The sextuple constraint of scope, time, cost, quality, risk and resource

If you have been involved in any kind of project management, be it in business or personal, you might have known about the famous triple constraint of project management, with the following general formula:

Quality = f(Scope, Time, Cost)

It is a simple rule of concept that says:

• To get the product with quality of your expectation, you have to at least plan carefully for the scope of work, time schedule and cost allocation.
• In order to maintain the same quality, any change to one of the 3 factors will need an adjustment to the remaining 2 of them. The 3 constraints are inter-dependent.
• If you want to adjust your quality expectation (either better or lower), then you can also adjust factors of scope, time and cost accordingly.

This is a very powerful concept commonly used during project planning, project monitoring and change management. It is used to assess the viability and to balance the trade-off factors.

For example, it is generally true that if you want to achieve a wide scope with little cost and time, you have to compromise on the quality expectation.

This triple constraint has been expanded to sextuple constraint in modern project management literature. They are: scope, time, cost, quality, risk and resource.

The risk factor is crucial because if it is not well managed, it will affect the other factors as well. Risk management comes in as preventive measure to safeguard the planned time schedule, cost, quality and resource allocated for the specific scope.

Resource is also an important factor. For example, with better resource on hand, you might be able to achieve the scope of quality with less time, cost and risk.

It is a good practise to always refer to the sextuple constraint for planning, managing and making changes to projects, so that our expectation is more realistic and success is viable.

You might want to use it in some of these projects which most of us will surely encounter during our life voyage:

• Education planning
• Wedding planning
• Parenthood planning
• Buying a house
• House renovation and/or decoration
• Travel planning
• Retirement planning
• ...

And of course, this is always applied to project management at work, including:

• Software development
• Building development
• Business development
• Operations planning
• Change/Restructuring management
• ...

CSC Steel made record high earnings in FY2009

CSC Steel (5094, CSCSTEL 中钢马来西亚, formerly known as Ornasteel), a subsidiary of China Steel Corporation of Taiwan (中钢公司) which produces flat steel products, is always well known for its excellent cash flow management.

Its unaudited 4th quarter financial result for 2009 announced today is very promising. Despite a comparatively lower revenue made during the challenging year of 2009, CSC Steel has successfully made record high in its operating profit, EBITA, profit after tax and NTA. The EPS of 24.42 sen has outperformed the expectation of all research firms, which majority estimate it to be around 20 sen only. Its cash on hand also soars to a new height of RM312 million.

The board of directors has proposed for a 20 sen dividend, which is also a record high in DY since its listing.

With its unaudited EPS of 24.42 sen and closing price of RM1.53 on 5 Feb 2010, its PE stood at a low point of 6.27 although its share price has risen above 50% within the past 1 year period.

The proposed 20 sen dividend will give a high DY of 13.07%.

The domestic steel demand and prices of steel products started to recover in December 2009 as the steel demand in China rebounded strongly after falling steel prices since October 2009. This improved market sentiment is expected to continue into the first quarter of 2010 as downstream steel industries are back to the market for re-stocking activities. The management of CSC Steel is optimistic that the first half of 2010 will continue to be positive.

Congratulation to the 6000+ shareholders of CSC Steel holding its 373 million shares (about 7 million of its 380 million shares are sitting in its treasury account due to buy back exercise).

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.


Click here to read my other article about this stock counter, written about 2 years ago.

The oriental culture of gift economy

Now is the new year gift session, and traditionally it is a norm for oriental businesses to send greeting card or gift to their loyal clients, partners, principals, suppliers, staffs, etc. This could also be in the form of lunch and/or dinner invitation.

The oriental gift culture, especially during new year time, is a form of social appreciation and thanksgiving to the people and entities who help or involve in the business making.

Gift economy (送礼文化) and the underlying spirit of gift governance (礼治精神) has always been in the core position in traditional Chinese culture. The basic principle is that whenever we received a gift, we must also respond with a returned gift (礼尚往来). From here, the harmonious relationship strengthen.

Note that the government in China, Hong Kong, Taiwan, Singapore and some other regions have come out with guidelines and rules to govern the gift economy, especially applied to civil departments. The value of the gift should not exceed a certain limit, or else it could be viewed as a form of corruption.

Normally, calendar, planner book, small stationeries, small electronic gadgets, etc. with the company info imprinted are common gifts specially made for this purpose.

The oriental culture of gift economy is a kind of crucial business activity, particularly in Asia-Pacific region. The business owners and their senior executives ought to practice well in this, in order to facilitate their money making business.