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Heublein: Project ManagementandControl SystemJason YearwoodBQM 444 – Project ManagementJune 22, 2014Mr. Jerry A. MosierSouthwestern College Professional StudiesIntroductionProjects come in different sizes and range from developing software to building a skyscraper. Every project regardless of size or industry needs to have a project management system in place. Aphale (2014) explains “Project management has emerged as a crucial factor that determines the success of an organization” (para 3). A project management system can be efficiently and effectively used to manage a project while meeting the time, budget and scope requirements in the contract. Project management involves planning, scheduling, executing, monitoring, and terminating a project. Within these five phases or stages of project management are other tasks that must be completed. Project management is difficult and project managers have to develop systems to assist project team members in their assigned tasks. One of the systems in project management, which falls under monitoring, but is actually in effect from the planning phase, is control systems. Control systems make certain that the project manager is in control of the project’s processes and aligns reality with what was planned (Mantel & Meredith, 2012, p. 475). This paper will examine project management and control systems; it will also highlight how Hueblein, Inc. implemented project management and controls systems to improve the way they managed all of their projects.SummaryHueblein Inc., develops, manufactures, and markets consumer food and beverage products domestically and internationally. Hueblein Inc. had a 10 step “capital project process” to oversee projects in the organization. The organization realized this process was not working and they had to develop and implement project management and control (PM&C) systems. Heublein Inc. did not want to implement a project management system that was already in place in another organization or a basic template for project management. They wanted a project management system that reflected the diversity of their business (Mantel & Meredith, 2012, pp. 268-269). Hueblein Inc. understood that the staff did not have any experience in project management or control systems, so they decided to hire a consultant that was knowledgeable in these two areas and had experience dealing with this type of organization. According to Mantel & Meredith (2012), “[the consultant for this task must have] the requisite knowledge, compatibility with the style and goals of the firm, and the ability to communicate to all levels and types of managers…..because of the diversity of the engineering department structures and personnel involved” (p. 269). After the consultant was selected, the program manager was selected from inside the organization. Once the right staff was in place, they established several ground rules concerning the project management and control systems implementation process. The consultant was instructed that the project management and control systems were to be developed as unique as the individual groups in the organization. The consultant was also notified that the directors of each group would be hands-on in the design and implementation of the project management and control systems. This would ensure that directors have a sense of ownership and since they have experience in the systems and also understand what each system needs (Mantel & Meredith, 2012, p. 269). When developing these systems, Heublein Inc. ensured the systems would reflect the way the company was structured, the types of projects that they will undertake, and the personnel in each group. Mantel & Meredith (2012) explains:“The emphasis was to be project planning as opposed to project control. The purpose of PM&C was to achieve better performance on projects, not catch mistakes after they have occurred. Success was the goal, rather than accountability or identification of responsibility for failure” (p. 269).Designing the project was challenging given the ground rules and diversity of each group; attempting to establish one standard for managing projects was rejected. Hueblein Inc. planned a phase by phase implementation of the PM &C. The implementation of the PM&C consisted of four phases, Phase I-educating engineering department managers (which included a three-day training session outlining project management principles and assisting senior managers in their goal and method for implementing a PM&C system), Phase II-PM&C system design, (which consisted of several weeks of break in between phases to allow the managers to brainstorm about what they learned in the first phase. This phase was set this way in order for the managers to have input on how the PM&C system would be created for the organization), Phase III-project plan development, (this phase resulted in the project manager designing a project plan for the PM&C system), Phase IV-implementation (this phase focused on the implementation of the approved plan). In phase II, the engineering managers created a list of options for the project management system that can be customized for each project and also for corporate tracking requirements (Mantel & Meredith, 2012, pp. 269-270). The list includes ten options for project managers to utilize when the projects are not critical or major, but when the projects are critical or major; the choices for which options are utilized are left up to the project manager (Mantel & Meredith, 2012, p. 270). Heublein Inc. understood this simple principle of project management, “Through proper project management, you can assure that the purpose/vision and goals of the project are maintained, all while supporting the audiences’ tasks and objectives” (, 2013, para 2). Heublein Inc. list of options for project managers to use includes the first option, introduction, which explains why the project is needed. The introduction was written in order for everyone involved with the project to have a basic understanding of what the project entails and also it gives senior management the answers they need for some of their basic project questions. It will give the functional managers a chance to start brainstorming about the resources they will need to complete the project. It will also give them a chance to conduct research using historical documents or external sources for the tasks that needed to be completed in order to populate the WBS. Finally, when everyone involved in the project finished reading the introduction, it made it easier for them to buy-in to the project and be aware of its value to the organization. The second option is project objectives, what are the specific reasons for this project. The project objective must have a structure that starts from general descriptions to particular descriptions of the objectives. Project managers utilize an acronym SMART when developing their objectives. According to Platt (2002) “SMART stands for Specific, Measurable, Achievable, Relevant and Time-based” (para 4). Specific deals with clearly identifying the objective, Measurable deals with whether or how the progress or success of the objective can be measured, Achievable is the organization asking if the objective can be achieved and how and with what process can it be achieved, Relevant asks, is the objective something that adds value to the organization and the project or is it something this organization needs, and Time-based outlines that a task has to start and end sometime within the project life cycle. The third option is project/program structure, defines how the project will be structured. It displays the objectives, the components which make up the deliverables, defines the tasks that produces the components and specific reasons as the results, and displays how the goals, components and tasks associate with each other. The work breakdown structure (WBS) is the means by which this information is displayed. Malone (2012) explains “a well-composed WBS is essential because it serves as a foundation for initiating and planning the project” (para 4). Each WBS is unique to the organization and the project and should be created with each functional manger’s input. The reason for doing this is to eliminate any type of confusion when different departments use the same words to describe a resource. The WBS needs to reflect the changes made in the project, show how the changes affect other areas of the project, and the project as a whole (Malone, 2012, para 9, 10, 11). The fourth option is project costs, which primarily deals with estimates by using the WBS to identify the tasks to be performed. The first thing the senior manager does is list the resources for the project, and then the budget is approved according to the resources listed. As Mantel & Meredith (2012) insists “The budget is not simply one facet of a plan, nor is it merely an expression of organizational policy; it is also a monitoring and control mechanism” (p. 285). The budget is a tool to be used by the accountants, finance department, senior management, and the project team members that will show how much money is available along with when and how the money is being spent. Each project is unique and the use of cost estimators will be valuable in developing the budget. Budgets are usually forecasted and there is a lot of uncertainty in budgets. The budget estimator must be able to forecast using either historical documents from a similar project or their experience. In project management the two most popular budgeting strategies are top-down or bottom-up budgeting. Top-down budgeting is where the senior managers using the WBS estimate the budget based on their experience. The budget is sent to lower-level managers who are expected to accept the budget and conduct further budget analysis to see if the budget is appropriate for their particular portion of the project. Bottom-up budgeting is where the actual individuals or departments contracted to complete a portion of the project, using the WBS, estimates their budget. The estimates are then sent to senior managers for review, acceptance, modifications or denial. While bottom-up budgets are not popular, they are the most effective and accurate (Mantel & Meredith, 2012, pp. 285-291). Each organization will have a strategy for budgeting and estimating accordingly by what is detailed in their project management system.The fifth option is network; it could be displayed as a diagram and is used to show the tasks that must be completed, the duration, and its predecessors and successors. The network aids in the scheduling, planning, implementing and ultimately, control of the project. The network can be displayed in two forms AOA (activity-on arrow) and AON (activity-on nodes). The network shows the sequence of the schedule and it shows which activities can be crashed. It also shows which tasks are critical to the project, which if they are delayed will also delay the project (Mantel & Meredith, 2012, pp. 338-339). The WBS is the main source for building the network and the network can be modified to the standards in the project management system or whatever each manager feels will work best for their section. The sixth option is schedule, scheduling determines when a certain task associated with the project will be completed. Scheduling is important because it tells the project manager when and where resources are needed to complete a task for the project. As Chestnut (2014) asserts “Project managers must strategically define each activity to ensure that the project moves smoothly and logically with minimum delays and work stoppages” (para 2). The schedule has to be reviewed daily by the project manager, functional managers and project team members to make certain that the right resources are on time, in the right place and also to see if that particular resource is needed for another project that the organization has going on at the same time. One of the most widely used tools for scheduling in project management is the Gantt chart (Chestnut, 2014, para 5). The project manager should indicate in the Gantt chart which resources are going to be utilized on another project. This will give the project manager a constant reminder when he views the Gantt chart that the resource should be used efficiently while it is present on the project. If the schedule is not accurate or hard to comprehended, then the project is doomed to fail. The seventh option is resource allocation and as Martin (n.d.) states “resource allocation means determining which resources are required for which activity, deciding on the total amount needed, and making sure they are available when they are needed” (para 2). Scheduling and resource allocation work hand-in-hand and gives the project manager a view of where resources are allocated, when they are needed and for how long. They work together to make sure that there is a plan for all the resources and also that resources can be ordered, transported and available according to the schedule. Resources include people, tools, equipment, and special machinery. All these items must be managed by the project manager, but should be monitored intensely by the functional managers. Project managers might utilize a resource that is scheduled to go to another project while they have it at their location, especially if the other project manager might need that resource a bit longer than the current project manager. When an organization has several projects going on at the same time that requires the same resources at different times both project managers must have a clear understanding that it will take a great coordination effort to make that one resource complete the task for both projects. The eighth option is organization and accountability, which describes who is responsible for what and who has the privileges to make decisions on tasks in the project. Project managers can use the WBS to display the name of the individual or section that is responsible for a task. It can be used to populate the name of the person who receives the resources such as materials and equipment for the section. It also can be used to identify the functional mangers of each section; like a quick reference guide for the project manager and senior managers. Heublein Inc. created an accountability matrix which shows the activity, who has the authority, and the decision making power concerning a certain activity. It helps to have an accountability matrix because it can be a quick reference guide in order to talk to the right person that can help you with a question or issue concerning a task on the project. Finding out who is responsible and who holds the power to make certain decisions allows managers to contact that individual or section and make decisions quicker because it cuts out the middle-person. The last thing the accountability matrix does for the project manager is identify who needs to be contacted because of their knowledge to give their input in planning, scheduling, monitoring and terminating the project. This matrix will make sure that only the personnel with input attend the meeting and is contacted because too many times some individuals show up to meetings or are contacted and wonder why they were contacted or are there (Mantel & Meredith, 2012, pp. 273-274). The ninth option is a control system which included a process for handling and adjusting variances in a portion of the project and also included a schedule for periodic reviews and what reports were due as part of the periodic review process. Hormozi & Dube (1999) accounts that:“In controlling a process for quality, the process capability must be considered. Process capability is the range over which the natural variation of a process occurs. Natural variation is determined by common causes. Process capability is, therefore, the ability of the combination of machines, team members, materials, and measurements to consistently meet specifications. The three components of process capability are design specifications, centering of natural variation, and the range of variation” (para 24).Periodic reviews ensure that the systems that are in place are actually working as planned. They give the current status of the project and the way forward. The project manager always wants to know the status of the project scope, cost, and time. Careful monitoring of the project ensures that any issues will be noted and arranged to be fixed (Mantel & Meredith, 2012, p. 475). Periodic reviews help identify any issues early in the project helps to save money because the project manager might be able fix the issues before they get out of control or obtain a resource at a discounted cost. It saves time because it avoids rework for mistakes made and it also saves time because the processes can be reduced or a resource can be brought in to shorten the time it takes to complete a task. The review process might reveal mistakes and provide solutions. It reveals any risk associated with the project and allows the project manager to implement risk mitigation strategies to lower or eliminate the risk. I prefer frequent brief evaluations over periodic major evaluations because projects are too large sometimes and trying to accomplish a major evaluation might be too late, whereas frequent brief evaluations can be designed to work in favor of the project manager, the evaluator and the functional managers (Mantel & Meredith, 2012, pp. 522, 527-528). Everyone should know when the periodic project reviews will be taking place in order for them to prepare for the reviews. There should also be a standard checklist prepared or process in place for both the frequent brief evaluation and the major periodic evaluations. Sometimes things that are planned do not go as planned and trying to coordinate a major evaluation is difficult. If for some reason it does not happen, then you have to either reschedule to a much better time or wait until the next periodic briefing is scheduled. However if you are scheduled to conduct a frequent brief evaluation and it does not happen for some reason, it would be much easier to reschedule or combine it with the next frequent brief evaluation. While the project is going on these evaluations are taking place and these individuals involve people, files, computer systems and any other resources that are needed to complete the evaluation; a major evaluation could affect progress on the project. The tenth option is milestone and schedule subdivision, milestones are predetermined points or current status of a task where the management expects a task to be either completed or at a certain point. Project managers should decide which activity or task they want to milestone. Project managers usually milestone parts of the projects that are of significant value or carry significant risk. They can also be used as a control mechanism, primarily a phase gated process, so that at a certain phase, approval must be given to move forward to the next phase (Mantel & Meredith, 2012, p. 485). Meeting a milestone can be a source of good news to upper management and part of a reward system for project and functional managers. Finally milestones might be part of project acquisition where the client wants certain milestones to be met and the firm that can meet these milestones will be awarded the project. Every functional manager should have input on the milestones that affect their section and the milestones should be realistic and attainable. Schedule subdivisions involve breaking down parts of the schedule that were already divided into smaller parts. The project manager might initiate such a plan to slow down work while waiting on additional resources or a project might be so far ahead and wants to have the team members focus on another portion of the project (Mantel & Meredith, 2012, p. 275). These are the ten options that Heublein Inc. developed and implemented to manage their projects in the organization. Within the phases, there was an evaluation phase about the PM&C; the evaluation phase revealed that the organization loved the new way projects were going to be managed. The case study also revealed some feedback a year after implementation and the organization has been successful with the PM&C system. AnswersThe project planning aids used in this case were the work breakdown schedule (WBS), a Gantt chart, hiring an outside contractor, hiring an internal PM, conducting the phased seminar, and developing the menu of component parts for the project. The project plan differed from the project charter described in this chapter by the way they structured because the project plan listed each part of the project and the project charter for instance has the budget under the resource, the milestones fall under the schedule, control procedures fall under the resources. The project charter added a personnel requirement and a risk management plan. The Heublein’s WBS was different from the WBS that was described in the chapter because it was represented in text form and the WBS in the chapter was represented in tree form. The Heublein’s WBS assigned each element a hierarchical numbering system and the WBS from the chapter had the account numbers. The WBS from the chapter displayed an outline with the top organizational tasks on the left and successive levels appropriately indented. Heublein’s accountability matrix differed because it did not list the Task code like the RACI did. Also the accountability matrix combined the ability to initiate/responsibility under the I-code and the RACI gave both of them an individual code. In comparing this project with the Project Portfolio Process (PPP) in the reading for Chapter 2, the project was deemed a success. They wanted to develop a new plan for the PM&C system to replace the “Capital project progress” and they successfully planned and implemented the PM&C system. They also included an evaluation phase and received feedback a year later that confirmed the organization has been successful using the PM&C system resulting in fifteen products going through the system. The problem with Heublein’s focus on cost-benefit was minimal emphasis on execution of the projects; no mechanism to assure that non-financial results were achieved. Also, some major projects went over budget and there became a need for optimal utilization of capitol funds since depreciation legislation was not keeping pace with the inflationary rise in cost. Heublein’s focus is now on project planning as opposed to project control. The purpose of the PM&C was to achieve better performance on projects, not catching mistakes after they occurred. Lagging depreciation legislation increased the importance of using capital funds optimally because the organization did not file the proper paper work to get the equipment written off in the directed time that was set by the government. Because the company did not get the write-off, the equipment did not give the value to the organization it should have and because the price of the equipment increased, the organization will have to spend money to get another one instead of collecting money that could have paid to replace it. ConclusionHeublein Inc. set out to change the way they managed projects. They hired an external consultant and paired him with an internal PM who knew the organization very well. They also worked with the consultant for a program design. Heublein Inc. also recognized they did not want a “canned” package system and they wanted their directors of the engineering departments of each Group to be directly involved and implementation of the PM&C system specifically for their group. Heublein Inc. worked with the consultants and the PM to design a phased implementation of the PM&C. The results were a “menu” of component parts of a project plan for the PM&C system. The elements of the menu were to be chosen to fit the type of project. The PM&C proved to be effective and the organization is still using the PM&C for project management. ReferencesAphale, K. (2014). Why project management is so important for business results? Retrievedfrom Chestnut, D. (2014). Why is project scheduling Important? Retrieved from Hormozi, A. M., & Dube, L. F. (1999). Establishing project control: Schedule, cost, and quality. S.A.M.Advanced Management Journal, 64(4), 32-38. Retrieved from Malone, B. (2012). Work breakdown structure. Retrieved from , S.T. & Meredith, J.R. (2012). Project Management: A Managerial Approach, 8th edition. Hoboken, NJ: John Wiley & Sons IncMartin, M., J. (n. d.). What is the difference between project allocation & project leveling? Retrieved from Platt, G. (2002). Smart objectives: What they mean and how to set them. Training Journal, 23. Retrieved from . (2013). Project management basics. Retrieved from Sir attached is the PowerPoint presentation, for some reason I could not attach both documents. If there are any problems with either file, I can email them to you. ................
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