Download Project Management for the Supply Professional

Project Management for the Supply Professional
Dr. Rene G. Rendon, CPSM, C.P.M., CPCM, PMP
U. S. Naval Postgraduate School
(831) 656-3464
[email protected]
95th Annual International Supply Management Conference, April 2010
Abstract. Best-in-class organizations are adopting a project management approach to how
they manage their business operations. As organizations use increasingly complex processes
to procure, produce, and distribute supplies or services, they are realizing traditional
management approaches are not sufficient. This presentation provides an overview of project
management as it relates to a supply professional‟s job. A conceptual overview of project
management with a focus on understanding today‟s new supply environment, the advantages
of using a project management methodology, understanding the characteristics of a project,
the organizing options for projects, and the role of the project sponsor, project manager,
project team and project stakeholders will be discussed. An introduction to the Project
Management Institute‟s (PMI) Guide to the Project Management Body of Knowledge
(PMBOK), including project management process groups and knowledge areas, will also be
discussed. Finally, an in-depth discussion of the application of project management tools such
as project life cycle, project charter, project plan, work breakdown structures (WBS), project
schedules, risk management, and earned value management will be presented. References to
the Project Management Institute‟s (PMI) Guide to the Project Management Body of
Knowledge (PMBOK) will be made throughout the presentation.
The New Supply Environment. Today„s new supply management environment reflects a
growing demand for complex, sophisticated, customized supplies and services. This new
environment is characterized by an increased reliance on suppliers and contractors for the
performance of critical business processes and functions. Furthermore, the new supply
management environment has seen an evolution of world-wide competitive markets. The
result of this new environment includes an increased complexity of supplies and services
produced and purchased by various companies. In addition, we are seeing an increase in the
complexity of the processes used to produce and procure these critical supplies and services.
Finally, because of this increase in complex supplies and services and the increase in complex
business processes, today‟s organizations need more sophisticated systems to manage our
supply chains. Our traditional management systems are not suitable for the procurement,
production, and distribution of complex supplies or services. There is a need for a project
management methodology in today‟s new supply management environment.
What is Project Management? Project management is the “application of knowledge, skills,
tools, and techniques to project activities in order to meet or exceed stakeholder needs and
expectations from a project (PMBOK, 2004). A project management approach differs from
traditional management approach in that projects are generally more complex, they progress in
phases, with each phase having unique and different goals, challenges, timelines, and
deliverables. Projects all have the same characteristics—they are unique and have a purpose
or goal, they have a lifecycle—that is they have a beginning, middle, and an end. In addition,
projects consist of tasks that are interdependent and also involve conflict within the project
team. A project management approach is an approach to business management that includes
the basic concepts of project management.
Project Management Concepts. A review of the current literature shows that the use of a
well-defined, disciplined methodology and infrastructure for the management of complex
projects is critical for a project‟s success in meeting cost, schedule, and performance
objectives (PMBOK, 2004; Kerzner, 2006). A project management approach includes the
infrastructure that facilitates the successful attainment of cost, schedule, and performance
objectives, and refers to the centralized, coordinated management of a project‟s tasks to
achieve the project‟s strategic objectives and benefits (PMBOK, 2004). Thus, a disciplined
project management approach includes the following project management concepts: project
lifecycle, integrated project processes, empowered cross-functional project teams, an assigned
and dedicated project manager, and an appropriate project organizational structure. These
project management concepts will be briefly discussed.
Project Life Cycle. An effective way of managing a project is to divide the effort into phases;
this provides better management and control. These phases make up the project lifecycle.
The phases of the project lifecycle can be used to manage and control the activities that are
conducted within each project phase. By using the phases of the project lifecycle and
establishing control gates or milestones between project phases, the project manager can
control the progress of the project. Although project lifecycles are different for each specific
type of project, many organizations establish a standardized lifecycle for their projects.
Typically, the project lifecycle consists of the following phases: conceptual, planning, testing,
implementation, and closure (Kerzner, 2006).
Integrated Knowledge Areas and Processes. A disciplined project management approach
includes the integration of various project management knowledge areas and functional
processes used throughout the project. The PMI has identified nine project management
knowledge areas that are generally applicable to all projects (PMBOK, 2004). These project
management knowledge areas and related project tools consist of the following:
Project Integration Management ensures that the various elements of the project are properly
coordinated. Tools related to this knowledge area include Project Charter, Project Plan, and
Change Control.
Project Scope Management ensures that the project includes all of the work, and only the work
required, to complete the project successfully. The Work Breakdown Structure (WBS)
supports project scope management.
Project Time Management ensures the timely completion of the project. This area involves the
development of a Project Schedule network and baseline.
Project Cost Management ensures that the project is completed within the approved budget.
Thus, the development and use of a budget and cost baseline are related to this knowledge
area.
Project Quality Management ensures that the project will satisfy the needs for which it was
undertaken. The use of quality requirement and specifications support this knowledge area.
Project Human Resource Management focuses on making the most effective use of the people
involved in the project. This includes the development and use of a Responsibility Assignment
Matrix (RAM) and resource histograms, among other tools.
Project Communications Management ensures timely and appropriate generation, collection,
dissemination, storage, and ultimate disposition of project information. A critical area of project
communication involves performance reporting and managing stakeholders.
Project Risk Management describes the process of identifying, analyzing, and responding to
project risk. Developing and using a Risk Breakdown Structure (RBS) and a risk matrix
support this knowledge area.
Project Procurement Management is focused on acquiring goods and services from outside
the performing organization. This critical area of project management supports the buying
organization‟s activities such as developing solicitations and awarding and managing
contracts. It should be noted that although the PMI project procurement management
knowledge area addresses the buying organization‟s procurement activities, it does not
address the organizations that are performing the “seller‟s” project management activities of
bid/no-bid decision-making, proposal development, and sales management. Many
organizations that have adopted a project management approach to their business operations
are managing projects from the contractor (seller) side, not from the buyer‟s side. Thus, a
focus on contract management from both the buyer (procurement) and the seller (proposal and
sales) is needed by project-oriented organizations. The current contract management
literature reflects a total view of contract management from both the buyer and seller‟s
perspective (Garrett and Rendon, 2005).
Although each of these specific project processes reflects different functional areas, a
disciplined project management methodology would integrate these various knowledge areas
to ensure that each of these areas are coordinated and integrated within the total project
management effort. In addition to integrated processes, the PMI Project Management Body of
Knowledge establishes five project management process groups. These project management
process groups include initiating processes, planning processes, monitoring and controlling
processes, and closing processes (PMBOK, 2004). Each of these project management
process groups includes various knowledge area processes that are part of that specific
process group. For example, the planning process group would include such phases as scope
planning, quality planning, risk management planning, procurement planning, and solicitation
planning processes. In order to effectively and successfully manage projects, project
managers must coordinate and integrate these various functional processes throughout the
total project effort. Integrated project processes are vital to successful project management.
Project Teams. Just as integrated processes are essential for effective project management,
integrated project teams are also critical. A disciplined project management methodology
includes the establishment of integrated project teams consisting of project team members
representing each of the different functional areas that are part of the project effort. For
example, a project team may include functional experts representing the various processes
used in the project, such as risk management, requirements management, and contracts
management. These functional experts on the project team are responsible for providing their
expertise in support of the project objective. Although the project team consists of these
various functional experts, the activities of these project team members must be coordinated
and integrated to ensure accomplishment of the project‟s objective. The coordination and
integration responsibility belongs to the project manager.
Project Manager. A critical aspect of a disciplined project management methodology includes
the assignment of a dedicated project manager to oversee the activities of the project. We
have already stated that the project effort includes various functional processes conducted by
functional experts on the project team. We have also stated that there are project
management process groups that are used to help integrate these various functional
processes. The role of the project manager, therefore, is to coordinate and integrate the
various project activities to ensure successful completion of the project (Kerzner, 2006). The
project manager is responsible for ensuring that all members of the project team support the
project‟s objectives. Thus, a dedicated project manager, who is responsible for managing the
project activities and ensuring the achievement of the project objectives, is an essential part of
a disciplined project management methodology.
Organizational Considerations. An appropriate organizational structure is also an essential
element of a disciplined project management methodology. An organizational structure that
supports the integrated project management processes, integrated project teams, and the
roles and responsibilities of the project manager will significantly contribute to the success of
the project. Large organizations typically utilize one of the three main types of organizational
structures—functional, matrix, and pure project (PMBOK, 2004). The degree of project
manager authority, resource availability, and budget control will be affected by the type of
organizational structure (PMBOK, 2004). Some of the factors to consider in selecting the
appropriate type of organizational structure include: the number of functional areas involved in
the project, the level of integration needed within the functional areas and between the
organization and the customer, the nature of the technology used in the project work, and the
organization‟s previous experience in performing the work required by the project.
Summary. This presentation provided an overview of project management as it relates to a
supply professional‟s job. An introduction to the Project Management Institute‟s (PMI) Guide to
the Project Management Body of Knowledge (PMBOK), including project management
process groups and knowledge areas, were discussed. An in-depth discussion of project
management tools such as project life cycle, project charter, project plan, work breakdown
structures (WBS), project schedules, risk management, and earned value management were
presented. References to the Project Management Institute‟s (PMI) Guide to the Project
Management Body of Knowledge (PMBOK) were made throughout the presentation.
REFERENCES
Book references:
A Guide to the Project Management Body of Knowledge (PMBOK© Guide), Newtown Square,
PA: Project Management Institute, 2004.
Garrett, Gregory A. & Rendon, Rene, G. Contract Management: Organizational Assessment
Tools. Ashburn, VA: National Contract Management Association, 2005.
Kerzner, H. Project Management: A Systems Approach to Planning, Scheduling and
Controlling. John Wiley & Sons, 2009.
Rendon, R. G., & Snider, K. F. (Eds.). Management of Defense Acquisition Projects.
American Institute of Aeronautics and Astronautics, Reston, Virginia, 2008.