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Project Management Case Study

Company Name : Jack Neift Trucking Company
Company Address :
City :
Country : USA

By Effective Project Management, Third Edition Robert K. Wysocki


The management of Jack Neift Trucking was facing difficult times and decisions. The trucking industry was depressed, and it was getting harder and harder to stay afloat in a down economy and with major competition able to weather the financial storms. Jack Neift Trucking was a family-owned company, founded in 1937. In that year the father, Jack Neift, had started a trucking company with one truck and one client. The company control remained within the family generation after generation down to its present president, Bea Stoveburden.

The company had seen both strong and weak financial times, but because of its ability to adapt quickly to marketing conditions, it remained one of the strongest family-owned companies in the United States. The company was medium-sized, averaging just over 500 trailer units. Jack Neift Trucking ser- viced mostly states east of the Mississippi but also had corridors into Texas and Oklahoma. Routes into the New York City area generated the major part of the company’s income.

The problem Bea was facing as the president was an old one. Deadheading had been a term used by everyone on the trucking industry, and it was a cause for concern for Jack Neift Trucking. (Deadheading occurs when a truck goes from point to point without a load of cargo.) Rick Shaw, the operations director, saw a trend occurring that had more and more deadheading happening as the company concentrated on the Northeast corridor. While it was fairly easy to get loads going from the Midwest to the Northeast, the opposite was not true. As the deadheading increased, it meant that the assets of the company were underutilized more and more, making the company profit margin dangerously slim.

Bea convened a retreat of her top management team and challenged them all by saying, “What we’ve been doing won’t get us through this time. We need to think of new ways to service our customers and to make us a modern com- pany at the same time.” (Happily she did not say, “Think outside of the box.”) “What is it that we need to control to make us more successful?” Dee Livery, the national sales manager, started off the discussion by saying, “My salespeople need to get shipping information faster. We could help the deadheading situation by knowing quickly if a load was going to a certain point.”

Dusty Rhodes, the head dispatcher, suggested, “We could save a lot of time if we could get better information on our destinations and how they handle unloading. We have trucks sitting in lots for five or six hours because we didn’t know what the best time was to offload our cargo.”

Otto Entruck, the chief mechanic, chimed in, “We can get better preventive maintenance if we know where the rigs are going to go and how much mileage we are expecting to put on the tractors.”

Finally, Hy Rowler, the CFO, said, “If we can get control of our deadheading, we can remain competitive and begin to build a much better balance sheet for the company. But we have to respond faster, because the value of money is greater if we can turn it over more quickly than we are doing currently.” The discussion went on long into the night with a variety of answers being suggested. Bea asked everyone to meet early next morning, at which time she would offer some ideas for further thought and then action.

Morning came and the group ate breakfast together while talking over the problems the company was having. After the plates were cleared, Bea began to describe a vision for the company. “We’re basically an old-time type of company. But we need to think like a modern one now. We aren’t going to get much relief from our problems with engineering or mechanical help. Our equipment is good, we keep our drivers a little longer than the industry average, and our customers keep coming back. But we need to be more responsive to our customers and, in turn, help our people be competitive in a highly competitive marketplace.”

“The one aspect that flows through all our needs is information. We need to get information passed between our people. We need to get information from our customers to our people and vice versa. We need to be able to link every- one in the company with others that can help them do their jobs. And we need to link everyone fast, so that information becomes a competitive tool. Here are some points to consider.”

“We’re still an old mainframe company, and our old machines are maxed out with only our accounting needs. We don’t have a system to deal with today’s trucking world and deal with it fast. So I’m going to ask all of you to take today and tomorrow to specify what you want in the way of information, and when we meet next, an IT consultant will be with us listening to our needs. The better we are at requirements, the better we’ll be at getting this project on the road.” With that, the meeting was ended.

The next two days were hectic for everyone concerned. Not only did they have their regular jobs to do, but also each of them was thinking of how to articulate the requirements they would have from the standpoint of information. The other part of the puzzle dealt with how the information was to be passed. The future of the company would depend in large part on framing the scope of the information technology project and beginning to articulate the require- ments needed to satisfy current market needs. And it was going to depend on running the project efficiently.

The day came and the IT consultant met with the management team. Bea intro- duced Laurie Driver, a brilliant designer and consultant. With her was Sal Vation, introduced by Laurie as “One of the best project managers I’ve worked with. He’s certified and comes to the table with 20 years of project manage- ment experience.”

Bea began the meeting by outlining the needs. Then each of the management team, and their assistants, described the requirements needed to help Jack Neift Trucking back to the position it was used to. Dee Livery started. “I’ve talked this over with my second-in-command, Crash de Van, and we both agree that to get the maximum out of the sales force, we need to know specific loads as they are sold and their destinations. We need to know when the loads will arrive and what time they will be unloaded. If we know this, we can make a concerted effort to sell return loads in the locations to which we’re going. This information is our major need at first. I’ll work on an incentive plan for the sales staff to make sure we concentrate on cutting down deadheading. To do that I’ll need input from you, Hy.”

Hy Rowler said, “I’ll be happy to work with you on that problem, and we should look at exactly how we’re going to incentivize the sales force. We’ll need to give them information on loads as quickly as possible. Without that information getting to them, we’re not going to be able to make this all work.” Rick Shaw suggested, “We also need to know what type of equipment we are going to use and to plan out its use over a period of time. We may want to look at a GPS system to get information about loads. Is this possible, Hy?” The response was what Bea wanted to hear. “We can justify the cost only if we can see a scenario that will give us a fast repayment. The costs are possible, but we need to link them to the increased sales effort to counter deadheading. But yes, it’s possible. I haven’t run the numbers yet though, and this meeting will help me focus on the cost side of the equation. Since we’re talking about a major IT system, we need to get input from Laurie on how she views the cost.” Laurie said, “This project will probably cost up to one million dollars just based on the small amount of requirements I’ve heard. What do you think, Sal?” “You’re better at that type of cost estimate than I am, but I think an order-of- magnitude estimate at one million gives us somewhere to shoot at,” said Sal. “We can start with that as an assumption and back up the numbers better after we have a first project meeting.”

Laurie suggested, “I need to get each of you to gather requirements. Sal will start putting together a project plan. Bea, the charge for this will be our hourly rate, and we won’t exceed 80 hours of billing time to get to the next step where we show you our suggestions. If we go over 80 hours, we’ll eat the cost. Should we start?”

Bea knew that this was coming and had already made the decision. “Go,” she said. “Ladies, Gentlemen, your priority over the next two weeks is to work with Laurie and Sal to get the requirements we need. Let’s make this work.”

Turning to Sal, Bea asked, “Can you have a time line for the next two weeks to me before end of business today?”

“I’ll give you first cut by then,” said Sal. Laurie said, “Let’s meet right after this meeting to go over our prospective needs.”

Laurie and Sal went to work immediately to get a schedule for the next two weeks. Since the sponsor was completely supportive, they both knew that access to key people would be easily arranged. Sal set up the schedule, Laurie checked off on it, and the first phase of the project began. Because of the spon- sor involvement, Laurie was able to gather requirements very efficiently. The trick with the project was going to be to make sure that the needs of all the stakeholders were met. Eighty working hours later, Laurie and Sal were pre- pared to make the presentation to the sponsor and stakeholders. And Bea led the management team into the room.

Description of the Project

“Laurie, Sal, we’re all listening,” Bea began. “One request, please don’t get too IT-technical during this presentation. We want you to take care of that. It’s how well your solution fits our business needs that matters most to us. Not the inner workings of the system.”

With that Laurie and Sal began to explain the IT project they were proposing. “There are several major areas to be considered. But the overriding considera- tion is getting information passed between people working in one location to people working in others. And the information has to come in real time, without delay, or the value of the information is lost. So we’re suggesting a Web-based solution that uses a client/server configuration behind it. The sales force in the Northeast locations has to know as sales are made in the Midwest. This information will be input through laptops that the entire sales force will have. As a sale is made, the information will be posted to a server that can either push the information down-line or store it. The information will be immediately available to several users. The sales department will get the information; the operations department also. In addition, the head dispatcher and mechanic operations will get the information.

“As sales information comes in, it will also be sent to an application that will determine sales salary as part of an entirely new focus for the compensation plan. This information will also be tracked for the president, and total sales by geographical area will be updated to the minute. All of this will be available on a secure Web site that will have passwords for each of the major users. “Amajor consideration for the project will be the decision of whether to build this system or try to find something off the shelf to use for this project.” “Please explain,” asked Bea.

Sal responded, “Off the shelf means an application or system that has already been made and tested by others. The risk factors are usually lower, since it has already been out in the marketplace and others have a had a chance to work with it.”

“What is the downside?” asked Bea. “Well,” said Sal, “if you don’t make it yourself, you can’t control what goes into it. So the final application may not fit exactly. And that little bit of differ- ence can be a huge problem. And don’t believe anyone who says it’s easy to customize a current system or application. So there has to be some type of decision on both the cost involved with the two choices, the risks involved with the two choices, and the ease of use of the two choices.”

“We have run a cost/benefit analysis and determined that in this case it will be more efficient financially to code this in-house. We will contract the coding out to a company that has experience with this type of application, so while it will be specific to Jack Neift Trucking, the production people will have gone through similar projects recently. We couldn’t find anything that fit what you wanted to do without major rewriting in any case.” “Any downside?” asked Bea.

Sal said, “While we believe the cost benefit is significant, we also realize a set of risks by writing it in-house. These risks, which I’ll give to you in a printed report, can raise the costs. So we’ll have to manage them.” “A second major part of the project is the installing of a GPS tracking system. This is actually a lot easier, since there are currently several over-the-counter models that we can use.”

“As you can see, the project will cost approximately $850,000. We can give you a project schedule as soon as you say go.”

“We have several questions,” said Bea. And for the next two hours the man- agement team asked everything they could think of so that they could clarify the scope of the project and how they were going to be involved. When that finished, Bea asked Laurie and Sal to step outside, and she polled the manage- ment team. “Are you satisfied you understand the scope of what we’re about to do? It’s important that everyone on the team give his or her complete support if we go ahead. Do we need more time for this decision?” She asked everyone on the team what he or she thought, and the reaction was unani- mous. It was a cautious go. Bea called Laurie and Sal back in and gave them the news. The project was about to start.

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