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PPM notes - Summary Process and Project Management

Process and Project Management (University of Birmingham)

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Lecture 1

Matching the abilities of a company to the needs of the customers

4Ps of Marketing

 Product
 Promotion
 Place
 Price

Marketing concept
Market -> Customer needs -> Integrated marketing -> Profits through customer satisfaction

4Ps give short-term planning. Strategic planning (long term): Analysis of customer needs, search
for sustainable competitive edge.

Promotion: Getting the message across

Advertising: Tells people product exists

Selling: Persuasion to purchase

Lecture 2: Consumer Psychology

The study of consumer characteristics and the processes involved when individuals select,
purchase and use goods and services to satisfy wants and needs.

Steps in purchase process

1) Recognize needs
2) Search for alternatives
3) Evaluate alternatives
4) Purchase and use product
5) Evaluate consumption
6) Provide feedback
7) End purchase process

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Perception

- Individual selects stimuli, organizes information about the stimuli and interprets the info

Influence

- Marketers create stimuli that will convey intended info – Product attributes, product
positioning

Risk

- consumers can’t interpret stimuli clearly enough to feel comfortable with a choice
- Reduce perceptions of risk
- gather additional information from marketers or other consumers
- price as indicator of quality

Perception System

Exposure - you are what you read

Comprehension – personal view on product

Attention – simulate by advertising on long term memory

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The Perceptual System

Exposure

Take up info (TV, papers, Word of mouth)

Promote product to hit target market

Comprehension

Eg soya bean could be either animal food , human food, cheap meat sub or even exotic
vegetarian food

Attention

Must stimulate attention to make impression on memory

The Evaluative System

Evaluative criteria -> Beliefs -> Attitude -> Intention

Beliefs: Does this brand possess what I want

Attitude: Beliefs influences attitude

Attitude to Objects : Measured by determining the attributes of a product that matter to a

customer. Research is needed to list significant product attributes, weigh these attributes, and
assess these attributes.

Motivation

A force within an individual which causes them to do something to fulfill a biological need or
psychological desire.

Motives in marketing (in importance)

1) Physiological needs (Food, water, air , shelter, reproduction)

2) safety needs (Stability, security, structure)

3) esteem needs (Success, self-worth, achievement)

4) Need to belong (Affiliation, affection, sense of belonging)

5) Self-actualization (Self-fulfillment, personal growth)

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Lecture 3 : Social influences on buying

Engagement with Purchase

Benefits: Importance, Interest, Personal relevance

Costs: Financial costs, risk of losses from usage

Variables: Background, culture, demographics, personality, lifestyle

Economic factors: -

1) Interest rates

2) Exchange rates

3) Budget deficit surplus

4) Trade deficit surplus

5) Inflation

6) GDP

7) Consumer income, spending and debt

8) Unemployment levels, work force productivity

Social Class (luxury goods, promote to AB social class)

AB Managerial Professional

C1 Supervisory Clerical

C2 Skilled Manual

DE Unskilled Manual

Lecture 4: Organizational Buying Behavior

Business Buyer Behavior: goods and services for production of other products that are sold,
rented or supplied to others. Retailing and wholesaling firms that acquire goods for resale or
renting others for profit.

Marketing Structure and Demand (compared to consumer): Have fewer but larger customers.
Business customers are more geographically concentrated. Demand is price inelastic and the
demand fluctuates more.

Nature of the Buying Unit (compared to consumer): Involves more buyers in the decision
process, more professional purchasing effort.

Types of Decisions and the decision process (compared to consumer market): More complex
buying decisions, formalized buying process, buyers and sellers work more closely together and
build a long term relationships.

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Influences on Business Buyers

- Environmental
- Organizational
- Interpersonal
- Individual
- Economic trends
- Supply conditions
- Technological, political and competitive changes
- Culture and customs

Specific Environment:

Group of organizations producing similar products.

Compete for customers and resources

Porter’s Five Forces Model is used to assess organization specific environment.

DMU – Decision Making Unit

Small order(20k) – One or Two Managers

Large Order – Director / Accountant

Advertising aimed at DMU

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Lecture 5: What is a Project?

Projects – formed where activity cannot be addressed by normal organization. – Brings step
change and important for organization. Eg create a new company asset, supply to a new market,
develop a new product, responds to new set of legal guidelines.

Project Key:

- Definite start and end points

- Objectives
- Organized plan of interrelated tasks to meet objectives
- Established goals to bring results
- A temporary organization with defined responsibilities and team
- Separate resources, i.e people, time and money

Business Projects – Achieve significant performance improvement or significant changes in the

way an organization, department or key business processes operate.

New Product Introduction – R&D projects, technology projects

Asset creation/ improvement – Facilities, Engineering and Construction

Lecture 6: Planning

Outcome of planning:

1) Establish business case and ensure clear reasons to do the project.

2) Facilitate communication among stakeholders.

3) Project delivery

4) Risk to success

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5) Ensure successful outcome for a firm.

Planning is

– time for reflection and thought

– defining strategy for managing the project
– identify risks to success and plans for dealing it
– Understood by project team members, sponsor and stakeholders.
– Documented: User Requirement Brief (what is to be delivered), Project Plan (How it is to be
delivered), Initial Risk Assessment.

Planning activities

– Establish business objectives

– document business objectives in terms of project parameters
– set and prioritise project objectives
– identify stakeholders.
– set implementation strategy (risk management, project funding strategy, governance &
finance management strategy)
– Identify appropriate methodology and tools to be used
– Write, communicate and gain approval for URB and Project Plan

User Requirements Brief (URB) – describes the requirements in terms of business to be

conducted, product to be manufactured, process requirements, required throughput,
environmental conditions and expected completion date.

Project Plan - Documents the management strategy for the project. Project manager’s contract
with the sponsor on how the project will be managed. Provides authority to implement the
project. Contributes to stakeholder confidence. PM is accountable for preparing and issuing the
plan.

Sponsorship – make available key people from Customer Organization. Make Critical decisions
on customer requirements. Be responsible for external communication. Justify the project and
obtain FUNDING. Remove obstacles that inhibit the success of the project.

Project Organization – PM consider the team structure and the communication with the team.
Team members chosen carefully with appropriate skills and skill levels.

PM role – define the project strategy, develop the project plan, gain buy-in and approval,
involve and coordinate the project team, identify risks to success and implement a strategy for
managing and communicate the plan.

Risk Management – Risk – An uncertain event or set of circumstances that should it occur, will
influence the achievement of the project’s objectives. Critical issue: an open or unresolved
matter that if not addressed in a timely manner, will impact the project.

Funding Strategy – effective will enable approval of project funding to meet project timelines,
ensure the availability of funds to meet the project liabilities, minimize project risk, optimize the
business benefits, facilitate transition between phases, comply with corporate governance.

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Effective Financial Management - ensure maximum benefit is obtained from local fiscal rules,
ensure adherence to appropriate financial controls, eliminate unnecessary cots, ensures
contractors are paid on time, provide accurate and consistent financial reporting, leave a full
audit trail.

Lecture 7: Cost Estimating

- Prediction of the final cost

- Informs the project sponsor, stakeholders and participants of the approximate cost of
the project
- Compares predicted final project cost with projected benefits
- Obtain funding for the project

Estimate Basis Document (EBD)

- Design documents used

- Exclusions
- Potential subcontractors
- Work breakdown structure
- economic / time basis for all unit costs
- currency assumptions
- assumptions for use of growth and other estimating allowances
- contingency included
- risk allowances
- estimating instructions including labour and schedule and escalation assumptions

Contingency : Minor scope changes, design changes, design errors and omissions

Lecture 8: Project Management

To ensure the correct project is undertaken at the right time in such a way that it gives it the
best chance of success to ensure long term survival and continuing prosperity of the
organization concerned.

Strategic Projects – Major and long term, large sums of money, committed over a long period of
time, authorized at a high level , eg : major plant expansion

Tactical Projects – Minor and short term, limited scope, little capital outlay, authorized at low
management level. Eg: minor modifications to an existing plant or improve yield/quality of an
existing product.

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Lecture 9: Critical Path Analysis

Lecture 10: Risk Management

Handling Risk

1) Avoid – Remove the risk, eliminating the cause

2) Transfer – Allocate the risk to others through contracts or insurance
3) Mitigate – Reduce the risk probability, risk impact
4) Accept – Accept the possible consequences of the risk, absorb within project allowances

Lecture 11: Total Quality Management

1) Quality, reliability, delivery price

2) Poor reputation for quality lasts.
3) Reputations (good or bad) can become common knowledge
4) Poor companies can be turned around by good management

Quality – Degree of comforming to a set of standards. Doing things the best way possible to
satisfy the customer at the lowest possible costs.

Quality system is the organizational structure, proceudures, processes, and resources needed to
implement quality management.

TQM

1) Consistency of purpose
2) New philosophy
3) Cease mass inspection
4) End lowest tender policy
5) Improve systems
6) Start Training
7) Institute leadership
8) Drive out fear
9) Breakdown barriers
10) Improve communications
11) Eliminates targets

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12) Permit pride in workmanship

13) Encourage education
14) Top management commitment

Lecture 12: TQM2

House of Quality : Method of getting the voice of the customer into the design process for a
product.

Quality Function Deployment: system for designing a product or service based on customer
demands

Activities involved in QFD

1) Market Research
2) Basic Research
3) Invention
4) Concept Design
5) Prototype design and testing
6) Final Product Testing
7) After sales

House of Quality Grid

What’s in rows, How’s in columns

Benefits : coordinates inter-functional activity, gives product that is designed produced and
marketed to sell, uses competitive info, reduced mid-stream changes and post production
problems.

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