1. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Project Management for
The Supply Management
Professional

2. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Learning Objectives:
2
L.O. # Seminar Objective
1 Identify the Various Stages in the Life Cycle of a Project
2
Understand How to Construct a Work Breakdown Structure Using a Sample
Project
3 Understand How to Read & Interpret a Gantt Chart Using a Sample Project
4
Use Project Management Principles to Get Things Done and Drive More
Efficient Execution
5 Diagram the Critical Path of a Sample Project
6 Create a Project Plan to Use in Managing Your Projects
7 Assess the Benefits of Using Microsoft Project 2010
8 Identify Software Tools Available to Help You Manage Your Projects

3. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Terminal Course Objectives of a Typical
Project Management Course:
• Select the best alternative from among competing projects.
• Conduct a task analysis .
• Determine task costs, total project cost and develop the
project budget.
• Understand the demands placed upon a project manager
and issues that must be addressed
• Analyze resource conflicts that jeopardize the project
schedule.
• Apply earned value techniques to calculate project
variances.
• Use project management software.
• Develop and apply management by exception threshold
criteria.
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4. Copyright 2012 John Wiley & Sons, Inc.
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5. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Introduction to This Course:
• Provide an overview of Project Management.
• Address the basic nature of managing all types of projects,
• Focus specifically on those of interest to the Supply
Management Professional.
• Notice specific techniques and insights required to carry out this
unique way of getting things done.
• Align with the material presented in the CPSM Exam 2 Study
Guide, Task 2-G-1 Perform Project Management Activities
Representing the Supply Management Organization
• Major topic areas: Project Initiation, Project Planning, Project
Execution, Project Monitoring and Control, and Project Closure.
• Introduce Microsoft Project 2010 - offer an overview of benefits
of using it to manage projects.
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6. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Introduction to Project Management:
• I am not a certified Project Manager.
• Six credentials available - visit the Project
Management Institute website http://www.pmi.org
• You will probably not become a Project
Management Professional but “Today, more than ever, supply
management professionals are active participants on projects, particularly with the advent of outsourcing.
They may be involved in enterprise-wide projects, projects with other functions including engineering,
operations, marketing and sales or their own internal projects. Most often they are concerned with the
acquisition, purchase and value to the organization of those goods and services that will be needed to
deploy any organization-related project plans. Some supply management professionals work in a project
environment on a full-time basis while others are brought into a project as needed. Examples of projects
where supply management lends expertise and will most likely be involved include:
• a. Creating a supplier certification program
• b. Developing and implementing an online auction program
• c. Selecting and recommending materials or developing a statement of work for a new product or service
• d. Contract preparation and negotiation
• e. Developing a key supplier”
• (Effective Supply Management Performance (ISM Professional Series), by Darin L. Matthews and Linda
L. Stanley, Chapter 2 (p. 23)
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7. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
7
How Project Management Developed
• Credit for the development of project management
goes to the military
 Navy’s Polaris program
 NASA’s Apollo space program
 Development of “smart bombs” and “missiles”
• Project management has found wide acceptance in
industry
• It has many applications outside of construction
 Managing legal cases
 Managing new product releases
 Managing Procurement & Sourcing Projects

8. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
8
Project Management Organizations
• The Project Management Institute, founded in 1969, is the
major project management organization
• Grew from 7,500 members in 1990 to over 320,000 in
2010
• Other organizations
 Association for Project Management
 International Project Management Association

9. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
9
The Definition of a “Project”
• “a temporary endeavor undertaken to create a unique
product, service, or result” (PMI PMBOK Guide)
• “a special piece of work outside the normal flow of daily
activities that has a specific objective and a time and
budget limit” (ISM Glossary)
• Modern project management began with the Manhattan
Project
• In its early days, project management was used mainly for
large complex projects
• As the tools and techniques were developed, the use of
project organization began to spread

10. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
10
Why Project Management?
• The main purpose for initiating a project is to accomplish
some goal
• Project management increases the likelihood of
accomplishing that goal
• Project management gives us someone (the project
manager) to spearhead the project and to hold
accountable for its completion

11. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
11
Projects Are Typically Created to Meet at
Least One of These Objectives
• Create a change in an organization
• Exploit new opportunities
• Implement the strategic plan
• Fulfill a contractual agreement
• Solve some problem

12. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
12
Project Management Defined
“the process of coordinating the organization,
planning, scheduling, controlling, monitoring
and evaluating of activities so that the
objectives of a project are met”
(Source: ISM Glossary)

13. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
13
Project Life Cycle - Process Stages
a) Initiating
b) Planning
c) Executing
d) Monitoring/Controlling
e) Closing

14. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
14
Project Life Cycle – Knowledge Areas
a) Integration Management
b) Scope Management
c) Time Management
d) Cost Management
e) Quality Management
f) Human Resources Management
g) Communications Management
h) Risk Management
i) Procurement Management

15. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
15
The Knowledge Area of Project Procurement
Management includes a discussion of :
a) Plan Purchases and Acquisitions
b) Plan Contracting
c) Request Seller Responses
d) Select Sellers
e) Contract Administration
f) Contract Closeout

16. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
16
Initiating the Project – To Define the
Problem that the Project Will Solve:
• SWOT Analysis
• Kepner-Tregoe Analysis
• Six-Sigma Analysis
• Business Case Analysis
• Alternative Analysis
• Stakeholder Analysis

17. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
17
Planning the Project – To define Project
Objectives, Scope and Tasks
• Solicitation Planning
• Scope Development
• Team Roles/Responsibilities
• Budget
• Schedule
• Risk Management

18. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
18
Executing the Project –Solicitation &
Source Selection Phase
• Source Selection Process
• Managing the Project Team
• Change Management

19. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
19
Monitoring and Controlling the Project
• Performance Measurement Tools
 Earned Value Analysis
 Schedule Analysis
 Budget Analysis
• Change Control Process
• Risk Management Process
• Reporting

20. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
20
Closing the Project
• Contract Closeout Process:
 Property Dispositions Process
 Final Product/Service Acceptance
 Final Payment Process
• Best Practice/Lessons Learned
• Post Project Audit

21. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Task 2-G-1 Case Study
Production Line-Redesign
Instructions: In your table groups, read the case study, answer the discussion questions and be prepared
to explain your responses. You have five minutes.
Martin Rodriguez works as the Supply Manager at the Summit Pewter Company, a small manufacturing
company headquartered in Littleton, Colorado. The company manufactures a line of commemorative
pewter products for the American market. For the past 18 years, commemorative wedding pewter goblets
have been the company's best-selling product line.
The company’s design group, along with corporate marketing, is busy developing new product lines for
the burgeoning home accessories market. The operations and production management group is
implementing a production line redesign initiative, including relevant software upgrades. This initiative is
driven by the need to retool the company’s production lines to support the new products and findings in a
recent study indicating that time delays involved in the existing procurement system are shutting down
production. To compensate, production has increased inventory on hand, negatively affecting cash flow.
Senior management has tasked the operations and production, information technology and supply chain
management groups with successfully implementing the production line redesign and replacing relevant
software modules. Rodriguez has been assigned as a full-time supply management subject matter expert
in the new initiative’s project team structure. Rodriguez's role will be to perform project management
activities representing the supply management organization by providing procurement expertise in all of
the phases of the project.
In order to be successful, Rodriguez will follow a standard methodology for project management and will
be involved in each of the following phases of the initiative: initiation, execution, monitoring and
controlling and closing. He will rely on his supply management and project management training and
skills throughout all project life cycle activities. As a supply professional, what questions should
Rodriguez consider from the project management point of view?
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22. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Task 2-G-1 Case Study #1
Discussion Questions
1. What are some analysis tools Rodriguez should
incorporate when analyzing capital equipment
acquisitions during the project initiation phase?
2. List four or five processes or tools Rodriguez can use in
the project monitoring and control phase to manage the
contract.
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23. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Benefits of Using a Project Management
Software Tool – MS Project 2010
• Increased ability to effectively manage and understand project
schedules
• Improved ability to become productive quickly
• Increased capability to build effective charts, graphs, and
diagrams
• Better communication within the project team
• Improved understanding of change impacts
• Increased control over finances and the resources allocated to
the project
• More effective tracking according to the project team needs
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24. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
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25. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Using Microsoft Project 2010
• User has 3 main options to Learn Project 2010:
 Use the trial –and-error method. Many people prefer to just start using the software and
learn as they go, using the Help menu provided by Microsoft as needed.
 Read/skim a book. There are many good books on the market. One of those is Microsoft
Project 2010 for Dummies by Nancy Muir. We quote extensively from this book in this
presentation.
 Watch a video tutorial. One such product is the set of 147 videos offered by Infinite Skills
(see www.infiniteskills.com).
• MS Project functions much like Excel but, as Nancy Muir says in her
book, Microsoft Project 2010 For Dummies, “it’s probably not like any
other software you’ve ever used, so mastering it can seem a daunting
process.”
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26. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Using MicroSoft Project 2010
• The file that you create in MS Project is called a Project
plan, or schedule.
• This plan contains a plethora of information.
• The many “views” of Project allow you to observe the
structure of your plan and see the progress of it.
• Project offers many ways to move around and display
different information in your views.
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27. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Using MicroSoft Project 2010 –
You move from one view to another by using the Task and View tabs on the Ribbon.
Clicking the down arrow on the Gantt Chart button displays the 13 most used views:
 Calendar,
 Gantt Chart
 Network Diagram
 Resource Sheet
 Resource Usage
 Resource Form
Resource Graph
Task Usage
Task Form
Task Sheet,
Team Planner
Timeline
Tracking Gantt.
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28. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Benefits of Using a Project Management
Software Tool - Excel
• It is Simple to Use
• It is readily available – not everyone has MS Project
Software
• It is suitable for many simple projects, involving only
yourself and your team
• Here is a simple project plan I used to develop a course in
Project Management for Webster University this Spring 1
Term
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29. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
29

30. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
30

31. © Copyright 2010 Institute for Supply Management™. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management™
Exam 2
Reference Sources
• CPSM Study Guide, Exam 2, Task 2-G-1 (pp. 179 –
190)
• Effective Supply Management Performance (ISM
Professional Series), by Darin L. Matthews and
Linda L. Stanley, Chapter 2 (pp. 23 – 70)
• Microsoft Project 2010 for Dummies by Nancy Muir
• Managing Projects in Organizations by J. Davidson
Frame
• Project Management: A Managerial Perspective by
Jack R. Meredith and Samuel J. Mantel, Jr.
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