Manufacturing projects can be derailed for any number of reasons. In fact, unless a process or task has been successfully completed multiple times, the likelihood of the unexpected happening cannot be underestimated.
This is what led us to develop our Cost Estimate Template – a spreadsheet-based document that triggers teams to consider a wide range of factors and contingencies when developing cost estimates.
However, mistakes can stem from more than data miscalculations.
Following is our comprehensive list of project risk landmines and general insights that will help you improve estimating accuracy and increase the chance of project success – and if you haven’t already downloaded your copy of our Cost Estimate Template for Mitigating Project Risk you can do that here.
Project Landmines – Further Insights for Mitigating Risk in Manufacturing Projects
Miscalculations arise from unknown variables that many times can be foreseen. They also stem from practices that simply don’t support the most thorough process for project management.
Here are a few key actions for not stepping on landmines during project estimating and planning:
- Consider a pilot or proof of concept phase
- Record assumptions made when arriving at costs
- Keep a log of associated constraints (i.e. what assumptions were made that make the estimate valid)
- Separate must-have’s from nice-to-have’s
- Use planning documents (such as our Cost Estimate for Mitigating Project Risk; Microsoft Project (R), etc.)
- Be realistic about time
- Always develop a contingency plan
- Ascertain the complexity of the project
- Substantiate variations throughout the project cycle
- Be extra diligent when reviewing subcontractors bids – make sure:
- Project scope is detailed and correct
- Overtime premiums are included if overtime is required
- Bids include adequate contingencies to cover inaccuracies
The softer side of business (the human factor) causes projects to go awry as well, including simply neglecting to explore all possibilities.
Ask yourself and your team the following questions to uncover hidden factors that might impact the accuracy of your cost estimate and to trigger ideas for further mitigating project risk overall:
- Are our expectations on cost and execution too optimistic?
- Has the project team been selected and what is their time commitment?
- What scenarios have we neglected to consider?
- Are we concerned about delivering “bad news” (we can’t do it on this timeline!)? How honest are we being about the timeline?
- What are the management reporting requirements?
- Have we identified all stakeholders? Do we fully understand their needs and goals?
- How will we recover justifiable unexpected costs?
- Can we transfer any risk to other parties?
What would you add to our list of considerations and questions? What are your company’s methods for mitigating project risk? We invite you to share your thoughts and feedback in a comment to this post.
