Project Management PM PLAN Project Management Day 2

Project Management (PM) PLAN Project Management Day 2 in the am

The Planning Process Project Management Cook Day 2 in the am # 2 / 30

Scope Management Progression Ø Conceptual: Realization of problem & project based solution Ø Initiation: specify a rough statement at the beginning of a project or commencement to the next phase (e. g. , Charter) Ø Planning: developing documents to provide the basis for future project decisions Ø Definition: subdividing the major project deliverables into smaller, more manageable components Ø Verification: formalizing acceptance of the project scope Ø Change control: controlling changes to the project scope Project Management Cook Day 2 in the am # 3 / 30

Business Context Ø Our 4, 000 person Su. Zhou SOE is to be privatized in 2 years Ø We make washing machines with a factory cost of 600 RMB and are having difficulty selling them retail at 800 Ø Haier easily sells a comparable model for 1, 500 RMB Ø The Int’l Appliance Show showed many Chinese brands, but only Haier & famous Japanese brands fared well afterwards Ø Our distributors complain of appearance, quality & image Ø Our slow/no debt repayment has cut off bank financing Ø We have until 2003. 7. 1 to have a new plant operational Ø This is a desperate situation, nothing is sacred: not location, not technology, not brand, not even time and budget Ø Next president will probably be one of the project leaders! Project Management Cook Day 2 in the am # 4 / 30

Lu Shan Manifesto (initiation) Ø Five Projects would be started: Ø Raise capital (sell RE development rights) Ø Re-engineer company (no slack; no work = no pay) Ø Develop new prototype (negotiate with marketing) Ø Get Production ready (hi quality, subcontract) Ø Plan market transition (kill old, launch new) Ø Our “new green baby” is to be launched on 6. 1 and be low energy and low water with a new brand name & positioning Ø On 2002. 12. 2 project leaders will deliver “Project Plan” Project Management Cook Day 2 in the am # 5 / 30

Project Leaders Presentation Ø “We can deliver!” But, we need: Ø Sponsor: Chairman, Organization: Project Ø Style: Autonomous, Priority: Dedicated, Ø Resources: (through 2003. 7. 1) Talent: Negotiated Budget: M RMB 1. 25 (+/- 20%, -3. 35 savings) in new funding Milestones: 2. 17 mock-up, 4. 16 exposition, 5. 15 pilot, 6. 1 Launch Talent: Huang Da, Finance; Song Mai. Ling, Marketing; Liang Si. Li, Engineering; Chen Yun, Manufacturing; and Chairman Liu Shao. Qi Freedom: New brand, new positioning, and expanded subcontracting Ø Goals: New product line image: “green”, “smart”, moderate price, low cost Good reviews after exposition Project Management Cook Day 2 in the am # 6 / 30

Problem / Opportunity Ø Market perceives our products as too traditional and undifferentiated Ø Using current technology, we can create the perception of offering greater value while holding our costs in line Ø Need to target to upscale, younger urban apartment owner Ø Must avoid a major redesign of our core technology Ø Take 2 ideas from Japanese: subcontract and reposition Ø Create a new model line at incremental development costs Ø Must move very fast; exposition is in April 2003, or lose a year! Ø Gain market share with environment & energy conservation Project Management Cook Day 2 in the am # 7 / 30

Goals Ø Revitalize the company with a new product line, targeted marketing, upscale positioning, and low cost digital technology, but based on our core values and capabilities Ø Revitalize finances by focusing on core capabilities in assembly, platform, and marketing; shed nonperforming assets; subcontract rest Ø Possibly, use the success of the project to legitimize a successor to the retiring president Project Management Cook Day 2 in the am # 8 / 30

Objectives Ø Launch a new brand based on “Upscale Conservation” on 2003. 5. 15 – 6. 1 Ø Design, develop, and produce new product by 2003. 7. 1 Ø Have a successful exposition with visitors, distributors, and press coverage all up over 100% over previous year Ø Distribute without resistance for 150% of production costs Ø Sales up by 50% during last half of 2003, double in 2004 Ø Meet or exceed all current product quality measures Project Management Cook Day 2 in the am # 9 / 30

Getting Started Ø Line up appropriate “symbolic” sponsor Ø Quickly assemble a strong project team Ø Get key stakeholders involved in the project early Ø Prepare a detailed analysis of the business problem & solution and develop project measurement techniques Ø Use a phased, architect-ed approach Ø Make a project charter that formally recognizes the project and provides direction, objectives & budjet Ø Get sponsor, management & key stakeholders to agree Project Management Cook Day 2 in the am # 10 / 30

Phoenix Project Charter Ø Name: Phoenix Project (Engineering - new product line) Ø Start: 2002. 11 Finish: 2003. 6. 30 Sponsor: Liu Shao. Qi Ø Manager: Liang Si. Li, x 6125 liang-sili@ourco. com. cn Ø Objective: Develop a new product line, with targeted marketing, upscale positioning, and low cost digital technology, based on our core values and capabilities Ø Budget (RMB): Direct Labor, 650, 000; Capital, 125, 000; Expenses 375, 000 Subcontracted 350, 000 (ex. Inventory) Ø Approach: · Split into 2 projects: α = make a working model, β = support launch effort · Satisfy marketing with lo water/energy product with upscale appeal · Use digital technology for features and employ subcontracting a lot Project Management Cook Day 2 in the am # 11 / 30

Phoenix α: Scope Ø Phase 1: Alpha Phase – make a working model Ø With marketing, “guestimate” until convergence Deliverable: 2002. 12. 31 preliminary product spec Deliverable: 2003. 3. 16 product spec with price/cost tradeoffs Ø With production, learn from Japanese, not USA Deliverable: 2002. 15 subcontract strategy Deliverable: 2003. 2. 16 subcontract list of items & prospects Deliverable: 2003. 3. 2 volume pricing Deliverable: 2003. 3. 16 preliminary production plan Ø Development, bias towards “off the shelf” and hi volume Deliverables: 2003. 2. 16 mock-up, 2003. 3. 16 (3) alphas Project Management Cook Day 2 in the am # 12 / 30

Phoenix β: Scope Ø Phase 2: Beta Phase – support launch effort Ø With marketing, coordinate for show & launch Deliverable: 2003. 4. 10 appliance show Beta prototypes (3) Deliverable: 2003. 5. 4 operating manual draft for marketing Ø With production Deliverable: 2003. 4. 30 pilot run of 100 for “children’s day” Ø Development Deliverable: 2003. 5. 19 performance & reliability testing report Deliverable: 2003. 5. 19 full CAD/CAM production drawings Deliverable: Rev. 1 Software for operation and maintenance Project Management Cook Day 2 in the am # 13 / 30

Activity Definition & Sequencing ØPreliminary Production Report Alpha Phase ØSubcontract Strategy ØSubcontractable Items ØSubcontract Prospects ØPreliminary Production Plan Ø Product Spec Ø Preliminary Product Spec Ø Product Specification Ø Cost Tradeoff Report Project Management ØConstruct Mock-Up ØPackaging ØMechanical ØConfiguration ØElectrical ØMock-up Demo Cook Day 2 in the am # 14 / 30

Activity Definition & Sequencing Beta Phase ØPilot Run (100) Ø Design Betas ØBuild Documentation ØMold Construction ØProcure ØIncoming Test ØComponent Test ØAssemble ØSystem Test ØShip Ø Pkg, Mech, Config, Elec, Digital, Operation, Maint, QA Ø Construct Betas (3) Ø Ø Ø Procure Build Test Demo Ship Project Management Cook Day 2 in the am # 15 / 30

Resource Planning Project Management Cook Day 2 in the am # 16 / 30

Guidance in Making WBSs Ø A unit of work should appear at only one place in the WBS. Ø Every WBS item is the sum of the WBS items below it. Ø A WBS item is the responsibility of only one individual, even though many people may be working on it. Ø The WBS must be consistent with the way in which work is actually going to be done. Ø Project team members should be involved in developing the WBS to ensure consistency and buy-in. Ø Each WBS item must have a objective scope of work. Ø The WBS must be a flexible to accommodate inevitable changes while properly maintaining control of the work content in the project according to the scope statement. Project Management Cook Day 2 in the am # 17 / 30

Activity Duration & Scheduling Project Management Cook Day 2 in the am # 18 / 30

Activity Duration & Scheduling Project Management Cook Day 2 in the am # 19 / 30

Task Dependency Diagram Project Management Cook Day 2 in the am # 20 / 30

Precedence Diagramming Method (PDM) Project Management Cook Day 2 in the am # 21 / 30

Cost Estimating Project Management Cook Day 2 in the am # 22 / 30

Cost Budgeting Ø Cost budget involves allocating project cost estimates to individual work items (based on WBS) Ø Cost budget provides cost baseline – a time -phased budget that the project managers use to monitor and measure cost performance Project Management Cook Day 2 in the am # 23 / 30

Quality Assurance Ø Quality assurance ensures that quality products are delivered Ø Another goal of quality assurance is continuous quality improvement Ø Benchmarking can be used to generate ideas for quality improvements Ø Quality audits help identify lessons learned that can improve performance on current or future projects Project Management Cook Day 2 in the am # 24 / 30

Quality Resources Ø Deming led Japan to top quality with his 14 points Ø Juran wrote the Quality Control Handbook and 10 steps to quality improvement Ø Cosby wrote Quality is Free Ø Ishikawa developed quality circles and using fishbone diagrams Ø Taguchi developed methods for optimizing the process of engineering experimentation Ø Feigenbaum developed the concept of total quality control Project Management Cook Day 2 in the am # 25 / 30

Project Plan Development Ø A project plan is used to coordinate all project planning documents Ø Its main purpose is to guide the project execution Ø Project plans help the project manager to: Ølead the project team Ødetermine the project status Project Management Cook Day 2 in the am # 26 / 30

Project Plan Contents Ø Executive Summary (what will help the next higher level of management) Ø Business Problem/Opportunity, Goals and Objectives Ø Solution, Organizing Principles, Competitive & Strategic Impact Ø Project Charter, Scope, Architecture, Phases, Deliverables, WBS (Levels 1 & 2), Success Measures, and Quality Plan Ø External & Internal Dynamics, Risks & Key People Ø Collaterals: Strategic Benefits, Alternatives, Contingencies, Check Points Ø Financial Analysis: Costs, Cash Flow, Capital Expenditures Ø Appendix: Gantt Chart, PERT Chart, Selected Drawings Project Management Cook Day 2 in the am # 27 / 30

Planning Outputs (Wish List) Project Management Cook Day 2 in the am # 28 / 30

Planning Outputs (More) Project Management Cook Day 2 in the am # 29 / 30

Concluding Remarks Ø Questions and Answers Ø Thank you, again. You can find a copy of this lecture (550 KB) on the Internet at: http: //cha 4 mot. com/PM Project Management Cook Day 2 in the am # 30 / 30