ORION Systems Case Study

ORION SYSTEMS 1

ORION Systems Case Study

Group Earth

Kirk Baringer

Meagan Beeman

Allison Benton

Yolanda Boyd

Thomas Guess

Southwestern College

Joel Light, Ph. D.

MGMT 505 Project Management Fundamentals

January22, 2012

Introduction

ORION Systems (ORION) has 7,000 employees and is a detachment of a large aerospace company (Gray & Larson, 2011). ORION was recently awarded a government contract to build high speed light rail trains. It is essential that ORION delivers an on time quality product to ensure they will continue to win government contracts in the future. The new government contract, known as Jaguar, will be headed by ORION’s project manager Mike Rosas. Mike realizes the challenges ahead for the company due to increased industry competition. This resulted in higher expectations from the customers which includes faster delivery expectations, better quality products, sufficient support after the project is completed, and overall lower product cost (Gray & Larson, 2011). ORION has all of the tools to succeed, however their current operation might require changes before new product implementation.

ORION’s current structure includes assigning projects to team members delegated by the Vice President of Operations. ORION currently uses the matrix arrangement where team members are either working on a full-time or part-time basis while performing normal job duties (Gray & Larson, 2011). ORION’s concept of project management prior to Jaguar only involved the design of a prototype which was then manufactured and delivered to the customer. The company’s structure included a project, planning/control, electronics system engineer, and mechanics system engineer managers (Gray & Larson, 2011). Most of ORION’s work was completed by 12 to 20 design teams consisting of 5 to 15engineers who were led by a team leader. ORION is facing some key changes in their structure in preparation for the Jaguar project.

Recommendations

ORION must be thorough with its planning and execution while following a time line to effectively complete the Jaguar project. A recommendation for the company is to first decide if they are going to continue with the matrix system or choose a different project management structure for the company. ORION should use the balanced matrix approach with an alteration of some of the team members working full time on the project until completion. The functional managers will have the power to determine how to meet their requirements, while the project manager still has the final power on decisions (Gray & Larson, 2011). The project will need more functional managers in addition to the four already in place. The balanced matrix will allow the functional managers to oversee their assigned teams to ensure completion by monitoring progress, making vital decisions, and being held accountable for their division’s success.

The project manager should also study the information learned in the major assessment to avoid potential issues. The project team must work better with the manufacturing department to ensure communication is open to improve the instructions, and design a friendlier model of manufacturing (Gray & Larson, 2011). ORION must be more proactive with quality defectsand deal with the issues before product production is initiated. This can be accomplished by addressing quality concerns during the design stage. Also, ORION needs to address issues with product support after the project is delivered. A customer expects the manufacturer to be able to trouble shoot problems and help with issues after the product is delivered. ORION has had trouble with this in the past. ORION should use a number of full-time team members to help deal with issues such as lack of project ownership, and keeping team members up to date on the project development. With these recommendations implemented ORION will be able to deliver an on-time quality product to its customers.

New Master Plan andOrganizational Chart

ORION Systems should think about keeping its current matrix organizational structure. Matrix organizations work well in dealing with governmental contracts, because the government works on a project to project basis (Wright Jr., 1979). However, ORION is currently operating under a functional matrix system. Under this system the project manager is limited to just coordinating the efforts of each functional group and lacks the authority to make key decisions (Larson & Gobeli, Matrix Management: Contradictions and Insights, 1987). This system is ranks high in allot of areas but features weak project integration (Larson & Gobeli, Matrix Management: Contradictions and Insights, 1987). ORION Systems should move more towards a balanced matrix system. This system will feature efficient use of resources which is essential when resources are spread across several projects at one time. This system will also feature greater flexibility and better information flow. The greatest advantage of a balanced matrix system is better project integration.

Projects should never be considered complete until the product or service is provided to the customer. So, ORION’s project teams will need to be involved in the project until the product reaches the customer. The ultimate goal of every project is to provide a quality product or service to an organization’s customers and this is not the case with the way ORION executes its projects. If this is to occur ORION needs to involve more functional managers in the process. ORION’s project teams will no longer be just involved in design and prototype development. They will now be involved in the manufacturing process. In this way functional managers who oversee key manufacturing process need to be added to the project team. The key here is each functional manager should still be held responsible for all aspects of their functional areas and responsible for decisions relating to their specialties. However, the project manager should still have overall decision making authority.

There currently is no quality assurance function or department within ORION’s project management process. If quality is such an issue why has this requirement never been identified in the past? ORION should quickly implement some sort of quality assurance (QA) program to ensure the highest quality product is being delivered. A company can be made or broken by the quality of its product, and the QA department would guarantee the highest quality product is being delivered. During the design phase changes were being made that were not in the best interest of the customer. This would result in delays and poor customer satisfaction. The QA department will make sure every aspect of the project will have the interests of the customer in mind.

The last change required to the master plan in place at ORION is its pay system. The project team needs to know they are all working together towards success and that every activity within the project process is just as important as the next. Currently design engineers are paid higher than other employees, and it appears to other project team members that these engineers run the show. A good, hard look needs to be accomplished by management to eliminate this issue. The type of conflict this issue can breed can cause great damage to the morale and motivation within the organization. This will prevent projects from running smoothly and possibly impact their success.

A new chain of command needs to be established by adding additional functional managers. A clear line of authority needs to be established that establishes the project manager as the ultimate decision authority with a project. The current chart has just one supervisor who falls directly under the project manager. According to the major assessment of probable problems and the increased demand from the government due to completion the master plan would reflect these changes. The initial plan of five to seven years would be shortened to three to four (Gray & Larson, 2011). Also, there would be a longer duration of documentation/training program, and building the product line to ensure fewer problems.

Implemented Changes

With Rosas’s plan, several changes were made that created animproved project approach to project management. The process in which a project is completed will be more streamlined with Rosas’s approach. First, there will be seven managers who will oversee the project to the end and coordinate with each other compared to the original four who were just responsible for the design and development of a new product (Larson & Gray, 2011). Under the new project management system, teams will be responsible for designing, developing, constructing and testing a specific subsystem of the project (Larson & Gray, 2011). By creating teams and placing most of the product development on each team, this improves product reliability and completion time.

One major overhaul to the management of the project was a newer master plan which would be implemented by ORION. By having an improved master plan, it aides in creating an organizational culture; one that shares in a management focus, unit integration, control, conflict tolerance, team emphasis and member identity (Gray & Larson, 2011). This contrasts to the previous management of projects in which each unit working on the project had their own identity. The newer master plan also decreases the chances of an implementation gap occurring and reducing the overall cost of the project. By using Rosas’s Jaguar master plan, a total of two to three years of time have been shaved off the traditional master plan ORION previously used. Also, by using the new and improved master plan, ORION will be able to cut back on the scope creep that occurred on past projects.

Impact of Implemented Changes

In the past ORION has managed projects according to the industry trends and norms. But because of increased competition for government contracts the change is vital for a bid at more contracts in the future. The changes recommended would directly improve completion time, product reliability, and lead to overall cost reduction (Gray & Larson, 2011). These three key issues were identified in previous project reviews and need to be implemented to maintain ORION Systems’ competitive advantage into the future. ORION has had some issues with the way the projects were handled in the past; the new method should improve quality, increase customer support, and cut down on the projects total time to completion (Gray & Larson, 2011).

The biggest change implemented involved abandoning the traditional sequential approach to product development and implementing a concurrent approach (Gray & Larson, 2011). This new approach creates parallel paths of activities which will shorten the amount of time required to complete a series of activities during the project. However, this new approach could result in possible conflicts in managing resources. To counter this possibility the number of teams performing core work will be increased to 35 teams, and each individual team will consist of at least 50% permanently assigned personnel. This will help build strong project ownership from permanently assigned members which will hopefully help inspire superior performance from other team members.

Staffing teams with these permanently assigned personnel will also prevent delays due to loss of focus or readjustment time required by team members who have to shuffle from project to project. Scope creep has also led to delays in the past, but future design refinements must now be closely coordinated between manufacturing and the Integrated Logistical Support (ILS) teams. This way production can begin immediately following the completion of the Production Readiness Review (PRR) and reduce the number of changes which are inconsistent with the demands of the customer. Unnecessary changes can reduce the quality and reliability of the finished product (Gray & Larson, 2011).

Reliability has been another issue that has plagued ORION Systems in the past. Reliability of products is directly linked to quality management. In the past project teams were only responsible for designing and developing a product. Now project teams will be responsible for the product from cradle to grave. Teams will be responsible for overseeing all aspects of the product from design to final customer delivery. This will help eliminate the sense of passing the buck to another department that was present in past projects. Project teams simply passed off responsibility for the final product to manufacturing. Three new positions have been created to help improve reliability and quality issues.

The newly created Production Manager will be responsible for raising production issues during the design phase which will help further eliminate scope creep. The ILS Manager position will be responsible for all activities requiring project and customer support. Finally, a Quality Assurance (QA) Manager has been added to implement a quality program which will enhance the reliability, availability, and maintainability of the product (Gray & Larson, 2011). The creation of the QA Manager position might be the biggest change toward improving product reliability and quality. Still, individual team leaders will be held responsible for the quality of their subsystems.

Costs in general will be reduced if all the recommended changes are implemented. Reducing scope creep will eliminate unnecessary changes which result in delays and increased costs. Improved owner’s manuals and ownership training will reduce costs associated with customer service. The implementation of concurrent engineering will allow production and documentation work to be conducted at the same time other core development is occurring which will accelerate project completion, reduce production costs, and contribute to higher customer satisfaction(Gray & Larson, 2011).

Support for Changes

When implementing change in companies there are likely to be some opposition from employees. ORION should avoid common pitfalls of implementation such as lack of planning, training, and communication that leads to ineffective change (Jick & Peiperl, 2011). Rosas put together a very ambitious plan to make the Jaguar project a success for ORION and for the government. It appeared he did this in an effort to address many of the issues that were cultural in nature to ORION.

The project team managers and team leaders would be in favor of the project plan, because it gives them the opportunity to lead parts of the project. Hopefully they were briefed prior to the planed roll-out so that they wouldn’t be blind-sided with a leadership or management position that they were not expecting. Within the current scheme at ORION, they use the matrix approach to project management. This approach would use the same people on multiple projects which does not allow for dedicating personnel to a single project. While this will be welcomed by the team it may not mesh with the current culture of the organization.

Rosas was also implementing some quality improvement methodologies to his plan which would add quality and value of the final product. Quality improvement practitioners see a focus on the customer as the starting point, and indeed, the reason d’etre, of the whole quality philosophy (Hill & Jones, 2010).The government (customer) will appreciate the method that Rosas is trying to employ, because it will address the organizational cultural issues at ORION which include: Higher than expected production costs, quality concerns, problems with customer support, lack of strong project ownership, and scope creep.

Since the ORION organization and leadership is accustomed to having many projects going on at the same time and using the matrix approach to project management the senior leadership and or the board of directors are not going to appreciate Rosas ideas. His idea to dedicate employees to a project team does not mesh with the culture. There could be dissention from all levels with this project.

Conclusion

It was very apparent after reviewing the situation at ORION Systems that changes were indeed required to bring about improvements in project completion times, quality, reliability, and project costs. Changes do not always require a change in organizational structure; however ORION did need to reassess how it did business (Wright Jr., 1979). It is very well known that matrix type organizational structures work well with government contracts, so the matrix system in place will suffice for now. A reassessment was conducted by Mike Rosas will produced changes that will bring about much needed improvements in the way the company operated. Whenthese changes are implemented by ORION Systems the future will be paved with project success after success as we will see with the Jaguar project.

References:

Hill, C. W., & Jones, G. R. (2008). Strategic Management: An Integrated Approach. Boston: Houghton Mifflin.

Jick, T. D., & Peiperl, M. A. (2011). Managing change. New York, NY: McGraw-Hill Irwin.

Larson, E. W., & Gobeli, D. H. (1987). Matrix Management: Contradictions and Insights. California Management Review, 29(4), 126-138.

Larson, E. W., & Gray, C. F. (2011). Project Management The Managerial Process. New York: McGraw-Hill/Irwin.

Wright Jr., N. H. (1979). Matrix management: A prime for the administrative manager. Management Review, 68(4), 58.