Prevost Car-the power of project management
by Marie-Josée Gagné
GAETAN BOLDUC HAD A BIG PROBLEM on his hands in July 1994. The vice president of production at Prevost Car Inc. had just been told surging demand for the company's intercity buses would require him to complete an unprecedented expansion of capacity in just five months.
Bolduc needed a good plan, a fast start, and a mistake-free project if he was going to protect Prevost's hard-won reputation for delivering vehicles on time. “There is enormous pressure on the organization to meet the delivery dates we have promised to our customers,” said Bolduc. “We were looking at a project to considerably increase our production, not a lot of time and a limited budget. I needed ideas, a structured approach to the project, and most of all I couldn't afford a mistake.”
As an engineer, Bolduc was aware of project management but had never tried it at Prevost Car, the largest manufacturer of bus chassis for motorhome conversion and the second largest manufacturer of intercity buses in North America. He decided it was the right time to introduce project management to the 72-year-old company which operates three factories just south of Quebec City Canada. Prevost turned to Cabinet Conseil Developpement (CCDI) Inc., a consulting firm with offices in Quebec City and Montreal, which specializes in project management for manufacturing companies.
Prevost needed to increase production by 31 percent, from eight vehicles a week in July to 10.5 a week by Januarys but couldn't say what that would mean in terms of expanding its facilities or additional equipment. A CCDI team of project managers, a value engineering expert, and the seven foremen from Prevost's main factory came together for an intensive five-day workshop to scope the project. Using value engineering methodology, the group produced a report to senior management outlining a $10 million project to simultaneously expand three departments of the main factory for a total increase in floor space of 60,000 square feet. The detailed planning in the scope report came as a revelation to Prevost executives, who were used to an ad hoc approach to change.
New Project Approach. “In the past, when they decided to expand they would call in one of their people and tell him they needed an expansion of a certain size, say 10,000 square feet,” said Richard Dan-cause, president of CCDI. The following Monday a bulldozer would be working and the project would be under way. But at what cost? On what timetable? And most of all, for what value to the business? They didn't know. Suddenly management realized that project management wasn't the same as how they had been carrying out projects in the past.
The project was approved within two days and it subsequently came in on time and on budget. What's more, the rigorous project definition process had also permitted the company to make allowances for future increased production requirements. on the basis of the excellent results of the initial expansion and increasing demand, the company decided to move immediately to expand production from 10.5 vehicles a week to 12.5 a week over the following two months. The total increase in production in nine months was 56 percent. The success of the expansion touched off a project management revolution at Prevost Car. Now, after almost a score of projects of varying sizes and types under CCDI's management, Prevost is planning to create its own project management department.
Prevost has found project management to be highly useful not only in planning its rapid physical expansion but also in reorganizing work processes. A disciplined approach to planning is spreading throughout the organization. For example, the health and safety committee is using it to define an important project aimed at reducing workplace injury. The company offers a good example of the power of project management in manufacturing, where businesses need to adapt quickly to face ferocious international competition, accelerating technological change, and rapidly changing market conditions.
Project Management Pays Dividends. The company's success in boosting production likely played a significant role in Volvo Bus Corp.'s decision to purchase Prevost in May 1995 for $140 million. The Swedish manufacturer in turn sold 49 percent of its shares to Henlys, the largest bus manufacturer in Great Britain. Prevost's management believes the synergy between the three companies will help it meet its goal of becoming the market leader in North America.
“Volvo has a philosophy of acquiring companies that are in good health,” Bolduc said. “We were able to present to Volvo a record of having increased production by 56 percent in nine months. And of that about 30 percent was done without an increase in manpower. So if you're looking to make an acquisition and you see that kind of performance along with an order book full for the next year, it makes the decision a lot easier.”
Prevost's two latest projects demonstrate the strides that project management has made within the company. In the first project, the company is investing $1 million to add an additional 10,000 square feet to its main factory for expanded painting facilities, $2 million for new painting equipment, and $3.5 million to modify equipment and technology in its existing painting installations. A second concurrent project, called optimization of the Painting Function, will invest $650,000 to introduce new technology, provide worker training, and change the way buses are painted.
Factory Reconfigured. At Prevost, buses are assembled at stations rather than on a line. Thus a bus is moved from station to station through the factory as various parts are installed. Currently, buses are painted midway through the process, meaning that after the roof and side panels are installed, the buses are taken to the end of the factory to be painted. Then, they are brought back to have bumpers, mirrors, tires, and other trim installed. However, new paint designs mean that a bus that in the past required only two colors now may require up to eight. The complexity of applying these designs has created problems in returning the buses to the correct production station on time. This problem will be solved by the expansion and reorganization of the paint shop. Now the buses will be painted only after assembly is completed. Although an obvious solution, this requires major changes to factory operations.
These projects provide an excellent example of how hard and soft projects can be combined so that a physical expansion also becomes an opportunity to improve production methods. And they illustrate the central challenge of modern manufacturing—the need to maintain production while implementing change quickly in order to meet growth targets and face new market conditions. “We have two missions in the organization,” Bolduc says. “The first is to design and manufacture vehicles. The second is to improve our way of doing things—to do more in less time and do it better. And to achieve the second mission, project management is the solution.”
Project management has also been important to Prevost because it encourages cooperation between departments and gives the company access to outside expertise. For example, there are 10 outside experts working on the paint shop expansion alone. The project manager ensures they are the right people for the job and that they understand Prevost's requirements and corporate culture. In turn, the outside experts offer Prevost experience gathered in other plants and fresh ideas that expand the business's capacity to innovate.
Passport to Innovation: PM and the Corporate Culture. Project management has also helped Prevost Car achieve two of its key corporate goals: to encourage constant innovation and to promote a team approach to problem-solving. The central challenge for manufacturers in an international economy is to maintain and increase production while at the same time constantly improving their methods. The discipline of project management has allowed Prevost to improve its strategic planning and reduce risks associated with the process of rapid change. The project management consultant has also given the company access to a network of outside experts who form multidisciplinary teams with employees. This team approach has had the effect of increasing the enterprise's capacity to innovate while improving employee morale.
“What's important is to recruit the best players possible for a project,” Dancause says. “When someone is recruited from the outside we have to make sure there is a good fit with the project and a good relationship with the company's employees. A business can't grow only with its own employees. People from outside have worked in other businesses, seen new things, and they break down paradigms that get built up in a business.”
Bolduc jokes that Prevost Car has become infected with the project management bug. The company is currently evaluating staff for its new project management department, which should be up and running this year, with about four project managers. Already, human resources, health and safety, and other departments have begun working on a project basis. “Right now it's a question of finding what couldn't be better managed by project,” Bolduc says. There will be no shortage of work for project managers at Prevost in coming years. The company is already projecting that it will far exceed a goal set in 1996 to build 1,000 vehicles annually by the year 2000, up from 700 in 1996. Prevost is also studying new opportunities linked to its core bus business. It's the kind of rapid growth that could not have been achieved without the project management approach.
“Prevost is a good example of the changes that manufacturing companies are going to have to undergo in North America,” Dancause says. “It's no longer just a good manufacturer of good products, it has the capacity to seize opportunities and embrace change.” ∎
Marie-Josée Gagné is a strategic communications consultant, headquartered in Québec City, Canada. Recently she has been involved in marketing and communication projects for a project management consulting firm.
PM Network • August 1997