3 steps to avoid project constipation and bottlenecks

After reading an article in Computer World about “Portfolio Management without Project Management” by Peter Kestenholz, our director, Nils Marstrand gave his response in a series of 3 steps:

3 steps to avoid project constipation and bottlenecks

I very much agree with Peter's view about the need to see more strategic planning coupled to the execution of ongoing projects. Below, I elaborate on why it is vital to properly integrate the resource dimension.

Many companies suffer from the disease “project constipation”. Too much is put in motion without a clear picture of whether there is capacity available. The result is backlog, stress and bottlenecks. Bottlenecks delay the liquidation of duties, which in turn delay the other tasks, and cause new bottlenecks to arise. A truly vicious circle causing long lead times and fire fighting, not to mention the expansive expensive involved.

Short lead time for projects is in itself, an important theme. Every project costs money over time. It goes without saying that the sooner the project is implemented the faster gains results; and last but not least, the quicker you get freed up capacity, the sooner you can move on to important new tasks.

In the strategic portfolio planning, there are some natural steps.

Step 1
Establish and maintain a roster of candidates with their main information for each proposed: the extent, timing, contributions to the company's strategic objectives (business drivers), risk and expected costs and benefits.

Step 2
This step may be called strategic alignment, where proposals are grouped together and compared and they agree on strategic priorities. Often it is only very large organizations in need of real algorithms. In medium and smaller organizations, this is more pragmatic.

Step 3
It’s all about capacity. Capacity is resource capacity - broadly defined. No activity can be implemented without resources in terms of people, equipment, materials and money. The resources are performing, which uses money and especially time. For all incoming generating resources, there may be delays and congestion.

A portfolio project should be defined in terms of the expected resource features at a coarse level, eg. on a monthly basis in terms of budgeted hours for design, planning, development / production, test and deployment. It may even be necessary to include key skills, specific needs for production equipment and for the procurement of external resources. The different capacity needs will vary over the project timelines. When you have completed this exercise you will also know the cost progress over time and thus important input for cash flow and management of monetary capacity.

Concerning hours, portfolio projects must also know how much capacity a person has already committed to the future with ongoing projects, the general operating and other, eg. education, management, leave, etc. In addition, forecasts of the capacity needed in upcoming projects are necessary, and this is where the need for interaction with project planning comes in.

At the strategic level, it is also important input for the long-term need for skills which can be accomplished by means of training, retraining and recruitment.

Planning and management of resources has a historic and obviously place in industrial production management: how many orders and resources must play together. Projects are such an important part of every organization to create change and serve customers. Using the resources optimally while the lead time in the supply chain is as short as possible while constantly refining and standardizing methodologies is the way forward. In all of this is resource management a critical dimension.