Project possibilities emerge whenever problems or opportunities occur. Generally, events over time come together to bring project possibilities into focus. The following examples explain several different ways that a project can come into being. These examples also illustrate some of the types of projects that are commonly undertaken.
The Internal Process Improvement Project
The production cost of a product produced by a manufacturing firm is running high, which concerns the firm's top manager. The top manager instructs the manufacturing manager to reduce the production cost. To do so, the manufacturing manager will consider various process improvement projects.
The manufacturing manager begins by discussing options with the firm's director of quality and discovers several production lines that seem to be good candidates for process improvement. Some analysis of process details and improvement possibilities is needed, so the manufacturing manager undertakes a cost/benefit analysis to help identify the level of improvement to be sought. Questioning feasibility, he asks, "What cost reduction benefit can be achieved from a 1 percent improvement in the key process output measure?" "Is the benefit from a 1 percent improvement enough to justify the project, or do we need a 10 percent improvement?" "Have we reason to believe that a 10 percent or even a 1 percent improvement is feasible?" If this analysis suggests that the project is feasible and can offer a good cost reduction, it is necessary to compare the project to other potential projects, because resources for process improvement are always limited. If analysis suggests that improvement of this specific process is a good use of scarce resources, a project is "born."
Because the manufacturing manager has sponsored the project, or undertaken to get it done, he has become the project sponsor. His responsibilities include: issuing an order announcing the project and its purpose, assigning a project manager, authorizing resources, defining the relationships between the project team and the process operators, clearly defining reporting channels, and reporting to higher authorities the reason for the project. This project order is sometimes called a project contract or project charter. It precedes discussions to precisely define project outcomes.
The Product Improvement Project
This type of project often begins in a firm's marketing department, which is always a good source for project concepts. In this setting, a process improvement project takes shape when a marketing product line specialist, who keeps in touch with his customers, discovers certain improvements one customer would like to have. In a company like Lincoln Electric of Cleveland, Ohio, this product line specialist would be a welding engineer who would regularly visit the customer's shop floor to see firsthand how the product is being used. Discovering the need for improvement, the product line specialist would inform the development and design engineers at the home office. Together they would discuss improvements and offer this information to the product line manager in the marketing department, who then develops some general estimates for project costs and the expected return on the investment.
In most cases, deciding on a project involves the allocation of scarce resources. Discussion with the leader of the engineering department and with manufacturing management also must occur to ensure technical feasibility and the availability of resources both for product development and new product production. If the proposed project is feasible and financially advantageous, the product line manager will take on the role of project sponsor. He may choose a product engineer to act as project manager, and ask him to work closely with the product specialist who first discovered the need for the product's improvement.
Every year, thousands of product improvement projects and new product development projects follow this general pattern.
The Information Systems Project
Information systems projects follow a similar pattern with a wide range of variations. An information systems department, like an engineering department, exists to do projects. In some organizations, it serves as a service department for the entire organization and develops software and hardware packages to meet the needs of all its operating units. An information systems department in a bank or other financial house faces a steady stream of demand for new or improved information processing services. Typically, others in the organization come up with the information on what needs to be accomplished. The information specialist tells them what can be developed and how to do it. The information package user typically sponsors the project and acts as the customer for the project. The appropriate person to act as the project manager for this type of project is a systems analyst/information specialist.
The Salesperson-Produced Project
In many organizations, salespersons are the contact people who identify potential customers. They send out a project manager who is a representative from the product development staff to negotiate unique product specification and delivery conditions with the customer. This makes for a good product, which is delivered when expected to a happy customer. The procedures that flow from specification to delivery are spelled out in a developed project plan. The customer is sometimes presented with a flow chart describing the plan. The project manager keeps the customer informed as to how the workflow is progressing, and a well-defined specification change procedure exists. Some companies that produce high-ticket custom products have developed a cadre of project managers former engineers to manage their projects.
The Marketing Project
Marketing organizations, which often sponsor product improvement and new product development projects, generate many internal projects. Part of their job is market research, and market research teams continually are involved in gathering market data that may be used for new product development or advertising and sales campaign decisions. A sponsor for such a project typically is a product line manager or the marketing general manager. As always, scarce resources are involved, and cost benefit and feasibility questions must be addressed.
The Small Basic Internal Project
A department manager often sponsors small basic internal projects. These projects emerge at a level where the manager has discretionary control over the resources and has the responsibility for unit performance that can be improved with projects. Two conditions must be met: 1) The manager must have authority to commit resources to a project, and 2) the manager must have the motivation to do so. There are always many project possibilities and never enough resources for most of them. Costs, and particularly benefits, are often hard to estimate. Yet, week after week, managers still initiate projects. It is a rare manager who understands the importance of a project manager using IPM procedures to lead a project. However, the assigned project manager often has the flexibility to pursue the IPM approach, win the manager's support for it, and proceed with a successful project.