The Big DigAny project that involves tunnelling is risky. Any project that involved tunneling under a city whilst trying to keep that city fully operational, is very risky. When that city is Boston in the USA, it is in a risk category all of its own. This does not, however, excuse the financial performance of this project, the results of which are exceptional and even make the performance of previous 'stars of disaster' such as the Channel Tunnel, look good.

During the 1950s, the Commonwealth of Massachusetts commissioned new roads as part of a national road-building frenzy that took place at that time. The result was. a partly elevated freeway that cut the city off from its old harbour and over time coped increasingly less well with the volumes of traffic that were trying to use it. For many years, the project had been the subject of much politicking and had been rejected by a number of national administrations. In 1993, it was given the go-ahead.

At this time the budget was $US2.6 billion, an enormous sum of money for an I-mile tunnel, but given the technical complexity of the task, this was considered acceptable. Gradually the costs rose, until in 1998, the estimated final cost was $10.4 billion. By mid-2000 this had risen to $13 billion and by mid-2001 to over $15 billion. It was still considered a technical success. but both ~oliticallva nd economically,it was a disaster. In project management terms it is also a disaster – a 500 per cent-plus overrun on budget can only be described as 'talented'.

How did such a financial disaster occur? The first is a feature of many large 'political' projects - that the 'real cost' would not be politically acceptable. The original budget was deliberately deflated to make the project happen. The second is technical risk - that of the tunnelling process. The ground through which the tunneling is being carried out is reclaimed land that was originally under the sea. The tunnelling process being used was also new, presenting a degree of technical novelty.

Case discussion1 How might the project be considered a technical success but an economic, politicaland project management disaster?2 Suggest how the 500 per cent-plus overrun might have come about.

A new campus for the University of Rummidge (with apologies to David Lodge)

In May 1999 a chance meeting between the leader of the town council of Splot the Vice-chancellor of the University of Rummidge started a project that would lead to the opening of a new campus in Splot. This appeared to be an ideal opportunity for both parties - the university was unable to expand further on its existing site due to local planning restrictions. This was despite having a well-known brand-name in the market, particularly for management education.

The town was in the process of applying to become a city – a status that would confer additional prestige on the area, and almost certain political success for whoever could make it hrppen. It hamem the recipient of around €4 billion of investment in recent years from leading-edge companies in the automotive and electronics sectors. These new firms were providing a major demand for a wide variety of higher education services that the existing institutions were incapable of providing. Local unemployment was virtually zero and firms were having problemsrecruiting for all types of work.

A number of opportunities presented themselves to the Splot council (see below for organisational structure). These included setting up their own university, in conjunction with local businesses, and accessing a remote provider through a virtual campus. The first was rejected on the grounds that they did not have the expertise to do this, and the second on the basis that despite the low unemployment and prevalance of high-technology industries, the majority of the people of Splot did not have Internet access. The availability of school premises in the middle of the town, which could be readily converted into a campus and which was in an area prioritized for redevelopment, sealed the decision. Shutting down the school was a decisioneased by the falling numbers of pupils. For the University of Rummidge, there were likewise other options. Expansion into areas that would relieve the dependence on government funding was always a priority, and operations beyond the physical limitations of the campus were increasingly attractive. Internet-based activities were an option for investment, but there were other initiatives in place to promote these. In addition, forming direct relationships with one or more of the large companies in the area for provision of inregrated higher education senices was considered. The university's management team favourably viewed the opening of a new campus.

In order to progress the work, a joint venture organisation entitled 'The University of Rummidge in Splot' was established with the brief to '. . . explore all the various options that will permit the establishment of a permanent and physical presence by the University of Rummidge in Splot'.The joint venture organisation reported in September 1999, recommending to both the university and the council that the school premises be converted ready for courses to be run in September 2000. A budget for the conversion of the premises and establishment of the campus (including provision of library and lT facilities) of €15 million was suggested and funding was underwritten by both organisations, subject to grants being approved from central government and sponsorship being obtained from local,companies.

It is September 1999 and the main part of the project is now about to start. Academic staff at Rummidge are not impressed by this move as much of the negotiation has taken place without their input. Moreover, Splot is around a one-hour drive from Rummidge, traffic permitting.

There are also significant reservations about the location of the campus in a relatively run-down district of the town, and whether there will be sufficient buy-in from local people to make it worthwhile. In addition, there was debate as to whether courses (both undergraduate and ~ostgraduatew) ould be run at both sites, and whether there would be resources available to assist with the workloads of the departments (both academic and administrative) caused by the new courses. Some of the administrative departments were also unclear as to how the new campus would affect their workloads. The organisauonal structures are shown in outline in Figures 3.8 and 3.9.Case questions1 What are the strategic objectives for each of the organisations involved? Arethere any conflim in these objectives?2 There are many projects that will be taking place in the process of opening thenew campus. How might running them as a programme help the chances ofsuccess?3 How might a project office be of use in this case?4 What would appropriate success measures be for the project?

Fast-track product redevelopment at lnstron

BackgroundInstron designs and manufactures machines for testing the properties of all types of material. One particular plastics testing instrument has been selling around 250 units per year worldwide. In 1992 at the height of the recession, with margins being squeezed and sales volume dropping, Instron decided to redesign the instrument to reduce its cost and make it easier to manufacture.

The project

Instron began to undertake change in the late 1980s, which included a programme to institute concurrent new product development. This was accompanied by pressure for cost reduction, the introduction of manufacturing changes, and the breaking of the firm into business teams.Due to this highly transient and changing environment, there were few restrictions on the way the redesign project had to be handled. It was one of the first projects in Instron to be run from the beginning as a concurrent engineering project.

A small multi-functional team was formed, consisting of a manufacturing engineer, a design engineer, a marketing engineer and a draughtsman. The design brief was to improve the ease of manufacture of the product such that a cost reduction of 20 per cent could be achieved.The team was co-located in an area adjacent to the manufacturing facility. Although there was some initial resistance, the comment was made that 'they don't know how they ever worked without it'. The ease of communication and sharing of ideas became a more natural part of working life.

Adverse effects

The principles of concurrency were, in general, favourably accepted by departments downstream of the design process (manufacturing, shopfloor, service) and, with some notable exceptions, unfavourably viewed by the design department. Individuals had concurrency imposed on them in the initial projects selected; first-line managers had decided that it made good business sense, and that it would be tried out. Senior management staff were selected as champions of the cause, with the objective of overcoming the resistance to change that existed. This came in anumber of forms:1 passive resistance - summarised as 'don't show reluctance to apply the newideas, attend all the group meetings, nod in agreement, then carry on as before';2 active resistance - 'do what you like, but don't ask me to do it';,3 undermining the initiative - through overstating the apparent problems.

It was not surprising that this resistance existed: people were uncertain about changes in the authority of the designers, an apparently higher workload, compromised design solutions for the sake of manufacturability, unqualified (in design terms) manufacturing engineers having a major input in designs, and the role of the engineering manager being threatened. There were further worries for all concerned, however. These included reduced product performance, loss of personal contacts (resulting from resiting people), loss of key individuals (who would leavethe firm) and higher management overhead. They began by carrying out brainstorming sessions with manufacturing engineers,

buyers, members of the shopfloor, suppliers and additional design engineers, to find new and innovative ways to improve the product. The outcome of these investigations was to draw up a list of areas where improvements were thought possible.

The benefits achievedThe results of this team's actions were: cost reduced by 49 per cent;product range rationalised from 12 to 2 versions; unique part count reduced from 141 to 98 (fewer parts to plan, purchase, stock and handle) and total number of parts reduced from 300 to 189 (much reduced assembly effort);assembly/machining time reduced by 55 per cent; project completed on time, with last version being released in April 1994. Once operational, few problems were encountered and those that did occur were minor in nature. The success was attributed by the firm to two decisions:the selection of the right project - one that made it easy to demonstrate concurrency;the selection of the right people - those who were prepared to be open-minded and have some enthusiasm for the changes.

The company now views this as a simple project that restored the profitability of an established product through the use of innovation, ingenuity and new design techniques by the whole concurrent team. What is also clear is that the product was subject to technical change in only one area -the materials used. The other benefits have all been due to the approach that the firm's management has taken to its new product development (NPD) process. The firm felt that the project has been a success and that this method of working would become an institutionalisedmethodology.

Case discussion1 What is the evidence to support the claim that this project was a success?2 Identify the steps the firm took in this project. How did this contribute to thesuccess?3 How might the main adverse effects be identified and countered?4 The firm attributed the success to the choice of project and the people selected tocarry it out. If a similar way of working is to be more widely adopted, whatmight usefully be done to ensure that other projects are similarly successful?

Balhur Beany introduce critical chain project management

Balfour Beatty is a large PLC within the construction sector. The case is divided into two parts - the overview and a more detailed consideration. The involvement with the TOC approach starts in 1995 as part of the efforts of their BusinessImprovement Team. The case charts their experience of the method through to how it is being used today.

The overview

The Business Process Improvement Team identified the possibility of using the approach outlined in The Goal in early 1995. During April 1995, two of the team leaders attended the Goldratt Institute's Management Skills Workshop (MSW). They did much analysis of the problems that the firm was facing, including the core ~robl emth at 'We don't work to programme'. Projects were regularly delivered late; indeed it was noted that late delivery was expected in the industry. Focusing on their project, they used the problem analysis techniques on the sub-projects in which each of them was involved. They came up with a new approach that was termed 'programme management', which eventually led to what we know today as'the critical chain'.

In order to make the new approach work a number of senior people went on a two-day programme at the Goldratt Institute in September 1995 to train them in the methods. They returned to work on the A13 project (5.2 km of dual carriageway including three major viaducts, two major junctions and various environmental challenges), which was already under way, but setting up a new 15-month programme.

The methods used to support the approach included creating six multifunctionalteams who were tasked with working out their own schedules. These were integrated by the site engineer to allow calculation of the critical chain. The outcome of the project was considered a major success for the company. Over the 15 months of the programme, the firm achieved more than 95 per cent completion of weekly schedules despite significant changes introduced by the client during this period. This compared with an historical average nearer 50 per cent.

Other bonuses came in the form of considerably reduced weekend working. The logic for this was simple - don't work overtime where buffers are not under threat. Weekend working was a feature of the industry, and its reduction had a number of beneficial knock-on effects. These included:increase in labour productivity;reduction in accident frequency rate;the job receiving commendation from the client for its high quality. In addition, as the project was performing so well, staff and contractors achieved their targets and were paid bonuses. In many cases this compensated them for the reduction in overtime.

It appeared that the scenario promised by TOC - that of win-win - had materialized on this project. As commented by Barber et al. (1999), 'It [the TOC approach] is not the only approach, but it did prove effective in this instance'.

On this basis, it is often taken that the method should be applicable elsewhere and that the successes are therefore imitable. Further consideration of the case reveals that there are many other contingent factors that should be included in any analysis. These include some consideration of the overall impact on the business since the original implementation.

Further consideration

The issues were revisited with the firm during 2000. This permitted a longer-term view of the approach to be established. It will be shown that despite initial successes, the method ran into heavy resistance, and that the resources which enabled the success were subsequently removed.

During the Management Skills Workshop the participants learned the basics of applying a structured logic approach to the problems that they faced, for identification and solution. These were used by the teams running the project. The project manager commented that this had removed the excuses for poor performance within the teams and had changed the mindset from that of 'we always run late' to that of 'we can complete on time'. However, there were a number of challenges that were faced in this project. The first was that there aras only a six-week buffer at the end of the project. This represents only 5-10 per cent of the schedule and is considerably less than recommended for this method of planning (this does not imply non-lean planning - as noted above, simply the 5050 ear1y:late risk).

Second, there was no software available at the time to assist in the planning, requiring a mixture of manual planning and extensive use of 'dummies'. Third, the buffer became a resource for shortening the project for senior managers who did not understand the approach. Given that the stated objective was to '. . . sell the idea that we could complete on time and show the effect of client changes on the schedule' this was particularly counter-productive.

In addition, it required a change in the role of the managers on the site. As the project manager commented, 'it is an information tool - it provides you with the information on which to react. The programme is there to plan management actions, not just construction events.' Furthermore, 'An important part is how you react to the news that the buffer is being shrunk and you have to spend some money'. Given that this was new, many of the middle managers on the sites felt exposed by the approach. On-site, one of the senior foremen commented: 'I thought that this was what we were supposed to be doing anyway,' indicating that at an activity level the changes were not significant. In the scheduling of resources, particular changes worked well. These included achange in the way that priorities were allocated. The project manager cited the example of the batching plant and the temporary works coordinator, both of which could be bottlenecks in the process. While there were several calls on the batching plant for concrete each day, only one or occasionally two could be handled at any one time. Those that received priority would regularly be those associated with 'those that shouted loudest'. Under the new approach, the highest priority was given to the job associated with the activity with the shortest buffer. In addition, thetemporary works coordinator would always have a backlog of work, but now this was prioritised by buffer length associated with the activity.

Other changes were also made. These included: delayering the management structure - there were only three (maximum four) layers between the project director and the workforce; the

cross-functional teams (maximum size 12 people); team leaders chosen for leadership rather than seniority or technical prowess; changes to assessments to reflect the need to manage not only an individual'sown area of work but also how these interface with others; supporting actions were demonstrated for the changes that were being made through the 'transition trees' (termed 'action plans' at the firm).

It took 2-3 months to get over the problems of buffer conflicts and the new way of resolving them. The changes were supported by a weekly 'critical events meetingat which each of the team leaders presented their own programmes. There was agreement not to change any activities due to the likely impact on resource constraints once the programme had been fixed. Feeder paths became separate projects in their own right.

Subsequent to this, the approach was implemented on their next project – the A30lA35. The project manager was not convinced and there appeared to be a considerable resistance to the approach, consistent with a not-invented-here mentality.

The notion that 'we've been doing it for the last 20 years and we've never finished on time' prevailed. The project was not completed on time. Today, the firm is involved predominantly in joint ventures and so is not able to put the TOC approach into practice. In addition, the original business improvement team was disbanded by a new managing director, the firm losing the knowledge as well as the resource to implement the approach.

Case 1 What is the evidence to support the claim that this change was a success?2 Identify the steps the firm took in this project. How did this contribute to thesuccess?3 Why would the removal of the supporting resource cause the method to be usedin subsequent projects?