Project Management

What do inventory systems and project management have in common?

It’s all about the order in which things are done.

Not sure what we’re getting at? Have no fear, it’ll become clear very soon. And when it is clear, it could make a huge impact on budding founders and entrepreneurs and how they approach project management.

A Brief Introduction to FIFO and LIFO

When a grocery store purchases milk — or any perishable item — the oldest products are pushed to the front. This way, the food will be sold before its expiration date while the next oldest item is put in its place.

After all, if the item perishes, it generates a direct loss in profit. When items have a best-by-date, such a technique makes perfect sense.

Above, is an example of “first in, first out” or FIFO inventory management, which shows that a company’s priority is the sale of items first purchased for resale. FIFO is believed to be the most profitable inventory method because the cost of producing goods will rise over time.

Not only does the FIFO model make sense for grocery stores, but also for businesses with products that go off-trend or become obsolete such as fashion retailers.

Conversely, the “last in, first out” or LIFO method of inventory management is best suited for commodities such as petroleum, metals, and chemicals. It counts the cost of goods sold instead of what was paid for the inventory that was already in stock. Provided the goods increase in price after the initial purchase, the “cost of goods sold” metric will be greater. Thus, profits will reduce, but so will tax burdens.

However, the direction we’re going is quite different from the traditional concepts of FIFO and LIFO.

We are taking these principles and applying them to project management and workflow. Look at the ‘goods’ or ‘products’ in the above example and replace them with work from clients and customers.

Throughout this post, we’ll be discussing where FIFO and LIFO can be used respectively for project management. In these examples, it will become apparent that FIFO is the ideal choice for assembly and service-based project management, while LIFO is conducive to sales conversions.

Let’s delve deeper below:

LIFO and Assembly-Based Tasks

There are plenty of reasons why FIFO is better for assembly-based businesses looking to efficiently manage projects.

We’ll start with scheduling:

First and foremost, any given project could come with a laundry list of hiccups. Therefore, placing every new bit of work to the back of the line offers enough time to problem solve in the case of unforeseen snafus.

FIFO makes it easier to predict and promise completion dates — no matter the difficulty level of the job. In fact, it’s better to give timeframes that are in line with the tougher work.

Think about it. Say a client brings forth something so rudimentary that it’d take just a couple of hours, but the set wait time is 2 weeks. Sure, it could technically be taken care of right away. But placing it to the back of the line means everyone can still focus on completing the insanely hard project they’d been working on for the past 10 days. Pushing the easier work to the front of the line could possibly lead to a missed deadline for another tougher project.

Of course, if business is slow, there’s nothing wrong with finishing a project early — but it’s better to under-promise and over-deliver. Saying that a project will take 2 weeks then finishing it in a week comes across a lot better than guaranteeing it’ll be completed in 2 days then finishing in 3. Furthermore, with a 2-week completion promise, a project can be completed in 1 day, 9 days, or the entire 2 weeks to the satisfaction of the customer. It offers the ultimate flexibility.

A solidified buffer time for all projects gives businesses more time to appease customers, whereas randomly prioritizing could lead to unnecessarily bungled time management.

Now we’ll look at FIFO through the workflow visualization lens:

It’s easier to visualize a straight line than one that swirls, zig-zags, and spirals.

With FIFO, the workflow will be linear, making tracking a piece of cake. If an engine needs 5 machining processes, machine workers can predict their required tools and will have time to order extra parts.

It’s possible because they’ll be doing the job sequentially from the beginning until the end. If they go from part 1 right to part 5 — skipping all the steps in between — it becomes vastly more difficult to be predictive and efficient.

In a nutshell, FIFO makes it so assembly-based project managers can see what lies directly in front of them rather than picturing tasks coming from all directions.

And finally, let’s examine how FIFO impacts delegation:

Having some form of implemented FIFO process makes delegation a cinch. Technicians only have to work on the next item in line. There’ll be no fussing over what’s the higher priority or who’s supposed to do what. Plus, managers won’t need to waste time needlessly doling out tasks to their team.

Instead, the rules will be set in stone. Technicians will place their finished work at the end of the line on the next rack, refer to whichever FIFO-based scheduling mechanism that’s being used, rinse and repeat.

Since workers won’t be bouncing around mid-task to jump onto another project, it makes it far easier to monitor time and efficiency. If projects are taking too long, managers can clearly assess whether the issues are due to a deficiency in skill or because of under-charging.

With all of this in mind, why would assembly-based project managers stray from the FIFO approach?

Now, despite project managers’ immense multi-tasking abilities, they aren’t demi-gods. They are human.

And the human element is what puts schedules into blenders, sends workflows into a whirlwind, and flips delegation onto its head.

Guess who else is human? Needy customers — one of the greatest hurdles placed in front of the FIFO method. Unfortunately, a trap many businesses and project managers fall into is forgetting the need for boundaries with customers/clients.

And in 2019, boundaries have never been more important. In days of old, customers couldn’t find an employee’s home number and hound them until the job was done. Meaning, lines didn’t need to be drawn. If a customer was difficult, they could only be so until 5 pm every work day. Now, these difficult customers can run amok 24/7. Cellphones, texts, and emails make it so these demanding clients can contact project managers any time they please.

Even when it’s been decided that a client is so unprofessional that they’re one-and-done, their project often gets pushed to the front of the line in an effort to speed up the departure.

While pesky clients are a reality of any business, there are ways to offset their obtrusiveness. Start by clearly illustrating the timeline for completion. Break it down in great detail — as to avoid any confusion. Also, project managers must be very clear about business hours as well as when and where they may be appropriately contacted.

From there, it’s a matter of quality customer service. Proactive status updates will prevent clients from pestering.

If a customer is abrasive to the point where the above measures won’t quell their quirks, there’s nothing wrong with ‘firing’ them. One project isn’t worth breaking the FIFO protocol.

Another prime contributor to breaking the FIFO-cycle is prioritizing preferred work.

Work projects are always going to be a mixed bag.

Some are going to be challenging in an engaging, fulfilling sort of way. While others are going to be challenging in a mind-numbing, slamming-head-into-a-wall sort of way. And others might not be challenging at all, and just plain boring.

Regardless, the way workers treat these projects can throw a wrench into what was once a well-oiled FIFO machine.

A job may not be glitz and glamor but it’s essential to complete it before the next (far more fun) project.

For FIFO to function at its fullest capacity, discipline is of the utmost essence. Breaking the FIFO chain because something isn’t desirable has greater consequences than just one job. More specifically, if it happens once, it’ll happen again. Suddenly, boring jobs start to pile up because all the fun ones were completed. Then, deadlines fall by the wayside — along with a business’s overall reputation.

No matter the mundanity of a job, it must be done well and punctually. Set aside the time to get it done. Provided the process was awful enough, use the experience as a lesson and reminder to avoid similar jobs in the future.

The lure of a quick buck can also throw FIFO project management for a loop.

We’ve all salivated at the idea of a few hundred dollars in our pocket at the blink of an eye.

Still, just because something seems profitable, doesn’t mean it is. A shop that’s backlogged with engines can’t afford to shift everything around for sake of an easy dollar. It could throw operations into complete chaos.

There is a compromise, however: some businesses will under-schedule daily workloads and leave a couple of hours open for walk-in appointments, as to not disrupt the FIFO flow.

Another business using the FIFO model for workload management was a maid service called Maids by Trade.

While cleaning homes and machine assembly are drastically different things, they are equally task-based. And completing first tasks, in both cases, removes the inefficiencies that stem from allowing new jobs to interfere with the old.

It’s a straight-forward concept. Multi-tasking means wasted time. Whereas, completing one job at a time — in the order that’s been promised — is far more productive.

Why LIFO Works in Sales

We’ll be honest, the LIFO model section isn’t as long as FIFO.

Part of the reason is that LIFO’s purposes are far more limited than those of its counterpart. Placing top priority on the newest task is counterintuitive. Why would a project manager neglect old tasks for something newer and shinier?

Comparatively, the FIFO model fulfills the needs of project managers in a multitude of industries — not just machine shops and maid services. From web designers to construction workers, the FIFO model has its place.

However, LIFO is a good fit for sales-based tasks — particularly for big-ticket items such as homes.

Why? Because the likelihood of converting a real estate lead decreases as time passes. Or, the lead ‘cools down,’ as they say in the industry.

So, it’s proven to be more fruitful for real estate agents to focus the bulk of their efforts on new leads because they’re ‘hot.’

Perhaps it’s the amount of money being spent on a real estate purchase that makes LIFO the model of choice for those in the industry. The more people can stew over such a large investment, the greater the chance for hesitation and second-guessing.

Therefore, we hypothesize that the LIFO model might be effective for other big-ticket items like automobiles. Much like real estate agents, car salesmen must strike when the proverbial iron is hot.

Can FIFO and LIFO Work in Harmony?

FIFO and LIFO by their very natures seem like they could never exist within the confines of the same company.

But there are businesses out there with both service/assembly-based facets and sales facets.

Consider an advertising agency, for instance, who must first sell its high-priced services to viable businesses. From there, it needs to manage projects for those businesses where they must produce (or assemble) campaigns on a deadline.

It can be surmised that in order to acquire new business and sell themselves to clients, this hypothetical agency should utilize LIFO methods to capitalize on leads when they’re hot.

Then, once the client has been onboarded and projects are underway, the FIFO model can be put in place to ensure streamlined workload management.

We all hear that automating and outsourcing tasks are the best way to grow a business. It sounds pretty easy, right? Just let someone (or something) else handle all your tasks without you having to lift a finger…and watch your revenue soar.

But it’s not quite that easy.

Anyone who has tried to hire a new employee or contractor understands that other people don’t always have the same vision of a process that you do.

I know I’ve been frustrated before at hiring someone who ends up completing a task entirely different from how I would have done it. And then I just have to redo everything anyway.

That didn’t save me any time or money at all.

And guess what?

It wasn’t the other person’s fault. It was mine.

Here’s why. I didn’t have a good process map in place before asking them to complete the workflow.

Sure, I knew exactly how to do the job myself. But that’s not the same as relaying the information to someone else in an efficient manner.

So I’m going to save you from making that same costly mistake.

Here’s the most important information you need to know for putting process management into practice easily, and getting your workflow completed…

You need to set your intentions

Process management is a beautiful thing because it essentially means you don’t have to do a lot of people managing. You’ve set the process in place so well that recurring workflows just get completed.

In order to get to that place of beauty, you need communication.

And before you can communicate to your team successfully, you’re going to need to set your intentions.

You cannot lead well by making assumptions that everyone else will automatically do things the way you do.

So be very clear to your team about what you expect and how you expect it to work. They’re not mind readers. It’s your job to set intent.

Let’s talk about how that works when it comes to process management tools…

Communicate better by choosing tools intentionally

You cannot manage a process well if everyone is not on the same page about how you intend to communicate.

If you have the process set up in a particular task management software, you need to make sure everyone on your team is using that software all the time.

So if you have a project with tasks outlined on cards on Trello, your team needs to know that you expect them to communicate via Trello regarding that project.

Make sure they know that is the intent.

That way you don’t end up with important questions about a project going to a cluttered inbox, for example.

You want to avoid the common trap of using 5 different applications to communicate about the same project or workflow.

Stay organized with documentation

As you’re going through the processes you are going to optimize, automate, or outsource, you’ll likely find that there are several different areas of your business that require this kind of attention and mapping.

So sit down and document them.

Note which processes you have in place. List all of them. And put them in a queue for mapping.

You can do this with whatever app works best for you. I like to use Trello so that I can see each process on a card, and all of the processes on a board together. I can also use it to group related process under columns. It’s pretty nifty.

Asana is another similar app that allows you to use cards and boards.

Both of these platforms allow you to invite your team members to access the boards.

And to be clear, I think you can benefit from process mapping every aspect of your business. We even optimize the process of showing gratitude to one another. Seriously.

The first step is writing down your current process

You can’t optimize until you have a working process in place.

Here’s the real trick though:

You have to write down every single step. Every. Single. Step.

Sometimes you’re going to mess this up because you know exactly what the step means. But the first time your contractor misses a step you’ll realize that it’s not as clear to everyone else.

When that happens, you know you need to add in an extra step to make everything understandable. Don’t expect them to make the leap in thought of: “If I’m told to do X, then that clearly means I have to do part Xa and part Xb.”

Mapping out a process

The purpose of setting up a mapped and efficient process is so that you can ideally begin using that process for OAO — optimizing, automating, and outsourcing.

You’re going to break each process up into two areas on the map — main phases and individual steps.

Let’s take a really simple process as an example:

You need to check and organize your email.

The main phases might look something like this:

1. Open the email application.
2. Address new emails.
3. Address old emails.

Each phase has its own individual steps.

To be fair, opening the email application is pretty straightforward, but let’s go ahead and map it out anyway.

1. Click the shortcut to your email application.
2. Click “sign in”.
3. Type your username.
4. Type your password.
5. Click “log in”.

Even a short, straightforward process has multiple steps when you break it down. (And even this process can be optimized/automated. One way is to use a password saver like True key.)

You will then go through each of the other phases to break them down into individual steps.

Optimizing the process

An optimized process map is one that you can give to a person who has never been through the process before, and they can complete each step without making a mistake in the process.

That is, the optimized process map is precisely clear on what tasks need to be done and in what order.

Automation can take care of process steps, but…

Once you have your process in place, you absolutely can build in automation using software.

There’s one thing I want to warn you about though:

After meticulously marking down every little part of every step of your process, your mind may be stuck in that step by step mode.

And that is not the way you want to automate.

Yes, you want the automation to complete all the steps. But you do not want to set up 20 different automations for 20 different steps.

As you look for automation software, keep in mind that it’s much more helpful to be able to integrate multiple steps into one automated process.

For instance, if you need to send a post to Facebook, Twitter, and LinkedIn, that is 3 individual parts of a process that need to be completed. But instead of manually going to each platform and making a post, you want to find software that will post to all 3 platforms for you.

Then, you only need to make the post once, and you’ve done 3x the work. Automation. It’s a beautiful thing.

Again though, you have to have a working plan in place before you can automate anything.

Just get started

The step that usually trips people up the most in process mapping is making a decision. If you’re like a lot of people, maybe you’re wondering right now, “But which process do I start with?”

Here’s the big secret:

It doesn’t matter.

It really doesn’t matter which process you start with.

Pick one area to create a process map for, and work on it until you have the entire process mapped out. Then start optimizing, automating, and outsourcing that process.

When you’ve finished that one, then you can pick another.

The real key to success is momentum. You’ve got to keep taking action, follow through and make process. Because with the help of automations, progress can lead to perfection.

When we’re talking about running our businesses to the best of our abilities, there are two terms that stand out:

Process management and project management.

Since they sound alike, a lot of people use them interchangeably. However, they’re not one and the same.

Each is used for different things and comes with its own set of benefits and tools.

Fortunately, you can automate both.

What Is the Difference Between Process Management and Project Management?

Project management is managing a lot of tasks that are going to help you achieve your goal.

So let’s say your company has a big marketing campaign for the spring of 2019 planned. Project management means managing all the things that need to get done:

• Ad creatives
• Channels and campaign distribution
• Task delegation

Or, to put it simply, project management answers the question: What needs to get done in order to get where we want to be?

Process management, on the other hand, manages standard operational procedures at your business.

For example, customer onboarding.

With process management, you’d define, organize and standardize all the different steps of the customer onboarding process such as:

1. Customer signs this document.
2. Customer is added to the CRM system or internal records.
3. Customer is sent a follow-up email.

And so on.

In order for the process to be completed, certain steps have to be taken. With time, they also have to be optimized and improved.

Or, to put it simply, process management answers the question: How do things need to get done in order to get where we want to be?

Now, people commonly confuse the two because there’s a lot of tasks in both. Which software do you even use to manage and automate it? Would you use Trello for process management, and Process Street for project management?

No.

Trello is a great tool — it’s a Kanban board, and it’s great for project management because it helps you visualize everything. However, it’s not a checklist.

And a workflow tool like Process Street is great at process management, but just doesn’t work for project management. Projects are specific, and Process Street excels at standardization — just like a checklist.

Benefits of Process Management Automation

Let’s say you wanted to manage a 47-step process of customer onboarding at your business. And keep in mind that 47 steps aren’t that much — it’s a standard number.

You’d have to have a documented process. It’s more efficient than just winging it every time a new customer comes in.

And when you have a documented process, you stick by it. Over time, you may even make adjustments and optimize it to better fit the customer.

The main benefit of going fully automated with process management is that you’re already doing it.

You have a well-documented process and if you automate it with tools like Process Street, you’re reducing your workload and making sure that the customer is onboarded successfully at the same time.

When you’re at the stage that automation is natural, it means that the process itself won’t feel dehumanized. Instead, you and your team can focus on more meaningful interactions that actually require you to communicate with customers.

Automation software can send automated onboarding emails, and you can get in touch with customers and help improve their experience where it matters.

Benefits of Project Management Automation

Since process management takes care of the minutiae of operations at your business, project management has to take care of the more high-level stuff.

With project management automation, the key area of focus is helping the manager or leader know where they should direct their attention to at any given time.

This means knowing:

• What the priorities are
• What tasks are at risk of being delayed
• Which team members have been assigned to which task
• Who needs help
• What needs to change

A project management software like Trello shows the manager what’s going on, without them having to understand the specifics.

They can jump in if something needs changing or if someone needs help, but otherwise, they’re free to focus on more important things.

Can Project and Process Management Overlap?

Yes, and they often do.

Let’s say your company is hiring someone new.

In process management, the manager would see all the 47 steps, which isn’t that important unless the manager is personally taking the hire through the process.

In project management software like Trello, they’d just see that a new hire has been added, and trained at the end. If the onboarding process has additional steps like background checks, they could be set up in Trello by stages such as:

1. Hire added
2. Background check
3. Training
4. Onboarding finished

Instead of seeing every part of the process (e.g. in background check — files submitted, processed, approved), the manager viewing it in project management software would just see that each stage has been completed.

They’d see the results — which is the main goal of project management (software).

Or, to paraphrase it:

Process management is about the journey. Project management is about the destination.

Which One Do I Need?

That depends on what your role is, and what your company is like.

In some cases, you may be needed as a part of the process (e.g. interviewing new hires, or talking to new clients before they’re onboarded).

In other cases, you might just be getting in the way.

And while the two terms frequently overlap, the most important thing is understanding where you and your role fit in your business’ journey.

Do you need to be a part of the process or just a part of the project?