A Troubled Project at Modern Materials, Inc.

Cheng Zhao (D10347652)

A Troubled Project at Modern Materials, Inc.

ITM R 6:00pm-10:00pm FALL 2014

Date: 11/26/2014

INTRODUCTION

Modern Materials, Inc. (MMI) manufactures products that are used as raw materials by large manufacturers and the construction industry. With yearly sales exceeding $3 billion, over 10,000 employees, and four large manufacturing facilities in the United States, MMI is one of the giants in the manufacturing materials industry. Two of the facilities produce basic products and the other two process these materials further to produce products with special properties and shapes.

MMI has lost money in two of the past five years. Furthermore, at this time it looks like the year 2003 will be worse than 2002. MMI went through a wrenching downsizing in 1998 that has left the remaining workers stretched thin and working at a hectic pace.

ISSUES/PROBLEMS

• Employees’ attitude on radical business process reengineering.
• Lack of customer service management system.
• Leadership of project step down.
• Infeasible tight schedule.

In 1995 Harvey Woodson was hired from a smaller competitor to become executive vice president for quality at MMI. And he believed that outstanding customer service could make MMI stand apart from its competition. Providing outstanding customer service depends upon excellent supply-chain management

United Consultants Associates (UCA) was charge of definition requirement, designation of system and program specification, and assistance on business process reengineering for MMI; and then STC an outsourced IT company would code and test new system, and install it around company. The SCMS project was planned to take three years at a cost of $60 million. Woodson had been through this process before, and he knew that radical reengineering was necessary to achieve the dramatic improvements in customer service that MMI was seeking. He also understood that radical reengineering was terribly hard to accomplish because it would require enthusiastic participation by workers who would have to make radical changes in how they did their jobs, and that degree of change is hard for most people. Therefore, he spent lots of time to generate enthusiasm and support for project, including making explanation on how important an outstanding customer service is, encouraging employee to give best efforts to project, and coerce people by using clout.

In 1998, just as the project was getting started, the industry was hit by a serious downturn, and MMI was forced to reduce its workforce by more than 8 percent. And as the remaining workers had to assume the duties of those who were downsized, it was difficult for them to find the time to get involved in reengineering and defining requirements of the system. UCA who was responsible to design system and develop program specification based on needs of end user and understanding of business began to make designation based upon what they thought, rather than collect information after field-visit or interviewing end users.

In 1999, Y2K compatibility problem made company work with STC sources that will be replaced by SCMS again, and it left much less time to SCMS project. Confronted with all problems, Wooden suddenly left over.

SOLUTIONS

• George Leach taking over leadership and continuously work in SCMS as proposal.
• Reworking on SCMS project by consultant.
• SCMS project must shut down.

In 2000, Wooden step down, George Leach took over leadership of project. Leach had no experience in an IS organization, but was very knowledgeable about how to run the business. When the requirements definition process for a system component fell behind schedule,

Leach would step into the breach and assist in defining the requirements and specifying appropriate processes. Under his leadership, first phase of system-order entry- was ready for final testing; even though proven that much rework need to be done after testing, order entry function was in use in 2002. Leach asserted that his team could complete the system in 18 months at a total cost of $84 million, after his success on overcoming downsizing and Y2K problem.

But financial vice president west thought SCMS project was failure, and considering MMI’s current financial condition, he suggested must shut down the SCMS project immediately.

New CIO Hastings hired an experienced consultant Carol Young to evaluate and provide operational suggestions on SCMS. She have reworked Leach’s schedule to eliminate the inefficiencies, do things in the proper sequence, provide the time needed to perform the necessary activities with the people available, involve the users in requirements definition and system testing. She lengthened the schedule, assigned the work properly, reduce the staffing on the project. And use “rolling wave” approach concentrate on defining the requirements of the first phase and staffs who defining requirement would keep doing definition job for second, third phase