DC Velocity - IdeaBook 2017

Our experience has shown us that following a project management methodology improves the chances for success, but eliminating failure is not guaranteed. Sometimes a project is plagued with issues and needs a “reboot” or cancellation. Figure 4 shows some of the most common problems found in poorly performing projects. Let’s take a brief look at each one.

1. Flawed hypothesis. A project with a flawed hypoth-
esis lacks focus, does not provide an adequate link
between cause and effect, is not quantifiable, and is
potentially irrelevant. If poor
ideas—perhaps the pet projects
of senior leadership—are pursued
while potentially good ideas go
unexplored, the company pays an
opportunity-cost “premium.”
Managers at a client company
once told us, “The CEO says we
need to open a new distribution
center on the U.S. East Coast
because we have more custom-
ers there.” But they could not
articulate the strategic rationale
for that statement, link cause and
effect, or identify exactly where
their customers were located.
Subsequently, we were brought in
to uncover the project’s strategic
relevancy and help the company
make an informed decision.

2. Insufficient analysis. Projects can also be doomed if they fail to examine the relevant data and business processes underlying the hypothesis. In the example above, we analyzed several years of order fulfillment data to determine the company’s demand demographic. Even simple data sets and basic analysis can generate relevant information that supports a better decision. Yet companies often avoid this step because data is sometimes hard to come by and because many seasoned supply chain professionals are not trained to use basic data-analysis tools and techniques.

3. Not sanctioned by decision makers. Projects that
are utilized to obtain buy-in from stakeholders generally
are not as successful as projects that have stakeholder
buy-in and guidance from the beginning. In the former
case, a project leader hopes the project’s results will pro-
vide justification that a path is worth pursuing. However,
without understanding all the issues leaders may be
concerned about, the project risks working toward irrele-
vance. For example, its aims or results may conflict with
management’s strategic and/or tactical plans. However,
if decision makers buy into an idea (hypothesis) that was
validated through data and process analysis, they are like-
ly to provide guidance and champion it.

4. Overreliance on technology. Software and technology are tools that enable people and processes to be more efficient. But too many managers believe software and other technologies can fix all supply chain ailments. For example, we often see people get excited about the benefits of technology without understanding that if technology is to have the desired effect, they must first address the fundamental cultural or process changes required to actually solve the problem. Dropping a new warehouse management system (WMS) into a poorly run warehouse with poorly trained staff will only compound the problems that exist. What’s more, the warehouse staff will have to wrestle with using a completely new system, which will almost certainly make things even more inefficient.

5. Lack of will or energy to implement. In our opinion, this is the worst hurdle that projects encounter. The project team has invested countless hours and financial resources driving toward a goal that has not garnered enough support or energy to move forward after consuming those resources. If the project is not energizing the leaders and personnel who need to drive implementation when it meets institutional resistance to change, then it should be abandoned at the earliest possible time.

6. Focused on symptoms, not root causes. When projects are focused on the symptoms rather than on the root causes of problems, they produce only short-term fixes. For example, a company may decide it has too much inventory, and in order to cut costs it slashes the amount of inventory it holds. But that won’t solve the problem. The company should have asked why it has so much inventory and determined which aspects of its supply chain processes were causing inventory levels to rise. By treating the symptom (high inventory levels) rather than the disease (a poor purchase order process, for example), inventory levels are guaranteed to rise again.