Chapter 3, Problem 1DQ

Give an example of a situation in which project management is needed.

Summary Introduction

To determine: Example of a situation in which project management is needed.

Introduction:

A project is a unique event or work which is specific to a particular context, time period and a project sponsor. Generally, no two projects have exactly similar scope of work, timeline for completion and project deliverables.

Each project will comprise of a series of tasks which have definite precedence and succession relationships with other tasks in the project. The objective of implementing the project will be to carry out the project as quickly as possible with the lowest cost and with no compromises on project deliverables.

Explanation of Solution

An illustration of a situation where project management is required is described below.

Automobile manufacturers periodically introduce new products into the market. The various tasks involved in the management of a project for new product introduction would be as follows:

• Constitute a project team which may comprise of the following: a marketing specialist, a finance specialist, an automotive design engineer, a production engineer, a supply chain specialist, a vendor development officer, and so on. Appoint a project manager.
• Carry out an exhaustive study of the market to understand the strengths and weaknesses of the automobile manufacturer’s product range. Do a similar analysis of competitors’ product ranges.
• Analyze the opportunities and threats in the market. The threats could be in terms of competitor activity, new technology such as electric vehicles, and so on. The opportunities could be in the area of smaller vehicles in terms of engine capacity, sub-1,000 cc for city driving, and so on.
• Determine the specifications of the proposed new products (style, engine capacity, drive system, brake systems, number of passengers to be carried, fuel type, suspension, wheel/tire size, and so on). Make an estimate of the production capacity volume of the new product to be produced.
• Produce a prototype.
• Test the product.
• Determine the detailed capital costs and operating costs of the new facility, which will also involve various “make or buy” decisions.
• Design a project schedule for the completion of the project and budget.
• Obtain the approval of the project from the company’s senior management.
• Take the appropriate decisions regarding the location of the plant and the layout of the production facilities.
• Finalize the vendors/suppliers for the product.
• Place orders/finalize contracts for buildings, equipment and other facilities.
• Build the factory.
• Recruit staff and employees.
• Start the production of the new model.
• Train engineers for maintenance and repairs of the new vehicle.
• Advertise and promote sales in close co-operation with the dealer network.
• Announce a launch date and make appropriate arrangements for the new product launch.
• Start selling the product in the market.

The application of various concepts of project management would be required to manage the above list of activities involved in the introduction of a new product.