Production Warehouse Move Program Status - Essay Example

? District 4 Production Warehouse Move Program Status 0 Executive Summary Trillo Apparel Company (TAC) is an apparel design and manufacturing organization whose operational headquarters is Albuquerque in New Mexico. The company has a divisional structure, which encompasses four distinct divisions namely District 1 in the North, District 2 in the South, District 3 in the West and lastly District 4 located in the East. The company’s top management designs annual goals and establishes appropriate measures aimed at attaining these goals. This is by primarily focusing on the most pressing matters before delving into aspects having lower importance. Such prioritization of goals allows for efficacy in utilization of company resources and wastage reduction in terms of labor resources required to effect different projects (Berkun, 2005). In order to maximize its profit and revenue potential, TAC has undertaken a robust project plan, which is aimed at streamlining its operations and enhancing its effectiveness. The purpose of this paper is to provide an overview of TAC’s operations by looking at its organizational structure, level of performance and overall management strategies employed in the company. In addition, the company is venturing into various strategic moves, one of which will primarily affect the District 4 warehouses’ operations as they have to be moved to a new location. This paper provides an assessment of this project’s management, risks involved and systems employed to ensure project success. The project has been brought about by District 4’s rapid expansion over a few years, which has necessitated movement and expansion of the division to a new site about 10 miles away from the old site. According to the company’s VP of operations, the move is bound to provide additional room needed to generate an additional $ one million in revenues, which will boost company’s overall financial performance. Table of Contents 1.0 Executive Summary..…………………………………………………….……………………2 2.0 Project Performance ………………………………………….……………………………….4 3.0 Organizational Structure ……………………………………………………….……………..6 4.0 Project and Administrative Teams ….………………………………………………………...7 5.0 Project Risk Management …………………………………………….………………………9 6.0 Project Management Techniques Employed …………………………………………………10 7.0 Conclusion……………………………………………………………………..………………11 8.0 References……………………………………………………………………………………..12 2.0 Project Performance For any company undertaking a business project, it invests time, money and other resources so its primary concern is always what it will get in return for its investments. A project manager should be employed, either from within TAC or from outside the company. This manager ensures the project stays on schedule and survives on its approved budget without requiring additional funding. A project manager uses project performance measurement to ensure the project team is operating within approved cost and time constraints, and the project is performed according to preset plans. Assessing project performance also alerts company management if or when the project starts lagging behind with regard to time constraints or if it runs over the approved budget. This is done to enable management to take proper treatment modules and return the project back on track. The project head outlines work packages involved in carrying out the project. Here, the project head establishes concise definitions of size and work packages through a work breakdown structure (WBS). There are two probable WBS standards to choose from in terms of performance. First, there is the 4 to 40 hours, which allows work packages that do not exceed one person’s work in a week. Secondly, the 8 to 80 hours model allows for surpassing of the conventional work package for one person in a week (Humphreys, 2001). Before commencing the project, developing predesign programming documents where risk management strategies and activities are outlined is of paramount importance. Budget and quality assurance documents should also be part of predesign documentation. An assessment of critical systems is done to ensure they are functioning and meet optimal standards. The size of the project and level of management are yardsticks used to measure the suitability of either WBS packages. With regard to the TAC District 4 project, the most appropriate package is the 4 to 40 hours module as it accommodates company staff who are used to working for 40 hours per week. Project performance also entails determining the appropriate matrix for giving credit for work performed. These value metrics are important as they allow company management to track project progress. In the TAC District 4 project, the best matrixes to track project performance are cost variance (CV), schedule performance index (SPI), cost performance index (CPI) and schedule variance (SV) (Humphreys, 2001). When gauging project performance in terms of SV, if the project is performing according to the preset schedule, then the SV factor should be zero. An SV factor greater than zero means that the project is earning value more than it was anticipated to, so the project is ahead of schedule. Because the TAC District 4 warehouse move project is required to utilize the least time possible, the latter scenario would be highly advantageous to the project team and company as a whole. Optimal cost variance is when the project performance is zero (Humphreys, 2001). At this point, the project runs on the set budget. However, if the CV is less than zero, the project earns lower value, hence runs over the budget. A factor of one in schedule performance index means that the project is running on schedule. A properly performing project’s SPI should be as close to one as possible. Cost performance index also uses the same guidelines as SPI, so the close a project’s CPI is to one, the better performing it is. The District 4 move project involves a number of intricate stages. These are moving production equipment to the site, framing of the new premises, electrical and plumbing works, drywall and eventually building work benches. All these tasks can only be done once all contracted companies acquire necessary certification. Once a stage is completed, the project cannot move to the next stage before inspections are conducted by city and county officials, as well as project managers. 3.0 Organizational Structure The diagram below shows a descriptive outline of Trillo Apparel Company’s organizational structure. As noted from the diagram, the entire company consists of 3,000 employees. However, District 4, which is the focal point of the warehouse move project, has only 1,001 employees. Within TAC, the Chief Executive Officer is the highest power in terms of hierarchy. Below the CEO, there are four vice presidents who head the sales and marketing division, customer service, design division and operations. The mandate to oversee operations of all Districts is bestowed upon the Chief Operating Officer. The CEO is hierarchically above the VP of Operations who monitors Districts’ operations and reports to the Chief Operating Officer. All Districts are headed by their individual managers, who are tasked with overseeing the District’s overall operations. Such an organizational structure is referred to as a divisional structure, where company operations are split into distinct divisions, and a divisional manager is appointed to oversee the division’s operation (Berkun, 2005). This organizational structure is effective in large organizations such as TAC where a conventional organization would be insufficient. This is owing to the organization’s magnitude in terms of scope of operations and employee numbers. 4.0 Project and Administrative Teams Before initiating the project, TAC must establish distinctive project teams to handle different aspects of the project. Within its organizational structure, TAC has made provisions for up to ten project managers who can oversee the project’s performance and running. The team of project managers can vote for a project management office manager (PMO) who will be responsible for ensuring that project performance is captured and reported on a routine basis. It is important to assign risk managers in the administrative structure of the project. According to Burke (2003), project managers oversee distinctive aspects within the project. For instance, one manager can be tasked with managing project resources such as funds and manpower, while another can oversee procurement of necessary materials. All project managers involved in running different project aspects must ensure proper records are kept by project teams. It is pertinent to appoint teams to conduct different activities within a project. An accounting team is required to ensure availability of funds whenever needed, by coordinating with the manager in charge of project finance. The accountancy team maintains records of project costs and calls for attention whenever the project’s cost variance exceeds the projected limits. It is paramount to note that while project managers and teams may be selected from within the organization, outsourcing service providers is a viable way of ensuring efficacy and high quality standards are achieved. Employing the services of external service providers is tantamount or more superior to using in-house expertise. This is as the company employees may not have all the necessary expertise to pull off an impeccable project of this magnitude. Teams or groups of persons are given different tasks. As noted, TAC employs the services of different companies to achieve this goal. First, City Equipment Movers is tasked with packing and moving all production equipment from District 4’s old location to the new site. Once there, they will also unpack and arrange the equipment accordingly. Another important team within the project is the team tasked with overseeing the installation of electrical fixtures. The table below shows a worksheet of activities to be performed by all teams, the amount of time allocated to all activities, the cost implication of performing the tasks and the name of the company used to accomplish each task. Such a concise WBS structure allows for easy monitoring and effective implementation of changes wherever and whenever they may be required. Activity Company Providing Services Total Contract Supplies Time Needed Pack, move and unpack production equipment City Equipment Movers $150,000 n/a 5 Days Move non-production equipment and materials Express Moving Company $125,000 n/a 5 Days Framing East Side Framing & Drywall $121,000 $125,000 15 Days Electrical Sparks Electrical $18,000 $12,000 10 Days Plumbing Waterworks Plumbing $15,000 $13,000 10 Days Drywall East Side Framing & Drywall $121,000 $18,000 15 Days Finish Work Woodcraft Carpentry $115,000 $15,000 15 Days Build work benches for production floor Student Workers Carpentry $112,000 $110,000 15 Days The overall project management office manager’s (PMO) duty is to ensure that all phases of the project are captured and reported. The level of reporting should be achievable to avoid overburdening project managers. The PMO is also responsible for establishing an appropriate standard for applying credit for work done. The PMO should consult other project managers when choosing the right credit application matrix as shown earlier. All project managers should routinely measure project performance and report to the PMO, who then forwards the information to the company CEO and directors (Burke, 2003). In the case of TAC, because the company already has a number of project managers having experience of project management, it is not necessary to employ the services of another project manager. Consequently, the commissioning program is established at the same time as project performance requirements. 5.0 Project Risk Management The occurrence of risks is common in any project. Therefore, this calls for the establishment of effective risk management strategies that will predict and counter the occurrence and impact of different types of risks (Berkun, 2005). Some risks can be adverted through effective prior planning through identification and anticipation of the risks, assessment of their impact on the project in terms of financial costs and timelines. In addition, it is paramount to determine the probability of risks recurring, which could be detrimental to the project’s success. Once risk assessment and measurement is done, it is important to come up with ways of lowering the outcome of the risk via effectual backup plans. Furthermore, the risk officer appointed should offer healthy skepticism, which allows for critical assessment of potential projects. It is also important to maintain a live and fully updated risk database where all risks are catalogued according to their date, title, description, magnitude and probability. According to Burke (2003), an anonymous risk reporting channel is a viable tool to ensure all team members feel free to report any risks they foresee. Once these systems have been established, it is important to initiate mitigation plans for all detected risks. The mitigation plan describes the risk and shows who, how, when and what will be done to reduce the risk’s consequences. 6.0 Project Management Techniques Employed Project management techniques detail the different methods used to obtain information and disseminate it, as well as the general conduct of project management. Effective project management entails the use of several techniques as no single technique is effective entirely. The TAC District 4 move project’s management should embody techniques such as cycle time analysis, critical path analysis and business change analysis. The critical path analysis module identifies essential and non-essential activities associated with the project. Here, clear priorities are laid down by considering all project aspects such as managerial, operational and technological changes in the project. Changes are prioritized and implemented in a systematic manner. Cycle time analysis technique is also a viable project management method that can be adopted in the District 4 move project. Cycle time analysis focuses on the length of time needed to complete an activity. This time is calculated by the quantity of time (measured in days or hours) used to transform input to output (Burke, 2003). For instance, the amount of time taken to transform electric wires into an electric system in the project is a total of 10 days. Cycle time analysis is perhaps the most effective technique to adopt in this project, which has many stages. Business change analysis within the entire TAC organization identifies movement of District’s operations as the highest priority project for the year. Project Annual Revenue Generation Project Cost Priority District 4 Production Warehouse Move 1,000,000 1,070,000 High New Marketing Campaign 1,500,000 500,000 High Fall Product Line Design 500,000 425,000 High Call Center Technology 0 750,000 High 7.0 Conclusion The District 4 move project is projected to improve TAC’s financial performance by enhancing production capacities. Once the company initiates the project, different project managers working in collaboration with the PMO will establish necessary project administrative teams and viable risk management measures. The project management team shall also deliberate on and adopt the most appropriate management techniques. The project, which is expected to be completed within four months, will bring a lot of positive transformation not only to District 4, but the whole company, as well. References Berkun, S. (2005). The Art of Project Management (Theory in Practice). Maryland: O'Reilly Media. Burke, R. (2003). Project Management: Planning and Control Techniques. London: John Wiley & Sons. Humphreys, G. (2001). Project Management Using Earned Value. New York: Humphreys and Associates. Read More