CASE STUDY 11.2 Ramstein Products, Inc.

Jack Palmer, head of the Special Projects Division for Ramstein Products, had been in his new position for only three months when he ordered an evaluation of project management practices within his division. Ramstein Products is a leading developer of integrated testing equipment for the energy industry, marketing more than 45 product lines to a variety of organizations involved in natural gas and oil exploration, power generation, and utilities. As head of special products, Jack was responsible for an ongoing project portfolio of 50 to 60 new product development projects. Top management at Ramstein estimated that 60% of company revenue came from new products and took a keen interest in the operations of the Special Projects Division.

As part of the evaluation, Jack became aware of the troubling fact that projects were routinely overrunning their budget and schedule targets, often by a significant margin. This fact was particularly troubling because Jack, who had once worked as a project manager within the division, understood that the project schedules were not terribly aggressive. In fact, he believed that a great deal of padding went into the project schedules as they were initially developed. Why, then, were projects chronically late and over budget?

Although important to Ramstein's future success, the Special Projects Division had long been operating on a tight resource level. There were seven system integration engineers supporting a portfolio of 55 projects. These engineers were very important to Ramstein's new product development efforts, and their services were often stretched to the breaking point. One of the senior engineers, Mary, recently informed Jack that she was supporting 14 projects, all being developed at the same time!

Jack reflected on some of the information he had received during his evaluation. Clearly, the easiest option would be to approach top management and request more systems integration engineers for his division. He had a hunch however that with the current economic conditions, any such request from him would probably be turned down. He needed to get a handle on the problems and apply some solutions now with the resources he had available.

Questions Applying Goldratt's ideas of critical resources, what is the system constraint within the Special Projects Division that is causing bottlenecks and delaying the projects?

How is multitasking contributing to systemic delays in project development at Ramstein?

How could the drum buffer concepts from Critical Chain Portfolio Management be applied to this problem?