Project management principles are essential in order to successfully manage business change. Initiatives, either improvement or strategic, are commonplace. This is especially true within the supply chain function. For example consider the activities that are carried out as part of improvement programs in many organizations these may include:
• Outsourcing key activities like assembly or manufacture
• Moving from a local to global supply chain
• Supplier rationalization
• Deploying corporate deals
• Cost reduction programmes
• Lead time reduction programmes
• Inventory rationalization
• Technology deployment
These sorts of activities require complex co-ordination of resources to deliver a defined objective within a set timescale – in other words they are a project. Those leading the initiatives need the appropriate skills and techniques as well as the detailed supply chain experience if the initiative is to be a success.
An all too common issue is where businesses appoint personnel who have no formal project skills or experience to deliver. This lack of experience and use of appropriate tools and methods can dramatically impact cost and schedule and more impact heighten the risk of project failure.
So what disciplines does project management provide and why is this an advantage? Consider the following
Scheduling and Planning:
One of the key facets of project management is developing and maintaining accurate delivery schedules that take into account project dependencies and resources.
Risk Management:
Understanding risk and more importantly having an appropriate risk management plan can prevent both cost and schedule over run and in the case of many supply chain projects ensure continuity of supply.
Business case and financial awareness
Both developing the rationale for undertaking the project and ensuring that the costs for executing it are covered are a key task. Subjective assumptions regarding business initiatives can result in projects failing to deliver to expectations. A robust business case will provide the rationale for proceeding with the initiative together with a sound understanding of likely benefits.
Quality Systems:
Integral to project management is ensuring that quality systems are built in to any project and this is of relevance to the supply chain process. There is no point in securing goods in a strategic manner with low costs, if they are not fit for purpose and meet business need.
Roles and Responsibilities:
Any good project manager will ensure that responsibilities are clearly set out, with key personnel identified as being responsible for specific items within the schedule. This ensures the smooth running of the initiative.
Communication
A key element of business change that is often overlooked by inexperienced personnel is stakeholder management and communication.
Project Management is fundamental to successful supply chain initiatives.
In a sense then, project management offers the procurement executive the foundations upon which he or she can build a good, strategic procurement plan. Without the foundations of project management there may be a strategy but no basis upon which to deliver in with the results ad hoc, sporadic and poorly delivered.