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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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SUPPLY MANAGEMENT

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In this chapter, we introduced you to some of the specific activities and challenges associated with supply management. We began by highlighting the importance of supply management, most notably the profit leverage effect. We then described in detail the strategic sourcing process (Figure 7.1) and demonstrated how spend analysis, total cost analysis, portfolio analysis, and weighted-point evaluation models can be used to support strategic sourcing efforts. We followed with a discussion of the procure-to-pay cycle, as well as some of the major challenges affecting supply management today.
We end this chapter with a brief discussion on the future of the purchasing profession. Every year, purchasing professionals perform fewer procure-to-pay activities and spend more time on strategic sourcing activities such as spend analysis, supplier evaluation and selection, and make-or-buy decisions. These activities require individuals with a solid mix of quantitative and interpersonal skills.
At the same time, information technology is reducing or even eliminating the clerical tasks that were traditionally carried out by purchasing professionals. By relying on information systems, end users can order directly what they require over the Internet. Also, production planning and control systems (Chapter 12) will generate orders automatically, based on production requirements. These systems will use online Web systems and portals to forward component requirements immediately to suppliers, reducing the need for direct purchasing intervention.
Another development that will reduce the clerical work assumed by purchasing is the use of suppliers to manage inventory at the customer’s site. This is a classic example of an outsourced activity that was previously performed by purchasing or materials management professionals.
Organizations such as the Institute for Supply Management (ISM) help serve the needs of professionals in the purchasing area. The ISM’s Web site, www.ism.ws, is an excellent place to learn about trends in purchasing and current research, as well ISM’s professional certification programs.
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