\-
How To Plan And Organize
An MHP !t Prolect
f nstalling MRP II represents one
I of the highest cost/potential pay-
I back of any project undertaken in
an organization. A successful man-
ufacturing control system is the re-
sult of careful planning and organ-
izing by the people responsible for
developing the system.
The process of planning involves
setting goals, selecting and develop-
ing methods for achieving those
goals, and presenting the plan,
required, to begin its execution.
Project organization
The process of organizing con-
sists of: specifying the task to be
performed; breakdown of the total
task into manageable segments; es-
tablishing clear responsihilities, and
selecting people to execute the task.
Steering committee
The overall management of the
project is a major factor influenc-
ing the chances for success. For this
reason, Bn executive steering com-
r\ mittee should be set up to direct the
organization's efforts. The IVIRP II
project team reports to the steering
committee in order to provide a ve-
hicle for top management coordi-
nation with the project. The steer-
ing committee should include the
vice presidents of manufacturing,
engineering, finance and market-
ing, along with the project man-
ager.'"The primary function of the
steering committee is to provide ac-
tive leadership for the project.
Other responsibilities include:
. staffing project team '.
. defining project scope
o stimulating company commit-
ment and dedication to the goals of
the project
. allocating resources
By Kenneth Hartley
Coopers & Lybrancl
o approving project budget will be impacted the most. The pro-
o developing overall strategies ject manager should, ideally, be
and policies from the materials managernent
o reviewing project status on a area. The project manager should
regular basis be a user assigned full time to the
. attending top management ed- project.
ucation classes. Since the team will be comprised
Though top management need of members from various depart-
not be involved in any time-con- ments of the compatry, the project
suming details, they must spend a manager's responsibility will be
few hours periodically developing much greater than the use of au*
&s ideas about how the business will be thority. The project manager must
run. Enlightened leadership is be capable of balancing considera-
needed to foster full cooperation tion for people with concern for
between departments. Management goal achievement. In addition, the
commitment and support are re- project manager should possess the
quired to demonstrate enthusiasm following skills and character traitsl
for the proj ect. The burdeh for I organizer-able to handle sev-
stimulating top management's com- eral tasks bimultaneously
mitrnent is on the project manager. t motivator-ta maintain user
He must sell the project to manage- and management commitment
ment in business terms, not through . communicator*tactful and
technical jargon. Outside consult- assertive
ants and courses can be very useful o diplomat*politically astute
in helping to make believers of top and sensitive to organizational be-
management. havior
Project manager assignments
I educator*provide education
and training to users
There are three key elements to o persislent*strong-willed
effective project management: o know the company
t a project organization with the . know MRP II.
necessary skills Communication is an essential
. a plan for implernenting the part of managing a project. Peri-
project objectives odic status reviews and reports are
. a manager capable of being a necessary to inform users and man-
synergist-fully utilizing the re- agement of accomplishments, prob-
sources and capabilities available. lems, and upcoming steps. Project
No team can function effectively publicity can be used for stimulat-
without strong leadership. Before a ing interest while keeping the or-
project manager can perform satis- ganization informed. Meetings are
factorily, he needs a complete urr- probably the major vehicle of com-
derstanding of the problems, &c- munication for the project man-
cepted techniques for solving prob- ager. An agenda should be planned
lems, and managerial skills to get and followed to keep the meeting
the job done. controlled and productive. Regard-
Even though every department of less of the mode of communication,
the company will be affected by .. the information transmitted should
MRP I[, the manufacturing area be clear, timely, and appropriate,
MAR(iH qI I IF I dI
An MRp II project team must concentrate on the people side of the
system. People are the most importont part of the system.
Management should itnderstand the subtle relationships that exist
between orgonizatiortal fficiency and employee satisfaction to bring
together these resources in o creotive ond effective monner.
The project manager has two basic
functions: to develop a project plan
and to implement that Plan.
Specific responsibilities of the
project manager include:
. Team members must be willing to
Organizing the Project and co-
ordinating the efforts of team
members and other dePartments
. Catling and chairing team
meetings
o be part time. This will dePend on
Monitoring and reporting Pro-
ject status to toP management
o Obtaining PolicY decisions
from toP management
. Identifying resource require-
ments
. and supportive
Providing the Project schedule
and ensuring comPliance with
schedule dates
. 'education
Coordinating user
and training Programs
. Representing the team to other
functions
o Ensuring that Problems out-
side the scope of the Project do not
distract team efforts
. Identifying critical issues and
ensuring that the right PeoPle are
involved with these issues.
Teanr member assignment In
many cases it is possible to predict
how well a team will Perform based
on the characteristics of its mem-
bers. As in sPorts, there is a rela-
tionship between the amount of in-
dividual talent and team Perform-
ance; teams with better athletes do
better. Team members should not
be new people with the company or
retirement-age people- Most impor-
tant the team should be made uP of
key users who will be managing oP-
erations after the sYstem is in-
stalled. Representatives from nlan-
ufacturing,Production and inven-
tory control, design engineering,
accounting, purchasing, industrial
engineering, marketing and data
processing should be members of
I IE I MARCH 9I
the team (or teanrs). People should
be carefully selected because just
one individual with superior or in-
ferior characteristics can affect the
performance of the entire group.
actively participate in the project-
not just attend meetings. Some
members should be assigned full
time to the project, while others can
the scope of the Proiect, existing
conditions and the size of the com-
pany. The following are desirable
qualities for team members:
. positive ottitude-enthusiastic
. good concePtual abilities*ca-
pable of envisioning how new
methods will work
. g,ood communication ski//s-
rnust be a "missionarY" back in his
clepartment
. available to contribute effort
on tasks
. dependable-accePts resPonsi-
bility to cotnplete a task
. understanding of MRP l/-or
willingness to learn
. knowledge of the comqanY-
knows how to get things done.
The size of anY group will affect
its performance; more is not neces-
sarily better. Cenerally, a group of
five to eight members is ideal.
When the team is finallY selected,
education needs should be deter-
mined and satisfied as soon as Pos-
sible. Until the team has a good un-
derstanding of MRP ll, Project
will be unproductive and
meetings
system develoPment cannot begin.
Proiect charter
A project charter is a formal
document which gives the Project
team authority and defines its re-
sponsibilities. The charter should
list general team objectives and in-
dividual team member responsibili-
ties, including time requirements
and provisions for department sign-
off. Project objectives must be spe-
cific, attainable, measurable and
agreeable to those involved.
In many cases the Project is best
organi zedinto several sub-projects
corresponding to functions of the
system or mrtqlules of the software
package. This decision is dependent
upon the project scope' company
size and nutnber of Project team
members involved. The Project
charter should be used to commu-
nicate the team's role and the ex-
tent of its authority to every person
affected in the organization.
Using a consultant
If no one on the Project team has
had previous exPerience success-
fully installing an MRP lI sYstem, a
qualified consultant should be used.
The reasons for using a consultant
would be to:
. perforrn an objective business
analysis to determine sYstem re-
quirement
. plan and assist with the edu-
cation program
. guide the proiect Planning
process
o
review the project Plan to ell-
sure it is comPlete and realistic
. provide professional advice
and guidance to Prevent exPensive
mistakes and avoid maior Problems
o act as a catalyst to get things
started
o prevent the team from re-in-
venting the wheel.
The consultant should be an ad'
visor, not the decision-maker. Also,
the consultant should not be the
project manager. The consultant
should aid in the initial start-uP
-plans and then visit the team peri-
"
odicatly to review project status. A
consultant can deal quite ef fectively
with top management Problems.
There is a strange phenomenon: an
outsider adds credibility to the pro-
ject team's recommendations. .
Project planning
The project tearn has the respon-
sibility for developing an overall
plan that identifies all major mile-
stones, along with start and com-
pletiou dates. It is essential that key
users and all team members are in-
volved in making the plan. Tltis will
ensure agreement and enhance the
practicality of the plan.
System obiectives
After the project teann is organized
and education is under way, the
first task is to define the scope of
the project. Although this sounds
very basic, it might seem that eve-
ryone in the organization has a
slightly different understanding of
the system objectives and bounda-
ries.
When delining the project scoPe,
good judgment should be exercised
to limit the project to real business
needs and to justify management
priority. The project team must re-
sist the temptation to include un-
necessary luxuries in order to allow
the system to provide all things to
all people.
Once the project scope is agreed
upon, general systern requirements
should be defined. A brief survey of
existing systems, problems and re-
quirements should be documented
and approved by the users. This
phase of the project is critical be-
it
cause will be the foundation upon
which the system is built. The fu-
ture of the system depends on how
well the system requirements are ac-
cepted. For this reason the systern
requirements document shoulcl be
approved and signed-off bY key
usgrs.
There is often a tendencY to as-
sign a due date to the Project Pre-
maturely. Defining project scope
and system objectives is prerequi-
site to preparing a Project Plan.
General project plan
Once the project scope has been aP-
proved, a general Proj ect Plan
should be drafted. The purpose of
the general plan is to show major
project phases at a gross level, bro-

In a report just published by tsusiness Education As-
sociates, 5390 of the manufacturers ttrat have in-
stalled MRP II systems in their operations have ex-
perienced greater inventory control within one year
47 slo have realized success in less than two years.
- business through a discipline of formal controls and
Among the benefits derived from the system, the
study revealed that successful users achieved im-
proved customer seryice levels, optimized produc-
tion scheduling, reduced component stock outs, fe-
fined stocks and increased plant throughput.
The report carried the statement that " . ' .MRP
II systems enable a company to be productive be-
cause they provide computer-based support for for-
mal planning and control manufacturing operations
from the receipt of materials to shipment of or-
ders. "
"MRP II should no longer be thought of as a
computerized system for just ordering components.
Rather, MRP II systems today integrate the entire
practices. "
According to the report, the keys to success with
MRP II include:
. Top management involvement, support and su-
pervision. This is needed to facilitate the organ-
izational changes necessary to resolve interde-
partment conflicts. A steering committee is also
found to be effective. Participation by finance,
sales/marketing, the foreman and manufactur-
ing is critical for project cooperation. Good
communication is essential during the irnple-
rnentation process.
. Performing a business requirement analysis
prior to MRP II software selection is a must.
This process will identify a company's unique
information needs and "blueprint" for the
software vendor, the explicit information re-
quirements of the company. This greatly re-
duces the future time needed to modify soft-
ware.
. The project must be a high business priority for
the company. The study showed that manage-
ment must ensure that the specific tasks and ac-
tivities required to implement an MRP Il sys-
tem stay on schedule
The research also noted an interesting by-product
from MRP II implementation. Prior to use of the
systeffi, there were no significant differences be-
tween data accuracy levels among companies. But,
after implementation, the successful companies had
significantly higher levels of data accuracy.

MARCH el I IE I 43
ken into months. This plan will be
used by management for planning
manpower and measuring progress,
and by the project team for deter-
mining detail schedules. Phases
should be broken down so that
small achievements can be built
upon and a sense of accomplish-
ment and momentum is created.
Putting i general plan together is an
iterative process-it will often
change when the details are laid
out.
The plan should be completelY
reviewed at each phase of the pro-
ject. As the job progresses, the plan
must be updated to reflect any sig-
nificant changes. An easily under-
stood and maintained project plan-
ning and control technique like a
Gantt or bar chart should be used.
Detailed task scheduling
From the general plan, a detailed
weekly schedule should be made for
each task, indicating who will per-
form each task, man-days required
and cost, if appropriate. The detail
schedule is a priority planning tool
used to sequence and measure task
completion.
The purpose of a project plan is
to:
. identify required tasks
o communicate the tasks and es-
timated man-days
. assign work to project team
members
o determine target dates
. coordinate work activities
o provide a basis for estimating
due dates and cost
r provide a means to control
project performance
. provide a basis for determin-
ing resource requirements.
The development of a workable
plan is a necessary prerequisite to
effective project planning and con-
trol. It provides a means for relat-
ing*objectives to task assignments.
There are seven steps required to
prepare a project plan:
o divide the project into major
phases
r divide the phases into smaller
tasks
.
prepare a narrative describing
each task, including task goals
. define documentation needed
44 I rE I MARCH 9l
to record task results
r obtain management approval
lor the plan
. determine the man-days re-
quired to complete each task
. review the skills and man-
power requirements, along with de-
partment responsibilities, with ap-
propriate management.
Presenting the plan
In order to achieve full benefit from
the planning phase, the implemen-
tation plan must be made known to
all concerned with or affected by
the plan. There are two phases in
presenting the project plan: (l) pres-
entation to top managernent for ap-
proval, and (2) eeneral publishing to
the organization. The project man-
ager should be prepared to explain
why the schedule should not be ac-
celerated or extended.
An excellent way to kick off an
MRP II project is through a letter
to all employees from the president
or general manager. This letter
could outline briefly the purpose of
the project, what MRP II is, why it
is needed, who will be developing it,
and how MRP II will benefit the
entire organization. This letter can
be followed by a copy of the gen-
eral project plan, sent to each de-
partment manager. Included with
the project plan should be a brief
explanation of each major phase.
Once the project plan is distributed
and approved, the actual system de-
velopment and implementation
phases can begin. It is now the pro-
ject team's responsibility to see that
the project is executed as planned.
Pitfalls
Project success requires concentra-
tion of efforts. Failure will result
from trying to do a little of every-
thing. It is unfair and ill-advised to
expect a person to handle a regular
job while also managing the pro-
ject. If the project manager can
only spend 50 percent of each day
on the project, the chances of fail-
ure will be greater than 50 percent.
Top management involvement
and ieadership can easily make or
break the system. Management in-
volvement must not be so strong as
to cause token compliance or re-
sentment. Also, labor unions can
cause resistance to organizational
change if they are not involved.
Union management relations should
be planned in the beginning of the
project to avoid problems later on.
Lack of user tnvolvement and lead-
ership is a pitfall which will ensure
failure.
If a project extends too long
(over two years), the company's at-
tention span and enthusiasm will
wane. Poorly defined objectives and
tasks will increase the time needed
to install the system.
Organizing a project team re-
quires discipline. Meeting atten-
dance and task completion must be
taken seriously and problem areas
should be recognized and resolved.
The probability of success is in-
versely proportionate to the length
of the project. By setting a tight
schedule, overzealous systems ana-
lysts will not be able to spend much
time exploring unnecessary "gin-
gerbread." Most companies cannot
afford to develop a "perfect" sys-
tem." Howrlver, the system cannot
be done "quick and dirty." A bal-
anced approach, concentrating on
the 2A percent of the efforts which
provide 80 percent of the benefits,
is recommended to achieve maxi-
mum return on resources.
Examples of these vital efforts
are data accuracy, education and
training, and top management sup-
port-all are people-related issues.
The project manager must consider
these issues top priority by carefully
planning and controlling efforts
which support them.
By following these steps outlined
for organizing and planning the
project, implementation will be
smoother and chances for success
will be greater. Project plans must
always be practical, organized and
realistic.
The project team must concen-
trate on the people side of the sys-
tem. People are the most impbrtant
part of the system. Management
should understand the subtle rela-
tionships that exist between organi-
zational efficiency and employee
satisfaction to bring together these
. yarious resources in a creative and
effective manner. E