Project Management Institute

The transition to project management in manufacturing

Implementing PM in manufacturing is not a simple act, but the rewards are measurable and long-lasting.

Philip Nunn, PMP

A recent experience with a client reminded me that little has been written about the transition of a company from traditional management methods to project management. It has been several decades since the aerospace and the construction industries converted, so few of us are aware of the trials associated with this change. I was only a witness to the construction industry transition, but I was a participant in the initial steps of the aerospace industry into project management. The changes in those industries were slow and laborious because there was no precedent. Today the manufacturing industries are moving toward implementation of modern project management, and some guidance is available from previous experience.

The implementation of project management is not miraculously achieved as the result of a single simple action. It is an evolutionary process which goes through several steps. No matter how many companies I try to help with this transition, they seem to invariably pass through the same steps.

The steps through which a company evolves in implementing project management are:

  1. Awareness
  2. The unfulfilled miracle of software
  3. Disillusionment
  4. Search for improved scheduling of tasks
  5. Discovery of the management system needed to track progress
  6. Submission to tighter discipline for measurement and comparison
  7. Scheduling resource utilization and cash flow
  8. Incorporating the solution of unforeseen problems into the project management model
  9. Continuous improvement through performance measurement.

This is a process of human learning, so it takes considerable time and effort. My experience is that it takes three to five years for a company to become self-sufficient in project management. This length of time may be shocking to managers just starting out, but once the nature of the process is seen, the time required is obvious. In fact, the manager who denies this time will only slow the transition process by ignoring realities.

These steps can be grouped into three traditional learning stages since this is a learning process:

  1. Awareness: Steps 1-3
  2. Learning: Steps 4 and 5
  3. Improvement: Steps 6-9.

In the Awareness Stage a company is likely to try to do it themselves. They may seek software training, thinking that is project management training. Most of the behavior patterns and the management systems at this stage are those of their traditional management. A company can muddle around in this stage for years.

In the Learning Stage, there is usually a strong desire to obtain knowledgeable assistance. This is most often in the form of project management courses, seminars and workshops from recognized training firms. The training will focus on project planning and use of the software as a tool. Entry-level software is appropriate here. A scheduler is usually added to the staff to improve the efficiency and consistency of the modeling and reporting process. It is at this stage that project managers and executives become aware of the professional organization, the Project Management Institute, and join it to get more professional information.

Only an enlightened management will accept regular long-term coaching and assistance from a qualified project management consultant. However, this is the only way to get the needed training in how to manage projects and take project management teams to the point where they are ready for advanced continuous improvement techniques. Even with professional help, this stage takes one to two years.

Without professional help, a company seldom becomes fully capable of managing its projects efficiently and effectively.

The Improvement Stage is the last step to maturity in project management. This is the point at which project managers recognize that they can improve their skill. The line managers will become aware of the ability of the project management system to plan and track the allocation of their skilled people and resource costs. They will begin requesting this type of reporting from the system and will be willing to provide update data regularly. With the build-up of demands for more and better information, the project managers may find that their entry-level software is no longer adequate. They will have outgrown it. Now they can justify a more sophisticated project management package and can be specific about what they want it to do.

The last step in this stage requires that performance measures be applied to the projects themselves. To quote my colleague Doug Reith of Plan Tech, “We can't improve what we can't measure. ” There are systems of measures designed for application to projects. At this stage, the project managers and their executive management are ready to accept performance measures as indications for improvements. This mature management is a long way from the traditional organization of several years previous that thought they could implement this new scheduling system on their own. By the time they are regularly reviewing performance measures, they will have invested about five years in the change process that brought them to it.

Let's examine the steps in more depth to profile behaviors and get specific guidance.

1. Awareness. This is the first awakening to the realization that there is a structured way to manage projects and that there are benefits in time, cost and quality to be derived from using it. A decision is made to do it. This decision is usually made without analysis of the changes it will take to realize the benefits. Project management is seen as only an improved scheduling method to be added to the business-as-usual management system.

It takes three to five years for a company to become self-sufficient in project management. This length of time may be shocking to managers just starting out, but once the nature of the process is seen, the time required is obvious. In fact, the manager who denies this time will only slow the transition process by ignoring realities.

2. The unfulfilled software miracle. This is the perceived solution to obtaining the improved scheduling method. After all, several software companies lure buyers with the promise that their software will solve all project problems. We read such statements as: “Survive the Sea of Sharks,” “Be a Winner,” etc. Entry-level software is available for only a few hundred dollars, and that is a small investment to make in getting more precise schedules, shorter work times, and relief from manpower overloads.

3. Disillusionment. Guess what? The software did not solve the problems. It required more work to use it to schedule because it demanded more precise input data. It required work to get current status information any time we wanted to show current status. And that logic stuff. What's that? That wasn't needed for the old bar charts. After all, we all know what the flow of work is, don't we? And if the model gets too detailed, we can't keep track of it anyway. I have even found some hired project managers from well-known consulting companies using their project management software as drawing software by inputting tasks, their scheduled start and finish dates and printing a bar chart. The managers they were reporting to were told that the schedule was prepared with the project management software. But, they didn't reveal that they were cheating. This was not a logic linked flow of work model. The result is that the performance of the project did not look any different than those before project management.

4. Search for improved scheduling of tasks. By now, even the dullards are beginning to recognize that project management isn't working for them. The cheaters try to revert to the old management system because it took less effort. Most engineers and modern managers are not satisfied. The really perceptive managers suspect that something is missing. They begin to examine more closely the requirements to manage projects more tightly. What they discover is that a management system is needed in which to imbed the software as a tool.

This project management system has such a broad scope that it threatens to change some of the company's methods of operating. It requires knowing the process used for developing new products, installing new facilities, and other project-type work. It requires true accountability, even at the executive level. It requires a system for regularly accumulating status updates on current work. And it requires work teams who are really empowered to make decisions, even workers on the factory floor.

5. Discovery of the management system needed to track progress. One of the subtler needs is the need to set up a management system that can regularly accumulate progress data so current status can be tracked. This is a management function, not a planning function. Most project management training addresses planning. Very few courses, books or articles address how to use the plan to manage the project. That is because management of a project is not accomplished in a day. It takes every day during the life of the project.

Also contributing to this weakness is that most trainers and professors are not personally familiar with managing projects. Collecting this information regularly requires time and discipline. It requires the time of a person to distribute current status reports to the people doing the work. These reports need to be individualized and structured so that they show only the current work of each person. Team members must discipline themselves to update this information promptly. Managers must reinforce this information flow. This updating does not happen just once, or only when needed. It happens every two weeks, or weekly, or daily for the whole life of the project. Establishing this system reaches into almost every corner of the company. Traditional practices begin to be altered, including management practices. Discipline is beginning to creep in.

6. Submission to tighter discipline for measurement and comparison. A strange thing begins to happen once the updating system is working reliably. Schedules begin to show reality for the projects. Confidence begins to build in the scheduling information system. Bad news is viewed as a problem, rather than a disaster, because the bad news is projected forward several weeks or months. The potential impact of problems is seen early enough that action can be taken to minimize the damage.

Project managers spend so much time minimizing the potential damage of problems that they begin to see themselves as damage control specialists, The way the company is being managed is shifting even more. The change is perceived as good and an indication of effectiveness. The price for it was some extra work and a tighter discipline. Now, line managers are clamoring for resource planning and cost tracking to be included in the project management system. This will impose more discipline on their departments, but they seem to be willing to submit to that for the benefits. They know the price, and it seems worth it.

7. Scheduling resource utilization and cash flow. Project managers’ interest in the utilization of resources is based on their desire to have enough horsepower to pull the wagon. Their interest in cash flow is usually motivated by upper management questions about performance to budget. They have little direct control over these concerns. However, the functional line managers see labor allocation and budget performance as their primary concerns. By this step they will have seen schedule management of tasks grow until it is credible as a management method. With confidence in the ability of the project managers to manage the tasks and knowledge that the system can be used to plan and track both resources and cost, they will begin demanding this type of information. This is a reversal from their initial reluctance to share their manpower assignment tasks and their spending patterns. This reversal is based on increased confidence in the project managers and more empowerment in the overall company environment.

8. Incorporating the solution of unforeseen problems in the project management model. A traditional idea in management that dies hard is that once we plan a project, that is the way it will run. Deviations and delays are thought to occur only because someone is not doing their job. WRONG! Project managers in the manufacturing industries spend most of their managing time chasing the solutions to unforeseen problems. In 30 years, I have never seen a project that ran to the original schedule.

Experienced project managers are masters at leading team problem solving. They do more of that than anything else. They are convinced that Murphy is the patron saint of project managers. With all of this time and effort spent on solving problems, the major ones should be written into the project management model. A significant problem is one that is going to take more than two reporting periods to solve, or more than four weeks to solve in a bi-weekly update cycle. This addition facilitates managing the solution to the problem, and projecting downstream the potential damage it could do to the project. Part of the job of managing the solution is minimizing the downstream damage.

9. Continuous improvement through performance measurement. Continuous improvement can be realized in several areas once the project management system has become effective. Improvements in effectiveness can be achieved by the project managers. The functional line managers can realize improvements in the efficiency of their work force management. Project management software needs can be clarified. Performance measures can be applied at the task level as well as at the project level.

Project managers can improve their effectiveness at coordinating the activities of the team by fine-tuning their knowledge and behavior. They can hone their general team building skills. They can become more effective at encouraging open communications among project team members. They can decrease slippage by implementing true team-based problem solving.

Functional line managers will find improvement of efficiency built into their use of more accurate and more frequent work force utilization information. Forward looking projections of workload will help improve planning. Confusion and wasted time will be reduced.

Although most organizations start off with entry-level software, a well-developed project management system will cause their needs to exceed its capabilities. The entry-level software was chosen because it was easy to learn and use. This is of considerable value in the beginning. During the learning process, familiarity with the function of the software increases the desire to have it do more, carry a heavier load, and provide information in formats not available. By this time it also will have been recognized that it is more efficient to have a person dedicated to running the information system than having each project manager doing his or her own. The reason for this efficiency increase is familiarity. A project manager will use the software for only a few minutes each week at the most. At this frequency there will be a lot of fumbling around because of lack of familiarity. The project manager will be wasting a lot of valuable time and building a lot of frustration. A full-time scheduler on the other hand, will be very efficient at collecting data, entering the changes and distributing reports and information. My experience is that a scheduler can carry 10 to 20 projects simultaneously in a well-developed project management system. Schedulers are keenly aware of the shortcomings of software, and can define their needs clearly. Under these circumstances, software upgrading is almost painless.

Performance measures come in many sizes and shapes. Overall we are interested in measuring the performance of a project as a whole. This is frequently done in terms of product success in the market, the speed with which the project was completed, and the cost of the product and its project. Projects can be evaluated in several ways, and the Project Management Institute literature contains several methods, one of which is even commercially available. Project managers are probably more interested in internal measures of performance applied to their projects. Performance measured at the task level can give an early warning of troubles, both organizational and technical. A simple measure is to apply the customer concept to the flow of work. Each task is the customer of the previous task, and evaluates the previous task's performance.

Collecting project information regularly requires time and discipline, Team members must discipline themselves to update this information promptly, not just once, or only when needed, but every two weeks, or weekly, or daily for the whole life of the project, Establishing this system reaches into almost every corner of the company. Traditional practices begin to be altered, including management practices, Discipline is beginning to creep in.

There is always opportunity for improvement in the frontend planning of a new project by reviewing the performance of similar prior projects and trying to beat them. If the time and cost for the solution of problems was incorporated into a prior project's model, those problems are less likely to be revisited in anew project.

Summary

Implementing project management in an industrial company is not a simple act. It is not a scheduling add-on to the existing system. Its implementation requires modifying the existing management system and the work behavior of all the people involved. The implementation of project management is a learning process which takes three to five years to institutionalize the change sufficiently that it is self-sustaining, but the rewards in efficiency and management effectiveness are measurable and long-lasting. img

Philip Nunn, PMP is manager of the Grand Rapids office of Plan Techr Inc., and has 30 years of experience in project management. His most recent book is Total Quality Through Project Management, co-authored with Jeffrey Leavitt.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM Network • January 1995

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