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The following case illustrates the development of a ...view middle of the document...
Heublein, Inc. $1.9 MM
Beverage operations 66% of sales
Food operations 34% of sales
Spirits group $992 M
Wines group $280 M
Food service/ franchising group $520 M
Grocery products group $131 M
Smirnoff Vodka Jose Cuervo Tequila Black Velvet Whiskey Regina Wine Vinegar
Beaulieu Wines Inglenook Wines Colony Wines Jacare Wines
Kentucky Fried Chicken
A-1 Steak Sauce Grey Poupon Mustard Ortega Mexican Foods
CHAPTER 6 / PROJECT ACTIVITY PLANNING
The engineering departments of the Groups have responsibility for operational planning and control of capital projects, a common feature of the Groups. However, the differences among the Groups are reﬂected in differences in the sizes of the engineering departments and their support services. Similarly, ﬁnancial tracking support varies from full external support to self-maintained records. Prior to the implementation of the Project Management and Control System (PM&C) described in this paper, the capital project process was chieﬂy concerned with the ﬁnancial justiﬁcation of the projects, as shown in Figure 2. Highlights include:
Some major projects went over budget. The need for optimal utilization of capital funds intensiﬁed since depreciation legislation was not keeping pace with the inﬂationary rise in costs.
Responding to these factors, Heublein’s corporate management called for a program to improve execution of capital projects by implementing PM&C. Responsibility for this program was placed with the Corporate Facilities and Manufacturing Department, which, in addition to reviewing all Capital Appropriation Requests, provided technical consulting services to the corporation. Feasibility Study Lacking specialized expertise in project management, the Director of Facilities and Manufacturing Planning decided to use a consultant in the ﬁeld. Interviewing of three consultants was undertaken to select one who had the requisite knowledge, compatibility with the style and goals of the ﬁrm, and the ability to communicate to all levels and types of managers. The latter requirement was important because of the diversity of the engineering department structures and personnel involved. The ﬁrst author was selected as the consultant. With the consultant selected, an internal program manager for PM&C was selected. The deferral of this choice until after selection of the consultant was deliberate, to allow for development of interest and enthusiasm among candidates for this position and so that both the selected individual and the selection committee would have a clear picture of the nature of the program. A program manager was chosen from the corporate staff (the second author). Having the key staff in place, ground rules were established as follows:
A focus on cost-beneﬁt analysis. Minimal emphasis on execution of the projects; no mechanism to assure that non-ﬁnancial results were achieved.
The following factors...