The Role Uncertainty Plays in Projects and in Risk Management - Assignment Example

First Section 1 What do you think about the Steve Jobs video - especially in light of the approach Apple has taken towards quality since Jobs returned to Apple in 1997? From the video that is provided there are the following two main point of views regarding the quality of a product or service that Steve Jobs mentions. Firstly, quality of a product or service is an innate factor and therefore, techniques like marketing or external validations are not as effective in establishing a product as a high quality one. It is the experience of the consumers alone that will impact their impression about the product and their perception of its quality. The second important point that Steve Jobs mentions in the interview is that quality is no longer an aspect related only to the manufacturing processes that a firm employs today. Instead it exists throughout the supply chain and reaches out to the customer as well. In fact, for the products to be of really high quality, it is necessary that the product design and manufacturing process is in fact initiated at the customers, understanding exactly their needs and requirements and it is then adjusted backwards so as to design the exact product and process through which the customers’ needs can be fulfilled. This video clearly signifies the approach that the company Apple is known for and has adopted for a large number of years. All of its products are known to be high quality, not in terms of marketing or advertising, but in terms of customer usage and satisfaction. Additionally, the company is known for making products which are not only highly innovative, but it also for solving the implicit and the explicit needs of the customers. 2 Are there any similarities between what Steve Jobs says, and the way that project quality planning works? This approach of Steve Jobs is also corroborated by the academic literature as well. For example according to a definition of product quality provided by Ron Basu, quality is identified as the lasting experience that the user of a product or service experiences [Ron14]. However, from a project planning perspective, a greater focus of the project managers is on ensuring that the project activities are completed within time and within the budget related constraints that is presented to it. Therefore, in order to ensure that the project is completed within the constraints of time and budget, but at the same time without compromising on the quality, the process of quality planning is used in the projects. To a certain extent, the quality planning process is aligned with the viewpoint presented by Steve Jobs. For example, Jobs similar to the quality planning process maintains that quality is not a passive act of simple inspection and testing, instead it is a more proactive method through which it is attempted to build quality into the products at the very initiation steps as well [Ros05]. Section two 1. Since your project will be a small 'factory' making 'deliverables' for your client, are there any of the principles in this video that you can take away and adapt for your use on projects? The provided video outlines some of the principles that are useful from a Lean manufacturing technique. One of the first principles is the use of continuous process flow through which the problems that the process might have can be identified as soon as possible. This will not only eliminate the huge time delays that will be encountered if the problem is identified too late in the process, but it will also reduce the cost that the company will incur if the mistake is identified too late in the process. Overproduction is yet another feature that should be avoided by the small firm and therefore, the principle of demand pull that it described in the video should be used. Principles like levelled and well distributed workload, and employee empowerment are also important as they can impact the overall quality of the work. The principle of stopping to fix issues is also highly relevant for the small manufacturing factory as it ensures that all the defects which have been identified are not allowed to impact the quality of the final product or the subsequent products being manufactured. Using the standardised processes that are used industry wide as a benchmark to create the manufacturing and design process is also an effective way to ensure that a highly streamlined process can be created with scope for minimum defects. 2- Which of the principles relates to 'quality assurance', and which to 'quality control'. Explain your reasoning. The continuous process flow method is a process more aligned with quality assurance, as it is not testing of the product, but ensuring that the processes are so aligned so that maximum product quality is ensured. Similarly, adequate distribution of work load is also a quality assurance method as it ensures that the periods of high work load or time pressures are eliminates so that any quality lapse that might occur during that period might also be eliminated. Using the industry wide standards for the creation of the processes is also a great way for process optimization and defect prevention, thereby belonging to the criteria of quality assurance. As opposed to the above mentioned methods, stopping to fix the problems is a method for quality control as it relates to the fixing of the defects that are already present in the process. As opposed to this, quality assurance is more process oriented and focusses more on the prevention of defects or poor quality products. This implies that in order to ensure a high degree of product quality while still maintaining high degree of product efficiency, it is necessary to maintain a combination of quality assurance and quality control processes. Section Three 1. What role does uncertainty play in projects in general, and in risk management in particular? The risk that is included in the project refers to the degree of uncertainty that the various factors that it contains, present. These uncertainties can either have a positive or a negative effect on the overall progress of a project and it can severely affect the three main pillars of timeliness, budget and quality of a project. However, risk and uncertainty are conceptually different. While uncertainty presents a wide spectrum that ranges from information that is totally unknown and unanticipated to the factors about which full information is present. Image source: [Fin13] From a project risk management perspective, only those risks are considered which are identifiable and at least some information regarding them is present. The other extreme end of total uncertainty is beyond the scope of project risk management, as identifying such risks is incredibly difficult. 2. Does the article by Fink change the way you look at traditional project risk management - if so, in what ways, and why? One of the biggest changes that the article by Fink brought about was that risk referred to both positive as well as the negative effects of the uncertainties and therefore, the objective of project risk management techniques is not just to minimize the negative effects of these uncertainties, but also to maximize the positive risks associated with the project. Through this article, it also became clear that risk also has a correlation with higher returns, as in many cases greater risk leads to much better payoffs. Therefore, the risk management practices employed in the project should take into consideration the risk appetite of the project owners as well, so that the return opportunities for the project can be adjusted in accordance with the preferred risk profile. Another crucial change of perception caused by the article was because of the different views that the risk management approach could employ, namely, issue driven, customer view, etc. Therefore, the project risk management techniques employed are not just performed from the project perspective, but also from many other perspectives as well, depending upon the project goals and priorities. Section Four 1. Is 'risk' part of a wider concept? If so, what is it, and why is risk important to it? (Hint - think about 'uncertainty') As mentioned in the video [Ris12], broadly speaking risk refers to the degree of uncertainty that is present in a process. The sources of this uncertainty could be very many. For example, one possible source of risk could be the environmental factors in which the firm operates (like changes in the customer, related aspects, or the behaviour of the competitors, etc.). In other words, risk is indeed a broad concept and therefore, one of the first and most important steps in the process of risk management is the risk objective identification. According to the definition of project risk provided in the academic literature, it is defined as any uncertain event or condition that has the potential to impact the project in a positive or negative manner. In other words, the effect of risk might not always be negative [Fin13]. However, in order to ensure consistent progress of the project and timely and within budget performance, it is necessary to manage these risks. However, from the perspective of project management, the risks management can be a part of a wider issue that relates to the project completion as well as the quality of the final output from the project [Pro]. In other words, having unhandled uncertainty or risk present in the project can lead to the project resulting in taking a longer than anticipated time for completion, overshoot the budgetary constraints for it or even result in the creation of products or services that are not up to the expected quality standards. According to the studies it has been found that the elimination of 100 percent of the risk involved in a project is impossible. However, through appropriate risk management practices it is possible to manage a significant portion of this risk and increase the likelihood of the project’s overall success [Fin13]. 2. If you were at the start of your project, how would you go about identifying possible risks? As also highlighted in the video “project risk management”, one of the good starting points for the identification of risk is to compile a risk register, which is simply a collection of all the identifiable sources of risk. This register requires the contribution of all the team members involved in the project, including from the high level managers and designers, to even the most junior level team members [Pro]. This risk register has the potential to comprehensively define all the sources of risk which might be strongly relevant to the project. Another method for the risk identification process can be an evaluation of the internal and external environment for the project from the perspective of risk. Some of the sources could be the regulatory process, which might either be lengthy or complicated, so that it can act as a bottleneck for the project thereby negatively affecting the project timeline. Another internal source of risk could be lack of employee skill or lack of adequate training required for the employees to ramp up their skills. Section five: 1. List and briefly describe nine options available to the project manager when faced with a set of risks. Avoidance: It refers to the development of an approach through which the uncertainties being anticipated can be totally avoided. An example of this approach is to use techniques or processes which are industry standards, so that the common sources of risks are already handled. However, a common drawback of risk avoidance techniques is that they could be costly to implement. Reduction: Risk reduction refers to the methods adopted by the project managers to ensure that the risk in the projects can be reduced consciously. A good example of this is hedging, through which the risk can be considerably reduced or the interests of the company can be still protected. This is particularly relevant for international projects. Sharing: Risk sharing states that the there are other partners who are involved or collaborated with so that the responsibility and the impact of the risk can be shared. This method is particularly common for large scale organizations which have international projects. In such situations, they often partner with local stakeholders or participants, with which the risk can be shared. This also ensures that the partners bring their own expertise to mitigate the uncertainty. Thus, the risk gets better absorbed across all the partners and its effect gets mitigated. Transfer: Risk transfer is a method for risk reduction where basically the risk is shifted entirely from one entity to another. Insurance is a good example of this method, as it involves the transfer of the risks entirely to the insurance agencies, against the payment of a premium. Example of this could be insuring against any natural calamities or accidents, like destruction through fire. Here the risk of damage to the property can be easily mitigated by insurance, as in the event of such occurrence, the insurance usually provides compensation for the damage done. Deference: As the name suggest, this involves deferring the activities which might cause the project risk. For example, if the risk is being caused by the purchase of new machinery that might take longer than expected to be procured, it might be beneficial in certain situation to defer the action so as to mitigate the risk (if it is possible). Mitigation: Risk mitigation is the creation and execution of a plan through which the risk that a project encounters can be either avoided, transferred, shared or reduced. Contingency: This refers to the process of creation of an alternate line of action as a response when project risks are encountered. This is also an important process as it ensures that business continuity is maintained. Insurance: As stated above, insurance is a method for transferring the risks of the project to another party, by paying of a premium. This is particularly useful with reference of those risks that can be identified, but are hard to be mitigated, for example, natural calamities and accidents. Acceptance: This is a last alternative that a project manager has and it occurs when the risk cannot be avoided, reduced, transferred or managed in any other way. 2. Search the internet for an example of a project risk management strategy template The template can be found using the following url: https://www.google.ch/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjVyfKQqYbUAhWBVBQKHbUDC30QFggkMAA&url=https%3A%2F%2Fwww2a.cdc.gov%2Fcdcup%2Flibrary%2Ftemplates%2FCDC_UP_Risk_Management_Plan_Template.doc&usg=AFQjCNFaL7fzjE3FnxX7Rh727GC5ecjveg&sig2=UcvFnMFblJqnpIdtQG0Tzw References Ron14: , (Basu, 2014), Ros05: , (Rose, 2005), Fin13: , (Fink, 2013), Ris12: , (RiskDoctorVideo, 2012), Pro: , (Project Management Videos, n.d.), References Ron14: , (Basu, 2014), Ros05: , (Rose, 2005), Fin13: , (Fink, 2013), Ris12: , (RiskDoctorVideo, 2012), Pro: , (Project Management Videos, n.d.), Read More