Project Management Practices, Methodologies, Tools, and Techniques Used In the Expansion Project - Assignment Example

The Custom Woodwork Company Woody 2000 Project Introduction The Custom Woodwork Company, established in 1954, is a medium sized company specializing in producing custom furniture and cabinet making. The company gained good reputation in the market and with its working over past few years. With the introduction of John Carpenter, company owner’s son, the company moved to subcontracting furniture installation and supplies to its customers. In 1989, following an increased demand in commercial furniture, the company decided to undertake expansion project for enlarging its facilities. The company had two options available, either move to a new location or expand existing facilities to avoid any interruption. The purpose of this report is to carry out an assessment of the Woody 2000 Project to evaluate the current project management practices, methodologies, tools and techniques used om the expansion project. This report is aimed to analyze the various problems during the execution of project. In this case study, a plan was developed for an earlier project and an improved plan has been proposed for completion of the project. In this report, project objectives. Scope of work, work breakdown structure, project network diagram has been examined and a Gantt chart has been formulated on the basis of information provided in the case study. Project Objectives The primary objective of this report is to conduct detailed assessment of the requirements that are considered critical to the completion of expansion of facility. Successful management of a project requires clear project objectives. Juli (2011) argues that project objectives should be SMART; specific, measureable, achievable, realistic and time-frame bounded. The detailed study of Woody 2000 Project case study revealed that the main objectives of the company included: Expansion of existing facility by 25% Installation of semi-automatic woodworking production train to increase the efficiency Installation of air conditioners and dust free paint to improve the work conditions Increase the compressor capacity to establish a finishing shop Renovation of offices of President and Executive Vice President. The objectives that were decided as part of the project completion were thorough deliberated in hourly prolonged meetings between the executives of the company for a considerable duration of the project prior to undertaking. However, it is suggested that a feasibility study prior to finalizing the project objectives would have been a better option to establish actual requirements. Besides, rather than taking up a separate feasibility study this effort could have been made part of the project justification. The primary problem in finalizing the project objectives was that department heads and employees were not involved to actually figure out their requirements and how they perceived to be impacted by the project. It is important to note what type of expansion or up-gradation is expected in the facility to meet the growth requirements. The project objectives figured out include: Develop a growth project plan considering the market stability, trends and performance indicators to establish growth requirements. Carryout analysis of existing facilities to establish baseline for maximum possible output and compare it with the predicted / forecasted increased production requirements to support market needs. Identify, analyze and incorporate requirements from different company departments for the expansion of the facility. Develop a plan for expansion of the existing facility. Analyze the impact and contribution of identified expansion objectives to company’s response for market growth. Carrying out above feasibility analysis would have provided an opportunity for the project justification and identifying and analyzing what objectives considered were actually necessary or not. Statement of Work (SOW) The statement of work provides a descriptive narration of the project objectives. According to PMBOK (2008), statement of work is provided by the sponsor or initiator for internal projects that is based on business requirements. However, for projects carried out for external customers, statement of work can be part of the initial contract. The statement of work should provide information on Business needs of an organization based on some technological advancement, regulatory or statutory requirements or increase in market demand. Description of the scope of the product or service that is intended as result of completion of the project being undertaken. The characteristics of the product or service may not have detailed description at this stage and would be progressively elaborated (PMBOK, 2008). Here, it is important to identify the relationship between the project objective and the business requirements that stimulated this need for this project. The strategic plan of the organization and the contribution of the project objectives to the organizational strategic plans should be considered in the statement of work. In Woody 2000 Project, there was no formal statement of work and no process as shown below was adopted for the formulation of same. Develop Project Statement of Work Figure 1 The analysis of the project revealed that the Statement of Work should have as given below as part of the Project Charter. Project Woody 2000 Project Project No 001 Project Manager Ian Leadbetter Problem The higher management decided to expand the existing floor space and upgrade the production facilities to respond to increasing demand in commercial construction. PROJECT STATEMENT OF WORK Goal The main goal and aim of the project is to expand the existing floor space by 25% of existing floor space and upgrade the semi-automatic woodworks machine to increase the production rate enough to respond to market needs. Objectives The main objectives of the project are: Expansion of existing facility by 25% Installation of semi-automatic woodworking production train to increase the efficiency Installation of air conditioners and dust free paint to improve the work conditions Increase the compressor capacity to establish a finishing shop Renovation of offices of President and Executive Vice President. Relevance to Organizational Strategic Plan The Custom Woodworks Company has a plan to respond to sudden increase in demand for furniture in commercial market. The project would allow the company to increase its productivity and meet the high demands in the market in commercial construction projects that is being filled by the competitors at present. This is likely to increase the revenue and profit of the company by 75% of existing earnings. Success Criteria The success of the project would be measured against completion within financial allocation of 17 million USD and in time frame of 18 months. Besides, adherence to existing regulatory and statutory requirements for construction and up-gradation of production facilities is mandatory. Assumptions and Risks At this stage following possible assumptions and risks associated with the project are identified which may progressively elaborated in the risk management planning for the project. Poor internal and external communication Low level of involvement of the client firm undertaking the project Noncompetitive resources Obtaining of regulatory and statutory requirements Extreme weather halting the pace of project Delays by suppliers and vendors Work Breakdown Structure (WBS) PMBOK (2000) has defined Work Breakdown Structure as a deliverable-oriented grouping of project elements that organizes and defines the total work scope of the project. Each descending level represents an increasingly detailed definition of the project work. Rita (2011) argues that the WBS is deliverable oriented decomposition of the project work and forms the basis of planning, organizing, executing and controlling the project work. The WBS has following characteristics It is hierarchal form of the work decomposed into smaller activities. It represents each activity to be accomplished and its result in a tangible form. WBS has deliverables that are tangible results of the project activities. WBS is created with the involvement of the project team. In WBS, the work is decomposed until it cannot be further subdivided logically and can be achieved more realistically (Wysocki, 2009!). It provides information on all parts of the work that are required for the project completion and is a graphical representation of the project scope. WBS helps to identify the responsibilities of the team for each activity and facilitates the reporting and analysis of the project performance and progress. Generally, the top level of the WBS is the project title, the next level breaks the work into smaller packages. This decomposition continues to activity level where further decomposition of the work or activity is not possible. In WBS, it is quite possible that some levels of the project are broken down more rigorously than the others. In Woody 2000 Project, no WBS was formulated during the planning phase of the project. The WBS of for the project has been formed using Microsoft Project 2013 as shown below. Project Network Diagram, Critical Path and Gantt Charts Project network diagrams provide graphical representation of the project schedule and dependencies of the project activities on each other and any external resource. Mainly two approaches, precedence diagramming method and arrow diagramming method are used to draw project network diagrams by manual methods of project management software (Schwalbe, 2006). The project network diagrams can contain entire project details or summary of activities as desired. A narrative can be used to describe the sequence of activities and their dependencies along the path of the project network diagram. Gantt chart is one of the major tools for project schedule management. It is a graphical display of schedule information on the project. In Gantt Chart, activities in the work breakdown structure are listed on the left side of the chart dates are across the top, and durations for all activities are represented as time placed horizontal bars (Milesovik, 2003). A summary level representation of major activities in the Gantt Chart is called milestone chart. Milestone is a significant point or event during the project that marks completion and achievement of a specific objective or goal. Gantt chart is attached as Appendix ‘A’. In Woody 2000 Project, since planning was the weakest area from the beginning. In absence of a comprehensive WBS, it was not possible to develop project network diagrams and identify the sequence and dependencies of the project activities. For our project, three point estimate technique based on optimistic, pessimistic and most likely durations in weeks was calculated. According to our analysis, the entire project schedule was calculated to be 278 working days excluding Saturdays and Sundays from 11 February 2013 to 05 March 2014. In addition, milestones identified for the project in Microsoft Project 2013 are also shown. Project Network Diagram and WBS are attached as Appendix ‘B’ and ‘C’ respectively. Project Risk Management Project risk is an uncertain event that if occurs has a positive or negative impact on the project completion (PMBOK, 2008). There can be one or more than one causes for the project risk and if it occurs can have one or more than one impacts on the project objectives. The conditions for initiation of a risk may include enterprise environmental factors, lack of management system integration or dependency on external sources that are beyond the control. PMBOK (2008) explains that risk management processes include identification, assessment, monitoring and control of the risks are updated throughout the course of the project. The main aim of risk management is to increase the probability of the positive events and reduce or eliminate the probability of negative events. The risk management includes following processes: Risk Management Planning. Planning the activities for risk management Risk Identification. Determining the risks that may impact the project success Qualitative Risk Analysis Prioritizing the risks Quantitative Risk Analysis Numerical analysis of the project risks Risk Response Planning Identifying and planning options for enhancing probability of positive events and reducing the threats. Risk Monitoring and Control Tracking risks, updating new risks, developing response and plans and evaluating their effectiveness. The project team in Woody 2000 project did not identify the risks associated with the projects and failed to develop any plans to mitigate and eliminate risks that could affect the completion of project. To respond to project risks, following plan was made: Risk Identification. Following risk categories were identified Technical risk – Technical risks include the complexity issues, quality and technology availability, poor communication within and external to project team. In our case, main technical risks included installation of Lag Bolts and coordination of shop drawings with contractors. Project Management Resources – This category of risk identification included poor allocation of resources and risks associated with cost and schedule. In Woody 2000 Project, poor management, incompetent resources, coordination for supplies and project interfaces were major risks in this category. Organizational Risks – These risks are result of organization factors. In Woody 2000 Project, it was important to ensure that adequate human resources is allocated for the project and policies that confront the completion of the project are avoided. External Risks. – External risks result from sources that are external to the project like regulatory bodies, labor contracts, weather conditions and vendor limitations. In Woody 2000, proper coordination with suppliers and utility companies and meeting of regulatory requirements are of prime importance. Risk Assessment – There are two main components of risk assessment; the probability of occurrence of risk and the impact of the risk on project objectives. It is important to evaluate each risk identified and calculate its financial effects on the project cost. Following table shows the assessment of risks. Risks Assessment Technical Risks Poor Communication Poor quality Technology availability Log Bolt Installation Coordination of Shop Drawing Medium High Medium High High Project Management Resources Poor Planning Incompetent resources Coordination for supplies Project interfaces High Medium Medium High Organizational Risks Poor Policies Change in Management Commitment Adequate human resource allocation High High High External Risks Regulatory requirements Weather Market Risks Contract related risks High Medium Low High Risk Response Planning. Following action plan has been formulated to respond to risks. Risks Assessment Response plan Technical Risks Poor Communication Poor quality Technology availability Log Bolt Installation Coordination of Shop Drawing Medium High Medium High High Mitigate - Develop communication model Eliminate - Identify quality standards Mitigate - Identify technological requirements and availability for each project tasks Eliminate - Discuss and plan with construction engineer the shop floor drawing and take action for any changes if required. Project Management Resources Poor Planning Incompetent resources Coordination for supplies Project interfaces High Medium Medium High Eliminate the risk through development of project management plan and all of its related components Mitigate the risk by identifying qualification, experience, and skills of resources required for the project activities. Mitigate the risk by developing procurement plan Mitigate the risk by identifying milestones and create WBS for the project and related component in the risk management plan Organizational Risks Poor Policies Change in Management Commitment Adequate human resource allocation High High High Mitigate by adding exception for policies in project management plan Include in contingency plan Mitigate through developing Human Resource Management Plan for the project and its related component in the risk management plan External Risks Regulatory requirements Weather Market Risks Contract related risks High Medium Low High Mitigate by including in Project Management Plan and its related component in the risk management plan Accept the risk Transfer the risk in Procurement Management Plan Mitigate risks through Project Procurement Management Plan and its related component in the Risk Management Plan Risk Monitoring and Control – The risks identified would be monitored and controlled by maintaining a log called risk register. This would include the risk description, response planned and any updates throughout the project lifecycle. Recommendations In light of above planning, following are the recommendations for Woody 2000 Project. Develop a comprehensive project management plan and its constituent components i.e., project integration plan, project scope management plan, project cost management plat, project schedule management plan, project human resource management plan, project quality management plan, project risk management plan and project procurement management plan. Identify and assess risk and develop action plan for risk elimination and mitigation. Project management processes and framework based on guidelines provided by PMI in its PMBOK are recommended as an effective strategy. Develop a communication management plan containing a model that defines the requirements and methods and techniques for communication. Involving staff especially from production department to identify the ways that production is not interrupted during the project execution. Identify project baselines for cost, time, scope and quality against which the project performance would be measured. Ensure all necessary approvals are in place to meet regulatory and statutory requirements. Use of tools like Project Network Diagram, Critical Path, Gantt Chart and milestone charts for monitoring project progress. Define and approve criteria for measuring the project success against standards or requirements as defined by management. References Juli, T. (2011) Leadership Principles for Project Success. Boca Raton: Taylor & Francis. Milesovik, D. (2003) Project Management Toolbox. New Jersey: John Wiley & Sons. Mulcahy, R. (2011). PMP Exam Prep. Burnsville, RMC Publications. Project Management Institute. (2000). A guide to the project management body of knowledge (PMBOK Guide). North Carolina, Project Management Institute. Project Management Institute. (2008). A guide to the project management body of knowledge (PMBOK Guide). Newtown Square, Pennsylvania, Project Management Institute. Schwalbe, K. (2006) Introduction to Project Management. Massachusetts: Cengage Learning Inc.. Wysocki, R. (2009) Effective Project Management: Traditional, Agile, Extreme. Indianapolis: John-Willey & Sons. APPENDIX ‘A’ GANTT CHART APPENDIX ‘B’ PROJECT NETWORK DIAGRAM APPENDIX ‘C’ WORK BREAKDOWN STRUCTURE Read More