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Chapter 7 of Managing Project Supply Chains (978-1-4094-2515-1) by Ron Basu

Supply Chain Integration: Regular Reviews

7

Introduction

Each building block may be managed very efficiently within its own silo, but these integrating processes act as a glue to the Project Supply Chain to deliver the project at the right time, right cost and right quality. Without these processes, especially regular reviews, the synergy of all building blocks could not attain their full potential. In this chapter the key processes of how to optimise reviews by appropriate groups at appropriate times on the specific issues project supply chains are discussed.

Why Reviews?

In the Project Management Body of Knowledge (PMBOK, 2008) the importance of project review meetings is recognised and well defined, as they ‘provide[s] the critical links among people, ideas and information that is necessary for success’. However there are few publications available, with the exception of the OGC Gateway Review process (www.ogc.gov.uk), to provide guidelines for project review conferences. Project Managers are often divided in their opinions about the efficacy of progress meetings. Some managers prefer numerous, small, frequent meetings while others prefer the occasional big get-together with almost everyone in the project in attendance. While it is true that there are some who consider ‘meetings, bloody meetings’ as a time waster, many view progress conventions as forums where steps forward, issues and risks can be discussed and agreed upon.

According to the OGC website:

The OGC Gateway Process examines programmes and projects at key decision points in their lifecycle. OGC Gateway Reviews are applicable to a wide range of programmes and projects including … procurements using or establishing framework arrangements. The process is mandatory in central civil government … OGC Gateway Reviews deliver a ‘peer review’ in which independent practitioners from outside the programme/project use their experience and expertise to examine the progress and likelihood of the successful delivery of the programme or project. The review uses a series of interviews, documentation reviews and the team’s experience to provide valuable additional perspective on the issues facing the project team, and an external challenge to the robustness of plans and processes. They are used to provide a valuable additional perspective on the issues facing the internal team, and an external challenge to the robustness of plans and processes.

 

Although the ‘gateway’ reviews provide useful additional perspectives on project issues, the need for regular and formal internal progress meetings cannot be underestimated. Sales and Operations Planning (S&OP) is an integrator of the building blocks of total supply chain management. In this method, all key managers and staff are involved in the process, but not at the same meeting. Every organisation usually has some form of regular planning meeting in which the financial and business plans are reviewed and often some marketing and operational targets are discussed by a group of managers. These monthly seminars tend to deal with short-term problems and opportunities, and usually decisions are made according to the subjective judgements of an influential senior manager. In many companies, what passes for S&OP is often little more than a monthly review of the performance of the Master Production Schedule (MPS). Many software providers also take the view that it is best done as an extension of the existing product level planning process.

In our experience both of these approaches fail to achieve the very real business benefits that an effective S&OP process can deliver. S&OP should be treated as a formal planning and execution procedure rather than just as a set of planning meetings. Whether the business processes are forecast driven, MRPII processes or order driven pull or Just-in-Time practices, the role of S&OP is equally important. Furthermore, there must be a course of action within S&OP that breaks down the aggregate plan into detailed arrangements.

Dick Ling, almost the founding father of S&OP, defines Sales and Operations Planning as a process rather than a system, saying that it is, ‘the process that enables a company to integrate its planning within the total company’. The outcome of the process is the updated operation plan over 18 months or two years (the ‘planning horizon’) with a firm commitment for at least one month. The process involves a set of sequential reviews by process owners, starting with a demand study, then a supply and capacity appraisal followed by a reconciliation of demand and supply. Finally there should be a senior management evaluation to approve the sales and operation plan over the planning horizon. The benefits of S&OP type meetings with major suppliers and stakeholders are also applicable to project supply chains.

Which Reviews and When and by Whom?

Learning from the good practices of S&OP as an integrator of supply chain management, project supply chain review meetings should also be sequential, ensuring that all key managers and staff are involved in the process but not at the same meeting. These review processes usually include:

  1. Team Meeting

  2. Supply Chain Review Meeting

  3. Project Management Meeting

  4. Milestone Review Meeting.

 

In addition there are Functional Meetings, Performance Review Meetings and Gateway Review Meetings to complement the mainstream review meetings as illustrated in Figure 7.1.

Team Meetings are conducted for each work package every week and are led by the team leader. The purpose of these meetings is to monitor progress and identify issues and bottlenecks to be resolved in subsequent meetings. The issues related to procurement, and its impact on the contraction schedule, are recorded for the next supply chain review meeting.

 
Figure 7.1 Project review meetings

graphics/fig7_1.jpg

Supply Chain Review Meetings are conducted every month and the key participants are the Supply Chain Manager, Buyers, the Schedule Planner and Major Contractors. The main objective of this meeting is to reconcile the issues arising from the procurement schedule (demand) and construction schedule (supply). The relevant issues developing from team meetings are also reviewed during this discussion. A typical such encounter will contain an agenda, procurement schedule, construction schedule, minutes from the previous meeting, configuration management and actions.

Project Management Meetings normally takes place prior to Milestone Review Meetings to assess the overall progress of projects and identify the key issues and any bottlenecks. The meeting is chaired by the Project Manager and the participants include Team Leaders, Functional Managers and representatives from major contractors. During this gathering it is common for process owners to give estimates or promises of fresh dates by which the issues can be resolved. Claims and accomplishments since the last meeting are also discussed.

Milestone review meetings are also known as Steering or Project Board Meetings. The participants are the Steering Team members from both Sponsors or Clients and the Project Management, including the Project Managers. In these gatherings the issues arising from the project management meetings are resolved. The milestones of the project are reviewed and monitored, and managers can compare actual costs and progress with a project budget and milestone schedules of work. A milestone denotes a particular, easily defined stage in the project schedule. Sometimes a milestone is recognised by the end of a phase in the project life cycle which is followed by a handover meeting. The purpose of the handover meeting is to formally terminate the phase or commence the next stage, or subcontract.

Functional Meetings are conducted on an ‘ad hoc’ or ‘as required’ basis. These seminars are related to Risk Management, Health Safety and Environment, Audit Review, Configuration Management and Quality Management. The risk management plan is reviewed and communicated to all project participants and, where necessary, is followed up by appropriate training. The plan is updated and changes to the scope of work, team members and suppliers are documented and passed on to project management meetings. A similar process is followed for other functions such as health, safety and environment, audit reviews and quality management.

It is essential to ensure continuous improvement in supply chain and project delivery performance by a regular review of Balanced Scorecard based Key Performance Indicators. As indicated earlier in the example of the T5 project, the review should extend to the participation by key suppliers to identify the cost of non-conformance. The outcomes and issues arising from performance reviews should be passed on to project management meetings. It is also important to establish a learning organisation culture. Unless staff at all levels are sharing in knowledge, and truly believe that the business can benefit from the exchange of ideas, the gathering of data will have achieved very little. If an organisation feels that they already know what the best practice is and are satisfied with incremental improvement then regrettably, it is fair to say that they will be left behind. History shows that knowledge progresses in leaps and bounds. The development of a learning culture does not just happen, and words are not enough.

Summary

In this chapter the importance of regular reviews by progressive meetings has been explained and emphasised. Even if good systems and processes are in place the involvement and appropriate commitments of all members and key stakeholders of the project are essential for its success. This is effected by well-designed and organised review seminars so that all members are involved in the process, but not in the same meeting. In addition to traditional project review meetings S &OP style supply Review Meetings are recommended for major projects

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