National Corporation is a big name in the industry and is operating successfully for more than hundred years. The company has annual sales of about $600 million and there are around 8000 employees. The company is a large multinational and produces specialty machines, components, and tools for different automotive and aircraft manufacturing companies.
The organizational structure of the company is strictly mechanistic and bureaucratic. The company is divided into different divisions on the basis of different machines, components, and tool production facilities. National Corporation has around 3000 industrial distributors across the country through which the company sells all its tools, components, and machines. Apart from this the company has also employed 20 sales representatives who work along with the different distributors to give presentations and seminars about the products to the customers.
The company uses traditional approach for the project management and for the assignment of the projects. The engineering department is responsible for purchase of capital equipment required and selects the methods of production which will be used in the manufacturing of different products. The engineering department is also assigned the project of assessing and evaluating the purchase of new machines. The project engineer is the supervisor of the complete project.
The project engineer has to coordinate with all departments like production, personnel, product design, plant engineering, and time study. The project engineer reports to the vice president. For example, the project engineer finalizes the location for the new machine and work out instructions related to the operations with the production. In order to define the job descriptions and for selecting and hiring new people for the project engineer coordinate and collaborate with the personnel department. Then the project engineer coordinates with the plant engineering department for the movement of the machine to the proper location. The most important and crucial is the product design department; the project engineer has to closely coordinate with the product design department. The product design department is responsible for the designing of different products which has to be produced and manufactured by the engineering and manufacturing department so there should be proper coordination and collaboration.
If there is any requirement about the product from the customer end which cannot be fulfilled by the manufacturing department then the project engineer communicates this issue to the product design department which in turn informs the sales department, which contacts the customers. The project engineer gets the answer through the same communication chain. The total communication process takes around four to five weeks.
Apart from this the engineering department has no authority over any of the other departments with which it has to work and coordinate. The project engineer has to persuade these departments to work effectively and on time or has to approach chief engineer who will make these departments work through the vice president.
Hence the company has top to bottom, mechanistic, and bureaucratic process for decision making and for performing operations. According to the vice president this is the 'professional way' of doing business and is required for effective, successful, and profitable operations and business (Kerzner, 2009).
Jeff Pankoff works as the chief engineer in the National Corporation. He went to South California where there is a branch of the company to investigate the demand of a new machine by the manager of the branch. There he went for a meeting with one of the airplane company which is the client of the National Corporation. During this meeting he comes to know that the airplane company has asked for quotations related to the delivery of a particular part. If properly dealt with this order from the airplane company can turn into a profitable business of around $40 million per year. But Jeff was surprised to know that the sales department has responded negatively by saying that they cannot take this order.
Jeff knew that the company is capable of fulfilling this order by installing just and additional machine and can capitalize on this opportunity. But as the sales representative of the company was not with him he was not able to comment or commit about the sales and contract. The sales vice president is angry at Jeff for directly talking to the customer as all communication with the customers are made through the sales department. Jeff informed the vice president about the whole situation and recommended that the company needs proper project management approach and requires a project manager. But the vice president is least bothered about this idea and is satisfied with the traditional approach and decides to continue with that.
The project started under the same old traditional method of project management with all communication with customers directed through product design and sales department. The nature of the project was such that Jeff spent huge time in getting clarification from the customer about the drawings of the design and all this communication took place through the product design and sales department. Without answering the questions and reservations about the design of the product the company is not able provide the quotation to the customers. The customers have to select the supplier within eight weeks and are eager to get the quotations. The company wasted around one week because of communication delay. The engineering department wasted another week in testing different options for manufacturing. After wasting two weeks, the product design department wants to change the design of the product and at the same time Jeff was informed that sales has promised the customers that the company will deliver 100 pieces of the products for test order within two weeks. This and all other miscommunication among different departments resulted in delaying the shipment of the test order and ultimately the company lost the order from one of the big and major customer (Kerzner, 2009).
HOW PROJECT FIRECRACKER COULD HAVE BEEN APPROACHED AT STRATEGIC LEVEL:
The management of the National Corporation should have been considerate about the importance and urgency of the project. The project firecracker required a proper and efficient project management approach. Project management is the professional approach towards managing projects in which the project manager plan, organize, secure, and manage resources in order to complete and achieve the goals of the project effectively and efficiently (Burke, 1999).
The problem in the project management approach of the National Corporation was that there was no proper coordination among different departments and division. Each and every department was working on its own and was looking for their own priorities and was least bothered about the overall goals and targets of the project. The design department was still working on the design of the product and engineering department was not able to find out the efficient and effective method of manufacturing the required product, but sales department committed with the customers that the company will deliver the test orders within two weeks. This was because of the lack of communication and coordination among different departments.
Apart from this the communication chain was long and complicated, any communication with the customer was routed through the product design department and sales department which resulted in wastage of time in communicating the requirements of the customers to the engineers and the reservations and questions of the engineers to the customers.
This all wastage of time because of complexity in the communication chain and lack of coordination among the concerned departments resulted in delaying of the delivery of the test order and fault in the products delivered for the test order. The traditional approach of the company towards project management cost the company almost $6 million in profits.
The management of the National Corporation failed to realize the strategic importance of the project and failed to devise strategic plan for the project management. Although the chief engineer Jeff warned the vice president about the efficiency level of the traditional project management approach. But vice president was not interested in going for more professional approach of project management. The chief engineer made this clear that if the company will follow the normal and traditional channel of communication and project management for this project then there will be different issues, problems, and delays in the project. In this project there was requirement of extensive communication between the customer and engineering department for continuous updating and changes. And the current communication channel of the company will result in delays and miscommunications. Apart from this there should be proper coordination among different departments as the project requires work from all departments and under current system each and every department is working on their own priorities and this will also result in the failure of the project. But the top management of the National Corporation was not ready to understand the need of professional project management approach.
The company should have devised proper strategy and should have hired a project manager for the project who will head the project with complete authority. The project manager has the ability and authority to manage the project effectively and efficiently…