PRIME COLLEGE

GRADUATE DIPLOMA IN BUSINESS & MANAGEMENT

COURSE NAME:

BUSINESS ANALYSIS AND DECISION MAKING

NAME OF STUDENT:

STUDENT ID:

INTAKE:

JULY 2002

LECTURER:

Index
1. 2. i) 3. i) 4. i. ii) iii) iv) 5. i) ii) iii) iv) 6. 7.

Page

INTRODUCTION ........................................................................................... 1 NETWORK ANALYSIS (ACTIVITY ON ARROW AOA) ............................ 1 The Advantage Of AOA ........................................................................................... 2 DEVELOPING STORE SETUP PLAN .......................................................... 3 List Of Main Activities ............................................................................................. 3 THE OBJECTIVES AND PROJECT STAGES.............................................. 4 Recruitment ............................................................................................................... 4 Purchase Of Asset ..................................................................................................... 5 Delivery and Installation ...................................................................................... 5 Testing & Commissioning And Training............................................................ 6 ADVANTAGES .............................................................................................. 7 The Advantage Of Establishing Objectives ............................................................ 7 The Advantage Developing Plan.............................................................................. 7 The Advantage Of Scheduling A Project ............................................................ 7 Implementing And Controlling ........................................................................... 8 CONCLUSION............................................................................................... 8 REFERENCES .............................................................................................. 9

1. Introduction A project is a collection of linked activities with a clearly defined start and finish point, carried out in an organized manner, to achieve some specific result.

Tesco is a multinational company in the retail business and is currently operating in ten countries in Asia and Europe.Tesco operates more than 900 stores around the world, employs more than a quarter of a million people and is a market leader in most the countries. In Malaysia, Tesco started non-retail operations in 2001 and a series of hypermarkets started to open this year. Its main business objectives are to expand one of its market segments, which is hypermarket business all over Malaysia. Recently, Tesco has built its 4th store in one of the prime area in Klang Valley. Being the project manager responsible for the setup of the store, my plan for the whole setup is laid down in this assignment with the use of Arrow-on-Activity (AOA) project management tool. 2. Network Analysis (Activity on Arrow AOA) Network analysis involves the breaking down of a project into its constituent activities and the presentation of these activities in diagrammatic form. For this project as well, the activities have been broken down to analyze its duration of project to identify the critical paths. This network called the AOA will also allow us to identify any duration that exceeds the actual time or any exceed in budget that will be affected by the time consumed. This network will keep the project in correct pace and budget.

In this planning, it has been identified the mission for this project which is to open a new store or hypermarket for business in the next approximately 5 months. The main success factors in this project are the purchasing of preparation machinery and equipment as well as employing the required staff to run the store. Having failed to purchase the equipment or not having the staff to work, will lead to failure to open the store for business. And the milestones too are identified to ensure the progress of the project. All the activities stated in the AOA network are compulsory steps and require step-by-step process from one

activity to the other. Therefore, to complete each activity, a milestone is used to measure the progress.

As per the calculation presented in the AOA diagram in appendix I, the longest path is the one that identifies the project duration that is 137 days. The critical path in this project is F, G, H, J and I. The activities listed below are important milestones in this project. The projects most important milestones are to setup the equipment and machinery in the building. As the duration has been identified, they are also some free floats in some of the paths as these paths has a shorter process time and it is identified in path C, G, H & I. And the free float time available in this project is in path C (7 days), path G (18 days), path H (46 days) and path I (46 days). Below, the principles of project management are used to fulfill the project requirement. Please refer to Appendix II for further calculations of the project timeline and constraints.

i)

The Advantage Of AOA

Project management principles are the step-by-step means of control of activities or plans by which the project will be followed to achieve cost, time and scope in a systematic manner. Also with the use of AOA network-planning tool, which I would say that is used as an engine to the project principles to achieve targets or to keep in track the project management principles.

3. Developing Store Setup Plan At this stage, a plan is set up to recognize the activities involved in the entire project. Each activity is a milestone for analyzing and controlling the progress of the project. Below are the activities involved in this project.

i)

List Of Main Activities

To identify budget for store setup. To identify types of resources suitable and identify quantity. To invite suppliers and consultants to tender in for supply of machinery, equipment and resources.

To purchase machinery and equipment for preparation equipment. To engage consultants for staff recruitment

To handover standard machinery and equipment manuals to suppliers for specification standards.

To develop an effective communication system network for efficient 2-way communication.

To use technologically supported IT system for clerical matters and filling system. To identify project period and date of commencement and completion. To liaise with M&E and plumbing contractors as well as recruitment consultants for smooth flow of plan.

Allocation of staff for respective duties during project. To plan delivery and progress payment for equipment and machinery. Establish schedules and chart on the progress of setup.

4. The Objectives and Project Stages

Setting objectives for this project is to know when, where, who, what and how to successfully complete a project. The aspects that should be known are the Time, Cost and Scope factor so that it can be controlled to succeed in the project.

The project is located in Klang Valley and at the moment the building has just completed and handed over to the shareholders i.e Tesco. The objective of the project is to achieve the opening its 5th store in Malaysia. In order for the process of setup to complete according to the objected timeline and accuracy, a flowchart of project life cycle is drawn to ensure all procedures are followed. (Please refer appendix III a & b).

i. Recruitment

To setup the new store, I would need a minimum of 32 experienced staff to be located in different area. This figure derived from the calculation of Gantt chart in Appendix IV. The most critical areas during the setup would be Fresh department, invoicing department, technical department, schematic department, general office and warehouse. Different department staff will require different experience and knowledge. For the setup purpose, only managers and assistant managers will be employed. The fresh department managers will require experience in using preparation machines as well as the equipment. As for the invoicing department, knowledge in inventory system and keying in good received and maintaining records of good received would be compulsory. The schematic department on the other hand would require hands on experience in doing the arrangements of goods for display. HR manager will be employed for the office to enable him or her to employ the associates and train them before the store opens for business. A Gantt chart is drawn to show the numbers of staff to be employed and allocated for designated areas. (Please refer appendix IV). As for the salaries, an estimated calculation is done to plan the budget for the entire project. Here a budget of RM108, 750.00 is needed to pay salaries for the project. (Please refer appendix V).

ii)

Purchase Of Asset

Here the objective is to purchase and deliver the machinery and kitchen equipment within budget and value for money, within the time period and the within the required scope or standards required by policies. The allocated budget for this project is RM1, 300,000. If not properly planned, budget can be affected by delay in purchase and cannot deliver the equipment within the specified time. E.g. if there is insufficient time available for the supplier to import and deliver equipment by normal delivery, this will lead us to pay extra for airfreight services. On the other hand, budget too can affect the time constraints should there be insufficient budget and decision cannot be made immediately to purchase a machine, which is highly priced due to market influence.

As for the timeline given, there are only two months available before the building handover ceremony take place and we will have only one and a half month to do the setup after the handover. All in, this project duration would be three and a half months3 months (Please refer appendix VI). However, even though the project is planned as per the following planned objectives of Time and Cost, there are risks of late shipments and deliveries due to macro environmental influences which should be considered too. Example like, delay is shipping process due to war or political and economy factor. These risks can either lead to extension of time or expansion of cost as per mentioned in the earlier example in paragraph 3 (ii). The overall cost of machinery and equipment is drawn in Appendix VII. Here the Chart will show that the equipment budget is achieved and the breakdown of preparation area is shown to identify budget for each area.

iii)

Delivery and Installation

The next stage of the project is to schedule the delivery of all the purchased machinery and equipment. (Please refer Appendix VI under heading 1 months after handover). During this stage, close coordination with the Mechanical and Engineering personnel is crucial. As a project manager, all equipment and machinery electrical and plumbing

requirement are to be planned in advance after the purchase is confirmed. This is to ensure there is no shortage of supply for electrical and water supply for kitchen equipment.

Last but not least, the installation takes place immediately after the delivery and normally takes about one week to install and commission the machines. During this stage, standards of installation are to be followed based on standard layout drawings and within the standard of Trading Law for food service.

The risk here, lie around the area of not having supplied with standard required M& E fittings and plumbing works. This in turn will incur extra cost for addition works by contractors. On the other hand, time too can be a constraint as all installation jobs is to be completed within one week.

iv)

Testing & Commissioning And Training

Testing and Commissioning means testing the equipment purchased once it is installed, and to ensure that the machine is properly running to enable the user to use the machine. At this stage, samples are taken from the outcome of the machine. For example, baking some bread will test the baking oven and settings will be done accordingly. In this project, the period for testing and commissioning takes about one week to complete.

Training on the other hand will take place during the above process of testing and staff will be trained on how to use the machine and adjust the features as and when necessary. They will also be informed of the health and safety precautions as well as the periodical maintenance procedures. Training the staff in this project will take another week after testing and commissioning.

5. Advantages

i)

The Advantage Of Establishing Objectives

Establishing objectives or setting objective for the project The advantages in using project management principles is that the project manager can see in a glance and analyze the projects overall performance in term of its capability to complete the project in the specified time, cost and scope. For example, a network is drawn with all the activities involved and broken down into details for those activities that are complicated and overlapped with one another. This way the project manager can identify which activity should come first and which should follow after that.

ii)

The Advantage Developing Plan

As mentioned above, this step in project management is crucial as only by outlining this step, can the project manager use the tools for creating the project network. It allows the project manager to identify the critical activities and identify which activity is after or before another. This stage also allows proper allocation of resources. All activities in the entire project are outlined and this process will ensure all respective activities are written down. The effort that goes into identifying activities, determining interrelationships among activities, and estimating activity times is crucial . 1

iii)

The Advantage Of Scheduling A Project

Scheduling in project management is very rewarding as it helps the project manager to ensure all core activities are being outlined systematically one after another. This process will ensure that one activity is completed before another and it also identifies the time

needed to complete the activity. Decision can also be made whether to increase resources to speed up the activity if it is delayed.

iv)

Implementing And Controlling

The advantage of Implementation and Control is that once this project is completed, the machinery and equipment need to be handed over to the user. In this project, the implementation is to open a new store for business. Proper hand over and implementation of equipment and machinery will be used the first time for business. The resources will be tested on the machinery and ensure they have skills to handle it. As for the control, the store will be given a manual on all machinery and equipment. This manual consists of all maintenance contract and policies. This will ensure all assets are well taken care and handled correctly.

6. Conclusion
In any project management, it is essential to use project management tool like AOA to facilitate the entire project and the activities involved fulfilling the project. By having such tools and project management principles, it allows the project manager and the activities to stay on the track for easy supervision. In this assignment, it has been learnt that this project can be analyzed whether its a successful project whereby the time, cost and scope is achieved. Here it does.

7. References
1. Henry L. Gantt (Quantitative Methods For Business, David Anderson, Dennis Sweeney, Thomas Williams, 8th Edition, 2001, Chapter 12, caption 12.1,Page 479)

2.

Henry L. Gantt (Quantitative Methods For Business, David Anderson, Dennis Sweeney, Thomas Williams, 8th Edition, 2001, Chapter 12, Page 478)