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*What Went Worng*??…………. The reality is that if project sponsors do not start out with an understanding of project management and its processes, the probability of such things happening are surprisingly high. Miles Faster jumped at the opportunity to get involved and decided to change the production train specification to increase capacity. Because of this, the software program had to be mostly rewritten, severely limiting Leadbetter’s time for managing the project. It also resulted in errors requiring increased debugging at startup.
Neither Moneysworth nor Leadbetter was conscious of the need for any review and approval procedures for specifications and shop drawings submitted directly by either S;P or by Eddie Forgot of Piecemeal Corporation, the suppliers of the production train. In one two-week period, during which both Faster and Leadbetter were on vacation, the manufacturing drawings for this critical long-lead equipment sat in a junior clerk’s in-tray awaiting approval. For this reason alone, the delivery schedule slipped two weeks, contributing to a later construction schedule conflict in tying-in the new services.
Another difficulty arose with the paint shop because the local inspection authority insisted that the surplus paint disposal arrangements be upgraded to meet the latest environmental standards. Two years after the project was first launched, the time to get the plant into production rapidly approached. However, neither Moneysworth nor Leadbetter had prepared any meaningful planning for completion such as owner’s inspection and acceptance of the building, or testing, dry-running and production start-up of the production train.
They also failed to insist that EID obtain the building occupation certificate. Moreover, due to late delivery of the production train, the “tie-in” of power and other utility connections scheduled for the annual two-week maintenance shut-down could not in fact take place until two weeks later. These factors together resulted in a loss of several weeks of production. Customer delivery dates were missed and some general contractors cancelled their contracts and placed their orders for millwork elsewhere.
Finished goods inventories were depleted to the point that other sales opportunities were also lost in the special products areas on which Woody’s reputation was based. Costs arising from these and other changes, including the costs of delays in completion, were charged to Woody’s account. Project overrun finally became reality when actual expenditures exceeded the budget and it was apparent to everyone that the project was at best only 85% complete. Cashman was forced to scramble for an additional line of credit in project financing at prime plus 2-1/2%, an excessive premium given Woody’s credit rating.
From then on, Woody’s were in a fire fighting mode and their ability to control the project diminished rapidly. They found themselves throwing money at every problem in an effort to get the plant operational. During Woody’s period of plant upgrading, construction activity in the region fell dramatically with general demand for Woody’s products falling similarly. Even though Sharpe launched an expensive marketing effort to try to regain customer loyalty, it had only a marginal effect.