Processing of Damage Inventory Goods, Research Paper Example

Abstract

Project management incorporates many tools and techniques to facilitate the opportunity for the success of a project implementation.  When developing a project there are three areas of concern including scope, schedule and cost of the project. By utilizing the best practice framework outlined by the Project Management Book of Knowledge (PMBOK) the project team will have the best environment to adhere to the client’s requirements while also meeting the time and cost demands.  This project will encapsulate the entire project lifecycle to move a data center in 30 days with a budget of $500,000.  The project will span the five process areas and nine knowledge areas specifically focusing on the key deliverables for each area including but not limited to the project schedule and key overviews of how the project will be monitored and controlled using project management tools such as Earned Value Management and risk management techniques.

Executive Summary

The project is focused on processing damaged inventory goods back to the supplier or to scrap the inventory and proceed to garner retribution from the supplier.  The issue at hand includes the accumulation and acceptance, by the organization, of damaged and unacceptable material from the suppliers.  The damage to these goods occurs in multiple ways.  They are damaged in transit by the carrier, unloading, loading or the goods are not conforming to the specifications outlined in the engineering drawings and do not meet the tolerance guidelines.  Currently the damaged goods are written off as a loss to the organization.  This is due in part by the fact that there is not a business process established to handle a return to vendor or to take the necessary actions to determine where the damage occurred or who is responsible.  The accountability for the goods must be enforced.  The current terms and conditions state the ownership of the goods transfer once they are received by the organization.  The enforcement of accountability lacks business process.  There is also a need for integration into the current procurement-to-payment system to allow for the return of damaged inventory as well as either a discount, inventory swap or repayment for the damaged goods.  The business process and supporting information technology infrastructure are necessary to save the organization operational funding that is currently lost to scrapping damaged inventory.

The transition from the area of not having a business process to handle these return to vendor activities nor having the technology in place to ensure accurate and precise data is tracked and utilized must be addressed during the project while also ensuring the project is a value-add to the business and is in line with the strategic goals and objectives of the organization.  During the transition from not having the foundation in place to implementing the new processes and infrastructure, hardware and software, there will be requirements for the leadership to drive the change and organizational acceptance.

Project Techniques

A project is by definition a temporary endeavor to produce a unique deliverable at the conclusion of the endeavor (PMI 2008).  Just as the foundation of a house supports the entire home to stand the test of time the definition of the scope of a project establishes the entire trajectory of the project and determines what resources and schedule will be needed to accomplish all of the requirements that constitute the scope.  The planning phase of project management includes developing the project management plan, collecting the requirements, defining the scope, assigning resources in a work breakdown structure and defining the activities.  Planning in a project establishes the ground work for the entire project’s lifecycle and will inherently become the foundation for success or failure when the project comes to a close.  In order to understand what is to be delivered at the end of a project there must be boundaries and guidelines established to set the parameters or scope of the project.  Planning a project revolves around defining what needs to be accomplished and how it will be accomplished.  Defining scope is the process of determining a common understanding of what the project will include in or exclude out of the final deliverable (Magal and Word 2011).

A program is a group of similar or related projects that are managed and controlled together to achieve a specific objective or set of goals.  A portfolio is a strategic effort for leadership to manage a group of programs that may not be necessarily interdependent or interconnected in form, fit or function but provide a definitive benefit to the company in terms of strategic positioning and corporate vision.  In order to provide the best environment for a project or program to succeed there must be an established and standardized form of monitoring and controlling.  The monitoring and controlling process includes the areas of tracking, reviewing and governing the achievements, roadblocks, progressions and overall performance of the project.  This is also the area within project management where changes to scope, project schedule and cost are governed and documented.  Changes within a project can cause unnecessary delays and potentially lead to a failed project if not properly controlled.  The tools and techniques associated with monitoring and controlling provide the project manager and the project team the appropriate tools to understand the overall changes to the project and provides the ability to building risk mitigation actions to alleviate potential issues that could derail the project.  Each of the keywords held define what is needed for monitoring and controlling a project or program based upon the schedule, scope and cost of the project/program.

Another area that must be tightly monitored and controlled includes delivery schedule.  Utilizing the agile project management methodology there will be multiple releases providing different levels of functionality.  The coordination and integration between systems must be defined as there will be new systems taking over the entire functionality of legacy systems as well as integrations and connections between new and legacy as well as reliance upon legacy systems that will not be phased out during the program’s lifecycle.  Without monitoring and controlling of these deliverables there is no way to manage the project effectively.  There are a couple tools that would enhance the project management methodology selected and that is the utilization of a Work Breakdown Structure (WBS) and defining and utilizing the Critical Path Method (CPM).  The WBS is a breakdown of project deliverables that help define the overall work required to perform specific functions (Miller, 2009).  This allows the project/program manager to understand what is needed at each level of the project or program and then they have the information to build a delivery schedule and coordinate the releases with other program or portfolio implementations.  The CPM illustrates all of the critical activities based on a WBS to include the duration or time required to complete the tasks and then add the dependencies among the activities to fully understand the project scheduling and resource allocation to achieve those requirements in the WBS (Kaufmann & Desbazielle, 1969).

Resource allocation is more than putting funding into a project and managing costs associated with scope changes.  To supplement the agile project management methodology the program team can use Earned Value Management (EVM) as a tool to measure scope, schedule and cost to provide forecasts of the project’s performance (Fleming & Koffleman 2010).  This tool also illuminates areas that are providing the appropriate level of progress for investment.  EVM measures the projects performance and compares the progress that is obtained with the limited resources provided to that project or program.

Selecting the tools to monitor and control the project was not based on new trends or up and coming models and methodologies of project management.  These tools are based on the needs, complexity and composition of the program which is going to be implemented.  This is a software development project which includes implementing new user interfaces, system requirements, security needs, training, awareness, hardware implementation, legacy system retirement as well as continually making improvements to effectiveness and efficiency.  All this is to be accomplished while making minimal impact to the business operations.

Project Scope

Scope management is a key success factor in completing any project.  If scope is not managed correctly, the requirements and deliverables may fluctuate so much that the original intent of the project may never be met and could result in a failed project attempt.  As any project progresses through the phases, the intricacies and details of the project gain clarity.  This is where the art of project management dances with the scientific project management methodology to build and execute a project.  The planning phase in project management establishes not only the framework but also how the framework will be followed, funded and communicated.  These established baselines create the launching pad formulating the trajectory of the project.  While the project manager can make adjustments throughout the project there will always be a tradeoff between the triple constraints including cost, schedule and quality (Cooper, Grey, Raymond & Walker 2005).  Proper project planning will promote the rate for success in any project.

Constraints: Objectives (Quality), Time and Cost (Budget)

A project manager faces a continual force in project management called the triple constraints.  These constraints limit the ability for the project manager to manipulate and change the variables within a project to meet everyone’s needs or expectations.  These constraints are cost, schedule and quality.  The cost of the project includes the resources needed to manage and implement the project and could range from hired expertise to manage the project or hardware and software requirements for a new information technology system implementation.  This also includes hired resources to come in and provide the extra labor efforts required to shorten the length of a project or build up the needed labor base for a product launch.  The schedule is the time it takes to complete the tasks within the project plan.  The last constraint is quality which reflects on the requirements of the project and to what level they are completed to meet the objectives of the project’s scope.  Within all three of these areas there are decisions that can be made to decrease the cost at the expense of quality or decrease the schedule with an increase of cost(Dobson, 2004).

Project Objectives:

• Established Return to Vendor Process
• Establish Repayment Process
• Implement Software to Support Processes
  • Prepare personnel for new process/software
  • Bring software up and operational
  • Implement new process/software
• Build Monitoring and Tracking System for Inventory Movements
• Implement security requirements

Timeline and Budget

The project will take 5 months to complete from the approval by the stakeholders until the go-live launch of the new process and software.  In order to accomplish this task there is a requirement of funding and resources that will be needed in order to accomplish the tasks necessary to be successful.

Each of these costs is estimates to provide a Rough Order Magnitude (ROM) of the project scope.  Currently the scrap that could be returned to the vendor exceeds $750,000 per year.  The commitment by the business would include a project management team consisting of one project manager, two analysts and an internal IT resource.  Other resources would be contracted to outside entities to facilitate the transition.

Justification and Success Criteria

Increasing the visibility into the damaged inventory goods will provide an opportunity that would continue to pay for itself every year after implementation.  The initial investment will be ultimately repaid after 2 to 2.5 years of operations.  In order to be successful and obtain the full payback that can be afforded with this project the first step is stakeholder support.  The support from leadership will help transform the culture of the organization and drive the necessary changes that must occur.  The primary objective is to have the end users involved in the entire process.  This includes coming up with the optimal solution, implementing the new business process and associated technology to support the process and sustainment of the system and process after the go-live activities have occurred.  Once the project is launched it will be owned by the end users and the project team will no longer be available for support or other sustainment activities.  These leads to the objective of ensuring the end users are trained and that the support team has a resident expert in the new process and system.

Success

Successful projects incorporate the best practices framework as well as the tools and resources that are gathered and utilized throughout a project manager’s career.  The project scope must align with the expectations of the stakeholders as well as the cost estimates, established budget and the proposed schedule of the project.  The project manager garners sign off on the project charter and scope statement at the beginning of the project but once that task is accomplished it becomes the project manager’s responsibility to manage the changes in the scope, the progress achieved through the resource allocation and ultimately the successful accomplishment of the milestones along the path of the project’s lifecycle.  This is achieved through monitoring and controlling techniques as well as the utilization of tools such as the EVM tool.  These tools and techniques provide the project manager the timely and accurate information to make project management decisions while taking the appropriate project actions to meet the expectations of the stakeholders while delivering the requirements on time, on schedule and on budget.  The three key success criteria include creation and adoption of the business process, software implementation and successful returns and payments for returns from the vendor.

References

Budd, C. I., & Budd, C. S. (2009). Earned value project management. (2nd ed.). Vienna, VA: ManagementConcepts.

Cooper, D. F., Grey, S., Raymond, G., & Walker, P. (2005). Project risk management guidelines, managing risk in large projects and complex procurements. John Wiley & Sons

Dobson, M. (2004). The triple constraints in project management. Vienna, VA: ManagementConcepts.

Fleming, Q. W., & Koffleman, J. M. (2010). Earned value project management. Project Management Institute.

Magal, S. R., & Word, J. (2011). Integrated business processes with erp systems. RRD/Jefferson City: Wiley.

Project Management Institute, P. M. (2008). A guide to the project management body of  knowledge. (4th ed.). Newtown Square: Project Management Inst.