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Project Management: On Time, On Budget, On Track

Feb. 1, 2006
Organizational progress requires successful project management.

Project management is hot. Over the 10-year period from 1995 to 2004, the Project Management Institute (PMI, Newtown Square, Pa.) grew from 12,000 to 153,000 members in 146 countries. Today PMI has over 200,000 members.

Last year PMI certified almost 87,000 project management professionals (PMPs), up from 35,000 the year before. Such growth reflects a mounting recognition that effective project management is a process— beginning with project definition, followed by planning, implementation and delivery—and that the successful execution of any company strategy depends upon the successful completion of many parallel and sequential projects, large and small.

Every plant manager, every logistics manager and every distribution manager has a list of projects his or her team must complete to move the organization forward. Getting those projects done, and achieving the desired objectives, starts with planning.

There are three variables in a project, explains Michael Ensby, a quality and organizational development consultant and instructor at Clarkson University. There's performance. (What do you want to do? Form, fit and function.) There's cost. (How much do you have available to achieve that form, fit and function?) And there's time. (What's the timeline to achieve the form, fit and function within the cost limits?) Each of these three factors needs to be prioritized.

"One of the problems you run into in poorly managed projects is everybody wants maximum capability right now for nothing. That's a theoretical impossibility," says Ensby. "What you have to do is sit down early with the stakeholders and get them to agree on the scope characteristics and where the tradeoffs are going to happen."

He recommends breaking down project requirements into "musts," "wants" and "like to's." Project managers should first make sure the musts can be achieved within the time and budget parameters. Focusing on the musts will also help prevent scope creep, when new tasks and objectives are added on during the latter phases of a project that contribute to delays and cost overruns.

"The whole thing of project management is you can usually figure out the technical issues. The better job you account for them in planning, the less you'll have to account for them in implementation," Ensby adds. What does it mean to plan better? Quality tools like fishbone diagrams (also known as cause and effect, or Ishikawa diagrams), which are often used to identify the root cause of process and component failures, can identify potential problems during the project planning process as well, before they erupt into major headaches.

"Most of your conflict is in the implementation stage when things aren't going well. What if you had that conflict in the definition and planning stage and everybody stated their case, and fought for their position, and provided hard evidence for why they have that position, and then you collaborate on an optimal outcome that respects everybody's position?" Asks Ensby. "Think about how much less conflict there would be in the implementation stage."

Process-improvement projects
The bigger the project—an organization-wide change initiative for example—the greater the number of people who will be affected, and the more important that communication becomes. Getting everyone on board starts with a common goal, says Ken McGuire, a management consultant based in South Yarmouth, Mass.

"Start with that overarching, straightforward, very simple goal. Something you can say in a few words and nobody can forget," he says. "You can do all of the project management you want, and all of the Microsoft Project calculations and charts you want, but if you don't have those goals, the details will never come into play."

When it comes to process improvement projects on the shop floor, to get the details accomplished requires accountability, he says. Team members have to complete their tasks on time, and a project leader has to make sure that the team meets every week, or twice a week if necessary. People won't volunteer for tasks to begin with however, if they don't think they will get support from maintenance, or engineering, or purchasing, or other departments.

"Many times management sets the goals and forgets to prioritize the recompanysources," says McGuire. "If you have the resources assigned, and it's a legitimate improvement, you'll get it completed because someone will take the responsibility of getting it done. The number of things that get completed is directly proportional to a) how many meetings you had where you generated ideas, b) how much resources you're able to draw down and use, and c) [whether] the people were committed."

To make sure the necessary resources are available, continuous improvement projects (CIP) at dj Orthopedics (Vista, Calif.) typically have a manufacturing engineer and a purchasing team member assigned to them. Larger projects, reports Jerry Wright, director of operations, are handled by a cross-functional team with representatives from manufacturing, design, purchasing, quality and production.

Dj Ortho factories in Vista and Tijuana make wrist braces, arm slings, back and abdominal supports, rigid knee braces and other orthopedic products. As a medical device company (which reported preliminary revenues of $286 million in 2005), nearly all projects must go through quality assurance validation. In 2005 CIP teams at dj Ortho completed 55 projects, saving the company more than $3 million. In total, management has documented $18 million in improvement project savings since 2000. Managers prioritize projects, in lean manufacturing parlance, by how much "waste" they think they can eliminate, be it excess lead-time or procurement costs.

"Whether it's a huge quality to the customer benefit, or a cost savings or just a lead-time reduction, we prioritize the ones that have the most bang for their buck," says Wright.

One such project was a cooler that forms part of a cold-therapy unit that reduces pain and swelling. When the company bought the product line, the coolers were sourced from China for a total landed cost of around $8 each. They had to buy the coolers by the container load, and when the molds broke the Chinese supplier stopped shipping product for two months.

Over the course of a year and a half—delayed when the factory of a potential supplier had a fire—a project team figured out how to economically manufacture the cooler in house, making their own injection molding tools, sourcing the blow-molded components locally and creating fixtures for the high-pressure foam injection machine. The project team is meeting frequently now as they get closer to cutting over to the internally produced product. Currently going through final quality validations, Wright says the cooler will cost $1 to $2 less than it did to buy it from China.

"It's a nice enhancement to the product line and we don't have to go through this horrible supply-chain frustration with China," says Wright. One project down. Many more to go.

Start Projects Off on the Right Foot

Successful projects begin by identifying what needs to be done to achieve the project objectives within the constraints of time, cost and quality. Projects often fail because of poor initial planning. Start the planning process by:

  • Defining the deliverables
  • Defining the work packages
  • Estimating the work
  • Scheduling the work packages
  • Managing resource availability
  • Creating a budget
  • Integrating the schedule and budget
  • Identifying key performance indicators
  • Identifying critical success factors


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