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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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Strategic Lead-Time Management

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Customers in all markets, industrial or consumer, are increasingly time-sensitive. There are many pressures leading to the growth of time-sensitive markets, but perhaps the most significant are: 1)Shortening life cycles, 2) Customers’ drive for reduced inventories, 3) Volatile markets making reliance on forecasts dangerous.
From the customer’s viewpoint there is only one lead time: the elapsed time from order to delivery. Clearly this is a crucial competitive variable as more and more markets become increasingly time competitive. Nevertheless it represents only a partial view of lead time. Just as important, from the supplier’s perspective, is the time it takes to convert an order into cash and, indeed, the total time that working capital is committed from when materials are first procured through to when the customer’s payment is received.
The longer the pipeline from source of materials to the final user the less responsive to changes in demand the system will be.
The key to the successful control of logistics lead times is pipeline management. Pipeline management is the process whereby manufacturing and procurement lead times are linked to the needs of the marketplace. At the same time, pipeline management seeks to meet the competitive challenge of increasing the speed of response to those market needs.
The difference between value-adding time and non-value-adding time is crucial to an understanding of how logistics processes can be improved.

 

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