Executive Briefings

Managing Large Logistics Projects

Catherine Cooper, executive vice president and chief information officer of OHL, lays out the potential pitfalls that can doom major projects, along with some tips on how companies can avoid them.

Why do so many large logistics projects fail? Often the culprit is a lack of understanding of what the company is trying to accomplish, says Cooper. Poorly executed efforts can become "orphans" within the organization, lacking a clear beginning, end and overall purpose.

It's vital to manage expectations from the chief executive officer on down, Cooper says. All managers involved in the process need to have a clear notion of what constitutes a successful project. The chain of responsibility must be laid out in detail, with expected results - such as cuts in staff - communicated ahead of time. A scorecard will help the company to define the project's scope and progress.

It helps to have one person in charge of the effort, but that individual can come from any number of disciplines within the organization, depending on the nature of the project. A chief financial officer might be looking to restructure billing in the company's warehouse or transportation systems. Information technology might want to install a new warehouse management system. Ultimately, says Cooper, the source of that guiding hand is less important than making sure that the designated business objective is being met across the company.

The various departments of an organization are likely to get into turf battles over projects that cut across functional lines. Cooper urges companies to think of each project as a triangle, balancing considerations of schedule, budget and quality. Rarely can a company achieve all three at once, though. "For pharmaceuticals, it's quality," says Cooper. "For a product launch, it's the schedule. Or it's the budget, if you need to scale back [overhead]. You need to get your executive team aligned on what is the primary driver. That will give you the direction to go forward over months."

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Why do so many large logistics projects fail? Often the culprit is a lack of understanding of what the company is trying to accomplish, says Cooper. Poorly executed efforts can become "orphans" within the organization, lacking a clear beginning, end and overall purpose.

It's vital to manage expectations from the chief executive officer on down, Cooper says. All managers involved in the process need to have a clear notion of what constitutes a successful project. The chain of responsibility must be laid out in detail, with expected results - such as cuts in staff - communicated ahead of time. A scorecard will help the company to define the project's scope and progress.

It helps to have one person in charge of the effort, but that individual can come from any number of disciplines within the organization, depending on the nature of the project. A chief financial officer might be looking to restructure billing in the company's warehouse or transportation systems. Information technology might want to install a new warehouse management system. Ultimately, says Cooper, the source of that guiding hand is less important than making sure that the designated business objective is being met across the company.

The various departments of an organization are likely to get into turf battles over projects that cut across functional lines. Cooper urges companies to think of each project as a triangle, balancing considerations of schedule, budget and quality. Rarely can a company achieve all three at once, though. "For pharmaceuticals, it's quality," says Cooper. "For a product launch, it's the schedule. Or it's the budget, if you need to scale back [overhead]. You need to get your executive team aligned on what is the primary driver. That will give you the direction to go forward over months."

To view this video in its entirety, Click here