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Project Management
A Necessary Skill for Manufacturers
Managing projects has always been a part of manufacturing
– and includes small projects such as developing a system for ordering supplies,
to complex projects like new product development. Why is there more emphasis on
having trained and certified project managers today than in the past? One reason
is that large customers are awarding long-term contracts, and are demanding that
their suppliers be able to prove they have the capability to manage these
projects. Providing formal project management training, and having certified
project managers on staff is becoming a requirement for winning many contracts.
How do you get project management training? Training is available through many
organizations, and certification is gained by a combination of passing an exam
administered by the Project Management Institute (PMI), having 3 years of
project management experience with a degree, or 5 years of project management
experience without a degree. In the past two decades project management
experience has grown from 3,000 to 45,000. In 2002, over 4,000 project managers
received certification.
A project is defined as a temporary endeavor undertaken to create a unique
product or service. The preferred objective of a project is to bring about
change. It has a defined scope or deliverable, has tasks, and usually has a
predetermined budget and an established time frame. In other words, a project
has a beginning, and an end – it should not be confused with managing the every
day activity of an organization.
Project management is managing the change brought about by implementing a
project.
It is the planning, scheduling, and controlling of project objectives. Project
management is both a science utilizing methods, tools, and procedures such as
charts, graphs and calculations, and an art requiring interpersonal, political,
and organizational skills. Effective use of project management leads to more
efficient service delivery and production, more accurate budgeting, greater
profitability, and improved stakeholder relationships.
An understanding of the project life cycle provides a good introduction to
project management. Although somewhat similar to a product life cycle, there are
differences. The project life cycle is divided into four main phases:
initiation, planning, implementation, and closure. The actual length of each
phase will differ depending upon the project.
Initiation defines the beginning of the project and requires the least amount of
effort but requires a great deal of communication and brainstorming. During the
initiation phase of a project, the project manager gathers data; identifies
need(s); establishes the goals, budget, schedule, strategy, risk level;
estimates the labor, material, and subcontractor resources; identifies
alternatives; and obtains approval for project planning.
During the planning phase of a project, the level of effort required by a
project manager and other team members begins to increase. Tasks during this
phase may include: determining key project team members; solidifying activities
proposed during the initiation phase; establishing policies and procedures;
assessing risks; and obtaining approval for the implementation of the project.
The implementation phase contains the largest amount of effort. During this
phase, the product of the project is being constructed. The team is working
together and communicating to accomplish the goals and objectives of the
project. Controls are in place to assure that the project is meeting its
objectives within the required time frame and budget. This is also the time in a
project when the largest amounts of costs are incurred.
As a project steps from implementation to closure, the level of effort drops off
and the project winds down. During this time, the product or service of the
project transfers hands. Final costs are reviewed and approved. The project
concludes with an evaluation of the project process and reassignment of the
project resources.
For every project there are three key constraints (scope, cost, and time) that
have to be managed through the numerous changes of a project during its life
cycle. But for each project it differs as to how the constraints affect the
project. For some projects, the budget (cost) may be fixed and no additional
funding is available. For another project, the schedule (time) must be met. The
importance of each of these constraints and the relationships between the
constraints must be determined during the initiation phase of the project for a
project to be successful.
Since these constraints are so important, project management can be broken up
into management of each of these constraints. Further definitions are included
below:
The scope of the project is defined as the goals and objectives of the project
with all of the tasks and resources required to meet these objectives. Since the
scope of a project changes over the life of the project, the scope must be
managed to minimize scope creep. Scope management includes: choosing the best
approach to achieve the project objectives; defining the project; obtaining work
authorization; periodically reporting project status; developing a control
system that notifies when the project is getting out-of-line; and getting the
project accepted by the customer at the end of the project.
The life of a project is typically predetermined by the project manager, the
customer, and other interested parties during the initiation phase of the
project. Since time is an inflexible resource, it must be planned and scheduled
and therefore managed. Time management is divided into planning, estimating,
scheduling, and control.
For most projects, money is typically an inflexible resource. Rarely does the
customer have an inexhaustible source of money, so costs must be managed
professionally. Project costs are managed through estimating and forecasting,
organizing and budgeting, analyzing and controlling, and taking the necessary
corrective action to keep costs within the established budget.
In addition to the major project constraints, there are others that also require
management throughout the life cycle of a project including: quality risk, human
resources, contract/procurement, communications, and integration. Understanding
the project life cycle and the constraints that must be managed during a project
are the first steps in effective and efficient project management.
The following are some examples of benefits reported by companies that have
implemented a formal project management system:
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Hewlet-Packard
has shown increased sales and customer satisfaction
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3M has reduced
its product development time from 4 to 3 years on average
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Radian
International has garnered more repeat business and happier clients: it has also
reduced cost overruns and write-offs
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Batelle has
achieved better on-time and on-budget product delivery; it has also been offered
non-competitive contract extensions
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OEC Medical
Systems has reduced its average number of service calls by 27% in the first 12
months of product life and 44% in the first 24 months
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