Businesses frequently utilise project management, they often do not recognise it and, accordingly, do not avail themselves of project management tools and techniques to make their job easier.
Distinctions are often made between Operations Management and Project Management, citing the temporary nature of projects vs. an ongoing view in operations, the uniqueness of projects vs. the repetitive nature of operations and so on. While these assertions are generally valid, projects and operations share several common characteristics including but not limited to:
- Performed by people combined into teams
- Limited by constraints such as resources and time
- Both ideally follow a “Plan-Do-Check-Act” cycle
- Both are specifically undertaken to achieve an organisational objective
In recognising the similarities between the two, opportunities for adding value to operations management by utilising project management techniques becomes evident. This approach can add significant value by providing focus and insight into the performance of the key processes in an operation. This can be implemented at a conceptual level but with committed application can yield significant business results – and through the application of technology, even more so.
Obvious examples include businesses that explicitly execute projects such as mining, construction, IT and events coordinators. Less apparent examples include batch manufacturing. However, every manufacturing plant requires maintenance and upgrade and typically this may be projectised.
One of the greatest opportunities lies in the development and implementation of the business strategy. It all comes down to focus; not all tasks are equal, some tasks are for long run benefit and others are important in the short term.
The key is to have a framework to prioritise the various imperatives and a system to measure or track whether the resources being applied to a task are indeed achieving their objectives. Management can then make informed decisions in the interest of the short and long-term interests of the business.
The use of project management techniques in strategy development and implementation
Strategy may be seen as a sequence of actions undertaken in concert to achieve a desired outcome. This implies that the actions are coordinated and aligned to a set of strategic goals.
Invariably the various goals have competing priorities to which end many companies utilise a ‘Balanced Scorecard” approach which combines financial, customer, internal and growth & learning initiatives.
Research by several authors has revealed that the content of a strategic plan is generally well put together, however the execution of the strategy is generally very poor. Project and portfolio management tools and techniques are arguably the most appropriate to plan and manage such diverse actions in an objective way. This presents a good opportunity for the project management industry to add tangible long-term value to business.
Project management systems and techniques provide business leaders with tools to:
- Develop the strategic plan, objectives and associated goals in a work breakdown structure format providing visibility as to how the various actions roll up to the bigger picture,
- Sequence and schedule activities in concert to the desired outcome providing assurance that all the key components of the strategy are actioned at the right time and are appropriately resourced,
- Monitor and track tasks and activities against the baseline plan providing assurance that all the key components of the strategy are implemented and are able to support each other,
- Re-prioritise actions or activities where resources are constrained whilst optimising the attainment of the strategic goals through the use of portfolio management tools,
- Capture decisions, lessons learned, risks, issues and opportunities which not only mitigate potential failure of the strategy but may in fact enhance the strategic plan, and
- Provide immediate visibility of the performance of the execution of the strategic plan and its various components; these performance measures are effectively a leading indicator of the strategy, which can later be evaluated against the lagging performance indicators to inform future iterations of the strategic planning process.
The use of project management techniques in operations management
In this context we refer to operations management where the business unit produces a tangible output, such as a motor vehicle or a commodity like platinum.
The operations process varies from continuous processes to batch type operations; which require minimal intervention, through to significant user input. Project management tools are better able to enhance value in the batch type operations by providing a system to initiate, plan, execute, monitor and control and close out a particular production unit.
In every such endeavour, physical plant requires maintenance, upkeep and upgrades. This type of work is generally multi-disciplinary and frequently undertaken during maintenance shutdowns. Accordingly the maintenance teams are under time and resource constraints requiring efficient and effective planning and execution. Again project management steps up to the plate and is essential in ensuring that the work is conducted in the right sequence, on time and within budget.
Mining is a special type of operation where the mineral resource is finite, invariably unique, and may be mined in various ways and in various volumes.
On a macro level, with the mineral resources being finite, mining companies have to continuously contemplate replacement projects to maintain production output.
Mining projects involve several stakeholders, are multidisciplinary, are generally complex, involve long lead times and huge sums of money; and consequently mining companies have to have a strong project management focus to ensure sustainability. Mining companies usually have several possible targets for future exploitation, the questions are “in what sequence?” and “at what volumes?” considering that poor planning may render portions of the mining resource uneconomic.
The use of project and portfolio management is not even a debate in this context.
On a micro level, the physical mining operations may be viewed as projects in their own right:
- A mining excavation has a defined scope, quality requirement, budget, timeframe and risk profile,
- The various mining excavations have to be sequenced in the right order to develop the mine,
- Certain excavations are more critical than others due to dependencies and should therefore receive priority,
- A mining operation involves people lumped into teams, equipment and consumables which have to be managed and coordinated,
- Poor planning may result in teams being unable to perform their work due to schedule conflicts, lack of access, lack of resources etc.
- Mining some excavations out of sequence destroys value by accelerating expenditure that is not yet required and consumes resources that should be adding value elsewhere.
Mining companies can be significantly more productive by adopting project management thinking in their operations. In this way each and every excavation will be executed as a project allowing for better coordination and focus, rather than merely mining tons of ore to satisfy poorly constructed performance measures.
Project management allows for priorities to be identified and actioned.
Project management allows for the time and cost to be judiciously managed facilitating activity based costing.
Project management provides visibility of the forecast project resources.
Project management provides overall visibility of the impact of an activity failure on the overall production profile and cost.
Adoption of project management techniques in mining will result in a step change in the industry which is sorely needed both locally and globally.
The use of project management techniques in consulting and construction
The delivery of projects is the business of consultants and construction contractors; the use of project management techniques not debatable.
What is important here is being able to have the very best visibility, performance and governance in the businesses project management system. These businesses need to be able to demonstrate the health of a project at the drop of a hat, requiring a mature project management system. The implementation of technology is a prerequisite.
The bottom line
The basic message is the project management can add significant value by virtue of that which constitutes project management. Project management is results-oriented requiring intensive focus on the critical tasks at hand. In projects, poor or good execution is very visible which drives efficiency in implementation, which is somewhat lacking in the management of operations where inefficiency can be hidden.
The implementation of cost effective technology that is integral with the remainder of the business infrastructure is critical to enabling project management thinking to be adopted in an operational environment. With recent developments in this space this time is now.