Deep Processing of Agricultural Crops. The Importance of Professional Project Management in Implementing a Plant Construction Project
“We should start rebuilding Ukraine now despite the fact that the war is still raging. We should help Ukraine grow into an advanced, self-sufficient and sustainable country. Ukraine can become a major producer of green energy, a supplier of high value industrial and agricultural products, a major player in the field of digital technologies, and a member of the EU with the appropriate infrastructure and legal framework”.
This is what the Federal Chancellor of Germany Olaf Scholz said at the Ukraine Recovery Conference that was held in Berlin in October 2022.
I think this quote can be used to start any article on the future restoration and development of our country.
In my articles, I keep repeating that the development of processing industries where raw materials are used to make high value products is one of the main factors in achieving economic stability and high standards of living in our country. Given the abundance of agricultural raw materials in Ukraine, the creation of an agricultural processing industry looks particularly attractive.
The purpose of my blog is to explain to the Ukrainian people the essence of industrial biotechnologies, including their processing capabilities, product characteristics, and design approach.
In this article, I want to touch on a number of important issues. The thing is that the development of this new industry in Ukraine is impossible unless these issues are solved.
It is about project management. Our team has come to the conclusion that the success of a bioprocessing project depends on who will implement it and how it will be done.
According to some expert assessments, most of the projects implemented by Ukrainian companies fail and only a third meet their objectives. And what’s more, very few projects are completed within their deadlines and budget while ensuring the required quality. The main problem lies not in objective circumstances that people often use to justify their failures, but in the lack of project management skills.
Unfortunately, some owners and managers of Ukrainian companies don’t understand the fact that project management is a special type of activity that requires considerable expertise, especially when it comes to industrial biotechnology projects that impose special requirements.
Since pre-war times, there has been a misconception that anyone can handle project implementation processes. In addition, it is often ignored that project management is radically different from regular management. The sad truth is that even successful companies that have significant financial, organizational and human resources may encounter serious problems when trying to implement technically complex projects.
Some managers believe that project management requires the same skills as managing day-to-day operations, which can pose serious obstacles to achieving project objectives.
Each project is unique and involves a great deal of uncertainty. Operations management techniques don’t work when it comes to project management.
The Project Management Body of Knowledge (PMBOK) provides the following definition:
“A project is a temporary endeavour undertaken to create a unique project, service or result. The temporary nature of projects indicates a definite beginning and end”.
“Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements”.
When it comes to project implementation, the use of traditional methods often leads to failures. For example, a few years ago McKinsey management consulting company conducted an analysis of more than 5,000 projects. Based on this analysis, it was found that 56% of the projects did not meet profitability expectations, 45% exceeded their budget, and 17% were so grandiose that they threatened the existence of the companies that tried to implement them. According to Pulse of the Profession 2018 Report published by the Project Management Institute (PMI), every 20 seconds organizations worldwide waste about $1 million due to ineffective project management practices. Annualized, that's almost $2 trillion, which is roughly equivalent to Brazil's gross domestic product.
The world's best practices show that it is advisable to hire a specialized company for the implementation of technically complex and expensive projects, because such organizations can involve highly qualified project managers, which is a key factor in a project’s success.
What criteria should a professional project manager meet? What factors should be taken into account by project managers when choosing a project management company?
Our experience shows that a successful project manager should have the following three basic skills:
- Strong organizational skills;
- Industry expertise;
- Ability to work with people and achieve effective communication.
As for organizational skills, these are described in project management standards and guides, including PMBOK, Agile and Scrum. These skills allow us to set goals and priorities, assess resource requirements, create project schedules, etc. In other words, all those things related to project administration. All in all, these skills are quite easy to develop, as they are sufficiently formalized. There are a lot of textbooks, courses, and trainings available today. Also, you can get the appropriate certificate if needed. Strong organizational skills can help you organize the process, but are not sufficient to make your project successful.
Industry expertise is also indispensable for managing a project effectively.
First, a deep understanding of the industry – industrial biotechnologies in our case – is of crucial importance in choosing the most effective project management tools. Undoubtedly, some methods are universal, yet they need to be adapted to the specific industry. The project manager should have a deep understanding of the product to be manufactured and be aware of the latest market and technology trends.
Secondly, industry expertise allows the project manager to think systematically and apply a systematic approach in order to meet project objectives. Speaking about the implementation of a plant construction project, the builder’s project objective would be the construction of the manufacturing facility, whereas the project manager’s end goal is the product manufactured at this facility. In other words, we consider the project complete not when we just cut a red ribbon and put the facility into operation, but when all the manufacturing processes are in place, the plant is staffed by qualified personnel, and the product is manufactured and sold in accordance with our business plan. Therefore, we lay the foundation for our future success at the early stages of project management.
Third, industry expertise helps the project manager to manage teams with different backgrounds, which is one of the key factors in the development and implementation of joint solutions.
Finally, strong teamwork skills are also indispensable to a good project manager. This part can’t be just delegated to HR managers, as is often the case in regular management. The thing is that project manager must know how to select effective team members, build strong team relationships, resolve conflicts, negotiate, set priorities, etc. That is called the art of managing people.
In addition to the abovementioned skills, a successful project manager needs a lot of other qualities too, but all of them are built upon the key skills. That said, he or she should be able to assess the social significance of the project, especially in the area where it is located. This will help in the process of dealing with local authorities and communities.
If your project management company has highly qualified specialists that have all the above-mentioned skills, it is extremely likely that your project will become a success.
That is why my colleagues and I built a professional team and founded, arguably, the first company in Ukraine that meets all the above criteria – AB AgroProject Group. The main goal of our company is to provide professional project management services. The list of our services can be found on our website https://ab-agroproject.com/.
We specialize in bioprocess engineering for agricultural applications, including deep processing of grain crops and conversion of beet molasses, oil crops and fruits.
Our product line includes glucose and glucose-fructose syrups; fructose; carboxylic acids (citric, lactic, acetic and other acids); amino acids; yeast and yeast extract; protein; feed additives; liquid biofuels (bioethanol and biodiesel).
Our core competencies are industrial biotechnologies and project management.
Our goal: by 2030, to facilitate the construction in Ukraine of manufacturing facilities that use biotechnology and are able to process at least 50% of corn and wheat exported by Ukraine.
In addition, AB Agro Project Group is one of the founders of the Ukrainian Association of Industrial Biotechnologies - UkrBiotechno.
Within a short period of time, we managed to build a team of professionals and started cooperating with some of the major technology companies in Europe. In our case, company’s age doesn’t really matter. OCM Solution (formerly AGS) studied the 10 most successful US companies in the field of project management. It was found that the determining factors of their success were their expertise multiplied by their innovative approach to working with clients.
The main thing is that we have already achieved positive results. In December, we entered into a contract with Gaztransit company based in Ukraine for the development of a project concept. The goal of this project is to construct a plant for ethanol production from grain. Other details related to this project will be disclosed later.
Some incompetent people believe that project management is no longer relevant. It is like claiming that such fundamental engineering disciplines as mechanics of materials or thermodynamics are no longer relevant.
Instead, let me quote an aphorism which is very popular among German project managers, "Project management is not cheap, but a lack of it could be much more costly”. This should become the main investment credo for future Ukrainian projects.
Oleksandr Batatin, owner and CEO of AB AGRO PROJECT GROUP