Case Study Boxer Pumps Ltd. has been building industrial pumps since 1953. By 1980, it was the fourth largest pump manufacturer in China. It was also the main producer of large scale fluid pumps for industrial pipelines. In the 1980s, the company's profits and market share increased significantly. The success of the company was attributed to a standard design for its large scale product line. The company did not develop new models or new products during this period of growth. Its manufacturing was based on continuous improvement of established designs. Due to the Chinese state structure, the company had a relatively stable market where its suppliers and customers were known and established. The company was able to build and deliver advanced pumps to its clients within their budget and on time. The company was extremely complacent and felt that this success would continue. Unfortunately, by the 1990's, China had opened its markets and became a major exporter and importer of products and machinery. Partly due to the increasing international competition, the company's clients began demanding pumps built to their own specifications. This led to a diminishing order book for the large scale pumping equipment. The company had the technical expertise to manufacture pumps according to customer specifications however, due to cost and schedule issues; it was running at a net loss. Management was used to long, standardised production runs. The new more competitive market demanded the company now react to the different desires of customers. During this period supplies of raw materials also became more difficult to source. The company's inability to plan and estimate the costs of manufacturing pumps according to new designs and varied specifications from its clients became a major problem. Eventually a new CEO was appointed who decided that each specialised order would be treated as a project. In order to do this, the CEO employed two newly recruited engineers as project managers and reassigned two company employees as project managers. This met strong opposition from the existing senior managers who felt that there was no difference between a project and a process. They felt that the functional approach used to manage processes, which had proved effective in the 1980's, would be good enough to handle the new, more varied orders. The project managers were assigned projects developed from the successful bids of the marketing department and an independently managed, bonus driven sales force. Unfortunately this led to corruption when sales personnel would by-pass marketing in order to discover internal costing figures. They would then conclude deals based on unrealistic margins and verbal promises about what would be delivered. This further weakened company profitability and credibility. The project managers found further problems when they attempted to get cooperation from the process managers for use of their staff on an individual project at a given time. Staff members found themselves working for two bosses simultaneously. A similar situation existed with supplies, which had to be processed through the old centralised system. The new project managers found themselves ignored by the established senior managers and the company's internally Page 4 of 7 appointed project managers discovered they were considered to still be part of their original senior managers' staff. Further production and delivery delays were inevitable. The situation could not continue and the company was taken over by a larger conglomerate. They appointed a new CEO with instructions to turn the company around. The new CEO was convinced that the project management approach to orders was the correct one but that other implementation issues were a concern. The CEO brought in a team of consultants to advise on the way forward. To do this they were given full access to all departments, personnel and records. You are a consultant with the management consulting company the CEO has called in for advice. The CEO has contracted you to: 1. Report your assessment of the issues leading to the current failures. 2. Compare your assessment with sound project management practices. 3. Recommend steps to bring in the management by project approach. 4. Recommend improvements to the supply chain practices for future projects. Task Write the report to the CEO which will cover the following: a) Your assessment of the issues leading to the current failure to succeed with project driven management. You are expected to make reference to issues such as the company culture and organisational structure. You should include a discussion of the validity of your assessment using examples from referenced project management practices, standards and rationales. (35%) b) Recommend measures to bring about change leading to an effective project driven organisation. You have been given the freedom to recommend changes to organisational structures and policies at all levels. The company cannot be closed down to start from scratch so you must also provide a plan for change which can be implemented in a timescale of no more than two years. You should recommend improvements to the supply practices which will satisfy the needs of the new structures as part of your answer. (45%) Page 5 of 7 c) Produce a list of the stakeholders involved in or impacted by the changes required and identify each stakeholder's interest in and perspective on the issue. From this provide a Responsibility Assignment Matrix (RACI) analysis of the stakeholders and on that basis develop a communications plan for the proposed implementation of the changes. (20%) Unlike many commercial reports you are required to reference your work clearly and properly in the same manner as an academic paper. You must provide a single combined reference list after your answers