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MANAGING PROJECTS

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Projects represent nonroutine business activities that often have long-term strategic ramifications for a firm. In this chapter, we examined how projects differ from routine business activities and discussed the major phases of projects. We noted how environmental changes have resulted in increased attention being paid to projects and project management over the past decade. In the second half of the chapter, we introduced some basic tools that businesses can use when planning for and controlling projects. Both Gantt charts and network diagrams give managers a visual picture of how a project is going. Network diagrams have the added advantage of showing the precedence between activities, as well as the critical path(s). We wrapped up the chapter by showing how these concepts are embedded in inexpensive yet powerful software packages such as Microsoft Project. If you want to learn more about project management, we encourage you to take a look at the Web site for the Proj...
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Matching Supply and Demand

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Most organisations face a fundamental problem: the time it takes to procure, make and deliver the finished product to a customer is longer than the time the customer is prepared to wait for it.
In many cases companies have an inadequate ‘visibility’ of real demand. By ‘real’ demand we mean the demand in the final marketplace, not the ‘derived’ demand that is filtered upstream through any intermediary organisations that may lie between the company and the final user. The challenge is to find a way to receive earlier warning of the customers’ requirements.
We have already made the point that in today’s volatile business environment it is much harder to achieve high levels of forecast accuracy for individual items. Whilst managers will always be seeking better forecasts, the fact is that as uncertainty increases it gets harder to run a business on the basis of forecast demand at the stock keeping unit (SKU) level. Instead the focus has to be on how the company can move from a forecast-driven to a demand-driven mentality.
The sales and operations planning process: Generate aggregate demand forecast, Modify the forecast with demand intelligence, Create a consensus forecast, Create a ‘rough cut’ capacity plan, Execute at SKU levels against demand, Measure performance.

 

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