Suddenly, major changes occurred in the business environment. Demand dropped significantly as some customers switched to a lower-cost competitive product; the company decided that, at least in the short term (six to 12 months), the expansion didn't fit into its strategic plan. So, the project was placed indefinitely on hold.
Fortunately, the company charged the project director with preparing a PSRP. The approved PSRP led to several actions, including:
• The decision to place the project on hold was immediately communicated to internal stakeholders, project team members, external contractors and potential suppliers.
• Design work was allowed to continue for a few weeks to complete preparation of critical engineering work packages. By doing this, work could commence in an efficient manner upon project restart.
• A small cadre of internal and external engineering resources was retained on the project for a short time to resolve critical outstanding issues.
• External contracts and purchase orders either were cancelled, placed on hold, or contract termination dates were extended.
• With support of discipline department managers and human resources, project team members were reassigned to short-term projects with the understanding that they could be recalled to this project within a reasonable timeframe.
• A project status report was prepared. It contained an updated cost report that reflected the latest quoted equipment costs and other committed costs; a generic schedule that incorporated the delivery dates obtained from equipment and material quotations; a risk register that documented risk items and the plan for mitigation; and a listing of outstanding technical and execution issues that remain on the project.
A Valuable Tool
By implementing the PSRP approach, companies can ensure better stewardship of their capital funds and give themselves the agility to more efficiently and cost-effectively restart projects. This can provide a crucial competitive edge.
Nat D. Schatz is an executive associate at Pathfinder, LLC, Cherry Hill, N.J. You can e-mail him at email@example.com.