With all the torches you have to juggle, wouldn't it be nice if there were a methodology to help you keep them all in play without getting burned? Sounds futuristic. And it also sounds like a job for MHM 's 2004 Innovator of the Future, Tosanwunmi C. Maku, a doctoral student in Texas Tech University's Industrial Engineering program. Tosan, as his friends call him, is working on a doctoral dissertation titled: "A Performance Model for Multiple and Simultaneous Projects." His goal is to develop a scorecard to track the performance of multiple complex projects, and assess trade-offs associated with them.
"Just in the last decade, project management has become an area of great interest to managers and engineers," Tosan says. "Some managers are interested in cost. Others focus on engineering as it relates to the timely completion of a project. Overall, my main theme is how an organization can effectively and efficiently use performance modeling [PM] to complete an assigned task."
Tosan's research objectives:
- Identify performance metrics for project management which can be integrated into a balanced scorecard (BSC).
- Create a BSC with perspectives related to the fundamental areas of PM.
- Investigate the use of weighting factors to assess performance trade-offs for multiple projects.
You're probably asking, "hasn't this all been done?" MHM wondered the same thing. But according to Tosan's faculty advisor at TTU, Professor Terry Collins, he hasn't seen a scorecard addressing all the challenges of supply chain management.
"There's not much research on the human interaction in supply chains," he says. "Each node in the supply chain needs a human to perform a function, whether it's purchasing material or moving it from one point to another. There's a lot of independent research on human performance in supply chain and project management. Combining all of these areas collaboratively will be interesting."
The biggest contribution Tosan wants to make with his research is to identify performance measures managers can use to assess supply chain performance. Many tasks are taken for granted and never assessed. According to the weakest link theory, that one small oversight can compromise the integrity of the entire chain. Tosan's project will identify the critical human performance metrics between nodes of a supply chain. Tosan's scorecard identifies and categorizes the measures in a project management environment. Color coding helps in the assessment. Red is bad, yellow is marginal, and green good.
"When you incorporate the human aspect in supply chain performance measurement it will identify areas for improvement," Collins explains. But you must also keep time intervals in mind. "The red might indicate a temporary spike, so you have to be careful not to give a knee-jerk reaction. If you track performance each month and it's consistent, they can say, wow, we need to make some changes. The score card is flexible, so as times change, managers can pull obsolete or non-effective metrics that have become that way due to technology."
Let's say you're measuring tons per hour, based on a manual method of production. There are 40 bags to a ton in a manual pallet stacking procedure. In the best case scenario you have two stackers and a turntable stacking four tons an hour. If you put in an automatic palletizing method it will increase-output twofold. That would call for modifying your acceptable requirement and adjusting it up to reflect automation.
For automation, downtime could be a performance metric. If you use 10 tons per hour as the benchmark and you're getting eight and a half tons, that could be attributed to downtime and could be another reason for investigation.
In summary, this is a tool for investigation based on the performance of people and systems.
"There is software for balanced score cards but you have to plug in the metrics and measure," Collins explains. "This score card offers the opportunity to create a hybrid, looking not only at internal activities in a plant but also at the vendors in the supply chain."
The BSC concept was originally developed by Robert S. Kaplan and David P. Norton, and published in the January-February 1992 edition of the Harvard Business Review. It considers performance from four principal perspectives :
- The customer perspective (market share, customer satisfaction, referral rate, customer retention).
- The internal business perspective (cycle time, cost of services, speed of services, job safety).
- The innovation and learning perspective (effectiveness of change to technology and processes, employee satisfaction, willingness to share and gain knowledge).
- The financial perspective (earnings per share, revenue growth, profit growth, etc.).
These perspectives provide answers to four basic organizational questions:
- How do customers see us?
- What must we excel at?
- Can we continue to improve and create value?
- How do we look to shareholders?
"The BSC brings together in a single management report many of the seemingly disparate elements of a company's competitive agenda," Tosan explains. "This prevents information overload by limiting the number of measures used within each perspective."
Tosan's approach to the balanced score card includes multiple weighting factors and enables the user to evaluate an array of trade-off issues. There's built-in flexibility, so if a metric shows one application is faltering, you can also see the metric's application in other projects. This can result in substantial organization-wide savings.
Tosan will test his assumptions once he lines up a "project-driven" sponsor company to participate in the next stage of his research effort to develop a functional PM-BSC. His future research will focus on assessing tradeoff scenarios.
Tosanwunmi C. Maku