Presentation on theme: "PPM Training Project Portfolio Management Process"— Presentation transcript:
1 PPM Training Project Portfolio Management Process Trainer: First Name, Last NameDate: dd/mm/yyyyJanssen Supply Chain Enterprise Portfolio Management Team
2 Training Objectives What Why Who How Understanding the WHAT, WHY, WHO and HOW of the PPM ProcessWhatWhyWhoHowWhat is the PPM process that is utilized by Janssen Supply Chain?How does it link to our ability to achieve our strategic goals?What is the critical role that you play in the process?What steps and process flow does the process consist of?
3 What is the PPM Process?A portfolio decision support tool for Janssen Supply ChainDecide on a portfolio that delivers maximum value to the organization over a specific time horizonPrioritize/rank projects within their portfolios based on a set of criteriaGovernances & Leadership Team
4 Why do we do the PPM Process? PPM helps us achieve our strategic goalsBefore PPMYTD with PPMCapital decisions were taken from ‘history’No formal process to make global investment decisions based upon strategic importanceNo link between projects and CAPEX Budget exerciseThe PPM Process has established:Global project inventoryIntegration of financial & project processesAll project linked & scored to strategic prioritiesAlignment of Capital & Resources capacityFacilitated active portfolio managementStrengthening of project management practicesGlobal leaders & decision-makers now:Save time in data collection from sitesHave a transparent strategic & financial overviewHave a clear view on implicationsHave a timely understanding of portfolio expend progressUsually we have more ideas for project initiatives & improvements than money and resources. Projects must therefore compete for resources.PPM enables fact-based decisions on GLOBAL priorities in a structured process.
5 Who is involved in the PPM Process? All PPM roles are inter-connected and crucial to successHighest Level Governance:Oversight of all project typesBusiness transformation PMOGovernance UnitFinancial UnitBusiness UnitLTPortfolio Governance:Calibrate priorityDecide which projects go in portfolioEscalate conflicts to LTHolds PM accountableIncludes:Functional Mgmt (resources & oversight PMs)Budget Ownership:Ensure actuals = targeted spendWork with GovernancesPROGRAMSProject Management & Resource Management:Ensure flawless project executionEnsure resource availability to deliver project on timeAccountable to:Functional MgmtBudget OwnersPROJECTS
6 Resource Intense Projects Capital Intense Projects Who is involved in the PPM Process?Governance Model created to mirror JSC organizational Business ModelJSC LT PPM CouncilLCMAssetsFunctional TeamsPDMSPlatform Small MoleculesProcurementNPIPlatform ParenteralsCustomer ManagementPlatform Liquids, Creams & TransdermalsProduct ManagementGlobal QualityPlatform SolidsCLSPlatform V&ATITSite governancesResource Intense ProjectsCapital Intense ProjectsGovernance Unit
7 How does the PPM Process work? Project Prioritized byGovernance: trade-off vs. other LT approved project or conversion of placeholder into project (2 steps at same time)How does the PPM Process work?PPM Prioritization and Approval FlowProject Case Approval in GovernanceProject Prioritized by GovernancePrioritized by LT (BP Approval)Idea/NeedProject in BP- In QueueProject CaseAccepted Project CaseProject ClosingApproved Project ExecuteProject in BP - PlanArchivedCAR Approval (when applicable)Closing Activities CompleteConfirmation of Project FinalizationProject ApprovalResource ApprovalDetailDetail
8 How does the PPM Process work? Projects are prioritized via a scoring system and criteria weighting6 weighted Portfolio Drivers are used to score each project on 2 scalesStrategic ImportanceRiskBusiness Impact/ValueProject AttractivenessCapabilitiesTime to CompleteResources RequiredProject Ease of Implementation
9 High risk – EHS, Quality/Compliance, IT, Supply Continuity How does the PPM Process work?Portfolio is determined based on the JSC Strategic Prioritization Hierarchy ModelTRANSFORMATIONAL All other strategic programs designed to transform the way JSC does business fall into secondary prioritySECONDARYJnJ Factory, Systems Harmonization, Planning, Procurement/Supplier, Network, Cost Reduction, LEAN, LCM, LMA, DTV, Quality Systems“MAKE THE MEDICINES” Includes investments to launch new products and cover SCRM/BCP programsNPIReliability: SCRM, Growth & Capacity, Track & TraceOver the last several years our demand for projects, in particular Capex, has been significantly greater than the targets provided by the Corporation. With that constraint, the simple priority was not enough to use to determine the portfolio for 2 key reasons- the first is that by definition – base business – those investments needed to maintain a safe and reliable supply would always end up being Low priority. There is no NPV, if typically are not high risk – eventually – if put off long enough, they might mitigate high risk – but this isn’t necessarily the best way to manage a business. And they typically don’t impact the ability to implement a strategy.- the 2nd reason is that we have so many high priority projects that we run out of target before all the allocations.- During last year’s BP exercise we grouped these projects into the Primary and Secondary priority.Similar to Maslow’s hierarchy of needs mode whereby food, shelter, clothing and safety are the lowest level, we developed a priority hierarchy to manage this situation.In the Primary priority we have 3 groups of projectsCarry Over, Base Business & Make the Medicines,In the bottom of the hierarchy are the carry over projects. Typically – it is disruptive to stop projects already in flight, more expensive to re-start. As well then you may end up with a lot of sunk capital and nothing much to show from it. Unless there’ s a major assumption change e.g. generic competition, clinical hold – we want to complete projects.for JSC this has been in the $200MM range for the last several years.The next level in Primary Priority includes what we’ve termed ‘base business’ – investments needed to maintain a safe and reliable supply. Into this category as a starting point are the high risk – EHS, Quality, Compliance, IT supply continuity projects, reliability – site and small projects, and the necessary maint, distr and facilities/admin projects.The last category in Primary – Make the Medicines – are those investments needed for new product launches, Growth & Capacity, regulatory compliance projects – like track and traceability. Also included in this category are the Supply Chain Risk Management projects. This was based on the direction of the JSC LT – who’s continued focus is on Reliability.into the Secondary priority are all the other strategic programs – we’ve termed these transformational. As in Maslow’s hierarchy of needs these would be things like education and vacation.- Should targets increase we may evaluate creating a more quantitative prioritization methodology between all the programs.High risk – EHS, Quality/Compliance, IT, Supply ContinuityReliability: Site and Small & Unidentified Maint & Dist, & Fact MaintPRIMARYBASE BUSINESSInvestments to safely maintain Reliability & Supply
10 How does the PPM Process work? Process Changes with the STEP Deployment to Answer the Key QuestionsResource ManagementNamed Resource ManagementResource role updatesResource Managers responsibilitiesBase Business bucketsProject ManagementEvery project with a managed project planAll projects inProject Managers must update projects in systemFinancial ManagementMonthly financial forecastingActuals entryAligned financial templateTM1 budget alignmentPortfolio ManagementSimplified & stage-gated portfolio flow managed by Portfolio ManagersUpdated prioritization matrixReal time reportingAll Projects inCan I complete the projects in my forecast?Will I hit my spending targets?Are my resources working on the right projects?What is the status of the projects in the portfolio?
12 How does the PPM Process work? In-Depth View: Portfolio PhasesProject goes through intake process & is entered into InstantisIf Governance accepts project, it becomes an “Accepted Project Case”Project included in budget. Decision is made on “do now” or “do later”Idea/NeedProject in BP- In QueueProject CaseAccepted Project CaseProject in BP- PlanProject ClosingProject ClosingApproved Project ExecuteApproved Project ExecuteProject in BP - PlanArchivedProject comes to an end & closing activities are completedProject is carried out & performance tracked via updates and reportsProject is given green light for resources & CAR funding is approved
13 Approved Project Execute How does the PPM Process work?In-Depth View: Key Steps per PhaseMonthly updates in line with financial calendarReporting of project status e.g.Latest forecastingFour up reportingChange notification processPerformance to planDetermination of completion of project activitiesProject promoted to “Project Closing”Project CaseCompletion of Project PlanProject moved to“do later” list, or;“do now” Proceed to next PhaseContinuous Work in Progress (CONWIP) review of ProjectsSelection of Projects to start in next three monthsAddition of those Projects to CONWIP GOStart of resource name assignmentsProject promoted to “Project in BP – Plan”Confirmation of named resources in line with start dateCAR process initiated (when applicable)Completion of resource name assignmentProject promoted to “Approved Project Execute”Accepted Project CaseCompletion of Financial Closure DocumentationCompletion of Lessons Learned & PPM feedbackRealisation & confirmation of savings benefitsApproved Project ExecuteProject ClosingProject in BP - PlanProject in BP- In QueueCharter created in InstantisCharter promoted to “Project”Presentation slot booked at Governance Review MeetingInsight in role demands for ProjectIntake presentation at Governance Review MeetingDecision “Go/NoGo”Project promoted to “Accepted Project Case” in InstantisProjects parameters reviewed for prioritizationProject list determined for:Projects to be proposed for BP (during regular working cycle)BP budget approval for following year (during BP cycle)Project promoted to “Proposed for BP”Project list reviewed in another prioritization exerciseDecision on which Projects to commit to next yearConfirmation of Project List as Final Business Plan for next yearProject promoted to “Project in BP – In Queue”Project ClosingApproved Project Execute
14 How does the PPM Process work? In-Depth View: Role of Project ManagerProject MgrFinance MgrPortfolio MgrGov LeadResource Mgr
15 How does the PPM Process work? Project MgrHow does the PPM Process work?In-Depth View: Role of Project ManagerResource MgrPortfolio MgrPortfolio MgrProject MgrProject MgrPortfolio MgrResource MgrFinance MgrApproved Project ExecuteProject ClosingProject CaseAccepted Project CaseProject in BP - PlanProject in BP- In QueueProject MgrProject MgrProject Mgr1.Create Charter & draft Project Case2.Promote Charter to Project3.Determine resource roles needed for project, with Resource Mgr input1.On cue of Portfolio Mgr, adjust dates of Projects that will start now (‘do now’).4.Alert Portfolio Mgr to put Project on agenda of Governance Review MeetingProject ClosingApproved Project Execute1.Initiate Financial Closure1.Update Project status until Project Closure1.Confirm named resources with Resource Mgr2.When Project activities are done, ask Portfolio Mgr to Promote Project to “Project Closing”2.Update 'To Be Named' Resources to the confirmed name/role3.Initiate CAR process (when applicable) with input from Finance Mgr
16 How does the PPM Process work? Portfolio MgrIn-Depth View: Role of Portfolio ManagerProject MgrGov LeadProject MgrPortfolio MgrPortfolio MgrPortfolio MgrProject MgrApproved Project ExecuteProject ClosingProject CaseAccepted Project CaseProject in BP - PlanProject in BP- In QueuePortfolio MgrPortfolio Mgr1.On cue of Project Mgr, place Project on agenda of Governance Review Meeting1.Direct Project Mgr that his/her Project is ‘do now’ & that Project dates must be adjusted1.Promote Projects to “Proposed for BP”, so that BP list can be made & reviewed2.Promote Project to “Accepted Project Case” if approved2.After PPM LT approves final list, Flip Flags to “Project in BP – In Queue”2.Promote the 'do now' Projectto “Project in BP – Plan”Project ClosingApproved Project Execute1.On cue of Project Mgr, promote Project to “Project Closing”1.Promote Project to “Approved Project Execute”
17 How does the PPM Process work? Gov LeadIn-Depth View: Role of Governance LeadPortfolio MgrPortfolio MgrGov LeadGov LeadProject CaseApproved Project ExecuteProject ClosingAccepted Project CaseProject in BP - PlanProject in BP- In QueueGov Lead1.Review Projects, calibrate & prioritize within Site/BU1.Review Projects at Governance Review Meeting(“do now” vs. “do later”)2.Work with & direct Portfolio Mgr to Flip Flags of Projects to be reviewed by PPM LT2.Alert Portfolio Mgr to direct Project Mgr that his/her Project is “do now” & that Project dates must be adjustedProject ClosingApproved Project Execute1.Approve Project to proceed once Resources & CAR are approved
18 How does the PPM Process work? Finance MgrHow does the PPM Process work?In-Depth View: Role of Finance ManagerProject MgrProject CaseApproved Project ExecuteProject ClosingAccepted Project CaseProject in BP - PlanProject in BP- In QueueFinance MgrProject ClosingApproved Project Execute1.Assist Project Mgr with validating financial information & CAR/NPV preparation
19 How does the PPM Process work? Resource MgrIn-Depth View: Role of Resource ManagerProject MgrResource MgrProject MgrApproved Project ExecuteProject ClosingProject CaseAccepted Project CaseProject in BP - PlanProject in BP- In QueueResource Mgr1.Provide input to Project Mgr to determine resource roles needed for ProjectProject ClosingApproved Project Execute1.Provide Project Mgr with confirmation of named resources
20 Who is involved in the PPM Process? Governance Model created to mirror JSC organizational Business ModelLCMAdditional product driven capacityAll product/product family optimizationProduct Tech Transfers related to LCM optimization (not network strategy)Product Driven SCRM (Safety Stock, additional/Alternative MFG site, material supplier validationProjects requiring PDMS support charged back to JSCNPILaunch Management Portfolio – Must Do
21 Who is involved in the PPM Process? Governance Model created to mirror JSC organizational Business ModelAssetsPlatform Small MoleculesPlatform ParenteralsPlatform Liquids, Creams & TransdermalsPlatform SolidsReplacement/Upgrade of all assets & infrastructureIntroduction of new platform technologiesManufacturing site and platform related optimizationsTech Transfers driven by network strategy projectsSCRM at site levelPlatform V & AT
22 Better definition for Product Management – not high level enough Who is involved in the PPM Process?Better definition for Product Management – not high level enoughGovernance Model created to mirror JSC organizational Business ModelFunctional TeamsProcurementCustomer managementProduct managementGlobal quantityCLSITProduct ManagementFocuses on product focused activities(SCRM, Planning, Reliability, Launch Management, Value Stream Management)Customer ManagementFocuses on relationship with commercial companies and external customers(Demand Planning, RADs, Graphics, Office Strategy & Execution, Business Excellence)Manufacturing & Technical OperationsFocuses on technology, production, site network optimization for internal and external sites(GTS, Platforms, Facilities, Procurement)Global QualityFocuses on quality and compliance (Quality, Analytics, DTV)IT, Finance & HRProvide critical support to the organization
23 Portfolio Drivers RISK Risk Related to the business if ‘not doing’ the project (external risk) (e.g. business continuity plans)3 risk categories are defined:Environmental, Health or Safety riskQA/Compliance riskContinuity of Supply risk External Risk calculated as Severity x LikelihoodSeverity: judgment of expected consequenceLikelihood: judgment of probability6 weighted Portfolio Drivers are used to score each project on 2 scalesStrategic ImportanceRiskBusiness Impact/ValueCapabilitiesTime to CompleteResources RequiredThe next Prioritization level is Risk.Risk has a few fields where based on your answers, will assess and place the project in a risk placement.
24 Money is key business driver of PPM Portfolio DriversMoneyMoney is key business driver of PPMRESOURCE CONSTRAINTSResources PEOPLE & MONEYBUSINESSBENEFITSDeploy STRATEGYEnsure Financial Return (NPV/CIP)Address RISK to:Quality; RegulatorySecurity of SupplyEnvironmental; Health & Safety6 weighted Portfolio Drivers are used to score each project on 2 scalesStrategic ImportanceRiskBusiness Impact/ValueCapabilitiesTime to CompleteResources Required
25 Portfolio Drivers - = PPM Resource Management Rationale 6 weighted Portfolio Drivers are used to score each project on 2 scalesStrategic ImportanceRiskBusiness Impact/ValueResource CAPACITYResource SUPPLYResource DEMAND-Resource PoolProject InformationVariance=CapabilitiesTime to CompleteResources Required
26 PPM Process Please advise on where this belongs? Three Decisions GOVERNANCEBUDGET OWNERSITEPrioritization & Approvals: Portfolio Manager determines a project’s correct GovernanceWhat budget does my project roll up under?Project Controls & Execution – Where is my primary work location?Here is a good visual that represents view the portfolio in three different ways.Originally, the process was set up by Governance to mirror the business model that JSC operates under. However, the way that our budgets are managed does not align with the governance model.We have an additional complexity in that project managers may come from the different functional teams.Each of these groups has a responsibility in managing the PPM process for their piece.For a site Portfolio Manager this creates a complexity in ensuring that they are aware of and looking at the entire portfolio at their site.READ WHAT EACH SECTION DOES FROM THE SLIDEMTOHO ITHO Function (i.e.; Home office – product management)GTSProcurementSite Eng/MaintVSL PMPDMS (etc)Assets – Platform/SiteLCM/NPIFunctional