Managing Project Supply Networks (PSNs)
Across all industries, another development can be observed that goes hand in
hand with the tendency towards customer projects. This is the development of project
supply networks built from independent companies that work together on a mission.
These networks can include hundreds of companies that are often very dynamic but
also very opaque. They can include contractors, prime contractors, subcontractors,
sub-subcontractors, and so on.
Figure 5: Typical example of a Project Supply Network
While my example seems to say that vendors develop an orderly supply chain,
the reality is more of a complex network that is open to frequent change, and
often not fully understood by all parties. To add further complexity, these supply
networks tend to be international, which introduce new difficulties like time
zones, cultural differences and different legal systems. Moreover, different,
often competing interests are sources of conflict amongst the supply chain companies
contributing to the project.
According to a recent survey that I have made with 302 participants from
both the customer and contractor sides, this is the number one cause for disruptions
in the project.
While my example seems to say that vendors develop an orderly supply chain, the reality is more of a complex network that is open to frequent change, and often not fully understood by all parties. To add further complexity, these supply networks tend to be international, which introduce new difficulties like time zones, cultural differences and different legal systems. Moreover, different, often competing interests are sources of conflict amongst the supply chain companies contributing to the project.
According to a recent survey that I have made with 302 participants from both the customer and contractor sides, this is the number one cause for disruptions in the project.
Figure 6: Frequency of different sources of project disruption
Indeed, there are many more sources of difficulties. Among them are that customers are too often not aware of who exactly works in their projects, yet when problems arise, these will nevertheless be their problems. Project Supply Networks (PSNs) are high risk for all parties involved.
Why are PSNs tasked with project work at all?
If Project Supply Networking is so challenging, would it not be better to get back to internal teams? In practice, this is probably no longer possible because PSNs enable contracting organizations to tap assets of other specialized organizations. These assets can include people, tools, materials, licenses, skills, management attention, and agility. PSNs help organizations keep pace with the speed of change in our disruptive times.
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Differences in Demands on a Project Manager
