8-10 Page- Operations Managment

In the building products industry there is a great need to supply the customer with a cheaper alternative to traditional exterior cladding products (i.e. wood and stone). The Royal Stone Veneer project is an attempt to penetrate the portion of the building products market that relates to stone by introducing a quality, cost competitive, and a less labor intensive product installation “stone-like” product. The introduction of such a product will spur growth in our business so that we can continue to grow and be a profitable organization.

As a start to defining this project upper management had set a few goals that the project must meet in order to be viable within our organization. The first was that this product had to be innovative. There are other polymeric stone veneer products in the building products market currently, but this product must be easily differentiated from other like products currently on the market. The second goal was to promote sales of our existing products along with this new product to allow us to sell the new product along with more of our existing products. The third goal was that the new product must be one that will allow the company to make a profit and allow us to take market share away from our competitors in this product category along with our existing line of products. As a fourth goal which is actually a required goal for every project within our organization is that the project must be completed in a safe and environmentally friendly manner.

In order to ensure that our needs for this project were clearly defined the project manager wrote a “Scope” document. This document outlines the requirements for all facets of the project. The outline defines manufacturing method, internal or external manufacturing, material type(s), what parts will be needed to make this product viable to the home exterior cladding market, market research to be completed, code compliance testing, and beta testing to be conducted toward the end of the project.

Another important point in the defining phase was the development of the priority matrix. The priority matrix gives the project team an overview of what management will accept in terms of the project time to completion, the performance or how closely the project will meet the requirements, and if the project must be completed within the budget or if a cost overrun is acceptable. The following represents the priority matrix that defined the Royal Stone Veneer Project:

The priority matrix that was developed for this particular project is one that gives a project team freedom to be creative in the development process of the product. Under the accept criteria of the matrix is cost. Since management has indicated that cost is not constraining this project the team has the ability to experiment or “ooch” (Heath, 2013) with different designs that may enhance the look or function of the product and make this one of a kind product stand out even more than it would without enhancement. The term “ooch” was used in the last sentence; ooching is the process of conducting small experiments to test a given hypothesis (Heath, 2013). In the case of this project ooching is required to determine the coloration of the product; this would only be a small portion of the experimentation that is required for the overall project.

The fact that the project matrix for this project has performance as the constraint and time as the enhancement criteria also foster a good project environment for a new product development project. Time being under the enhancement criteria grants the team ample time so that the development of the product is not rushed, but does not give the team an unlimited amount of time to complete tasks. Time being the criteria that can be enhanced is management’s way of saying that the team is given an allotted amount of time to complete the project, but we would rather have this project to market sooner than later. This may not be the case in all new product development projects, but this project must have some flexibility in the time to completion.

Performance being the constraint of this project is completely understandable. This product being a new and unique product makes the need for the product to be made to the specification of the utmost importance. In this project specifically there was a fair amount of

Royal Stone Veneer: New Product Development Project

market research completed so that our company could understand the needs and wants of our customers. Getting the feedback from the customer and applying what we have heard to the specifications of the project is important to the success of the project. Performance as the constraint, especially for this project, is the best criteria to ensure that the product will meet the customer’s needs and wants.

Figure 2 shows a modified and truncated version of the responsibility matrix that was developed for the Royal Stone Veneer project. I was asked by management not to use the actual matrix that was developed for this project. The matrix shows that design and development are responsible for or are in a support role for each task. This may not be the ideal situation for a

Royal Stone Veneer: New Product Development Project

project of this size and scope, but other than the third party manufacturers that are performing work in the project the team consists of five members. Two engineers, one representative of quality/ product development, one representative of purchasing, and the project manager. Having so few team members has made the decision making process much easier throughout the project. We don’t have to deal with as many different personalities which has made any conflict that has arisen very easy to resolve without ruffling too many feathers in the process.

The matrix organization structure for this project is a balanced matrix. The project manager developed the overall scope and plan for the project while the functional (Engineering Manager) is making the determination as to how the work will be completed. For this project this type of structure has worked well. Since 60% of the team members are direct reports to the functional manager the project has progressed quite well. The functional manager in this case has a great interest in seeing this project to fruition, so the other team members are also on board with the manager’s goals. Where this has been disadvantageous is with such a small team that is not totally dedicated to the project, tasks frequently take a little longer than they would if there were a larger team with more members to aid in completing the work. Another disadvantage to the using the matrix structure in the case of our company is the fact that resources are shared across projects. This would normally be a strength, but with a small group that works on projects in our company we tend to not always be able to dedicate the time that may be necessary to ensure that the work is being completed. Most of the team members are working on three or more projects at one time along with performing their day to day tasks which explains why tasks may not get completed as quickly as they normally would if there were a dedicated team to complete project work.

Royal Stone Veneer: New Product Development Project

The schedule for this project is a resource-constrained type of schedule. The project team has very few members internally that are performing the design and development tasks with a third party manufacturing the product. Looking back at figure 1, this is why management has determined that the time is a priority that cannot be constrained, but if possible could be enhanced. The schedule for this project is not detailed to the extent of a traditional project. The ES, LS, LF, and EF are not defined and the team is unsure of which activities have slack as an example. After studying the application of the previously mentioned items in the QSO-680 course I now see that although the Royal Stone Veneer project is not employing this method, the use of the methods would likely make the project progress a little more smoothly.

The schedule for the project is developed in a project management software called Smartsheet. Similar to Microsoft Project, Smartsheet allows the user to enter tasks with dates, predecessors, and resource assignments. MS project has more features and functionality than Smartsheet, for example, in MS project the user has the ability to create network diagrams and perform earned value analysis which is not available in smartsheet. Having a schedule that outlines the project activities, completion dates, and resource assignments has allowed this project to stay on pace to complete on schedule.

With the development of artist renderings and physical prototypes of the product we were able to conduct a rather extensive amount of market research. This research allowed us to get feedback from contractors, architects, and homeowners as to what the product needed to be. We

Royal Stone Veneer: New Product Development Project

were able to determine at what price point this product would be able to be sold at, what types of coloration were needed to satisfy the needs of the American market, and how the product must perform in order for it to be viable in the home exterior cladding market. The market research was the first phase in planning the project; once the research was completed we now have the requisite information to develop a plan for the development and introduction of a product that will be well received in the market.

Once all of the research information had been collected the team had to make some determinations as to how this product would be manufactured. Could it be done via a manual process? Would automation get the product to the price point we need? Would automation be too large of an initial investment? Our scope document was sent to multiple suppliers along with a request for proposal. Once the proposals were received we were able to make a determination as to which direction we must go. The project manager developed a budget consisting of cost of automation, development costs, tooling costs, man hours, and code compliance testing. Our company requires that each larger project go through a stage gate process where the project budget and plan are reviewed by a committee that consists of mostly upper management. During this meeting the committee approves or disapproves the budget for the project. The budget numbers given in this part of the process are purely budgetary; a more detailed time-phased

budget is created after the committee gives the go ahead for the preliminary budget requested. The term time-phased budget is used loosely when defining the budget for this project. The budget is broken down by work package but is not as detailed as how much will be spent per week. The budget is tracked on a spread sheet that shows the spending per the schedule of

Royal Stone Veneer: New Product Development Project

activities which is like a time-phased budget. We are able to track our spending per activity and this sheet is viewable by a select group of senior managers which allows them to see the progress of the project in terms of spending. This being a somewhat large capital project there are requirements that the budgeted dollars must be spent by the scheduled date.

With any project there are risks that could be detrimental to the project, risks are an inherent part of projects; whether it is a cost overrun, a delay in the build of a piece of equipment, or delayed raw material delivery there are many possible risks related to project tasks. My company has taken a more formal approach to risk management, meaning that some of the risk assessment and mitigation procedures are used but the methods are not followed to the letter of the law. There are contingency plans in place to allow the project to continue if the first option is deemed to not be viable or will not allow the product to achieve the required performance. As a short example the product that this project is aimed at developing must have colorant applied to the surface. In our scope there is a section that calls for an automated decoration machine. As a contingency plan for the coloration or decoration of the product, a manual method of decoration can be used in order to achieve the appropriate level of coloration. We are relying on our contingency plans as risk mitigation which would not suffice in an organization that is any level above formal i.e. institutionalized (QSO-680 "Module Ten Lecture"), but this method has worked quite well up to this point in the project.

Currently this project is in the heart of the execution phase. All planned activities have begun. Although there is a single team member that has been given the title of project manager

RSV Project 11

each team member has taken on the task of keeping everyone abreast of the status of the project tasks to which they are assigned. A standard template for status report is used on a bi-weekly basis. This form includes what activities have been completed since the last report and what activities will need to be completed for the next report. Each status report contains a snapshot from each of the Gantt charts that apply to your tasks and the amount of dollars spent on the tasks. Once the status reports are complete the project manager reads them all and gives the project sponsor (general manager) an overall update of how the project is progressing. There is also a project sheet that is visible to all team and the project sponsor that shows the progression of the project from a capital spending perspective. Both the status update and the project sheet have been instrumental in keeping everyone informed as to the status of the project.

Royal Stone Veneer: New Product Development Project

Works Cited (n.d.). Retrieved from http://pmstats.dis.arkansas.gov/meth/07-execution%20phase.pdf Heath, C. &. (2013). Decisive "How To Make Better Decisions". New York: Crown Business. Larson, E. W., & Gray, C. F. (2014). Project Management "The Manegerial Approach". New York: McGraw-Hill Education. Olvey, P. (2012). Royal Stone Veneer Project Scope. Columbus, OH, United States of America. QSO-680 "Module Ten Lecture". (n.d.). New Hampshire.