excelling at material handling project management

Excelling at Material Handling Project Management

Track 3 Session 1

Director, Engineering and Global Operations ManagementClarkson University

[email protected](315) 268-5982

Mike Ensby

mailto:[email protected]

ACHIEVE OPERATIONAL EXCELLENCE ○ 2008 MATERIAL HANDLING & LOGISTICS CONFERENCE ○ SPONSORED BY HKSYSTEMS

Abstract

• Managing the life-cycle of a supply chain technology project is like nothing else. This collection of tools and topics includes the “Value of the Effort” (VOE) life-cycle, project stakeholders & tradeoffs, scope definition & creep, and emphasizes qualitative and quantitative tools of project planning based on Design for Six Sigma (DFSS) quality. This class will appeal to those who take on responsibility and accountability in project execution and bring insight on taking a more proactive approach to project management. 3


Agenda• Process Project Management• Stakeholders and Scope• Design for Project Quality• Project Process Inputs and Outputs• Prior Proper Project Planning

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ACHIEVE OPERATIONAL EXCELLENCE 2008 MATERIAL HANDLING & LOGISTICS CONFERENCE SPONSORED BY HKSYSTEMS

An organization’s program/project management system is a set of tools, techniques, resources and procedures used to manage a temporary effort. It can range from informal to formal, and aids in guiding a project to successful completion. The system is a set of processes and the related control functions that are consolidated and combined into a functioning unified whole.

• Project Management – the application ofknowledge, skills, tools, and techniques to variousactivities to meet the agreed-upon requirements.

Project Management as a Process

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Project Integration ManagementProject Scope ManagementProject Time ManagementProject Cost ManagementProject Quality Management

Project Human Resource ManagementProject Communications ManagementProject Risk ManagementProject Procurement Management

Project Management Knowledge Areas

Organizes the 44 PM processes into Nine Knowledge Areas

While the knowledge, tools, skills and techniques represented by these areas are important, effective Project Management also requires that project managers and teams understand and use special knowledge and skills from these and other sources.

Project Management System

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Integrated Management of Projects

CustomerEnvironmental Analysis

External InternalFirm

mission, goals, and strategies

Priorities

Projects Environmentand CultureSystem

Project Implementation

ScopeWork Breakdown

NetworksResources

Cost

Organization

Leadership Teams

Partners

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Project Management Challenges

• The definition of a project seems straight forward – Did you know?

• Several studies suggest that over 30% of all IT projects get cancelled before completion and that 88% of these projects are behind schedule, over budget or both?

• Why do you think that is?Scope Creep

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Project Expectations – Scope is Critical – The Big Q

Identify PotentialObjectives

Evaluate“Musts,” “Wants,”And “Like Tos”

Quantify the Opportunity

Cost Schedule

Scope

???9


“Value of the Effort” (VOE)Project Management Model

The “Theory” of the Triple Constraint:

Only One Variable can Dominate

One Variable must be “Relaxable”

The Customer Cannot Have, “Everything Right Now for Nothing!”

Time

Scope/Performance

CostQuality

Stakeholder Satisfaction

A change to any one of the attributes will result in a change in at least one of the other terms, fully evaluate and communicate the impact of any change to the entire project.

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Project Management TradeOffs – An Example

Big “Q”Quality

Performance

X

Cost

X

TimeX11


The Project Life Cycle

Cos

t Pro

gres

sion

Initial PhaseIntermediate Phase

Final Phase

Time

“Visible” use of resources across a project life-cycle.

Project Management Process Framework

[Monitor Control]

Define Plan Implement Closure

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The Potential Consequence of “Planning Lite”

Holding The Gain

The “Sag” Principle

Pro

ject

Pla

n

Time

Not Holding the Gain

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Three Views of Project Cost

Project Duration

CommittedActual CostScheduled Budget

Cos

ts$6,000

5,000

4,000

3,000

2,000

1,000


Cost of Project Quality

• Refers to total cost of all efforts to achieve project process quality

• Includes all work to ensure conformance to requirements, as well as all work resulting from non-conformances to requirements

• Three types of cost are incurred:Prevention costsAppraisal costsFailure costs (internal and external)

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Historical Cost of Quality Model

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Prevention

Appraisal

Internal Failure

External Failure


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Costs of Poor Project Quality

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Engineering TimeManagement TimeProject Team Idle TimeIncreased Team TurnoverDecreased MoraleRework, Scrap, InspectionsLost Future Project Work

Cost OverrunsBusted Schedule

Contractual Claims TrueFailureCosts

CommonlyMeasured

FailureCosts

HiddenFailureCosts


VOE PLC – PMI PMBoK – 6 Sigma

• PMBoK Section 8.3: Perform Quality ControlMonitorAuditControlQualitative ToolsQuantitative Tools

• Proactive, Pre-emptive, and Possible!

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PLC Effort: Visible vs. Value

Low

High

Define Plan Implement Closure

[Monitor Control]

Leve

l of E

ffort

Value of Effort

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Design for 6 Sigma Project Process

FEEDBACK LOOPS

FEEDBACK LOOPS

FEE

DB

AC

K L

OO

PS

Develop“Prototype/

Mockup”

StakeholderFeedback

Resource-Laden

Schedule

“Customer”IDs Need

DevelopFunctional

Specs

Verify Specs w/

“Customer”

“Ballpark”ResourceEstimates

FunctionalSpecs toDesign Specs

Design Specs to

Engineering Specs

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The Inputs and Outputs of VOE PLC

VOE PLC Stages DEFINE PLAN IMPLEMENT

Process Outputs

Process Inputs

CLOSE

Scope/Big Q

Resource Laden Schedule

Turnover(Sat/Dis)

Org Learning

Resource Laden Schedule

Overarching Checks and

BalancesMonitor Control

Metrics, Measures, and Measurement

Bounded Solution Deliverables

DeliverablesScope/ Big Q

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Effective VOE Metrics

• Meaningful to Stakeholders• Understandable• Show Trends• Timely• Economical• Actionable

METRICS

Project Processes

Objectives

Planning Tools

Key Deliverables

ProjectScope

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Progressive Cost of Quality Model

Prevention

Appraisal

Internal Failure

ExternalFailure

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Quality Tools for DFSS Project Management

• Seven Statistical Tools

Ishikawa DiagramForce Field AnalysisHistogramPareto ChartControl Chart with Spec LimitsCheck SheetScatter Diagram

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• Seven Planning ToolsAffinity DiagramInter-relationship DiagraphTree DiagramPrioritization MatricesFlowchart/Process MapProcess Decision Program ChartActivity Network Diagram


Control Chart – Voice of the ProcessUpper Specification USL

Lower Specification LSL

Upper Control Limit UCL

Lower Control Limit LCL

XControl Limits+ 3 σx

Distribution of Averages

Process Spread+ 3 σ

Distribution of Individual Values

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Ishikawa Diagram – Planning Tool

MATERIAL MACHINE

MANPOWERMETHOD

TASKDEF’N

FACTOR 1

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Prior Proper Planning –The Sub-processes• The “Resource-laden Schedule” is:

Work Breakdown Structure (WBS)Risk Breakdown Structure (RBS)

o Failure Modes and Effects AnalysisOrganizational Breakdown Structure (OBS)Schedule Development

o Time Estimationo Activity Sequencing

Bottom-up Budgetingo Setting Up for the “Three Views of Project Cost”

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Work Breakdown Structure

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Structured Risk Analysis - FMEA. Risk Assessment Matrix

Risk EventProba-bility

Undetecta-bility Severity Score

Order of Importance Trigger Response

Evaluate Market 7 9 10 630 1Skewed Results

Use a bigger and more

Representativesample

Design and Development

Plan 4 5 8 160 5

Forgot Customer

neededfeature

Have list of needed features

present

Risk Analysis 6 4 9 216 3

Non-Identified

RiskHave extensive checklist and

visuals

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Organizational Breakdown Structure

Task Name

Junior MarketingSpecialist

MarketingMgt

OpsSpecialist

ProjectMgr.

Evaluate market Primary Secondary Tertiary

Develop Business opportunity Tertiary Primary Secondary

Customer preference study Primary Secondary Tertiary

Business evaluation (NPV, etc.) Primary Secondary Tertiary

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Activity on Node Scheduling

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http://upload.wikimedia.org/wikipedia/commons/6/61/Project_network.png







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Bottom-up Budget

Task Name Task ActionHourly

RateDailyRate Task Time

Total Task Cost

Project Management Tasks Proj. Mgr. $147 $1,176 200 $29,400

Evaluate Market Condition Jr. Mktg. Spec. $51 $408 96 $4,896

Develop Business Opportunity Mktg. Mgr. $101 $808 112 $11,312

Customer Preference Study Jr. Mktg. Spec. $51 $408 168 $8,568

Business Evaluation (NPV, etc.) Jr. Mktg. Spec. $51 $408 32 $1,632

Period Cost= $55,808 36


Prior Proper Planning –The Sub-processes• The “Resource-Laden Schedule” is:





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Voila! – Resource-laden Schedule

ction Equipment

CelebrationStart: 6/10/09 ID: 14Finish: 6/10/09 Dur: 1 day

Res: Design Engineer[400%],

onentsID: 11

9 Dur: 5.83 days?

sing Agent

Install Production EquipmentStart: 5/4/09 ID: 13Finish: 6/9/09 Dur: 25 days?

Res: Development Engineer[300%]

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VOE PLC: Organizational Learning

Levelof ValueofEffort

Low

High

Project Evaluation (Audit) Process

Change Management System

Project Manager Roles and Responsibilities

Closed-Loop Planning-Monitor-Control System

Goal/Budget Priorities Org. Monitor/Control

Proj. Estimates- Time- Risk- Budget

Resource (Re)allocationCrashingControl

Cost Containment

“Learn Curve”Termination

Goal AssessmentFinal Report

Define Plan Implement Close

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Key Takeaways

• Project Management is a Key Strategic Enabler• A Systems Approach to PM Makes Sense• A Systems Approach Requires Six Sigma

Principles• A Systems Approach is not Simple….• ….But then again, Nothing Long-lasting usually

is!

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Additional Resources

• “A Guide to the Project Management Body of Knowledge,” 3d Edition, Project Management Institute, ISBN: 1-930699-45-X

• http://www.pmi.org• “Project Management: the Managerial Process”, 4th

Edition, Gray and Larson, McGraw-Hill Irwin, ISBN: 978-0-07-352515-4

• “Project Management: a Managerial Approach”, 7th Edition, Meredith and Mantel, John Wiley & Sons, ISBN: 0-471-49996X

• “Project Management: a Systems Approach to Planning, Scheduling, and Controlling,” 8th Edition, John Wiley & Sons, ISBN: 0-471-22577-0 41

http://www.pmi.org/


Questions?

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excelling at material handling project management

Documents

logistics

logistics

risk breakdown

john wiley

work breakdown

prior proper

activity sequencing

systems approach