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Copy of PROJECT MANAGEMENT, CASE STUDIES, SECOND EDITION
Transcript of Copy of PROJECT MANAGEMENT, CASE STUDIES, SECOND EDITION
- The recession of 1979-1983 forced management to realign their thinking.
Cutbacks in production had decreased the demand for the standard machine tools.
- More and more customers were asking for either major modifications to the standard machine tools or a completely new product design. Williams Machine Tool Company
For seventy-five years, the Williams Machine Tool Company had provided quality products to its clients, becoming the third largest U.S.-based machine tool company by 1980. The company was highly profitable and had an extremely low employee turnover rate. Pay and benefits were excellent. - The marketplace was changing and senior management recognized that a
new strategic focus was necessary.
- However, lower-level management and the work force, especially engineering, were strongly resisting a change.
- The employees, many of them with over twenty years of employment at Williams Company, refused to recognize the need for this change in the belief that the glory days of yore would return at the end of the recession. PROJECT MANAGEMENT
CASE STUDIES, SECOND EDITION 1- IMPLEMENTATION OF PROJECT MANAGEMENT
Williams Machine Tool Company Present to: Prof. Hamdy Elwany
Pesent by: Ahmed Abo forn Williams Machine Tool Company Between 1970 and 1980, the company's profits soared to record levels. The company's success was due to one product line of standard manufacturing machine tools.
Williams spent most of its time and effort looking for ways to improve its bread-and-butter product line rather than to develop new products.
The product line was so successful that companies were willing to modify their production lines around these machine tools rather than asking Williams for major modifications to the machine tools. - By 1985, the recession had been over for at least two years, yet Williams
Company had no new product lines.
- Revenue was down, sales for the standard product (with and without modifications) were decreasing, and the employees were still resisting change. Layoffs were imminent. NO - In 1986, the company was sold to Crock Engineering.
- Crock had an experienced machine tool division of its own and understood the machine tool business.
- Williams Company was allowed to operate as a separate entity from 1985 to
- By 1986, red ink had appeared on the Williams Company balance sheet. - Crock replaced all of the Williams senior managers with its own personnel.
- Crock then announced to all employees that Williams would become a specialty machine tool manufacturer and that the "good old days" would never return.
- Customer demand for specialty products had increased threefold in just the last twelve months alone.
- Crock made it clear that employees who would not support this new direction would be replaced. - The new senior management at Williams Company recognized that eighty-five years of traditional management had come to an end for a company now committed to specialty products.
- The company culture was about to change, spearheaded by project management, concurrent engineering, and total quality management. - Senior management's commitment to product management was apparent by
the time and money spent in educating the employees.
- Unfortunately, the seasoned twenty-year-plus veterans still would not support the new culture.
- Recognizing the problems, management provided continuous and visible support
for project management, in addition to hiring a project management consultant to
work with the people. The consultant worked with Williams from 1986 to 1991. - From 1986 to 1991, the Williams Division of Crock Engineering experienced
losses in twenty-four consecutive quarters.
- The quarter ending March 31, 1992, was the first profitable quarter in over six years. Much of the credit was given to the performance and maturity of the project management system.
- In May 1992, the Williams Division was sold. More than 80 percent of the employees lost their jobs when the company was relocated over 1,500 miles away. IMPLEMENTATION OF PROJECT MANAGEMENT PROJECT MANAGEMENT CULTURES Apache Metals, Inc. - Apache Metals is an original equipment manufacturer of metal working equipment. The majority of Apache's business is as a supplier to the automotive, appliance, and building products industries.
- Each production line is custom designed according to application, industry, and customer requirements. - Project managers are assigned to each purchase order only after the sales department has a signed contract.
- The project managers can come from anywhere within the company. Basically, anyone can be assigned as a project leader.
- The assigned project leaders can be responsible for as many as ten purchase orders at one time. - In the past, there has not been enough emphasis on project management.
- At one time, Apache even assigned trainees to perform project coordination.
- All failed miserably. At one point, sales dropped to an all-time low, and cost overruns averaged 20-25 percent per production line. - In January 1997, the board of directors appointed a new senior management team
that would drive the organization to excellence in project management.
Project managers were added through recruitment efforts and a close examination of existing personnel. Emphasis was on individuals with good people and communication skills. - The following steps were implemented to improve the quality and effectiveness of the project management system: 1- Outside formal training for project managers 2- Development of an apprenticeship program for future project managers 2- PROJECT MANAGEMENT CULTURES
Apache Metals, Inc.