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Multi-Company Project Management: A Case for Collaboration

By: Michael Bleau

Monday, February 01, 2010
 
With the recent publishing of “Multi-Company Project Management: Maximizing Business Results through Strategic Collaboration” came the opportunity to talk again with an old acquaintance, author Dean Baker. Dean enjoyed a long, successful 40-yr. run at General Motors and retired in 2005 largely to spend time teaching and consulting. Even in retirement, Dean remains very involved within the stamping community, and chances are you may know him. You may recall a series of projects during his tenure when General Motors invested more than $2-billion in stamping plant modernization. The program was implemented over 14 years, involved 16 major capital equipment suppliers spanning four continents, and impacted more than 60 percent of all of GM’s stamping equipment in North America.

This started in 1994 when Dean moved from his post at GM’s Parma, OH stamping plant to its headquarters in Warren at a time when GM management was beginning the formation of a new stamping operation. This was another in a series of major reorganization moves including plant closures and consolidations that started in the early 1980s with an aim to improve GM competitiveness. The objective of the new division was to create and implement corporate manufacturing standards and operating procedures for stamping that would allow GM to better leverage its size and resources. Until then, each mostly autonomous plant maintained individual facility-specific requirements for equipment. Each had specifications for pneumatic components, controls, hydraulics, motors, drives, paint color codes, pipe-and-wire standards, automation, press die clamps, the works.

At that time, the receiving plants’ demands eliminated many of the advantages of shared standards, which jeopardized GM’s ability to implement improvements and maintain flexibility among the plants. Compounding these challenges, GM was a behemoth, operating some 14 stamping plants in North America, selling nearly 5 million vehicles annually in the U.S. and reliant upon a large equipment supply base, each with their own set of unique standards. Deciding what would be the new order and the implementation of new corporate-wide standards, along with integrating these with existing equipment, had to be tight or vehicle launches were at risk.

As if this wasn’t enough, it came in the wake of the 1992 departure of GM’s infamous and highly adversarial purchasing czar Ignacio Lopez. Lopez left many suppliers gun shy of GM’s cooperation efforts, to say the least. For Dean’s team to succeed he needed supplier collaboration on a whole new scale.

Impressive Results

The result over several years of fine-tuning is what Dean today refers to as multi-company project management (MPM). MPM is a hybrid and integration of two methodologies: multi-company management and project management. The result is a collection of activities or best practices organized into six process groups; cooperate, communicate, coordinate, control, complete and close. To accomplish the desired results, the project manager exercises freedom in selecting the appropriate activity from each process group to provide the maximum flexibility in applying the MPM process to each project. Essentially, MPM creates the optimum environment for project management involving multiple companies to operate with maximum efficiency while not limiting innovation and creativity.

Unique to this approach is shared decision-making that involves a board of senior executives representing each partner company. This leadership team works to establish long-term, mutually beneficial outcomes and a means to encourage collaboration and accountability between the stamper and the suppliers. For MPM to work, decision-makers must be involved. Having all of the decision makers available during meetings keeps the projects moving. At the front end of any project, common goals and mission-critical objectives are set and agreed to ahead of time. The focus on these shared objectives leverages individual company skills and builds synergy, resulting in the overall success of the team and individual partner companies.

Accounting for how large and complex GM was during the 90s and the competitive pressure exerted by Asian car companies, the following clarifies the scope of this achievement. While launching $2-billion in equipment, with MPM, GM overcame bureaucratic, cultural, and language barriers between distant, sometimes unfamiliar suppliers at a time when the not invented here syndrome prevailed and many management teams undervalued project management, classifying it as an administrative function for the production of Gantt charts.

To quantify GM’s success, consider that following implementing of the MPM approach, coupled with plant productivity efforts, GM’s stamping-equipment productivity moved from last place in 1994 to first place in the 2003 Harbour reports.

Suppliers Can Learn from GM

Regardless of the size of the organization, the products being stamped or the specific metalforming processes employed, there is value to be gained by considering the business approaches of the MPM process. These include reducing project costs and increasing overall effectiveness of capital through closer collaboration and alignment of objectives between key equipment suppliers. This said, the MPM approach does not fit every project simply given the essential involvement of key executives. To succeed, MPM demands a true commitment of time by senior management—at a minimum quarterly involvement—so it isn’t reasonable or appropriate to involve senior management on all projects. MPM is appropriate when a project holds key strategic value to your stamping organization, typically large capital-intensive programs. Also, it’s important that you don’t let the process dictate to the team. Apply the process to the organization to make it work for the team.

Dean points out that it was very challenging when GM started developing MPM as suppliers were notably suspicious and accustomed to little or no transparency with GM and other suppliers working on common projects. Furthermore, breaking down adversarial barriers that had grown between GM and its suppliers was difficult, as suppliers had historically looked to the individual plants as their immediate customer. And since Lopez’s regime focused on winning at all cost, it took some convincing to assure suppliers that the MPM approach would be as beneficial for their business as it was for GM. After considerable groundwork, trust began to build and Dean noted that when problems arose, the relationships within the team led to quick resolution. Team members having formed solid relationships were comfortable to simply pickup the phone and talk through issues. From 1997 to 2007 Dean polled MPM-run project participants to gauge their level of satisfaction and learn how their company benefited from the approach: 82 percent of the results across all categories were positive with only 2 percent negative and the balance neutral.

Reading today’s headlines, many lose sight of the fact that GM, for more than a century, fueled our economy and was a point of pride for many hard working American’s who contributed greatly to our manufacturing knowledge and skill base; MPM is one such example. Collaborative project management in metal stamping is particularly useful since major capital investments may take years to implement and the equipment is expected to run for decades. Such projects play a large part in a company’s long-term strategy. And it’s just as important for the equipment supplier to see the system flourish in that stamper’s environment. A poorly executed system or one that simply doesn’t meet requirements can result in a loss for the machine maker on the initial project as well as future opportunities.

We all have teams—our suppliers have teams—their subsuppliers have teams and sometimes these teams work in semi-enclosed bubbles focused on their own goals. Without substantial, shared goals and a means of cross communication, each team wins only a little. Working as a unified team, with shared vision and goals using solid decision making tempered with multiple perspectives, maximizes the satisfaction and business results of all participants.

To learn more about MPM, visit teamimplementers.com. MF

 


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