Project management case studies

PROJECT MANAGEMENT CASE STUDIES HAROLD KERZNER, Division of Business Administration Baldwirz- Wullace College Berea, Ohio John Wiley & Sons, Inc Ph.D This book is pr-inted on acid-free paper Copyright 2003 by John Wiley & Sons Inc All rights reserved Publrshed by John Wlley & Sons Inc Hoboken, New Jersey Publl\hed slmlrltaneously In Canada No part of thia publication may be reproduced stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, record~ng,scanning, or otherwise except as permitted under Section 107 or 108 of the 1976 United States Copyright Act without either the prior written permission of the Publisher, or authoriratlon through payment of the appropriate per copy fee to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470 or on the web at www.copyright.corn Requests to the Publi5her for permission should be addre\sed to the Permissions Department John Wiley & 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Department within the United States at (800) 762-2974, outside the United States at (317 572-3993 or fax (3 17) 572-4002 Wiley also put.lishes its books in a variety of electronic formats Some content that appeal-, in print may not he ab~dlablein electronic books For more information about Wiley products visit our web site at www.uiley.con1 Library of Cotrgress Cataloging-iiz-PublicationData: Kerzner, Harold Project management : a 5ystems approach to planning, scheduling, and controlling / Harold Kerzner. 8th ed p cm Includes lhibliographical references and indexes ISBN 0-471-22578-9 (pbk : alk paper) Project management I Title Printed In the United States of America Contents Preface ix PROJECT MANAGEMENT METHODOLOGIES Lakes Automotive Ferris Healthcare, Tnc Clark Faucet Company IMPLEMENTATION OF PROJECT MANAGEMENT Kombs Engineering 13 Williams Machine Tool Company 15 Wynn Computer Equipment (WCE) 17 The Reluctant Workers 20 Hyten Corporation 22 Macon, Inc 35 Continental Computer Corporation 37 Goshe Corporation 43 Acorn Industries 49 MIS Project Management at First National Bank Cordova Research Group 70 Cortez Plastics 71 L P Manning Corporation 72 Project Firecracker 74 11 56 CONTENTS PROJECT MANAGEMENT CULTURES Conlo Tool and Die (A) 83 Conlo Tool and Die (B) 87 A p x h e Metals, Inc 90 Hal ler Specialty Manufacturing 92 PROJECT MANAGEMENT ORGANIZATIONAL STRUCTURES @ Qudsar Communications, Inc 95 Jones and Shephard Accountants, Inc 100 Fargo Foods 104 Goi ernment Project Management 108 Falls Engineering 10 W h ~ t eManufacturing 15 Ma)-tigConstruction Company 117 Mohawk National Bank 19 NEGOTIATING FOR RESOURCES Du~m Chemical 125 American Electronics International The Carlson Project 133 81 PROJECT ESTIMATING 123 129 135 Capital Tndustrles 137 Pol ypl-oducts Incorporated 139 Srr~dllProject Cost Ectimating at Percy Company Cot y Electric 147 Carnden Con\truction Corporation 15 PROJECT PLANNING 155 Grryron Corporation 157 Teloxy Engineering (A) 162 Teloxy Engineering (B) 164 Payton Corporation 165 PROJECT SCHEDULING 167 Crosby Manufacturing Corporation 169 146 93 PROJECT EXECUTION 173 The Blue Spider Project 175 Corwin Corporation 19 Quantum Telecom 203 The Trophy Project 205 Concrete Masonry Corporation Margo Company 17 Project Overrun 219 10 CONTROLLING PROJECTS 208 221 The Two-Boss Problem 223 The Bathtub Period 225 11 PROJECT RISK MANAGEMENT 229 The Space Shuttle Challenger Disaster Packer Telecom 28 Luxor Technologies 283 Altex Corporation 287 Acme Corporation 291 12 CONFLICT MANAGEMENT 231 295 Facilities Scheduling at Mayer Manufacturing Scheduling the Safety Lab 300 Telestar International 302 The Problem with Priorities 304 13 MORALITY AND ETHICS 307 The Tylenol Tragedies 309 14 MANAGING SCOPE CHANGES 337 Denver International Airport (DIA) 339 15 WAGE AND SALARY ADMINISTRATION Photolite Corporation (A) Photolite Corporation (B) 385 388 383 297 CONTENTS Photolite Corporation (C) 39 Photolite Corporation (D) 396 First Security Bank of Cleveland Jackson Industries 405 16 TIME MANAGEMENT 409 Time Management Exercise 411 402 Preface Other than on-the-job training, case studies and situations are perhaps the best way to learn project management Case studies allow the students to apply the knowledge learned in lectures Case studies require that the students investigate what went right in the case, what went wrong, and what recommendations should be made to prevent these problems from reoccurring in the future The use o f cases studies is applicable both to undergraduate and graduate level project management courses, as well as to training programs in preparation to pass the exam to become a Certified Project Management Professional ( P M P ~administered ) by the Project Management Institute Situations are smaller case studies and usually focus on one or two specific points that need to be addressed, whereas case studies focus on a multitude o f problems The table o f contents identifies several broad categories for the cases and situations, but keep in mind that the larger case studies, such as Corwin Corporation and The Blue Spider Project could have been listed under several topics Several o f the cases and situations have "seed" questions provided to assist the reader in the analysis o f the case An instructor's manual is available from John Wiley & Sons, Inc., to faculty members who adopt the book for classroom use Almost all o f the case studies are factual In most circumstances, the cases and situations have been taken from the author's consulting practice Some educators prefer not to use case studies dated back to the 1970s and 1980s It would X PREFACE be easy just to change the dates but inappropriate in the eyes of the author The circumstances surrounding these cases and situations are the same today as they were twenty years ago Unfortunately we seem to be repeating several of the mistakes made previously Recom~liendationsfor enhancements and changes to future editions of the text are always appreciated The author can be contacted at Phone: 216-765-8090 e-mail: Itkerzner@bw.edu Harold Kerzner Baldwin- Wulluce College Part PROJECT MANAGEMENT METHODOLOGIES As companies approach some degree of maturity in project management, it becomes readily apparent to all that some sort of standardization approach is necessary for the way that projects are managed The ideal solution might be to have a singular methodology for all projects, whether they are for new product development information systems, or client services Some organizations may find it necessary to maintain more than one methodology, however, such as one methodology for information systems and a second methodology for new product development The implementation and acceptance of a project management n~ethodology can be difficult if the organization's culture provides a great deal of resistance toward the change Strong executive leadership may be necessary such that the barriers to change can be overcome quickly These barriers can exist at all levels of management as well as at the worker level The changes may require that workers give up their comfort zones and seek out new social groups 425 Rationale and Point Awards Activity 48 49 50 Description Priority Your assistant project manager wants to know if he has the authority to visit vendors without informing procurement (Time = X hr) You have just received your copy of Engineering Review Quarterly and would like to look it over (Time = % hr) You have been asked to make a statement before the grievance committee (this Friday, 10 A.M to 12 noon) because one of the functional employees has complained about working overtime on Sunday mornings You'll have to be in attendance for the entire meeting (Time = hrs) RATIONALE AND POINT AWARDS In the answers that follow, your recommendations may differ from those of the author because of the type of industry or the nature of the project You will be given the opportunity to defend your answers at a later time a If you selected the correct priority according to the table on pages 375-376, then the following system should be employed for awarding points: Priority A B C Points 10 b If you selected the correct accomplishment mode according to the table on pages 375-376, then the following system should be employed for assigning points: Method ofAccomplishnzent Y T P D A Points 10 10 8 c You will receive 10 bonus points for each correctly postponed or delayed activity accomplished during the team meeting d You will receive points for each half-hour time slot in which you perform a priority A activity (one that is correctly identified as priority A) TIME MANAGEMENT EXERCISE e Yo11 will receive a 10-point penalty for any activity that is split f You will receive a 20-point penalty for each priority A or B activity not accomplished by you or your team by Friday at 5:00 P.M Activity Rationale The updating of schedules, especially for Phase 11, should be of prime importance because of the impact on functional resources These schedules can be delegated to assistant project managers However, with a team meeting scheduled for Wednesday, it should be an easy task to update the schedules when all of the players are present The updating of the schedules should not be delayed until Thursday Sufficient time must be allocated for close analysis and reproduction services This must be done immediately Your assistant project manager for manufacturing should be able to handle this activity You must handle this yourself Here, we assume that the representative is available only today 'The assistant project managers can handle this activity This activity may be important if you were unaware of this vendor's product This could be delegated to your assistants provided that you allolw sufficient time for personal review on Wednesday Delaying this activity for one more week should not cause any problems This activity can be delegated You must take charge at once Even though your main concern is the project, you still must fulfill your company's administrative requirements This can be delayed until Wednesday's team meeting, especially since these are Phase 111 schedules However, there is no guarantee that line people will be ready or knowledgeable to discuss Phase I11 this early You will probably have to this yourself The procurement request must be answered Your assistant project manager for manufacturing should have this information available This is urgent and should not be postponed until the team meeting Good project managers will give functional managers as lnuch information as possible as early as possible for resource control This task can be delegated to the assistant project managers, but it is not recommended This belongs to the project manager The agenda review and the meeting can be split, but it is not recommended This must be done immediately The results could severely limit ,your resources (especially if overtime would normally be required) Although your assistant project managers will probably be involved, the majority of the work is yours Rationale and Point Awards Rationale Most project managers hate a request like this but know that situations such as this are inevitable Project policies should be told by the project manager himself Policy changes should be announced as early as possible Team meetings are appropriate for such actions Obviously, the prqject manager must this task himself Fortunately, there is sufficient time if the lead times are accurate The priority of this activity is actually your choice, but an A priority is preferred if you have time This activity cannot be delegated This activity must be done, but the question is when Parts of this task can be delegated, but the final decision must be made by the project manager Obviously you must this yourself Your priority, of course, depends on the deadline on the corporate project review form The project manager must perform this activity immediately Top-level executives from both the customer and contractor often communicate project status among themselves Therefore, since the conclusions in the report reflect corporate policy, this activity should be accomplished immediately The reproduction department considers each job as a project and therefore you should try not to violate their milestones This activity can be delegated, depending on the nature of the report This could have a severe impact on your program Although you could delegate this to one of your assistants, you should this yourself because of the ramifications This must be done, and the team meeting is the ideal place You, personally, should give the functional manager the courtesy of showing you his outstanding results However, it is not a high priority and could even be delegated or postponed since you'll see the data eventually The question here is the importance of the problem The problem must be resolved by Thursday in case an executive meeting needs to be scheduled to establish company direction Waiting until the last minute can be catastrophic here The project manager should personally review all data presented to the customer Check Thursday's schedule Did you forget the interchange meeting? This is your show This should be done immediately Nonparticipants need to know the project status The longer you wait, the greater the risk that you will neglect something important This activity can be delegated, but it ir; not recommended TIME MANAGEMENT EXERCISE Rutionale You may have to solve this yourself even though you have an assistant project manager for manufacturing The decision may affect the schedule and miletones Activities such as this not happen very often But when they do, the project manager should make the most of them, as fast as he can These are gold mine activities They can be delegated, but not postponed If this activity is not accomplished immediately, the results can be catastrophic Regardless of the project manager's first inclination to delegate, this activity should be done by the project manager hinlself This activity can be postponed or even avoided, if necessary Obviously, if the report is that important, then your assistant project managers should have copies of the report and the activity can be delegated This activity should be discussed in the car pool, not on company time This is extremely serious The line manager would probably prefer to work directly with the prqject manager on this problem This is an activity that you should handle Transmitting this to clne of your assistants may aggravate the situation further Although it is possible that this activity could be postponed, it is highly unlikely that time would smooth out the conflict This is a decision for the project manager Extreme urgency may not be necessary Project managers also have a social responsibility The solution to this activity is up for grabs Most con~paniesrealize that employees occasionally need company time to complete personal business Why is he asking you about a recurring problem? How did he solve it last time'? Let him it again You must this personally, but it call wait until Monday This activity is not urgent and can be accomplished by your assistant projecl managers This could be your lucky day Although most managers would prefer to delegate this activity to their secretaries, it is really the responsibility of the project marlager since it involves personal business This is an example of an administrative responsibility that is required of all personnel regardless of the job title or management level This activity must be accomplished today, if time permits PRIORITY/ACCOMPLISHMENT MODE (Continued) 19 AIB Y, p 20 A Y AIR YP 21 A Y 22 A DY 21 A Il,Y,T A/B Y,p A/B Y, p C AJ' B y,p - - 34 A Y,T 35 C A,P 36 A Y,T 37 A Y 18 B Y,p 39 A Y PRIORITYIACCOMPLISHMENT MODE (Continued) TIME MANAGEMENT EXERCISE 48 49 50 Although you might consider this as a B priority or one that can be postponed, you must remember that your assistant project manager considers this as an A priority and would like an answer today You are morally obligated to give him the answer today Why can't he get the answer himself? Whether or not you handle this activity might depend on the priority and how much time you have available How important is it for you to review the publication? This is mandatory attendance on your behalf You have total responsibility for all overtime scheduled on your project You may wish to bring one of your assistant project managers with you for moral support Now take the total points for each day and complete the following table: I I Summary Work Plan Points Day Monday Tuesday I Wednesday I Friday CONCLUSIONS AND SUMMARY QUESTIONS Project managers have a tendency to want to carry the load themselves, even if it means working sixty hours a week You were told to everything within your normal working day But, as a potentially good project manager, you probabll have the natural tendency of wanting to postpone some work until a later date so that you can it yourself Doing the activities, when they occur, even through transmittal or delegation, is probably the best policy You might wish to the same again at a later time and see if you can beat your present score Only this time, try to as many tasks as possible on each day, even if it means delegation Concl~lsionsand S~irnrnarvQuestion.\ Several of the activities were company, not project, requests Project rnanagers have a tendency to avoid administrative responsibilities unless it deals directly with their project This process of project management "tunnel vision" can lead to antagonism and contlicts if the proper attitude is not developed on the part of the project manager This can easily carry down to his assistants as well Several of the activities could have been returned to the requestor However, in a project environment where the project manager cannot be successful without the functional manager's support, most project inanagers would never turn away a line employee's request for assistance Make a list of the activities where your answers differ from those of the answer key and where you feel that there exists sufficient justification for your interpretation Quite often self-productivity can be increased by knowing one's own energy cycle Are your more important meetings in the mornings or afternoons'? What time of day you perform your most productive work'? When you your best writing'? Does your energy cycle vary according to the day of the week? Index Acme Corporation, 291-293 Acorn Industries, 49-55 Altex Corporation, 287-290 American Electronics International, 129-1 32 Apache Metals, Inc., 90-91 Bathtub Period (case study), 225-226 Blue Spider Project, 175-1 90 Camden Construction Corporation, 151-154 Capital Industries, 137-1 38 Carlson Project, 133-134 Challenger disaster see Space Shuttle Challenger disaster Change, scope, see Managing scope change Clark Faucet Company, 7-10 Como Tool and Die (A), 83-86 Como Tool and Die (B), 87-89 Concrete Masonry Corporation 208-216 Conflict management, 295 facilities scheduling at Mayer Manufacturing, 297-299 problem with priorities, 304-305 scheduling the safety lab, 300-301 Telestar International, 302-303 Continental Computer Corporation, 3742 Controlling projects, 221 bathtub period 225-227 two-boss problem 223-224 Cordova Research Group, 70 Cortez Plastics, 71 Corwin Corporation, 19 1-202 Cory Electric, 147-1 50 Crosby Manufacturing Corporation, 169-171 Cultures, see Project management cultures Denver International Airport (DIA), 339-382 Ducor Chemical, 125-128 Estimating, tee Project estimating Ethics, see Morality and ethics Execution, project, see Project execution Facilities scheduling at Mayer Manufacturing, 297-299 Falls Engineering, 10- 14 Fargo Foods 104-107 Ferris Healthcare, lnc., 5-6 First National Bank, 56-69 First Securit) Bank of Cleveland, 402404 Goshe Corporation, 4 Government Project Management, 108-100 Greyson Corporation, 157-16 Haller Specialty Manufacturing, 92 Hyten Corporation, 22-34 implementation of project management, 1 Acorn Industries, 49-55 Continental Computer Corporation, 374: Cordova Research Group, 70 Cortez Plastics, Goshe Corporation, 4 Hyten Corporation, 22-34 Kombs Engineering, 13-14 L.P Mann~ngCorporation, 72-73 Macon, Inc., 35-36 MIS Project Management at First National Bank, 56-69 Project Firecracker, 74-80 The Reluctant Workers, 20-21 Williams Machine Tool Company, 15-16 Wynn Corliputer Equipment, 17-1 Jackson Indu\tries, Jones and Shepard Accountants, Inc., 100-1 0.3 Kent Corporation, 304-305 Kombs Engineering, 13-1 Lakes Automotive, L.P Manning Corporation, 72-73 Luxor Technologies, 283-286 Macon, Inc., 35-36 Managing scope change, 337 Denver International Airport, 339 382 Margo Corporation, 17-2 18 Martig Construction Company, 117- 18 Mayer Manufacturing, 297-299 Methodologies, see Project management methodologies MIS Project Management at First National Bank, 56-69 Mohawk National Bank, 119-122 Morality and ethics, 307 The Tylenol tragedies, 309-336 Negotiating for resources, 123 American Electronics International, 129-132 The Carlson Project, 133-1 34 Ducor Chemical 125- 128 Organizational structures see Projecl management organizational structures Packer Telecom, 28 1-282 Payton Corporation, 165-166 Percy Company, 146 Photolite Corporation (A), 385-387 Photolite Corporation (B), 388-390 Photolite Corporation (C), 391-395 Photolite Corporation (D), Planning, see Project planning Polyproducts Incorporated, 139- 145 Priorities, problem with, 304-305 Problem with priorities, 304-305 Project estimating, 135 Camden Construction Corporation, 151-154 Capital Industries, 137-138 Cory Electric, 147-1 50 Polyproducts Incorporated, 139-1 35 small project cost estimating at Percy Company, 146 Project execution, 173 The Blue Spider Project, 175- I 90 Concrete Masonry Corporation 208-2 16 Corwin Corporation, 191-202 Margo Corporation, 17-2 18 project overrun, 19-220 Quantum Telecom, 203-204 The Trophy Project, 205-207 Project Firecracker, 74-80 Project management cultures, Apache Metals, Inc., 90-9 Como Tool and Die (A), 83-86 Como Tool and Die (B), 87-89 Haller Specialty Manufacturing, 92 Project management methodologies, Clark Faucet Company, 7-10 Ferris Healthcare, Inc., 5-6 Lakes Automotive, Project management organizational structures, 93 Falls Engineering, 10-1 14 Fargo Foods, 104-107 Government Project Management, 108-109 Jones and Shepard Accountants, Inc., 100-103 Martig Construction Company, 17-1 18 Mohawk National Bank, 119-122 Quasar Communications, Inc., 95-99 White Manufacturing, 115-1 16 Project Overrun, 19-220 Project planning, 155 Greyson Corporation, 157-161 Payton Corporation, 165-1 66 Teloxy Engineering (A), 162-163 Teloxy Engineering (B), I64 Project risk management, 229 Acme Corporation, 29 1-293 Altex Corporation, 287-290 Luxor Technologies, 283-286 Packer Telecom, 28 1-282 The Space Shuttle Challenger disaster, 23 1-280 Project scheduling, 167 Crosby Manufacturing Corporation, 169-171 Quantum Telecom, 203-204 Inc., 95-99 Quasar Cornrnun~cat~ons, Reluctant Workers, 20-2 Resource negotiation, see Negotiating for resources Risk management, see Project risk management Safety Lab, 300-301 Salary, see Wage and salary administration Scheduling, see Project scheduling Scheduling the safety lab, 300-301 Scope change, see Managing scope change Small project cost estimating at Percy Company, 146 Space Shuttle Challenger disaster, 23 1-280 Structures, organizational, see Project management organizational structures Telestar International, 302-303 Teloxy Engineering (A), 162-163 Teloxy Engineering (B), 164 Time management, 409 time management exercises, 41 1-433 Time Management for Project Managers, 41 3 Trophy Project, 205-207 Two-Boss Problem, 223-224 Tylenol, 309-336 Wage and salary administration, 383 First Security Bank of Cleveland, 402404 Jackson Industries, Photolite Corporation (A), 385-387 Photolite Corporation (B), 388-390 Photolite Corporation (C) 391-395 Photolite Corporation (D), WCE, see Wynn Computer Equipment White Manufacturing 15-1 16 Williams Machine Tool Company, 15-16 Wynn Computer Equipment (WCE), 17-19 ... 16 TIME MANAGEMENT 409 Time Management Exercise 411 402 Preface Other than on-the-job training, case studies and situations are perhaps the best way to learn project management Case studies allow... supporting project management Project management became so disliked that the procurement manager refused to assign any of his employees to project teams Instead, he mandated that all project work... millionlyear project as well as a complete description of how the project management system at Kombs functioned When Kombs won the original bid in 1988, there was no project management requirement All projects