Shaken to the core



When I moved with my wife to Santiago, Chile in December 2009 to accept a position as supply chain project manager for Walmart, I was expecting a major challenge. The company was piloting a new technology, and on top of that, I was working in a different culture with a different business environment, different language and different legal regulations.

Despite this, the project went reasonably well for the first two months. The team worked well together, the stakeholders were happy with the progress, and we appeared to be on track to deliver the project on schedule and on budget in June 2010.

All of that changed on the night of 27 February. I woke up in the middle of the night to an 8.8-magnitude earthquake—one of the largest quakes in recorded history.

After making sure that all my co-workers and their families were safe (fortunately, they were), the project team still had a job to do, and our task had just become a lot more complicated.

All special projects were put on hold as Walmart, along with the rest of the country, attempted to get daily life and business back on track as quickly as possible.

Teams worked around the clock to restore infrastructure systems and bring them back online. Because electricity was still out in many parts of the country, we had to use generators. Power use was reserved for core systems and restricted for “conveniences,” such as overhead lighting and hot water.

All company offices were carefully inspected and major debris was removed. Once it was safe to enter the buildings again, everyone pitched in to help clean up the mess that remained.

Room for Recovery

Then it was time to examine the status of the projects and the business in general. When a natural disaster such as a major earthquake occurs, multiple problems combine to negatively impact the supply chain:



Damage from the earthquake in Santiago, Chile, 27 February 2010

  • Infrastructure damage. Roads, production facilities and communication links are impaired, limiting the supply of commodities, gas, food, etc.
  • Personnel disruptions. Some people cannot come to work because of personal issues, lack of transportation or other difficulties. As a result, organizations cannot perform at full capacity.
  • Resource reallocation. Many organizations must take their existing resources and apply them to the common good. For example, water that would normally be used to create a product is instead redirected to serving basic human needs.
  • Change in consumer habits. With so many homes without electricity and water, products such as ice, coolers, bottled water and basic foods sell out quickly. In addition, people lose confidence in the regular supply of the market, so they buy much more than they usually would. This causes large fluctuations in the supply chain, and products disappear very quickly.

Seismic Waves

Due to these major interruptions in the supply chain, the stakeholders on the project—especially the end users—were not in a position to implement any changes to their daily business. Learning a new IT system was the last thing on their minds.

As a result, implementation of the project had to be delayed to allow the situation to stabilize somewhat. Several changes needed to be made to the project plan:

1. Quality activities were restructured. The original plan called for systems testing, followed immediately by a period of user-acceptance testing. Both were delayed. However, we observed that the end users were more impacted, long-term, by the supply chain interruptions than the systems team. As a result, changes to the project plan were approved to move forward with rigorous systems testing, but we postponed user-acceptance testing.

The systems team was also given additional quality-monitoring tasks to minimize smaller impacts that might otherwise appear later during user testing.

2. New training activities were added. The end users had taken training classes for the new system only a few days before the earthquake. Because much of this benefit was lost, additional training was initiated. Instead of training everyone at the same time, though, a small group of key users was trained, while the others continued to focus on the day-to-day business. It then became the responsibility of these key users to guide the others throughout user acceptance testing and implementation.

3. Additional monitoring was implemented. The goal was to implement the new system without causing any negative impact to stakeholders or end users. Because the situation was still somewhat unstable in July, when user acceptance testing began, additional business metrics were put in place to monitor the quality of the new system, and to be sure it would match or exceed the results of the current system being replaced.

This increased monitoring allowed the testing phase to move forward by mitigating some of the risks of testing a new system in an unstable supply chain.

4. Implementation plans were modified. Instead of implementing the new system entirely in one day as originally planned, the decision was made to try it out on a pilot group of stable suppliers and monitor the results.

The rollout of the new system finished in early September. In the end, the earthquake resulted in a timeline extension of three months, with no negative business impact.

Like all project managers, I don't like to deliver a project late. We were willing to take a hit on our schedule and budget to maintain our quality and risk constraints. Although a major risk event can change project plans drastically, this goal of adding value may be the one constant that remains.

One of the most important steps in recovering from a crisis is returning to normalcy. Project management helped toward this effort; it gave us a goal to strive for and a path to follow out of the rubble. PM


Michael Allen, PMP, is a project manager for Walmart Chile with a background in implementing international IT projects to benefit the supply chain.

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