Factory Physics, Inc.

How To Save Billions of Dollars With Operations Science for Project Management

There is a crisis in the management of mega projects. Companies spend billions of dollars on energy and civil construction projects which are chronically late and over budget. Fortunately, the visionary leaders of the Project Production Institute are applying the principles of operations science described in Factory Physics and Factory Physics for Managers to successfully address the problem.

The solution centers on overcoming the deficiencies of traditional project management techniques by applying operations science to treat projects as a special case of production systems. All production systems are governed by the fundamental relationships governing capacity, inventory, response time, variability and cost. Mega projects are no exception. In the newly published Volume I of the Journal of Project Production Management are a number of great articles detailing this revolution in project management.

The first article by Todd Zabelle and Dr. Ram Shenoy, New Era of Project Delivery – Project as Production System, clearly and practically describes how project management reached its current state of crisis and how project management must evolve to overcome the massive waste that is all too common in today's mega projects. The same concepts apply to any project management effort, large or small.

Abstract for New Era of Project Delivery – Project as Production System
Project management can be viewed as having developed over 3 distinct time frames, or Eras, in response to the evolving nature and needs of projects over time. Viewing project management through the framework of the 3 Eras provides a number of useful insights described in this article. Conventional project management, as codified by the Project Management Institute, spans the first two Eras. It has two fundamental gaps, preventing the satisfactory management and execution of today’s complex and dynamic capital projects. Understanding these gaps explains why some traditional responses to recover from cost and schedule overruns in projects do not work. We describe how Project Production Management (PPM) provides the two missing elements of conventional project management. We conclude with the perspective that PPM ushers in a new third era of project management to address today’s complex major projects operating in dynamic environments.

The journal contains a number of fascinating articles covering this vitally important opportunity. To see them, click here to visit the Project Production Institute's website. A simple sign-in is required and then click on Resources/Journal. There is also an article from Factory Physics Inc., From Factory Physics to Project Physics, relating the fundamental concepts of operations science to project management. -ESP

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