Project management

Managing projects and project portfolios in a manufacturing company using FlexiProject

A characteristic of most manufacturing companies is that they first invent products they want to sell on the market and then set up production processes to manufacture them. Here, it is worth adding that not every manufacturing company is also an innovation company-i.e., not every company invents new products because some such companies produce products on behalf of other companies, which are just in charge of inventing them and marketing and selling them. For this article, however, let’s assume we are talking about a “classic” manufacturing company with its products.

The context of project management in a manufacturing company

Concerning the characteristics of a manufacturing company presented earlier, we can distinguish several categories of projects in it:

• Research and development (R&D) projects – for example, in cosmetic or pharmaceutical companies;
• Design and implementation of new products (also product line extensions and improvements to products already sold);
• Product implementation projects;
• Marketing projects;
• Investment projects – implementation of new technologies, modernization, and renovation of production infrastructure, factory development, etc..;
• Optimization projects:
  • Projects related to the optimization of business processes,
  • Restructuring projects,
  • IT projects,
  • projects of an organizational nature,
• Legislative projects – projects required by law to be carried out.

A manufacturing company has such a wide variety of ongoing projects that it must ensure an appropriate approach to implementing each. Of course, general principles such as, for example, that each project must have a project charter or a project plan can be consistent for all categories; however, there will already be many differences in the details, and it is worth considering them.

Below, we will discuss a few immediately relevant principles for effective project management in a manufacturing company. These principles are theoretical concepts and practical tools that can be applied to our ongoing projects.

Create project portfolios for each significant project category

Project portfolios will help us collect all projects with common characteristics in one place. The following illustration shows a list of project portfolios created at a manufacturing company in the FlexiProject project management system.

Project portfolios increase the efficiency of project management. First of all, the company’s management can see all the projects in a given category in one place and, based on structured information, can make decisions about adding another project to the portfolio, removing from the portfolio projects that have lost their attractiveness, etc. So let’s take a closer look, for example, at a portfolio called “New Product Development” to show the advantages of managing through project portfolios in a manufacturing company. Such a project portfolio created in the FlexiProject project management system is shown in the illustration below.

What does the company’s board/management see on such a screen, and how can they make effective decisions based on it:

• The chart at the top left of the screen serves a dual purpose. It ranks the projects in the portfolio based on their attractiveness to the company, with projects in the green area being the most attractive. The attractiveness decreases as you move toward the upper left corner of the chart. In addition to this, the chart also presents initiatives/ideas and potential candidates for future projects. Understanding this chart is crucial for the company management to discuss the optimal composition of the New Product Development project portfolio.
• At the bottom of the screen, three lines are shown: the current portfolio data, the adopted plan, and the deviation of current values from the plan. Thus, if a company allocates, for example, PLN 10 million for the development of New Products over a certain period, then by observing this screen at any time, it will be possible to see to what extent this goal is being realized. Suppose specific parameters of the portfolio show negative deviations. In that case, the system allows us to perform particular simulations – for example, how the observed parameters will behave if a project is removed from the portfolio or a new initiative is introduced.

Another advantage of the project portfolio is the ability to observe a roadmap showing the prioritization of projects over time and how their implementation is progressing against the approved plan. Such a roadmap is shown in the following illustration. The plan for each project is shown with a thin black bar, and the project’s current status is with a wide blue bar. In this way, the company’s management has information about the current status of all projects in the Strategic Projects portfolio at any time in an obvious way.

Create management standards for projects of a repetitive nature

A manufacturing company carries out dozens of yearly projects to develop and launch new products or investment projects. Very often, such projects are similar to each other, and what’s more, several manufacturing companies want to implement reasonable standards for the smooth implementation of such projects. To this end, for example, for New Product Development projects, a so-called master or target optimal process can be developed, and the same is worth creating for investment projects (of course, such templates can be made for marketing, HR, or IT projects). Such a template is often a master project template for the schedule structure and budget, a hint with a list of potential risks, and a description of the expected products in such a project. As part of defining products, it is worthwhile to include in such standards, for example, the required document templates and the so-called best practices, in other words, examples of how, in the best way, certain products should look – these can be examples from very well implemented earlier projects.

Properly plan all projects and monitor deviations during their implementation

Considering that many projects of different natures are carried out simultaneously in manufacturing companies, planning them properly is of great benefit. Projects involve a lot of human and financial resources; for this reason, manufacturing companies must ensure high efficiency in project execution to maximize profit. It is said that the absence of a plan is the best plan for project failure – there is undoubtedly something in this saying. When a project team starts to execute a project without a plan, they don’t know if they will make it in time, if they are executing the right thing, etc., and it just moves forward. The lack of a plan often results in chaos and the demotivation of the following team. The company’s board of directors, or management in general, needs a point of reference to monitor whether projects are being implemented effectively. The first step in creating a project plan should be to make a good project charter.

The Project Charter, as exemplified in the illustration below and drawn from the FlexiProject project management system, is a powerful tool for developing and communicating a project concept to all stakeholders. It ensures everyone is on the same page, and any discrepancies in understanding can be rectified from the outset, fostering a culture of clear communication and shared knowledge.

In addition to the Project Charter, I would like to point out that the construction of the project schedule and its distribution over time are presented in a Gantt chart. The project schedule shows the phases of the project, its stages, tasks, and milestones. It also allows you to determine each task’s deadlines and responsibilities. Working on the schedule provides an opportunity to think carefully about what needs to be done and how to do it optimally.

The management and leadership of a manufacturing company should regularly monitor the progress of ongoing projects

Everyone is familiar with the saying that “the Lord’s eye is fattening the horse.” The same is true of projects—if they fall off the radar of senior management’s interest, they start to “roll on forever,” which every company should avoid.

At least once a month, the key projects going on in the company should be reviewed and analyzed by the Board of Directors. I once worked at a substantial manufacturing company, where there was a so-called Strategic Project Review once a month. The Board of Directors and the company’s key managers met and listened to reports from project managers responsible for strategic projects. This allowed, on the one hand, the necessary decisions to be made in time and, on the other hand, motivated the project teams to work well. In this regard, the Automated Project Reviews module in the FlexiProject system will significantly help the management of manufacturing companies.

If you don't have one, then create a Project Management Office (aka PMO)

The variety of projects carried out in a manufacturing company, the need to implement standards, and the need to provide adequate information about the company’s project situation to management justifies the existence of a Project Management Office in the organization. Nowadays, there is a lot of talk that it should be a so-called Digital PMO, i.e., equipped with appropriate IT tools and using them skillfully, as well as promoting the use of technologies in the organization to support project management.

Optimizing project management in manufacturing companies

Manufacturing companies carry out a large number of projects of different nature. These projects involve significant human and financial resources, so companies should gradually make maximum efforts to achieve excellence in project management.