Title: The Effects of Schedule-Driven Project Management in Multi-Project Environments (Fee or subscription required.)
Authors: K. Yaghootkar and N. Gil (both University of Manchester)
Publisher: International Journal of Project Management, vol. 30, no. 1
Date Published: January 2012
Managers who try to meet important product development deadlines by shifting resources from other projects may succeed in the short term, this paper finds, but the continuous shuffling of resources and team members has a harmful ripple effect over time. Ultimately, the company’s ability to deliver projects reliably will suffer from this schedule-driven approach to project management.
The insight applies to any company that finds itself overextended in the rush to make good on multiple commitments. But it has particular relevance now, given the recent recession and the ongoing so-called jobless recovery, the authors write, because companies have few resources (for example, their highly skilled engineers are in short supply) and are reluctant or unable to hire and train new staff.
If product development and manufacturing firms are to survive in competitive markets, they must continuously tweak their offerings and create new products that feature emerging technologies and trends. As a result, these firms typically have many projects cooking at once, and have different teams sharing engineering and design resources, which can become overextended at peak times. They’re also under pressure to accelerate product development and reduce the time it takes to get their merchandise to market, especially for cutting-edge technology or in-demand goods.
Accordingly, top managers often try to allocate resources from concurrent jobs to ramp up an important project that has fallen behind because of a late start or insufficient support, both common scenarios when companies are juggling many assignments. And some projects are simply more critical to the business than others. For example, firms can lose significant anticipated revenues if their products don’t get to market before a certain predetermined date or if a competitor beats them to it. Many contracts also stipulate penalties for delays.
But what is the long-term effect of this schedule-driven project management approach? To find out, the authors studied the product development division of a manufacturer of high-performance trucks, which embodied the challenges faced by many companies that work on several projects and deadlines at once.
The firm’s target customers are mostly short- and long-haul logistics companies that pay more than US$150,000 per vehicle. Preserving customer loyalty is essential in the trucking industry, because customers rarely switch between competitors when renewing their fleet. Manufacturers must respond swiftly to their competitors’ new products, advances in technology — including ways to improve fuel efficiency and reduce emissions — and regulatory changes.
The company in the study builds about 100,000 trucks annually, mostly tractor units for semitrailers or rigs, but very few are identical. A top management team allocates the annual R&D budget to a number of initiatives to develop new business, and the approved projects share the same pool of specialized resources.
The authors conducted more than 80 one-on-one interviews, eight group presentations, a four-hour workshop, and an analysis of the firm’s archives, as well as making direct observations at the company from 2004 to 2009. Employees participating in the study had diverse job roles, including engineering designers and project and portfolio managers.
The resulting data was then fed into several computer-based models that probed the effects of schedule-driven pressure on long-term productivity. Specifically, the authors examined scenarios in which the time crunch resulted from a policy to complete business-critical projects by the deadline, regardless of whether they started late or initially lacked resources.
The simulations showed that as top management put pressure on a team to finish a project, the time lost on subsequent projects tended to snowball in several stages. First, as one project sacrificed resources, it also came under schedule pressure. Second, as the pressure ratcheted up on more projects, resources switched back and forth more frequently as managers struggled to prioritize. Third, productivity went down as the teams’ size increasingly fluctuated and employees logged long overtime hours.