project management mega projects

Megaprojects: The good, the bad, and the better

Infrastructure megaprojects are crucial to the future of cities, states, and individual livelihoods. The problem is that these projects often go off the rails, either with regard to budget or time—or both.

However, it’s important to remember that building and maintaining infrastructure is a critical and sometimes even lifesaving undertaking. Sewage and water-supply systems, for example, keep diseases such as cholera at bay. Much of the Netherlands would be under water without the North Sea Protection Works, which guards that low-lying country’s landscape

Big infrastructure projects can also be economically transformative. Consider the Panama Canal. It accounts for a significant share of the country’s GDP. Dubai’s international airport is the world’s busiest, accounting for 21 percent of Dubai’s employment and 27 percent of its GDP. And Hong Kong would surely grind to a halt without its clean and speedy subway system, the MTR, which has enabled the densely packed city to build beyond the downtown districts.

All these megaprojects have worked as intended; indeed, it is almost impossible to think of these places without them. Not surprisingly, all of them are being expanded. Also not surprisingly, the canal and airport projects are both running late and well above the initial budget; even the hyperefficient MTR has run into delays with some of its projects.

McKinsey estimates that the world needs to spend about $57 trillion on infrastructure by 2030 to enable the anticipated levels of GDP growth globally. Of that, about two-thirds will be required in developing markets, where there are rising middle classes, population growth, urbanization, and increased economic growth. These countries need infrastructure, but all too often many years will pass and the promised road, bridge, and metro projects still will not have materialized.

The risks associated with megaprojects—those that cost $1 billion or more—are well documented. In one influential study, Bent Flyvbjerg, an expert in project management at Oxford’s business school, estimated that nine out of ten go over budget. 1 1. Bent Flyvbjerg, “What you should know about megaprojects and why: An overview,” Project Management Journal , 2014, Volume 45, Number 2, pp. 6–19. Rail projects, for example, go over budget by an average of 44.7 percent, and their demand is overestimated by 51.4 percent. McKinsey has estimated that bridges and tunnels incur an average 35 percent cost overrun; for roads, it’s 20 percent. Given that many projects are approved with a 20 percent return on investment expected, this leaves governments to pick up the tab for the rest.

Time overruns, too, are a perennial problem. Consider the metro system in Salvador, Brazil. Construction began in 2000, but it took more than a dozen years for the first passengers to ride it; most of the work is still unfinished. It has taken New York a decade just to begin the $3.9 billion project to rebuild the 59-year-old Tappan Zee Bridge; meanwhile, the cost of maintaining the worn-out bridge keeps increasing.

Finally, the premise that projects need to work on two levels—in the short term for recovering financial outlays and the longer term for creating social impact—often becomes a barrier to taking action. Even projects that are needed do not get executed, especially in places where revenues from a project are unlikely to cover its cost.

How can companies and governments do better to build megaprojects that deliver their societal benefits and do so on time and on budget? To answer that question, we consider the most important reasons that megaprojects falter, and then we suggest principles for improvement.

Why projects go bad

There are three main reasons for failure.

Overoptimism and overcomplexity. In order to justify a project, sometimes costs and timelines are systematically underestimated and benefits systematically overestimated. Flyvbjerg argues that project managers competing for funding massage the data until they come under the limit of what is deemed affordable; stating the real cost, he writes, would make a project unpalatable. From the outset, such projects are on a fast track to failure.

A common example of this comes when big projects cross state or national borders and involve a mix of private and government spending. For example, a new railway could involve three national governments, numerous local governments, different environmental and health standards, varied degrees of skills and wage expectations, and dozens of private contractors, suppliers, and end users. Just one issue can stall the process indefinitely. In one case, for example, it took two countries a decade to work out the diplomatic considerations that allowed them to build a hydroelectric dam. All too often, these complicating issues are not deeply considered or priced to the fullest before launching a project.

One useful reality check is to compare the project under consideration to similar projects that have already been completed. Known as “reference-class forecasting,” this process addresses confirmation bias by forcing decision makers to consider cases that don’t necessarily justify the preferred course of action. For example, if a city wants to build a ten-kilometer metro line with four stations, it should look at other cities that have built similar lines to understand the true cost and time dynamics.

Voices on Infrastructure, Number 3

Poor execution. Having delivered an unrealistically low project budget, the temptation is to cut corners to maintain cost assumptions and protect the (typically slim) profit margins for the engineering and construction firms that have been contracted to deliver the project. Project execution, from design and planning through construction, is riddled with problems such as incomplete design, lack of clear scope, ill-advised shortcuts, and even mathematical errors in scheduling and risk assessment. A McKinsey study of 48 troubled megaprojects showed that poor execution was responsible for cost and time overruns in 73 percent of the cases; for the rest, these were due to politics, such as new governments or laws. In part, execution is poor because many projects are so complex that what might seem like routine issues can become major headaches. For example, if steel does not arrive at the job site on time, the delay can stall the entire project. Ditto if one of the specialty trades has a problem. Higher productivity will not compensate for these shortfalls because such delays tend to ripple through the entire project system.

Another challenge is low productivity. While the manufacturing sector has approximately doubled its productivity over the past two decades, construction productivity has remained flat or even declined. Wages, however, have continued to rise faster than inflation in many markets, resulting in higher costs for the same results.

McKinsey studies have shown that delivering infrastructure more efficiently can reduce its whole cost by 15 percent. 2 2. For more, see “ Infrastructure productivity: How to save $1 trillion a year ,” McKinsey Global Institute, January 2013. Up-front preparation pays for itself many times over. All told, efficiency gains in approval, engineering, procurement, and construction can generate savings of as much as 25 percent on new projects, without compromising the quality of outcomes.

Weakness in organizational design and capabilities. Many entities involved in building megaprojects have an organizational setup in which the project director sits four or five levels down from the top leadership. The following structure is common:

• Layer 1: Subcontractor to contractor
• Layer 2: Contractors to construction manager or managing contractor
• Layer 3: Construction manager to owner’s representative
• Layer 4: Owner’s representative to project sponsor
• Layer 5: Project sponsor to business executive

This is a problem because each layer will have a view on how time and costs can be compressed. For example, the first three layers are looking for more work and more money, while the later ones are looking to deliver on time and budget. Also, the authority to make final decisions is often remote from the action.

Capabilities, or lack thereof, are another issue. Large projects are typically either sponsored by the government or by an entrepreneur with bold aspirations; they can take 10 to 15 years to finish. Even individuals who build large infrastructure projects for a living may execute only three or four megaprojects in a lifetime. Because each one is unique, the learning curve is steep every time, and the skills needed are scarce. All these problems are compounded by the speed at which projects get started. Starting from scratch, megaprojects may have to create organizations of several thousand people in 12 to 18 months—a significant operational and managerial challenge equivalent to creating a new start-up company.

How to deliver on the promise of megaprojects

Any big project carries a big opportunity for failure, but regularly going over time and over budget implies that there are systematic errors at work. And that means these problems can be identified and addressed.

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Typically, when projects go wrong, hindsight shows that the problems began at the outset, due to poor justification and need for the project, misalignment among stakeholders, insufficient planning, and inability to find or use the appropriate capabilities. Costs are commonly underestimated and benefits overestimated. As a result, the baseline for assessing overall project performance is wrong. The key is to first establish social and economic priorities and only then to consider what projects are best suited to deliver them. That requires developing independent and robust analyses on the true cost and benefits. Some countries are closer to achieving this ideal than others. Singapore, for instance, has a national goal for dense urban living, with public transit accounting for 75 percent of journeys. This aspiration guides how the Land Transport Authority selects transport projects. Without such rigor and oversight, you can imagine bridges to nowhere, excess power supplies, and empty roads.

The process for selecting projects needs to be fact based and transparent to ensure accountability. South Korea shows one promising approach. In 2005, it established the Public and Private Infrastructure Investment Management Center (PIMAC) to get accurate data on costs and benefits; PIMAC does feasibility studies on public megaprojects, conducts value-for-money tests, sponsors comprehensive research on improving public investment, and evaluates projects when they are done. So far, PIMAC has rejected almost half the projects that it has reviewed. Before PIMAC, the rejection figure was 3 percent.

Distressed projects have another thing in common: they lack adequate controls. Specifically, they do not have robust risk-analysis or risk-management protocols and do not provide timely reporting on progress relative to budgets and timelines. The data used to report on project progress are typically outdated (as they generally rely on payments to contractors rather than on actual work performed) and not aligned with the true progress of the project. In addition, baselines get adjusted time and again, and contractors and owners use different metrics to measure progress. It is problematic when there are multiple estimates of the cost and time performance of the project relative to the baseline, which means there is no common understanding of performance. This limits the partners’ ability to figure out how to accelerate project delivery and control cost overruns.

A more sophisticated approach is to use real-time data that measures activity in the field, such as cubic meters of concrete poured or earth moved, relative to work plans and budgets. This differs from the usual approach, which is to track progress by measuring funds paid to contractors relative to budget. Measuring progress on the basis of cash flow, however, is less than ideal, because usually it takes more than 30 days to pay. That means the related data are out of date; moreover, payments to contractors may not correlate to actual construction progress. Improving project performance requires better planning and preparation in three areas.

Do the engineering and risk analysis before starting construction. This is often stated but rarely followed, though doing so clearly improves project performance. Edward Merrow, the founder of the Independent Project Analysis consultancy and author of a book on megaprojects, 3 3. Edward W. Merrow, Industrial Megaprojects: Concepts, Strategies, and Practices for Success , first edition, Hoboken, NJ: John Wiley & Sons, 2011. has shown that the best examples of project-definition work reduce both project timelines and costs by roughly 20 percent.

Most project-development organizations or project sponsors are reluctant to spend a significant amount of money on early-stage engineering and design for three reasons. First, they often lack the funds in the early stage of a project to spend significantly on design and engineering. Second, they are eager to break ground and start construction. Finally, they worry that the design will be modified once construction is under way and thus make the expenditure on up-front design pointless.

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Our experience indicates that if project developers or project sponsors spend 3 to 5 percent of the capital cost of the project on early-stage engineering and design, it tends to produce far better results in on-time and on-budget delivery. This is because the design process will often raise challenges that need to be resolved before construction starts, saving time and money.

Streamline permitting and land acquisition. It’s not unusual that it takes longer to get approvals for a project than to build it. Best practices in issuing permits involve prioritizing projects, defining clear roles and responsibilities, and establishing time limits all along the way, including on public review. Providing “one stop shop” permitting can help. By applying these approaches, England and Wales cut the time to approve power-industry infrastructure from 12 months to 9, compared with an average of four years in the rest of Europe.

Projects can also be designed to reduce time-consuming land battles. The state of Virginia completed a plan to widen Interstate 495 in 2012, after a private design company came up with a plan that cut costs markedly and eliminated the need to remove hundreds of homes.

Build a project team with the right mix of abilities. Without a well-resourced and qualified network of project managers, advisers, and controllers, projects will not deliver the best possible return on investment. At worst, they will fail.

Investors and owners need to take an active role in putting together the project team. It is not enough for them to have a vague theoretical overview of how the project should work. They need to create a detailed, practical approach to deal with such likely eventualities as managing quality risks, escalating contractor’s costs, or replacing a high-tech supplier. An experienced project manager is not enough; players must assemble a team that has all the requisite skills, including legal and technical expertise, contract management, project reporting, regulatory approval, stakeholder management, and government and community relations.

The world needs megaprojects to deliver the economic and social goods that billions of people lack and to create the economic growth that will pay for them. But a bad project has consequences that go well beyond a specific bridge, tunnel, or sewage system. Getting it right, or at least better, is good for everyone.

Nicklas Garemo is a director in McKinsey’s Abu Dhabi office, Stefan Matzinger is a director in the Hong Kong office, and Robert Palter is a director in the Toronto office.

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Make Megaprojects More Modular

• Bent Flyvbjerg

In conventional business and government megaprojects—such as hydroelectric dams, chemical-processing plants, or big-bang enterprise-resource-planning systems—the standard approach is to build something monolithic and customized. Such projects must be 100% complete before they can deliver benefits: Even when it’s 95% complete, a nuclear reactor is of no use.

On the basis of 30 years of research and consulting on megaprojects, the author has found two factors that play a critical role in determining success or failure: replicable modularity in design and speed in iteration. The article examines those factors by looking at well-known megaprojects, both successful ones and cautionary tales.

Repeatable design and quick iterations can reduce costs and risks and get to revenues faster.

With climate change forcing the pace, many sectors are contemplating major changes in technology and basic infrastructure. The oil- and coal-fired power generators of the last century are giving way to wind farms and solar arrays. Fossil-fueled cars and networks of gas stations may soon be consigned to history. In almost every industry, large capital investments will need to be made, and with them will come big risks.

Projects have displaced operations as the economic engine of our times, but despite this shift, many leaders still undervalue project management. Companies need to reinvent their approach, embracing a new set of tools and principles.

• Bent Flyvbjerg is the Villum Kann Rasmussen Professor and Chair at the IT University of Copenhagen. He is a Fellow of St. Anne’s College at the University of Oxford and was the first BT Professor and Chair of Major Programme Management Emeritus at  Oxford’s Saïd Business School.

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Five Rules for Managing Large, Complex Projects

Recent research on megaprojects — defined as projects costing more than $1 billion — reveals five lessons that can help executives manage any large-scale project more effectively.

• Workplace, Teams, & Culture
• Leadership Skills
• Executing Strategy
• Project Management
• Collaboration

“Megaprojects” — defined as projects with budgets exceeding $1 billion — are important contributors to numerous sectors, including health care, defense, mining, telecommunications, transport, energy and water infrastructure, sporting events, science, and manufacturing. They represent a significant proportion of many nations’ economic activity and profoundly affect productivity, social cohesion, and the environment. 1 Yet megaprojects have proved notoriously difficult to deliver on time and on budget; one estimate suggests 90% of them end up over budget. 2 Two prominent examples are the Sydney Opera House in Australia, which was 10 years late and a staggering 1,400% over budget when it opened in 1973, 3 and the “Big Dig” Central Artery/Tunnel Project in Boston, Massachusetts (original estimate $2.6 billion, actual cost $14.8 billion).

Why are megaprojects so difficult to manage? The reasons include technical challenges, changes in design and operational requirements, increases in costs, disputes over responsibility, and new regulations. Complexity usually increases with project scale, and complexity can give rise to uncertainty and an inability to foresee the difficulties, changing conditions, and unanticipated opportunities that will be encountered once the project is underway. In this article, we argue that one way to manage the uncertainties is to innovate throughout the course of the project. What’s more, we believe our suggestions are applicable to all large-scale, long-term projects — not just projects with billon-dollar budgets.

Specifically, we’ll distill five rules for innovation in large, high-risk projects, providing managers with guidance on how to modify their plans and processes when opportunities arise or conditions change. Our findings are based on more than 10 years of research into megaprojects. (See “About the Research.”) The projects we studied included:

• High-Speed 1 (1998-2007), a high-speed, 109-kilometer railway from London to the Channel Tunnel, which cost £5.8 billion (roughly $7.5 billion at today’s exchange rates) 4 .
• Heathrow Terminal 5 (2002-2008), a new airport terminal, hotel, car park, subway line, and air traffic control tower, which cost £4.3 billion.
• Infrastructure for the London 2012 Olympics (2006-2012), which cost £6.8 billion.
• Crossrail (started in 2007, scheduled to open in 2018), a 118-kilometer railway across London that has a budget of £14.8 billion and includes 42 kilometers of new railway tunnels and 10 new and 30 upgraded stations.

About the Authors

Andrew Davies is a professor of the management of projects at the Bartlett Faculty of the Built Environment at University College London ( @andyinBrighton ). Mark Dodgson is a professor of innovation studies at the University of Queensland Business School in Brisbane, Australia ( @DodgsonMark ). David M. Gann is a professor of innovation and technology management at Imperial College Business School and vice president (innovation) at Imperial College London ( @DavidMGann ). Samuel C. MacAulay is Thiess Research Fellow at the University of Queensland Business School ( @sam_macaulay ).

1. B. Flyvbjerg, N. Bruzelius, and W. Rothengatter, “Megaprojects and Risk: An Anatomy of Ambition” (Cambridge, U.K.: Cambridge University Press, 2003); and B. Flyvbjerg, M. Garbuio, and D. Lovallo, “Delusion and Deception in Large Infrastructure Projects: Two Models for Explaining and Preventive Executive Disaster,” California Management Review 51, no. 2 (winter 2009): 170-193.

2. B. Flyvbjerg, “What You Should Know About Megaprojects and Why: An Overview,” Project Management Journal 45, no. 2 (April-May 2014): 6-19; and A. Davies, M. Dodgson, and D.M. Gann, “Innovation and Flexibility in Megaprojects: A New Delivery Model,” in “The Oxford Handbook of Megaproject Management,” ed. B. Flyvbjerg (Oxford, U.K.: Oxford University Press, 2017), 313-338.

3. B. Flyvbjerg, “Introduction: The Iron Law of Megaproject Management,” in “The Oxford Handbook of Megaproject Management,” 1-18.

4. “Committee of Public Accounts – The Completion and Sale of High Speed 1: Written Evidence From Andrew Bodman,” https://publications.parliament.uk.

5. D. Sull and K.M. Eisenhardt, “Simple Rules: How to Thrive in a Complex World” (New York: Houghton Mifflin Harcourt, 2015); and K.M. Eisenhardt and D. Sull, “Strategy as Simple Rules,” Harvard Business Review 79, no. 1 (January 2001): 107-116.

6. A. Davies, D. Gann, and T. Douglas, “Innovation in Megaprojects: Systems Integration at London Heathrow Terminal 5,” California Management Review 51, no. 2 (winter 2009): 101-125.

7. House of Commons Transport Committee, “The Opening of Heathrow Terminal 5: Twelfth Report of Session 2007-08” (London: The Stationery Office Ltd., Oct. 22, 2008), https://publications.parliament.uk.; R. Thomson, “British Airways Reveals What Went Wrong With Terminal 5,” Computer Weekly, May 14, 2008, www.computerweekly.com; and E. Clarke, “Counting the Cost of Crisis at Terminal 5,” CNN, April 4, 2008, www.cnn.com.

8. See “Awards We’ve Won,” Heathrow website, www.heathrow.com.

9. National Audit Office, “Case Studies: Improving Public Services Through Better Construction” (London: 2005), www.nao.org.uk.

10. S. Lenfle and C. Loch, “Lost Roots: How Project Management Came to Emphasize Control Over Flexibility and Novelty,” California Management Review 53, no. 1 (fall 2010): 32-55.

11. See www.neccontract.com.

12. A. Davies and I. Mackenzie, “Project Complexity and Systems Integration: Constructing the London 2012 Olympics and Paralympics Games,” International Journal of Project Management 32, no. 5 (July 2014): 773-790.

13. A. Davies, S. MacAulay, T. DeBarro, and M. Thurston, “Making Innovation Happen in a Megaproject: London’s Crossrail Suburban Railway System,” Project Management Journal 45, no. 6 (December 2014-January 2015): 25-37; M. Dodgson, D. Gann, S. MacAulay, and A. Davies, “Innovation Strategy in New Transportation Systems: The Case of Crossrail,” Transportation Research Part A: Policy and Practice 77 (July 2015): 261-275; and T. DeBarro, S. MacAulay, A. Davies, A. Wolstenholme, D. Gann, and J. Pelton, “Mantra to Method: Lessons From Managing Innovation on Crossrail, UK,” Proceedings of the Institution of Civil Engineers - Civil Engineering 168, no. 4 (November 2015): 171-178.

14. See the i3P website, www.i3p.org.uk.

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Capacity Management in Business Operations

Businesses need to thrive, grow more profitably and stay competitive in a marketplace that is constantly changing. That means increasing their output to the greatest extent possible. The process of achieving that goal is called capacity management.

To understand capacity management, we’ll first fully define the term, list the different types and explain why it’s so important in operations management. Then we’ll discuss some of the strategies involved in implementing capacity management and their benefits.

What Is Capacity Management?

Capacity management is the process of controlling a business’ available capacity to ensure that resources are being used as efficiently as possible. Businesses have a finite amount of resources and capacity management is working to get the most out of their workforce, production, etc. Business capacity measures how much a company can produce or sell over a given period.

Looking at the various resources available to a company and comparing them to the time each needs for a specific project is part of capacity management. Then capacity management analyzes the capacity to get an overview of the composition of the human resources available and whether they are a good fit for the actual needs of the business. This leads to the development of a capacity management plan that addresses the supply and demand of resources.

Capacity management seeks to answer the following questions: are there enough available resources to cover all products and are there enough projects to supply all available resources with enough workload? Some might confuse this for resource management, but there are differences. Capacity management is the first step in project planning. Only after this has been done will management focus on resources, such as assigning teams and allocating tasks.

Being able to monitor resource capacity during the execution of projects is essential to ensuring that a business is maximizing its output. Project management software is a helpful tool in this process. ProjectManager is award-winning project and portfolio management software with features that oversee resources in real time. The team page allows managers to view all the human resources across their projects. They can then see if anyone is over- or underallocated and balance the team’s workload to keep everyone working at capacity to be as productive as possible. Get started with ProjectManager today for free.

Types of Capacity Management

Different types of capacity management must be managed to get the most out of production. These are potential capacity, which looks at the long term, immediate capacity, which is what’s currently available, and effective capacity, which is the total available capacity that can be put to use. In terms of types of capacity, there are also three types: workforce, production and resources. Let’s review each.

• Workforce Capacity Management: Aligns a company’s human resources with its operational requirements to meet customer demands, achieve business objectives and maintain a competitive advantage. It does this by identifying discrepancies between staff skills and upcoming work needs and making smooth transitions that integrate business strategy with human resource capabilities.
• Production Capacity Management: Seeks to manufacture the greatest amount of output in a production facility. Production capacity is measured in finished products over a given period. This helps manufacturers accurately quote lead times, provide more informed scheduling processes and gauges the efficiency of manufacturing processes and overall performance.
• Resource Capacity Management: Defines the amount of work that can be done by resources at a company, determining tasks and projects that can be completed by those resources over a set period and matches that work with the available resources to meet current and future demand. To do so effectively requires predicting demand, identifying resource gaps and developing and implementing strategies.

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Capacity Planning Template

Use this free Capacity Planning Template for Excel to manage your projects better.

Proactive vs. Reactive Capacity Management

Proactive capacity management is planning and managing capacity to get the best business outcomes. Reactive capacity management is when managers and their teams respond to emerging capacity issues and try to stop them from negatively impacting performance.

Reactive capacity management can be risky. Following this type of response to capacity issues can lead to not having the resource capacity needed to effectively run projects. It requires visibility into the project so you’re not caught by surprise and unable to fulfill the project’s needs.

Employing proactive capacity management is preferred as it’s a planned method that can meet the anticipated resource challenges. It involves resource forecasting and monitoring to make sure that there are enough resources available and used appropriately to meet current and future project requirements.

By using the long-term process of proactive capacity planning costs are saved, resource utilization is optimized and there is better service quality. This allows businesses to better align resources with their objectives.

Importance of Capacity Management in Operations Management

Capacity management is important in operations management because it helps businesses with their budgeting and scaling so they can identify optimal levels of operations.

In terms of budgeting, capacity management helps businesses determine how their services are offered and the appropriate time frames and staff required to meet current and future operational costs. This informs yearly budgets to better allocate money for expenses.

For scaling benefits, capacity management helps businesses understand if there’s a need to add more staff to help meet anticipated demand based on capacity plans. Not only adding staff but adding specific skills or investing in a larger facility or new equipment is clearer through the lens of capacity planning .

This free capacity planning template for Excel allows you to estimate the human resource capacity that’s needed to execute a project, process or workflow. It allows you to identify the total available hours for your employees, the total hours that they’re scheduled to work, calculate their utilization rate and estimate costs based on their hourly pay rate.

Capacity Management Strategies

Manufacturers who want to ensure that they’re producing as much as they can to meet demand need to engage in capacity management strategies. Several are commonly used: lag, lead, match and adjustment strategy. All are ways that managers use to grow the business production capacity.

Lag Strategy

In this strategy, managers wait until there’s a surge in demand to act by increasing production and meet the current market demand. This is reactive and puts the business at a disadvantage if demand spikes to unexpected levels, which will be hard to ramp up production to meet. This scenario could result in customer attrition which is why businesses functioning at full capacity use lag strategy.

Lead Strategy

With a lead strategy, a business will increase its production capacity before a surge in demand. Of course, this assumes there will be an increase in demand just around the corner and the additional output will cover that increased demand. This strategy is better suited for larger companies that can warehouse excess inventory and the costs associated with it or even sacrifice stock that doesn’t sell.

Match Strategy

Match mixes lag and lead strategies. Businesses increase capacity after analyzing current market demands. But these increases are small until it becomes clear that demand is going through the roof. Then the business increases production to meet that demand . Again, these increases are always small and incremental, which allows the business to work on expanding sales.

Adjustment Strategy

This is similar to the match strategy as it uses both lag and lead strategies, but the adjustment strategy is more data-based. It uses planning tools to analyze multiple variables, such as demand forecasts, real-time sales data and seasonal trends. Thereby, capacity is adjusted more accurately in advance of demand.

Benefits of Capacity Management

Capacity management helps businesses be as productive as possible and meet the fluctuating market demand. But that’s only the start when it comes to the benefits of capacity management. Here are some other reasons to employ this process when manufacturing products.

• Improves cost estimates, especially during growth or recessions, by identifying sudden shifts in prices
• Optimizes production efficiency by scheduling production cycles ahead of time
• Reduces the general cost of doing business
• Helps with inventory management and issues within the supply chain
• Allocates resources better
• Provides operational analysis when thinking of growing the business

How ProjectManager Helps Monitor Resource Capacity

Capacity management relies on the close monitoring of production. It’s only through tracking and analyzing data that significant improvements can be made to manufacturing processes that will lead to greater capacity utilization. Project management software can help to provide the key performance indicators (KPIs) that will direct how to work more efficiently. ProjectManager is award-winning project and portfolio management software that has multiple project views that are all capturing live data and updating together in real time.

Allocate and Schedule Resources with Multiple Views

When onboarding team members, managers can set their availability, including PTO, vacation and global holidays. That makes it easier to allocate resources. Those resources can be scheduled on robust Gantt charts that organize tasks on a timeline but can also link all four types of task dependencies to avoid costly delays. Once the schedule is made, set a baseline and the software automatically compares planned versus actual progress in real time to keep work on track.

Track Labor Costs with Timesheets

Progress is one area of improvement to add capacity to production, but it’s not the only one. Reducing costs should also be on the forefront of a manager’s mind. There are several ways to track costs. One is with secure timesheets that streamline payroll, but also provide visibility into how far each team member has gone to completing their tasks and the labor costs associated with that. For a high-level overview, toggle to the real-time dashboard , which tracks many KPIs, including costs, with easy-to-use graphs and charts.

For a more detailed look at metrics, and to keep stakeholders informed on capacity, use the customizable reporting features. Reports on status , portfolio, workload, timesheets, variance and more can be generated with a keystroke. They can be filtered to show only pertinent data and shared across multiple formats with stakeholders.

ProjectManager is online project and portfolio management software that connects teams whether they’re in the office or on the factory floor. They can share files, comment at the task level and stay updated with email and in-app notifications. Join teams at Avis, Nestle and Siemens who use our software to deliver success. Get started with ProjectManager today for free.

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St Johns County outlines capital improvement plan for roads, drainage, safety facilities

The st. johns county board of county commissioners outlines $588 million in capital improvement projects for roadways, drainage, public facilities, and coastal projects from 2021 to now.

The St. Johns County Board of County Commissioners has outlined $588 million in capital improvement projects for roadways, drainage, public facilities and coastal projects from 2021 to those currently underway.  

According to a press release issued by the county’s Office of Public Affairs, 60% of the funding comes from federal and state grants inclusive of development impact fees and developer contributions; 27% is from the Transportation Trust Fund; and 13% is from tourism and/or was borrowed.  

Capital Investment Projects for 2021-24

Pavement Management Program:

These projects, costing $298 million, include improvements to Old Moultrie Road, Homes Boulevard and the King Street intersection.

Roadway projects:

For 2024, they include County Road 2209, County Road 210 West (Greenbriar to Cimarrone,) CR 210 East, Longleaf Pines Parkway, Mickler Road and State Road A1A;.

Also included: traffic signals at Preservation Trail, Stratton Boulevard and on Pine Island Road and U.S. 1; the widening of Racetrack Road; improvements on State Road 16 and International Golf Parkway; and road improvements at Woodlawn and Kings Estate.

Drainage Infrastructure Program:

There are $49 million worth of projects including addressing aging systems on Winton Circle and Kings Road. Additional work will be done on Santa Rosa, Holmes Boulevard; North Rodriquez, Porpoise Point, San Julian and Surfwood, plus a countywide underdrain.

Public Safety Plan:

In April, the county commission unveiled a  five-year Public Safety Plan  that includes the construction of four new public safety stations, a new regional fire training center and a new medical examiner facility, as well as the expansion of the  St. Johns County Sheriff’s Office  (SJSO). Click here to read the story.

Coastal Investment Projects:

These projects, totaling $173 million, includ e Ponte Vedra’s Restoration: FEMA Berm and St. Augustine’s USACE Beach Renourishment, which has been temporarily delayed . The North Ponte Vedra project is currently underway. Three miles have been completed.

2024 projects also include Ponte Vedra Beach Nourishment; South Ponte Vedra and Vilano Beach USACE Coastal Storm Risk Management; a Flood Control and Coastal Emergencies Project; St. Augustine USACE Shore Protection Project; FCCE Project; FEMA Summer Haven Rock Revetment at Old A1A North; Porpoise Point Drive Armoring; and the Summer Haven Intracoastal Waterway Dredge Disposal Project.

 Click here for information on coastal projects. Click here for Florida Department of Transportation (FDOT) road updates.  Updates on capital projects can be found here .