The Woody 2000 Project- Lack of the Appropriate Planning and Resource Management Capabilities - Case Study Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Title : Woody Case study. Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2010 Executive summary This project management plan is organized as a preliminary report and proposal for the Woody 2000 project. This widespread report , analysis and recommendation is being developed as a suggested plan for business management and facility expansion plan and we will establish the proposed plan and enlarge its constituents as we exert through the numerous stages of construction management procedure. Our teams of managers will closely work with Woody 2000 administrative management team. The aim of this report is to offer an assessment of the Woody 2000 project and entails an assessment of the present management methodologies and processes applied in the expansion of the company’s production facilities. The project management plan looks at the appropriate procedures that should have been used as a base for Woody 2000 project and also identifies the problems that came up during the implementation of this project. As a part of the assessment, we will start with evaluation of preconstruction process and compare the incidences that took place with the practices and standards of a well executed project management plan. In addition, the proposal plan will recognize the several procedures needed during the post construction and construction stages. The current case study had several mistakes and problems connected with the whole process. The following proposed plan and report recognizes the techniques and processes that would eradicate the problems pointed out in the background of the Woody 2000 scheme. The proposed plan is grounded on the presumptions that were obtained from the data collected on the background of the Woody 2000 scheme. The suggested project management plan is essential and will function as a direction for completing the project management manual for Woody 2000 scheme. And this project manual will be used as a guideline for all stages of the construction project. Introduction The Woody 2000 project which was started in 1954 was established by management of the custom woodworking company also known as Woody’s company which is situated at an open facility in the Industrial Estates, Someplace, British Columbia and millwork producing facility. The executive management panel includes Mrs. Emelia Carpenter as the president, Mr. Ron Carpenter, as the chairman, Mr. John Carpenter, as the director and Ms. Kim Qualey, as the Executive Vice president. The firm is privately owned with Emelia Holdings Limited as the main shareholders. The company currently has around 850 workers and has yearly revenues of around 93,250,000 dollars. The supporting management staff of the company includes Mr. Spencer Moneyworth who is the finances Vice president, Mr. miles Faster, as the production Vice president, Mr. Bruce Sharpes, as the estimating and sales Vice president, Mr. Kim Cushman, as the controller and Ms. Molly Bussel as the Personnel Vice president. The firm manufactures cabinetry, custom mill work, and furniture. During latest years, with the expansion in commercial construction activities, Woody’s company has changed their focus to the subordinated millwork for novel commercial construction. The firm has had a good repute in market place and has benefitted high profitability on its most recent project of delivering millwork to construction industry. The incidents illustrated in this Woody 2000 project case study are characteristic of the form of things that occur in real life projects. The project will bring out several of Woody’s management problems and the requirement for change. Literature review According to Ireland (2006) Project management involves carefully organized and planned attempt to accomplish a specific one time goal such a construction of a building or implementing a main new computer system. It included establishing a project plan, which entails defining and verifying the project objectives and goals, recognizing tasks and how the goals will be accomplished, quantifying needed resources and determining timelines and budgets for completion (Esteban, 2000). Bergman, (2009) argues that project management also entails managing implementation of the project plan, together with operating frequent controls to make sure that there is objective and accurate data on performance relative to plan, and the systems to implement actions of recovery where necessary. According to Elrod, (2005), projects often follow major stages or phases including project planning, feasibility, evaluation, maintenance, and support. The company’s move for expansion was aroused by the 1989 mini boom in commercial construction in south western British Columbia. With the probability of a main airport enlargement and opportunities of free trade in southern border, Bruce Sharpe pleaded with the company directors that they were in a better position to enlarge their manufacturing business. Miles Faster complained that the production efficiency of the company was being frustrated by absence of a manufacturing room and told John Carpenter that the company could be moved to completely modern and new facilities. John Carpenter, who had a vision of expansion based on the computer regulate automation, discussed the idea with the company’s chairman. Jon Carpenter discussed the issue with the company’s president who then included Spencer Moneysworth and Kim Cashman into the discussion. Dinsmore (2005) argues that planning is the key to a thriving project. Creation of a project plan is the initial thing to be done when setting up any project. Project planning is usually ignored in favour of starting the work. Nevertheless several people do not realize the worth of a project plan in saving money, costs, and several other problems (Badiru, 2000). In regard to project goals, project is only successful when stakeholders needs have been achieved. Stakeholders are all people indirectly or directly affected by the project. Hughes (2008) argues that project stakeholder may include project sponsor, customers who receive supplies, users of project output and project team and project manager. Once the project goals have been identified, a list on requirements that needs to deliver so as to meet these goals is created and specifications are made on how and when every item should be delivered (Barret, & Greene, 2009). The deliverables are added to the project with a suggested delivery date. Given that there were no procedures on order for submittal approvals and reviews, in Woody’s project there was a considerable delay in delivery of production train equipment. In project schedule step, a list of tasks that requires to be undertaken for every identified deliverable is created. Once the effort needed for every task has been established, the effort needed for every deliverable is worked out, and an appropriate delivery date. At this stage of planning, software packages like Microsoft Project to create the project schedule (Paulus, 2004). A common setback recognized at this stage, is when the project has a compelled delivery time limit from sponsor that is unrealistic on basis of the estimates. If this happens the options available may include renegotiation of the deadline which leads to project delay, employment of extra resources implying increased cost and reducing the scale of project implying that deliverables will be reduced. Mr. Moneysworth requested the EID to submit a fixed price suggestion and the preliminary estimate was 20 million dollars based on 18 month schedule. The owner did not offer a written program, detailed specifications and drawings and this resulted to an excessively padded quotation from the EID. After negotiations, EID agreed to offer construction service on basis of completely reimbursable contract in the absence of a guaranteed maximum price. A human resource plan identifies by name, the organizations, and individuals with a principal function in the project and their responsibilities and roles in the project are described. Next, the type and number of people required in undertaking the project are described. Other descriptions are on the resource start date, approximated duration, and the methods to be used in achieving this (Landis, 2006). At the planning stage, Mr. Moneysworth settled on not involving input for production employees and invited a well recognized contractor known as Expert Industrial developers (EID) to make a quotation on the project. There were no written design or plan documents at the time. Communications plan entails document illustrating the people who need to be regularly informed on the project and the way they will attain the information. Warhoe (2000) argues that a mechanism such as monthly or weekly progress report, describing the way project is progressing, the milestones attained, and the task planned for future is useful. A risk management plan is a significant portion of project management. Even though it is regularly overlooked, it is significant to recognize the probable risks in the project and be ready in case of anything. According to Farmer, (2003) risks may include unclear responsibilities and roles, unanticipated budget cuts, optimistic cost and time estimates, slow customer feedback and review and lack of resource obligation. Other risks are changes of project requirements by stakeholders after the project has already started, improper understanding of stakeholder input and needs, and poor communication leading to quality problems, misunderstandings, and rework. Risks may be trailed using a risk log and every risk recognized should be added to the log (Reynolds, 2007). Moneysworth and Cashman strongly felt that the company was supposed to stay where it was, because there was extra land on their property, although the land was not most suitable for plant expansion. They argued that this would prevent costs of selling and buying property, and most importantly prevent the disruption to production while moving their current equipments. In addition, the nearest probable site at attractive cost was at least 15 miles further out from residential region where majority of them resided. Polarization of ideas quickly became evident and therefore in 1989 spring, the company called for a meeting of directors and major personnel to solve the issue. After visiting the factory floor, it was consented that the firm would remain where it was situated. Early in the software and equipment design stage, EID appealed that the owners administer the procurement of the manufacturing train. As a result of inappropriate change order processes, Mr. Miles Faster came in and made changes on the manufacturing train specifications so as to expand capacity. This alteration made the software design task that was already completed to be disposed leading to Mr. Leadbetters want to focus on redesigning of the software and not on his roles of communicating and facilitating information among parties Discussion There were several problems that resulted during the construction stage, including intercoordination of shop design to drawings resulting to the structure of the building being designed five feet less than needed for train production, subcontractors undertaking business with owner representatives in the absence of the contractor and several difficulties with technical and process management. There lacked a communication plan for the project and therefore people were doing things they felt were rightful to be done. The project was almost at completion two years after its establishment and there were impediments as a result of several shortfalls within the project management system. The management did not hold EID responsible for the project closeout and completion leading to delays in the schedule. EID did not offer the building occupation consent and did not abide by scheduling requirements for service tie-ins resulting to numerous weeks in lost production. As a result of delays, several customers cancelled the orders they had placed and records were depleted. The company experienced considerable reduction in sales revenues during this duration. The cash flow was additionally affected, when Mr. Cashman realized that the project was beyond the budget and only at 85% completion. The company acquired an extra credit line at an extreme premium, so as to cover the extra expenditures incurred at the Woody 2000 project. As a result of this experience, Emilia carpenter, the Woody’s president, maintained project management consultant Win Easley to undertake a post project appraisal. Easley had difficulties in obtaining solid data since relevant information was scattered amid several employees, who were not attentive to disclose their shortcomings. Recommendations The project had numerous tasks that required completion, but the process would have been made simpler by particular milestones. The initial landmark would be to fix a schedule or budget for the Woody project, so that every person knew what required to be done, the time it requires to be done, and how much money will be needed. The second landmark would comprise of obtaining a contractor to sign and break the ground so that the project would have a definite beginning date. Searching and installing the right machinery would be a milestone that would have ensured that the machinery passes through all inspections and suitable usage standards. Another useful landmark would have been tie-in of power and numerous other utility connections and inspection and authorization of the new construction. The final landmark would have been relocating to the new building and starting production. The Woody 2000 project milestone Bar Chart, shown below, illustrates the appropriate milestone that the company should have set up, met, and recorded. In so doing, the company would have remained on track and saved itself from the experienced setbacks. It the company had devised an appropriate baseline plan, it could have charted its progress and gained a suitable idea of what needed to be accomplished. With an appropriate baseline plan, Woody’s would have recognized their delays, the causes of the delays and would have a chance to swiftly correct the difficulties. Top management would have been informed before a small difficulties reached crisis level. The management should have cautiously managed and not considered float time as time that could have been wasted. Earlier, the company , would have utilized float time to look for potential contractors and later on in the project, they would have utilized it to have plans approved, hold group debates , make up for the delays or pay attention to other facets that would have required additional attention. Proper utilization of float time would have had a significant effect on the finishing date of the project. A 25 million dollars budget would be a suitable high level estimate, based on costs of construction together with extra expenses. This guesstimate was supposed to be presented to the management at the period of proposal for approval. As the project was scheduled to consume 18 months, life cycle prices would not have a considerable impact. Kim Cashman shouldn’t have hidden the cash flow chart, since in so doing, people might guess that he was hiding his faults or stealing money. Hiding such information is not prudent, as it cast doubt on individual’s motives or questions individuals’ competence. It also robs the firm ant visible idea of real expenses. Spencer Moneysworth impressed by prominent reputation of the EID and probably by being over confident in his administrative capabilities, made a imprudent decision. Acting on his personal accord and his hasty decision of not involving production employees in the process of decision making on expansion project was inappropriate. Knowledgeable workers are usually valuable resources and must be included in any project so that they can utilize their talents and contribute to the project. Moneysworth also invited EID to make a quotation on the project, without reaching on other contractors and this limited the company’s contracting alternatives. Moneysworth should have looked for alternatives, which how have enabled him to compare the EIDs schedule, rates and skills would have been fairly and competitively compared with those of several other probable contractors. Through administering contracts that exclusively suited the company’s schedule and finances to contractors who would capably meet the needs of the expansion, Moneysworth would have been availed with a properly devised plan to follow and eventually the company could have been successful. The Woody’s did not notice Moneysworths tendency of placing too much value on detailed planning, thus they shouldn’t have permitted him to bear the whole responsibility as if he was the sole player in the project. Although Ian Leadbetter was a mechanical engineer she should not have assigned with the task of managing the project. Training Leadbetter in concepts like control concepts and project life cycle would have benefitted the project, if inflexible time restraints hadn’t been very essential. Additionally, Ian lacked prior experience in management of people and communication coordination of communication. Someone with the essential qualifications must have been selected as the project manager, or a project management consultant maintained upfront instead of being merely used to undertake a post project appraisal. When the expansion came up, the company’s key personnel and directors, together with EID representatives must have held meeting frequently to discuss and plan the project. They must have debated every aspect of the project, entailing schedules, objectives, mechanical improvements, renovations, budget restraints, designs and concise, clear goals must have been set up. The project manager must have assigned jobs with every person reporting progress together with openly presenting all difficulties encountered at the scheduled meetings. An appropriate baseline could have assisted to make an appropriate time allocation to the project. Through establishing realistic time objectives and abiding by them, commitment is anticipated and value of this commitment is easily visible and respected. When there is a clear indication of lost time which need to be regained, workers are encouraged to be more efficient and diligent. Reminders of upcoming vital dates, deadlines, and present progress charts in the company would have kept every person working on the project involved, excited, and motivated on the project. The worth of an appropriate baseline plan is supreme if a project is to remain within the essential budget and time restraints. The Woody 2000 project Responsibility Chart for Effective Control, shown below, demonstrates the way tasks must have been efficiently assigned within a visual format, providing quick reference. Guessing of task assignments is a risky proposal and definitely brings more confusion to every project. After recognizing that the project was running behind the planned schedule, the project manager was supposed to have touched base with every person taking part in the project with stress based on ensuring that the project further fall behind the schedule. Neither leaves nor vacations should have been given during this vital period. Any worker causing delays via poor work practices or decisions could have been warned or trained on the changes that were to be integrated. Computer records and complete files must have been maintained of all things regarding the Woody 2000 project. Files must have contained dated memos, formal notes, contractor correspondence, financial records, and copies of contracts. The company included reformation of the executive Vice presidents and presidents offices in the project, perhaps because they were modernizing the building. The company perhaps that with the on hand contractors could permit simultaneous renovation and expansion projects with reduced costs. If the company had done the initial planning properly, the contractors could have easily combined and completed the two projects successfully. Considering the planning and management of the company, would most likely have fared well with one project at a time other than combining both projects but the below work breakdown structure (WBS) chart would have assisted the Woody’s to contain and control the expansion project. The project budget must have taken into consideration a bigger percentage for emergencies. Unbudgeted expenditures and delays were the major problems with Woody’s budget and whereas these extras to the expenses budget would have helped in solving the company’s financial situation, they could not have completely resolved the problems. The only actual remedy in handle a projects budget is cautious planning supported by careful spending. Considering emergencies is the only way of making sure that budget overrun doesn’t take place to the loss of the present project and the business itself. A firm’s excellent credit rating can be considerably and at times irreversibly compromised. If the company had incorporated depletions and additions utilizing a simple flow chart, as illustrated below changes would have been taken into considerations, planned and executed without putting the Woody 2000 project at risk. Conclusion The Woody 2000 project was not well envisaged and the Woody’s lacked the appropriate planning and resource management capabilities to run the project. They lacked concrete plans for the project inspection and approval of the building. Without plans put in place, long durations of products were wasted and this made numerous contractors to cancel their contracts with the company. Customers also cancelled their orders, inventories were diminished, and the company’s good reputation faded. The woody 2000 project was run poorly by the Woody’s and the significant problems that occurred in the initial planning resulted to more vital faults later in the progress of the project. Lack of documentation was a key disaster together with total lack of communication between S&P, EID and the company led to delays and extra expenses on the project. The company should have done extensive planning and used real project management tools such as simple flow chart, baseline plan, a milestone bar chart and a responsibility chart in planning and management of the Woody 2000 project. 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