Project Management for the Supply Professional

Transcription

1 Project Management for the Supply Professional Dr. Rene G. Rendon, CPSM, C.P.M., CPCM, PMP U. S. Naval Postgraduate School (831) th Annual International Supply Management Conference, April 2010 Abstract. Best-in-class organizations are adopting a project management approach to how they manage their business operations. As organizations use increasingly complex processes to procure, produce, and distribute supplies or services, they are realizing traditional management approaches are not sufficient. This presentation provides an overview of project management as it relates to a supply professional s job. A conceptual overview of project management with a focus on understanding today s new supply environment, the advantages of using a project management methodology, understanding the characteristics of a project, the organizing options for projects, and the role of the project sponsor, project manager, project team and project stakeholders will be discussed. An introduction to the Project Management Institute s (PMI) Guide to the Project Management Body of Knowledge (PMBOK), including project management process groups and knowledge areas, will also be discussed. Finally, an in-depth discussion of the application of project management tools such as project life cycle, project charter, project plan, work breakdown structures (WBS), project schedules, risk management, and earned value management will be presented. References to the Project Management Institute s (PMI) Guide to the Project Management Body of Knowledge (PMBOK) will be made throughout the presentation. The New Supply Environment. Today s new supply management environment reflects a growing demand for complex, sophisticated, customized supplies and services. This new environment is characterized by an increased reliance on suppliers and contractors for the performance of critical business processes and functions. Furthermore, the new supply management environment has seen an evolution of world-wide competitive markets. The result of this new environment includes an increased complexity of supplies and services produced and purchased by various companies. In addition, we are seeing an increase in the complexity of the processes used to produce and procure these critical supplies and services. Finally, because of this increase in complex supplies and services and the increase in complex business processes, today s organizations need more sophisticated systems to manage our supply chains. Our traditional management systems are not suitable for the procurement, production, and distribution of complex supplies or services. There is a need for a project management methodology in today s new supply management environment. What is Project Management? Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project (PMBOK, 2004). A project management approach differs from traditional management approach in that projects are generally more complex, they progress in phases, with each phase having unique and different goals, challenges, timelines, and deliverables. Projects all have the same characteristics they are unique and have a purpose or goal, they have a lifecycle that is they have a beginning, middle, and an end. In addition, projects consist of tasks that are interdependent and also involve conflict within the project

2 team. A project management approach is an approach to business management that includes the basic concepts of project management. Project Management Concepts. A review of the current literature shows that the use of a well-defined, disciplined methodology and infrastructure for the management of complex projects is critical for a project s success in meeting cost, schedule, and performance objectives (PMBOK, 2004; Kerzner, 2006). A project management approach includes the infrastructure that facilitates the successful attainment of cost, schedule, and performance objectives, and refers to the centralized, coordinated management of a project s tasks to achieve the project s strategic objectives and benefits (PMBOK, 2004). Thus, a disciplined project management approach includes the following project management concepts: project lifecycle, integrated project processes, empowered cross-functional project teams, an assigned and dedicated project manager, and an appropriate project organizational structure. These project management concepts will be briefly discussed. Project Life Cycle. An effective way of managing a project is to divide the effort into phases; this provides better management and control. These phases make up the project lifecycle. The phases of the project lifecycle can be used to manage and control the activities that are conducted within each project phase. By using the phases of the project lifecycle and establishing control gates or milestones between project phases, the project manager can control the progress of the project. Although project lifecycles are different for each specific type of project, many organizations establish a standardized lifecycle for their projects. Typically, the project lifecycle consists of the following phases: conceptual, planning, testing, implementation, and closure (Kerzner, 2006). Integrated Knowledge Areas and Processes. A disciplined project management approach includes the integration of various project management knowledge areas and functional processes used throughout the project. The PMI has identified nine project management knowledge areas that are generally applicable to all projects (PMBOK, 2004). These project management knowledge areas and related project tools consist of the following: Project Integration Management ensures that the various elements of the project are properly coordinated. Tools related to this knowledge area include Project Charter, Project Plan, and Change Control. Project Scope Management ensures that the project includes all of the work, and only the work required, to complete the project successfully. The Work Breakdown Structure (WBS) supports project scope management. Project Time Management ensures the timely completion of the project. This area involves the development of a Project Schedule network and baseline. Project Cost Management ensures that the project is completed within the approved budget. Thus, the development and use of a budget and cost baseline are related to this knowledge area. Project Quality Management ensures that the project will satisfy the needs for which it was undertaken. The use of quality requirement and specifications support this knowledge area.

3 Project Human Resource Management focuses on making the most effective use of the people involved in the project. This includes the development and use of a Responsibility Assignment Matrix (RAM) and resource histograms, among other tools. Project Communications Management ensures timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. A critical area of project communication involves performance reporting and managing stakeholders. Project Risk Management describes the process of identifying, analyzing, and responding to project risk. Developing and using a Risk Breakdown Structure (RBS) and a risk matrix support this knowledge area. Project Procurement Management is focused on acquiring goods and services from outside the performing organization. This critical area of project management supports the buying organization s activities such as developing solicitations and awarding and managing contracts. It should be noted that although the PMI project procurement management knowledge area addresses the buying organization s procurement activities, it does not address the organizations that are performing the seller s project management activities of bid/no-bid decision-making, proposal development, and sales management. Many organizations that have adopted a project management approach to their business operations are managing projects from the contractor (seller) side, not from the buyer s side. Thus, a focus on contract management from both the buyer (procurement) and the seller (proposal and sales) is needed by project-oriented organizations. The current contract management literature reflects a total view of contract management from both the buyer and seller s perspective (Garrett and Rendon, 2005). Although each of these specific project processes reflects different functional areas, a disciplined project management methodology would integrate these various knowledge areas to ensure that each of these areas are coordinated and integrated within the total project management effort. In addition to integrated processes, the PMI Project Management Body of Knowledge establishes five project management process groups. These project management process groups include initiating processes, planning processes, monitoring and controlling processes, and closing processes (PMBOK, 2004). Each of these project management process groups includes various knowledge area processes that are part of that specific process group. For example, the planning process group would include such phases as scope planning, quality planning, risk management planning, procurement planning, and solicitation planning processes. In order to effectively and successfully manage projects, project managers must coordinate and integrate these various functional processes throughout the total project effort. Integrated project processes are vital to successful project management. Project Teams. Just as integrated processes are essential for effective project management, integrated project teams are also critical. A disciplined project management methodology includes the establishment of integrated project teams consisting of project team members representing each of the different functional areas that are part of the project effort. For example, a project team may include functional experts representing the various processes used in the project, such as risk management, requirements management, and contracts

4 management. These functional experts on the project team are responsible for providing their expertise in support of the project objective. Although the project team consists of these various functional experts, the activities of these project team members must be coordinated and integrated to ensure accomplishment of the project s objective. The coordination and integration responsibility belongs to the project manager. Project Manager. A critical aspect of a disciplined project management methodology includes the assignment of a dedicated project manager to oversee the activities of the project. We have already stated that the project effort includes various functional processes conducted by functional experts on the project team. We have also stated that there are project management process groups that are used to help integrate these various functional processes. The role of the project manager, therefore, is to coordinate and integrate the various project activities to ensure successful completion of the project (Kerzner, 2006). The project manager is responsible for ensuring that all members of the project team support the project s objectives. Thus, a dedicated project manager, who is responsible for managing the project activities and ensuring the achievement of the project objectives, is an essential part of a disciplined project management methodology. Organizational Considerations. An appropriate organizational structure is also an essential element of a disciplined project management methodology. An organizational structure that supports the integrated project management processes, integrated project teams, and the roles and responsibilities of the project manager will significantly contribute to the success of the project. Large organizations typically utilize one of the three main types of organizational structures functional, matrix, and pure project (PMBOK, 2004). The degree of project manager authority, resource availability, and budget control will be affected by the type of organizational structure (PMBOK, 2004). Some of the factors to consider in selecting the appropriate type of organizational structure include: the number of functional areas involved in the project, the level of integration needed within the functional areas and between the organization and the customer, the nature of the technology used in the project work, and the organization s previous experience in performing the work required by the project. Summary. This presentation provided an overview of project management as it relates to a supply professional s job. An introduction to the Project Management Institute s (PMI) Guide to the Project Management Body of Knowledge (PMBOK), including project management process groups and knowledge areas, were discussed. An in-depth discussion of project management tools such as project life cycle, project charter, project plan, work breakdown structures (WBS), project schedules, risk management, and earned value management were presented. References to the Project Management Institute s (PMI) Guide to the Project Management Body of Knowledge (PMBOK) were made throughout the presentation. REFERENCES Book references: A Guide to the Project Management Body of Knowledge (PMBOK Guide), Newtown Square, PA: Project Management Institute, 2004.

5 Garrett, Gregory A. & Rendon, Rene, G. Contract Management: Organizational Assessment Tools. Ashburn, VA: National Contract Management Association, Kerzner, H. Project Management: A Systems Approach to Planning, Scheduling and Controlling. John Wiley & Sons, Rendon, R. G., & Snider, K. F. (Eds.). Management of Defense Acquisition Projects. American Institute of Aeronautics and Astronautics, Reston, Virginia, 2008.