Return to the handbook index.

SUBJECT: Project Management

ALPHANUMERIC IDENTIFIER:

KEYWORDS: Project Management, Scope Management, Time Management, Cost Management, Risk Management

OVERVIEW:

Projects and operations are similar in that both are performed by teams of people and are constrained by limited resources. A project differs from an operation in that work in a project is temporary and work in an operation is ongoing. Project management is thus defined as managing work with a beginning and end with established milestones throughout the work’s life.

Project management (PM) can be broken down into nine management sub-categories:

• Integration
• Scope
• Time
• Cost
• Quality
• Human Resource
• Communication
• Risk
• Procurement

Effective project management is vital to a manufacturing company’s success. Applying PM principles can shorten the lead-time of two important activities: product development and production start-up. A classic project example from the auto industry is the development of a new vehicle coupled with the factory retooling necessary to produce the auto.

Many firms need to take drastic steps to change from inefficient push methodologies to lean principles. These steps’ successful implementation is another area where PM principles can help. The following activities represent examples of steps that will improve a plant’s leanness and can be guided with project management tools:

• Relaying-out assembly line to improve material flow
• Designing and installing a visual management system
• Developing new maintenance schedule to reduce overall equipment ownership costs
• Auditing suppliers to support supplier rationalization decisions
• Benchmark internal and external plants within industry to identify best practices

The importance of project management has given rise to the importance of the project manager. Few projects that will have long-term positive implications on the firm will be confined within the boundaries of one functional area. To meet a project’s cross-functional objectives a successful project manager must have extremely good organizational skills and an excellent track record for meeting deadlines. The project manager must be also be an effective communicator and team builder with strong ties across the various functional boundaries.

Besides a good project manager, successful projects also depend on support from senior management. The following list outlines duties and responsibilities of senior management with regard to projects:

Pre-project Duties:

1. Select the right project.
2. Commit the corporation.
3. Obtain needed technical and management skills.
4. Select the right project manager.
5. Provide sufficient support systems.
6. Establish effective incentives.

During the project’s execution senior management should:

1. Let the project manager manage the project.
2. Provide the project oversight and feedback.
3. Provide senior-management-level client contact.
4. Ensure technical and management support availability.
5. Keep the project shielded from corporate politics.
6. Provide staff-growth opportunities

In the post-project phase senior management should:

1. Document the project.
2. Recognize the project team.
3. Build on the successful project.

Companies that quickly grasp and use PM tools will effect needed changes more rapidly than firms that do not. These successful companies will launch a series of projects that will build on each other and eventually transform the company into a world-class operation.

REFERENCES:

• A Guide to the Project Management Body of Knowledge, PMI Standards Committee, William R. Duncan, Director of Standards, 1996.
• The Field Guide to Project Management, David I. Cleland, Van Nostrand Reinholdâ , 1998.
• What Every Manager Needs to Know about Project Management, W. Alan Randolph and Barry Z. Posner, Sloan Management Review, Summer 1988.
• The Boeing 767: From Concept to Production, Harvard Business School Case #9-688-040, Revised April 1, 1991.

ACKNOWLEDGEMENT: This is a March 29, 1999 revision by Gene Goodson of an assignment for OM742 contributed by Andy Parker.