The Management and Production Project at Delamere Pottery Limited - Case Study Example

The Management and Production Project at Delamere Pottery Limited Introduction The one hundred years trading of the T.G. Delamere & Co. Ltd. ended when it underwent a management bought-out headed by TGD’s managing director Malcolm Lewis with Delamere Pottery Limited. High street banks and venture capitals financed this MOB. The organisational structure of Delamere was divided into three level, namely: the senior management, middle/supervisor management and blue collar workers. Malcolm Lewis as the managing director headed it. The competition in the market is becoming so aggressive that the company decided to conduct a marketing and investment strategy that is designed to achieve two primary business objectives 1. To maintain and grow their market position 2. To improve customer service and responsiveness to demand, also to facilitate inventory reduction. The new management drafted a revised business strategy and a new business plan to answer some of the demands of the changing market. They conducted a process evaluation to identify the lead times and delivery performance made by the company. The result of the investigation led them to the formation of a project team which work on the application of integrated Manufacturing, Planning and Control (MPC) procedure using new plant operated by a computer aided manufacturing (CAM). The team was composed of existing staff from Delamere. The first 6 months of the project runs smoothly. All the activities were finished on time. But on the 7th month, the activities started to lag behind schedule. The board had decided to put the project on hold due to so many problems that happened. Question No.1 The Project Management Process The project management process can be divided into two parts, project management planning and project control. Project management planning is the development of a workable project management plan that describes project tasks in terms of “who does what”, “when”, “at what cost” and “to what specification”. This integrated plan of the project should be at a level of detail that the project manager considers necessary and sufficient to enable effective and efficient project control. The second part of the process is to use the plan to control and coordinate the progress of the project (BSI, 2002) Project management planning The success of any project depends on the leadership and motivation given by a project sponsor (Office of Government Commerce 2002). The project sponsor for this project is the board of Delamere Pottery Ltd. They were the one who authorized the funding for the formation of the project management team. What they should have done was to monitor closely the development of the project. Instead of approving the funds for the whole project, they should have done it by project phase or stage. Through this, the problem can be minimised and arising problem can be given immediate solution. There is also an assurance that every project phase is complete before proceeding to the next phase of the project. The project was broken down to two distinct projects. The first project involved manufacturing, planning, control system and second project is the new computer system and software to run CAM and the introduction of stage one of MPC. The project organization for this project should be like the one in figure 1. As mentioned earlier, the project sponsor was the board, Allan Slip was appointed as the Project Manager and members from each department. Malcolm Lewis should have function as the Investment Decision Maker for this project. Being the Managing Director of the company, he was fits in that position. He has all the power to perform all the duties that IDM should have done to contribute to the success of the project. Andrew Slip was not a qualified project manager in the first place, because he does not have an idea of how to conduct a project management. The team should have been under his full control while working on the project so that problem like transfer of those he has trained has been transfer to other duties should have been avoided. The work breakdown structure (WBS) for the project was not clearly defined and discussed in details. It is a critical part of the project to prepare WBS in full details. It should have included performance measurement and task completion so that there is a monitoring on the developments of the task. The project manager should have also applied PERT/CPM so that the task that was that fall on the critical path can be given extra attention. Commitment is important in every project or task. This was lacking in the members of the project team and the company as a whole. Because even if this project was very important for the company, the people inside the organization were not committed to cooperate and do everything they can to help meet the goal of this project. Project Management Control Controlling the project is the most difficult task. All the plans, theories and concepts that the project team had conceptualized for a long time will now be put the test. This part of the process will dictate the outcome of the whole project. Some of the critical part of this phase include controlling the project plan, setting annual budget, monitoring progress, managing the project, assessing the risk, managing the risk, motivating task owners and negotiating. Because of lack of proper scheduling method, the project team started to be behind of their schedule until such point that they cannot achieve their milestones. Risk Management According to the UK Risk Management standard, the risk management can be define as a core process within any business organization regardless nature, size and industry. It is rare for all risks to be identified and taken into account systematically in the early stages of planning. Kloman describe a process for identifying, assessing, and controlling risks within a broad framework. The focus is on projects, "the principal means by which a business moves forward." It is another way of accepting that risk is inherent in all decision-making (2000) It is important to have a risk management plan because it contributes to the high probability to the success in the project. Although this is a very difficult task to do not all people can make a sound risk management plan. The correct selection of the opportunities and strategies to be used to improve their quality and efficiency is a very risky thing in itself that is why an expert on this matter should be hired. In figure 2, we can see the flow of the risk management process. Delamere should have applied this in their project in order to have more realistic project planning, on-time deadlines, minimised loss control, increase flexibility and fewer expenses. Procurement Processes Good procurement is essential to ensuring good public services, from buying goods and services that work as they are supposed to, to achieving savings that can be ploughed back into front-line services (HM Treasury 2007). This words are not only true with the government sector but it is also applicable to businesses and private sectors. A business organization must know how to choose the best suppliers who can meet their demand at all times. They should have prepared other options so that in times when their regular suppliers failed to meet their requirements they have options to remedy that problem The Organisational Procedure The Delamere project does not have a clear organisational procedure. The project team should have created a good organisational procedure which they can follow as they work on the project that includes the name and position of the responsible person and its responsibilities. By doing this, there will be no over-lapping of responsibilities. Question No.2 Risk management is very important even in small medium enterprise like Delamere Pottery Ltd. It gives insurance to the business and save time, money and effort. It can be considered as the heart of any organisation’s strategic management because it holds the solution to all the possible threats that will hinder the success of the project. Risk management plan have to be a constant and on going process that should be included in making the strategic plans for the company. The plan must contain possible solutions to all possible threats or risk that the company will encounter as they go with their project or programme. It should also answer problems or issues of the past and present and through the effective leadership of a manager, this should be included in the policy and programmes designed for the organisation. There are ten major classes of business risk four of them are internal and six are external. In this business case, we will concentrate on the internal risk particularly technical, financial and organizational External Risk Internal Risk 1. Political 1. Financial 2. Economic 2. Organizational 3. Legal 3. Technical 4. Social 4. Cultural 5. Environmental 6. Market A. Technical Risk According to British Standard (2002) some of the major technical considerations that can affect the business risk are: (1) inadequate design; (2) professional negligence; (3) human error/incompetence; (4) structural failure; (5) operation lifetime lower than expected; (6) residual value lower than expected; (7) dismantling/ decommissioning cost; (8) safety; (9) safety; (10) performance failure; (11) residual maintenance problem. B. Financial Risk Financing a project is not an easy decision because you will not know whether you will succeed or not. The financial aspect of the project plan must be carefully studied before implementing the plan. The problem that happened with Delamere will not happen if they anticipated that there is a huge possibility that cost of the project will increase. If the project team prepared a detailed financial risk this problem will not happen in the first place. Delamere Pottery should have considered the pointers of British Standard (2002) regarding the economic considerations that can affect the business risk. According to them exchange rate fluctuation, interest rate instability, inflation, shortage of working capital, and failure to meet revenue targets. There are capital risk involved in this business. If the project failed, it will a loss on the part of the business. There are also possibilities that the project cost is rising out of hand and continuing it will need more money from the company. C. Organizational Risk Human factors can affect the organization, major human resource issues are also factors that must be look into because they can affect the outcome of a certain business project. Issues like management competence, corporate policies, management practices, poor leadership, inadequate authority, poor staff selection procedures, lack of clarity over roles and responsibilities vested interests, perceptual errors regarding risk, individual or group interest and personality clashes are associated with business risk (BSI, 2002) The following plans can minimise mistakes and contribute to the success of the project. Risk Management Plan for Delamere Pottery Ltd. Identified technical risk for Delamere Pottery Ltd., Risk Likelihood of risk Degree of Impact Inadequate design (MPC using CAM) Possible High Is integrating MPC using CAM, an appropriate an appropriate process in earthenware tableware? There is a possibility that the design that the project team had chosen for the company’s production process is inadequate. If this happen the degree of impact to the business is high because, big amount of money is invested on this. It is advisable for the project team to study thoroughly their options before engaging themselves into integrating new process and system to the production of the product. If this happen the project team should have another option so that the damage will be minimise. Communication Management Plan This is can be use for informing the stakeholders involved like the board of the company, the banks and other concerned regarding the progress of the project. This is a useful tool to find out how these needs will be met, taking into account regular meetings, phone conferences, workshops, presentations, email, reports, project intranet sites and other repositories of information. For every define its mode of communication, objective, frequency of occurrence (if applicable), the owner responsible for managing and coordinating it and the participants in a Communications Register. Procurement Management Plan This ensures that the suppliers of the company requirements for the special project will be served. This includes list of what needs to be purchase (the new system, new plant and new equipments), the time when it will be purchased ( new system for Delamere was purchased on 7th month and new plant and equipments were purchase on the 10th month). The plan should also include the procurement process involve, authorize person in procuring these products, equipment and property. Find below the suggested Procurement Plan Purchases Month Process Involve Key Personnel New System July Request for Quotation Team Member A and D New Equipment November Request for Quotation Team Member B New Plant November Contact type Team Member C **see Microsoft project for the schedules Project Change Control Management Many changes happen as we implement the project plan. These changes must be recorded, properly documented and communicate accordingly to the people concern. They should be kept track so that the team can evaluate and review them from time to time. Conclusion There are so many things that Delamere must change in their project management plan in order to succeed. The project management plan must be in details in order to ensure the success of the project. A detailed plan can be used to minimise the mistakes and problems that the project might encounter. A sound risk management plan, cooperative staff and supportive management, well-planned schedule are just some of the areas that the project team should. Most of all a responsible and qualified project manager must be in-charge. Bibliography Modell, Martin. 1997. Pert, CPM and Gantt. [online] 03 May 2007. OGC. Available at World Wide Web:< http://studentweb.tulane.edu/~mtruill/dev-pert.html> British Standard. 2002. Project management - Part 1: Guide to Project management. UK: BSI British Standard. 2002. Project management - Part 2: Vocabulary. UK: BSI British Standard. 2002. Project management - Part 3: Guide to the management of business related project risk. UK: BSI Introduction, British Standard No. BS 6079-3:2000, British Standards Institution, London (2000). In Risk Management Report (2000) Felix Cloman [online] 05 May 2007. SEawrach Press Inc. Available at World Wide Web: http://www.riskreports.com/protected/archive/rmr0500.html Office of the Government Commerce. Introduction to Project. [online] Accessed on 04 May 2007. OGC. Available at World Wide Web: http://www.ogc.gov.uk/programmes___projects_introduction_to_projects.asp Office of the Government Commerce. 2002. Project Sponsor Support. [online] 01 May 2007. OGC. Available at World Wide Web: http://www.ogc.gov.uk/documents/Project_Sponsor_Support.pdf Software Engineering Institute Carnegie Mellon University. 2007. Software Product Line Acquisition: A Companion to A Framework for Software Product Line Practice Version 3.0. [online] 02 May 2007. Carnegerie Mellon University. Available at World Wide Web: < http://www.sei.cmu.edu/productlines/companion/org_risk_man.html> Read More