01spm 02 06 08

SPM

إال توفيقي ومابالله

Strategic Project Management

Dr. Attia Hussien GomaaIndustrial Engineering Professor & Consultant

2008 Engineering service - American University in Cairo (AUC)

SPM 2Strategic Project Management - Dr. Attia Gomaa - 2008

Project manager should be a facilitator to achieve the targets and to overcome

the constraints

Project manager should be a facilitator to achieve the targets and to overcome

the constraints

Resources

TimeCostQualityHSE

PMIS

Targets

Problem Problem Problem

Right Person in the Right Place

Leader

Objective:


Targets = Medium Term SMART Objectives

S = Specific (Bill of Quantity, Quality, Performance, Cost, Time, etc.)

M = Measurable (Certain value or range)

A = Applicable (Achievable, Flexible, etc.)

R = Reliable (Positive, Assurance, Trust, Convince, Accuracy, Reference, etc.)

T = Time frame(Weekly, Monthly, Annual, 2 years, 5 years)

Goals = Long Term SMART Objectives


Strategic Project Management (SPM)SPM is a powerful systematic methodology

to achieve the strategic goals and overcome the constraints through long

term continuous improvement

STRATEGIC PLANNING:

Strategy Formulation

STRATEGIC MANAGEMENT:

Strategy Formulation and Strategy Implementation


Business strategyBusiness strategy is a long-range plan of an organization is a long-range plan of an organization and provides a road map of how to achieve the missionand provides a road map of how to achieve the mission

• Operations strategy (focus on Quality, Cost, Service, ..etc.)

• Financial strategy(focus on Value added, Margin factor, profit, NPV, ..etc.)

• Marketing strategy(focus on Market share, Competition, ..etc.)

• Human resource strategy(focus on Productivity, utilization, Motivation, ..etc.)


Benefits of strategic management

• Establish the mission

• Formulate philosophy

• Establish policies

• Setting objectives

• Developing strategy

• Plan the organizational structure

• Provide personnel

• Establish procedures• Provide facilities• Provide capital• Set standards• Establish programs

and plans• Control information• Activate people


Strategic Cycle

AnalyseAnalyseCreateCreate

PlanPlanImplementImplementReviewReview

ReviseRevise

VisionVision


Study objective: Improve Power Plant Efficiency

Important matrix:

Urgent(due soon)

Not urgent(not due soon)

Important - Maintenance- Fuel system

- Replace- Inventory

Not important

- Training - Change management

- -

Case Study:


1) Scope of work Maintenance Fuel system

2) Specific Improve Availability Minimize fuel cost rate

3) Measurable From 70% to 80% From 30% to 20%

4) Applicable Yes (History analysis) Yes (Modification)From Mazot to NG

5) Reliable - Management support - Management support

6) Timely - Annual - 3 monthly

7) Constraints & problems

- Manpower skills- Material availability- Safety conditions

- Fuel availability- Safety conditions

8) How to overcome the constraints?

- Training plan- Increase mat. budget- Change management

- Procurement plan- Change management


9) Approach Maintenance planning Fuel system modification

10) Duration One year One year

11) Responsibility Leader A Leader B

12) Organization structure

Team A Team B

13) Main Steps - Criticality analysis- Rule 80/20 (A,B,C)- PM w/o analysis- CM w/o analysis- RCFA- Proposed PM program- Proposed Forms- Implementation- Control- Corrective actions

- Scope & requirements- WBS & main items- Design- Technical evaluation- Economical evaluation- Financial evaluation- Master plan- Implementation- Control- Corrective actions


Strategic Management ProcessStep 1. Develop a vision and translate it into a mission

statement.Step 2. Assess strengths and weaknesses.Step 3. Scan environment for opportunities and threats.Step 4. Identify key success factors.Step 5. Analyze competition. Step 6. Create goals & targets Step 7. Formulate strategies. Step 8. Translate plans into actions. Step 9. Establish accurate controls.


Constraints:• Poor communication• Poor visions of the future• Lack of time• Lack of motivation• Lack of information• Costs V’s returns


Strategic Project ManagementEvaluation Parameters

1. Goals & target & constraints2. Leadership & org. structure3. Change management4. PMIS documentation5. Job plans6. Quality plans7. Safety plans8. Material plans9. Standards & codes10. Negotiation skills11. Planning skills12. Control skills13. Risk assessment skills14. Value engineering skills15. Problem solving skills16. Others


Steps to strategic management

• Environmental analysis• Establish organizational direction• Strategy formulation• Strategy implementation• Strategic control


Environmental analysis

• Process of examining the organization’s environment to determine:– Strengths– Weaknesses– Opportunities– Threats


SWOT ANALYSIS:

I. Internal Environment (resources) AnalysisStrengthsWeakness

II. External Environment AnalysisOpportunitiesThreats


Environmental structure

• General environment– Social, economic, political, legal, technical

• Operating environment– International, supplier, labor, competition,

customer• Internal environment

– Organizational, marketing, financial, personnel, production


Methods of environmental forecasting

• Expert opinion

• Trend extrapolation

• Trend correlation

• Dynamic modeling

• Cross-impact analysis

• Multiple scenarios

• Demand/hazard forecasting


Establish organizational direction

• Establishing an organizational direction for the company involves determining two indicators:– Organizational mission – the reason why the

organization exists– Objectives – measurable targets to track the

growth of the business


Key objective areas

• Market standing• Innovation• Productivity• Resource levels• Profitability• Manager performance and development• Worker performance and attitude• Social responsibility


Types of objectives

• Profitability• Growth• Market share• Social responsibility• Employee welfare• Product Quality• Service

• R&D• Diversification• Efficiency• Financial stability• Resource conservation• Mgt & labor development


Strategy formulation

• What are the purpose(s) and objective(s) of the organization?

• Where is the organization presently going?• What critical environmental factors does the

organization currently face?• What can be done to achieve organizational

objectives more effectively in the future?


Formulating business strategies

• Structural analysis of competitive forces– Threat of new entrants– Bargaining power of suppliers– Bargaining power of buyers– Threat of substitute products– Rivalry among existing competitors– Strategic alternatives


Formulating functional strategies

• Operations strategy (focus on Quality, Cost, Service, ..etc.)

• Financial strategy(focus on Value added, Margin factor, profit, NPV, ..etc.)

• Marketing strategy(focus on Market share, Competition, ..etc.)

• Human resource strategy(focus on Productivity, utilization, Motivation, ..etc.)


Components of Operations Strategy

Operations Strategy

ProductProductDesignDesignProcurementProcurement

Quality Quality ManagementManagement

ScheduleSchedule

LocationLocation

LayoutLayout

ProcessProcess DesignDesign

Reliability &Reliability &MaintenanceMaintenance InventoryInventory

HumanHumanResources &Resources &Job DesignJob Design


Elements of Operations Strategy

– Product design• Custom• Standard

– Process (Conversion) arrangement• Product-focused• Process-focused

– Finished goods inventory policy• Produce-to-stock• Produce-to-order


Elements of Operations Strategy

– Focus of the Operations System– Product/Service Plans

• Product/Service life cycle– Production Process and Technology Plans– Resource Requirements and Allocations– Facility Plans

• Capacity• Location• Layout


Strategy implementation

• Commander approach

• Organizational change approach

• Collaborative approach

• Cultural approach


Commander approach• Manager determines “best” strategy• Manager uses power to see strategy implemented• Three conditions must be met

– Manager must have power– Accurate and timely information is available– No personal biases should be present

• Limitations– Can reduce employee motivation and innovation

• Advantages– Managers focus on strategy formulation– Works well for younger managers– Focuses on objective rather than subjective


Organizational change approach• Focuses on the organization• Behavioral tools are used• Includes focusing on the organization’s staffing

and structure• Often more effective than Commander• Used to implement difficult strategies• Limitations

– Managers don’t stay informed of changes occurring within the environment

– Doesn’t take politics and personal agendas into account

– Imposes strategies in a “top-down” format– Can backfire in rapidly changing industries


Collaborative approach• Enlarges the Organizational Change Approach• Manager is a coordinator• Management team members provide input• Group wisdom is the goal• Advantages

– Increased quality and timeliness of information– Improved chances of effective implementation

• Limitations– Contributing managers have different points of view

and goals– Management retains control over the process


Cultural approach• Includes lower levels of the company• Breaks down barriers between manage-ment and

workers• Everyone has input into the formulation and

implementation of strategies• Works best in high resource firms

• Advantage– More enthusiastic implementation

• Limitations– Workers should be informed, intelligent– Consumes large amounts of time– Strong company identity becomes handicap– Can discourage change and innovation


Suggested Books:

Strategic Management: Concepts and ApplicationsSamuel C. Certo and J. Paul PeterRandom House Business Division


Discussion

Suggestions

Questions

Comments

Thank you for your attention!

Dr. Attia Hussien GomaaIndustrial Engineering Professor & ConsultantTel: 0122738497 [email protected]

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