• Posted on: 30 August 2013
  • By: greeny

Into this section the essential knowledge base has been collected. Basics, definitions and useful concepts in terms of Project Management (PRINCE2), Process Improvements (LEAN) andProcess Re-Engineering.


I. Project management (PRINCE2)


1.    Project: is a temporary organization that is created for the purpose of delivering one or more business products according to an agreed business case.

2.    A project introduces changes, has a defined start and defined end, often cross-functional, unique and risky.

3.    Project management is the planning, delegating, monitoring and control of all aspects of the project to achieve the project objectives within the expected performance targets for time, cost, quality scope, benefits and risks.

4.    Project manager: is the single focus for day-to-date management of a project. PM has the authority to run the project on behalf of the Project Board. Tasks: Line management, cost mgmt., communication, quality, product status, product vs. product needs, changes, user needs, monitoring, planning, teamwork and strategy.

5.    The ability to delegate is important in project management.

6.    To make the right information available at the right time for the right people to make the right decisions.

7.    Control: costs, timescales, quality, scope (what will the project deliver), risk and benefits (PM has to have clear understanding of the purpose of the project).

8.    Output: any of project’s specialist products

9.    Outcome: the result of the change derived from using the outputs

10.  Benefit: is a measurable improvement resulting from an outcome

11.  PRINCE2 principals:

·         Continued business justification (must to be)

·         Learn from experience (lessons are sought, recorded and acted)

·         Defined roles and responsibilities

·         Manage by stages (project is planned, monitored and controlled on a stage-by-stage basis)

·         Manage by exceptions ()project has defined tolerances for each project objectives to establish limits of delegated authority)

·         Focus on products (project focuses on the definition and delivery of products)

·         Tailor to suit the project environment (size, complexity, importance, capability and risk)

12. PRINCE2 Themes:

·         Business case:  to establish mechanism to judge whether the project is (and remains) desirable, viable and achievable. Approach: develop, verify, maintain, confirm.

·         Organization (to define and establish the project’s structure of accountability and responsibilities). Business, user and supplier. Directing by project board, managing by project manager and delivering by team manager.

·         Quality (to define and implement the means by which the project’s product fit for purpose) Quality management: quality planning, quality control and quality assurance.

·         Plans (to facilitate the communication and control by defining the means of delivering the products – where, how, by whom, when and how much) Project plan, stage plan, team plan, exception plan.

·         Risk identifying, assessing and controlling uncertainty and, as a result, improving the ability of the project to succeed) A risk can be a threat or an opportunity. Tasks: identify, assess and control. Covering: time, cost, scope, quality, benefits and resources. Responses: avoid, reduce, fall back (plan B), transfer, accept, share, exploit, enhance or reject.

·         Change (to identify, assess and control any potential and approved changes to the baseline)

·         Progress (to establish mechanism to monitor and compare actual achievements against those planned; provide a forecast for the project objectives and control any unacceptable deviations)

13.   Benefits: can be financial and non-financial (aligned to corporate objectives and strategy

14.   A3 (from LEAN, clear, simple, comprehensive)

·         Title / owner / date / approval

·         Background (business case)

·         Current conditions (what’s going on, facts, dates)

·         Goals

·         Analysis

·         Proposal

·         Plan

·         Follow up

15.   Additional benefits: avoided human failures, removed loops, eliminated re-works, reduced compliance.

16. Project managers can have the responsibility of the planning, execution, and closing of any project. A project manager is the person accountable for accomplishing the stated project objectives. Key project management responsibilities include creating clear and attainable project objectives, building the project requirements, and managing the triple constraint for projects, which is cost, time, and scope.

17. Project management triangle: Traditionally, these constraints have been listed as "scope," "time," and "cost".[1] These are also referred to as the "project management triangle", where each side represents a constraint. One side of the triangle cannot be changed without affecting the others.

18. Project controlling and project control systems

  • investment analysis
  • cost–benefit analyses
  • value benefit Analysis
  • expert surveys
  • simulation calculations
  • risk-profile analyses
  • surcharge calculations
  • milestone trend analysis
  • cost trend analysis
  • target/actual-comparison


II. Process improvements

1.    LEAN Principles: Value, Value stream, Flow, Pull, Continuous improvement (perfection)

2.    Distinguish value added from non-value added (ordinary process: 95 % of non-value added, 5% of value added à if we are focusing on 5% the final result will be small while if we are focusing on 95% the final result will be far better)

3.    Wastes: reject, stock, overproduction, movement, transport, waiting, unnecessary operations.

4.    Additional wastes in office environment: approves, failures, inaccuracies, papers, double checks, re-works

5.    Main problems:

·         Thinking in departments and functions instead of processes

·         Sequential processing of independent process steps instead of parallel processing

·         Just a few people see through the entire process

·         Inappropriate communication between process steps / departments

6.Value stream analysis and map

·         Objectives: to visualize the entire matter and information flow, to identify wastes, to define targets

·         Focus: whole or a part of the value stream

·         Phases: present state (as-is), ideal state, future state + action plan

·         Action plan: gathering to-dos, grouping, scheduling

·         Every process has a supplier and a customer

·         Products are flowing in value stream, in administrative environment they are the needs of internal customers

·         Header:

o    What are the product and the process?

o    Who is the owner of the process?

o    Who is the customer?

o    Who is the supplier?

o    What is the value for the customer?

o    What is the target of the improvement?

o    What are the inviolable factors?

o    Indicators.

h.      Steps:

·         Walk through the process and identify connection points.

·         Data gathering (measurement): lead time, cycle time, stock, staff, input, output, rejection rate, pull or push

·         Summarizing data

·         Create ideal process (we can change anything we want, standards, waste less, one piece flow)

·         Create future state (back to reality, collect barriers, focus on crucial areas, identify short-term aims (LT, CT, FTE, quality etc.)

·         Identify takttime: time difference between process starts and first product issued.

·         Control stocks.

·         Identify and eliminate bottlenecks

·         Redesign information flow

·         Equalize cycle times

·         Action plans

7.       Value added ratio calculation: Value added / Total lead time (VA + Non VA)

8.       Flow:

·         Conventional: functional grouping, flow in huge series, push (work organized by previous plans and not by the real needs

·         Characteristic of conventional flow: lot of in-process products, long lead times, long shipping ways, high rejection rate, no or slow feedback

·         Continuous flow: organized by function not by department, one-piece flow, pull.

·         Characteristic of continuous flow: little in-process products, short lead times, short shipping ways, low rejection rate, quick feedback

·         Create parallel workflows where possible

·         Optimize the process before implement a new IT tool.

9.FTE calculation

Overall days in a year



Weekend days



Official bank holidays



Available working days






Holiday (avg/year)



Sick leave (avg/year)



Participating Training in days (avg/year)



Working day shrinkage per year (Callover, performance dialoge, Team meetings,Daily 1 hour "other" activites)



Effective working days per year






Ratio: 188,5 / 251



Working hours:



Effective working hours: 8*75%



10.   Efficiency vs. effectiveness (e.g. efficiency high but effectiveness is low = everybody works hard but the process performance is low (stocks, waiting, unnecessary movements etc. – wastes)

III. Process re-engineering

1.Problem solving:

·         What are the facts? From where I know them (justifications)? What more I need to know? How can I get answers?

·         4W: What is the problem? What are the reasons? What are the solutions? Which one is the best solution?

·         Method: Typed errors, frequency measurement, Pareto analysis, fishbone diagram.

·         Pareto: 80% of failures are caused by 20% of types of problems – we should focus on the 20% of errors!

·         Creating Pareto: select problem, design data gathering (content, method), outline data gathering process (place, timeframe), data gathering, identify frequencies, create column chart, create cumulative line

·         Fishbone diagram (People, Policies, Procedures, Plants) used to root-cause analysis of focused problems.

2.       We have to go to site and see what’s going on!

3.       6S: Sort, Set in order, Shine, Standardize, Sustain, Safety

4.  TQM, Poke-yoke

5.       Reverse engineering is the process of discovering the process  through analysis of its structure, function, and operation.

6.       Root cause: is what if we eliminate the problem disappears.

7.       Only if there are difference between where we are and where we would like to be!

·         Root-causes: eliminate

·         Commitments: eliminate

·         Barriers: vanquish!

8.       Method: consecutive PDCA (Deming cycle) cycles

·         Plan: identify problem, target, indicator and plan

·         Do: execution and data gathering

·         Check: data analysis

·         Act: full implementation

·         Do-check cycles!

9. LEAN: delivering more value with less waste.


Guideline for work - need to know!