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Project Management main phases

Project Management main phases (Photo credit: Wikipedia)

In a previous article, I discussed how, when it comes to project management—especially the management of multiple projects (i.e., PPM or Project Portfolio Management)—what we don’t know can really hurt us. In this article, I am going to take a somewhat tongue-in-cheek look at some of the answers managers and executives may actually have at the ready when tough questions arise regarding multi-project management.

 

Question: How often are our resources not available when needed for a new assignment?

 

The answer to this one varies. In many organizations, the answer would sound something like this: “When we’re busy, I never have enough resources and the resources I really need for a new assignment won’t be available for days—or even weeks. On the other hand, when things are slow, all my resources are available, but I’m not managing any projects then either.”


Question: How often does it happen that a resource is unavailable for a new assignment at a time when an ongoing project is already behind schedule and in trouble?

 

Unfortunately, in far too many project-driven organizations the answer to this one is the same as the one above: “When we’re busy, there’s always a shortage of resources and we find ourselves scrambling to try to make the best of a bad situation—usually on several projects running late to some extent or another. And, when we’re not busy, it doesn’t really make any difference.”

 

The sad situation is, however, these same managers or executives would add: “We don’t have any statistics or data on how frequently we are seeking a resource assignments on projects running into trouble and no resource is currently available. Of course, one of the reasons we don’t keep those statistics is because it’s hard to keep statistics in the midst of a chaotic situation.”


Question: Today, what percent of our resources are allocated to projects?

 

Well, most of the time, in many project-based enterprises, the answer is “All of them.”

 

However, the truth goes well beyond that. The truth is: “When we’re busy, all of my resources are allocated to several projects at once.”

 

This common practice leads to time-loss due to task-switching, increased errors in execution, and—on top of that—makes it nearly impossible to know the actual status of any single task on any given project.

 

Furthermore, since priorities on tasks assigned to resources might change several times during a week, or even an entirely new task might be assigned to this resource at any time, it becomes impossible for anyone to predict when any given task might actually be completed.


Question: Looking forward four to six weeks in the future, will project requirements cause overloading of any of our resources?

 

Once again, if we are talking about the “busy times” in a project-driven organization, the honest answer to this question would generally be, “Of course! When it’s busy, we expect our resources to be overloaded. We just keep piling on the work and making promises, all the while hoping for the best.

 

“Oh, sure; sometimes we can spread out the workload a bit, but once a client signs on the dotted-line, they expect to have their project completed as soon as possible. So, we just have to do what we have to do,” the manager might go on to say.


Question: In the longer-term, what are the workloads and workload trends for our resources?

 

In most of the organizations with which we have experience, the answer to this question is typically drawn entirely from intuition and not from any concrete knowledge of projects in the “pipeline” or the actual correlation of workloads to the calendar and resource availability.

 

Besides, when the general organizational mandate is “just keeping piling on the work while we’ve got it, and hope for the best possible outcome,”—the “make hay while the sun shines” approach—there is really little compelling reason to do much legwork around forecasting workloads, trends and resource availability except in the roughest possible way. On top of that, most project-driven enterprises we have seen have no tools to help them gather this data rapidly for review.

 

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We believe there is a better way

 

We are confident that there is a better way to approach multi-project management. If you have experience—good or bad—with managing multiple projects, tell us what you think works or does not work. We would be delighted to hear.

 

Leave your comment below, or feel free to contact us directly, if that is your preference.

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Agile Project Management

(Photo credit: VFS Digital Design)

In other articles, I have frequently discussed the dangers of what we think we know. There are times that we think we know and understand things about how our business or industry operates, and those things we think we know may be inaccurate and stymie our innovation and stop our efforts at improvement.

 

However, in this article, I want to particularly speak to those businesses that operate in a project context and undertake project management on a routine basis.

 

Organizations that do projects (e.g., IT projects, construction projects, engineering projects, or even engineer-to-order) frequently display very similar behaviors and symptoms. Here are some of them:

  • Priorities change frequently—sometimes, on the worst days, several times a day
  • People get shifted too frequently from one project to another
  • Resources are forced into inefficient multi-tasking mode in an effort to appease multiple (internal or external) customers
  • Projects tend to fall further and further behind schedule with no foreseeable opportunity for recovery

 

These are all symptoms of an organization that simply has too many active projects with no buffers to absorb variability or the negative affects of “Murphy,” when he shows up.

What are some of the things we don’t know that hurt us?


When attempting to manage multiple overlapping projects (i.e., a project management office or project portfolio management):

  1. We frequently lack data to know how to properly stagger projects to avoid overloading critical project resources or skill sets.
  2. Similarly, most have no toolset by which to do what if scenarios with pending (un-released) projects to see what the impacts might be on future resource loading or cash flows.

 

All too frequently, our multi-project management degrades into nothing more than appeasement management. We have fixed rules for setting priorities. Instead, priorities are set by the customers (again, internal or external) who manage to raise the biggest fuss, make the loudest demands, or the strongest threats. In the absence of a clear and consistent set of priorities for managing multiple projects, we actually have no way of clearly knowing the following:

  1. Which of the current set of active tasks are most endangering the projects’ successful and timely completions?
  2. Of those tasks that are ready to be assigned, but not yet assigned to a specific resource, which are most urgent?
  3. And, of those tasks that cannot yet be assigned (because they are contingent on some other task or event), which are most likely to endanger the successful and timely completion of the projects with which they are associated?

Our multi-project management systems aren’t doing the job

 

Because our project management systems (if we have one) are disjointed, disconnected, and frequently just plain hard to use and update, senior managers are unable to ask cogent questions about the status of any given project—let alone the affects of that project on other projects in the portfolio.

 

As a direct result, those responsible for projects often find themselves discovering that a project is in trouble only after it is too late to take any meaningful corrective action.

 

This, of course, triggers yet another round of changing priorities, reassigning resources and forcing the workers into more debilitating rounds of task-switching and wasteful multi-tasking. Focus becomes nearly impossible to achieve at any level.

 

Managers and executives are no longer focused on clear project priorities. Their focus has been shifted almost entirely to appeasement of the customers awaiting their overdue projects and quelling fears—mostly real, some imagined—of cost overruns.

 

And, the folks doing the work: their focus is lost in constant rounds of task-switching and time lost in trying to keep their minds clear as they are required to move from project to project on a not-so-merry-go-round of trying to keep their managers happy by making a little progress on every project and task that has been handed to them.

 

There must be a better way

 

If nothing else—if this is our experience—it should plainly show us that there must be a better way. What we don’t know is hurting us.

 


 

We would like to hear from you on this topic. What is your experience? Please leave your comments here, or feel free to contact us directly, if you’d rather.

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Lora Cecere, founder of Supply Chain Insights LLC, recently published another cogent and valuable report entitled Supply Chain Visibility in Business Networks.

 

English: An illustration of a company's supply...
(Photo credit: Wikipedia)

 

In the way only Lora Cecere can do it, her insights nail the critical issue in a few succinct sentences:

"Companies want to build end-to-end value networks. The supply chain processes are more dependent on trading partners and interactions of the extended supply chain; but, the IT capabilities are largely based on electronic data interchange (EDI) and spreadsheets. It is inadequate. IT spending is focused on Enterprise Resource Planning (ERP) which automates the enterprise, not the network. This is a conundrum for the supply chain leader." [p. 2]


What we say we are building versus what we are actually building

 

While many of the companies with whom we do business say they are building end-to-end supply chain processes, in the final analysis, we generally discover that this is not the case. What they are actually building is mostly internal automation of their own activities around the supply chain.

 

Sure. Many of them recognize the increasing need to extend visibility, integration, collaboration and even automation beyond the four walls of their own enterprise, most of them are still stuck managing most of their supply chain tasks on spreadsheets and limit external integration/automation to whatever EDI capabilities they have added over the last decade or so.

 

I have frequently told companies with whom we consult, "If Microsoft Excel were to stop working tomorrow, the U.S. economy would grind to a halt."

 

Furthermore, Cecere's analysis is correct: "EDI is effective in moving transactional data, [but] it is point-to-point [and lacks] community interaction." Hence, EDI is not an effective tool for really increasing visibility across the extended supply chain in any real sense.


Always seeking, but seldom finding

 

Almost all of the small to mid-sized business enterprises (SMEs) for whom we consult have recognized the need for increased supply chain visibility as being critical to being able to achieve supply chain agility.

 

What they want--indeed, what they need--is an IT infrastructure and architecture that will give them some hope of achieving near real-time supply chain visibility. It would be a huge boon to may of these SMEs to be able to know the true "shelf take-away" of their products from the point-of-sale (whether that's a cash register at some retail establishment, a delivery guy, or some other transaction point).

 

Unfortunately, as Cecere points out clearly in her report, "To close the gap and improve supply chain visibility, there is not a clear path forward."

 

In the Supply Chain Insights study, nearly half (49 percent) of the organizations surveyed made ERP the focus of their IT budgets in 2013. I doubt that this number will shift dramatically in 2014.

 

Most of us who consult with clients on a regular basis and understand their ERP systems well are thoroughly convinced that the supply chain visibility gap will not and cannot be closed through ERP spending alone. Worse! While "B2B efforts are now three decades old;... the primary mechanisms are [still] based on manual efforts. The dependency on spreadsheets is limiting the evolution of supply chain visibility" into something deeper, wider and more robust, Cecere cogently assesses.


Finding a way forward

 

I am confident that there is a way forward. Some of the largest enterprises (e.g., Fortune 1000) have the resources and have begun creating their own infrastructure and mechanisms for end-to-end supply chain visibility. Certainly WalMart's work in this arena stands out as being highly visible.

 

However, for the SMEs with whom we consult on supply chain and business improvement matters, there must be found answers that are both effective and within their reach from both a skills and economic point of view.

 

The steps outlined in the Supply Chain Insights report [p. 12] certainly apply, regardless of the size of the enterprise:

 

  1. Define priorities and align solutions -- Our sense is that as long as "cost-cutting" is focus of SME executives and managers, rather than "increasing Throughput" (and, hence, profits), then all (or most) of the priorities will remain internally focused and the resulting "solutions" will do little to actually increase supply chain visibility, integration or collaboration.

    This, we believe, is a huge mistake. It will be the SMEs with the vision to begin redefining their supply chains from the outside-in that will increase their market share and become dominant in the near future.

    I also believe that the IT vendors and value-added resellers (VARs) who first create a way for SMEs to readily provide and consume customer-driven data up and down the supply chain, at a price the SMEs can afford, will also become market leaders in their industries.

  2. Get clear on what you are doing today. Document the 'as-is' and the 'to-be' states -- When we work with our new clients' executive and management teams, we find that what they think they know about how their organizations and industries work and reality are sometimes miles apart. Many of them do not have good tools in hand for unlocking "tribal knowledge" and documenting in a simple easy-to-use, easy-to-update form their current reality ('as-is' state) or future reality ('to-be' states). Instead, they rely on business process management (BPM) consultants who leave them with huge binders of written pages that mostly end up gathering dust on their shelves after the many thousands of dollars in checks are written for the cost of preparing these tomes.

    We believe that there is, indeed, a simple and effective way to help organizations understand and agree upon their current reality and the cause-and-effect relationships that drive their current reality.

    Generally, in a single day, we can generate a single-page document that allows managers and executives to see their organization and operations like they have never seen it before--with clarity.

  3. Align IT strategies with future goals -- Cecere is correct in concluding that if IT spending is to be a real investment, instead of just money thrown at problem, then--proceeding from step 2 above--the IT money must be allocated to those few factors that are going to lead to increasing Throughput and profits. Everything else merely adds expense.

Conclusion

 

So, I want to thank you, Lora Cecere, for bringing forth this excellent report on supply chain visibility. We would also like to hear your comments and questions on this important matter.

 

Please leave your comments here, or feel free to contact us directly, if you prefer.

______________________________________

Cecere, Lora. Supply Chain Visibility in Business Networks. Rep. N.p.: Supply Chain Insights LLC, 2014. Print.

 

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Supply chain management 01.jpgI thought it would be interesting to see what topics you have found most interesting in my writings here at the Kinaxis Supply Chain Expert Community and, perhaps, to discuss why certain writings may have piqued your interest. So, here are the top-ranked posts from 2013:

 

  1. Reducing production lead time to improve supply chain performance - An article containing some very practical advice on steps you can take to reduce production lead times
  2. Why you need your own project manager - This post covers a topic important to CEOs, CFOs, CIOs and others managing IT projects with vendors and value-added resellers involved
  3. On demand-driven supply chains - part 1
  4. On demand-driven supply chains - part 2 - These two posts discuss what it really means for a supply chain to become demand-driven (not just call itself 'demand-driven')
  5. CFOs require proof of IT investment ROI - Yes! An article actually suggesting that CFOs should require some hard ROI from monies spent for IT improvement projects

 

Here are the TOP 10 ALL TIME articles I have written here a the Kinaxis Supply Chain Expert Community:

 

  1. Uncertainty: the elephant in the room - part 2 - Supply chain "uncertainty" is a hot topic: two parts of this series are found in the top 10 views
  2. How much money should you commit to an improvement project? - CEOs, CFOs and CIOs would like to have better guidance about how much money should be committed to improvement projects, it appears
  3. Misaimings about metrics - Metrics in many organizations are conflicted and create internal conflicts; this article provides guidance to resolve those conflicts
  4. Simpler is better: Dynamic Buffer Management (DBM) - This article set forth a simple solution to managing inventory levels across your supply chain
  5. On making more money: Metrics not working? Check your complexity - In this article, I address the troublesome matter of how complex and conflicting metrics make it hard for managers and workers to connect day-to-day actions and decisions to corporate goals and improvement
  6. Supply chain agility - Why it's not getting done - Here I take head-on the two key stumbling blocks to the creation and sustaining of supply chain agility; almost everybody knows they need it, but few have achieved or sustained high levels of agility across their supply chains
  7. Business Intelligence, CPM and the middle market - Here is a topic near and dear to the hearts of strategic-thinking CFOs in the middle market: what to do about corporate performance management (CPM) metrics and business intelligence initiatives
  8. The dangerous dichotomy - part 1 - Addressing how companies get caught between cost-cutting and revenue-increasing strategies, frequently finding themselves in oscillation between the two options, but seldom finding a real resolution
  9. Forecasting mistake #1: Forecasting to the wall - Talking about one of the key dangers in forecasting practices
  10. Uncertainty: the elephant in the room - part 1 - Back to supply chain "uncertainty" and technology "improvements"

 

We think you will find going back over some of these very popular posts might help you discover new insights to help you move toward a process of ongoing improvement (POOGI), or at least stimulate some new thinking in your organizations.

 

In any event, we want to take this opportunity to thank you for your continued readership.

 

Please leave comments on any of the posts that you might find interesting, informative, thought-provoking, or even if you disagree. We would like to hear from you.

 

Thank you again for your faithful following of these posts.

This supply and demand model shows how prices ...

This supply and demand model shows how prices vary because of a balance between the availability of a product and the demand for it. The graph shows an increase in demand from D1 to D2 with the resulting increase in price and the amount needed to reach a new balance point on the supply curve (S). (Photo credit: Wikipedia)

It’s a recognized truism that forecasts are always wrong. They are especially wrong when forecasts must be narrowed to a single number to be made useful.

 

A statistical forecast should be stated as a number followed by a plus and minus range. For example, one might say: “This model forecasts demand for next month to be 12,816 units, plus or minus 3,018 units.”

 

That would mean that the statistical model employed can predict with reasonable certainty that demand for next month would fall in the range between 9,798 units and 15,834 units.

 

However, to be useful for planning production or other actions, that range really needs to be narrowed to a single number—how many to make or how many to have on-hand to meet the demand.

 

The problem is that the single number we choose is almost always going to be wrong—we just don’t know by how much it’s going to be wrong.

 

So, let’s take a semi-humorous look at just how wrong various “experts” might be in making forecasts about the future.


“Computers in the future may weigh no more than one-and-a-half tons.” [1]

 

This was a prediction made by Popular Mechanics magazine’s team of expert prognosticators back in 1949. They were right, of course. It is certainly true that computers today “weight no more than one-and-a-half tons.”

 

But being right in this vein is somewhat like forecasting that “sales will be more than 100,000 units” only to discover that sales are more than 10 million units.


“I think there is a world market for maybe five computers.” [2]

 

Here is the wise speaking of founder and then chairman of industry-leading International Business Machines (IBM), Thomas Watson, in 1943. Is it any wonder that they barely made a noticeable dent in the personal computer (PC) market and were dramatically overshadowed by other PC manufacturers like Apple Computer, Dell Computers and dozens of others?


“The concept is interesting and well-formed, but in order to earn better than a ‘C,’ the idea must be feasible.” [3]

 

When Fred Smith presented his paper outlining the concept that was to become “FedEx” to his Yale University professor, this was the professor’s response. This business “expert” apparently forecast that the demand for a reliable overnight delivery service would not support a firm and make it profitable.

 

Wrong! by a wide margin, I should say.


“Who the hell want to hear actors talk?” [4]

 

Harry Warner, one of the Warner Brothers, didn’t think there was a market for “talking pictures.” In 1925, Harry’s brother, Sam, wanted to introduce “talkies,” while Harry opposed this move. The studio had lost nearly $350,000 ($4.6 million in today’s dollars) by February 1926, so Harry relented.

 

Harry’s forecast was off.


“We don’t like their sound, and guitar music is on the way out.” [5]

 

Decca Recording Company’s executives forecast a very limited market for the Beatle’s sound and, apparently, guitar music in general, back in 1962. They missed their big opportunity.


“Heavier-than-air flying machines are impossible.” [6]

 

There is a great danger to innovation any time we come to the conclusion that anything is “impossible.” The brilliant scientist, Lord Kelvin, was beaten by two bicycle guys who changed the world.


“So we went to Atari and said, ‘Hey, we’ve got this amazing thing, even built with some of your parts, and what do you think of funding us? Or, we’ll give it to you. We just want to do it. Pay our salary, we’ll come work for you.’ And they said, ‘No.’ So then, we went to Hewlett-Packard, and they said, ‘Hey, we don’t need you. You haven’t gotten through college yet.’” [7]

 

The short-sighted executives at Atari (whatever happened to Atari?) and Hewlett-Packard (still trying to find itself in some respects) turned down Apple’s visionary thinkers because their “forecasting” and “innovation” engines were missing badly at the time.

 

The point is…

 

The point is this: trying to operate your business or your supply chain based on forecasts is a risky business.

 

Supply chain agilityand fast, flexible and innovative responses to changes in the market will beat attempts to out-guess the market.

 

The strategic selection and positioning of resources, accompanied by big data, supply chain visibility and becoming customer-driven, are the best ways to secure your company’s future.

 


 

We would like to hear from you. Please leave your comments here, or contact us directly if you prefer.

 


[1] Meigs, James B. "Inside the Future: How PopMech Predicted the Next 110 Years." Popular Mechanics. Popular Mechanics, 10 Dec. 2012. Web. 10 Mar. 2014.

[2] "Thomas J. Watson." Wikipedia. Wikimedia Foundation, n.d. Web. 11 Mar. 2014.

[3] "Fred Smith." Entrepreneur. Entrepreneur (online), 8 Oct. 2008. Web. 09 Mar. 2014.

[4] "Warner Bros." Wikipedia. Wikimedia Foundation, n.d. Web. 11 Mar. 2014.

[5] "The Beatle's Decca Audition." Wikipedia. Wikimedia Foundation, n.d. Web. 11 Mar. 2014.

[6] Weisstein, Eric W. "Kelvin, Lord William Thomson (1824-1907) -- from Eric Weisstein's World of Scientific Biography." Kelvin, Lord William Thomson (1824-1907) -- from Eric Weisstein's World of Scientific Biography. Wolfram Research, n.d. Web. 11 Mar. 2014.

[7] Goldberg, Marty. "The Atari/Apple Connection." The Atari/Apple Connection. Indiana University-Perdue University Indianapolis, n.d. Web. 10 Mar. 2014.

 

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English: Portrait of Eli M. Goldratt

Portrait of Eli M. Goldratt
(Photo credit: Wikipedia)

It seems that there is no end to what dedication to a process of ongoing improvement (POOGI) can bring to firms in terms of increased profits. At least one visionary, Eliyahu Goldratt, believes that virtually any company has the potential of turning its revenue figure of today into its bottom-line profit figure over the course of five years dedicated to unrelenting ongoing improvement.

 

Interestingly, many firms have yet to consider taking Lean or Theory of Constraints or any of the proven methods and cultures for ongoing improvement seriously. They still manage by outdated methods—the way their fathers ran the business—or, perhaps worse, by the latest management “fad” or “flavor of the month.”

 

At the other end of the spectrum are firms that have discovered that nothing in the supply chain is off-limits for consideration in a full-fledged POOGI.

 

In a recent article published by McKinsey, Markus Hammer and his cowriters bring some valuable examples of new applications of the Lean approach to a POOGI to light. We feel these examples are worth repeating here for one purpose—and for one purpose only: to spark the innovative imagination of all executives and managers who read these examples toward inciting fresh innovation in their own organizations and operations.

 

Example 1: A pharmaceutical company

A pharmaceutical company “applied lean manufacturing to a series of processes in its biological reactors, where it grew cell cultures.” The firm applied value-stream mapping along with deep statistical analysis, and then set about problem-solving in sessions involving both “engineers and operators” in order “to identify improvements [possible] in the productivity of the biological resources.”

 

“The company expects the [resulting] improvements to boost yields by over 50 percent—without additional costs,” the McKinsey report says.

 

This is all the more remarkable in light of the fact that the firm was already “well-versed in lean thinking and methods.” The firm had not recognized these opportunities for improvement earlier because the executive and management team had previously assumed “variability in biological materials” as a given that could not be addressed through a process of ongoing improvement.

 

Example 2: A European chemical company

The McKinsey report also relates how “a European chemical company used lean value-stream analysis of raw-material flows in one of its businesses to understand which activities created value and which created waste.” As a result, “the company learned that up to 30 percent of its raw-materials inputs were wasted.” They further discovered that “some plants were far more wasteful than others, despite otherwise appearing” to be quite efficient.

 

After making these discoveries, the firm undertook to “prioritize a range of improvements.” These improvements started with “how it sourced raw materials” and extended all the way to “equipment and process changes in production.”

 

These improvements resulted in net gains of more than 50 million Euros annually.

 

Example 3: A look at energy consumption

Since rising energy costs affecting the entire supply chain, some resource-intensive suppliers are now taking a closer look at energy consumption versus value-added in the supply chain.

 

By combining the value-mapping of Lean with big-data analytics, one firm identified a series of process control improvements that, when taken together with opportunities to reduce thermodynamic energy losses during processing, contribute a net 15 percent savings in annual energy costs. These savings were equivalent to three-fourths of the plants entire fixed labor cost.

 

The enduring value of a process of ongoing improvement

The McKinsey report concludes with this important point:

 

“While… these examples are impressive on their own, perhaps more impressive is the enduring power of lean principles to generate unexpected savings when companies gain greater levels of insight into their operations…. In the years ahead, as emerging-market growth continues to boost demand for resources and to spur commodity-price volatility, more and more companies should have incentives to experience this power for themselves.”

 

Lean, of course, is no the only school or culture for gaining “greater levels of insight” into your operations. Goldratt-inspired Theory of Constraints has also proven to be hugely effective and its Thinking Process tools help unlock “tribal knowledge” like none other of which we are aware.

 

Without exception, however, is the fact that greatest enemy to a process of ongoing improvement is the attitude that “we know”—not being on a constant quest for greater understanding of your own operations, your own supply chain, and what might be done to improve it.

 

Begin your own POOGI now. Tomorrow may be too late.

 


 

We would sincerely like to hear your thoughts on this important matter. Please leave your comments below, or contact us directly, if you prefer.

 


See also: Hammer, Markus, Paul Rutten, and Ken Somers. "Insights & Publications." Bringing Lean Thinking to Energy. McKinsey.com, Feb. 2014. Web. 25 Feb. 2014.

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