Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

19.3 Summary

Systems engineering is a systemic method of realizing systems. The basic idea of proceeding from the general to the particular (top-down approach) requires that the system be viewed at different levels, that is, with its subsystems and environment. The system life cycle encompasses three concept phases (system development) called preliminary study, main study, and detailed studies, and four implementation phases — establishment of the system, introducing the system and handing it over, operation of the system, and disposal, or decommissioning, of the system. The three concept phases run through the problem-solving cycle with the following six steps: situational analysis, formulation of objectives, synthesis, analy­sis, evaluation, and decision. In the preliminary study, this is predominantly system analysis and formulation of objectives; in the main study and in the detailed studies, this is synthesis, analysis, evaluation, and decision.

Individual phases in the system life cycle can be viewed as projects. Here, project management is a systematic approach to ensure project effectiveness and the efficient use of resources. A project follows certain objectives, the achievement of which often culminates in deliverables and is subject to external constraints and conditions from the environment, such as regulatory requirements, and internal constraints and conditions, such as deadlines and cost and capacity limitations. The project life cycle encompasses initiation, a number of intermediate phases, and an end phase. A work breakdown structure subdivides a project into levels of tasks and work packages, whereby the degree of detail increases with each descending level. For project scheduling, the durations for each task or work package in the work breakdown structure can be graphically shown as date-placed along horizontal bars. The resulting Gantt chart also contains the project milestones. Under certain conditions, network analysis techniques, such as the critical path method, can be used for scheduling. The role of the project manager can be that of coordination in a line organization, or direct management in a project-based organization, or one of limited authority in a matrix organization. Project costs can generally be determined relatively easily. Estimating benefits, however, is difficult in many cases. Often, project profitability can be established only when indirect benefit is included. Profitability itself can be determined using the payback period method or the net present value (NPV) formula. Multiple profitability calculations with inclusion of cumulative benefits with different degrees of realization can provide the required basis for decision making. This procedure also yields a sensitivity analysis that can be used in the estimation of project risk.

Course sections and their intended learning outcomes

  • Course 19 – Systems Engineering and Project Management

    Intended learning outcomes: Explain systems engineering. Disclose project management.

  • 19.1 Systems Engineering

    Intended learning outcomes: Explain systems thinking and the top-down approach. Describe phases of life of a system and the system life cycle. Present in detail the problem solving cycle. Disclose the differences between software engineering and classical systems engineering.

  • 19.2 Project Management

    Intended learning outcomes: Present goals and constraints of a project. Describe project phase, project life cycle, and work breakdown structure. Explain scheduling and effort planning as well as organization of a project. Differentiate between cost, benefits, profitability, and risk of a project.

  • 19.3 Summary