This project comprises the planning, construction and implementation of franchise program in shangdong province. The COO of the company is responsible for the whole implementation of the project including planning, construction and development. The construction of the franchise program will start on 3rd, march 2014 and is expected to start on 31st July 2014, in total of 26 weeks. The estimated cost of the whole project shouldn't exceed RMB 398000. The estimation is based on the assumptions that there will not be significant delays in the construction schedule, delivery dates and the personnel management. Among the risks BYF may encounter is inability of The project will meet the following objectives:
-satisfy the need of franchisees
-provide the best possible business format
-increase the exposure of the brand
-achieve 30% increase in profitability (connect with NPV calculation)
Scope Management
The franchising program encompasses products and services, processing, distribution, sales of products, rendering of services, marketing of the brand, distribution and sales. The Broad of BYF agreed that the scope of the franchising in 2014 is limited to the granting of permission to use intellectual property rights, such as products, trademarks, patents services and business system in Shandongprovince. The franchisees sell solely the products of BYF and BYF can retain part of the earnings.
Work Breakdown Structure
There are 6 major deliverables, benchmarking, planning, design, development, finalization, implementation and transition to steady state.
Integration Management:
The project charter is to develop and implement franchise program to enter to the Shandong province. The main objective is to increase exposure of brand to and ultimately increase profitability by 30%.
The project is initiated by the broad of directors and funded entirely by the company itself. A team of 6 department heads are arranged roles and responsibilities and the COO is the project manager. The product or service requirement is the complete system of product and business format franchising. The project management plan of franchising program has the components of all knowledge areas in the entire project. It also includes project schedule, cost and schedule baselines, major milestones and target dates for each baseline.
Risk management
Three risks that could arise as the franchise program is launched: 1) unqualified equipment suppliers 2) decisions are not made in timely manner 3) actual costs that is different from estimates BYF must have a standby supplier ready to get the right equipment replace if problems arise to keep the deadline set for the project. If the decision of the projecthinders the progress, the project manager needs to make the final decisions. If the milestones are missed, the plan must be re-planned.
If the actual cost is different from the estimate the extra cost will be reviewed by the broad of directors as they are responsible for any changes required for approval and releasing of funding. A preliminary cost estimated will be developed at the beginning of the project and it will be updated at the critical milestones of the project. The mitigation strategy for each risk is difficult to quantify, however, the project manager and the broad of directors will try every means to avoid additional cost and risk.
Project performance must be monitored and measured to identify variances from the plan. Any variances that endanger the project objectives must be taken into account by adjusting the plan through repeating the appropriate project planning processes.
Do you think logical diagram is required here?
Quality management
During the franchise projects’ entire life cycle, in order to bear less claims against product quality defects or quality accident, BYF should actively assist or supervisor the factories to conduct a comprehensive quality control at all stages of project. Check sheets will be used to gather data while performing inspections to identify defects.
Category / S / M / T / W / T / F / S / TotalCracks / /
defects
Incorrect dimensions /
Wrong pattern /
Improper quality control procedures /
Colormismatch
HR management
The project manager is the COO of the company. Her duty is to assign the project team members, to determine their responsibilities and to look for completion of each step of process. Every team member is responsible for particular part of the project. He/she should appoint his/her department to implement the process related to his/her area and to survey the completion of the tasks. All department heads report to COO, who is accountable to broad members. This is group responsibility of all members of the project, but in general the COO is the person to be blamed for an eventual failure of the project. Generally based on the 8 hours work day 5 work days As a whole, the estimated staff hours
The project organization is shown on the organization chart with clear reporting line:
Role and responsibilities
RACI chartProject manager / Marketing and sales / operations / HR / Accounting / production / procurement
planning / R / A / I / I / I / I / I
development / A / R / R / I / I / I / I
design / A / R / R / R / C / C / C
finalization / R / A / C / I / C / R / R
implementation / C / C / R / A / C / C / C
Transition to steady phase / A / R / R / R / C / I / I
R =responsible A= accountable C=consult I=inform
Communication Management
Project communication provides a critical link among stakeholders, ideas and information that are necessary for the project’s success.
A communication system incorporates inventory, sales, VIP, HR system to meet with different information needs of the stakeholders can help BYF fulfills its corporate strategy. The system should also provide a way for stakeholders to communicate with each others electronically. Meetings with broad of directors and department heads should be conducted regularly. The plan is agreed by the project manager and the broad. It will then be communicated and agreed by the project team. Updates of the project performance will be communicated to the broad members, team members and prospective franchisees. A foundation will be laid as to the project manager will be the decision maker so all disputes and unresolved conflict can be handled in a professional manner.
OCB and WBS graph
Time management
The whole project duration will last for no more than 8 months. The start date is 3rd march and the end date is 29th, august. When the activities of development of franchise program are identified, their duration is estimated, and then the sequencing of activities takes place. Since it is the first time BYF launches the franchise program, the project manager cannot rely on past project template, but from expert and project schedule from scratch to provide the needed estimate. The relationships of activities are illustrated within a network diagram, such as Gantt chart. The Gantt chart identifies which activities are on the critical path. The critical path is the path with the longest duration and typically has zero slack or float. Therefore, the activities such as the sign of franchisee agreement cannot be delayed. In order to avoid the project manager to bloat the duration estimates, BYF can use a percentage of the project time as management reserve. In case when the activities are late, the tardiness of the work is borrowed from management reserve rather than tacked onto the conclusion of the franchise program.
Cost Management
The project manager will be responsible for managing and reporting on the project’s cost throughout the duration of the project. During the monthly project status meeting, the project manager will meet with the department heads to present and review the program’s cost performance for the preceding month. Performance will be measured using earned value. The four earned value metrics will be used to measure projects cost performance: schedule variance, cost variance, schedule performance index and cost performance index. The project manager is responsible for accounting for cost deviations and presenting to the broad of directors with options for getting back on budget. The broad of directors has the authority to make changes to the project to bring it back within budget. The project manager needs to present the broad of directors with a formal cost variance corrective action plan. Any particular graph required here?
Procurement Management
The last planning activity within the planning phase is to identify the elements of the projects, which will be acquired from external suppliers to the project. Since BYF does everything from production to retail stores, it only requires the supply of machines. BYF uses a customer’s satisfaction review to determine whether the machine suppliers could solve the problems of products’ defects. Since production will increase with the adoption of franchise program, the procedure of developing a step by step methodology that addresses the terms and conditions of the contracts and any required completion for contract closure must be in place.
Gantt Chart
Gantt charts can help to keep a track the individual tasks, utilization of resources and the overall project progression. The WBS shows that the role and responsibilities of each department manager. The milestone and deliveries are………….
The whole project duration will last for no more than 5 months, from 3rd march and the to 31st July. When the activities of development of franchise program are identified, their duration is estimated, and then the sequencing of activities takes place. It is important to note that the accurate estimate is paramount. The activity estimates will be used to create the project schedule, and predict when the project should end. BYF project manager should rely on several inputs such as activity lists, constraints, assumptions, resource requirements, effort, duration, resource capabilities and historical information to create accurate estimates.
In order to havemore accurate estimates of activities, the project manager should incorporate the historical information and expert judgment to predicate accurate duration estimates. The project manager can also incorporate a reserve time. For example, reserve time can be added to printing brochure based on the uncertainty of this activity. As the project moves forward, the reserve time can be reduced or eliminated as the project manager sees fit. For example….please add reserve time on MS project and write further points here
The logical links are outlined in the Gantt chart. All tasks have both predecessors and successors expect the first and final task. Meetings should be conducted approximately once per month to review the progress. The critical path is the longest line of dependent activities. The tasks implementation consulting and performance measurement of franchisees are both critical paths. The activities in the critical path have an effect on the deadline of the project. The project manager can consider reducing the time of activities, such as selection of franchisees to accelerate the project or re-sequencing the activities. The project manager can also perform more activities in parallel or by shortening the planned critical path by adding more resources. For example: development of brochure and website optimization can be done at the same time. If the proposed schedule takes too long, there are a few strategies to compress the project. 1: re assess the estimates 2: add more resources 3: have people to work over time, change to a 6-day working week 4 increase the lead time. Can you add further points here?
The dependent activities need to be completed in sequence, whereas other activities, such as sign of franchisee agreement may be done at any time before or after a particular stage is reached. Leads and lags must be considered in the project schedule since an abundance of lag time can increase the project duration. For example, since the marketing and sales manager want to learn from the production of training program and apply if there is anything to sales video otherwise two tasks can be done in parallel. An abundance of lead time may increase risks. For example,
Furthermore, the project manager must also pay attention to the completion of activities on paths with float. What are floats? The critical paths should be arranged and monitored in a hierarchy of the path with the smallest float to the path with largest float. As activities are completed, the float of each path should be monitored to identify any paths that may be slipping from the schedule end dates.
Schedule control
Poor performance may result in schedule changes. To tackle the problems, the project may be changed to allow for additional quality inspections and more time for activity completion. Constraints such as industry regulations, expected delivery of raw materials will restrict when and how the project may be implemented. Project constraints can also include milestones. If the franchisee request a milestone for a deliverable within the project on may 1st. Based on it, all of the work needed to create a deliverable must be scheduled against the expected due date.
Can you make further points to make the answer of this part more completed?
Please apply my cost estimates, WBS (role and responsibilities), milestones or anything required to my MS project file. I have no ideas how to use it. Thanks
Financial Plan
The budget for the project is RMB398000 and is made up of staff cost and the materials costs. The budget profile is shown on the graph below. This budget includes the costing of the feeder and project buffers, which amounts to 8000. There is a financial risk buffer of 20000 (staff cost buffer 12000 and materials buffer 8000). The intention is not to spend this amount and the project cost target therefore is 378000
Can you show the buffers on Gantt chart?Or logical diagrams?
Each week the project costs, staff and materials costs will be calculated and presented on a cost profile. Cost estimates about producing training videos, developing and printing brochures, operations Manuel, legal consultation, and expansion of production capability, providing training, human resources, and marketing, should be analyzed. The number of staff hours required, quantities of material and equipment needed are closely coordinated with cost estimating.
The cost profile will be compared to the budget profile and the cost target. A revised cost forecast will be produced. If there is overspend, the responsible manager will be investigated and actions will be implemented to ensure cost target is achieved. If the overspend cannot be recovered, then the department managers need to report to the project manager.
Budget cost=cost baseline
Resource Initial / budget / cost forecast / cost actualplanning and analysis / A / 5000 / 3500 / 4300
training videos / B / 50000 / 49000 / 46800
brochures / C / 20000 / 19000 / 17000
printing / D / 35000 / 34800 / 31820
legal consultation / E / 20000 / 18000 / 16800
expansion of productioncapability / F / 20000 / 14800 / 14500
implementation / G / 23000 / 22000 / 20000
In direct cost / H / 23000 / 18000 / 16340
website / I / 33000 / 30000 / 30000
marketing / J / 64000 / 61000 / 60500
staff cost per hour 24/hour X 6 staff X1250 hours / K / 180000 / 160000 / 158500
material and equipment cost / L / 5000 / 4500 / 4500
transportation cost / M / 5000 / 4500 / 4200
preliminary and general cost / N / 5000 / 4500 / 4000
398000 / 270100 / 258060
week / budget / cost forecast / actual cost
1 / 2/3-8/3 / 0 / 0 / 0
2 / 9/3-15/3 / 500 / 350 / 320
3 / 16/3-22/3 / 1000 / 800 / 740
4 / 23/3-29/3 / 9000 / 5800 / 5540
5 / 30/3-5/4 / 22000 / 13300 / 12840
6 / 6/4-12/4 / 44000 / 24300 / 22840
7 / 13/4-19/4 / 67000 / 39300 / 37640
8 / 20/4-26/4 / 91000 / 57300 / 55140
9 / 27/4-3/5 / 121000 / 80100 / 76140
10 / 4/5-10/5 / 153000 / 104100 / 99940
11 / 11/5-17/5 / 192000 / 133100 / 127940
12 / 18/5-24/5 / 231000 / 164100 / 158840
13 / 25/5-31/5 / 271000 / 196900 / 189840
14 / 1/6-7/6 / 305000 / 214900 / 207840
15 / 8/6-14/6 / 327000 / 224900 / 216840
16 / 15/6-21/6 / 345000 / 234800 / 225270
17 / 22/6-28/6 / 358800 / 243300 / 233470
18 / 29/6-5/7 / 367600 / 249300 / 239360
19 / 6/7-12/7 / 374600 / 254300 / 243660
20 / 13/7-19/7 / 380600 / 259300 / 248660
21 / 20/7-26/7 / 385600 / 263300 / 252460
22 / 27/7-2/8 / 389600 / 265800 / 254460
23 / 3/8-9/8 / 393100 / 267800 / 256260
24 / 10/8-16/8 / 395400 / 269300 / 257460
25 / 17/8-23/8 / 396400 / 269800 / 257840
26 / 24/8-30/8 / 398000 / 270100 / 258060
cost is calculated in accumulation
Program funding is based on the estimates developed during the proposed preparation phase. These estimates can be modified during the contract negotiation phase. The program funding is used to establish the budget baseline.
The project manager assigns funding to the program according to the procedures to delegate funding decisions for individual projects. Often, budget input is requested in chunks, each one and just in time to fund the next spend period. Accountability to the broad of directors should be emphasized. The resources required to complete each defined element of work are developed in terms of hours. These hours are converted to labor dollars by applying direct labor rates and indirect burdens. Costs of purchased materials and subcontracts as we as other direct costs are also generated and included in the proposed amount.
Each work package and planning package contains a budget divided into time increments by elements of cost, such as direct labor, material, and other direct cost. During the phasing process, the project manager must ensure that requirements will be met, work sequences are logical and resources are available to execute the plan.
The work breakdown structure is the framework used to facilitate the requirement of integrating scope, schedule and cost.
Each week the project costs, staff and materials costs will be calculated and presented on the cost profile. This cost will be used to compare with the budget profile and the cost target.
Because NPV recognizes the time value of money, and takes into account the forecast cash flow from the project and the opportunity cost of capital, it is widely recognized, especially for short term project.
NPV=investment +CF/(1+k)1+
How can I apply NPV calculation in this case?
Cost control
Once the budget is established, adhering to the project budget at all times is key to profit from project. Also, it is better to prepare the budget as time-based so that the project manager can keep track in different stages. Therefore, the whole project team can make accommodation with the final amount in the budget. Furthermore, the project manager needs to constantly remind the team of important deadlines in order to ensure the work is completed on time. Finally, any changes on the scope must be reviewed by the team and report on project financials can also help keep track of the progress of the project. The use of earned value management can also help manage cost: