Running head: ORION SYSTEMS

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

January 22, 2012

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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 15 engineers who were led by a team

leader. ORION is facing some key changes in their structure in preparation for the Jaguar

project.

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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 defects and

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 final product 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

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project development. With these recommendations implemented ORION will be able to deliver

an on-time quality product to its customers.

New Master Plan and Organizational 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 ranks

high in a lot 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 produce

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. ORION’s project teams will need to be involved in the project until the product

reaches the customer. They will also need to have continued support for the customer after the

product is delivered. 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 currently executes

its projects. For this 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.

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They will also be involved in the manufacturing process as well. 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 in all areas of the project.

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 and aid in lower product defects.

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.

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A new chain of command needs to be established by adding additional functional

managers. A clear line of authority needs to be recognized 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 an improved 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

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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 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

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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

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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 new improvements should help the new project be more efficient.

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. All employees should be

briefed prior to the planed roll-out so they understand their expectations and responsibilities.

Within the current scheme at ORION, they use the matrix approach to project management. This

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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.

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. But the new changes should bring higher productivity, eliminate looming

issues, and hopefully secure more government bids in the future.

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

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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.

When these changes are implemented by ORION Systems the future will be paved with project

success after success as we will see with the Jaguar project.

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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.