Question

By 1997, Como had achieved partial success in implementing project management. Lead times were reduced by 10 percent rather than the target of 25 to 35 percent. Internal resources were reduced by only 5 percent. The reduction in prototype time and cost was 15 percent rather than the expected 30 to 35 percent. Como’s automotive customers were not pleased with the slow progress and relatively immature performance of the company’s’ project management system. Change was taking place, but not fast enough to placate the customers. Como was on target according to its 36-month schedule to achieve some degree of excellence in project management, but would its customers be willing to wait another two years for completion, or should Como try to accelerate the schedule? FORD INTRODUCES “CHUNK” MANAGEMENT In the summer of 1997, Ford announced to its suppliers that it was establishing a “chunk” management system. All new vehicle metal structures would be divided into three or four major portions with each chosen supplier (i.e., chunk manager) responsible for all components within that portion of the vehicle. To reduce lead time at Ford and to gain supplier commitment, Ford announced that advanced placement of new work (i.e., chunk managers) would take place without competitive bidding. Target agreements on piece price, tooling cost, and lead time would be established and equitably 110 negotiated later with value engineering work acknowledged. Chunk managers would be selected based on superior project management capability, including program management skills, coordination responsibility, design feasibility, prototypes, tooling, testing, process sampling, and start of production for components and subassemblies. Chunk managers would function as the secondtier component suppliers and coordinate vehicle build for multiple different vehicle projects at varied stages in the development–tool– launch process. STRATEGIC REDIRECTION: 1997 Ford Motor Company stated that the selection of the chunk managers would not take place for another year. Unfortunately, Como’s plan to achieve excellence would not have been completed by then, and its chances to be awarded a chunk management slot were slim. The automotive division of Como was now at a critical junction. Como’s management believed that the company could survive as a low-level supplier of parts but its growth potential would be questionable. Chunk managers might find it cost effective to become vertically integrated and produce for themselves the same components that Como manufactured. This could have devastating results for Como. This alternative was unacceptable. The second alternative required that Como make it clear to Ford Motor Company that Como wished to be considered for a chunk manager contract. If Como were to be selected, then Como’s project management systems would have to: Provide greater coordination activities than previously anticipated. Integrate concurrent engineering practices into the company’s existing methodology for project management. Decentralize the organization so as to enhance the working relationship with the customers. Plan for better resource allocation so as to achieve a higher level of efficiency. Force proactive planning and decision making. 111 Drive out waste and lower cost while improving on-time delivery. There were also serious risks if Como were to become a chunk manager. The company would be under substantially more pressure to meet cost and delivery targets. Most of its resources would have to be committed to complex coordination activities rather than new product development. Therefore, value-added activities for its customers would be diminished. Finally, if Como failed to live up to its customers’ expectations as a chunk manager, it might end up losing all automotive work. The decision was made to inform Ford of Como’s interest in chunk management. Now Como realized that its original three-year plan for excellence in project management would have to be completed in 18 months. The question on everyone’s mind was: “How?” QUESTIONS 1. What was the driving force for excellence before the announcement of chunk management, and what is it now? 2. How can Como accelerate the learning process to achieve excellence in project management? What steps should management take based on its learning so far? 3. What are Como’s chances for success? Justify your answer. 4. Should Como compete to become a chunk manager? 5. Can the decision to become a chunk supplier change the way Como performs strategic planning for project management? 6. Can the decision to become a chunk supplier cause an immediate change in Como’s single methodology for project management? 7. If a single methodology for project management already exists, then how difficult will it be to make major changes to the methodology and what type of resistance, if any, should management expect?

Answer 1

1.Before : wish for better performance After; Life and Death

2.Take the steps used to reduce waste and improve thus far and apply them more widelyand with more strictness.To achieve the excellence in project management , como should accelerate the learning process by understanding the client requirement and exact needs. Efforts should be made in understanding client's culture,knowledge of their market and products and what their expectations from project management are and how they want it be implemented.

3.como's plan to achieve excellence would not have been completed and its chance to be awarded a chunk management slot were slim but when people are faced loosing with their jobs they may work faster and could achieve a higher level of efficiency.

4. In order to be competitive and stable in the market , como should compete to be a chunk manager.Quiting is not an option as it spoil its reputation.

7.Definitely the customer knowledge towards project management effects the strategic planning of the organization because they tend to control and take advantage of existing project scenario.customers with better knowledge in project management try to mold the process and they want to change the style of work as per their requirment. Tey expect the best operations management and documentation with detailed steps. How ever the project managers have to control this situation by doing proper planning initially so that they know what to expect from the customer and how to handle the situation.