Supply chain management related to risk factor
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Review of Literatutre
A temporary enterprise that is undertaken for the creation of a specific project is called as a project. Though the products are of temporary nature, the management of a project should occur in a repetitive manner all through the cycle of life of every project. A process is nothing but a series of actions, alterations and functions that have the objective of bringing about the desired result. The major focus of the implementation of the project lies in the effective management of any project. To facilitate the effective management there should be a proper conception of the project by the stakeholders and there should also be a consistent enforcement by the management. The techniques and tools used in the dissemination of the project also occupy an important role in the management of a project. The organizations that are involved in the establishment of the project management processes face numerous predicaments from the outset. The fundamental question that is asked is that where to begin? The solutions that are taken with reference to this basic question would help in the designing of the plan for the effective management of the project and this would give a platform to make the project a failure or success.
The major goal of the process of project management is that it helps to establish consistent practices in the planning, initiation, control, execution and closure of the projects. There practices by nature do not occur spontaneously. Careful crafting of the ideas, effective communication and delicate enforcement of the same is the key behind the successful management of any project. Many road blocks like the resistance from the organization exhibited towards change should be overcome in order to enhance the possibilities for successful management of the project. The processes of management of the project itself are the basic building blocks of the establishment of procedures and also for the training. The methods that are used for the development of the procedures are used in elimination of the resistance shown by the organization to changes. The techniques and tools used for the implementation of the projects minimize the cost involved in the maintenance of the processes (Johnson et al, 2003)
- Initiation of the project
- Planning and designing of the project
- Construction of the project
- Commissioning of the project
- Close out of the project (Federal Transit Administration)
Scope of the Project
Every project is unique and it should have its requirements written and the document should take the operational needs into consideration, the service levels and the requirements for regulation that includes the acts like the “Americans with Disabilities Act” and also the deliverables’ quality. The scope of the project evolves as and when more and more information becomes available throughout the life cycle of the project. For example in case of a project on maintenance facilities, the early planning phases would suggest a scope of 5 bays of service. In the later times as the design of the project progresses, the nature of service and the correct location could be determined. The concepts of scope creep and the scope refinement should not be confused. The creep in scope is occurred when the agency realizes in the middle of the project that the operational requirements suggest a need for 6 bays rather than 5 bays. This is a serious change and would potentially affect the budget of the project that would have more requirements for land, infrastructure and redesigning. This may also introduce delays in the schedule like the replanning, longer time of construction. This refinement of scope is an essential process in the life of a project and the creep in the scope is due to a deficiency in the clarity of the requirements of the agency (Federal Transit Administration, 2003)
A definite beginning and end is sufficient for any project. The “Capital Improvement Plan (CIP)” of the project helps in the provision of tentative dates for the commencement of the project and in the ending of the project. Once the scope of the project is defined well, there should be a determination of the time according to the schedule of the project. This involves the breaking down of the project into fragments that are manageable and the scope of every deliverable should be considered. The duration of each activity should be calculated and a logical sequence should be devised for the accomplishment of every part of the broken down project. Hence the duration of the project that is expected and the coherent associations between the actions that is inclusive of the activities in the “critical path” that controls the ending date of the project should be devised (PMBOK® Guide, 2004).
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The Budget of the Project
There are many constraints involved in the planning of the project and the major constraints are the monetary constraints. Hence a definite budget should be constructed so the funding requirements of the project can be defined. The preliminary funding of the project should be established by means of a CIP. The budget is developed by the project manager on the basis of a cost estimate at the start of every phase and this can be refined once better information is available that defines the scope of the project. By means of the studies and analysis done the process of developing a design in the preliminary phase of engineering, the refining of the budget could be done. The common problem encountered in the fixing of the budget in a project is that as and when the project is implemented, there is always an excess encountered in the budget. Hence a way to overcome this is that there should not be a baseline fixing of the budget until the preliminary course of engineering is completed (PMBOK® Guide, 2004).
Life cycle of the project
The conception of the project involves the process of logical planning and the documentation of the plan in the Capital improvement plan. The major reasons for the creation of the project is to deliver the assets that are needed in order to
- Facilitate the sustenance of the service and to introduce improvements in the service quality
- Expansion of the service so that the growing demands can be met
- Facilitate compliance in the regulatory requirements
The CIP is composed of a lot of projects that would give the agency the required assets for introducing improvements in the strategic objectives on implementation. The life cycle of the project is supposed to begin when there is authorization to navigate from CIP towards implementation. Hence authorization of the project is the resolution that is approved to apply for funds. This would also help in the hiring of consultants who can work on the project. The resolution passed by the board is the authorization given for the project to move into its next phase. In many of the cases, the agency involve would approach the board again before initiation of the next phase of the project. This is because the scopes and the costs of the project would be defined better at this stage due the work done in these preceding phases of the project. In a conventional design of the project, the life cycle of the project starts with the beginning of planning that helps to decide the environment of the project and the funding and moves on to the designing that involves the conceptual design. There is a certain degree of overlap between the phases to a certain extent. In these phases, there is an evolving of the project by considering the alternate options and a fool proof design for an alternative is formed. The phase of designing continues throughout the process of preliminary engineering and leads to the attempts for further analysis, validation, and defining of an most feasible alternative and hence a baseline scope, budget as well as schedule. The conclusion of the phase of design occurs that gives a detailed view of the features in the design so that the agencies and the contractors are given a collection of construction drawings with specifications that helps in the building of the project. The phase of construction then proceeds with the process of award and bid. At the end of the phase of construction, the work of the contractor should be integrated with that of the operations and the activities furnished by the agency, the equipment, and technology. This should then be evaluated for acceptance all through the commissioning phase and hence the project could be brought to a successful completion. There are many methods for delivering a project and these methods follow many phases of work like the designing and construction to one contractor (PMBOK® Guide, 2004).
In the process of developing a project there is an identification of the needs of the project by the agency and an assessment of the ranking of the project in terms of importance in comparison to the other projects. The agency analyses the requirements for funding and a decision on whether to authorize the implementation of the project is reached. The mission of the agency, its vision and the strategic approach taken by the agency shapes the development of CIP of the agency. The developed plan takes into account the mission of the agency which in turn helps in defining the vision and the strategic plan that emerges as a result of these helps in the achievement of the goals and objectives of the agency. The next step is the determination of the assets that are required for the accomplishment of its strategies. Also the gaps existing between its existing assets and the required assets could be traced out. Hence a capital project is developed for the bridging of the gap existing between the required and the current assets. The CIP is a list of project that is prioritized so that the capital asset needs of the agency could be charted out.
In a CIP, not all the project could be implemented due to the constraints imposed by the funding problems. The important task is to rank the projects according to their relative importance and making hard choices for the selection of the projects to be implemented. Hence in this step of managing a project there should be a fine balance achieved between the costs of the project and the finance that is available for the project. The source of the finance could be by means of public policy, capital and operations, public financing etc.
Integration of the goals of the agency into the CIP
The important part of the project development process of an agency is that the capital improvement plan that is developed should be consistent with the goals of the agency. The steps that should be taken to achieve this are as follows:
- Assessment of the capital resources that are required for the achievement of the goals of the agency
- Identification of the gaps existing between the current and the required resources of capital
- Evaluation of substitute options for the filling of the gaps
A proper success in the assessment of the capital resources requires that there should be a confirmation and alignment between the goals of the agency with the mission of the agency. In order to attain this a proper process of strategic planning is needed so that the executive from the agency could do a reexamination of the agency’s mission according to the changing needs in the requirements of the community, mandates of the government, priorities of the board, strengths and weaknesses of the organization. Subsequently the policy goals and the objectives could be redesigned to be consistent with that of the mission of the agency. Once the goals and the objectives of the agency fall into place, an assessment of the capital resources of the agency could be done. For the identification of the gaps in the existing and the required resources, an inventory of the present capital assets is needed. Imploring the views of the personnel involved in the maintenance, operations and engineering who are involved directly in the present asset would provide valuable information on the utility and performance of an asset which is defined based on the following factors:
- The type of the asset and status and location of the asset
- The physical condition of the asset and the needs of maintenance of the asset
- Use of the asset and the level of performance of the asset
- On contracting the service, the ownership of the asset (PMBOK® Guide, 2004).
Critical success factors in the management of a project
There are special problems posed by the process of international project development for the project managers. The data by the World Bank group (World Bank, 1999) and from other resources (Bastani, 1988, Beamish, 1993) shows that there are many international projects that are challenged. There are separate sets of challenges for the projects that are completed and the projects that are about to be completed. There are many factors and they have been classified on the basis of their nature as follows
- Political factors
- Cultural factors
- Economical factors
- Social factors
- Legal factors
- Technical factors
- Environmental factors
- Managerial factors
- Physical aspects and corruption
From the perspective of the project managers these factors are elaborated and they exert an impact on these factors. There is also some influence exerted by the government on these factors.
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