion and Term Contracts Procurement Management Plan Contractor Statement of Work Organization Process Assets Contract Feasibility Analysis Contents of Project Proposal Technical Section of Project Proposal Management Section of Project Proposal Contract Teamwork and Cooperation Vendor Rating System Rating Procedure Requirements Computation Steps Multicriteria Vendor Selection Technique Wadhwa–Ravindran Vendor Selection Technique Weighted Objective Method Goal Programming Compromise Programming Inventory Analysis and Procurement Economic Order Quantity Model Quantity Discount Calculation of Total Relevant Cost Evaluation of the Discount Option Sensitivity Analysis Chapter 11 STEP Case Study: Space Shuttle Challenger Case Background Foundation for Lessons Learned Space Shuttle Mission Background and Authorization Space Shuttle Design Decisions Shuttle Development Process Chronology of Developments The Challenger Mission Launch Delays Launch Problems The Accident The Investigation Flaws in the Decision Process Testimonies McDonald’s Testimony Mulloy’s Testimony Presidential Commission Findings Management Decision Ambiguities
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Additional Commission Findings Post-Investigation Developments Space Shuttle Columbia Disaster Technical and Organizational Issues Shuttle Flight Risk Management Concluding Remarks Satellite Project Failure: Another STEP Case Example Death of a Spy Satellite Response to Soviet Threat A Company Trying to Diversify Multiple Design Challenges Winning Bid Is Announced Signs of a Project in Trouble Search for Lessons Appendix A Appendix B Appendix C
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Preface This book introduces the STEP methodology for managing science, technology, and engineering projects. The focus is to provide tools and techniques for executing projects in the domains of science, technology, and engineering (STE). STEP refers to science, technology, and engineering projects and STEP methodology refers to the specialized process of managing such projects. This book presents a step-by-step application of project management techniques to managing STEPs. It uses Project Management Body of Knowledge (PMBOK ™) as the platform for the topics covered. Technical project management is the basis for sustainable national advancement. Thus, managing technical projects effectively is essential for economic vitality. Project management is the process of managing, allocating, and timing resources to achieve a given goal in an efficient and expeditious manner. The objectives that constitute the specified goal may be in terms of time, costs, or technical results. A project can range from the very simple to the very complex. Due to its expanding utility and relevance, project management has emerged as a separate body of knowledge that is embraced by various disciplines ranging from engineering and business to social services. Project management techniques are widely used in many endeavors, including construction management, banking, manufacturing, engineering management, marketing, health care delivery systems, transportation, research and development, defense, and public services. The application of project management is particularly of high value in science, technology, and engineering undertakings. In today’s fast-changing ITbased and competitive global market, every enterprise must strive to get ahead of the competition through effective project management in all facets of operations. Project management represents an excellent basis for integrating various management techniques such as statistics, operations research, six sigma, computer simulation, and so on. The purpose of this book is to present an integrated approach to project management for science, technology, and engineering projects. The integrated approach covers the concepts, tools, and techniques (both new and tested) of project management. The elements of the PMBOK provide a unifying platform for the topics covered in the book. This book is intended to serve as a reference for planners of science, technology, and engineering projects; stakeholders; designers; project managers; business managers; consultants; project analysts; senior executives; project team members; members of project management offices; project customers; functional managers; trainers; and researchers. It can also serve as a guidebook for technical consultants and as a textbook resource for students and educators. It is also useful as supplementary reading for practicing engineers and as a handbook for project operators. It will appeal to technical professionals because of its focused treatment of STEPs. STEP project management will be beneficial for a variety of professional groups and specialty areas including the following: Acquisitions management Aerospace engineering
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Applied research and development Composite engineering Engineering infrastructure design Facilities engineering Financial management Industrial engineering Information systems analysts Logistics engineering Maintenance engineering Materials science and engineering Mechanical engineering Operations research analyst Process engineering Project engineering Science and technology consultancy The following process areas can also benefit from the application of the techniques of STEP methodology: Contracting support Cost estimating Global logistics support Global supply chain Integrated logistics support Interoperability Life cycle cost Performance-based logistics Product design Supportability analysis Systems analysis Total ownership cost This book uses a mixed-mode tools-and-techniques approach that combines managerial, organizational, and quantitative methodologies into a logical sequence of project implementation steps. Adedeji Badiru, PhD, PE, PMP
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Acknowledgment The only way I could have embarked upon and completed this latest massive project was to enter into partnership with my wife, Iswat. She allowed me to turn our bedroom, kitchen, family room, and every nook and corner of our home into writing centers. She participated actively by helping to type, design graphics, format equations, and critique textual materials. My highest expression of gratitude goes to her.
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Adedeji Badiru
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Author Adedeji Badiru is a professor and department head of the Department of Systems and Engineering Management at the Air Force Institute of Technology, Dayton, Ohio. He was previously professor and department head of Industrial and Information Engineering at the University of Tennessee in Knoxville. Prior to that, he was professor of industrial engineering and dean of University College at the University of Oklahoma. He is a registered professional engineer (PE), a certified project management professional (PMP), a fellow of the Institute of Industrial Engineers, and a fellow of the Nigerian Academy of Engineering. He holds a BS in industrial engineering, an MS in mathematics, and an MS in industrial engineering from Tennessee Technological University, and a PhD in industrial engineering from the University of Central Florida. His areas of interest include mathematical modeling, project modeling and analysis, economic analysis, and productivity analysis and improvement. He is the author of several books and technical journal articles. He is the editor of the Handbook of Industrial and Systems Engineering. He is a member of several professional associations including the Institute of Industrial Engineers, Society of Manufacturing Engineers, Institute for Operations Research and Management Science, American Society for Engineering Education, New York Academy of Science, and Project Management Institute. Professor Badiru has served as a consultant to several organizations around the world including in Russia, Mexico, Taiwan, Nigeria, and Ghana. He has conducted customized training workshops for numerous organizations including Sony, AT&T, Seagate Technology, U.S. Air Force, Oklahoma Gas & Electric, Oklahoma Asphalt Pavement Association, Hitachi, Nigeria National Petroleum Corporation, and ExxonMobil. He has won several awards for his teaching, research, publications, administration, and professional accomplishments. He holds a leadership certificate from the University of Tennessee Leadership Institute. Professor Badiru has served as a technical project reviewer, curriculum reviewer, and proposal reviewer for several organizations including the Third-World Network of Scientific Organizations, Italy; National Science Foundation; National Research Council; and the American Council on Education. He is on the editorial and review boards of several technical journals and book publishers. Professor Badiru has also served as an industrial development consultant to the United Nations Development Program.
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