The initial monthly cash flow charts set aside one million for contingencies: one million in each of the first and last months, with an intervening ten months at $1.4 million (Wideman, 1993, Planning). The project should have been carefully guarded against so-called scope creep or an expansion of the project which was not strictly approved of, according to the initially-set limit and budget. If more money or additional expansion was required over the projects duration, a formal meeting should have been immediately called for in the initial project directives to determine why and how the costs could be curtailed. Communication channels and pre-ordained regular project meetings should have been established between EID and Woodys. The projects leadership hierarchy should have been defined.
Deadline completion was a must, given that the project was designed to respond to an available external opportunity. EID was paid an hourly rate. The problem with paying a company at an hourly rate is that there is an incentive for the organization to include more billable hours, and to make the project longer in duration, versus a fixed, lump initially agreed-upon sum where the incentive is for the contractor to finish the project quickly. There should have been specifications written into the contract that the project must end at a given point in time and/or there would be reductions in the final fee allotted for the project if things went over-time or over-budget.
Develop a work breakdown structure
The overall breakdown of duties is as follows on project Woodys 2000 are as follows
Woodys leadership in the form of the Carpenter family->Spencer Moneysworth (in charge of project) & Ian Leadbetter (engineer and assistant to the project)->Expert Industrial Developers (EID) (in charge of production) ->Schemers and Plotters (S&P) (in charge of the building and industrial design work)
Note the amount of diffusion on the project, for a relatively small organization.
Additionally, there is a great deal of cross-pollination of different duties and requirements, which can result in a confusion of responsibility. For example, neither Moneysworth nor Leadbetter were aware of or had created review and approval procedures for the specifications and shop drawings submitted directly by either S&P or by Eddie Forgot of Piecemeal Corporation, even though they were supposed to be overseeing EID. EID was supposed to be overseeing S&P but neither company was certain of its specific duties in the project. A better structure to adopt would be to have different company officials in charge the oversight of specific aspects of the organizational overhaul and given specific outside personnel to supervise both the EID and S&P corporations. In retrospect, it was unwise to have contracted EID and allowed EID to subcontract S&P, given that timeliness is such an essential aspect of fulfilling the obligations demanded by the overhaul and subcontracting can result in additional delays
Wideman, Max. (1993). Woody 2000. Expert Project Management.
Retrieved September 27. 2010 at http://www.maxwideman.com/papers/woody2000/intro.htm.