Assignment

Case Study: CAPITAL INDUSTRIES

In the summer of 1976, Capital Industries undertook a material development programto see if a hard-plastic bumper could be developed for medium-sized cars.By January 1977, Project Bumper (as it was called by management) had developeda material that endured all preliminary laboratory testing.

One more step was required before full-scale laboratory testing: a three-dimensional stress analysis on bumper impact collisions. The decision to performthe stress analysis was the result of a concern on the part of the technical communitythat the bumper might not perform correctly under certain conditions. Thecost of the analysis would require corporate funding over and above the originalestimates. Since the current costs were identical to what was budgeted, the additionalfunding was a necessity.

Frank Allen, the project engineer in the Bumper Project Office, was assignedcontrol of the stress analysis. Frank met with the functional manager of the engineeringanalysis section to discuss the assignment of personnel to the task.

Functional manager: "I'm going to assign Paul Troy to this project. He's a newman with a Ph.D. in structural analysis. I'm sure he'll do well."

Frank Allen: "This is a priority project. We need seasoned veterans, not newpeople, regardless of whether or not they have Ph.D.s. Why not use some otherproject as a testing ground for your new employee?"

Functional manager: "You project people must accept part of the responsibilityfor on-the-job training. I might agree with you if we were talking about bluecollarworkers on an assembly line. But this is a college graduate, coming to uswith a good technical background."

FrankAllen: "He may have a good background, but he has no experience. He needssupervision. This is a one-man task. The responsibility will be yours if he fouls up."

Functional manager: "I've already given him our book for cost estimates. I'msure he'll do fine. I'll keep in close communication with him during the project."

Frank Allen met with Paul Troy to get an estimate for the job.

Paul Troy: "I estimate that 800 hours will be required."

Frank Allen: "Your estimate seems low. Most three-dimensional analyses requireat least 1,000 hours. Why is your number so low?"

Paul Troy: "Three-dimensional analysis? I thought that it would be a two-dimensionalanalysis. But no difference; the procedures are the same. I canhandle it."

Frank Allen: "O.K. I'll give you 1,100 hours. But if you overrun it, we'll bothbe sorry."

Frank Allen followed the project closely. By the time the costs were 50 percentcompleted, performance was only 40 percent. A cost overrun seemed inevitable.The functional manager still asserted that he was tracking the job andthat the difficulties were a result of the new material properties. His section hadnever worked with materials like these before.

Six months later Troy announced that the work would be completed in oneweek, two months later than planned. The two-month delay caused major problemsin facility and equipment utilization. Project Bumper was still paying foremployees who were "waiting" to begin full-scale testing.

On Monday mornings, the project office would receive the weekly labormonitor report for the previous week. This week the report indicated that the publicationsand graphics art department had spent over 200 man-hours (last week)in preparation of the final report. Frank Allen was furious. He called a meetingwith Paul Troy and the functional manager.

Frank Allen: "Who told you to prepare a formal report? All we wanted was ago or no-go decision as to structural failure."

Paul Troy: "I don't tum in any work unless it's professional. This report will bedocumented as a masterpiece."

Frank Allen: "Your 50 percent cost overrun will also be a masterpiece. I guessyour estimating was a little off!"

Paul Troy: "Well, this was the first time that I had performed a three-dim dimensionalstress analysis. And what's the big deal? I got the job done, didn't IT'

Questions:

1. Who is the best person qualified to make functional estimates?
2. Can this task be delegated?
3. Should the estimating of this task have been delegated?
4. Should Paul Troy have been delegated the responsibility for theestimate?
5. Should Frank Allen have sensed a communication problem between Paul Troy and the functional manager?
6. Should Frank Allen have tracked the project more closely because of the above-mentioned problems?
7. Does Paul Troy appear to realize that there are also time and cost constraints on a project?
8. Is it beneficial for project office personnel to know the man­ hour estimates?