Project management - Business improvement
Project Management for Business Improvement
Defining the Project and its Scope
This article describes the approach to project management as it relates to business improvement projects. Obviously there are many forms of project such as building bridges or oil pipelines which share techniques (such as network approaches to planning) with these exercises but there are specific issues relating to the implementation of new ways of working that deserve specific consideration.
There are a number of key aspects to successful management of a business change project including planning, project launch and communication as well as the on-going management of the project. However, this article is focused on the first and foundational step of getting the project correctly defined and scoped. Without this there is no chance of success.
Project Definition and Scope
The fundamental first step is to define any major project. It is very easy to talk about improvement without saying what we mean - 'we want to give better service' is a classic such statement. What do we mean by 'better'? Perhaps we are simply looking at on-time delivery, meeting the commitments we have made. However we may be looking also to reduce our lead times - quoting and meeting a six-week delivery is all very well but if the market wants four-week turnarounds then we have to think again.
Further, the improvement may be required across our product range, but may be limited to finished products, or perhaps to aftermarket supply. Perhaps the problem lies in the ongoing maintenance we offer to our installed customer base. If we supply a range of finished products, some of which are standard 'off the shelf' models and some heavily designed and configured to order then we need to be sure where to direct our efforts.
We then need to be more specific about this word 'better', which can de interpreted in different ways by different people. We may recognise that the service we offer our customers is adversely affected by the way we handle orders in the front end of the business and that we need to find a better way of doing things. This is where subjective interpretations of the concept of improvement come into play - credit control departments may feel that batching orders from new customers for weekly submission to an external agency offers 'efficiency' while others may see this as a factor in increasing the time to market.
So the first step in any improvement project is established - we have to sit down and specify exactly what we mean by improvement. We have to look at the end objective and be clear what we mean by it so that we set the project off in the right direction. To do this we have to ask ourselves some searching questions - such as:
- By 'on-time delivery' do we simply mean the number of orders shipped late, or do are there other factors? For example, a company building bridges around the world might settle for zero per cent on time if no project were ever more than two days late in reaching completion.
- Can we balance potentially conflicting objectives? For example, customer service versus maximised monthly sales? If our maximum manufacturing output gives billings of £2M per month and corporate targets require us to achieve this figure on a regular basis then loading customer orders to no more than this value will probably mean failure to meet this figure - one minor delay on one order will mean missing the target. On the other hand, taking orders in excess of capacity guarantees customer service of less than 100% before we've even started.
- By 'on-time delivery' do we simply mean the number of orders shipped late, or do are there other factors? For example, a company building bridges around the world might settle for zero per cent on time if no project were ever more than two days late in reaching completion.
How Do We Make Things Better?
The bottom line to all improvement projects is that we make things better by changing the way we operate. This leads to an immediate area of conflict in projects related to the implementation of IT solutions - for example integrated Enterprise Resource Planning (ERP) packages or eCommerce solutions which speed communications with customers and suppliers. There will be people in the company who see the implementation as a goal in itself, and these people must be taught that the system is a tool for doing things differently. (ERP is a field in which one of the classic mistakes is to introduce the system around current ways of working and then seek to make change later.)
There are some radical ways of doing things differently that have brought substantial benefits to organisations in many industries and markets. Some examples:
- Management of shop floor stock in manufacturing industry by vendors who visit on a regular basis, identify the items needed on the next visit and then deliver. This saves considerable internal administrative effort and double-handling of components that, quite simply, do not justify the effort that they consume.
- Service engineers ordering and collecting purchased items without the delay caused by central procurement.
- Sales staff having immediate access to details of customers and potential customers so that when discussing future business they know which tactics will bring the highest possibility of orders.
It may seem strange for an article on managing projects to concentrate on examples of new ways of doing business, but this highlights something that will be a recurring theme of this article. The fundamental lesson to be learned before managing change within a business is that all the technical project skills in the world are of no benefit without the understanding of how the organisation might go about its work more efficiently and profitably.
Project Definition
~ Ian Henderson ~
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