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CASE STUDY - LAZ-SKAN PROJECT

November 26, 2011

MANAGEMENT OF PROJECTS
MODULE CODE (MMN213308)

MSC GLOBAL SUPPLY CHAIN AND LOGISTICS MANAGEMENT

CASE STUDY - LAZ-SKAN PROJECT

November 26, 2011

Characteristics of a good Project Manager The first step for the potential project manager is to understand the project environment. By this it is meant the range of different factors that may affect the project during its life. These include external issues such as the political, economic, social, and technological environment together with internal issues such as culture, responsiveness to change, executive and managerial support. The project environment can also include the intrinsic difficulty of the project defined by its scale, degree of uncertainty, and complexity. Project difficulty can be determined by looking at three aspects. The scale of the project, whether the project is basically repeating an existing formula or is it truly ground breaking. Finally whether the project is based on a single site focusing on one main activity or the project scope includes many organisations or skill sets. For a Project Manager, not only the technical skill necessary to understand the details of the project but also a whole set of interpersonal skills is required. Project managers need to influence, motivate, coordinate and generally keep an overall grip on the project. Being able to do this not only require a keen intellect but also disciplined and flexibility of the mind that can cope with them in the same circumstances. Besides this, there are a number of criterions for selection of Project Managers depending on the type of project for which hiring is being considered (Norman Gaither, 1999 & Alan Muhlemann, sixth edition) Who should be the Project Manager for Laz-Skan project and why? There are five key persons in the Laz-Skan Project: 1. Anuar Kamaruddin, COO of Malaysian business 2. Bob Brierly, Vice President of development, situated in USA 3. Halim Ramli, Vice President of marketing, situated in Malaysia 4. T.S. LIM, Head of Laboratory in Malaysia, who generated the idea of Laz-Skan 5. George Hudson, Head of instrument development Since this is a novel project (not usual) generated by a relatively small part of the group, project skills and enthusiasm / commitment should probably be rated highly. However, because it is also a very different project to the ones that have been developed earlier, it may be that organizational influence is also very important. No single candidate has all of these qualities because of which multi-criteria decision analysis would be used to identify the optimal candidate where the standards to be examined are taken in the columns for all the options available in the rows (vice-versa). Points are given to each candidate for the specific skill on the basis of case study (Hillier & Lieberman, 2009). Here an alternate is also introduced with standard supposed marking in case if none of the available options suit the project.

CASE STUDY - LAZ-SKAN PROJECT

November 26, 2011

Evaluation of skills Candidates Project Management Time for Project 1 0 1 3 1 3 0 2 3 0 11 8 8 14 9 Location Total

Technical Commitment Influence

Anuar Kamaruddin Bob Brierly Halim Ramli T.S. Lim George Hudson Someone else

1 2 1 3 3

2 1 1 3 1

2 3 2 1 2

2 2 1 1 2

11

Since Anuar Kamaruddin is the COO of the Malaysian business and belongs to the top management so he lacks the technical skills and may not be able to give proper attention to the project. Bob Brierly, although has an influence of organization but is located in US so has been marked Zero for last two criterions. Halim Ramli lacks the main requirement of project management skills along with the technical skills and lack of knowledge would result in less commitment to the project. This is why Bob Brierly and Halim Ramli got a minimum total marking of 8 and similarly George got 9. As an alternative a candidate with standard requirement has been supposed who got 11 marks. Now coming to T.S Lim, who got the maximum score of 14, he was the initiator of the new project so had strong technical skills and obviously his initiation shows his commitment and availability of time. Since he was working in the Malaysian capacity so location is also ideal but he had a short experience after his recent studies from Stanford he has lacks influence and the Project Management skills because of which he got low marks in these criterions. Therefore, the use of Multi Criteria Decision Analysis (MCDA) shows that T.S. Lim is the optimal Project Manager for the Laz-Skan.

CASE STUDY - LAZ-SKAN PROJECT

November 26, 2011

Project Risks Risks are a set of possible events that can negatively affect the viability of a project. These risks become vulnerable when an organisation lacks the professionals who could identify such events well before time. The process of controlling the risks efficiently starts with identification of the risks related to the project, analyse each of them, make a strategy and at last, control and document. This process is repeated till the end of risks related to the project.

In start of the project, risks and costs are low but during the execution stage, both factors increase gradually. At this stage, if the risks are not assessed or controlled, then it will impact on the cost and time line of the project. As shown in the figure, there is a proportion between cost and risks. As much as the risk is high, so higher would be the cost of the project. These costs are of four types: Direct (cost of materials) / indirect (administrative) Fixed (rents & salaries) / variable (production bonus & sales commissions) Recurring (repeated like salaries) / non-recurring (single time like capital investment) Normal (cost which is paid for normal time lines) / expediting (cost paid for accelerating the project activities) These costs are estimated in one of the two ways: Top-down costing: estimates which are fixed by managers and are competitive. Bottom-up costing: estimates which are fixed by juniors and are realistic but flexible.

The costs and timelines of a project may be crashed according to the requirements of the project which refer to acceleration of the activities that are on the critical path. Here critical path is the one which has the longest duration and delay in completion of any activity on this path will delay the project as a whole. While crashing the activities on the critical path, a sensitivity analysis is needed through which the non-critical paths are observed after each crashing so that may not become critical. And once they become critical as well, then it is necessary to crash all the critical paths in parallel otherwise it will neither be helpful to reduce the time nor will be cost effective as well. This is what we say Quality of the Project which

CASE STUDY - LAZ-SKAN PROJECT

November 26, 2011

refers to the completion of the project as per desire of the customer or end user within the timelines committed in the beginning of the whole process (Class notes). Risks for the development team 1. T.S. Lim is already working for the Malaysian business which is being run by Annuar Kamaruddin, COO and has roles and responsibilities to Bob Brierly as well, who is the VP of Development running CSU in United States. Previously, T.S Lim was only involved in existing business of modifications in custom products as per customer desire and now will be handling Laz-Skan as well. The consequence for T.S. Lim would be that he could be drawn in different directions at the same time with his two different bosses each wanting their work done. 2. Although Bob Brierly should be the immediate boss of T.S. Lim but his blind trust in his team may result in the occurrence of a vulnerable risk at any time. Just like in the beginning when T.S. Lim brought the idea of Laz-skan to Bob Brierly, he was relying on the facts and figures provided by his junior who was not that much experienced in his field. It gave an image of bottom-up costing which is realistic but not competitive. 3. Geneva Trade Show in April 2006 is the key to success for entering the market with new product but there is a strict deadline of time to manufacture the first batch of prototypes to be presented in the show. 4. Engineers had a very little experience and such a major project requires special attention. If these engineers face a situation which has never occurred before, then it might go wrong. Also the quality of the project may be affected due to strict deadline for the trade show discussed above. Suggestions for the expected Risks 1. T.S. Lim should report to a single manager so that he may properly concentrate on his day by day tasks. This is an important factor because Project Manager needs a relaxed mind to bring innovative ideas and improvements to the project and if there is a pressure of work from two seniors then it will affect the quality of the project badly. Not only gets the performance of the Manager but also the working of his whole influenced with such atmosphere which would be more stressful in this case. 2. T.S. Lim should report to Bob Brierly as it is, but with very strict reporting relationship. Bob Brierly should behave like a professional person and should be aware of what the company expects from that seat because frankness in the work area may compromise the objective of the organization. 3. There are two critical paths as shown in the network diagram of the Laz-Skan project: i. ii. 1-4-5-6-7-8-12-32-33-34-35-36 and 1-4-5-6-7-11-8-12-32-33-34-35-36

CASE STUDY - LAZ-SKAN PROJECT

November 26, 2011

Both of these belong to the Vision Support System in the Laz-Skan project. The maximum time that the project will take is 48 weeks, no matter whichever path is adopted. The project started in February 2005 and had to complete before April 2006. Although time is too short for arranging the prototypes of the new product to the Geneva Trade Show, but since the time estimates used in the PERT analysis here, are those gathered from the Bottom-up costing method, so are more realistic or might have greater margins from the supervisors. Along with that, cost per week for accelerating the critical activities is too high. Therefore, being four to six weeks ahead of the deadline even with the relaxed activity times, cost crashing is not required here actually. The only thing that could be focused on is the motivation of team members and a strict follow up of each task.

Engineers should be gradually trained on the job so that they may not get surprised to a certain situation during the project execution. This training may be outsourced from a professional institution or a senior person from within the organization like Anuar Kamaruddin or Bob Brierly may share his relevant experiences with the young intakes to give them better exposure of what is expected in a certain situation. But since COO has been working for the organization for a long time ago and is better aware of the issues related to the execution of different projects in UPM so the priority should be given to him rather than investing more on external Trainer or time and again visits of Bob Brierly from US.