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Project Management in Logistics

A Proven Process for Success: Project Management

Pamela Bocek Murphy

The Project Management Institute is having a profound impact on the landscape of logistics in Canada and worldwide. Here is a snapshot of how the discipline of meticulous project management yields outstanding results.

When it comes to outperforming competitors, a rising number of companies are finding the newly emerging discipline of project management can provide many advantages, from reducing costs to bolstering the bottom line.

What exactly is the practice of project management? Project management is predicated on the elements that constitute a project. A project is a temporary endeavor undertaken to create a unique product or service, according to the Project Management Institute (PMI). In this context, the word temporary means that every project has a definite beginning and end. Unique means that the product or service is different and can be distinguished from other products or services. A high profile and familiar example would be a project that is implemented as a means to achieve an organization’s strategic plans.

Project Management is the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of a particular project. Project management is comprised of five processes, namely: initiating, planning, executing, controlling, and closing – as well as nine knowledge areas. These nine areas center on management expertise in project integration, project scope, project time, project cost, project quality, project human resources, project communications, project risk management and project procurement.

The phrase “project management” began to emerge in the late 1950’s and early 1960’s when the size, scope, duration and resources required for new projects began to deserve more analysis and attention. PMI, founded in 1969, has grown rapidly from 8,500 members in 1990 to now include more than 100,000 members in 125 countries. PMI is the leading nonprofit professional association in the area of project management, administering a globally accepted and recognized, rigorous, examination-based, professional certification program of the highest caliber. The PMI Certification Program maintains ISO 9001 certification in Quality Management Systems as evidence of its commitment to professional excellence.

Today, project management is used globally by multi-billion dollar corporations, governments and smaller organizations as a means of meeting their customers’ needs by both standardizing and reducing the basic tasks necessary to complete projects in the most effective and efficient manner. Many organizations around the world such as HP and Ryder utilize project management to enable innovative processes, plan, organize and control strategic initiatives, as well as to monitor performance and forecast their impact on the organization and project(s).

An exemplary application of the practice of project management emerged as a result of the May 2002 merger of Hewlett-Packard and Compaq Computer Corporation. This $18.5 billion deal forced HP to tackle the daunting task of integrating the estimated 60,000 Compaq employees with HP’s 90,000-plus work force spread across 160 countries. The merger also provided the new HP with logistics and distribution challenges in Canada. HP’s enterprise strategy to drive customer value in today’s challenging environment remained a key focus throughout this logistics initiative.

In this case, HP had a distribution facility with Ryder performing logistics services in the Toronto, CN area. Compaq had two other facilities also within this area. HP closed these Compaq facilities and merged them into the HP-Ryder facility. Besides the shutdown and physical move of the products, new systems had to be integrated into the Ryder facility and employees needed to be trained on these new systems and processes.

Both companies engaged the services of their project management expertise to provide the leadership required for a transparent integration involving the on-time closure of both facilities and completion of this project under budget. The project management methodologies noted earlier were deployed to ensure issues were identified and quickly resolved, risks mitigated and contingency plans developed. As a result, all of the required tasks were completed within the established timeline and budget.

By applying project management, both companies enabled senior executives to:

When engaging more than one service offering and/or when there is a facility startup or a facility closure/move, Ryder will deploy a program manager to ensure the scope of work is clearly defined with deliverables, milestones, planning assumptions, critical success factors, and resource roles identified that will fill the specific tasks identified in the scope of work. The program manager will develop and validate the startup budget and track the burn rate of the project to the end. As the program manager works on the project plan and oversees the deliverables to completion, the project will transition to its Operations group for the ongoing support of its client’s customers. A meeting is held to ensure the client agrees the deliverables have been achieved. The final steps involve the client completing a customer satisfaction survey and a debriefing meeting to review the lessons learned on the project. These lessons then become the basis for program management process improvements. The goal is to improve upon each engagement to deliver results faster, better and cheaper than in previous engagements and ensure we have provided excellent customer satisfaction.

In summary, when a complex project is involved, it’s important to engage the services of a program manager and preferably one that has earned the PMP certification. This resource will help to analyze opportunities, chart the best course and execute it flawlessly.