Difference between Methodologies of Projects in Controlled Environment and Project Management Body of Knowledge - Term Paper Example

Engineering Project Management 2012 - 2013 ASSESSMENT BRIEF Portfolio Index Part 1: 1. PRINCE 2 management 1.1. Introduction 1.2. History 1.3. Features 1.4. Overview of the methodology 1.5. Project management roles 1.6. Process of the methodology 1.6.1. Start up of a project 1.6.2. Designing and appointment 1.6.3. Direction of the project 1.6.4. Control of different stages 1.6.5. Management of product delivery 1.6.6. Closure of the project 1.7. Technique 1.7.1. Project assurance 1.7.2. Project support 1.7.3. Scope 1.7.4. Controlling change 1.8. Benefits 1.9. Pitfall 1.10. Conclusion Part 2: 2. PMBOK 2.1. Difference between PRINCE 2 and PMBOK 2.2. Conclusion 2.3. Consideration and its reason Part 3: 3. Case study on inventory management 3.1. Description and organizational background 3.2. Key concerns 3.3. Centre of study 3.3.1 Issues related to inventory at BSR and depot level 3.3.2 Demand scheduling procedure 3.4. Key trade signs 3.5. Conclusion 3.5.1 Imprecise inventory accounts 3.5.2 Elevated inventory stages 3.5.3 accumulation in the damaged stocks 3.6. Advices and actions undertaken 3.7. Successes Part 1: 1. PRINCE 2 management 1.1 Introduction PRINCE stands for Projects IN Controlled Environment. It is an effective project management method based on de-facto process which is extensively used by the UK government. Though it is widely used in the private sector both in UK and internationally, it is in the public domain also where it offers non-proprietarily best practice guidance on project management. It refers to the management, control and organisation of the project. 1.2 History: PRINCE was originally established by The Central Computer and Telecommunication Agency abbreviated as CCTA in 1989. It is based on another project management method, PROMPT which was created by Simpact systems Ltd. in 1975 and was adopted by CCTA in 1979 as a standard methodology. The discovery of the PRINCE suppressed the PROMPT within government projects. In its succession, PRINCE 2 was established in 1996 in which about 150 European organisations contributed. PRINCE and PRINCE 2, both are now the trademark of the Cabinet office. 1.3 Features of PRINCE 2 are: Project flexibility Direct focus on business justified strategies Planning based on product Approach of proper division of the project into manageable and controllable stages Well organised structure for the team 1.4 Overview of the methodology: PRINCE2 method is shown by the above diagram. Information in the chart flows in the direction of the arrows. It is a project management method which is driven by the process and at the same time contrasts with the adaptive methods. PRINCE2 is simply based on 7 principles- Project environment adjustment Focus on product approach Well defined roles and responsibilities Experience learning Business justification Management by stages Management by exceptions And 7 themes: Plans Risks Quality Organization Business case Change Progress 1.5 Project management roles: Project manager Customer, user and supplier Project board 1.6 Process of the method: 1.6.1 Start up of a project: All the 7 principles and themes come into existence in the process of the methodology. As the first step, appointment of the project team is been done along with the preparation of a project brief which includes description, objective, outline of the project. Proper documentation is done by preparing files of the plan. With this the approach to be followed is decided and the further steps of the project are planned. After this the next stage gets started which is initiating the project. 1.6.2 Designing and appointment: For the whole process, an executive and a project manager are appointed. The project brief is used to form a Business case. The approach taken for the project ensures the quality as well as the control of the whole project itself. The next stage of the project is planned after that. The resultant information is forwarded to the project board for the authorization of the project. 1.6.3 Direction to the project: This is now the turn of the project board to control the overall project plan. Project board has enough powers to authorize an initiation of a project or to reject it in the very beginning. This step of the project dictates the working of the project board that what decision it must take in any slippage condition or other unforeseen circumstances. It also includes the ways of the ad-hoc direction or the closure of the project. 1.6.4 Control of each different stage: PRINCE2 methodology works on the fundamental that the whole project should be broken down into different stages and the control of each individual stage come under this step of the process. It also includes the way project package is authorized and received. In this, also the highlights of the project are reported to the project board. A project issue is captured and corrective actions are taken. The process also covers the ways that should be considered when the situation goes out of control. 1.6.5 Management of product delivery: It forms a link between project manager and the team manager by maintaining the formal requirements on the project work. The objectives of this process are: To make clear plans of the product and the expected efforts, cost and the timescales required. Delivery of the product is done according to the expectations and within tolerance. Providing accurate progress information to the project manager. Managing the expectations. Surety of authorization of work allocated to the team. 1.6.6 Closure of the project: Things that should be done at the end of a project come under this process. In this, the project should be formally evaluated as well as follow on actions should be identified. This procedure finally binds up the working of the project along with the justification assured. 1.7 Techniques: 1.7.1 Project assurance: the job of project assurance is to provide an independent view of the progress of the project. Assurance job can be done either by individual members of project board or by a separate team of people called the project assurance team. 1.7.2 Project support: It indulges all the administrative work including meeting arrangements, keeping plans up-to-date; keeping files etc. this work is done by project managers particularly. 1.7.3 Scope: This method provides the project with the necessary controls to work successfully within a pre-defined framework. 1.7.4 Controlling change: This technique basically consists of managing risks, quality, change on the project and many other things. PRINCE 2 has a technique of controlling the changes to prevent the project from getting hit by some wrong issue. 1.8 Benefits of PRINCE 2: Structured approach to project management Greater control of resources Ability to manage business more effectively Reducing project risks Greater employments prospects for individual Benefit to the organisation- a) Consistent approach b) An organised system for the project c) Regular views of the progress d) Assurance of business justification Coordination between people and activities in a project Clearly defined framework 1.9 Pitfall: The major drawback of PRINCE 2 is that it is inappropriate for small projects or where requirements are expected to change. 1.10 Conclusion: PRINCE 2, as a project management method and certification, is very popular and is followed in many countries worldwide, including the UK, Western Europe and Australia. Part 2: 2. PMBOK PMBOK stands for Project Management Body of Knowledge and defines the life-cycles of the project and deals with the application of skills, knowledge, tools and techniques to meet the requirements of a project. As an internationally recognised standard, it provides the fundamentals of project management without considering the type of the project to be build. It is based on 5 basic process groups and 9 knowledge areas which are typically implemented for all types of projects. 5 Basic Process Groups: 1. Initiating 2. Planning 3. Execution 4. Monitoring and Controlling 5. Closing Its processes are defined in terms of Inputs(documents, requirements, plans, design, etc. ), Tools and Techniques which are the mechanisms applied to inputs to reach the outputs and the last one is Output. Output is the result in form of product, documentation, some proof etc. 9 knowledge areas are: 1. Project Integration Management 2. Project Scope Management 3. Project Time Management 4. Project Cost Management 5. Project Quality Management 6. Project Human Resource Management 7. Project Communication Management 8. Project Risk Management 9. Project Procurement Management 2.1 Differences between PRINCE 2 and PMBOK: Comparing it with another project management approach, PRINCE 2, we can find some of the differences, which are: Origin and administration: The basic difference between both of them can be seen on the basis of their origin. PMBOK was originated in United States in 1987 and is administrated by PMI whereas PRINCE 2 was originated in United Kingdom in 1996 and is administrated by APMG, though both are worldwide adoptions. Procedure: PMBOK can be defined as a compilation of recommendations and best practices based on experience. It is a guide which tells how things could be done whereas PRINCE2 is a methodology which has a well-defined process step by step. People who follow PRINCE 2 know their next step very clearly. The objective of both is the advancement in the project performance or victory pace. Role: PMBOK is a prescriptive approach that guides the skill sets development and situation handling that helps a project manager. It focuses on the project manager’s role. While PRINCE 2 deals with the roles of everyone involved in a project and is a non-prescriptive approach. Pros and cons: PMBOK seems to have more generous frameworks for convention and scope management for its users though it is less vigorous in PRINCE2. Also PMBOK the project manager can apparently become the primary decision maker, planner, problem solver, human resource manager and so on whereas PRINCE 2 aids the project manager to supervise projects on behalf of an organisation's senior management and is easy to learn. But it lacks the value of ‘soft skills’ that should be a spotlight for a project manager. Implementation: PRINCE 2 can be deliberate by itself as an effective way for learning project management practices. It becomes useful as a methodology as it can shape and direct knowledge whereas PMBOK certified people are not sure about the implementation of the knowledge to actually run a project. Decision making: The definitive serviceable and financial power is with the senior management thus the key project decisions are meant to be executed by senior management. PRINCE 2 ensures the same and defines the role of project manager as to manage the project on the behalf of senior management. On the other hand, if there is the need of project manager to be one and only decision maker, then PMBOK must be preferred. 2.2 Conclusion: On the basis of above difference discussion, conclusion can be set that both the project management methods have their own individual significance as they both focus on the successful planning of the project. 2.3 Consideration and its reason: An expert project manager is the one who can apply his knowledge gained by training and experience efficiently into the practical applications for the success of the project. PMBOK approach teaches the perfect understanding of the situation and its handling and PRINCE 2 approach provides the step-by-step methodology for the project management. Thus maximum advantage can be made by considering both the approaches altogether, which is, applying the knowledge areas of PMBOK with a structured methodology of PRINCE 2. Part 3: 3. Case Study on Inventory Management 3.1 Description and organisational background: A case study of a top consumer products company selling in cosmetics and other personal goods, whose office was located overseas, was made. The whole company had 3 factories with Bonded Stock Rooms (BSR) attached for the shipping to the depots and 35 depots for servicing distributers. The flow of the business was the movement of goods from the company to BSR, then from BSR to mother depots and finally from mother depots to the distributors. 3.2 Key concerns: The company was on the lookout for the following methods: 3.2.1 To improve inventory record accuracy at the level of their storages including both BSR and depots. 3.2.2 To keep the accurate check on the damaged goods in the supply chain and initiate action on time. 3.2.3 To shrink the catalogue levels across their presumptuous supply chain at the BSR and depots. t 3.3 Centre of Study A case study was prepared based on the following parts: 3.3.1 Issues related to inventory at BSR and depot levels. These integrated: Inventory asset as a fraction or proportion of sales Precision of inventory records mainly of express trade lines Proportion of changing stocks to the entire inventory Preparation in service for track commodities in the depot Connections of factory send out goods to BSR with BSR send out goods to depots 3.3.2 Demand scheduling procedure. This study concerns with: Relationship between ‘estimates and resulting despatches’ and ‘significant available closing stocks’ at depots Intensity of secure stock at each site united with the procedure to re-evaluate and retune Forecasts accuracy and the methods for re-examine and amendments for the same. 3.4 Key Trade Signs: 3.4.1 Divergence of about 30% between books and physical stocks 3.4.2 6.5 weeks of sales as an average inventory investment at depots 3.4.3 8.2 weeks of sales as an average inventory investment at BSRs 3.4.4 Holdings of depots included: Damaged stocks for about 3 months High inventory of withdrawn stocks 3.5 Conclusion: 3.5.1 Imprecise inventory accounts: Absence of any particular policy regarding periodic ceasefire of physical stock with paper records Due to dead stocks, process failure and inaccuracies took place 3.5.2 Elevated inventory stages: Due to the mismatch between Sales and despatch estimations and actual primary or secondary sales Unavailability of procedure to cyclically re-examine and filter the yearly forecasts matching with market opinion Unturned relation of the market requirements with the system indulging demand and supply across the whole distribution chain No monitoring and control over the actual depot stocks which were comparatively high than the annual target stocks Manual system to collect orders and allocate stocks from the distributers instead of automatic control over the stock exchange business. 3.5.3 Accumulation in the old or withdrawn or damaged stocks: Due to lack of visibility in the inventory information across the stockpile points Due to non-periodic maintenance of records of old or dead or withdrawn stocks at the stocking points, inaccuracies in results arouse. Common means of information of dead or old stocks between the pertinent teams were mostly manually filed reports which were time-consuming to prepare and were more vulnerable to errors Due to the slow procedure to monitor and act on old withdrawn stocks. 3.6 Advices and actions undertaken: To avoid the certain circumstances as stated above and to improve and enhance the process and business, following steps were undertaken: 3.6.1 A periodic process to regularly resolve the accounting problem and matching the physical and book stocks was directed. 3.6.2 A ‘Bind-Card System’ was employed for each frame of the depot and also the delivery staffs was trained in the applications of Bind-Card System and its practices. 3.6.3 An IT solution was found out and was executed for the following: assisting communication between damaged or old or un-saleable stock and the industrial sector assisting communication between closing stock of BSR or depots and logistic units figuring out the forecast with the help of combined orders along with factoring for endorsement and seasonality assigning the stocks with the automatic control according to the FIFO (First-In-First-Out) principle at the depot manipulating secure stock targets on the basis of calculating the number of weeks of sales target accounting the amendment notes and the cycle-count process 3.6.4 Working models were set to be active for damaged or old stocks and other dead stocks. Also definite steps were taken in order to kill or destroy these kinds of stocks. 3.6.5 Periodic and dynamic processes were adopted based on updated sales data for settling safety stocks at depots. As a periodic activity, demand planning and forecasting were used to tune up the actual sales and market orders together. 3.6.6 Based on the visibility provided by the IT solutions, for the monitoring and the authorise activities, responsibility and accountability were well-defined in the organisation. 3.7 Successes: The exertion mentioned in the ‘key concerns’ collectively was a considerable trouble to the company. Implementation of the certain steps and best training after a comprehensive business analysis resulted in the following benefits: 3.7.1 The organisation achieved an Inventory Record Accuracy improved of 95% within 2 months only. 3.7.2 There was a reduction in the Stock levels of about 30% across stocking points in the supply chain 3.7.3 Achievement in the whole visibility in the supply chain with respect to damaged goods inventory was observed 3.7.4 Some of the following achievements were also marked by the company in the span of 2 months: Reduction in stock level a) BSR: from 8.2 weeks to 5.5weeks b) Depots: from 6.5 weeks to 4 weeks c) Stock value holding reduction in the supply chain Better management of old and damaged stocks: a) Discounted price for the sales recognition on retrieving selling the damaged stocks b) Well-timed destruction of inoperative and potentially destructive goods c) Appropriate action on stock management, handling, transport and product development fronts in order to reduce damages d) Lucidity of saleable and un-saleable/damaged stocks in the supply chain which results in more accuracy in demand planning, production and stock allocation. e) Decline in quantity of old and damaged stocks and aid of ensuring the unsullied stocks in the market. This was accomplished essentially by sinking inventory levels across the chain and also by enhanced stock management at the depots. References: References: http://www.prince2.com/what-is-prince2.asp http://www.prince2.com/prince2-methodology.asp http://en.wikipedia.org/wiki/PRINCE2 http://en.wikipedia.org/wiki/A_Guide_to_the_Project_Management_Body_of_Knowledge http://www.projectsmart.co.uk/pmbok.html http://projectmanager.com.au/education/methodologies/pmbok-not-methodology/ http://www.linkedin.com/answers/business-operations/project-management/OPS_PRJ/706118-23851794 http://www.hilogic.com.my/PRINCE2-PMP-PMBOK-Comparison.html http://www.prince2.com/us/prince2-pmbok.asp Read More