A Nuclear Challenge; Guest Post by Glenn Williams

We spotted this article at a popular website, TheStreet.com. It is not accessible to most, because it is part of a paid subscription service, RealMoney. Because we liked it so much, we sought, and received permission to reprint the article, with credit. Why were we so impressed with this analysis by author Glenn Williams?

First, we have experience in Program and Project Management (PPM) in the Nuclear industry, and we continue to follow it. Second, although the article is a financial analysis, it demonstrates great insights, in estimating, in research, and analysis, in a complex subject. Third, Mr. Williams demonstrates the type of professional PPM competence that every Executive should be able to depend upon for advice in strategic decisions. Thank you Glenn, for being such a great example!

And Now, the Article
With license in hand, Southern (SO) is ready to build the [USA] nation’s first generation-III nuclear power plant. While this does not signal any nuclear renaissance, it does provide the nation with badly needed generation. The challenge will be for Southern to build Plant Vogtle’s additions on time and on schedule.

The reality is that cost and schedule will be difficult to achieve. In fact, the probability that Southern’s two 1,154-megawatt units will be operating by 2016/2017 and will have a final cost of $14 billion is about zero. Of course, the best available estimate is being used to forecast the project’s outcome. History has taught us 110 times before, however, that utility estimates for nuclear power plants include dozens of assumptions.

If one of those assumptions is wrong, the estimate is wrong. Remember, the Vogtle project is an attempt to build a first-of-its-kind nuclear power plant.

The question is how far off are Southern’s estimates? The answer is nobody knows. And, if anyone claims they know, they’re lying to you.

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How I Learned to Balance the Project Vital Signs

PM Commentary by Stacy Goff

I named the key project factors of Time, Cost, Scope, Talent, Risk and Quality the Project Vital Signs nearly thirty years ago. I named them to evoke the signs one measures in the Emergency Room at a hospital, not measure if the patient was dead yet, but to determine whether he or she was improving. My rationale: Effective project managers use those factors to manage for success, not just to identify when the project failed. But I did not originally learn the importance of balancing those Vital Signs in the project world; instead, I learned it in a number of early formative experiences. This article is about one of those experiences.

Growing Up In the Cherry Capital of the World
I grew up in The Dalles, Oregon, the fresh dark red, ripe, sweet cherry-producing capital of the World. Other competitive regions included Italy, California, and Michigan, but our orchards produced the largest, richest-flavored cherries. They were so much in demand, that flights to Paris would next-day deliver our cherries to such noteworthy gourmet places as Fauchon. One part of our packing process was to box the cherries in elegantly foiled and lined wooden boxes, so they made a classy image in the shops. And one of the choicest jobs, once I turned 18 years of age, was to be one of the workers who made those boxes.

The box-making process involved standing at a large, noisy machine, and following these steps:

  1. Insert two ends (called heads) and one side into the machine, and push the nailing pedal. A large mechanical device containing the hammers would rapidly descend and nail the parts. Caaarrrunch!
  2. Flip the box over and place the lid on the assembly (the boxes were filled from the bottom, with the top several rows carefully arranged by packers, the goal being, when opened, the customer would see exquisitely-perfect rows of artfully placed cherries). Press the nailing pedal; caaarrunch, went the machine.
  3. Flip the mostly-assembled box to its final position, add the last side, push the pedal; caaarrrunnch!
  4. Place the finished box on the slanted track behind me, where four people added the foil, cardboard, and poly liner, while I began to repeat the cycle.

Those four steps required 6-10 seconds for each box.

Read moreHow I Learned to Balance the Project Vital Signs