The Ill Fated Project

Jeff Pankoff, the chief engineer for National, flew to Southern California to one of National's (tool) plants. Ben Ehlke, manager of the Southern California plant, wanted to purchase a computer numerical controlled (CNC) machining center for $250,000. When the request came to Jeff for approval, he had many questions and wanted some face-to-face communication.

The Southern California plant supplied the aircraft industry, and one airplane company provided 90 percent of the Southern California plant's sales. Jeff was mainly concerned about the sales projections used by Ehlke in justifying the machining center. Ehkle pointed out that his projections were based on what the airplane company had told him they expected to buy out the next five years. Since this estimate was crucial to the justification, Jeff suggested that a meeting be arranged with the appropriate people at the airplane company to explore these projections. Since the local National sales representative was ill, the distributor salesman, Jack White, accompanied Jeff and Ben. While at the airplane company (APC), the chief tool buyer of APC, Tom Kelly, was informed that Jeff was there. Jeff received a message from the receptionist that Tom Kelly wanted to see him before he left the building. After the sales projections were reviewed and Jeff was convinced that they were as accurate and as reliable as they possibly could be, he asked the receptionist to set up an appointment with Tom Kelly.

When Jeff walked into Kelly's office the fireworks began. He was greeted with, "What's wrong with National? They refused to quote on this special part. We sent them a print and asked National for their price and delivery, indicating it could turn into a sizable order. They turned me down flat saying that they were not tooled up for this business. Now I know that National is tops in the field and that National can provide this part. What's wrong with your sales department?"

All this came as a complete surprise to Jeff. The distributor salesman knew about it but never thought to mention it to him. Jeff looked at the part print and asked, "What kind of business are you talking about?" Kelly said, without batting an eye, "$40 million per year."

Jeff realized that National had the expertise to produce the part and would require only one added machine (a special press costing $20,000) to have the total manufacturing capability. Jeff also realized he was in an awkward situation. The National sales representative was not there, and he certainly could not speak for sales. However, a $40 million order could not be passed over lightly. Kelly indicated that he would like to see National get 90 percent of the order if they would only quote on the job. Jeff told Kelly that he would take the information back and discuss it with the vice presidents of sales, manufacturing, and engineering and that most likely the sales vice president would contact him next.

On the return flight, Jeff reviewed in his mind his meeting with Kelly. Why did Bob Jones, National's sales vice president, refuse to quote? Did he know about the possible $40 million order? Although Jeff wasn't in sales, he decided that he would do whatever possible to land this order for National. That evening Jack White called from California. Jack said he had talked to Kelly after Jeff left and told Kelly that if anybody could make this project work, it would be Jeff Pankoff. Jeff suggested that Jack White call Bob Jones with future reports concerning this project.

The next morning, before Jeff had a chance to review his mail, Bob Jones came storming into his office. "Who do you think you are committing National to accept an order on your own without even a sales representative present? You know that all communication with a customer is through sales."

Jeff replied, "Let me explain what happened."

After Jeffs explanation, Jones said, "Jeff, I hear what you're saying, but no matter what the circumstances, all communications with any customer must go through proper channels."

Following the meeting with Jones, Jeff went to see Wolinski, his boss. He filled Wolinski in on what had happened. Then he said, "Don, I've given this project considerable thought. Jones is agreeable to quoting this job. However, if we follow our normal channels, we will experience too many time delays and problems. Through the various stages of this project, the customer will have many questions and changes and will require continuous updating. Our current system will not allow this to happen. It will take work from all departments to implement this project, and unless all departments work under the same priority system, we won't have a chance. What we need, Don, is project management. Without this approach where one man heads the project with authority from the top, we just can't make it work."

Wolinski looked out the window and said, "We have been successful for many years using our conventional approach to project work. I grant you that we have not had an order of this magnitude to worry about, but I see no reason why we should change even if the order were for $100 million."

"Don, project management is the only way to handle this type of project. With $40 million at stake we can't afford not to use this approach."

"Listen Jeff, your problem is you take seminars given by these ivory tower professors and you think you're an expert. I've been in this business for forty years and I know how to handle this job—and it isn't through project management. I'll call a meeting of all concerned department managers so we can get started on quoting this job."

That afternoon, Jeff and the other five department managers were summoned to a meeting in Wolinski's office. Wolinski summarized the situation and informed the assembled group that Jeff would be responsible for the determination of the methods of manufacture and the associated manufacturing costs that would be used in the quotation. The method of manufacture, of course, would be based on the design of the part provided by product design. Wolinski appointed Jeff and Waldo Novak, manager of product design, as coheads of the project. He further advised that the normal channels of communication with sales through the product design manager would continue as usual on this project.

The project began. Jeff spent considerable time requesting clarification of the drawings submitted by the customer. All these communications went through Waldo. Before the manufacturing routing could be established for quotation purposes, questions concerning the drawings had to be answered. The customer was getting anxious to receive the quotation because its management had to select a supplier within eight weeks. One week was already lost owing to communication delay. Wolinski decided that to speed up the quoting process he would send Jeff and Waldo along with Jones, the sales vice president, to see the customer. This meeting at APC helped clarify many questions. After Jeff returned, he began laying out the alternative routing for the parts. He assigned two of his most creative technicians and an engineer to run isolated tests on the various methods of manufacturing. From the results he would then finalize the routing that would be used for quoting. Two weeks of the eight were gone, but Jeff was generally pleased until the phone rang. It was Waldo.

"Say, Jeff, I think if we change the design on the back side of the part, it will add to its strength. In fact, I've assigned one of my men to review this and make this change, and it looks good."

While this conversation was going on, Wolinski popped into Jeff's office and said that sales had promised that National would ship APC a test order of 100 pieces in two weeks. Jeff was irate. Product design was changing the product. Sales was promising delivery of a test order that no one could even describe yet.

Needless to say, the next few days were long and difficult. It took three days for Jeff and Waldo to resolve the design routing problem. Wolinski stayed in the background and would not make any position statement except that he wanted everything "yesterday." By the end of the third week the design problem was resolved, and the quotation was prepared and sent out to the customer. The quotation was acceptable to APC pending the performance of the 100 test parts.

At the start of the fourth week, Jeff, with the routing in hand, went to Charlie Henry, the production manager, and said he needed 100 parts by Friday. Charlie looked at the routing and said, "The best I can do is a two-week delivery."

After discussing the subject for an hour, the two men agreed to see Wolinski. Wolinski said he'd check with sales and attempt to get an extension of one week. Sales asked the distributor salesman to request an extension. Jack White was sure it would be okay so he replied to Bob Jones without checking that the added week was in fact acceptable.

The 100 pieces went out in three weeks rather than two. That meant the project was at the end of the sixth week and only two remained. Inspection received the test pieces on Monday of the seventh week and immediately reported them not to be in specification. Kelly was upset. He was counting heavily on National to provide these parts. Kelly had received four other quotations and test orders from National's competitors. The prices were similar, and the test parts were to specification. However, National's parts, although out of specification, looked better than their competitors'. Kelly reminded Jones that the customer now had only nine days left before the contract would be let. That meant the 100 test parts had to be made in nine days. Jones immediately called Wolinski, who agreed to talk to his people to try to accomplish this.

The tools were shipped in eleven days, two days after the customer had awarded orders to three of National's competitors. Kelly was disappointed in National's performance but told Jones that National would be considered for next year's contract, at least a part of it.

Jeff, hearing from Waldo that National lost the order, returned to his office, shut the door, and thought of the hours, nearly round the clock, that were spent on this job. Hours were wasted because of poor communications, nonuniform priorities, and the fact that there was no project manager. ''I wonder if Wolinski learned his lesson; probably not. This one cost the company at least $6 million in profits, all because project management was not used." Jeff concluded that his work was really cut out for him. He decided that he must convince Wolinski and others of the advantages of using project management. Although Wolinski had attended a one-day seminar on project management two years ago, Jeff decided that one of his objectives during the coming year would be to get Wolinski to the point where he would, on his own, suggest becoming more knowledgeable concerning project management. Jeffs thought was that if the company was to continue to be profitable it must use project management.

The phone rang, it was Wolinski. He said, "Jeff, do you have a moment to come down to my office? I'd like to talk about the possibility of using, on a trial basis, this project management concept you mentioned to me a few months ago."

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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