1. Control

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 Woodys period of plant upgrading, construction activity in the region fell dramatically with general demand for Woodys products falling similarly. Even though Sharpe launched an expensive marketing effort to try to regain customer loyalty, it had only a marginal effect.

2. Post Project Appraisal

The net result was that when the new equipment eventually did come on stream, it was seriously under-utilized. Production morale ebbed. Some staff publicly voiced their view that the over-supply of commercial space could have been foreseen even before the project started, especially the oversupply of retail and hotel space, the prime source of Woody's contracts. John Carpenter, not a favorite with the older staff, was blamed for introducing these "new fangled and unnecessarily complicated ideas". Because of this experience, Woody's President Emelia Carpenter retained project management consultant Win Easley of W. Easley Associates to conduct a post project appraisal. Easley had some difficulty in extracting solid information because relevant data was scattered amongst various staff, who were not keen to reveal their short-comings. Only a few formal notes of early project meetings could be traced. Most of the communication was on hand-written Speedy memos, many of which were undated. However, interviews with the key players elicited considerable information, as has been outlined above.

3. Case Study Exercise and Project Appraisal Questionnaire

The incidents described in this case study are typical of the types of things that happen in real-life projects. They are a reflection of peoples' attitudes and the way they do things. Perhaps they do not all happen on the same project. Yet the reality is that if project sponsors do not start out with an understanding of project management and its processes, the probability of these kinds of happenings are quite high! One of the best ways of learning is from mistakes preferably from those of other people. The focus of this case study centers on construction. However, the project has served to bring to light many of Woody's management short-comings and the need for change. Can you spot the real source of the problems and what needs to be done to fix them? Your task is to show how you would run this project properly from the beginning.

Questions

(10) Cost Control

Why was EIDs first price so high? Was their position reasonable?

When did Woodys know they were in trouble with over expenditure? What was the result?

How should the project budget and expenditures be set out for cost control?

Draw a simple flow chart for processing changes?

(11) Risk Identification and Management

How did EID handle their risks? Was this effective? What might they have done?

List Woodys actual surprises and add other possible surprises. What was, or should have been, done to prepare for and respond to them?

Were there changes? What were the impacts?

(12) Facility Startup and Project Closeout

How was startup managed on the Woody project? How should it have been managed?

The Woody 2000 project was evidently not well run. Why? Give reasons for your opinion.

• Develop a list of "Key Success Indicators" that could and should have been measured on completion. Rank them in order of priority for this project.