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    Project Management Casebook
    Project Management Casebook
    Project Management Casebook
    Ebook1,042 pages11 hours

    Project Management Casebook

    By Project Management Institute

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    Each of the cases provides new and unique challenges that have been mastered by the practice of project management. Readers will be able to apply the knowledge learned from this casebook in their work. The cases enable readers to see how and why projects are used in a wide variety of organizational settings in contemporary life. Readers are exposed to both successful and not-so-successful project management practices. The case-study approach encourages reader participation and active learning, and provides the opportunity to learn something of the real world of project management. It is essential in the curricula of project management training for both undergraduate and graduate students, as well as for continuing education, consulting, and in-house company training programs. The cases were chosen for their importance in discussing the fundamentals of project management. Most contain descriptions of actual projects, and each is followed by a series of questions to guide readers' analysis of the article to maximize the learning process.
    LanguageEnglish
    PublisherProject Management Institute
    Release dateMar 1, 2016
    ISBN9781628251609
    Project Management Casebook

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      Project Management Casebook - Project Management Institute

      casebook.

      Preface

      Project Management is an idea whose time has come.

      Project teams are becoming commonplace as key elements of organization design to deal with change in contemporary organizations. The use of project and other types of teams have modified the theory and practice of management as today’s organizations plan and implement strategies to change products, services, and organizational processes. The key challenge facing contemporary managers is how to maintain ongoing efficiency and effectiveness in existing capabilities—and at the same time develop new initiatives to prepare the enterprise for survival and growth in uncertain times through the use of project management initiatives.

      The extraordinary growth of project management has created the critical need for case-related instructional material to use in developing competencies in people by way of the knowledge, skills, and attitudes needed to perform effectively as members of project teams. Then too, those functional and general managers who use projects as building blocks in the design and execution of organizational strategies need instruction on how projects can be used to develop and execute strategic initiatives in preparing the organization for its uncertain future. It is to these purposes that this casebook is dedicated.

      The casebook contains articles and symposia papers drawn from the literature of the Project Management Institute (PMI). Select pieces have been included from the Project Management Journal, PM Network magazine, and from the Proceedings of PMI’s Annual Seminars & Symposia. A few articles, rich in project management information, have been included from other prestigious journals.

      Since its founding in 1969, PMI has taken a commanding lead in the conceptualization and development of a body of knowledge about project management. For clarity, in 1987 it published the Project Management Body of Knowledge, which is known as the PMBOK. This was updated and expanded in 1996 and published as the Guide to the Project Management Body of Knowledge, or PMBOK Guide. In some literature, references are also made to the PMBOK, which would represent the sum of project management knowledge written and unwritten.

      Each of the articles and papers selected include important information regarding the fundamentals of project management. Following each article or paper is a series of questions to guide the reader’s analysis and maximize the learning process. Included in the questions are suggestions as to where the reader can look in the PMBOK Guide for insight into the particular project management techniques used, or challenges posed, by the project.

      The cases can be used in senior undergraduate or graduate project management programs. The casebook is adaptable for use in short training courses. The cases illustrate how and why projects are used in a wide variety of organizational settings. Readers will be exposed to both successful and not-so-successful project management practices. By understanding what works and what does not work in project management, readers are given an opportunity to reach their own conclusions about the nature of project management philosophy in their personal and professional lives.

      According to Business Week magazine, Companies that learn the secrets of creating cross-functional teams are winning the battle for global market share and profits. Those that don’t are losing out. With this statement Business Week has captured the prevailing attitude concerning the use of alternative teams as an essential element of organizational design to improve operational and strategy performance of the enterprise. Reengineering teams, benchmarking teams, concurrent engineering teams, and self-managed production teams are a few of the types of teams that are changing the way contemporary organizations are managed—often with striking improvements in the efficiency and effectiveness of the enterprise.

      Project management has provided the strategic pathway for the emergence of these alternative teams. In this book the editors have provided several cases dealing with the use of alternative teams in the strategic management of the enterprise to enable the user to experience how such teams can improve organizational performance. The cases should also help the reader to recognize that cross-functional and cross-organizational teams are highly versatile strategic resources and key elements in the design and execution of strategic management initiatives.

      The casebook editors hope this book will provide meaningful information to its readers. In doing so the knowledge, skills, and attitudes concerning project and team management will be enhanced.

      The casebook is organized in six sections:

      Planning—How to develop the objectives, goals, and strategies for projects.

      Organizing—Considerations involved in the development of an organizational design for the management of projects.

      Motivating—The design of strategies to bring out the best in people serving on and working with project teams.

      Directing—How to develop effective leadership styles in the management of projects.

      Controlling—Developing and executing the means for monitoring, evaluating, and controlling the use of resources to support project purposes.

      General—A grouping of cases reflecting broader issues in project management.

      Dr. David I. Cleland, University of Pittsburgh

      Dr. Karen M. Bursic, University of Pittsburgh

      Richard Puerzer, Hofstra University

      A. Yaroslav Vlasak, University of Pittsburgh

      Pittsburgh, Pennsylvania

      September 30, 1997

      PLANNING

      1

      PLANNING

      The Benfield Column Repair Project

      Food Waste Composting at Larry’s Markets

      Winning the Sydney to Hobart: A Case Study in Project Management

      Kodak’s New Focus

      Managing Kuwait Oil Fields Reconstruction Projects

      Managing Resources and Communicating Results of Sydney’s $7 Billion Clean Waterways Program

      Making Affordable Housing Attainable through Modern Project Management

      Goal Definition and Performance Indicators in Soft Projects: Building a Competitive Intelligence System

      1995 PMI International Project of the Year

      The Benfield Column Repair Project

      Ian Boggon, PMP, General Manager, INTENS SA

      PM Network, February 1996, pp. 25–30

      At 12:30 P.M. on Tuesday, March 8, 1994, a fire broke out in the carbonate regeneration column in the Benfield Unit of the Gas Circuit at Sasol Three, one of the factories of Sasol, a leading South African coal, chemical, and crude-oil company. The column, which was open for repairs and maintenance during the annual factory shutdown, is used to process hydrogen. It is one crucial component in a long chain of equipment that converts coal to oil and chemicals. Without it, a large section of the factory could not function, resulting in a considerable loss of income.

      A damage investigation revealed that buckling in the shell of the column had caused it to bend in the middle to such an extent that the top of the steam chimney was 500 mm (20 inches) off-center, making the 70 m (231 feet) column resemble the Leaning Tower of Pisa.

      Decision analysis revealed that, to get the plant safely back online in the shortest possible time, the damaged portion of the shell would have to be cut out and replaced. The main component of the project, therefore, was to strip out the original shell, fabricate a new section, reinstall the column, and re-commission the unit.

      GROUND RULES

      The project will be schedule driven, not cost driven.

      There is NO float on this project.

      Plan to reduce scheduled times, not be governed by them.

      The project will be a team effort with Sastech and Sasol Operations as partners, assisted by Sasdiens and CBI.

      Safety will not be compromised at any stage during the project.

      Quality will not be compromised at any stage during the project.

      Technical decisions will be authorized by Mr. J.D. Bosch and Dr. J.H. Snyders.

      Process decisions will be authorized by Mr. A.S. du Toit and Dr. J.H. Snyders.

      Resources will not be considered as a limitation.

      Commitments will be adhered to.

      Communication will be continuous at all levels.

      Sasol Mechanical Maintenance and Production will be notified of all work before it takes place in the unit.

      And all this was to be accomplished in forty-seven days.

      The project team. Sastech, a subsidiary of the Sasol Group of Companies, was requested to undertake the repair at 8:00 A.M. on Thursday, March 10. The Sastech project team consisted of a project manager, a senior project engineer, a cost engineer, and a planner. The total team, however, had twenty-seven members: four process engineers, six mechanical engineers, a pressure vessel specialist, a metallurgist, a welding engineer, a pipe stress engineer, a piping draftsman, a mechanical draftsman, a structural engineer, a structural draftsman, three quality assurance inspectors, a commercial contract officer, and a commercial procurement officer. Members were drawn from Sastech, Sasol Three, Sasdiens, Chicago Bridge and Iron Works (the original fabricators of the column), and from suppliers of the equipment and material.

      CBI was contracted to remove, fabricate, and replace the vessel, with Sasdiens providing the rigging, piping, electrical, and associated work. Some of the CBI engineers involved when Sasol Three was built fourteen years ago now worked on the repair. The cutting up and removal of the damaged sections of the column was a combined effort between CBI and Sasdiens.

      Within fifteen minutes of receiving the contract, CBI had contacted employees from six sites in the United States, Saudi Arabia, Turkey, and South Africa and were faxing drawings from their head office, placing provisional orders for material, completing the rigging study, and arranging delivery of the massive spreader beam to be used to lift off and replace the damaged and new sections. This speed of response set the standard for everyone involved.

      The column was handed back to production on Sunday, April 3, at 12:30 P.M., certified as ready for commissioning. The project completion certificate was signed on Friday, April 8, at 4:30 P.M.—fifteen days ahead of schedule.

      Special management methods. Conventional project management techniques were not sufficient to ensure that the work was carried out in the shortest possible time. Two areas were identified as requiring special attention: innovation and creativity, and enthusiasm and commitment. Because the time frame was short, any time saved on individual tasks would have a direct effect on the overall project duration.

      PROJECT STATISTICS

      But because the majority of the workforce had been involved in the maintenance shutdown when the fire started, they were locked into a mindset that the schedule governs the duration of each task and a successful task is perceived as one that is completed on time. On the first day of the repair project, two people were overheard saying that they had plenty of time to finish a particular task. It was explained to them that, for this project, they would be given credit for work finished ahead of schedule rather than on schedule.

      This story was recounted at the next meeting, and supervisors were asked to pass the message on to their teams. The result was incredible. People came up with ideas for saving even five minutes—unheard of under normal circumstances. Such was the enthusiasm created in the workforce that this became the dominant culture. On the third day, when a new supervisor joining the team said that he would start first thing in the morning, there was an immediate uproar, with everyone in the meeting shouting that he should begin immediately!

      It was agreed at the beginning of the project that to get the commitment of everyone involved, they had to know what was going on at all times. This was achieved in a number of ways.

      A list of ground rules, developed in conjunction with the client’s senior management team, was distributed to everyone on the project. Any decision, even if unconventional, could be accepted if it complied with these rules. For example, the welding foreman hired welders from a rival company rather than delay completion of a task because the ground rule stated that resources could not be considered as a limitation.

      A board was put up outside the command center caravan and updated twice daily. When people performed well, their names were posted there. This was a real morale booster. The project team was located on-site and was present before the night shift finished in the morning and after it started at night. Visits were frequently made during the night, removing the feeling of isolation normally associated with this shift. The project team also made a commitment to visit every crew at least twice a day to give feedback and encouragement. Frequent visits were also made to off-site supervisors. Each member of the project team had a pager and the crews were encouraged to make contact at any time of the day or night, which helped to speed up the decision-making process.

      From the first meeting, we encouraged innovation and creativity. Even silly ideas were examined in case they produced a worthwhile solution. This continuous push for innovative ideas produced numerous time-saving solutions.

      Each person was encouraged to work for the benefit of the project as a whole and not for his or her own interest. The person responsible for a critical path activity would get help voluntarily from all other members in the team because he or she understood that to shorten the critical path would also shorten the total project. This concept was so successful that at one stage a fistfight nearly broke out because three different artisans wanted to work on one particular section of scaffold at the same time, such was their enthusiasm for the job.

      A policy of Accept It…Or Change It…But Never Complain About It kept meetings positive. In addition to the shift change meetings, communication sessions were convened twice a day when the activities of the next two days were discussed in minute detail.

      This positive spirit created a dedicated project team that had many successes leading up to the overall success. Over one million Rands ($3.6 million) worth of material and equipment was ordered and not one single item was late. Each piece of piping fitted correctly the first time—and there were many hundreds of meters installed. The managing director of one company opened up his factory over the Easter weekend to supply urgently required material. The production department, swept up in the spirit of the project, applied the same principles to re-commissioning activities and slashed the previous record for bringing the plant safely back online. The human factor was what made the project a success.

      SCOPE MANAGEMENT

      The objective of the project was clear from the beginning: Bring the plant back online in the shortest possible time. The first step was to determine the exact scope of the repair. We had to determine if it was an option to simply do nothing. A communication link was set up between CBI and the Sastech process engineers, which involved working very long hours because of the ten-hour time difference between South Africa and the United States. Their decision analysis revealed that the optimum solution was to remove the damaged shell sections.

      While they were deliberating, other scope functions were already running in parallel. A meeting was convened to identify that work which could be performed irrespective of the type of repair selected. Items that fell into this category included removing the damaged packing material, insulation, and cladding, which would have to be changed even if the decision was to do nothing. Tasks that could not wait for a formal decision before starting without affecting their overall duration, and therefore the duration of the project, also had to be identified.

      Scope statement. The brief scope statement issued initially simply stated that part of the Benfield Unit was offline due to fire damage and that it must be repaired as soon as possible. Development of the scope statement from this single sentence to the final format was carried out in conjunction with the development of the work breakdown structure. In fact, the work breakdown structure formed the basis of the scope, quality, schedule, and cost control documents.

      To reduce bureaucracy, only two aspects required management approval: technical and process decisions used to determine whether to repair the column or leave it in its damaged condition. The baseline plan therefore lay in the hands of the project team. There were no fundamental changes to the baseline plan throughout the project life-cycle apart from the fact that durations were reduced and the project was completed ahead of schedule.

      Project plan and control system. Once the optimum course of action was decided upon, planning started in earnest. The first step was to develop a work breakdown structure. This was completed at open meetings with representatives from each interested party present. A brainstorming process was used, with each topic identified on a Post-it note and attached to a huge white board. Delegates were encouraged to shout out tasks as they came to mind. The meeting was adjourned once the ideas dried up. A second meeting was convened to fine-tune and accept the WBS. The WBS determined what had to be done and when it had to take place, as well as the logic associated with each task.

      Everyone was aware from the start that a higher premium would be placed on team performance than on individual performance. That this concept was clearly understood was demonstrated during feedback sessions. As soon as a task was reported as being in trouble or not being completed ahead of schedule, the rest of those present immediately offered to help. This removed the fear of reporting negative feedback and raised the morale of the whole team.

      On completion of the project, a series of post-project analysis meetings were convened with the major players. Although we thought we had fast-tracked this project to the last second, there were a number of problems which, if recognized, would have saved time on the critical path. For instance, we failed to consider religious faith when we drew up the schedule. A number of the welders and boilermakers employed on the fabrication of the new shell sections were Muslims whose religious festival of Ramadan fell right in the middle of the most critical portion of their work. By the time we realized the problem, it was too late to employ welders with the same track record of zero defects from other ethnic groups. We updated the planning checklist to include this topic in case the same situation arises in the future.

      QUALITY MANAGEMENT

      Quality was one of the ground rules of the project. Everyone employed on the project had previously worked within the Sasol quality system and was familiar with Sasol’s forms and procedures. One aspect that emphasized how far team building had come was the cooperation between QC personnel and the artisans. Not once did the foreman or supervisor have to call out the QC people to do their work; they were ready and waiting for the artisan to finish each task. The artisans didn’t rush off to the tea hut the minute their work was complete; they stayed behind and helped the inspectors by preparing and cleaning the material to be inspected. This was reciprocated by the inspectors who dropped their That’s failed…fix it! attitude and worked together with the artisan to identify problems and rectify them.

      From a managerial point of view, normal quality-related steps were followed for each aspect of the project. The complete quality dossier for the project was signed off and filed before the close-out certificate was signed.

      TIME MANAGEMENT

      From the beginning it was clear that the project would be schedule-driven. There would be no constraints as far as resources were concerned and no float would be published. Tasks identified during the development of the WBS were given to the teams responsible for carrying out the work and they were asked to attach durations to them. This gave the teams ownership of the schedule; and who better to develop accurate durations than the people with the relevant experience?

      In the initial stages a two-day look-ahead window was used, which allowed immediate tasks to continue while future tasks were being developed. Meetings were held twice a day in the initial stages as detail was developed and input into the program. Because of its user-friendliness, Microsoft Project for Windows was used as the scheduling tool at the beginning of the project.

      The schedule was also used to identify resources with the potential to affect critical task durations. Resource utilization was continuously examined to make sure that the labor and equipment to perform each task in the shortest possible time was available. If a task had work for ten welders but only eight welding machines were available, two additional welding machines would be located, plus a standby. The standby philosophy also applied to labor.

      COST MANAGEMENT

      Project cost management principles employed on this job paid a handsome dividend. The initial budget was R23,300,000 ($85,278,000) and the final job cost was R17,414,945 ($63,738,698): a massive savings of 25.26 percent of the total project cost.

      A cost control base was developed based on the existing Sastech system and established estimating and forecasting methods. Regular feedback was given to each cost center. A one-page cost report was developed and presented to management on a regular basis.

      Costs were also reduced by using techniques like value analysis. One example of cost reduction due to value analysis was the saving of hundreds of meters of scaffolding required to weld the connecting piping to the column. The regulations state that you can either put men or equipment into a man-rider basket hung from a crane; you cannot have both. This regulation was challenged and a man-rider was developed specifically to carry men and equipment. Drawings were taken to the responsible government minister in Pretoria, who accepted the proposal. A prototype was fabricated on-site. It passed the required tests with flying colors and was immediately put into service. From conception of the idea to the approved piece of equipment being used on-site took only four days.

      RISK MANAGEMENT

      Risk management ranged from ad hoc discussions to formal Potential Deviation Analysis (PDA) studies. Some of the results of these studies included arranging to receive weather reports from two different weather stations twice daily, extending every scaffold to make it possible to drape tarpaulins over the tower in the event of rain, the extensive use of standby equipment and materials, extensive servicing of equipment in the early stages of the project, canceling Easter holidays for key personnel (not a single person objected to this measure), and having crane maintenance personnel permanently on-site during lifting operations. Formal PDA sessions were convened for operations such as the removal and replacement of the shell sections. These sessions were attended by representatives from the fire brigade, insurance companies, production, maintenance, loss control, projects, design, Sasol management, and everyone involved in the operation.

      In order to minimize risk associated with design, all design information was verified by actual site measurement before being finalized. The small increase in time paid dividends in the fact that all designs fitted the first time, reducing rework to zero.

      TEAM DEVELOPMENT AND HUMAN RESOURCES MANAGEMENT

      For a team to function at its peak, each member must devote all his or her energy to the task at hand. If they are worried about things like working conditions and transport arrangements, they will not be able to devote all their efforts to the project. Thus, a simple plan, centered around communication and considering the soft issues of each team member, maximized the motivation of the workforce.

      The huge hierarchical gap between team members at some of the meetings had to be recognized. On some occasions, participants ranged from the factory manager to site laborers, and lower-level team members tended not to contribute in such senior company, which stifled valuable input. Therefore, meeting attendees were very carefully selected.

      One member of the project team was appointed to give feedback to management and one member of the management team was appointed to receive it. This reduced the risk of confusing or misleading information being propagated up the management ladder. Secondary information was always cleared with the contact person before it was accepted, eliminating rumors and exaggerations.

      The soft issues of hourly-paid team members involved ensuring that transport was provided, that contractors’ accommodations were acceptable, that lunch packs were provided for the entire project team every day, and that overtime hours were strictly controlled. This policy of looking after the people and letting the people look after the job really worked. One example: A welder flown in from the United States was accommodated in a well-appointed apartment. Expecting him to be more than satisfied, we were amazed to discover that he was not happy with his situation. He was on night shift and the apartment block was also home to a large number of noisy small children. The welder got virtually no sleep. He was moved to the more Spartan but quieter Sasol single quarters and his productivity shot up the next day.

      PROCUREMENT MANAGEMENT

      Only two main contracts were entered into, one for the repair of the pressure envelope of the column and the second for all the other ancillary work such as removing and replacing piping, painting, scaffolding, rigging, and cranage. Therefore, Sastech would have to trust contractors to work on a verbal instruction to proceed, followed in due course by a conventional written contract. There simply was not enough time to work any other way. All the steps used in conventional procurement and contract management were followed, but on an informal basis and in a very short time frame.

      CBI, the fabricator and installer of the original column, was asked to provide a target price within three days and to follow this up within a further ten days with a fixed price. Sasdiens was selected for the remainder of the work because it was on-site, knew the Sasol systems, and was part of the Sasol organization. Its contract was on a rates basis with a governing target price.

      In addition, ten smaller contractors were involved. We were honest with all of them, explaining the situation and asking them to proceed without official paperwork in cases where it could not be generated timely. Though risky, this paid off. The level of trust in Sastech was such that we were invited to attend the internal meetings of some of the contractors.

      On the procurement side, one buyer was selected to handle all purchase orders. By using one person rather than a department we had accurate feedback when and where we needed it. The risk associated was that if anything happened to the buyer, we would lose continuity. We reduced this risk by asking the buyer to keep a handwritten diary of events on his desk at all times.

      The approach adopted with suppliers was to go in aggressively to ensure that we were not taken advantage of in our vulnerable situation. Once we came to an agreement, we dropped the adversarial attitude. By including suppliers in the team, we reaped tremendous benefits. A number of suppliers worked at night, during weekends, and even during holidays.

      COMMUNICATIONS MANAGEMENT

      Most of the communications management techniques employed on this project are described elsewhere in this article—which is as it should be, since communication is at the heart of successful management of risk, scope, cost, and so on. Communications management, the golden thread that ran through the project, was the one aspect that received the greatest attention; yet, it was also the one where most improvements were identified during the post-project evaluation.

      A number of important people were left out of the communications list altogether at the beginning. One example was the quality inspector from the supply depot. When the first consignment of material was requested, we discovered that the inspector had gone home without clearing the goods we urgently required. We phoned him and apologized for not keeping him informed about the repair and he was on-site within ten minutes, eager to do his part. This incident prompted a critical look at the communication list, which revealed a surprisingly high number of missing people. A checklist was developed to ensure that the problem will not reoccur on future projects.

      The communication channels covered contractors and vendors, subordinates, peers, and management, with frequency and type of communication structured to suit each recipient. At its request, feedback to management was mostly verbal and restricted to once per day so that we were not burdened with unnecessary paperwork. The only written reports given to management were the cost report and the schedule. One senior manager passed on progress information to interested parties outside the Sasol organization and to the head office. This ensured that there was only one horse’s mouth.

      Meeting notes that required follow-up were typed into a computer program designed specifically for expediting action items. Each person with follow-up actions informed the meeting secretary on completion of the task so that the program could be updated. This meant that meetings could be restricted to exception items, which saved precious minutes each day. At meetings a PC screen was projected on the wall of the conference room for everyone to read. Minutes were printed at the end of each meeting. Since no one wanted his or her name to be on the follow-up list after the specified completion date, a great deal of effort was expended to ensure that action items were worked off quickly.

      The only other information covered at every meeting was safety. Safety representatives were encouraged to give feedback and recommendations, and it was made clear to everyone that safety was not negotiable and that safety-related threats must be resolved on-site as soon as they were identified.

      The project team spent a minimum of fourteen hours per day on-site. Talking to the workforce was an excellent way to pass on and receive information. As the level of familiarity increased, the quantity of information flow increased proportionally, confirming the maxim that the simplest solutions are the best.

      CONCLUSION

      The November 1993 issue of Chemical Processing contained an article entitled ‘Fast Track’ Approach Replaces Tower in Record Time. The column in question was 6 feet (1.83 m) in diameter and 140 feet (42.6 m) high. This compares to our column, which was 5.8 m (19 feet) in diameter and 70 m (231 feet) high. Their work was completed in ten weeks, a new record, according to the article. Our work was completed in only twenty-five days! This was the only other project of its kind that we could find to use as a benchmark; but it gives a good indication of what was achieved.

      The project is over, but it lives on in the form of accumulated knowledge and lessons learned to be used on all future projects.

      Study Questions

      THE BENFIELD COLUMN REPAIR PROJECT

      A work breakdown structure was used in the project management of the project described in this case. According to the PMBOK Guide, what is the concept of the work breakdown structure?

      The work breakdown structure is described as a key for the scope management of the project. Describe the process used in this project to develop the WBS.

      The author of this case presents communications management as the golden thread which ran through the project. If the supplier relationships were less trustful, how would this have changed the management and success of the project?

      This project challenged the way in which things are usually done, and based its success on what were considered special management methods. Mention a couple of the examples from the project which you think reflect these special practices.

      How did the project build commitment from every member of the team? List several reasons for this commitment.

      Food Waste Composting at Larry’s Markets

      Brant Rogers, Environmental Affairs Manager, Larry’s Markets

      PM Network, February 1995, pp. 32–33

      The food waste composting project at Larry’s Markets became one of the country’s first when it began in the fall of 1991. The project is part of the company’s comprehensive environmental program that includes recycling, waste reduction, energy conservation, water management, environmental landscaping, environmental product evaluation, community project support, and more.

      Food waste composting was proposed in mid-1991 as a potential cost saving measure and method of reducing the company’s impact on the natural environment. According to 1991 waste audits, 3000 tons of byproducts (e.g., garbage, cardboard, food waste, plastics, glass, etc.) were produced by the company’s five stores during a typical year. Of this, over 700 tons per year were estimated to be compostable, and most of the compostable material was produced in the stores’ produce and floral departments.

      The project’s mission was to capture all of the produce and floral department byproducts for composting by late 1993. Because food waste composting projects were virtually unknown, one of the project’s first objectives was to find project team members to haul and compost Larry’s byproducts.

      Another fundamental objective of the project was to have the composting function well within the normal day-to-day activities of the company. To accomplish this, the project team included management staff of all stores.

      As full-scale composting began in early 1992, the volume of material grew rapidly. In 1992 about 350 tons were composted. In 1993 almost 700 tons were composted. As the amount of material composted grew, the amount of material going to landfills decreased proportionately. In 1991, 2,000 tons of garbage were produced. In 1992 about 1,250 tons were produced, and in 1993 about 1,050 tons were produced. The proportion of the byproduct stream going to landfill declined significantly from 69 percent in 1991 to 47 percent in 1992 and to 36 percent in 1993.

      In addition, Larry’s began using the finished compost for landscaping. A new Larry’s store in Tukwila, Washington, which opened in July 1993, used the compost in the topsoil of its large landscape. Also, Larry’s B.I.O. Scapes landscaping staff uses the compost on the company’s other landscapes, including an organic apple orchard and herb garden at its Kirkland, Washington, store.

      As a result of the project, Larry’s had reached a 64 percent recycling rate, exceeding the 50 percent goal for King County in 1995 and also Washington State’s 60 percent goal for the year 2000. Also, the project has saved the company over $20,000 per year in garbage fees and has been a source of pride to employees and customers who are sensitive to environmental problems. Larry’s received numerous letters, customer comments, and awards from local government and environmental groups for its efforts.

      Study Questions

      FOOD WASTE COMPOSTING AT LARRY’S MARKETS

      The case description contains the following statement: The project’s mission was to capture all of the produce and floral department byproducts for composting by late 1993. The words mission, vision, objectives, and goals are very frequently used in management. What are their definitions and differences? Also, what were these for the Larry’s Markets project?

      Would this project be termed a success even if it meant no economic gain but the same environmental gain? If you were developing the proposal for this project given only the non-economic gain, how would you sell it to stakeholders?

      This effort began as a project. In its current state, it is an ongoing effort by the company with no end in sight. Review the definition of a project and answer the following question: How can it be determined that an effort need no longer be managed as a project?

      The outcome of this project was outstanding. What do you think are the primary reasons for this success?

      Winning the Sydney to Hobart: A Case Study in Project Management

      Lynn Crawford, University of Technology, Sydney

      PMI Proceedings, 1993, pp. 53–59

      INTRODUCTION

      Campaigning for an ocean classic yacht race is a project. The campaign has a starting point which can be defined and the end of the race is the end of the project (l). It involves a process which requires management if the objectives are to be defined and achieved. Unlike many other projects where success may be open to debate and achievement of objectives may be unclear, this is a project in which project success or failure is as clear as the race results. As an interesting and atypical project type, it provides excellent opportunities to illustrate, examine, and question the application and operation of the project management framework.

      The project was successful. The objectives were achieved; the races were won. This paper will briefly present, as a project, the campaign which culminated in the winning of both the 1992 Sydney to Hobart Yacht Race and the 1992 Kodak Asia Pacific Ocean Racing Championship. The phases of the project life-cycle—concept, development, execution, and finishing (2); the four basic project management functions—management of scope, quality, time, and cost; and the other essential project management functions—human resource management, communications management, contract/procurement management, and risk management—will be discussed in relation to the project.

      As a case study, a project management framework is applied to the project, in retrospect. Many project managers tackle their tasks without conscious reference to the various project management frameworks developed by theorists. This project was carried out by a project initiator with many years experience and a reputation for success in leading projects in the corporate and financial field. Application of a rigorous and systematic process to a project outside his normal field of activity was both instinctive and a major reason for initiation of the project. However, the project process used does not necessarily fall neatly into accepted project management frameworks. Interpretation of the project in terms of project management theory is open to fruitful debate which provides project managers with useful insights to apply in planning and evaluating their own projects. An interesting question for debate is: What stage in this project can be regarded as execution or implementation in the project life-cycle? Is it the point at which

      • the decision was made on the type of boat to be procured? or

      • a commitment was made to acquire the boat? or

      • the race entry was lodged? or

      • the race started?

      This case study adopts the acquisition of the boat for the race as the point marking the start of the execution phase, but other interpretations could be equally valid.

      The project demonstrates the value of strategies which can be applied to a wide range of project types.

      PROJECT LIFE-CYCLE

      The project life-cycle (3) is used here to provide a summary of the major activities undertaken throughout the project. The phases and activities will be covered at varying levels of detail in the balance of the paper (see Figure 1).

      PHASE 1: CONCEPT

      Identification of Needs and Opportunities

      Projects arise in response to an identified need. In February 1992, a former corporate high flyer and keen sailor, decided that he needed a new boat. His current yacht, "a 10.2 m speed machine, designed by Ben Lexcen, called The Pink Boat" (4) was then four years old and no longer competitive. Important bits, like the mast, were falling over too often when the boat was pushed too hard. There was no longer any point in persevering with it in serious racing.

      With excellent timing, the project initiator had retired from the corporate rat race at the height of the boom. Accustomed to a high-pressure business environment in which he had enjoyed considerable success, the project initiator had begun to miss the challenges of corporate life. Spurred on by the need to replace his current yacht, he decided to address his need for a new challenge by using his planning, organizational, financial, and general business skills to achieve success in a totally unrelated field—yacht racing.

      In taking on this challenge he held a strong belief that winning in yacht racing is at least 80 percent over before you even get to a race—40 percent in the choice and setting up of the boat and 40 percent in selection and training of the crew. On this basis, 80 percent of the challenge of winning can be directly controlled, leaving 20 percent, the actual race, subject to unpredictable factors, primarily weather.

      Hence, there was:

      • a need for a new boat, which would be exciting and pleasurable to sail

      • a need for challenge.

      At the same time, the project initiator had identified an opportunity. By February 1992, the International Offshore Rule (IOR) was still regarded as the grand prix rule of international racing, but rapidly losing worldwide popularity (5). Although major regattas were still being run under IOR handicapping rules, there was rapid development of cruiser/racer fleets using the International Measurement System (IMS) for handicapping.

      From the 1930s until the late 1980s, serious offshore racing had been conducted under IOR rules. By the late 1980s the IOR rules, as a measurement formula for handicapping boats, were out of date, relatively inflexible, and had given rise to fundamentally bad boat design resulting from efforts to cheat the rules. The IMS is based on the use of software (Velocity Prediction Programme), which, when fed with enough data about boats in a competition, can predict the theoretical maximum speed of any boat on any point under predicted or actual wind conditions. Boats designed for IMS racing were proving cheaper, faster, and more enjoyable to sail. As Bruce Farr, one of the top half dozen boat designers in the world, and a leader in design of boats specifically for IMS racing, said:

      In our early IMS designs we simply chose what we believed were good boat styles and designed as well as we could.… This approach yields boats that are very fast for their size, inexpensive relative to size (and especially to performance), an absolute pleasure to sail, and simply a lot of fun (6).

      Although Australia was lagging behind the rest of the world in converting from IOR to IMS, it was fairly certain that IMS would eventually dominate.

      The opportunity for someone looking for challenge, excitement, and a modern, fast, seaworthy, and far less expensive ocean racer (7) was to take the lead in IMS by campaigning a yacht purposely designed and built for IMS racing.

      Having identified the needs and the opportunity, the next conscious step was definition of the project scope including objectives.

      But in doing this, the project initiator recognized, as all project managers should, that opportunities have corresponding risks. Assessment and addressing of risk should begin at project definition.

      His first instincts in response to the need and the opportunity was to replace his current boat with one in which he could enjoy sailing and winning. Being based in Australia, the obvious high profile race to aim to win was the Sydney to Hobart, conducted each year, starting on Boxing Day, the day after Christmas Day. Before deciding on project scope, however, the project initiator assessed the risks.

      Initial Risk Assessment

      Determination of project success on the results of one race, the Sydney to Hobart, over a distance of 630 miles (8), constituted a significant risk, due to the unpredictable and uncontrollable effects of weather conditions over considerable time (approximately three days) and distance. This could be offset by aiming to win the 1992 Kodak Asia Pacific Ocean Racing Championships which comprised five races, four of which were sailed out of Sydney Harbour in December, over distances between twelve to fifty miles, and less subject to unpredictable and uncontrollable conditions as they were sailed basically in the same weather. The Sydney to Hobart, although a race in its own right which could be entered and won independently on the Asia Pacific Championship, is the fifth and final race in the Asia Pacific Championship and carries double points. An objective of winning the 1992 Kodak Asia Pacific Ocean Racing Championship reduced the risk profile of the project.

      Although it seemed likely, based on international precedent, that IMS division winners would be recognized in the Asia Pacific Championships and the Sydney to Hobart Yacht Race, it was not until mid-1992 that the race organizers finally decided to give dual status for IOR and IMS handicap winners. This constituted a risk at the outset of the project.

      Even if the decision was made to recognize IMS division winners, there was no guarantee, early in 1992, that there would be no further change to IMS rules. They were then, and are still, subject to change which might impact on the competitiveness of boats designed specifically for IMS. It was possible that decisions could be made to adopt one design or special rules for a major regatta.

      There was no established precedent for interpretation of rules. An established and entrenched IOR fleet could cause adverse pressures in rule application and interpretation. This would need constant monitoring and potentially require lobbying.

      There was a strong risk that it might not be possible to be ready for competition in December 1992. The time constraints were extremely tight. In any case, there would be little time for tuning the boat and tuning and training the crew. It would be necessary to plan for aborting the project at any point if time constraints became unachievable.

      There was a significant risk of potential embarrassment through failure to achieve project objectives.

      Review Alternative Approaches

      A possible alternative which was considered was the replacement of the current boat with a really good IOR boat to be campaigned in the 1992 Asia Pacific series, then sold and replaced by a purpose built IMS boat once the IMS rules had settled down and IMS racing was well established.

      Although this alternative avoided risks involved in making a commitment to IMS before its future was settled, and the possibility of running out of time for the 1992 series, it was rejected because:

      • The sale price of IOR boats was plummeting (e.g., one four-year-old IOR yacht had cost $600,000 to build and had recently been sold for $80,000), and the competitive nature of IOR design quickly rendered them obsolete for international competition (9).

      • The project initiator/manager considered IMS boats more sensible in design and more pleasurable to sail than IOR boats. Sailing pleasure was a need of the initiator.

      Scope Management—Project Definition

      The project initiator clearly recognized both the risks and the opportunities. His career to date had been characterized by successes based on identifying, dealing with, and taking well calculated risks. His withdrawal from corporate life had been based on timely risk identification and effective risk management. With full recognition of the risks involved, he was attracted by:

      • the opportunity to be first winner in a new IMS handicap division in the Asia Pacific Championships and Sydney to Hobart Yacht Race—a position in history

      • the opportunity to enjoy sailing a state-of-the-art ocean racer

      • the opportunity to be a leader and winner—an irresistible combination

      • the opportunity to attract a first rate crew inherent in having a leading edge boat

      The overall objective by which successful conclusion of the project would be judged was, therefore, defined as:

      • to win the 1992 Asia Pacific Championships in the IMS division.

      Project scope would include:

      • acquisition of a boat purpose built for racing under IMS handicap rules

      • establishment and training of a crew to race the boat

      • competition in the 1992 Asia Pacific Championships, commencing in December 1992, under IMS handicap rules

      • preparedness to abort the project at any stage if it became evident that the objectives could not be achieved.

      Time management. Time was of the essence. The race series would begin on December 18, 1992. No extensions would be possible.

      Quality management. Winning the race series in the IMS division would be dependent upon satisfying quality objectives. Choice and fit out of boat and selection of crew would be driven by the need for highest quality in order to achieve the overall project objective. Sailing pleasure was a quality objective.

      Cost management. Due to the financial resources available to the project initiator, cost was subsidiary in importance to time and quality objectives in achievement of the overall project objective. In deciding on a purpose built IMS boat as against IOR, cost management had already been exercised to some extent as purpose built IMS boats cost significantly less than top of the range IOR boats.

      PHASE 2: DEVELOPMENT

      Project Team

      The primary decision-maker was the project initiator/manager/potential owner and captain. He was assisted and advised at all stages by the crew of his current boat—The Pink Boat—and he had, over the years, established an expert advisory panel of experienced sailors, crew members, sail makers, boat designers, and builders.

      The initial project team comprised the project initiator and a long-time colleague and crew member of his current boat, who was seven times world champion in different boats, and sought after as a crew member in ocean racing. The third and vital member was the owner of one of Sydney’s top sail lofts.

      The role of the initial project team was the selection of the boat and the rest of the crew.

      An important and delicate issue of human resource management was the decision as to which members of the crew of the current boat would be involved in the project team and crew for this particular project.

      Boat

      The primary activity in the development stage of this project was the selection of the boat. This required considerable and extensive research.

      A study of all IMS events around the world, and specifically the winners, indicated that Bruce Farr 44-foot designs were dominant. The 44-foot Farr-designed Gaucho, a yacht designed specifically to compete under IMS rules, had beaten all other IMS boats so soundly that it had led the establishment of a new breed of boat on the international sailing scene in what had become known as the Gaucho Revolution. The project initiator/manager spent time with Bruce Farr and sailed on Gaucho in March 1993.

      On the basis of race performance it would have been reasonable to follow the Gaucho lead and decide on a proven 44-foot Farr design. Farr had designed a 40-foot IMS boat, but at this stage it had not been built or raced. Examination of empirical data from previous races and advice from experts suggested that for the distance and weather conditions of the 630-mile Sydney to Hobart race a 40-foot boat was an optimum size in terms of performance, comfort, and ability to withstand varying weather conditions.

      Factors considered were: The 44-foot Gaucho design was proven, with an unblemished record, but it required twelve to fourteen people to sail it (heavy crew requirement/commitment), and it was more expensive than the 40-foot design.

      The project initiator/manager was really looking for a sportscar style boat—fast, with plenty of sail—and considered the proven 44-foot Farr design a little too big, a little too conservative, and a little too expensive. He was attracted to the as yet unbuilt and untried 40-foot design. While attracted by the 40-foot Farr design, the project initiator/manager recognized the inherent risk.

      He continued his research, finding out all he could about potential builders, as it appeared most likely that he would have to arrange for a yacht to be built, regardless of the design chosen.

      Gaucho had been built in Argentina, but this presented problems of transport and communication. An Australian or New Zealand builder was preferred for these reasons. Research suggested that a New Zealand builder might be most attractive in cost terms, as labor rates were sufficiently lower than in Australia, to offset the 25 percent tax which would apply. Two New Zealand builders were visited and assessed.

      By May/June 1992 a decision had still not been made and the project initiator/manager was considering abandoning the project, or rather modifying the objective to aim for the equivalent 1993 race series. However, while market research and evaluation had been proceeding, Mick Cookson of Cooksons in New Zealand, had decided to build himself a 40-foot Farr design. This boat, High Five, was finished in June 1992 and won the Kenwood Cup in July. It proved to be very much as the project initiator/manager had expected—a sportscar style ocean racer, with large sail area, and a challenge to sail.

      Spurred on by the success of High Five, Cookson started building another 40-foot Farr on a speculative basis. The project initiator/manager was able to negotiate an extremely favorable fixed price to take over the boat Cookson had under construction.

      The final selection of the design and procurement method or acquisition strategy were, therefore, decided virtually simultaneously. The decision minimized risk as far as possible. The 40-foot Farr design had been proven by the performance of High Five. A time advantage was achieved as the new boat was already under construction.

      PHASE 3: EXECUTION

      Boat

      Procure boat. The agreement for procurement of the boat was signed in August 1992 and the boat completed, for the amount initially agreed, at the end of October 1993.

      Fit out boat. On completion of the boat, a skeleton crew, including the project initiator/manager and his top two crew members, flew to New Zealand to oversee initial fit out and trial the boat, spending three days sailing the boat with the crew from High Five. Full support and assistance were given by Cooksons and the experienced crew which had sailed High Five successfully in the Kenwood Cup. Once it was trialled, and they were happy with the set up, they marked settings, dismantled the boat, and had it shipped to Australia. Training with full crew began in early November 1992. The aim was to optimize the IMS rating through adjustment of set up, trimming, and weight.

      Other aspects which had to be decided and arranged before the boat left the Cookson yard were the color scheme for the boat—and most importantly, the name. Much consultation resulted in adoption of the name Assassin which reflected the level of opposition and depth of feeling against this bold new breed on the ocean racing scene. Public relations had become a key issue.

      Project Team

      Commit and train crew. The selection and securing of the crew were as important as selection and securing of the boat. All key crew members were committed prior to the commitment to the boat. The right combination of boat, crew, commitment, and conditions were identified as essential to success of the project.

      IMS rules provide the opportunity to choose the crew weight, and a decision was made to establish a crew of nine.

      Crew, or team, members were carefully selected for particular positions based on previous experience and track record, motivation, and commitment and ability to work well together. Roles were clearly defined and agreed to by project team members.

      The project initiator/manager fostered team relationships, watching the various personalities, keeping the peace, and relieving tensions when required.

      Team motivation was assured by the nature of the campaign and the team members selected. All team members really liked sailing and took it seriously in career terms. The campaign was established as the leading edge in yachting. This would be one of the first purpose built IMS boats, and the first time that there would be an IMS handicap division winner in the Sydney to Hobart Yacht Race, one of the world’s most prestigious ocean racing competitions. With a leading-edge boat and top crew there was a real chance of winning. The better the boat and the crew, the more fun there is in sailing. Team members had the opportunity of enjoying good sailing while improving their own skills and

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