Project Management: Case Study of a Pharmaceutical CO

Introduction

The case study pertains to a mid size pharmaceutical co. in the M 25 region. There are 290 employees in the company and the turnover for the company in the last year is £ 19 millions.They had an additional profit margin of £ 130000.The owner Rose Luxemburg wanted to reinvest this profit in a viable project. The product development manager Denise Edwin wanted to invest this amount on a research project for a new prescription drug. Indra Roy, manager of production wanted to invest this amount to change the lay out of the plant to get higher output. Greg Arsenal, manager of operations would like to use the excess profit to buy new computers and to hire a computer programmer to upgrade the software to run on the new computers. Greg was successful in convincing the owner of the company the viability of his project through an in-depth analysis of the critical success factors, quality management plan, change control plan, communication and information distribution plan, performance and closure plan. We will analyze briefly each aspect of the study report.

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Critical Success Factors Of Greg’s Project

Identifying a critical success factor is important as it allows firms to focus their efforts on building their capabilities to meet the critical success factors or even allow firms to decide if they have the capability to build the requirements necessary to meet critical success factors.in any organisation certain factors will be critical to the success of that organisation ,in the sense that ,if objectives associated with the factors are not achieved the organisation will fail perhaps catastrophically so. New product development, good distribution and effective advertising are examples of critical success factors for any organisation. There are four types of CSF.They are listed as below

  1. Industry CSF’s resulting from specific industry characteristics
  2. Strategy CSF’s resulting from the chosen competitive strategy of the business
  3. Environmental CSF’s resulting from economical or technological changes and
  4. Temporal CSF’s resulting from the internal organisational needs and changes

(Reference: Rapidbi: Determine The Critical Success Factors (CSFs) for your company http://www.rapidbi.com/created/criticalsuccessfactors.html)

The CSFs is not a key performance indicator.But it is a mission statement with 5-6 high level goals in the hierarchy. it should analyse the requirement and problems.

The critical success factors highlighted by Greg are as under

  1. Better track of customer orders
  2. Reduction of customer complaints
  3. Timely issue of invoices
  4. Improvement of cash flow
  5. Cost effectiveness

Quality Mangement Plan Of Greg’s Project

Statistical research into CSFs on organisations has shown there are seven key areas.They are as follows

  1. Training and education
  2. Qality data and reporting
  3. Management commitment and customer satisfaction
  4. Staff orientation
  5. Role of the quality department
  6. Communication to improve quality and
  7. Continuous improvement.

Greg’s quality management plan assimilated all the above seven characters.

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Managerial issues

The production and delivery of high quality goods and services are critical elements in determining the long term success of an organisation.No longer is quality looked upon only from the narrow perspective of defects. Rather, managers are now recognising that quality has many dimensions and they need to identify those dimensions that are most important to the specific market segments that they serve.

Unlike product quality service quality is often highly subjective varying from customer to customer even under identical circumstances. As a result good service quality to one customer may be viewed as poor service quality by another.

Another reason the managers should be concerned with quality is that quality and cost are closely related. There is significant cost associated with producing bad products. Similarly there are costs related to providing poor service to customers.Bad quality results in dissatisfied customers who eventually take their business elsewhere.thus high quality in goods and services is essential to maintain customer loyalty and long term customer relationships, which has been shown to significantly increase profits.

Quality in goods

David Garvin has identified eight different quality dimensions, with respect to goods, on which a company can compete: they are (a) performance, (b) features, (c) reliability (d) durability (e) conformance (f) serviceability (g) aesthetics and (h) perceived quality

Quality in Services

Parasuraman, Zeithaml and Berry (1986, 1990) identified the following 10 generic factors or dimensions that contribute to the level of service quality a firm provides to its customers. They are (a) tangibles, (b) reliability ,(c) responsiveness ,(d) competence ,(e) courtesy, (f) credibility ,(g) security ,(h) access, (i) communication and (J) understanding the customers.

Cost of Quality

Cost of quality involves three major categories: (a) cost of prevention (10%),(b) cost of detection/appraisal (20%)and cost of failure (.70%).

Two views of the cost of improved quality:

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In the traditional view quality improvement will increase appraisal cost which should result in higher quality and higher cost. In Deming’s view quality improvement can be achieved through increase in process quality which results in higher quality of the product at lower cost.( refer pages 177- 201 of FUNDAMENTALS OF OPERATIONS MANAGEMENT by Mark M. Davis and others. )

Quality Initiatives

Two of the more successful quality initiatives that been adopted by many firms are total quality management and six sigma

Total quality management

TQM can be viewed as an organisation wide approach that focuses on producing high quality goods and services. When properly used TQM is an integral part of an organisation not a separate, stand alone program and it encompasses all of the functional areas and levels within the organisation including suppliers

Elements of TQM

There are four primary elements that are integral to every successful TQM program: (a) leadership, (b) employee involvement (c) product/ process excellence and (d) customer focus.

Six Sigma

The goal of six sigma programme is to reduce process variation to the point where there are only 3.4 defects per million opportunities. Six sigma is especially important to that business such as services and high volume manufacturing firms that involve a very large number of operations or transactions on a continuous basis.

Greg’s project report on the installation of new computers and the new software laid special emphasis on total quality management where he elaborated the necessity for the involvement of senior management and employees’.product / process excellence and customer focus.He could convince the management that he looks for the long term financial results and increased process quality which should result in lower cost and higher quality. This should help to achieve the corporate goal of higher market share and resultant profit. He also laid special emphasis on employee empowerment by way of training and inter-organisational communication to build trust in senior management.His report recognised that customer loyalty depends upon higher quality of goods and services and the ability of the firm to “delight” its customers

Change Control Plan

The change control plan allows project managers to affirm organizational protocols for change and to assert project –specific change control practices and policies in an effort to more effectively manage project modifications. It serves as the common process for all changes and asserts when changes may be deemed as formally accepted. The project support office or the project management office prepares the control plan or sometimes it is prepared independently. It is shared with stake holders who have an interest in changing the project. The change control plan should identify organizationally standard change process information as well as information specific to the project. The change control plan should have an outline as below

  1. Rationale: Some members in the administration feel that change control protocols are unnecessary.Hence the necessity for the change and the process change should be logically explained. The key players in the process change should be identified
  2. Process: -The plan should identify how the change will be implemented and the source for the change.Procedure for tracking and follow up should be clearly specified. Cross reference to other documents such as change control forms ,change request log etc. are to be spelt out
  3. Background: The key agencies involved in the process and their specific responsibilities should form the background information
  4. Change initiation:-To determine the scope of change and the level of responsibilities for approval some initial sorting function should be carried on.
  5. Change Documentation:-This comes in the form of change request or change control form. The latter may be more appropriate in dealing with changes driven by the environment rather than by a specific request from a project stake holder
  6. Change process flow: – The flow may illustrate how different levels of change are managed such as when cost or schedule thresholds are exceed or when the change might require the approval or acceptance of a regulatory authority
  7. Tracking: – Follow up and monitoring are the functions of this section. A cross reference to other documents is specifically required
  8. Approval :- The name ,role and level of the approving authority should be clearly identified
  9. Attachments:- The main attachments are (a) change control form (b)process documentation form (c) list of change control board members and (d) change request form
  10. Signatures: – All parties directly affected by the control plan should sign the change control plan.

Approaches: – Change control plan is a good substitute for laborious document rich processes and it is a good guide as to whom to look upon in the case of a proposed change (reference The project management communications toolkit by Carl Pritchard 2004 pages 70 to 73).

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Change Consideration:-The Change Control Board will consider at least the following factors when considering a change.

  • What is the expected benefit?
  • How would the change affect the project’s schedule?
  • How would the change affect the software’s quality?
  • How would the change affect the team’s work distribution?
  • Can the change be deferred to a later stage?
  • Would the change risk destabilizing the software?

When Greg presented his project report to the Board of Directors, some of the directors expressed that the expected benefit where highly inflated.They also had apprehension about the brand image of the computers to be installed. They had also doubts about the timing of the project.They were more in favor of the project proposal by the product development manager. Denis Edwin. So the owner of the firm, Rose Luxemburg requested Greg to modify his project report taking into account the suggestions made by the directors.She formed a sub committee of the director board to monitor the change control plan and the committee was termed as Change Control Board who went in depth about the outcomes of the project and success fully implemented the change control plan

Communication And Information Distri Bution Plan

Success of any project depends upon a good communication and information distribution plan which would cover the employees, shareholders, public and the directors

Basic Communications

  • identify the benefits of effective communications in managing a project.
  • recognize examples of potential barriers to effective communication.
  • select examples of effective techniques to improve communication among project stakeholders.
  • apply techniques to improve communications in a given business scenario.

Communications Planning

  • recognize the value of communications planning.
  • match the inputs to communications planning to descriptions of how they are used.
  • match the tools and techniques for communications planning with examples of their uses.
  • identify the purpose of the Communications Management Plan in the context of project communications.

Information Distribution

  • identify the benefits of understanding the Information Distribution process.
  • classify communication examples in a given scenario.
  • identify how the input to Information Distribution is used.
  • match tools and techniques for Information Distribution with examples.
  • determine the appropriate Information Distribution method to use in a given project scenario.
  • identify examples of the outputs of Information Distribution in the context of project communications. (Reference: Communications Planning and Information Distribution – Business Training library).

The communication management plan is based on five fundamental questions

  1. Who will make decisions on issues?
  2. Who will develop an action list of task and who will be responsible for the task?
  3. When will these tasks be completed and reported?
  4. How will other pertinent information be distributed?
  5. To whom the information is delivered?

Greg’s project report on the installation of new computers had a specific communication plan answering all the above questions

Information Distribution Plan

The output for information distribution is the project Management plan and organization process assets.The relevant sections in the PM plan describes the approach chosen for securing and storing project database or company’s repository through emails ,formal letters and status reports (reference THE AMA HANDBOOK OF PROJECT MANAGEMENT BY Paul C. Dinsmore 2006 : page 165 – 166).

Information distribution

  1. A project information system is operational for the storage and retrieval of project performance data and other relevant information
  2. All teams are using a standardized system for collecting and distributing project information
  3. Lessons learned and best practices are used to improve the information distribution procedures.

(reference: Project Management Process Improvement by Robert k Wysocki : page no. 56 ).

Performance Report Plan

There are two main components in project management: One heavily emphasizes the organization and the behavior of people; the other focuses on the technology of the method. Consequently, project managers focus their efforts on three major elements:

  • Time: How long will the project take from start to finish and will it be completed on schedule.
  • Performance: Does the project meet or exceed the quality required by the customer
  • Cost: What are all of the.costs, both direct and indirect associated with the project, and will it be completed on budget.

Performance reporting is the process of collecting all baseline data and distributing performance information to stakeholders and the project. An aspect of this report is to clarify how resources are being used to obtain the objectives of the project. This should be done in conjunction with providing information on scope, schedule, cost, risk, procurement, and quality. In my experience this is normally a good activity to complete with regular frequency.

Performance reportsPerformance reports are presentations and documents that summarize work performance information in the form of bar charts, S-curves, histograms, and tables.

Greg utilised Gantt chart and critical path scheduling to show the schedule of time and the sequence in which activities are to be performed. He suggested alternative plans to crash some of the activities by additional resources.

Closure Plan

Project closure plan is the last phase of the project lifecycle.The commencement of the project closure phase is determined by the completion of all project objectives and acceptance of the end product by the customer. It includes the following process:

Administrative closure: This is the process of preparation of closure documents and process deliverables. This includes the release and redistribution of the project resources.

Development of project post implementation evaluation report: – It includes project sign -off, staffing and skills, project organisational structure, schedule management, cost management, quality management, configuration management and customer expectations management (reference Vistak Project Management Tips –Project Management Training and Resources).

Greg utilized the techniques of project closure for his project on computers. He gave an account of the post implementation scenario on the revised viability of the company and also how the employees and other resources engaged during the project period can be utilized by the company in the post implementation period.

Bibliography

Rapidbi: Determine The Critical Success Factors (CSFs) for your company refer pages 177- 201 of FUNDAMENTALS OF OPERATIONS MANAGEMENT by Mark M. Davis and others. Web.

The project management communications toolkit by Carl Pritchard 2004 pages 70 to 73Web.

Change control plan. Web.

Communications Planning and Information Distribution – Business Training library. Web.

THE AMA HANDBOOK OF PROJECT MANAGEMENT BY Paul C. Dinsmore 2006 : page 165 – 166. Web.

Project Management Process Improvement by Robert k Wysocki : page no. 56. Web.

Anticlue: Performance Reporting – 2007. Web.

Vistak Project Management Tips –Project Management Training and Resources. Web.

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