Operations Management: Project Management

In Jay Heizer’s Operations Management, 11th Edition, he offers Bechtel’s experience rebuilding Iraq after the war that took down Saddam Hussein, as an example of project management (Heizer and Render). It is the perfect example of project management because of the level of complexity involved in the massive engineering and construction undertaking required to successfully facilitate the project. Bechtel, over a century old, has had its hands in iconic projects throughout the history of the United States. The company had numerous railroad, tunnel, and highway construction projects in its earliest beginnings, but won its first mega project in 1931, the Hoover Dam. In partnership with other companies, Bechtel formed a consortium to ensure that the project would come off without a hitch. After the Hoover Dam, the company built other dams, jetties, a highway and tunnel. Their next mega project was the San Francisco – Oakland Bay Bridge (“History”). How does an operations manager contemplate project managing such overwhelming components? The Iraq rebuild project management team had to address an inordinate amount of supplies in its efforts to reestablish the demolished electrical systems, crumbling road infrastructures, damaged ports of entry, and dilapidated school systems (Heizer and Render). This was the charge of operations managers for Bechtel. Project management, in a company such as Bechtel, is a high-stakes proposition. Efficiency and effectiveness are high priorities. The broad vision for properly scheduling events and transitions can lead to cost overruns and delays if improperly planned and controlled. 

The Three Phases of Project Management

There are three distinctive phases involved with project management (Heizer and Render; Russell and Taylor; Stevenson; Tomar). If there is a breakdown in any of the three phases, it can mean billions of dollars of cost overruns for a company such as Bechtel. The Iran reconstruction agreement represented a series of billion dollar contracts for the company over the period of 2003 through 2006. The phases are:

Planning – determining the full scope of the project, establishing goals and selecting teams

Scheduling – creating a timeline with time slots that associated supplies, expenditures and human resources with specific events, and associating the events to one another

Controlling – resources, expenditures, quality and costs are audited (Heizer and Render; Russell and Taylor; Stevenson; Tomar).

Project Management Phase I: Planning

If a company has ongoing activities to address, ie. Bechtel has a highway construction project in addition to the Iran rebuild project, the company would create a special project organization, so that the highway project continues effectively and uninterrupted, while the specific needs of the Iran rebuild is addressed within one easy to understand view (Heizer and Render; Russell and Taylor; Stevenson; Tomar). The project organization allows Bechtel to assign human capital and resources to the Iran project. Project organizations are not permanent, rather, they are temporary representations that allow a specific project to come to fruition and then end. 

In the diagram below there is one project organization with two projects associated with it. The first project represents the Bechtel Iran Rebuild Project that is focusing on the rebuild of the electrical needs of the county. The second project represents the Bechtel Iran Rebuild Project that is focusing on the building of Iranian schools. Since the actual Bechtel Rebuild Project included the rebuild of roads and ports of entry, those projects would normally be listed on the project organization chart, as well.

Part of the planning process includes determining the costs involved in the project, establishing the amount of time the project will take, projecting the amount of people needed to be reassigned or hired, establishing the amount of supplies that will be needed, and determining if Bechtel should partner with other construction/engineering businesses, because of the enormity of the project (Heizer and Render; Russell and Taylor; Stevenson; Tomar). For example, the operations manager along with the project manager determined the amount of electrical wires needed to post wires from one village to another, the number of poles needed to hold the wires in place had to be calculated, and they had to determine how many electrical transformers would be needed. If the local power plants were faulty, what needed to be replaced, rebuilt, or what components remained operational. 

Work Breakdown Structure. Initially, Bechtel had to determine each project’s objectives. Once this was determined, the company had to then break each project into its component parts, so that in the end, all aspects would be manageable (Heizer and Render; Russell and Taylor; Stevenson; Tomar). This is the function of the work breakdown structure. The purpose of the work breakdown structure is to carve the project into major tasks. The project is then further divided into smaller components, and then once again, to arrive at specific activities and their associated costs. The process is by no means easy to accomplish. If any aspect is overlooked, it could have devastating consequences for the overall project. In addition to the project manager, it is imperative that experienced personnel are involved in the work breakdown structure, to ensure that no stone goes unturned.

Here is an unsophisticated and partial work breakdown structure for building an Iranian school:

Building a School in Iran – Work Breakdown Structure

(Figure redacted in preview. Figure available via download)

There are many other considerations that must be brought to bear when building a school, in fact, Bechtel had to include the cost of heavy security and armed personnel to protect their workers, as well, but the above work breakdown structure would simply be considered a start, showing major tasks, subtasks and activities.

Project Management Phase II: Scheduling

The second step in project management is called the scheduling phase (Heizer and Render; Russell and Taylor; Stevenson; Tomar). The purpose of the scheduling phase is relate activities to one another and to the project as a whole, to show what comes first, to allow for the establishment of reasonable time estimates and cost projections for the activities, and aids in efficient utilization of human capital, finances and materials by shedding light on potential impediments in the project as a whole. In the scheduling phase, a project manager (PM) will place tasks in order and project time needed for completion of each task. Each activity will be allotted a time, the number of people needed will be determined, and the amount of materials will be assessed. Charts showing schedules by skill might also be created. For example, a schedule might show carpenters, construction laborers, managers, electricians, engineers, and equipment operators. Another chart might be created for materials, since some materials might need to arrive at the build site before other materials.  

PERT, CPM and Gantt charts are the most popular tools used by PMs to display scheduling. Gantt charts, however, are very simple charts, and are not quite as effective as PERT and CPM charts, which are generated by software and more appropriate for complex undertakings (Heizer and Render; Russell and Taylor; Stevenson; Tomar). 

Project Management Phase III: Controlling

During the actual execution of the plan, it is important to monitor and control the project ("Project Monitoring and Control Activities"). This phase occurs in tandem with the execution process. Oversight is important because it give the operations manager and project manager the ability to make corrective action in the event of a bottleneck or a plan that has gone awry. During this phase, the PM will compare actual events as they take place against plans and schedules to ensure that the project is moving along as expected, with the right number of personnel, the correct cost levels and with no unanticipated risks. There are times when the monitoring and control process will identify things that were not planned. At this juncture, the PM would go back to the planning team and revisit issues that are not in sync in order to make accommodations relative to materials, costs, personnel or other considerations ("Project Monitoring and Control Activities").

The control process includes observation, collection, measurement and distribution of performance data; monitoring of risks that might need corrective action; providing suggested corrective measures; providing suggested preventive measures; supplying forecasted information; suggesting potential repair options for defects and addressing change requests ("Project Monitoring and Control Activities"). In addition, the PM must approve, reject, update and deliver on change requests; make sure scheduled deliverables are accepted. Also, the PM is responsible for ensuring the project stays on scope, on schedule, on cost, on quality, on track with team members, and reports including updates, status reports and forecasts are provided.

The PM must be a person who is detailed oriented, communicative and likeable, because so many aspects of the massive new project are under their control ("Project Monitoring and Control Activities").

Works Cited

Heizer, Jay and Render, Barry. Operations Management. Boston: Pearson, 2011 Print.

"History." Bechtel. n. d. Web. 26 July 2016. <http://www.bechtel.com/about-us/history/formative-years/>.

"Project Monitoring and Control Activities." Project Management Documents.  n. d. Web. 26 July 2016. <http://www.pmdocuments.com/project-monitoring-and-control-documents/>.

Russell, Roberta, S. and Taylor, Bernard, W. Operations Management: Quality and Competitiveness in a Global Environment. New York City: Wiley and Sons, Inc., 2005 Print.

Stevenson, William. Operations Management (McGraw-Hill Series in Operations and Decision Sciences). New York City: McGraw Hill, 2014 Print.

 Tomar, Ravinder. Commercial Operations Management: Process and Technology to Support Commercial Activities. New Delhi: Global India Publications Pvt Ltd, 2009 Print.