For example, the company did create a monthly cash flow chart for the modernization project. However, this flow chart was not regularly re-evaluated over the course of the project on a regular and timely basis, once delays became a problem. There was no talk of scaling back or reformulating the approach, once it became clear that the project was going to be more expensive and take longer than anticipated. Additionally, there was no careful monitoring of the external market environment for opportunities or threats that could affect the future profitability of the project. The lack of close monitoring was especially detrimental to the company because of the fact that the contracted firm, EIS, was paid at an hourly rate: once delays began to spiral out of control, so did costs. Another poor strategy was evident in their criteria for selecting members of the leadership team. For example, Ian Leadbetter did not have project management training and experience. A clear forecasting of how the project might transpire, with allowances for delays, under the guidance of someone experienced in project management could have prevented many of the obstacles Woody faced and ensured that the benefits of the projects outweighed the costs.

Question 4: Did they consider other solutions? Give examples.

Initially, when the firm was contemplating modernization they considered relocating. They could have relocated to an area more conducive to expansion, and with more competitive bids for the various components of the project. Moving may have been cheaper in the long run, but instead of coolly and dispassionately weighing the financial and logistical pros and cons between staying vs. moving, the company began to break down into personal in-fighting between the managers. The only source of agreement seemed to be that EIS's initial bid was too high; however the solution that was...

It is not enough to merely have the goal to expand, or to make more money, or to expand one's global presence. Instead, specific targets for profits, costs, and timelines must all be tied together, along with forecasts about the evolution of the market environment.
Of course, a critic might respond that it is impossible to judge whether the project was a success or a failure, given that in the very long-term, the investments of the company may 'pay off.' Modernization was surely necessary, thus the improved software system and the expansion of the production facilities are likely to be useful. However, in terms of maximizing improvements and minimizing costs, the project was still a failure. The benefits accrued by the project, if any, could have been more obvious had a more rigorous timetable been instated, with more financially sound management. Critical opportunity costs during the mini-boom were lost because of delays.

A great deal of good will was also lost between the staff and the management which may not be able to be regained. And relocating may have resulted in fewer costs and higher profits, as well as enabled the company to have a more global perspective. Because a thorough financial 'forecasting' was never implemented, the owners of the Custom Woodworking Company will never know.

Reference

Wideman, Max. (2002, November 14). The Woodworking Case Study. Expert Project

Management. Retrieved May 23, 2010. http://www.maxwideman.com/papers/woody2000/background.htm