The other day I was speaking with my father and I asked for his opinion on the value of using software to integrate supply chain planning with project management. This might not be the typical father daughter conversation but we enjoy these chats, and I have always valued my father's opinion. My father, Don Lambert, is a chemical engineer retired from a career at Imperial Oil and Exxon. Dad was a business and technical manager for many years and he often speaks about the oil well drilling and refining in Talara, Peru, where we lived for a few years.
Industrial activities, particularly those in lesser developed areas of the world, rely heavily upon the establishment and maintenance of the supply chain. For example, the first activity when drilling an oil well is the building of a road to the well site. These roads must be able to carry very heavy loads. In Talara, they relied on Caterpillar equipment shipped from the US. Downtime of this equipment was critical, as a one day delay in the completion of a well could have tens of thousands of dollars of negative affect on cash flow (With today’s crude prices, it might be millions of dollars). Any part or component that could be on the maintenance critical path had to be identified and its supply had to be appropriately managed. The difference 40 years ago was that inventories could be bigger and leadtimes were longer. Global competition in recent decades has driven the need for tighter budgets. There is constant pressure to be on time and on budget.
Dad spoke about critical path scheduling, which identifies those activities and resources that dictate and control the completion date. The paths have to be continuously monitored as they change, or as new problems/events take place. One key word here is 'planned.' Dad's experience was that successful project management was based on testing the current plan with the question "what might go wrong" and then conducting reassessments where necessary. The most obvious insurance was to have spares for all the equipment and lots of surplus people to handle any eventuality. This was impractical and lacking the technological tools available today (there was a heavy reliance placed upon experienced personnel). Analysis was performed (pen and paper at that time!) on identifying the critical paths in the project plan, and actions were put in place to reduce their impact on project completion.
Some will argue against having a strong project management focus, using the argument that situations occur that you could never have planned for. When questioned about this, my father's response was that these "surprise" events strengthen the argument for a strong, resilient planning system. Response Time is the key bottom line in emergencies and having a supply chain management system which uses project planning as a major tool can significantly reduce response time.(I had no idea that my dad was dealing with these responsibilities as I collected baby octopuses in the ocean, put them in a jar, and watched the water turn blue!)
Project management is required in numerous industries from refineries, to cell tower installations, solar farms, and consumer new product introductions. We agreed that it would be very beneficial if there was tighter integration of all dimensions of the project activity including materials, resources, cost projections, and revenue projections.
Thanks for the chat Dad. Ever since I was a kid I always wanted a fast car, an oil well, and an elephant. I have the first but I am not sure that the other two are very likely. At least I have a Dad who worked in the industry and helped me make an oil rig for my science project.
Originally posted by cmcintosh at http://blog.kinaxis.com/2012/01/control-tower-concepts-what-might-go-wrong-a-case-for-a-strong-project-management-plan/