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CONSIDERING TIME–COST TRADE-OFFS 391

MANAGEMENT SCIENCE IN ACTION

Kimberly-Clark Europe
imberly-Clark are a leading global health and to: project management lacking standards and dis-
K hygiene company employing almost 60000 staff cipline; roles and responsibilities being unclear;
worldwide and with sales of nearly $16 billion in 2005. unrealistic timescales being set. The company
It has operations in 37 countries and sells in more decidedonaninitiativetoestablish commonproj-
than 150 countries. However, in the late 1990s its ect management approaches across Kimberly-
European business was facing difficulties. Although Clark Europe supported by extensive staff training.
its UK business was strong, the company were keen As a result the company is now confident that the
to expand market share across the rest of Europe, selection of projects is improved and that those
but a number of critical projects had not projects are being managed effectively with signifi-
been completed successfully and were affecting cant cost savings being achieved.
the company’s results to the extent that a
Based on M. Palmer, ‘How an effective project culture can help to achieve
profits warning was issued. An independent review business success: Establishing a project culture in Kimberly-Clark
concluded that there were major problems relating Europe’, Industrial and Commercial Training, 34/3 (2002): 101–105.

So we crash Activity A by one day at a cost of E100. This will reduce the overall
completion time from the current 12 days to 11 days. However, we can crash
Activity A still further given that there are a further two crash days available.
However, crashing Activity A by one day may have affected the slack times of
other activities and may have altered the critical path so we need to check the
network. On inspection of Figure 9.14 we can see that the A–B part of the network
will now have a duration of nine days (six+three) and that of the C–D part of the
network will also have a total duration of nine days (six+three). We now have a
situation whereby, through crashing Activity A, all activities are now critical. Clearly
crashing Activity A by a further day will not reduce the overall project duration
time since the path C–D will still take nine days. Clearly, if we were to crash part of
the A–B path by one day we would simultaneously have to crash part of the C–D
path by one day. The net effect on total project duration, however, would only be
one day. In fact we can summarize the crashing options we now have:

Activities to be crashed Total crash costs
A and C E300 (E100 + E200)
A and D E250 (E100 + E150)
B and C E350 (E150 + E200)
B and D E300 (E150 + E150)
E E200

The Project Management We now see that the lowest cost option is to crash Activity E next. This will reduce
Institute (PMI) was total project duration by a further day, to ten days, at an extra cost of E200. We have
formed in 1969 to
provide a forum for the now met the hospital manager’s target of completing the maintenance in ten days
project management but we should inform her that this will cost an extra E300. If any further reductions
community. are needed, we could simply continue crashing activities using the information
above. In this example, crashing can be conducted with some basic calculations
and careful inspection of the project network. For more complex projects, crashing
would normally be done as part of the computer software solution.

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