Owner’s Project Life Cycle Approach: A Case Study of Rubber Plantation Projects of Vietnam Rubber Company

In recent years, Vietnam Rubber Company (VRC) has invested big capital for expanding rubber plantations and upgrading rubber processing facilities both domestic and outside the country. For VRC, the concept and practice of owner’s project life cycle have been used in rubber plantation projects. Nevertheless, VRC has not built a type of project life cycle appropriating with its specific characteristics; therefore, some projects meet with serious difficulties during performance.

According to internal audit and situation report, VRC’s oversea rubber projects show many problems especially in cost and schedule on the project management in construction during 2007-2010 such as:
- Cost overrunning or over budget;
- Projects are prone to delay;
- Project quality uncontrolled;
- Project scope creep.

Also according to this report, VRC recognize the bad results in Cambodia are created by many reasons; however, poor management of the project life cycle is one of the reasons bring about serious consequences including the followings:

- No establishing a framework of project life cycle;

- Project proposals and business cases and project selecting process in the first phase were carried out incautiously have impacted to all remain phases of the project life cycle;

- Some projects do not have a strong project management team;

- Inadequate delegation from VRC’s head quarter and the project organization is not properly;

- Lack of managerial skills and competencies as well as the internal capacities of the owner

VRC considered that poor management of the project life cycle caused negative impact to the projects. They are the critical problems which VRC and other related parties to Cambodia projects need to consider cautiously.

Mr. Do Huu Phuoc made a research to study Vietnam Rubber Company’s project life cycle approach, analyze situation and develop a framework of project life cycle of a rubber plantation project and guideline to possibly ensure the projects deliver on time, on budget and to the level of quality expected.

Conclusion

All projects have certain characteristics in common which only last for some time.

Projects can be managed using a common set of project management processes. In fact, a similar set of project management processes can be utilized regardless of the type of project. All projects should be well-defined and well-planned, and all projects should manage the scope, risk, quality, status, etc. Although every project is unique, the lifecycle model typically is not. The general lifecycle model that an organization use will probably be similar to one that has been used dozens or hundreds of times in other organizations. There is no reason to reinvent everything for a project. It just takes longer and contains more inherent risk. The better approach is to utilize a standard set of lifecycle processes, techniques and templates.

The project life cycle of VRC’s projects may progress through four phases:

- The first phase of a project is the initiation phase.

- The second phase, the project enters the detailed planning phase.

- The third phase involves implementing the plans created during the project planning phase.

- The final phase involves completing the work, closing out the project.

Conclusion for VRC’s project life cycle approach

There is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in project management as well as the type, size and location of the project. It is important for VRC to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, VRC should be concerned with the life cycle costs of planted rubber trees, constructed facilities rather than simply the initial costs.

Saving small amounts of money during construction may not be worthwhile if the result is much larger than the operating costs; or not meeting satisfactorily the functional requirements for the new facility or the objective is not align with the scope. Thus, generally a project or particularly a rubber plantation project wants to finish successfully it must be very concerned all the phase of the project life cycle.

Recommendations

With so many ongoing projects like situation at present, VRC may encounter difficulty for all projects to get adequate support, or even the attention of top managements. The particular common problems when trying to manage multiple projects concurrently may be:

a.There is no time for summary experience, so the mistakes from a project can repeat to all projects.

b. Delays in one project may drag other projects because of common resource needs or technological dependencies;

c. The inefficient use of corporate resources results in hills and valleys of resource utilization;

d. There are unwholesome competitions between project teams to get support, or the attention of top managements.

VRC should consider a temporary stopping with the current projects to review all the problems happening. The lessons learn from projects should be analyzed, reviewed and documented for future projects and any other projects will be performed by VRC in Cambodia or other countries in the future.

This study had concentrated on owner’s approach in managing project life cycle to an agriculture project. However, there are many aspects relating to the project management. Further studies should be carried out to find out the approach of owner for agriculture project management.

His thesis abstract is copied and posted.

Abstract

Project life cycle is an approach that links the phases, which can lead to significant results required for completing a project. As the owner has the most authority in enforcing the implementation of constructability, the owners' awareness of the benefit of the project life cycle is the most important. Project owners must be aware that the decisions that are made in the stages of projects are difficult and costly to change once construction begins.

Owners should recognize that there is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in project management as well as the type, size and location of the project. It is important for the owner to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, owners should be concerned with the life cycle costs of constructed facilities rather than simply the initial construction costs. Saving small amounts of money during construction may not be worthwhile if the result is much larger operating costs or not meeting the functional requirements for the new facility satisfactorily.

However, the traditional approach to project life cycle limits their option for involving in the phases of the project. The general lifecycle model that an organization use will probably be similar to one that has been used dozens or hundreds of times at other organizations. There is no reason to reinvent everything for your own project. It just takes longer and contains more inherent risk. The better approach is to utilize a standard set of lifecycle processes, techniques and templates which to be used in the same industry.