project management- session 3

8/7/2019 Project Management- Session 3

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Project Management: Ideas

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Salil Sansare

Project Management-Session 4

1/31/2010



How to generate ideas?

• Can come from various sources.

• Mainly from customers.

• By pure accident or luck! (vulcanized

1/31/2010Project Management-Session 4

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..

• The end product i.e. project should competeeffectively.

• Toyota- 35 ideas per employee per year• Kodak- benefits to employees

• 3M -15% rule



.. And how to screen (reject) them?

• Product differentiation

• Acceptable risk level

• Government priorities/ policies


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• Compatibility of promoter

• Availability of inputs

• Adequate market demandDelhi Metro is a good example.



Kanter’s 10 rules for stifling innovation

• Regard any new idea with suspicion - because it's new,and because it's from below.

• Insist that people who need your approval to act first gothrough several other layers of management to get theirsignatures.

•


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each other's proposals. (That saves you the trouble of deciding - you just pick the survivor.)

• Express your criticisms freely, and withhold your praise.(That keeps people on their toes.) Let them know they

can be fired at any time.• Treat identification of problems as signs of failure, todiscourage people from letting you know whensomething in their area isn't working.



Kanter’s 10 rules for stifling innovation(continued…)• Control everything, carefully. Make sure that people

count everything that can be counted, frequently.• Make decisions to reorganize or change policies in secret,and spring them on people unexpectedly. (That also keepspeople on their toes.)


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• a e sure a reques s or n orma on are u y us e ,and make sure that it is not given out to managers freely.(You don't want data to fall into the wrong hands.)

• Assign to lower-level managers, in the name of delegationand participation, responsibility for figuring out how to

cut back, lay off, move people around, or otherwiseimplement threatening decisions that you have made.

And get them to do it quickly.• And above all, never forget that you, the higher-ups,

already know everything important about this business.



Technical analysis- FI angle

Area Details explained

Product range Main products, Byproducts, Scrap

Process know how Plant outline, building outline, layout structure, vendorslist for critical equipment


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Plant location Soil testing, socio-economic conditions, off-site facilities

Plant & machinery Import licenses, installed capacity, inspection & expediting,guarantee period

Materials Cost availability & quality

Personnel Organization chart, HR policies, training facilities



Location, location & location

• Why space vehicles are launched fromSriharikota?


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• Why thermal power projects are near a river?



How to choose a location?

• Availability of skilled workforce

• Proximity to clients and suppliers

• Already available infrastructure


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• a our mater a cost• Future expansion plans

• Climate conditions

• Political scenario (ask Tatas!)• Government policies



Effect of government policies

• SEZs- tax breaks

• Backward areas- tax subsidy


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• Environmental controls

• Capacity capping



Recently stalled/failed projects

• Enron Power, Ratnagiri


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,

• Tata Motors, Singur

• Any others?



PM- Material Procurement

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Salil Sansare1/31/2010Project Management-

Session 4



Procurement Management

• Process of acquiring goods and services from afirm external the performing organization – PMI


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Project procurement planning

• What to procure?• When to procure?

• How to rocure?


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Objectives of procurement planning

• Acquiring all products & services from a single vendor.


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vendors.

• Acquiring a part of required resources from theexternal sources.



Procurement documents: Terminology

• VIR- Vendor Information Request

• IFB- Invitation For Bid (client very specific


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.

• RFP- Request For Proposal (client not sure whathe wants. Negotiated procurement)

• RFQ- Request For Quotation (only for marketpricing for small purchases)

• IFN- Invitation For Negotiation



Criterion for judging a vendor

• Need interpretation by vendor

• Total cost of procurement (Purchasing +


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• Can the vendor deliver the product at the lowestpossible cost?

• His technical expertise

• His Management style

• Financial position



3 ‘R’s of contracting

• Responsibility

• Reimbursement

• Risk


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Responsibility

▫ What to parcel out & what to retain

▫ No ambiguous, overlapping, undefined,


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▫ Relevant performance parameters for contractfulfillment



Re-imbursement

• Lump sum contracts

▫ Fixed price• Cost plus contracts:

▫ Cost plus a fee for services


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• Item rate contracts:▫ Rates are frozen, not quantity

• Convertible contracts:

▫ Cost plus till scope; then lump sum• Hybrid contracts:▫ Lump sum + cost plus, Lump sum+ item rate



Risks

• Risk management

• Project contract- GCC clauses


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• Progress review meetings- MoMs

• Restrictions on the supplier- confidentiality,poaching of staff/customers

• Restrictions on the supplier’s liability- Liable fordirect losses with a capping



Tendering Process


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Tendering & Selection of a contractor

• Pre-qualification of a contractor

• Preparation of tender documents


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• Evaluation of tenders

• Agreement/ Contract

• Guarantee



Let’s call it a day!


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project management- session 3

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