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Program Management Making History - Risk Management Leads to Victory!” December 11, 2014 Mr

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Program Management Making History - Risk Management Leads to Victory!” December 11, 2014 Mr “Making Project Management Indispensable for Business Results.” ® “ Program Management Making History - Risk Management Leads to Victory!” December 11, 2014 Mr. Roberto “Bobby” Lago, PMP “Making Project Management Indispensable for Business Results.” ® In Memoriam to All Veterans and The Greatest Generation that saved the World from Tyranny on the 70th Anniversary of the Attack on Pearl Harbor December 7th, 1941 “…A day that will live in Infamy!” “Making Project Management Indispensable for Business Results.” ® Project Management Process Groups: Initiating Planning Executing Monitoring & Controlling Closing Project Knowledge Areas: Integration Management Scope Management Time Management Cost Management Quality Management HR Management Communications Management Risk Management (so dear to my ) Procurement Management “Making Project Management Indispensable for Business Results.” ® ISSUE – War Raging in Europe & Pacific -Winds of War heading to USA- Need for increased mobility for troops and cargo carriers to war zones Germany Expanding and invading Poland, Africa, and Annexing neighbor countries. Invasion of France, Britain under fire. Germany scoring victories May – June 1940 Empire of Japan taking over Pacific Rim Sphere of Influence (since 1936) Great Britain losing warships and transports to German U-Boats Need to replace loses rapidly and inexpensively Numerous stakeholders and competing requirement Shipbuilding methodology in USA is cumbersome and in state of flux in 1940 adding complexity “Making Project Management Indispensable for Business Results.” ® Project Management Process and Knowledge Areas Applied in the War Effort: Project objective-Produce war components Keep Cost-Schedule-Functional Product (Scope) Control Expectations of Stakeholders Develop New Techniques to Streamline Production One Shot Efforts (with catastrophic results for failure!) Bottom Line Projects/Programs MUST be managed Smartly, Aggressively, Efficiently and Effectively to obtain… VICTORY! “Making Project Management Indispensable for Business Results.” ® TO SUPPORT THE WAR EFFORT….. U.S. will require a significant shipbuilding program. Industrial output must meet requirements, war demands and outperform enemy war production. New Techniques must be developed to control cost and meet schedule demands. New Technologies must /will be developed. (High Risk Area) “Making Project Management Indispensable for Business Results.” ® Remember?..... Risk Characteristics A definable event Probability (Likelihood) of occurrence Impact (Consequence) of occurrence A risk event that has materialized i.e. ”became a reality” is a PROBLEM (an “ISSUE” for PMBOK®) What is Risk? Start Completion Data History Current Experience Hindsight Information General Specific Total Uncertainty Uncertainty Certainty Knowns Risk Known Unknowns Unknown Unknowns 8 Remember?..... Sources of Risk Seek to CONTROL the Internal and INFLUENCE the External Acts of God Economy Industrial Base Technical External Macro-Management Policy Changes Regulatory Requirements Creep Personnel Costs Budget Schedule Internal Customers Integration Communication Constructive Change Scope Changes Micro-Management Teamwork Labor Force Acts of9 Congress Remember?..... Characteristics of Risk Events (continued) Magnitude dependent The greater the payoff, the more the risk is acceptable The higher the impact, the more significant the risk Value based Personal and cultural values affect company risk taking Company values affect individual choices Everyone sees risk differently Do Not Forget!....The Nature of Risk Probability of Probability of Failure (Pf) success THREAT OPPORTUNITY Consequence of Benefit of success Failure (Cf) (the Consequence) Note: Failure to properly control the risk…….. The “Balance” of Risk Do Not Forget!.... The Nature of Risk Probability of Probability of Failure (Pf) Success THREAT OPPORTUNITY Consequence of Benefit of success Failure (Cf) (the Consequence) The “Balance” of Risk Question: Why should you take a risk? Answer #1: To gain a specific reward! Answer #2: Sometimes you don’t have a choice! Probability and Impact (Matrix) Samples 5 5 HIGH HIGH 4 4 3 3 MODERATE MODERATE 2 2 1 LOW LOW 1 1 2 3 4 5 5 4 3 2 1 Risk vis – a – vis Opportunity “Making Project Management Indispensable for Business Results.” ® AMONG SHIPS DESIRED……TRANSPORT AND CARGO SHIPS. The U.S. Answer The Liberty Ship SS Jeremiah O’Brian (Hull No. 0806) SS John W. Brown (Hull No. 0312) “Making Project Management Indispensable for Business Results.” ® The Liberty Ship can be traced to a design proposed by the British in 1940. Seeking to replace wartime losses, the British placed contracts with US shipyards for 60 steamers of the Ocean class. These steamers were of a simple design and featured a single coal-fired 2,500 horsepower reciprocating steam engine. While the coal-fired reciprocating steam engine was obsolete, it was reliable and Britain possessed a large supply of coal. While the British ships were being constructed, the US Maritime Commission examined the design and made alterations to lessen cost and speed construction. “Making Project Management Indispensable for Business Results.” ® Liberty Ship Specifications: Displacement: 14,245 tons Length: 441 ft. 6 in. Beam: 56 ft. 10.75 in. Draft: 27 ft. 9.25 in. Propulsion: Two oil fired boilers, triple expansion steam engine, single screw, 2500 horsepower Speed: 11 knots Range: 11,000 miles Complement: 41 Stern-mounted 4 in (102 mm) deck gun, variety of anti- aircraft armament Capacity: 9,140 tons Last at least 5 years “Making Project Management Indispensable for Business Results.” ® The Problem Solver - Henry J. Kaiser The United States Maritime Commission for merchant shipping came to American industrialist Henry J. Kaiser for his expertise in Complex Program and Project Management to help meet the construction goals set by the Merchant Marine Act of 1938. Kaiser was known for building the Bay Bridge and the Hoover Dam, Kaiser pioneered many new production and construction techniques to increase /maximize efficiency at work sites. Henry J Kaiser did not know shipbuilding. “Making Project Management Indispensable for Business Results.” ® The Problem Solver - Henry J. Kaiser (Cont.) Establishes Kaiser Shipbuilding Company shipbuilding company around 1939. Develops new shipbuilding techniques. Builds Infrastructure to support production Kaiser ranked 20th among United States corporations in the value of wartime production contracts. “Making Project Management Indispensable for Business Results.” ® In early 1941, the US Maritime Commission placed an order for 260 ships of the Liberty design (60 were for Britain). With the implementation of the Lend-Lease Program in March, orders more than doubled. “Making Project Management Indispensable for Business Results.” ® Risk Management at its Best! Major Risks: Speed of Delivery Through Innovations/Agile Management Builds seven major shipbuilding yards located on the U.S. west coast during World War II. Four of the Kaiser Shipyards were located in the San Francisco Bay. Together, these four Kaiser Shipyards produced 747 ships, including many of the famous Liberty ships and Victory ships, more than any other complex in the United States. To meet the demands of this construction program, new yards were established on both coasts and in the Gulf of Mexico. The first ships required about 230 days to build (SS Patrick Henry took 244 days), but the average eventually dropped to 42 days. “Making Project Management Indispensable for Business Results.” ® Risk Management at its Best! Major Risks (Continued): Cost Control Through Technology Development and Insertion A new practice, the use of welding decreased labor costs and required fewer skilled workers. Speeded construction (same ship riveted would take 3 month on average. Welding techniques developed for changes in temperature/ Lower loss of materials. Sections built in different areas in yard to maximize yard throughput and brought together for assembly. Under $2M USD Functional meeting requirements/specifications Uses the British baseline design of the Ocean class steamer. Revised design was classified EC2-S-C1 and featured oil-fired boilers. The most significant change was to replace much of the riveting with welded seams. “Making Project Management Indispensable for Business Results.” ® Risk Management at its Best! Major Risks (Continued): Functional meeting requirements/specifications Uses other production line methods and adapts them to shipyard. Adapts work schedules and increase throughput. Applies technology maturity where possible. Keeping stakeholder interest/public support Due to their plain looks, the Liberty Ships initially had a poor public image. To combat this, the Maritime Commission dubbed September 27, 1941, as "Liberty Fleet Day" and launched the first 14 vessels. In his speech at the launch ceremony, Pres. Franklin Roosevelt cited Patrick Henry's famed speech and stated that the ships would bring liberty to Europe. (Hence “Liberty Ship”) In November 1942, one of Kaiser's Richmond yards built Liberty Ship S.S. Robert E. Peary in 4 days, 15 hours, and 29 minutes! “Making Project Management Indispensable for Business Results.” ® Risk Management at its Best! Major Risks (Continued): Man power/ skills Welded seams required new training therefore shipyard had its training program to teach welding as they built. Kaiser recruited from across the United States to work in his yards, hiring women and minorities.
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