Advantages and Disadvantages of Current Project Management Methods and Lean Production Delivery Systems

1. Introduction

Industries are continually evolving due to a mix of external factors and changing customer demand. Due to this fundamental change, traditional project management techniques which are built upon a more rigid structure may not provide the flexibility or adaptability that businesses now require. To increase efficiency and drive businesses toward clear outcomes, new methods such as Lean Production Delivery System (LPDS) have emerged. This report will centre on the comparative analysis of the advantages and disadvantages of traditional and LPDS methods of project management.

2. Traditional Project Management Method

Traditional project management such as that defined in the Project Management Book of Knowledge (PMBOK) involves a step-by-step approach whereby each stage of a project is broken down and completed consecutively to achieve project objectives. Traditional project management follows a very structured regiment and can be summarised in five stages:

1. Initiation

2. Planning + Design

3. Execution

4. Monitoring + Controlling

5. Closing

Traditional project management offers significant advantages in the areas of financial control, production gains and communication through the use of a chain of command. Despite these efficiencies, traditional project management exhibits disadvantages such as a ‘business-first’ mentality, and long lead times which aren’t as flexible in meeting current and future customer demand. An analysis of the advantages and disadvantages are summarised below.

Advantages of Traditional Project Management

Financial Control

Projects run using the traditional project management approach utilise functional managers with tight control over their individual budgets. This is supported and approved by the managerial hierarchy ensuring that the project comes in, on or under budget.

Production Gains

Activities using a traditional project management approach are carried out within functional groups and led by a subject matter expert with a strong technical background. As each process is segregated the production is scalar and can be easily ramped up or down as required. This is especially important should mass production be required.

Communication

Vertical communication channels through a chain of command structure provide clearly defined roles and responsibilities. This means that each person has a single point in which to communicate down or up the line.

Disadvantages of Traditional Project Management

Lack of Central Authority

As each functional group is largely autonomous there is a lack of governance from an overall project perspective. Conflict may be heightened and upper management may need to get involved in day to day operations thus reducing the overall organisational efficiency.

Lack of Customer Focus

As not all functional groups are interlinked, changing customer needs cannot be adapted to the original scope easily. Instead of direct correspondence between the customer and the workforce, messages are relayed from upper management down. This can extend project duration and reduce customer satisfaction.

Limited Creativity

Traditional project management delays involvement of certain parties until their functional group is required. This results in lack of involvement in the initial stages where ideas and creativity is required.

Lack of Cohesion

Workforce acts individually rather than as a team resulting in a lack of mutual commitment and coordination. Should something go wrong in the delivery process, rather than the team banding together, individuals seek to lay blame on each other.

3. Lean Production Delivery System (LPDS)

Where traditional project management is rigid, LPDS embodies a more engaging and purposeful delivery style providing significant gains in efficiency and reductions in waste. The result is a more robust business model which increases competitive advantage and adds value to clients and business processes.

The concept of ‘Lean’ production management originated in the manufacturing industry with Toyota Japan seeking to reduce all unnecessary waste in all capacities or functions of the organisation (Preechachanchai: Wangwacharakul 2011). In Toyota’s implementation of LPDS, they found the factory was able to produce more vehicles, with higher quality in a shorter timeframe. Additionally, they could reduce the space required and complete the same tasks with less double handling than using traditional methods of project delivery.

Underpinning the LPDS theory is the PDCA (Plan, Check, Do, Act) cycle for undertaking change. The PDCA cycle which is outlined below is repeated to continually optimise processes and reduce waste.

 Plan – Determine objectives and processes required to deliver a successful outcome

 Do – Implement the plan and actioning the required steps/processes

 Check – Review feedback from the ‘Do’ stage and evaluate against what is deemed to be the successful outcome

 Act – If there is a variance between what was planned and what was carried out then action what is required to bridge the gap. Based on these required actions, improvements may be made to the work process for future implementations

The PDCA cycle is incredibly important in the Lean theory as understanding where waste can be trimmed is beneficial to the organisation. Waste is a cost and holds no value. Reducing waste in a process increases ones capacity to do more value added work. (Canacari; Ross 2012).Waste was identified by Canacari into the following buckets.

Waiting – for the next activity to commence

Transportation – Movement of the product which is unnecessary

Motion – Movement of employees within a process that is unnecessary

Defects – Time spent completing a task which was found to be incorrect and the time taking to rectify

Overproduction – Exceeding the customers’ requirements

Over Processing – Completing work which does not add value to the