Project management for the supply management professional rev. 5 13-13

© Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™

Exam 2

Project Management for

The Supply Management Professional


Exam 2

Learning Objectives:

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L.O. # Seminar Objective

1 Identify the Various Stages in the Life Cycle of a Project

2Understand How to Construct a Work Breakdown Structure Using a Sample Project

3 Understand How to Read & Interpret a Gantt Chart Using a Sample Project

4Use Project Management Principles to Get Things Done and Drive More Efficient Execution

5 Diagram the Critical Path of a Sample Project

6 Create a Project Plan to Use in Managing Your Projects

7 Assess the Benefits of Using Microsoft Project 2010

8 Identify Software Tools Available to Help You Manage Your Projects


Exam 2

Terminal Course Objectives of a Typical Project Management Course:• Select the best alternative from among competing projects.• Conduct a task analysis .• Determine task costs, total project cost and develop the

project budget.• Understand the demands placed upon a project manager

and issues that must be addressed • Analyze resource conflicts that jeopardize the project

schedule.• Apply earned value techniques to calculate project

variances.• Use project management software.• Develop and apply management by exception threshold

criteria.3


Exam 2

Introduction to This Course:

• Provide an overview of Project Management. • Address the basic nature of managing all types of projects, • Focus specifically on those of interest to the Supply

Management Professional. • Notice specific techniques and insights required to carry out this

unique way of getting things done. • Align with the material presented in the CPSM Exam 2 Study

Guide, Task 2-G-1 Perform Project Management Activities Representing the Supply Management Organization

• Major topic areas: Project Initiation, Project Planning, Project Execution, Project Monitoring and Control, and Project Closure.

• Introduce Microsoft Project 2010 - offer an overview of benefits of using it to manage projects.

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Exam 2

Introduction to Project Management:• I am not a certified Project Manager. • Six credentials available - visit the Project

Management Institute website http://www.pmi.org• You will probably not become a Project

Management Professional but “Today, more than ever, supply

management professionals are active participants on projects, particularly with the advent of outsourcing. They may be involved in enterprise-wide projects, projects with other functions including engineering, operations, marketing and sales or their own internal projects. Most often they are concerned with the acquisition, purchase and value to the organization of those goods and services that will be needed to deploy any organization-related project plans. Some supply management professionals work in a project environment on a full-time basis while others are brought into a project as needed. Examples of projects where supply management lends expertise and will most likely be involved include:

• a. Creating a supplier certification program• b. Developing and implementing an online auction program• c. Selecting and recommending materials or developing a statement of work for a new product or

service• d. Contract preparation and negotiation• e. Developing a key supplier” • (Effective Supply Management Performance (ISM Professional Series), by Darin L. Matthews and Linda

L. Stanley, Chapter 2 (p. 23)6


Exam 2

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How Project Management Developed

• Credit for the development of project management goes to the military

Navy’s Polaris program NASA’s Apollo space program Development of “smart bombs” and “missiles”

• Project management has found wide acceptance in industry

• It has many applications outside of construction Managing legal cases Managing new product releases Managing Procurement & Sourcing Projects


Exam 2

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Project Management Organizations

• The Project Management Institute, founded in 1969, is the major project management organization

• Grew from 7,500 members in 1990 to over 320,000 in 2010

• Other organizations Association for Project Management International Project Management Association


Exam 2

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The Definition of a “Project”

• “a temporary endeavor undertaken to create a unique product, service, or result” (PMI PMBOK Guide)

• “a special piece of work outside the normal flow of daily activities that has a specific objective and a time and budget limit” (ISM Glossary)

• Modern project management began with the Manhattan Project

• In its early days, project management was used mainly for large complex projects

• As the tools and techniques were developed, the use of project organization began to spread


Exam 2

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Why Project Management?

• The main purpose for initiating a project is to accomplish some goal

• Project management increases the likelihood of accomplishing that goal

• Project management gives us someone (the project manager) to spearhead the project and to hold accountable for its completion


Exam 2

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Projects Are Typically Created to Meet at Least One of These Objectives

• Create a change in an organization • Exploit new opportunities• Implement the strategic plan• Fulfill a contractual agreement• Solve some problem


Exam 2

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Project Management Defined

“the process of coordinating the organization, planning, scheduling, controlling, monitoring and evaluating of activities so that the objectives of a project are met”

(Source: ISM Glossary)


Exam 2

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Project Life Cycle - Process Stages

a) Initiating

b) Planning

c) Executing

d) Monitoring/Controlling

e) Closing


Exam 2

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Project Life Cycle – Knowledge Areas

a) Integration Management

b) Scope Management

c) Time Management

d) Cost Management

e) Quality Management

f) Human Resources Management

g) Communications Management

h) Risk Management

i) Procurement Management


Exam 2

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The Knowledge Area of Project Procurement Management includes a discussion of :

a) Plan Purchases and Acquisitions

b) Plan Contracting

c) Request Seller Responses

d) Select Sellers

e) Contract Administration

f) Contract Closeout


Exam 2

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Initiating the Project – To Define the Problem that the Project Will Solve:

• SWOT Analysis• Kepner-Tregoe Analysis• Six-Sigma Analysis• Business Case Analysis• Alternative Analysis• Stakeholder Analysis


Exam 2

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Planning the Project – To define Project Objectives, Scope and Tasks

• Solicitation Planning• Scope Development• Team Roles/Responsibilities• Budget• Schedule• Risk Management


Exam 2

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Executing the Project –Solicitation & Source Selection Phase

• Source Selection Process• Managing the Project Team• Change Management


Exam 2

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Monitoring and Controlling the Project

• Performance Measurement Tools Earned Value Analysis Schedule Analysis Budget Analysis

• Change Control Process• Risk Management Process• Reporting


Exam 2

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Closing the Project

• Contract Closeout Process: Property Dispositions Process Final Product/Service Acceptance Final Payment Process

• Best Practice/Lessons Learned• Post Project Audit


Exam 2

Task 2-G-1 Case Study Production Line-Redesign

Instructions: In your table groups, read the case study, answer the discussion questions and be prepared to explain your responses. You have five minutes.

Martin Rodriguez works as the Supply Manager at the Summit Pewter Company, a small manufacturing company headquartered in Littleton, Colorado. The company manufactures a line of commemorative pewter products for the American market. For the past 18 years, commemorative wedding pewter goblets have been the company's best-selling product line.

The company’s design group, along with corporate marketing, is busy developing new product lines for the burgeoning home accessories market. The operations and production management group is implementing a production line redesign initiative, including relevant software upgrades. This initiative is driven by the need to retool the company’s production lines to support the new products and findings in a recent study indicating that time delays involved in the existing procurement system are shutting down production. To compensate, production has increased inventory on hand, negatively affecting cash flow.

Senior management has tasked the operations and production, information technology and supply chain management groups with successfully implementing the production line redesign and replacing relevant software modules. Rodriguez has been assigned as a full-time supply management subject matter expert in the new initiative’s project team structure. Rodriguez's role will be to perform project management activities representing the supply management organization by providing procurement expertise in all of the phases of the project.

In order to be successful, Rodriguez will follow a standard methodology for project management and will be involved in each of the following phases of the initiative: initiation, execution, monitoring and controlling and closing. He will rely on his supply management and project management training and skills throughout all project life cycle activities. As a supply professional, what questions should Rodriguez consider from the project management point of view?

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Exam 2

Task 2-G-1 Case Study #1

Discussion Questions

1. What are some analysis tools Rodriguez should incorporate when analyzing capital equipment acquisitions during the project initiation phase?

2. List four or five processes or tools Rodriguez can use in the project monitoring and control phase to manage the contract.

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Exam 2

Benefits of Using a Project Management Software Tool – MS Project 2010• Increased ability to effectively manage and understand

project schedules• Improved ability to become productive quickly• Increased capability to build effective charts, graphs, and

diagrams• Better communication within the project team• Improved understanding of change impacts• Increased control over finances and the resources allocated

to the project• More effective tracking according to the project team needs

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Exam 2

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Exam 2

Using Microsoft Project 2010

• User has 3 main options to Learn Project 2010:

Use the trial –and-error method. Many people prefer to just start using the software and learn as they go, using the Help menu provided by Microsoft as needed.

Read/skim a book. There are many good books on the market. One of those is Microsoft Project 2010 for Dummies by Nancy Muir. We quote extensively from this book in this presentation.

Watch a video tutorial. One such product is the set of 147 videos offered by Infinite Skills (see www.infiniteskills.com).

• MS Project functions much like Excel but, as Nancy Muir says in her book, Microsoft Project 2010 For Dummies, “it’s probably not like any other software you’ve ever used, so mastering it can seem a daunting process.”

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Exam 2

Using MicroSoft Project 2010

• The file that you create in MS Project is called a Project plan, or schedule.

• This plan contains a plethora of information. • The many “views” of Project allow you to observe the

structure of your plan and see the progress of it. • Project offers many ways to move around and display

different information in your views.

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Exam 2

Using MicroSoft Project 2010 – You move from one view to another by using the Task and View tabs on the Ribbon. Clicking the down arrow on the Gantt Chart button displays the 13 most used views:

Calendar, Gantt Chart Network Diagram Resource Sheet Resource Usage Resource Form

Resource GraphTask UsageTask FormTask Sheet, Team PlannerTimelineTracking Gantt.

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Exam 2

Benefits of Using a Project Management Software Tool - Excel• It is Simple to Use• It is readily available – not everyone has MS Project

Software• It is suitable for many simple projects, involving only

yourself and your team• Here is a simple project plan I used to develop a course in

Project Management for Webster University this Spring 1 Term

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Exam 2

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Exam 2

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Exam 2

Reference Sources

• CPSM Study Guide, Exam 2, Task 2-G-1 (pp. 179 – 190)

• Effective Supply Management Performance (ISM Professional Series), by Darin L. Matthews and Linda L. Stanley, Chapter 2 (pp. 23 – 70)

• Microsoft Project 2010 for Dummies by Nancy Muir • Managing Projects in Organizations by J. Davidson

Frame • Project Management: A Managerial Perspective by

Jack R. Meredith and Samuel J. Mantel, Jr.

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Project management for the supply management professional rev. 5 13-13

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