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WOODWORKING COMPANY-

WOODY 2000 PROJECT

Submitted By: Group C


1

1. Project Concept and Strategy


a) Was the Woody 2000 project well-conceived? Give reasons for your opinion.
The Woody 2000 project was not well conceived. The expansion project was carried out based on mini
boom in commercial construction in South western BC, possibility of major airport expansion, and free-
trade opportunities south of the border. No analysis or evaluation was performed by the Woody’s, to
check whether the mini boom was sustainable for extended period of time or the possible expansion of
airport would take place or not. The initial strategy was that Woody’s would expand and upgrade to
increase output of their product and improve the current manufacturing facility. Woody’s should have
performed some kind of analysis to see whether expansion was necessary or not.

b) What were Woody’s real objectives that could and should have been articulated?
The real objective was to increase the production efficiency of the company, to move production to
computer based automation process, in order to meet the current increase in demand of its products.
Firstly, Woody’s should have looked at the possible ways to increase and improvise their current
production system by making improvements to current processes and possible equipment upgrades
without moving or expanding to a new location. Moving to a new location involved a lot of cost and
interrupted their existing manufacturing capabilities due to relocation of existing equipment. Woody’s
could have outsources the analysis and project review process to some external agency who could have
reviewed, whether or not it would be in their best interest to move to a new facility or expand the existing
one.

c) What strategies were there for achieving these objectives? What would you
recommend?
No proper and efficient strategies were articulated to achieve these objectives by Woody’s. Woody agreed
to commit the company to a budget of $17 million as an absolute maximum for all proposed work and the
target date for production was set to be eighteen months. They set arbitrary timelines without any study
and planning, accompanied by an arbitrary budget without getting any approvals. Production people were
not involved in the project which hampered the project completion process. Once the project was formally
decided upon, Woody should have taken formal approvals and undergone a bidding process to get the
best people at job in order to finish the project within the stipulated deadline and budget.

d) Did they consider other solutions? Give Examples.


Woody’s did not evaluate and studied the alternative solutions extensively before starting the project.
The decisions were often made by one individual (Moneysworth), solely based on his or her limited
expertise and vision. With no proper vision and planning, the result was an inefficient and fragmented
progress, followed by costly miscalculations. As a result, S&P commenced project’s preliminary designs
and raised questions and issues on the decision making process implemented by Woody.

e) Did they consider other solutions? Give Examples.


The project’s success or failure could not be measured very accurately, unless the project had been
completed as per the schedule. Woody’s employees worked without any planning and coordination, as a
result of which the project could not be completed as per the schedule. For an instance, neither
Moneysworth nor Leadbetter was conscious of the need for any review and approval procedures for
specifications and shop drawings submitted directly by either S&P or by Eddie Forgot of Piecemeal

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
2

Corporation, the suppliers of the production train. In one two-week period, during which both Faster and
Leadbetter were on vacation, the manufacturing drawings for this critical long-lead equipment sat in a
junior clerk's in-tray awaiting approval. For this reason alone, the delivery schedule slipped two weeks,
contributing to a later construction schedule conflict in tying-in the new services. When at last, the plant
became operational, Woody’s mistakes were evident as the commercial space was over supplied and
equipments were underutilized.

2. Project Scope
a) Why do you suppose renovation of the President and Executive Vice President’s
offices were included in the project?
The renovation work could have been kept out of the project's scope as it was in no way a critical activity
for the main goal. Extra resource allocation and time meant that this activity added cost to the project.
The estimated cost of $17 Million did not include cost for this work.

The reason behind this move could have to do with the HR policies of the company or with the
standardized norms of the industry.

b) Write a simple project scope statement?


The space available in company for production plant will be increased by 25%. Also an increase in
production quantity and quality has to be achieved by the installation of new semi-automatic equipment.
Renovation of the offices of top most management (The President and Executive Vice Presidents' offices
- 6 in No. maximum). The cost of project is estimated to be about $17 Million and time allocated is 18
months. Broad scope of work is described below:

All engineering, procurement, construction and commissioning.

Employing Schemers and Plotters (S&P) for the building and industrial design work.

Renovating offices as per annexure(s) attached.

Note: Any other work not mentioned in the above scope will not be considered as part of the project and
will only be included after consulting the project executing company at expense of additional costs and
resources.

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
3

c) Develop a work breakdown structure?

Wood
y
2000
Pre-
Executio
Planning Executio
n
n
Documents
Define time Decide Detailed legal / Preparing Commission
Plan Layout Foundation
for project Budget Estimations contract the land ing
works

Painting the
Install
Install CEO and the
automation
Facilities presedent
processes
office.

3. Project Planning
a) What should be included in a Woody 2000 project plan? What use would it be?
The right budget and time must be estimated which makes for a good plan. The case must be
studied in the best possible manner. This could include the assignment of right person to the
right position. The scope description must be included in each stage.
b) Evaluate Woody's plans for managing the project, including their approach to
contracting for professional services and construction work. What would you have
done and would that change for successive phases of the project??

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
4

There seems to be no real plan whatsoever. The decisions have come without any realistic
information. The contract wid EID Company was not made without a plan. This increases the end
cost unnecessarily.
c) Did the project plan explain how the project and any changes would be controlled?
Should this be part of the plan? Give reasons?
The project plan was written in a very haphazard manner and did not explain as to how the project will
be handled in case of any contingencies. They did not compensate for the perceived weakness in the
planning.

- Scheduling was done but it was on macro level, minute and very important details were ignored
and there was no milestones and checkpoints in scheduling plan.
- Goals set were very unrealistic and the commitment which was expected out of the employees
could not be expected because of such speedy goals. Also there was issue of responsibility conflict.
- Responsibilities were not clear and were ambiguous, resulted in conflict between manager,
contractor and consultant at various level.
- The project plan did not discuss every work to be performed in detail like objectives, schedules,
designs, mechanical improvements, renovations, budget constraints and clear goals.

All this should be a part of the project plan because of the following reasons:-

- A good baseline helps the project to make the use of most of the time allotted to the people. It
gives then clear idea and direction and help management to channelize all department/workers’
energy in one direction.
- By setting realistic timelines and sticking to them a commitment can be expected from the
employees and this is being valued a lot in terms of the work. It helps in standardization.
- The reminder of deadlines, information about the upcoming critical dates and current progress
charts if posted lets the employee be motivated to perform the work in time.

4. Quality
a) How should quality be approached, and what does it mean?
Quality is an important aspect for the project to be undertaken where it is mainly divided into two type:

1) Product quality
2) Process quality

The process quality is developed by the project team in order to obtain the final product according to the
necessities the owner have. And the product quality in more of dependent on the process under taken
and is also determined by the condition of satisfaction established by the client.

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
5

Our group has identified below parameters for quality:

# Quality Description Responsible Quality


Parameter Type
1 Schedule All deliverables, each milestones should Contractor / Process
be produced in line with the agreed Consultant / Quality
project schedule PM
2 Finance All deliverables should be within budget Contractor / Process
restrained. i.e. New unit, salary etc. Consultant / and
PM Product
3 HR Proactive engagement with the local Wood’s Process
community: All impacts on the local management
community should be discussed and and HR Team
agreed with them in advance, including all
workers and office staff
4 HSE Ensure all pre-defined HSE standards and Contractor / Process
Compliance Regulations are adhered to at all times PM and
and with the involvement of the Product
contractor’s safety officer.
5 For Construction Material: Random tests Contractor Product
Quality of such as crushing test and compaction test
Construction shall be carried out by the Contactor for
the concrete, and other construction
items according to the consultant’s
specifications and instructions
Construction Quality: The quality of all PM/ Consultant Product
deliverables must be planned for and
managed to ensure quality as envisaged
by stakeholders.

b) Why did Leadbetter not invoke the specifications to ensure quality? What was the
result?
Ian Leadbetter, Project manager for this project was a bright young mechanical engineer who had
specialized in programming semi-automatic manufacturing machinery. Though gave considerable
contributions to the mechanical and software side of the project, but he lacked the necessary project
management techniques and processes. This was main reason behind not invoking the specification to
ensure quality as he was not able to necessary approval from management. Mr. Leadbetter was occupied
with the software development and does not have a standardized process in place for the approval of
submittals and other key project management owner processes. . Moreover neither Moneysworth nor
Leadbetter was conscious of the need for any review and approval procedures for specifications and shop
drawings submitted directly by either S&P or by Eddie Forgot of Piecemeal Corporation, the suppliers of
the production train. They both were on the vacation and were least bothered about the project, where

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
6

the manufacturing drawings for this critical long-lead equipment submitted by S&P and Piecemeal
Corporation were awaiting approval. Due to this this reason alone, the delivery schedule slipped two
weeks.

Another key area where Mr. Leadbetter failed was quality of design process. There was not a process that
was in place to deal with the expansion of the production train. This change caused the software design
work that was completed to be discarded resulting in Mr. Ledbetter’s need to focus on redesign of the
software and not on his duties of facilitating and communicating information between all parties. Since
there were no processes on order for submittal reviews and approvals, there was a significant delay in the
delivery of the production train equipment.

c) What is the importance of Quality to a project like this?


Quality Control here can be defined as process of verifying that the project is built to plan, that the
tolerances allowable by industry standard and engineering practices have been met or bettered, and that
the finished project (and all phases to get there) meet with the quality standards of the management,
consultant, engineer, and general contractor. In today’s world, there is not much time nor resources to
waste. Reworks and delays are not acceptable. In Woody's case lack of product and specially process
quality control cost them not only delay in production but also excessive financial burden, drop in sales
and demotivation and negative environment across the unit.

So, the impact of quality on these projects are very high in achieving success where it would require the
implementation of proper procedures and planning to achieve a timely, inexpensive, and suitable project
completion. Quality controls and regular auditing helps in getting more reasonable estimates of the cost
and deadlines.

5. Quality
a) Identify and describe a set of project schedule milestones from project concept to
project completion.
The project millstones are: the budget can be made clear through proper planning, setting a good
schedule of the work. This allows each one to know about his role in the project, the timelines
and the cost of this role. The equipment and machines should be suitable for the project needs
and installed correctly.

b) Illustrate your milestones on a simple bar chart scaled to the information provided in
the Case Study.
The Chart of milestones:

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
7

begin working and production

getting certificate of completion

Purchase and installation of


Woody Project Millestone suitable equipments and machines
Contract Allocation

planing (budget, Schedule,


timeline)

0 1 2 3 4 5

c) Illustrate your milestones on a simple bar chart scaled to the information provided in
the Case Study.
Woody would know clearly what was happening in each phase, if the planning is good. A good
baseline plan, means every task will be scheduled by time and budget. This makes it easy to figure
any problem which occurs, by following up all the tasks in the project. So, the manager can stop
any out of control task or payment and he can come in any phase to add or fix any errors. The
baseline plan allows the manager to get a full view of the project progress. It also shows up the
strength and weaknesses in each task.

d) Illustrate your milestones on a simple bar chart scaled to the information provided in
the Case Study.
The complete project with critical milestone was not completed. There was no accountability for
not meeting the schedule. To overcome this, the overall project schedule with critical milestone
could be identified. The contract will be tied to the schedule and the float on critical path could
be better managed with such a method.

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
8

6. Cost Estimating
a) Develop a high-level estimate by "guesstimation".

The "guesstimation" as prepared by Cashman was as follows:

Cash Flow

First Month - $1 Million

Months in between - $1.4 Million/Month for 10 months = $14 Million

Last Month - $1 Million

Contingencies - $1 Million

Total = $17 Million

Considering EID Quote for time frame of 18 months, this "guesstimation" can be

Cash Flow

First Month - $1 Million

Months in between - $1.4 Million/Month for 16 months = $22.4 Million

Last Month - $1 Million

Contingencies - $1 Million

Total = $25.4 Million

b) How should the estimate be presented?


The estimates can be prepared well in advance of the project initiation as it helps us to
make the budget more accurate.

Before approving a project, the cost of work required must be thoroughly investigated. It is
necessary to prepare the cost estimate, for the intended work from the plans and
specifications. Thus, an estimate for construction work can be defined as the process of
calculating the quantities and costs of the various items needed in connection with the work.

Quantity Estimate or Quantity Survey

This is a complete estimate of the quantities of materials or items that may be required to
accomplish the project concerned. The quantity estimate is one of the most important ones in
order to arrive at an accurate cost estimate for the detailed plan.

Detailed Estimate
Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
9

Based on the results of the quantity estimate, this includes the cost estimate of everything
required for satisfactory completion of work, and should be the best and most reliable estimate
that can be made.

Complete Estimate

This is an estimated cost of all items, i.e. cost of main contract or material, labour and
supervision, cost of land, engineering fees, miscellaneous, viz. removal costs of owner,
contingency percentage, etc., which are related to the work in addition to the detailed
estimate.

Estimates can be prepared and presented broadly under these 4 pillars

 General abstract of cost


 Abstract of cost
 Analysis of rates
 Quantity estimates

c) Is life-cycle costing a factor on this project?


Clearly the cost estimated roughly in the very initial stage of the project showed that the total project
cost was a function of time. Thus every day added in the project during its mid-phase would have added
$46,666.

Also a delay in the start or the end would mean that the cost would go up by $33,333 approximately.

30

25

20

15
Guesstimation 1
Guesstimation 2
10

0
End
1
2
3
4
5
6
7
8
9
Start

10

12
13
14
15
16
End / 11

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
10

d) Cashman kept his cash flow chart a secret. Why, and what would you have done?

An estimate is a very confidential document and has to be kept away secretly. As seen above
and estimate can show many details about the project, thus has to be treated with utmost care.
Reasons for keeping an estimate secret can be:

 To keep the budget cash flow of the company safe, away from leakage to bidders.
 To keep the cash flow from leaking to other employees of the company.
 An expansion project cash flow can be used for knowing the financial plans of the
company.
 Such documents can be used by bidding companies to win the tenders by quoting in
lines with the document.

If it was up to me to handle this situation, I would have worked the cash flow document and
then consulted with VP's and other top management. Also I would have looked into the funds
available and prospects of loans in future. This would have helped me create a better cash flow.
Thus consulting with the core of the company was important. A copy of the document could
have been sealed and kept safely with the CEO also. It should have been opened to the trusted
members of the company, thereby making them feel an integral part of the project and the
company.

7. Contracting for Engineering and Construction Services


a) What were the contracting alternatives open to Woody’s? Which would have been
best and what would that have involved?
Moneysworth took a decision of not involving any sort of production people in the decision making
process for the expansion plan.

- He, on his own will, directly invited EID for quotation on the planned expansion.
- He did not take efforts to research on many alternative contractors thereby he limited Woody’s
contracting alternatives.

In order to take advantage, they quoted a high price seeing that Woody might need help in the planning
also.

Taking the production individuals in the decision making would have been a better option as they had a
better idea about the process and they would have given better insights on the plan. Apart from
contacting more contractors he could have also asked to make bids to get the best price.

b) How should the contract(s) be organized and tendered?


The planning should have been done in stages. Firstly the management comprising of experienced
individuals should have internally done activities like brainstorming to generate more ideas.
After establishing goals and clearing the plans, they should have go for bids from different contractors.
This method would have helped them get a better price as the objectives would have been clear.

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)
11

c) How should they be administered?


Moneysworth has never been involved in a project planning in the past, therefore giving this responsibility
to him didn’t looked like a good decision. Dealing with such pressure could also hamper his personal and
companies plans. So, I think the responsibility of the project should have been given to a more experienced
person who would have known the objective properly and would have given proper insights.

d) Were the original Woody 2000 project requirements delivered?


I don’t think Woody 2000 project requirements were delivered. There was no planning and poor
administration. The project witnessed additional loans, production delays, exceeded budget, discontent
among employees. Woody’s had a loss of image and reputation in the market.

Submitted by Group C (Aniruddh, Abhinav, Ankit, Gaurav, Gururaj, jeevan, Prashanthi, Ramya, Naman,
Nikita)