Project Management: Scantel Project - Essay Example

Project Management: Scantel Project Analyse the network diagram for the project and identify, giving reasons, activities or groups of activities that contribute to risks of delays and resultant potential lack of completion on time. In the light of delays actually occurring, what strategies could you employ to bring the project in on time? From a coherent review of the case study and the network diagram it is possible to discern and identify the many concerns facing the Scantel Management with regard to this project.The product has a considerable potential given that it is skilfully developed. It consists of five major systems as mentioned which can be briefly described as Lens and lens mounting Vision support system Display system Control logic system Chassis and body ,the physical support chassis and outer casting Initially Callister was faced with the problem confidentiality during the development and procurement of the equipment to be engineered for the project.There was a dilemma between confidentiality and the necessary evil of expert opinion which put the project at the risk and mercy of being plagiarised or “stolen”.Most of the decisions in his regard have been left tentative as evident through the diagrammatical analysis above.Reasonable estimates have been drawn up by Callister ,subject to the “optimistic”, more likely and “pessimistic estimates”. Furthermore, the development of the unique lens, relying heavily on the trial and error approach (as shown by events (5-38-43-44)is at the risk of being procured late due to its specialist nature. However as evident through the diagram and the conclusions of Callister the manufacture of the lens is not amongst the critical path activities. The diagram expresses no fear of delays with in the sphere of the development of the vision support system. Moreover there is an optimistic possibility of the work being completed beforehand if the funding is allocated at the right time and place. The control logic system was innovative yet due to its novelty and the lack of prior experience of the company with it there was a fear that the time schedule here could be tentative. Events 37-42 present the time frame for the development of the chassis and body requirements and the major uncertainty involved here was the timely receipt of data collection from other units.Last but not the least is the Display system which was only at the risk of facing delays due to the delivery timings. The dangers presented by delays Scantel like, any other company in its position is facing a rather time based competition in the market.Its network diagram and product design cycle should be imperatively short and the time estimates should be as accurate as possible. The problem with the design activities underlying all the above five sub parts of the project are intertwined to a large extent and the uncertainty does not make the task any easier.Take the example of lens design. The development of this product needs a lot of trial and error(reiteration) For example, some activities may have to be iterated several times to meet the design criteria. The problem with such time critical projects as Scantel is that they are at a risk of market failure and profit loss if the established target dates are not met.Academics have always elaborated the dangers that time delay can cause and have pointed to possible losses where there will be a corresponding “domino” effect on the subsequent tasks and a drain on the resources.(Nichols 1990.Research has shown that “if a product suffers from a 50% over expenditure in product development, the loss of total recoverable profit is 4%. However, if the product is late to market by 6 months for a life cycle of 5 years, it can lose one third of its profit” (Nichols, 1990). New information and trial and error based development almost always causes an uncertainty in the time base.. (Nukala et al., 1995). So what are the possible solutions to this dilemma? “Risk management is an activity within project management that is gaining importance due to current business environment with a global focus and competition. The techniques reviewed in this paper are used on an ad hoc basis currently. A more risk focused approach is likely to result in an integration of several of these techniques, resulting in an increased effectiveness of project management.”1 Few in the modern business world would disagree with the statement above. The overcoming of such delays relates to the problems of “Flexibility management” which if done successfully can actually prepare the Scantel for the occurrence of uncertain events like the delays in delivery and design.Although this method is often criticised by academics as threatening the stability of a project ,however it is an effective way of overcoming environmental uncertainty.Such a solution will also save resources and prevent any highlevel monetary losses for Scantel.This would include a heavy amount of an analysis and careful sequential planning. Callister can resort to “late locking” the project keeping in ,mind the failures and challenges involved in the innovation and development of new technology. All this can also be achieved by “step by step locking” of projects to check the task completion in a step by step method,through the method of “decision gates locking”or even “incremental decision making”. Another suitable solution for Scantel would be to proceed on a policy of contingency planning where provision is made for alternative plans.For example in the event of the lens not being made on time with in his own firm for example he should have the option of outsourcing this work to a trustworthy he already has in mind. Unexpected events and delays can effectively be countered by having the provision of anticipated potential departures .However it has to be observed that these plans should not add to the costs of planning. More importantly the Scantel Diagram lacks flexibility.The reason this claim can be made is that it doesn’t give alternative time periods for alternative plans of action in the event of the failure of one task.Therefore there has to be a review of the planning and execution strategy.Academic opinion has also opposed flexibility is projects like Scantel due to the firm planning required in large engineering projects.For them this discourages stakeholders and the credibility of the projects as a whole.This measure is not as related to efficiency as it is to its comprehensive and effective implementation. In the implementation of the strategy to avoid delays what actually has to be done to is to acknowledge the possibility and existence of delays. Delays cause monetary loss. Many academics have also spoken out about the role played by stakeholders in project management facing delays and uncertainities, “Incentives for different project stakeholders are strongly related to the contracting structure of a project and other financial obligations. A common tool for achieving flexibility in projects is the use of option based contracts, which enables a continuous locking of the projects…………….. a key factor in creating win–win situations between the stakeholders in Engineering, Procurement and Construction (EPS) contracts lies in flexibility of contracts and the implicit relations that are created by the contracts. …………………is based on a game theory approach, where dealing with flexibility can be a win–win or zero-sum game between the stakeholders. In co-development of automotive parts, the supplier gets no additional payments for late identification of need for modifications in the design phase. The supplier therefore has strong incentives to provide engineering expertise to work closely with the manufacturer in order to understand the needs and the production process”2 As can be seen from the quotation above contractual Management Incentives are the most vital strategies to be utilised in the avoidance of and management of delays and anticipated delays beforehand. The contracting structure of a project should be imperatively designed in such a way to provide for what is known as “a continuous locking of the projects”.3It has to be noted that users are a group of stakeholders who are not related to the projects directly.So Scantel should carry out its work with the knowledge that many times the quality of the final product is way more important than the avoidance of direct costs nevertheless.Properly drafted contracts are essential in risk and delay management.Scantel would do well if it allocated the liability for delays on behalf of subcontractors properly and prudently to cushion any financial losses.There can also be a strategy of creative sharing of the financial risks with other parties which can be achieved if for example, “the contract could contain terms which ensure the parties agree to a limited period free of delay damages, apportion the financial liability with another party by calculating a lower, liquidated level of delay damages or agree that certain events would only entitle another party to time, but not to money.”4 Another way to overcome delay problems would be to provider for variations with in the planning structure. A variation is any deviation from an agreed well-defined scope and schedule. Stated differently, this is a change in any modification to the contractual guidance provided to the contractor by the owner or owner's representative. This includes changes to plans, specifications or any other contract documents. A variation order is the formal This table demonstrates one of the methodologies through which an effective way of countering delays and anticipated delays can be devised5in the light of the above mentioned strategies. document that is used to modify the original contractual agreement and becomes part of project's documents…. Furthermore, a variation order is a written order to the contractor signed by the owner and issued after execution of the contract, authorizing a change in the work or an adjustment in the contract sum or the contract time …, variations are inevitable in any project. Hence, in every …, a contingency sum is usually allocated to cater for possible variations in the project, while keeping the overall project cost intact.6 Conclusions and the way forward for Scantel This case study is over a decade old(infact it could be older).In a modern setting Scantel would be facing tougher challenges in the wake of increased customer oriented market,globalisation and better technology. In the modern era companies face problems with quality”rather than quantity.Uncertainity is unavoidable in the use of new technology in the development of products. The aim of my essay was to show that all these delays and uncertainities highlighted in the network diagram are highly manageable and should not be interpreted as frustrated sabotages to the project.These procedures act as safety locks to become essential parts of the delay problem solving process. On a more serious note it should be “ recognizing uncertainty as a complex issue of its own will provide basis for the future research and facilitate the development of tools for project management.”7 Therefore Scantel would be advised to pursue one or many of the above strategies for the avoidance of losses occurring from anticipated delays materialising. _______________________________________________________ Bibliography 1. Ammar Ahmed, Berman Kayis, Sataporn Amornsawadwatana, A review of techniques for risk management in projects Benchmarking: An International Journal; Volume: 14 Issue: 1; 2007 2. Christofides, N., Alvarez-Valdez, R. and Tamarit, J.M., 1987. Project scheduling with resource constraints: A branch and bound approach. European Journal of Operational Research 29 3, pp. 262–273 3. Cooper, D., Chapman, C., 1987. Risk Analysis for Large Projects – Models, Methods and Cases. Wiley, New York 4. Davis, E.W. and Patterson, J.H., 1975. 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