Supplier Management In Troubled Projects

1. Supplier Management In Troubled Projects Christopher L. DennisSteaming Kettle Consulting December 5, 2008

2. Our Scenario • You are summoned to a meeting… • Grave boss Grave situation Will you fix it? Steaming Kettle Consulting

3. You can enhance your ability to resuscitate troubled projects when you Make accurate diagnoses Triage efficiently, and Cultivate good bedside manner

4. Many Scary Questions Should we even try? Can the problem project be saved? Can the problem project be saved? Do we know the real problem? Can relationships change to accommodate an altered scope? Are suppliers part of the problem? Steaming Kettle Consulting

5. You can increase suppliers’ contributions to project recovery when you • Localize the source of troublesome symptoms • Deepen understanding of team/supplier relationships, and • Uncover suppliers’ secret power

6. Project Team Material supplier Raw or Finished Corporate Purchasing IT Service bureau Design Marketing Project Suppliers In Group OutGroup Steaming Kettle Consulting

7. Where Are Vendors Entangled? • Work breakdown approach • Leverage existing project documentation • Comfortable for experienced PM • Value stream approach • Leverage existing process documentation • Comfortable for lean and 6S Steaming Kettle Consulting

8. Project Pathogens • Inadequate information • External events • Unclear or wrong goals • Unproven technology • Inadequate resources • Failure of communication • Failure of management Steaming Kettle Consulting

9. Example Work Breakdown New Bicycle WBS 1.MarketResearch 2. Design 3. Prototype 4. Market 5. Transferto Prod. CustomerInterviews Frame Build DesignCampaign SourceNew Parts CompetitorSurvey DriveTrain MechanicalTest RecruitNew Retail ModifyLine FinancialAnalysis Finish MarketTest TeamSponsorship AlterDistribution Steaming Kettle Consulting

10. Step 1: ID Troubled Work New Bicycle WBS 1. MarketResearch 2. Design 3. Prototype 4. Market 5. Transferto Prod. CustomerInterviews Frame Build DesignCampaign SourceNew Parts CompetitorSurvey DriveTrain MechanicalTest RecruitNew Retail ModifyLine FinancialAnalysis Finish MarketTest TeamSponsorship AlterDistribution Steaming Kettle Consulting

11. Step 2: List Vendors for TW New Bicycle WBS • As you list, look for • Repeating names • New relationships • New services/ materials Prototype Steel Stamping West Welding Ironworks, Inc. Build Sensors ’R Us Wild Ride West Welding Data Bucket MechanicalTest Steaming Kettle Consulting

12. Step 3: Map Symptoms • Common symptoms • Delivering nothing • Delivering garbage • Delivering late • High costs • Eliminate asymptomatic Steaming Kettle Consulting

13. Did project teamset up trouble by…? Failing to deliver Delivering garbage Delivering late Passing on costs Dependencies Evaluate input quality Step 4: Localize Symptoms FixedUnworkableDesign ProjectTeamDelay NoExcuse Steaming Kettle Consulting

14. Diagnosis Checklist • Troubled work packages, prioritized • Critical path • List of vendors • Symptomatic relationships • Localized symptoms • Root cause helpful but not necessary • May never know root cause • To increase contributions • Must know the now contribution Steaming Kettle Consulting

15. People Quality of interaction Statement of Work Is it working? Deepen Understanding of Team/Supplier Relationships Steaming Kettle Consulting

16. Supplier Relationships • Sales • Contracting • Leaders • Information Exchange • Material Exchange • Feedback/compliance • Payment In Group OutGroup Steaming Kettle Consulting

17. Step 1: Diagram Relationships Be Clear AboutVacancies RecognizeKnowledgeGaps Steaming Kettle Consulting

18. Step 2: Quality Assessment • Look For • Silence • Fear • Fatigue • Disinterest • Overload • Misunderstanding • Surprise • Your insight… • Assessment worksheet • http://steaming-kettle.com/… Steaming Kettle Consulting

19. Step 3: Collaborate on Adjustments • Consider • Goal alignment • Role clarification • Strategic awareness • Personnel swaps • Their ideas • Remember, their engagement and action is a contribution Steaming Kettle Consulting

20. Revisiting SOWListen First • Problems you might not know about • Fresh solution ideas • People are more likely to implement ideas they own Steaming Kettle Consulting

21. Revisiting SOWChoosing Words • Get rid of “win-win” • You’re asking for more • Supplier indicates a win for them • Use questions to generate possibilities • New possibilities are a significant contribution Steaming Kettle Consulting

22. What false or outdated assumptions are we operating under? Steaming Kettle Consulting

23. Help make the impossible possible What in the SOW is preventing us from implementing a brilliant idea? Help remove the frustrating obstacles that prevent creative ideas from being implemented. Steaming Kettle Consulting

24. How is the SOW inhibiting delivery? Steaming Kettle Consulting

25. Be Wary: Truth May Hide • Vendor Relationships 7 Steaming Kettle Consulting

26. Avoid rash action Before divorce Consult your consul Calculate the total costs Including your consul Reassess risk Getting Out Steaming Kettle Consulting

27. Fulfill vendor promise Review scope of work Do something spectacular Unveil vendors’ secret power What contribution is needed? To increase suppliers’ contributions to project recovery… Steaming Kettle Consulting

28. Contribution’s Benefit • Why should a vendor increase their contribution? • They can sell it to the next customer • Ensure vendors a real benefit • Whole-hearted endorsement • Ownership stake Steaming Kettle Consulting

29. The Power of “Wow!” • Use end-of-project viewpoint • What will your organization say after the contribution? • What would the vendor put on their web site after the contribution? • Use “Wow!” to open up possibilities • Fear constrains thinking • Break everyone’s mind set Steaming Kettle Consulting

30. Wow! We made up four weeks using their embedded systems programmer! Steaming Kettle Consulting

31. Wow! When our GIS provider folded, they took up the slack in less than two weeks! Steaming Kettle Consulting

32. Wow! A great power supply design! On time and 20% savings! Steaming Kettle Consulting

33. Engage Your Team in Wow! “What incredible invention would make this job much easier and the project more productive?” Steaming Kettle Consulting

34. Your Mission: Three Wow! Statements • Look back after recovery • Hear your sponsor’s voice • Imagine a vendor’s marketing flyer • Think big, smile, laugh at your outrageousness • 3 minutes Steaming Kettle Consulting

35. You don’t know who has the secret power Every vendor Vendor’s vendors Vendor’s consultants Personal, personal, personal Secret powers revealed by trust Engage the team Getting the Message Out Steaming Kettle Consulting

36. Starting the “Secret Power” Conversation Why do you ask? “What do you dothat we don’t know about?” We searching for a partner to… Steaming Kettle Consulting

37. Guam Networking Example • Objective: debug network for new billing system (33% packet loss, billing system >$1M) • Trouble: IT staff unable to make go-live deadline • Solution: • Champion overtime • Marshal local forces and equipment • Institute rigorous testing and replacement program • Outcome: network available (<0.1% packet loss) on time • Cost: ~15% of total budget Steaming Kettle Consulting

38. Converting Revelation to Contribution • Vendor Solutions 6 Steaming Kettle Consulting

39. Summary, Conclusions, Q & A1 Steaming Kettle Consulting

40. Summary, Conclusions, Q & A2 Steaming Kettle Consulting

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43. Steaming Kettle Consulting Email: chris@steaming-kettle.com Phone: 503-803-7627