In the mid 1970s, I was the Project Manager (PM) for a $32,000,000+, five site, product/package National expansion which allowed the project team 26 weeks from the initial funding authorization to the startup of the fifth site. At the time of funding, only two of the five sites had been identified, no process and packing had been ordered, and no construction organizations were established at any of the sites. To make the project really challenging the first site need to start up 18 weeks after funding.
Due to our schedule constraints, we knew we could not follow our “normal” execution processes. Thus, prior to funding we identified a purchasing strategy to ensure technical issues were resolved, orders placed, and all equipment deliveries could meet our schedule. Typically, developing a purchasing strategy is a lengthy process involving numerous meetings between the technical engineer, project manager (PM), and purchasing manager, talking with suppliers, more meetings, etc. Given our schedule constraints this process would not meet our business need. Thus, four months before we were to request and hopefully receive funding, Engineering and Purchasing met to define a purchasing strategy which would meet this business need.
We evaluated numerous execution options and selected a purchasing strategy where the project manager (PM) had total control of the purchasing process and could authorize purchase orders “on the spot” to save time. We also agreed to inquire all the equipment prior to funding but required the suppliers be able to meet our tight delivery timing to all sites or not bother to submit a bid. To make this system work, we also required the PM to issue perfect purchase orders were issued to the suppliers so the project’s “paperwork trail” would not require a massive rework cycle after all the site start-ups. This would ensure accurate payment to our suppliers as well as minimize/eliminate any rework effort required by accounts payable, accounts receivable, tax, purchasing. Internal auditing, and finance personnel as the project was closed out.
The final project critique showed all the Business needs were met and the feedback from the noted Organizations was extremely positive because the appropriate “paperwork” was correctly completed throughout the project minimizing rework in their Organizations while all equipment, design, and construction was delivered on time, on schedule, and within budget.
The learnings:
- Do it right the first time always saves time and effort in the long run
- PM and Purchasing alignment to the business need will always deliver great, if not impossible results even if they need to legally change the game to achieve them.
The Premier Resources Group (PRG) Advisors can help your Company identify functional misalignment between disciplines and/or project teams to deliver exceptional business results. Whether PRG Advisors are brought in during the initial conceptual or definition phases or later in a project lifecycle, our PRG Advisory Services Teams’ vast industry experience can help identify project quagmires to meet your Business’s needs.
This story is based on the 1994 story “Quick Strike Purchasing” by W Scott Cameron published in “In Quest of Project Excellence Through Stories”, edited by Dr. Alex Laufer, Messrs. Robert C. Volkman, Mr. George W. Davenport Jr., and Ms. Susan Terry.