Project management is applicable to any industry. This case study represent a story of success where the company had limited resources, fixed type of products, and the succeeded to enhance their performance and work worldwide using project management approaches.
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Download the video Transcript: ScottPaperTranscript.pdf
Reference to Case Study (n.d) Scott Paper is a company specialized in manufacturing paper products. They have a business strategy to extend the current international market to new international regions. The company established a Project Portfolio Management (PPM) to effectively manage and implement the products developments, existing product marketing, and product-line extensions.
Scott’s Chief Technology Officer had an approach called “core-satellite” which was aligned with the company overall business strategy. The approach was to produce higher volume of right products to the right market. Reference to Vanguard. (2012) core satellite approach “Using index funds as the ‘core’ of your portfolio, indexing gives an investor a low cost, more tax effective and diversified portfolio, while carefully selected lowly correlated actively managed ‘satellites’ can complement the core by giving potential to outperform the market.”
Research and Development:
Although, the creation of brand new product lines was not feasible, but Scott’s dynamic development process along with stakeholders and customers involvement gives a great ideas about new products. Accordingly, they contributed the ideas into the pipeline. As a result, Scott Company were able to produce several new feasible products matching with the market needs.
PPM implementation of the Scott’s Paper Case Study:
Scott Company successfully implemented the following development process:
Scott defined a clear organization strategy associated with clear steps:
The company business strategy is to expand the market with the existing products, then innovate new products for the extended market.
Senior managers (CEO and VP) were involved to implement the PPM:
CEO was “periodically contributes ideas into the pipeline”, and vice president was monitoring the risks and financial issues.
The team had excellent skills:
Scott’s Chief Technology Officer used “core-satellite” approach to gain access to the new market.
Team were performing product testing to reduce the risks.
Research and Development department were able to create feasibility study for new products.
Ranking termination, and prioritization of projects:
One of the core processes to develop company projects based on PPM approach is the ranking and prioritization of the projects (Rothman, 2009). Scott Company were prioritizing the pipeline based on “distribution deals with new markets” which perfectly tied with the company overall strategy. Furthermore, the company stop developing unwanted products and accordingly terminate the low ranking products.
Innovation of new products:
Da Silveira, Borenstein and Fogliatto, (2001) stated that continues and fast product development and innovation is one of the Success factors of mass customization systems. Scott company invented new products using the customers feedback and by performing a research and developments studies.
Monitoring and controlling:
By performing monthly review with stakeholders, quarterly reviews with all international partner teams, and involving the customer’s ideas, Scott Company were monitoring and controlling the portfolio performance. This opportunity made the company product aligned with the overall strategy, renewed the senior management buy-in, and enhanced the products from the customer’s feedback.
New product development approach:
Developing new products perfectly reflects the company overall strategy. Gilmore and Pine II, (1997) recommended to access new markets as the most important factors for mass marketing, which matches with the company strategy goal to extend the current market. Furthermore, since the new product were based on R&D, existing products testing, and customer’s feedback, the products development leaded to value maximization, less cost, increased the competition level, and returned happy customers.
Limitations with the approach that Scott Paper is following:
Due to the company funds limitations, they did not create a new product line, which could produce totally new products. The cost limitations appears also in the testing stage where the vice precedent said “I don’t mind some uncertainty if the financial stakes are low,”
There is no clear evaluation criteria. Müller, Martinsuo and Blomquist, (2008) highlighted the connection between portfolio control as a factor influencing portfolio management performance. Specific criteria of monitoring, controlling, and prioritization of products such as Internal Rate of Return (IRR) could maximize the profits of the products, and guide the team to judge which product is better.
Finally, the approach used by Scott Company does not show the PMBOK ® Guide processes, Kerzner, (2010, p169) said that the company consider the PMBOK ® Guide as “gospel of project management.” However, each organization needs to customize the processes to match with the company natural, and strategy. The missing PMBOK ® Guide processes applicable to this case study are change management, risk management and quality management.
Case Study (n.d)
Scott’s Paper, [online].Available at:
http://mym.cdn.laureate-media.com/2dett4d/UofLiverpool/MSPM/0015/03/mm/ScottPaper/index.html (Accessed: 04 Jun 2014).
Da Silveira, G., Borenstein, D. and Fogliatto, F. S. (2001) ‘Mass Customization: Literature Review and Research Directions’, Int J Prod Econ, 72 (1), pp.1-13.
Gilmore, J. H. and Pine II, B. J. (1997) ‘The Four Faces of Mass Customization’, Harv.Bus.Rev., 75 (1), pp.91-101.
Kerzner, H. (2010) Project management best practices :achieving global excellence. 2nd Edition. Hoboken, N.J.: John Wiley & Sons. pp.684.
Müller, R., Martinsuo, M. and Blomquist, T. (2008) ‘Project portfolio control and portfolio management performance in different contexts’, Proj.Manage.J., 39 (3), pp.28-42.
Rothman, J. (2009) Manage your project portfolio :increase your capacity and finish more projects. Raleigh, N.C.: Pragmatic Bookshelf. pp.181.
Vanguard. (2012) Vanguard’s guide to Core-Satellite investing [Online] Available from https://static.vgcontent.info/crp/intl/auw/docs/resources/adviser/GuideToCoreSatelliteInvesting.pdf?20130411|101500 [04 Jun 2014]