Toyota: Project Management Report
The present paper describes the project delivery process for Toyota’ hybrid car manufacturing that was described in the previous report. Even though the complexity of Toyota’s operations makes it difficult to forecast a specific outcome, objectives must be set to draw a general path to achieving the ultimate goal of improving processes (Marttunen et al., 2019). Gomes and Romão (2016) state that it is of crucial importance to estimate proper objectives and critical factors in order to be able to manage the success criteria for the project. When failing to define the objectives, a company is at risk of achieving none of the required criteria for relevance in the segment (Hartwell, 2020). In the previous paper, it was decided to use value stream mapping to redesign the company’s operations and processes to achieve improved productivity. According to Slack and Brandon-Jones (2018), the following objectives should be set:
- Draw a current state value stream map;
- Identify wastes;
- Develop solutions;
- Draw future state of value stream map;
- Implement the developed solutions;
- Measure the outcomes of the process.
The present paper describes in detail how the six goals provided above will be fulfilled to achieve excellence in the operations of producing hybrid cars. The paper will draw on the current research and utilize MS Project software to create a work breakdown structure (WBS), Gantt chart, network diagram, cost analysis, performance analysis, and risk communication and PR management. The implementation plan will focus on the fundamentals of sustainability while relying on the principles of an integrated management model.
Work Breakdown Structure
Project timeframes are one of the most crucial aspects of any process, as time is the major variable in terms of success management. With an intention to control the project’s progress and execute flexibility within the process, various approaches to defining the project schedule were described (Băncescu, 2016). Some of the most widespread and efficiency-proved tools to estimate and control the project’s timeline are the Gantt chart creation and estimated value management control. However, in order to properly define the timeframe of a project, it is important to precisely estimate the overall workload scope in terms of the project’s objectives. Such a calculation and analysis might be achieved through the work breakdown structure (WBS) development. WBS generally stands for ‘the standardised method to hierarchically subdivide a project into its sub-parts aiming to reduce project complexity’ (Sutrisna, Ramanayaka, and Goulding, 2018, p. 382). Thus, the hierarchy should be based on the project pillars developed by specialists.
The WBS is based upon the six objectives that were outlined in Section 1 of the present paper. While it was initially believed that six objectives should be the six necessary steps to achieving success, the final WBS had only five fundamental steps that were needed to accomplish the primary goal of improving operations in Toyota’s hybrid car production. The hierarchy of parts of the project were determined to be as follows:
Evaluate the efficiency of current operations
- Draw a current state value stream map
- Assess the efficiency of current use of materials
- Conduct HR efficiency evaluation
- Identify wastes
- Conduct research to identify new ways of diminishing the identified wastes
- Outline all the possible alternatives that can be used to address the problem
- Critically assess all the alternatives in terms of costs, outcomes, and alignment with the company’s values, vision, and mission
- Draw future state of value stream map
Plan implementation of the chosen solution
- Determine goals and objectives
- Identify milestones and deliverables
- Schedule the implementation
- Conduct cost analysis
- Outline and available resources for efficient implementation
- Develop project performance analysis methods
- Assess possible risks and mitigation strategies
- Develop a communication plan
Implement the chosen solution according to plan
- Measure the outcomes
- Determine what objectives were achieved
- Identify the barriers to implementation
- Note successful practices
- Recommend further improvements
While the WBS provided above was used to create a detailed delivery schedule using MS Project. According to Polianskii and Chukalova (2020), the utilization of specialized software facilitates communication and helps all stakeholders access the plan at any given time. After scheduling procedures, the project was determined to start on September 1, 2020, and end on July 27, 2021. Figure 1 below demonstrates WBS, as seen in MS Project 2016.
As seen in Figure 1, some of the activities presented in the WBS overlap. According to the empirical data analysis, one of the most efficient tools for controlling the overlaps was the methodology of creating a Gantt chart (Sharon and Dori, 2017). Gantt chart is a visual representation of the tasks allocated on the project’s timeline (Project Manager, 2017). The major job of the Gantt chart is to define where these activities should be placed on the calendar to finish the task as soon as possible (Robles, 2018). Considering such a high dependence on the activities’ symbiosis, it becomes clear that once one of the tasks is getting out of control, the whole project paradigm is affected significantly. Gantt chart, in its turn, is the best way to allocate major tasks in one timeline paradigm.
MS Projects creates Gantt charts automatically for all projects, which is another advantage of using specialized software for project management. However, the program has one significant disadvantage that may result in the incorrect critical path and slacks calculation. A critical path is “a sequence of stages where you figure out what the least amount of time is necessary to complete a task with the least amount of slack” (Ray, 2019, para. 3). CPM is a way of estimating the least duration frame for each task of the project, taking into account the probability of this activity’s major slack time (Effendi and Sarno, 2017). In such a way, the project’s timeline is created considering the potential delay due to some external factors and slack. The critical path method requires an accurate articulation of predecessors. In reality, there may be several predecessors for one task. However, MS Project allows including only one predecessor for every task. The Gantt chart for the present project is demonstrated in Figure 2 below. In the figure, red bars mark critical tasks.
A network diagram is another way to overview the project. Network diagrams incorporate PERT and Gantt charts to create a comprehensive visual representation of a project (Sinaaps, no date). Network diagrams use arrow and node method to identify dependencies in a clear manner and allow all stakeholders to grasp the project in its entirety (Sinaaps, no date). MS Project creates network diagrams automatically using the information put in the WBS. Network diagrams are usually sizeable and make take up several pages to be readable. The network diagram for the present project created using two juxtaposed screenshots is demonstrated in Figures 3 below.
The financial aspect of project management is one of the most significant pillars of the project’s potential success. While being closely interrelated, the cost and timeframe of the project determine the stakeholders’ perception of the future outcome. In terms of the following project initiation, the emphasis should be placed on the financial aspect of the campaign, as it serves as a major advantage in today’s market and a growth development factor (Maher, Fakhar, and Karimi, 2018). Furthermore, the financial advantage of the project is also predetermined by the relevance of the brand name, allowing the enterprise to find large-scale investors who already trust the brand. Hence, the major attention in terms of the planning stage should be drawn to the process of negotiating with potential investors and major Toyota’s stakeholders.
Once the negotiations are over, it would be possible to draft the overall project cost, which would later be allocated according to the project’s milestones. Another important aspect to consider when defining the budget is the approximate end cost and revenue of the product (Foster, 2017). However, the present project is associated with a significant degree of uncertainty, as it is unclear what flaws the assessment team will discover what solutions will be suggested. Thus the technique that should be used is to apply the budget baseline model, which is a template used to plan the budget for an upcoming project (Business Dictionary, no date). MS Project can calculate the cost of the project automatically if the project manager inputs all the resources and allocates them to tasks.
The present project was identified to need several resources to accomplish. First, the project manager is required in order to coordinate all stakeholders to achieve the ultimate goal of improving operations. The salary of the project manager was estimated to be $40 per hour (Project manager II salary, no date). Second, the project requires an executive finance manager with an hourly pay of $30. Third, an HR manager with a salary of $30 per hour was also considered crucial for completing the project. Fourth, and R&D and assessment teams were included in the required resource with an hourly pay of $300 per team. Fifth, the resource sheet in MS office includes necessary office supplies with $200 per use cost. Finally, the resource sheer includes the “implementation cost” line, which is estimates the money needed to implement the developed solutions. The cost was estimated to include 5% of yearly R&D spending of the company, which is 1.1 trillion Japanese yen, which is almost $10.5 billion (Statista, 2020). However, the majority of this cost is included in variance rather than baseline costs. The resource budget baseline view from the MS project is presented in Figure 4 below.
MS Project creates a budget automatically using the data put on the resource sheet and the resource allocation information in the Gantt chart. All the cost, however, is automatically allocated to variance, while the baseline cost needs to be entered manually. Figure 5 below demonstrates the baseline budget with variance depending on the identified changes needed to be implemented, and the actual time spent on the tasks. According to the calculation, the total cost of the project is estimated to be $500,267,720, with $100,138,000 in the baseline budget and $400,129,720 in variance.
Key Performance Indicators
In order to control the ways in which the project desirables are done, the project manager is to identify the measurable ways to calculate the project’s success and individual growth rates. The most appropriate way to define this progress rate is to develop the system of the key performance indicators (KPIs). According to the researchers, KPI is an indicator of the activities of the unit (enterprise), which helps the organization in achieving strategic and tactical (operational) goals’ (Lagodiienko et al., 2019, p. 1304). The KPI measurement should be applied to both the project activities and the employees’ performance growth. The basic requirement for the model application is to establish the measurable indicators that could be potentially calculated.
The KPIs for the present project are difficult to quantify, as there are no specific numerical targets that should be achieved. However, there several KPIs that can be sued for the present project. Table 1 below provides recommendations that can be applied to different participants. The KPIs were selected from the list provided by KPI Library (2017).
Table 1. Suggested KPIs
|Suggested KPIs|| || || |
Value-based metrics (VBMs) are financial measures that focus on assisting managers and investors in understanding if the company is improving its performance or losing money (Weiner, 2017). The purpose of the present project is to improve the overall financial performance of the company by optimizing the operations. Optimization of operations is possible only be decreasing wastes using best practices and innovation. Thus, the central value-based metric for the present project will be to decrease the cost of operations. According to Yahoo Finance (2020), the cost of revenue for Toyota corporation was over 24.5 trillion Japanese yen, which is more than $231 billion. Considering that the total revenue was 29.9 trillion JPY, the profit margin ratio was 18% (Yahoo Finance, 2020). The reduction of the cost of revenue will result in profit margin ratio growth. For instance, a cost reduction of 5% will make the profit margin increase by 5%. Thus, the central VBM for the present project will be the profit margin ratio measured in 2023. This metric will also help to calculate return on investment in the project. The suggested aim of the project is to improve profit margin ration by 1%, which will result in a $2.31 billion additional net income.
The overall aim of the project is to improve operations management while continuing to manufacture high-quality, financially successful products. The overall success of the product could be measured with the help of the following major automobile aspects: visual design, functionality, comfort, and safety. When it comes to the hybrid vehicle’s production, however, the attention should be drawn to the customers’ maximum satisfaction, because today’s market rather favors fully electric cars. For this reason, the prices of the vehicles have been rapidly decreasing over the last years in order to attract new target audiences (Weiss, Zerfass, and Helmers, 2019). Thus, the purpose of the optimization of operations is to find a consensus and decrease the cost of production of hybrid cars.
According to Lynch and Cross (1991) Performance Pyramid, the central concern of the project is its alignment with the corporate vision. Toyota’s vision is to lead future mobility society through sustainable development practices and exceeding expectations (Toyota Motors, no date). The goals and objectives of the project adhere to the vision statement of the company; however, it is the project manager’s responsibility to assure that the implementation process and the outcomes comply with the vision statement. After that, the project manager needs to make sure that all the activities add to the financial success of the company (Lynch and Cross, 1991). The next in the hierarchy is customer satisfaction, and the least important is waste reduction (Lynch and Cross, 1991). Overall, Lync and Cross Performance Pyramid are presented in Figure 6 below.
Balanced Score Card
Balanced Score Card (BSC) is one of the most widely-used performance analysis metrics. It allows the project manager to look at the project from four different sides: financial, customer, learning and growth, and internal perspectives (ACCA, 2017). Table 2 below provides a detailed BSC that can be applied to the present project.
Table 2. Balanced scorecard
|Customers|| || |
|Internal business perspective|| || |
|Learning and growth perspective|| || |
|Financial perspective|| || |
Risk, Communication, and HR Management
Risk management is a core aspect of any project that aims at achieving maximum results. Researchers claim that the notion of risk management stands for the process of estimating the project’s values that later mitigate the probability of potential failures (Willumsen et al., 2019). In order to secure the project’s success, the project manager, along with the team, is to make sure that the agile framework can adapt quickly to changes in terms of both human and financial resources. The possible risks for the present project are associated with a high degree of uncertainty around the cost and the timeframe of the project. Thus, there is a high probability of lagging behind the schedule or going over the baseline budget.
The risk of going over the budget was identified on the stage of planning the implementation. In order to control for possible risks, a flexible budget was created with a significant degree of variance in cost for the most unpredictable stage of the project (see Figure 5). However, the project manager will still need to assess adherence to budget on the bi-weekly basis to control for possible discrepancies. The same type of control should be applied to controlling the timing of project deliverables.
Another important managerial aspect of the project is closely correlated with the communication patterns with stakeholders as well as within the working team. The communication plan is provided in Table 3 below.
Table 3. Communication plan
|Stakeholders||Project team, clients, R&D department, Toyota top managers.|
|Project team||Project manager, finance manager, HR manager, R&D team, assessment team.|
|Communication methods||Trello, Slack, Zoom, face-to-face meetings|
|Communication types||Online chat among team members, online conferences with team members, online conferences with key stakeholders, task management updates in Trello with team members, face-to-face meetings with team members, face-to-face conferences with key stakeholders.|
|Communication style||Informal among team members; formal when talking with an extended circle of stakeholders.|
|Communication goal||To exchange information concerning the implementation of the project in the most efficient manner.|
|Communication schedule|| |
The collaboration with the employees and tracking the workers during the whole project implementation period is crucial for potential success. Hence, the HR management needs to learn how to control all the behavioral patterns of the team members so that everyone would feel the support and profound knowledge of one’s job description. They must develop personal growth plans for each employee, which will increase their motivational mechanisms. In terms of the following project, the HR management would establish a schedule for the evaluation sessions that aid precisely follow each step of the manufacturing process and eliminate any possible inconveniences in the early stages. KPI report analysis will help the employees keep track of their work progress and set clear goals for their career development.
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