Question

Como Tool and Die was a second-tier component supplier to the auto industry. Its largest customer was Ford Motor Company. Como had a reputation for delivering a quality product. During the 1980s and the early 1990s, Como’s business grew because of its commitment to quality. Emphasis was on manufacturing operations, and few attempts were made to use project management. All work was controlled by line managers who, more often than not, were overburdened with work. The culture at Como underwent a rude awakening in 1996. In the summer of that year, Ford Motor Company established four product development objectives for both tier 1 and tier 2 suppliers: 1. Lead time: 25–35 percent reduction 2. Internal resources: 30–40 percent reduction 3. Prototypes: 30–35 percent reduction (time and cost) 4. Continuous process improvement and cost reductions The objectives were aimed at consolidation of the supply base with larger commitments to tier 1 suppliers, which would now have greater responsibility in vehicle development, launch, process improvement, and cost reduction. Ford had established a time frame of 24 months for achievement of the objectives. The ultimate goal for Ford would be the creation of one global, decentralized vehicle development system that would benefit from the efficiency and technical capabilities of the original equipment manufacturers and the subsupplier infrastructure. STRATEGIC REDIRECTION: 1996 Como realized that it could no longer compete on quality alone. The marketplace had changed. The strategic plan for Como was now based on maintaining an industry leadership position well into the twenty-first century. The four basic elements of the strategic plan were: 1. First to market (faster development and tooling of the right products) 2. Flexible processes (quickly adaptable to model changes) 3. Flexible products (multiple niche products from shared platforms and a quick-to-change methodology) 4. Lean manufacturing (low cost, high quality, speed, and global economies of scale) The implementation of the strategy mandated superior project management performance, but changing a 60-year culture to support project management would not be an easy task. The president of the company established a task force to identify the cultural issues of converting over to an informal project management system. He believed that project management would eventually become the culture and, therefore, that the cultural issues must be addressed first. The following list of cultural issues was identified by the task force: Existing technical, functional departments currently do not adequately support the systemic nature of projects as departmental, and individual objectives are not consistent with those of the project and the customer. Senior management must acknowledge the movement away from traditional, “over-the-fence” management and openly endorse the significance of project management, teamwork, and delegation of authority as the future. The company must establish a system of project sponsorship to support project managers by trusting them with responsibility and then empowering them to be successful. The company must educate managers in project and risk management and the cultural changes of cross-functional project support; it is in the manager’s self-interest to support the project manager by providing necessary resources and negotiating for adequate time to complete the work. The company must enhance information systems to provide cost and schedule performance information for decision making and problem resolution. Existing informal culture can be maintained while utilizing project management to monitor progress and review costs. Bureaucracy, red tape, and lost time must be eliminated through project management’s enhanced communications, standard practices, and goal congruence. The task force, as a whole, supported the idea of informal project management and believed that all of the cultural issues could be overcome. The task force identified four critical risks and the method of resolution: 1. Trusting others and the system Resolution: Training in the process of project management and understanding of the benefits. Interpersonal training to learn to trust in each other and in keeping commitments will begin the cultural change. 2. Transforming 60 years of tradition in vertical reporting into horizontal project management Resolution: Senior management sponsors the implementation program, participates in training, and fully supports efforts to implement project management across functional lines with encouragement and patience as new organizational relationships are forged. 3. Capacity constraints and competition for resources Resolution: Work with managers to understand constraints and to develop alternative plans for success. Develop alternative external capacity to support projects. 4. Inconsistency in application after introduction Resolution: Set the clear expectation that project 107 management is the operational culture and the responsibility of each manager. Set the implementation of project management as a key measurable for management incentive plans. Establish a model project and recognize the efforts and successes as they occur. The president realized that project management and strategic planning were related. He wondered what would happen if the business base would grow as anticipated. Could project management excellence enhance the business base even further? To answer this question, the president prepared a list of competitive advantages that could be achieved through superior project management performance: Project management techniques and skills must be enhanced, especially for the larger, complex projects. Development of broader component and tooling supply bases would provide for additional capacity. Enhanced profitability would be possible through economies of scale to utilize project managers and skilled trades resources more efficiently through balanced workloads and level production. Greater purchasing leverage would be possible through larger purchasing volume and sourcing opportunities. Disciplined coordination, reporting of project status, and proactive project management problem-solving must exist to meet timing schedules, budgets, and customer expectations. Effective project management of multitier supply base will support sales growth beyond existing, capital-intensive internal tooling and production capacities. The wheels were set in motion. The president and his senior staff met with all of the employees of Como Tool and Die to discuss the implementation of project management. The president made it clear that he wanted a mature project management system in place within 36 months. QUESTIONS 5. What chance of success do you give Como? 6. What dangers exist when your customers are more knowledgeable than you are concerning project management? 7. Is it possible for your customers’ knowledge of project management to influence the way that your organization performs strategic planning for project management? 8. Should your customer, especially if it is a powerful customer, have input in the way that your organization performs strategic planning for project management? If so, what type of input should the customer have and on what subject matter?

Answer 1

What chance of success do you give Como?

The chances of success for Como Tool and Die are high because of few critical reasons. Most vendors, in response to client’s requirements give a knee jerk reaction by either letting go of the opportunity or completely changing production methods as per the new set of requirements. Como Tool and Die on the other hand is in the process of a well thought out complete overhauling at a strategic level. And this is not to keep only Ford Motor happy, but the same is being done with an outlook to future.

The plan for Como Tool and Die has many dimensions. The changes proposed are at a strategic level with elements of lean manufacturing, flexible products and processes. The President also talks about cultural changes, since at the end of the day it is the people of the company who would be executing these changes, and hence incorporation of cultural changes is required.

The only impediment to this entire issue is the deadline that Ford Motor has of 24 months, whereas President of Como Tool and Die has a target of 36 months for full implementation of the proposed changes.

What dangers exist when your customers are more knowledgeable than you are concerning project management?

For the most part, a knowledgeable partner can only have positive outcomes. The dangers could possibly be

Aggressive imposition of project management methodologies as per the customer’s needs

Lack of understanding may often lead to unnecessary changes being implemented, causing unnecessary expenses

In the customer deciding to take business away for any reason in the future, the changes implemented can stop giving the planned returns

Is it possible for your customers’ knowledge of project management to influence the way that your organization performs strategic planning for project management?

It is very much a possibility and happens mostly when vendors lack the understanding of project management nuances and the opposite is true for the client. Having said that, such influence is not always a bad thing, as the same is a critical stage in knowledge sharing.

For a company such as Como Tool, even though the company had superior quality as its USP, it is Ford’s intervention that led to Como thinking in a more strategic manner and hence change its ways for the better.

Should your customer, especially if it is a powerful customer, have input in the way that your organization performs strategic planning for project management? If so, what type of input should the customer have and on what subject matter?

A powerful customer will always have inputs in the processes of my company, however it is important to draw a line and accept inputs at a certain level only. In most cases, the client declares only the expectation that it has from the vendor and at best asks for a list of ground level changes that will be carried out to meet said expectations.

However intervention at ground level changes are not to be entertained and that understanding should be in the vendor client relationship.