Future of collaborative project management
Sandy Gill, Ford Motor Company
A project may be defined as the allocation of resources directed toward achieving a specific objective by following a planned and organized approach. The principles of successful project management are select the best people, manage a budget, coordinate all processes, involve customers, delegate responsibilities, and track the project's progress.
Project management is a confluence of several concepts that offer short-term and long-term performance improvements. Manufacturing processes involving few activities, resources, constraints or interrelationships may be easily visualized and thus, planned informally. However, when these processes exceed a certain threshold level of size and complexity, informal planning must be substituted with formal planning. Without effective planning there would be chaos such as missed deadlines, and overspending on budgets, etc. Within most technical organizations, project management means large budgets are exhausted, additional employees are hired, intricate systems are delivered and contracts are either won or lost. Each project can trigger extensive issues as decisions are quickly being continuously made. In participative projects, tasks and their directions could shift completely from one course to another. The objective of project management is to assist individuals to be more productive in their work as they measure project risk and establish contingency plans. Using various techniques, companies must continually differentiate themselves to remain competitive (Chandra).
AMR Research studies, a leading provider of business application and technology research and advisory services for global organizations, indicated 80% of a product's cost is embedded before it moves into manufacturing. Therefore, it is important for organizations to facilitate effective communication, coordination, and control within several functional departments. There is a need for entrusting an individual or group, along with collaborative software, with the responsibilities for integrating activities and functions of various departments and other companies.
In the book e-Enterprise (Hoque, 2000), FedEx is quoted stating “through the industrial era, the ultimate corporate model was vertical integration—companies that owned their entire supply chains from manufacturing through assembly to marketing.” In the new economy, however, Fed Ex argues that vertical integration will make way for virtual integration, “where value-leading businesses focus on a limited set of core competencies and outsource virtually every other function.”
Automation and Globalization
Automation and globalization is becoming more important in the production process. For example, General Motors, which pioneered the application of robots, are importing new robots from Japan. New machine tools, microprocessors, sensory technology and computer controls now make it possible to reduce machine setup time and costs. This enables greater variety of products at a lower cost. Now through the use of cutting-edge technology, setup times have dramatically been reduced. This results in more efficient utilization of machines with lower direct labor costs.
The production function has become increasingly a global challenge. Virtually every aspect of modern manufacturing, from the design of products, planning, control of material flows, to the sales and distribution of goods, is in the process of being integrated and computerized. Production systems are thus being automated to secure high quality, lower costs and greater flexibility. It is estimated that Web-based collaboration between auto-suppliers will shave 18% off their product development costs within two years (Aberdeen group, 2001).
American automotive companies outsource numerous parts including those for the engine, transmission, etc. per vehicle program and then assemble these parts in-house. Within the auto industry, outsourcing is the norm of the corporate culture; nearly 45–60% of all parts and product designs are now outsourced per each vehicle program. Therefore, companies today must embrace the technological diversities implemented by their partners, suppliers and customers. This in turn facilitates rapid communications between internal departments and with outsourced manufacturing partners.
One of the basic decisions that an enterprise makes is to select a product or products it intends to produce and market. A product moves from one life-state to another, which in turn transfers responsibilities from one department to another. Under these circumstances it is important to monitor, coordinate and control all product activities, from concept to production.
Rodney Egdorf, VP of Wireless Business for OnStar, at the EyeForAuto Conference in Detroit this past May stated; “Consumers want greater connectivity with the outside world while driving, and greater productivity during the 500 million hours Americans spend in their cars each week.” With global positioning system (GPS) and OnStar added as accessories in automobiles, the car industry is headed toward a revolutionary step. This is an optimistic approach of car manufacturers to create “LAN-On-Wheels.” This allows a virtual private network (VPN) to be established from practically any point to any other point regardless of geographic location of a vehicle.
Collaboration in Operational Management
The fundamental business concept behind collaboration is that a manufacturing organization can gain a leading edge by creating better products in less time, at less cost and with fewer defects than that of their competition. This is achieved by developing and delivering products that involve multiple participants from various organizations. Collaborative project management technologies provide a product centric web based platform that allows a competitive advantage.
The divergent interests of functionally oriented professionals influence what products will be produced and marketed. It is important to integrate various interests and opinions in order to leverage existing information.
A historical focus for most manufacturers has been operational efficiency oriented around enterprise-level business processes. ERP (Enterprise Resource Planning) allows a manufacturer to optimize the processes of planning, procuring, manufacturing and distribution of their products. Manufacturers are investing in SCM (Supply Chain Management) to improve effectiveness of entire supply-nets that allow manufacturers and their suppliers to create more effective processes centered on demand forecasting and delivery, as well as, inbound and out-bound logistics. Companies have also invested in Product Data Management (PDM) to maintain product information and Customer Relation Management (CRM) to establish and maintain external customer delight. As seen in Exhibit 1, all four sectors need to collectively create and deliver the information necessary to capitalize on the definite advantages of realizing reduced delivery timing for customized products.
Over the years, products will evolve in complexity and technology and this will be reflected in the products themselves and in the processes used to produce them. Manufacturing companies, particularly within the automotive sector, need to gather product ideas that will satisfy the needs of customers and contribute to the goals of an enterprise while being consistent with the strategy to remain at the forefront of the technology field.
“We want timely, high quality launches,” said Ralph Seekins of Fairbanks, Alaska, who heads the Ford dealer council. Ford dealers are pressing top management at Ford Motor Co. to deliver more new products and deliver them faster. For people in every type of enterprise, on any part of the globe, the challenge to reduce lead-time and time to market is great (US AutoNews.com 2002).
For example, the automotive industry can use collaborative processes to focus on reducing cost and lead-time on new product programs. It is estimated by Aberdeen group, a leading IT market analysis and positioning services firm, that the Big 3 automakers will save roughly 300 million per new vehicle program and reduce time-to-market and improve agility by utilizing workflow and real-time functionality.
Information Technology in Automotive and Manufacturing Sector
Although the basic nature and purpose of project management control does not change, a variety of tools and techniques can be utilized. Information Technology provides the communication link and makes coordination possible. In fact, data cannot be useful unless it is processed into a usable form that is accurate, interpretable, and informative. One attempt at solving the information overload is to establish user-friendly systems, which are easy to interpret and are capable of analyzing large quantities of data at a relatively low cost.
Information needs to differ at various organizational levels. Therefore, role based access will ensure appropriate information at the right organizational section. Information technology facilitates communication within departments and external companies. For automotive and manufacturing industries it is important to have technology that provides a range of technical capabilities.
With the information technology industry moving at light speed, the traditional roles and responsibilities of almost all skill-based positions are undergoing evolutionary changes. Despite the recent Internet industry crash, cost-saving opportunities still exist for the automotive industry through eBusiness solutions providers. Aberdeen's interview (Aberdeen Group, 2001) with the automotive supplier's procurement executives revealed that, in 1999, the procurement of indirect goods and services at the global automotive supplier were widely distributed and poorly controlled, with purchase processes and decisions largely being managed at the individual site level. Adding new facilities and acquiring new companies only exacerbated the situation, swelling supplier ranks and increasing instances of maverick buying. In addition, purchase requests for indirect supplies were generally handled through manual means, increasing order cycles and decreasing the productivity of plant personnel. The automotive supplier estimated that the labor costs for processing an indirect purchase request was more than $70 per purchase.
The result? By 1999, the automotive company was purchasing indirect goods and services from an unmanageable mix of 18,000 suppliers. Plant and procurement personnel were spending as much as 20% of their time identifying, requesting, and processing MRO purchases. And, according to one purchasing executive, the company “didn't have a clue” as to how much they were spending on indirect suppliers or even who these suppliers were. The automotive supplier identified e-Procurement as key to addressing these challenges (Aberdeen Group, 2001). In a white paper recently released by Arthur Andersen, the authors found electronic procurement, via virtual supplier network (VSN), as becoming more commonplace in the automotive industry and to take a first step in the formation of the new economy supply chain (Arthur Andersen, 2001).
To date Covisint is the most talked about VSN. Rivals General Motors, Ford and DaimlerChrysler announced in February 2000 that they would combine efforts to form a single global supplier exchange. Each company would bring its individual e-initiative with the goal of integrating and collaborating, meaning marked efficiency for the entire industry. A vital component of a VSN such as Covisint is the ability to create an online network to facilitate interaction between suppliers, as well as between suppliers and their customers, including procurement, preproduction engineering and communication of production and supply-chain management information. Participants can log into the discussion from any location, as long as they have a computer and an Internet connection. In doing this, it allows you to directly increase efficiency and asset utilization (Covisint website).
Transferring data between an Original Equipment Manufacturer (OEM) and its suppliers is an extremely error-prone procedure as it is time consuming and the data may be misinterpreted or vital information may be lost during any translation processes to exchange data from the OEM's software package to the software package of the supplier. There are many times when the data itself does not need to be transferred between the sites, but it must only be viewable by a few parties to review any design changes or modifications that must be examined. Thus, in this scenario, the technology of data conferencing may be utilized.
The International Telecommunications Union (ITU) developed a standard to allow such data exchanges to occur. This standard is called the T.120 standard and it is comprised of various communication and protocols that allow different companies to share data (ITU standards). Many large hardware vendors currently have corresponding T.120 supported software that ensures interoperability between other manufacturers to allow data sharing. Some of the uses of the T.120 suite are application sharing, whiteboard conferencing, chatting, and file transfer. Companies who are able to use the T.120 toolset to assist in multiple projects realize enormous gains. The technology is able to bridge the gap between PC and Unix platforms as it allows interoperability between systems. As suppliers and OEMs all use different platforms, this allows them to interact in meetings along with their applications, regardless of their hardware configuration. The other advantage of conducting virtual meetings through data conferencing is that the majority of hardware manufacturers such as Microsoft, Sun, and HP all provide free T.120 software that is able to run on their hardware. This allows the addition of this technology as an IT tool to be relatively inexpensive. The applications of this technology within the automotive and manufacturing sectors are endless. As the technology is software independent, any type of software package may be shared. This is especially useful in design reviews where some suppliers may not have a certain software package, but using this technology means only one participant within the conference is required to have the software loaded, but all other participants are able to actively participate and take control of the lead user's software and make any necessary changes. CAD/CAM/CAE design reviews of parts may be completed on the spot as needed, whereas before, communications were done with paper drawings and travel was required between site locations with a huge communication gap if meetings were conducted without any visual aids. Other uses include the sharing of project management files such as project outlines and timing files. Advantages of using data conferencing include; reduce travel expenses, increased accuracy through reduced misinterpretations, and instantaneous design reviews (Microsoft website).
Ford Motor Company now deploys the T.120 toolset as a standard load on all employee workstations. But, in the current industry, with suppliers contributing such a large percentage of the vehicle development and parts, it has become a necessity to include suppliers in internal data conferences. Allowing suppliers within a company's firewall raises security issues, but Ford Motor Company has been able to successfully create an environment where suppliers are able to participate in data conferences. Thus, the benefits of the technology may now be experienced across the entire Ford extended enterprise.
The conceptual idea of a vehicle until the final finished vehicle is manufactured is a lengthy and extremely complicated process that involves the coordination of numerous groups. From one end to the other of this process, millions of conversations and interactions between thousands of people will need to occur for a successful vehicle line launch. Information technology's latest tools allows for greater efficiencies to occur in these human transactions of data sharing.
Another new and exciting information technology tool being utilized within the automotive industry is the use of digital workplaces. Ford Motor Company utilizes such a Web-based workspace called an ‘eRoom’ by eRoom Technology Inc. “where ideas are unleashed and communication and collaboration take place.” This tool was designed specifically for assisting companies with project management and has been found to be useful when participants in a project are remotely located. B2B projects can be managed at a virtual meeting place and various project management tools may be utilized for a complete collaborative project such as incorporating file sharing, chats, polls, tracking issues and tasks, calendars etc. requirements. All participants in an eRoom must actively utilize the technology for it to successfully allow team members to complete a project effectively using the tools in eRoom (Sorofman).
Future of Project Management
The future of project management has arrived with the availability of Internet-based tools where people communicate ideas on the web, coordinate resources worldwide and work with multiple systems in real-time. The Internet is becoming more appealing to organizations because it is flexible, globally connected and easily accessible. It also integrates information virtually on an instantaneous basis, thereby reducing considerable delays that usually impede effective control. Systems are available to provide fast and systematic collection of data to be easily accessible. Project management can implement flexible technical capabilities where different companies can adopt technology in different ways. Aspects of advanced project management are as follows:
1. Project information must be shared.
Simultaneous engineering enables design and manufacturing engineers to work together while maintaining close contact with marketing and customers.
2. Handling of issues should be a continuous effort to investigate and resolve issues.
Designs can be optimized in minutes as manufacturers work collaboratively with contractors, vendors and subcontractors, on an ongoing basis.
3. Project management applications should be network based that can integrate or interface with internal software.
This enables project management to leverage existing technology investments that companies have made so far in Computer Aided Design (CAD), Customer Relation Management (CRM), Enterprise Resource Planning (ERP) and other home-grown systems.
The Internet when used in the business realm has produced stimulated concerns over security and privacy issues. To fully unleash the power of collaboration over the Internet, companies must be able to ensure all transactions conducted over the Internet are completely secure. Secure Socket Layer (SSL) is a secure communication protocol used to secure all sensitive data (Stair, 2001). As enhancements are made with SSL technology, the utilization of the Internet for further project management's tools should also proportionally increase. The possibility of any security concerns has many companies clearly avoiding the Internet for project collaboration. Within the automotive industry, the Automotive Network exchange (ANX) was established to thus avoid such electronic issues, ensuring all data transfers were completely secure. But global reach and cost issues still push the industry to pursue Internet opportunities that will further increase their flexibility within the scope of project management.
The benefits of modern project management are compelling where resources can track multiple projects and management can have more power with more awareness, access and control over each project's progress. With emerging applications and networks, basic technology can support more complex software with higher performance at affordable costs. Thus a project centric business solution unifies product information and collapses time and distance across product chains.
New, innovative technologies aim in simplifying project management applications as it can be used with little to no formal training. Such applications provide “wizards” and online help to users to provide assistance as required. Web, Internet, and other technologies enhance the capability to connect people and processes by bringing down the barriers of time, place and technology.
One of the most compelling features used in the latest technology is that the data is independent of the platform, which means data created in any native application can be viewed and accessed independent of the software in which it was created.
The benefits of advanced Project Management are compelling however companies should understand that the technology is merely an enabler. Companies should decide how to approach project management and recognize that developing an excellent collaboration capability may require cultural change. Therefore some companies can take this as a multi-step approach, where the first step is to look at the strategic direction of the industry, review the operational capability of the firm and then fit into information technology functionality.
Aberdeen Group. 2001. Fastenal and a Large Automotive Supplier Tap iProcure to Streamline the MRO Supply Chain. Available at http://www.aberdeen.com/2001/research/05012012.asp
Arthur Andersen. White paper. March 2001. Covisint—An Automotive Network in Practice. Available at http://www.andersen.com/Website.nsf/Content/IndustriesProductsAutomotiveResourcesCovisint!OpenDocument
Chandra, Prasanna. 4th Edition. Projects- Planning, Analysis, Selection, Implementation & Review.
Covisint. Available at http://www.covisint.com
Hoque, Faisal. 2000. E-Enterprise Business Models, Architecture, and Components.
International Telecommunications Union (ITU). Available at http://www.imtc.org/faq.htm
Minahan, Tim A. August, 2001. MatrixOne Drives Collaborative Commerce for the Automotive Value Chain. Impact, August 2001. Available at http://www.aberdeen.com/2001/research/09012698.asp
Sorofman, Jeff. Clarifying Collaboration. Available at http://www.eroom.com/whitepapers/CLARIFYING%20COLLABORATION.pdf
Stair, Ralph W. and George W. Reynolds. 2001. Principles of Information Systems, 5th Edition, p. 308.
US AutoNews.com. March 2002. Ford dealers want new products faster.
Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA