PROJECT

MANAGEMENT
ASSIGNMENT
[SIN-46]
MBA REFERENCE: SIN 45.09

PART-A
SUPPLIER MANAGEMENT
ABSTRACT

This assignment is commissioned to discuss about the key issues faced by project managers

during the course of the project works and the importance of supplier management to succeed

and meet the challenging schedules of completing the projects on-time and the common

strategies used by the project managers to overcome those issues.

INTRODUCTION

In common practise organisations employee project manager to manage projects by

organising the resources. In general resources can be classified as man power or materials

required in accomplishing the project.

Most of the organisations including my current company outsource for their manpower &

materials, as the project duration is finite, it is not cost effective to employee many people

just for any particular project. Hence most of the companies’ only employee the project

manager and his role is to manage the suppliers to accomplish the project on-time, within

budget and delivering to the requirements. Further, this method of outsourcing in another way

mitigates the project risk associated with any non-compliance. We will discuss about the

project mitigation strategies in the later part of this assignment.

SUPPLIER MANAGEMENT

Sub contracting companies who provide man power and materials required for the projects

can be classified as suppliers for projects. Workmanship & materials play a major part in

determining the quality and time for project works. In view of these the key objective for any

project is supplier management and usually the assigned project manager has to manage the

suppliers.
Old carpenter’s advice is to measure twice but cut only once. [Citied under contemporary

project management text book; p298] This precaution of double confirming during the

planning stage itself saves time due to perfection in avoiding re-cutting and the possible cost

which may be associated with re-doing works. This is a strategy to deliver quality products

on-time and at an affordable price. Hence project managers shall have very good control over

planning in order to manage Cost, Quality aspects for the project to complete them on

schedule.

For projects resource planning & organising at the starting stage is critical to manage time &

cost of projects. Ensuring to have the right resources is the first priority for project

management. As discussed earlier resources are provided by the suppliers, as such they are

the key, they need to be managed well and in return to become their valued customer and it is

in the good hands of the project manager to manage the suppliers.

Suppliers can impact the company in many ways, we will discuss on the major once for this

assignment. Supplier components can positively or negatively affect the quality of the

product. Better/high quality adds to the customer satisfaction and decreases rejections, which

in return adds cash to the bottom line of the organisation.

Further, timely deliveries are crucial to ensure the projects complete on time and also to

maintain reliability. Tracey and Tan (2001) says that selection of supplier on the basis of

quality, reliability & performance will positively influence the client’s satisfaction in terms of

Cost, Quality & Time. In fact, if the client trusts & believes in any company, they appreciate

it with repeated invitations for new projects.

Besides these, Kotabe and Murray (2001) argues that supplier’s reputation, quality and brand

image are also equally important to have competitive advantage. Suppliers can influence any
company to be highly competitive based on their pricing, quality, reliability, technological

breakthroughs and knowledge of industry trends. In this way good relation with the suppliers

will also help the company to have competitive advantage in terms of pricing & quality.

Only valued customers receive such additional support from the suppliers. In order to be a

valued customer to suppliers, the project manager shall understand few basic things to

maintain good working relationship. Any business which runs for profits expects payment on

time to have healthy cash flow within the organization, project manager can negotiate for

favourable payment terms before placing an order, but once the order is placed, it should be a

gentlemen’s deal with no changes in the rules. If the supplier loses faith that’s the end of the

relation, as in this competitive market only good working relation can maintain loyalty

between companies.

To develop a good working relation the supplier shall be treated fairly whenever possible it is

good to give suppliers as much lead time as possible on the orders. Unless there's a strong

competitive reason, sharing with them an honest projection of the needs and keeping them

informed of any significant changes in the requirements or schedule will help in smooth work

flow.

The Project manager shall explain his quality and time needs clearly to the suppliers, have

them committed to their agreements to ensure they stay competitive. Clarifying why they are

together and what are the future plans and in which way the supplier can be involved in it.

Project manager shall communicative by treating them fairly and paying them on time and on

the other hand shall also be demanding at times when schedule calls for. With good working

relation, when situation demands supplier can also source for ex-stock reserved for other
works with some internal adjustments and dealings with other companies; this is all about

relationship between project managers and suppliers.

An example of such scenario can be drawn from the author’s works experience, whereby for

one for the project the site engineer forgot to order an isolator contactor to monitor the status

of equipment’s operation. Usually the contacts are only used for monitoring specialised

equipment and are not common as not all the equipments need to be monitored. So there is no

surprise if the engineer did not order it along with the isolator. But by the time the need was

realised, it was already installation and commissioning time for the equipment, with less than

a week to commission the equipment the contact has to be delivered immediately.

Being a rare item there was no stock with our regular supplier, but he has done his best to

source from other suppliers in his contacts and arranging immediately with no additional cost,

this is where the working relationship matters for projects, if the contact was not delivered

and installed our companies reputation would have been at stake, suppliers can just wash

hands saying that it was not informed earlier.

From this example, we can understand that managing the suppliers is very important for

projects; whenever possible it is not a bad idea to include the suppliers in some of the

company’s strategy meetings, inviting them to the office parties such as gatherings or picnics.

Suppliers shall be treated as internal people that is where project management strategy lies.

Good working relation may also provide a possibility whereby the suppliers introduce the

company to some of their other clients, which helps in business expansion.

Having said that it is not wise to rely on one supplier, if that supplier don’t have the resources

or materials to the extent we are looking at, there should always be a backup in the form of

multiple suppliers on hand this is business strategy as there is no company or supplier who

can provide all the items required for the projects. At times they need to be replaced due to
time, requirement or other recommendations, such situations shall be discussed with them so

that they can appreciate and continue to provide their support in the future endeavours.

Shiba argues that Social networking accelerates quality improvement. [Cited under

contemporary project management text book; p294]

It is necessary to know the target, then plan to meet the target, without target there is no goal

and without goal there is no direction. Knowing the target in the Key for projects and

planning contingencies is necessary for risk management.

Most of the companies hold the project manager responsible for supplier management to

execute the projects. As such the project manager shall possess technical and behavioural

skills [Cited under contemporary project management text book; p208].

Project manager shall also possess working knowledge on many fields pertaining to the scope

of projects, so as to guide their peers in arranging day to day works.

Sabaa (1999) argues that to be a successful leader & a team player the project manager shall

possess human, organisational & technical skills to lead the team.

Quick understanding and adopting is the key to project’s success, as every project differs

from one another hustle approach may pose a threat to the quality. Balance Cost quality &

Time is absolutely necessary. As no client will agree if their project is over the projected

budget or exceed the stipulated time for completion.

Raw materials, man power plays a major part in deciding the quality of the project, skills of

the project manager is evaluated in managing and balancing them for successful execution
From a survey conducted by Muller, he identified that manager’s leadership style can be

identified on the basis of their emotional (EQ), managerial (MQ), and intellectual (IQ)

competencies.

Where by Emotional qualities are motivation, influencing others, self awareness etc,

Managerial qualities are managing resources, empowering, engaging in commutation etc and

Intellectual qualities are critical analysis, imagination and strategic planning.

Usage of the qualities depends on the nature of project and people the manager is dealing

with as dealing with suppliers needs qualities such as communication, empowerment etc

whereas while dealing with the internal team members qualities such as motivation,

influencing are critical.

Project manager shall deal with cause effect matrix for projects whenever he is going to a

slightly critical stage of the projects. This has to be clearly discussed with the suppliers,

engineers & supervisors to enlighten them on the outcomes and also to give them the

ownership of the task depending on their strengths. Effective utilisation of resources is a skill

for the project managers.

Supplier management is also a part of risk management for project. In response to the risk,

project managers’ use various strategies namely avoid, transfer, mitigate, accept, research,

exploit, share enhance. [Cited under chapter 10, project risk planning; p281]

For dealing with suppliers strategies such as Mitigate, exploit, share enhance can be used.

Mitigating the risk for projects is the effort to lower the risk; this mitigating strategy can be

used for product reliability from suppliers to ensure quality for projects. Quality in projects is

directly dealing with cost, relaying on suppliers will reduce the quality risk for projects as it

becomes suppliers responsibility once agreed. In fact during the planning stage of the project

the project manager shall clearly explain the requirements for the projects so that the supplier
plans and delivers to the expectations. This agreement of compliance mitigates the quality

risk.

Further, exploiting the suppliers will benefit both the supplier and the project manager in

getting new projects. Project managers and suppliers shall create a good reputation to create a

benchmarking for projects accuracy in delivering to the quality requirements within budget

and stipulated time.

Moving forward, if the suppliers are not managed well, it can lead the project to a disaster.

Usually whenever the work is assigned to any supplier the project manager expects the work

to be executed to the quality requirements of the clients. If the supplier fails to assign capable

and experienced people the workmanship will not be good. With poor quality standards of

installations the works will lead to re-work which will impact the schedule for projects. This

ultimately effects the cost be it paid by the supplier or the employer (i.e. the project

manager’s organisation) once such scenario come into existence the reputation and the faith

of the client will be effected. This will negatively influence on the future biddings for the

involved company.

Using strategies does not mean that the project manager leaves everything to the suppliers to

take the responsibility, sharing to enhance is also a part of the risk management strategy.

Helping each other for better working environment creates a more productive work

relationship.

CONCLUSION

Suppliers if managed well can positively influence the organisation and lead to new business

opportunities, at the same time they can also lead to undesired outcome if not managed well.
From the earlier discussion it can be argued that supplier management is a key issue for

project managers, and they have to use variety of strategies and skills to ensure that they meet

the project deadlines in terms of time, cost and quality.

REFERENCES

Ashby, W. R. 1957, An Introduction to Cybernetics, Chapman & Hall Ltd. Second

Impression. London.

Baccarini, D. 1996, “The concept of project complexity--a review”, International Journal of

Project Management, vol. 14, issue 4, pp. 201-204.

Brown, S. L. and Eisenhardt, K. M. 1997 "The Art of Continuous Change: Linking

Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations,"

Administrative Science Quarterly, vol. 42.

Casti, J. L. 1994, Complexification. Abacus Press.

Collins, A. & Baccarini, D. 2004, "Project Success - A Survey", Journal of Construction

Research, vol. 5,no. 2, pp. 211-231.

Coveney, P., & Highfield, R. 1995, Frontiers of complexity: The search for order in a

chaotic world. Farber and Farber.

Cramer, F. 1988, Chaos und ordnung: Die komplexe struktur des lebendigen. Deutsche

Verlags-Anstalt Stuttgart.

Crawford, L., Hobbs, B., & Turner, J. R. 2005, Project Categorization Systems, PMI, Newton

Square, PA, USA.

Dulewicz, V. & Higgs, M. 2000, "The Competent manager – A model for effective

performance", Journal of Managerial Psychology, vol. 15, no. 4.

Dulewicz, V. & Higgs, M. 2005, "Assessing leadership styles and organisational context",

Journal of Managerial Psychology, vol. 20, no. 1, pp. 105-123.

Dulewicz, V. 2005, “Categorizing sten codes”, Personal communication, 30-11-2005.

Luhman, J. T. & Boje, D. M. 2001, “What Is Complexity Science? A Possible Answer from

Narrative Research” EMERGENCE, vol. 3, no. 1, pp. 158–68

Lundin, R. A. & Söderholm, A. 1995, "A theory of the temporary organization",

Scandinavian Journal of Management, vol. 11, no. 4, pp. 437-455.

Malik, F. 2003, Strategie des Managements komplexer Systeme. Ein Beitrag zur

Management-Kybernetik evolutionärer Systeme. Haupt Verlag AG.

Morris, P. 1988, "Managing project interfaces," in Project Management Handbook, 2nd edn,

D. L. Cleland & W. R. King, eds., Van Notstrand Reinhold, New York, USA.

Morris, P. W. G. & Hough, G. H. 1987, The anatomy of major projects: A study of the reality

of project management, John Wiley & Sons, Ltd., Chichester, UK

Müller, R. & Turner, J. R. 2007, "Matching the project manager's leadership style to project

type", International Journal of Project Management, vol. (to appear).

Müller, R. & Turner, J. R. (to appear), "Project Success Criteria and Project Success by Type

of Project", (submitted).

O'Reilly III, C. A. & Tushman, M. A. 2004. "The Ambidextrous Organization," Harvard

Business Review, vol. 82, pp. 74-81.

Patzak, G. 1982, Systemtechnik - Planung komplexer innovativer Systeme: Grundlage,

Methoden, Techniken. Springer-Verlag.

Shenhar, A. J. 2001, "One Size Does Not Fit All Projects: Exploring Classical Contingency

Domains", Management Science, vol. 47, pp. 394-414, 2001.

Simon, H. A. 1962, “The Architecture of Complexity”, Proceedings of the American

Philosophical Society, Vol. 106, No. 6, pp. 467-482.

Turner, J. R. 1999, Handbook of Project-based Management: Improving the Process for

Achieving Strategic Objectives, 2nd edn, McGraw-Hill, UK.

Turner, J. R. & Müller, R. 2005, "The Project Manager's Leadership Style as a Success Factor

on Projects: A Literature Review", Project Management Journal, vol. 36, no. 2, pp. 49-61.
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SIN-46

PART - B
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SIN 45.09

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Question-2: Construction of Cricket Stadium

From the details provided the actual duration of each activity can be calculated by using the

formula T (e) = (A+4M+B)/6 [Cited under SIN 46 project management lecture slide; p180]

With the given values from the table in the question individual activities duration is as

follows:

OPTIMISTI PESSIMISTIC
MOST LIKELY DURATION
ACITIVITY C TIME TIME
TIME (m) [(a+4m+b)/6] PREDECESSORS
(a) (b)

A 3 4 5 4

B 5 7 9 7 A
C 2 4 5 3.8333333 A, B
D 4 6 7 5.8333333 A, B, C
E 5 7 8 6.8333333 B
F 3 4 5 4 B, D, E
G 2 3 4 3 B, D
H 2 4 5 3.8333333 D, E, F
I 2 4 6 4 K
J 4 6 8 6 G, H, F
K 3 4 5 4 H, E
L 2 3 5 3.1666667 G, H, D
M 5 6 8 6.1666667 K, L
N 7 13 19 13 J, K, L

O 8 11 17 11.5 D, G
Alphabetical arrangement of activities and durations on the basis of Finish to start logical dependency & successor relationship:
Schedule showing Re-Arrangement of activities on the basis of Finish to start logical dependency and successor relationship:
Preceding table shows the activities with the new arrangement

RE-ARRANGEMENT
ACTIVITY PREDECESSORS DURATION
OF ACTIVITIES

1 A   4

2 B A 7

3 C A,B 3.83

4 E B 6.83

5 D A,B,C 5.83

6 G B,D 3

7 F B,D,E 4

8 O D,G 11.5

9 H D,E,F 3.83

10 L G,H,D 3.16

11 K H,E 4

12 J G,H,F 6

13 I K 4

14 M K,L 6.16

15 N J,K,L 13
From the preceding table with duration and successor, predecessor relations we can find the

Earliest start time (ES), Earliest finish time (EF), Latest start time (LS), Latest finish time

(LF) by using the following formulas.

Early Finish time (EF) = Early start + Duration [Cited under project management lecture

slides; p154]

Early start time (ES) = Largest EF of immediate predecessor [Cited under project

management lecture slides; p154]

Latest start time (LS) = Latest Finish - Duration [Cited under project management lecture

slides; p163]

Latest Finish time (LF) = Smallest late start of the successor [Cited under project

management lecture slides; p166]

By using the above formulas the values of each activity can be tabulated as follows:

EARLY EARLY LATE START LATE FINISH

DURATION
PREDECESS START TIME FINISH TIME TIME TIME
ACITIVITY [(a+4m+b)/
ORS (ES) (EF) (LS) (LF)
6]
A 4 0 4 0 4

B 7 A 4 11 4 11

C 3.8333333 A, B 11 14.8 11 14.8

D 5.8333333 A, B, C 14.8 20.6 14.8 20.6

E 6.8333333 B 11 17.8 13.8 20.6

F 4 B, D, E 20.6 24.6 20.6 24.6

G 3 B, D 20.6 23.6 25.4 28.4

H 3.8333333 D, E, F 24.6 28.4 24.6 28.4

I 4 K 32.4 36.4 43.4 47.4

J 6 G, H, F 28.4 34.4 28.4 34.4

K 4 H, E 28.4 32.4 37.3 41.3

L 3.1666667 G, H, D 28.4 31.5 31.3 34.4

M 6.1666667 K, L 32.4 38.5 41.3 47.4

N 13 J, K, L 34.4 47.4 34.4 47.4

O 11.5 D, G 23.6 35.1 35.9 47.4

From the above values of ES, EF, LS & LF we can calculate the slack to identify the critical

activities and the critical path for the project

Slack can be calculated using the following formula

Slack = LF – EF (or) LS - ES [Cited under project management lecture slides; p176]

EARLY LATE START LATE SLACK

DURATION EARLY
FINISH TIME FINISH (LF-EF)
ACITIVITY [(a+4m+b)/ START
6] TIME (LS) TIME or
TIME
(EF)
 (ES) (LF) (LS-ES)

A 4 0 4 0 4 0

B 7 4 11 4 11 0

C 3.8333333 11 14.8 11 14.8 0

D 5.8333333 14.8 20.6 14.8 20.6 0

E 6.8333333 11 17.8 13.8 20.6 2.8

F 4 20.6 24.6 20.6 24.6 0

G 3 20.6 23.6 25.4 28.4 4.8

H 3.8333333 24.6 28.4 24.6 28.4 0

I 4 32.4 36.4 43.4 47.4 11

J 6 28.4 34.4 28.4 34.4 0

K 4 28.4 32.4 37.3 41.3 8.9

L 3.1666667 28.4 31.5 31.3 34.4 2.9

M 6.1666667 32.4 38.5 41.3 47.4 8.9

N 13 34.4 47.4 34.4 47.4 0

O 11.5 23.6 35.1 35.9 47.4 12.3

Activities with zero slack value critical that means it has no time for any delay to execute the

project. From the above table Activities A, B, C, D, F, H, J & N are critical.

So the Critical path can be shown as follows:

Start A B C D F H J

Finish
From the above value we can prepare an AON network & the critical path is as follows:

Project duration can be calculated by adding activity duration of critical activities, which makes a total of 47.5 weeks
Standard deviation for the activities can be calculated using the following formula

Standard Deviation (SD) = [(b-a)/6]

ACITIVITY OPTIMISTIC MOST LIKELY PESSIMISTIC Standard Variance

TIME TIME (m) TIME Deviation
(a) (b) [(b-a)/6] [(b-a)/6]2

A 3 4 5 0.333333 0.11111

B 5 7 9 0.666667 0.44444

C 2 4 5 0.5 0.25

D 4 6 7 0.5 0.25

E 5 7 8 0.5 0.25

F 3 4 5 0.333333 0.11111

G 2 3 4 0.333333 0.11111

H 2 4 5 0.5 0.25

I 2 4 6 0.666667 0.44444

J 4 6 8 0.666667 0.44444

K 3 4 5 0.333333 0.11111

L 2 3 5 0.5 0.25

M 5 6 8 0.5 0.25

N 7 13 19 2 4

O 8 11 17 1.5 2.25

Total of the critical activities variance A + B + C + D + F + H + J + N [0.111 + 0.444 + 0.25

+ 0.25 + 0.111 + 0.25 + 0.444 + 4] = 5.861

Square root of the total ∑S.D = √5.861 = 2.42

Project Management Assignment Student I.D. 200891929
______________________________________________________Intake: SIN 46

Project completion probability can be calculated using the formula [T(s)-T(e)/√∑S.D] From

the obtained value probability percentage can be find out from the Z-Values table

In 45 Weeks = [(45-47.5)/2.42] = -1.033

From the Z-Tables the probability for -1.03 can be noted as 0.1515 = 15.15% probability of

completing the project in 45 Weeks

In 47 Weeks = [(47-47.5)/2.42] = -0.206

From the Z-Tables the probability for -0.21 can be noted as 0.4168 = 41.68% probability of

completing the project in 47 Weeks

OBSERVATION & ANALYSIS:

From the earlier analysis it is noticeable that activities A, B, C, D, F, H, J, N are critical for

the project with zero slack time, i.e. is there is no room for delay in starting or completing

these activities.

Activities N & O takes considerably longer time to complete, which is 13 & 11.5 weeks

respectively. However activity O is not critical as there is a slack time of 12.3 weeks to

complete, but activity N is critical for the project with the maximum duration and Zero slack

time, further it also ends the project. Any delay in completing activity N will delay the whole

project and upset the schedule.

So the resources’ pertaining to activity N and other critical activities has to be managed and

organised well to complete the project in 47.5 weeks.

Further, the possibility of starting some of the critical activities concurrently has to be

discussed to hustle the project works in reducing the total project duration. Any

communication gap will lead to delay in the project. It is advisable to have meeting with the

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Project Management Assignment Student I.D. 200891929
______________________________________________________Intake: SIN 46

supplier before starting of each critical activity to review, plan & ensure that the schedule is

met and the necessary materials & manpower are allocated.

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