see files
Project Management At 6:00 P.M. on Thursday in late October 1998, Don Jung, an Atlay Company project manager (assigned to the Lyle contract) sat in his office thinking about the comments brought up during a meeting with his immediate superior earlier that afternoon. During that meeting Fred Franks, the supervisor of project managers, criticized Don for not promoting a cooperative attitude between him and the func- tional managers. Fred Franks had a high-level meeting with the vice presidents in charge of the various functional departments (i.e., engineering, construction, cost control, scheduling, and purchasing) earlier that day. One of these vice presidents, John Mabby (head of the purchasing department) had indicated that his depart- ment, according to his latest projections, would overrun their man-hour allocation by 6,000 hours. This fact had been relayed to Don by Bob Stewart (the project purchasing agent assigned to the Lyle Project) twice in the past, but Don had not seriously considered the request because some of the purchasing was now going to be done by the subcontractor at the job site (who had enough man-hours to cover this additional work). John Mabby complained that, even though the sub- contractor was doing some of the purchasing in the field, his department still would overrun its man-hour allocation. He also indicated to Fred Franks that Don Jung had better do something about this man-hour problem now. At this point in the meeting, the vice president of engineering, Harold Mont, stated that he had experienced the same problem in that Don Jung seemed to ignore their requests for additional man-hours. Also at this meeting the various vice presidents indicated 675 The Lyle Construction Project c17.qxd 12/21/12 7:00 PM Page 675 that Don Jung had not been operating within the established standard company procedures. In an effort to make up for time lost due to initial delays that occurred in the process development stage of this project, Don and his project team had been getting the various functional people working on the contract to “cut cor- ners” and in many cases to buck the standard operating procedures of their respective functional departments in an effort to save time. His actions and the actions of his project team were alienating the vice presidents in charge of the functional departments. During this meeting, Fred Franks received a good deal of criticism due to this fact. He was also told that Don Jung had better shape up, because it was the consensus opinion of these vice presidents that his method of operating might seriously hamper the project’s ability to finish on time and within budget. It was very important that this job be completed in accordance with the Lyle requirements since they would be building two more similar plants within the next ten years. A good effort on this job could further enhance Atlay’s chances for being awarded the next two jobs. Fred Franks related these comments and a few of his own to Don Jung. Fred seriously questioned Don’s ability to manage the project effectively and told him so. However, Fred was willing to allow Don to remain on the job if he would begin to operate in accordance with the various functional departments’ standard operating procedures and if he would listen and be more attentive to the com- ments from the various functional departments and do his best to cooperate with them in the best interests of the company and the project itself. INCEPTION OF THE LYLE PROJECT In April of 1978, Bob Briggs, Atlay’s vice president of sales, was notified by Lyle’s vice president of operations (Fred Wilson) that Atlay had been awarded the $600 million contract to design, engineer, and construct a polypropylene plant in Louisiana. Bob Briggs immediately notified Atlay’s president and other high- level officials in the organization (see Exhibit I). He then contacted Fred Franks in order to finalize the members of the project team. Briggs wanted George Fitz, who was involved in developing the initial proposal, to be the project manager. However, Fitz was in the hospital and would be essentially out of action for another three months. Atlay then had to scramble to appoint a project manager, since Lyle wanted to conduct a kickoff meeting in a week with all the principals present. One of the persons most available for the position of project manager was Don Jung. Don had been with the company for about fifteen years. He had started with the company as a project engineer, and then was promoted to the position of manager of computer services. He was in charge of computer services for six months until he had a confrontation with Atlay’s upper management regarding the 676 THE LYLE CONSTRUCTION PROJECT c17.qxd 12/21/12 7:00 PM Page 676 Exhibit I. Atlay and Company organization chart CEO Head of Operations VP Control B. Knapp VP Eng. H. Mont VP Purch. J. Mabby VP Const. S. Russel VP Sales B. Briggs Mgr. of Proj. Mgrs. F. Franks Project D. Jung Project Project Process Civil Elect . Instr. Piping Scheduling Cost Control Buying Exped. Inspect. Traffic ProjectsMech. R.. Begen R.. Stewart 677 c17.qxd 12/21/12 7:00 PM Page 677 policies under which the computer department was operating. He had served the company in two other functions since—the most recent position, that of being a senior project engineer on a small project that was handled out of the Houston office. One big plus was the fact that Don knew Lyle’s Fred Wilson per- sonally since they belonged to many of the same community organizations. It was decided that Don Jung would be the project manager and John Neber (an experi- enced project engineer) would be assigned as the senior project engineer. The next week was spent advising Don Jung regarding the contents of the proposal and determining the rest of the members to be assigned to the project team. A week later, Lyle’s contingent arrived at Atlay’s headquarters (see Exhibit II). Atlay was informed that Steve Zorn would be the assistant project manager on this job for Lyle. The position of project manager would be left vacant for the time being. The rest of Lyle’s project team was then introduced. Lyle’s project team consisted of individuals from various Lyle divisions around the country, including Texas, West Virginia, and Philadelphia. Many of the Lyle project team members had met each other for the first time only two weeks ago. During this initial meeting, Fred Wilson emphasized that it was essential that this plant be completed on time since their competitor was also in the process of preparing to build a similar facility in the same general location. The first plant finished would most likely be the one that would establish control over the south- western United States market for polypropylene material. Mr. Wilson felt that Lyle had a six-week head start over its competitor at the moment and would like 678 THE LYLE CONSTRUCTION PROJECT Exhibit II. Lyle project team organizational chart VP of Operations F. Wilson Project Mgr. Asst. Project Mgr. S. Zorn Sr. Project Eng. B. Dradfy Const. Eng. D. Able Instru. Eng. C. Short Mech. Eng. B. Henny Elect. Eng. J. Stert Process Eng. J. Tomkan Procure. Rep. J. Bost c17.qxd 12/21/12 7:00 PM Page 678 to increase that difference, if at all possible. He then introduced Lyle’s assistant project manager who completed the rest of the presentation. At this initial meeting the design package was handed over to Atlay’s Don Jung so that the process engineering stage of this project could begin. This pack- age was, according to their inquiry letter, so complete that all material require- ments for this job could be placed within three months after project award (since very little additional design work was required by Atlay on this project). Two weeks later, Don contacted the lead process engineer on the project, Raphael Begen. He wanted to get Raphael’s opinion regarding the condition of the design package. Begen: Don, I think you have been sold a bill of goods. This package is in bad shape. Jung: What do you mean this package is in bad shape? Lyle told us that we would be able to have all the material on order within three months since this package was in such good shape. Begen: Well in my opinion, it will take at least six weeks to straighten out the design package. Within three months from that point you will be able to have all the material on order. Jung: What you are telling me then is that I am faced with a six-week sched- ule delay right off the bat due to the condition of the package. Begen: Exactly. Don Jung went back to his office after his conversation with the lead process engineer. He thought about the status of his project. He felt that Begen was being overly pessimistic and that the package wasn’t really all that bad. Besides, a month shouldn’t be too hard to make up if the engineering section would do its work quicker than normal and if purchasing would cut down on the amount of time it takes to purchase materials and equipment needed for this plant. CONDUCT OF THE PROJECT The project began on a high note. Two months after contract award, Lyle sent in a contingent of their representatives. These representatives would be located at Atlay’s headquarters for the next eight to ten months. Don Jung had arranged to have the Lyle offices set up on the other side of the building away from his project team. At first there were complaints from Lyle’s assistant project manager regarding the physical distance that separated Lyle’s project team and Atlay’s project team. However, Don Jung assured him that there just wasn’t any available space that was closer to the Atlay project team other than the one they were now occupying. Conduct of the Project 679 c17.qxd 12/21/12 7:00 PM Page 679 The Atlay project team operating within a matrix organizational structure plunged right into the project (see Exhibit III). They were made aware of the delay that was incurred at the onset of the job (due to the poor design package) by Don Jung. His instructions to them were to cut corners whenever doing so might result in time savings. They were also to suggest to members of the functional departments that were working on this project methods that could possibly result in quicker turnaround of the work required of them. The project team coerced the various engineering departments into operating outside of their normal proce- dures due to the special circumstances surrounding this job. For example, the civil engineering section prepared a special preliminary structural steel package, and the piping engineering section prepared preliminary piping packages so that the purchasing department could go out on inquiry immediately. Normally,