Risk Analysis and Project Management Scope

Projects, usually, are categorized into three different types: market driven, change driven and crisis driven, based on their respective functions and usages. By definition, change driven projects are expected to meet certain goals in order to change operation to match the environment; crisis driven projects are usually anticipated to response to urgent situations, such as the evacuation of a terrible natural disaster. The project in task 2, in my opinion and based on the Managing Projects (2014, p7), should be defined as market driven project, which uses new technologies to produce products that meets the market needs to increase competitiveness. Furthermore, this project, as addressed in task 2 briefing that it is partially considered by the company as a response to the effects of globalization, should be categorized as market driven project.

Defined by Project Management Institute (2013, p51), “Project Scope Management includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully”. The scope statement should first include project justification or the benefit of building a new site and introducing new technologies; second, product description that briefly documents the characteristics of the product; third, the deliverables: sub-products or tools will be used to make the product successful; fourth, project objectives which include cost, schedule, and quality. The most important tool that will be used in to show the sub-division of the scope of work is a Work Breakdown Structure. A Work Breakdown Structure defined by Pinto and Jeffrey (2015, p173) is “a process that sets project’s scope by breaking down its overall mission into a cohesive set of synchronous, increasingly specific tasks.” In other words, WBS helps the project team understand the steps and details that are required to make sure the completion and success of this project.

Gantt charts are an easy method to present beginning and end of a project. It also helps managers to schedule different tasks and track the progress of the entire project. The advantages of creating and using a Gantt chart is that it helps managers monitor and control the progress of the project because Gantt chart shows prerequisites for each separate activity. It helps managers set priorities, notice what needs to be done first in order to continue the progress, and make changes to the preset schedule and plan. By identifying a critical path— “series of interdependent activities of a project, connected end to end” (Pinto, 2015, p332), managers can determine the shortest total length of the project. By looking at the critical path, managers will clearly see what tasks need to be finished before the next dependent one can start, so if a critical task cannot be completed on time, the whole project will be delayed, vice versa. Generally speaking, the success of a project must be based on the consideration of key factors that define the very nature of a project (Pinto, 2015, p36).

Time—can the project be finished on time or even earlier than expected Budget—did the cost meet our estimation or budget Quality—whether the outcome of the project meets the specifications of the requirements Scope-- work that needs to be accomplished to deliver a product, service, or result with the specified features and functions Defining success of a project can be hard sometimes, since different people will take different elements into account. Therefore, comparing the future outcome of the project (products or services) with time, budget, and quality all combined together is probably the easiest way for the determination.

Using risk management, which is a four-stage process—identification, analysis, mitigation, and control and documentation (Pinto, 2015, p245), can be helpful. First, management team must know what the risk could be and what might cause them to happen. Second, a risk impact matrix should be constructed to reflect all identified project risks, each prioritized according to the probability of its occurrence (Pinto, 2015, p248) in order to have a general idea of the risk likelihood and consequences. Third, after analyzing the risks, use different strategies to transfer—for example liquidation; minimize—reduce the damage to minimum; accept the risk if its damage is minor and if it is not avoidable; or share risks by bring in investments or contracts that legally require risk sharing. Finally, use control and documentation system to classify and codify various risks for referencing. This helps managers make quick and effective decisions if similar events occur in the future (Managing Projects, p127).

In order to make sure that project in task 2 is completed successfully on-time and within budget, project evaluation, monitoring and control method should be implemented. This method allows management team stay on top of a project’s changing status as it moves through different life cycles toward its completion (Pinto, 2015, p453). First method can be used is milestone analysis. Milestones of a project represent significant stage completion during the process of the project. It can motivate the project team, make changes to meet new objectives, help coordinate schedules with suppliers and vendors, notify other team members to begin their part, and develop a better overall view of the project. Another method is called tracking Gantt charts. By doing so, project team can constantly update project’s status by linking task completion to the schedule baseline. Tracking Gantt charts helps project management team monitor specific activity starting and ending date, thus make adjustments to ensure project can be finished on time, if necessary. Now more and more companies use EVM—earned value management, to monitor and control their projects, because it is believed that it is necessary to consider the impact of time, cost, and budget all together to determine the current status of a project. Unlike other methods, EVM provides integrated information for managers to have a better understanding of the current situation and to determine what changes have to be made (Pinto, 2015, p460).

To and increase automotive industry competitiveness, TSK Bearings Ltd has decided to introduce new technology and machinery, transferred from Asia, into a manufacturing site within the UK as part of a strategy of expansion. This project must be completed by March 2018 with a 12 million GBP budget including the purchase and building of a manufacturing site, and training and recruitment of team members for the success of project completion and of new technology implementation. In the report, project life cycle—concept, development, implementation, and termination—along with management skills, will be the main theory used to explain and describe essential activities, during the management process, required to successfully manage this new initiative, ensuring that it is on-time, and within budget.

Concept Stage

Defining objectives

This is the phase that management team grasps a general idea of what the project is going to be. First thing to begin with as a manager is to have a clear understanding of the objective which is to make sure that the building of new manufacturing site and the transfer of new technology will be accomplished within the time and budget limitations. At the same time, stakeholders or owners of this project must also be taken into consideration, since the challenge to achieving total success comes from complexity of the objectives and the requirements of many different groups of stakeholders for the project, not least because there will be conflicts between the requirements of each (Maylor, p76). For example, some stakeholders emphasize more on the short-term rate of return, others may focus on long term development of the company. It is important to balance and finalize, and have a specific and clear direction that members work towards. This project does not only serve the purposes of catching up with new production technology. This project “establishes a sense of what the organization hopes to accomplish or what top managers hope it will become at some point in the future (Pinto, 2015, 59),” because as mentioned in the task 2 brief, it considers expanding production capacity as its organizational strategy for the future.

Management team and required skills

Quality of a team determines how successful can a project be. In other words, team members and teamwork is crucial to project management. We must work within teams, and we must build our teams in such a way that members can and will work together cooperatively to accomplish the work of the project. An effective team could be described as any group of people who must significantly relate with each other in order to accomplish shared objectives (Michael, 2008). Team building should start as early in the project life cycle as possible—in the concept stage, because the performances of everything that comes up in the following stages will be based on the efficiency and effectiveness of the team.

The success of a team can be influenced by two important factors: leadership and individual skills and attitudes. Addressed by Harvey Maylor (2011, 268), “leadership involves the influencing of others through the personality or actions of the individual”. Manager is the dynamic, life-giving element in every business. Without his or her leadership, the resources of production remain resources and never become production. Manager leads the team by acquiring resources for the team, motivating team members, having a vision for the project, and communicating with team members (Pinto, p139). As the manager for this project, I will need to be familiar with each member’s capability, and at the same time build up a relatively good communication channel with each member. This can facilitate appointing personnel to separate activity when work breakdown structure is introduced. For individual team members, they are required to train in Asia for potentially 12 months to gain knowledge, experience and assist the implementation of the new technology. Since team members are to be recruited from existing company staff with some members recruited externally, as mentioned in the task 2 brief, cooperation between internal and external members. I, as the manager of this project, play important in making sure our team is fully functional without any conflicts between team members.

Cost estimation

Nothing can be done without sufficient resources. Within limited budget (12 million pounds), manager of this project must devise an estimation of required resource as sophisticated as possible. Resource limitation, as one of the constrain, includes both money and people. Since we already have existing team members, initial project cost estimation and budgeting are extremely important elements in the project. It is essential to estimate cost before the project starts, because it creates a reasonable budget baseline for the project and identify project resources as (Pinto, p279). Cost estimation also relates to scheduling or time management, because “if necessary, additional resources will be added to the project to hit critical launch window (Pinto, p423).” Meanwhile, cost over estimation should be avoided. If estimation exceeds actual resources required for the project, wastes will be generated, thus leading to less profit or even potential failure. After full assessing the activities mentioned above and determined that the project is feasible, manager need to obtain approval for the next stage, which is the development stage.

Development Stage

Development scope baseline

A scope baseline is a document that provides a summary description of each component of the project’s goal, including basic budget, end product quality, and schedule information for each activity. Scope baseline presents detailed objectives for the team members to focus on. It reflects a team’s best endeavor at creating the documentation and approval of all important project. Creation of the scope baseline is the final step in the process of systematically laying out all pre-work information, in which each subroutine of the project has been identified and given its control parameters of cost and schedule (Pinto, p173). The establishment of scope baseline not only set a specific objective for the team to achieve, but also serves as a tool for monitoring and control in the future. By looking at various activities and their requirements and specifications, manager will be able to identify and make adjustments during the process to determine whether the project is working toward its success.

Budgeting

Even though cost estimation gives us a general idea of how much resources are required in achieving project objectives, budget development identifies the allocated resources, the project’s goals, and the schedule that allows an organization to achieve those goals. A budget helps in planning actual activities by forcing managers to consider how the conditions might change and what steps should be taken, and by encouraging managers to consider problems before they arise. It also helps to co-ordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments. In this project, activity-based costing method should be implemented. It assigns cost first to activities and then to the project based one each project’s use of resources (Pinto, p296). In this project, budget can be separated into two parks: new manufacturing site, and team member training and new technology transformation. Within the 12 million pounds project budget, resources should be allocated effectively into each individual activity, such as purchase of construction material, labor cost, purchase of new machinery, etc. The entire project team need to be familiar with respective cost of each activity to optimize limited resources, because the implementation of monitoring and controlling can be much easier if any potential event occurs that may benefit or harm the project.

Work breakdown structure

Work breakdown structure is a deliverable-oriented grouping of project elements which organizes and defines the total scope of projects (Pinto, p173). Work breakdown structure provides management team with a clear view of how many individual activities are needed for the completion of the entire project. Each descending level of activities represent an increasingly detailed definition of a project component. After creating a work breakdown structure, team members can be appointed to be responsible for each task, and cost can be allocated to different activities, which helps determine and make adjustments to budget during the process. Furthermore, work breakdown structure can facilitate the creation of schedule by using Gantt charts and identifying critical path for different activities. Work breakdown structure can be crucial to the project, because A poorly constructed WBS can result in adverse project outcomes including ongoing, repeated project re-plans and extensions, unclear work assignments, scope creep or unmanageable, frequently changing scope, budget overrun, missed deadlines, and unusable new products or delivered features (Brotherton, 2008).

Assessing risks

Risk Analysis and Management is a key project management practice to ensure that the least number of surprises occur while the project is underway. While we can never predict the future with certainty, we can apply a simple and streamlined risk management process to predict the uncertainties in the projects and minimize the occurrence or impact of these uncertainties. This improves the chance of successful project completion and reduces the consequences of those risks (Lavanya, 2008). However, there’s a problem in assessing risks is that risks are possible future events that have not yet occurred, thus their probability of occurrence can only be estimated (Hillson, 2004). For example, the possibility of natural disaster that may delay the construction of new site cannot be determined, even though previous weather data will be taken into account. Therefore, when assessing risks, we should take precaution, because overestimate the possibility of risks may discourage team members and allocate unnecessary resources for response plan.