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  • 1. BUSN7024 Project Management Basics Semester 2, 2008 – Major Assignment Project Management Plan Supply Chain Management Sorabh Jain u4281996, Kenny Kuo u4495139, Petrus Ralda u4477079, Jarrod Wood u4505588, Word Count: 9,432 (excluding tables, frameworks and references)
  • 2. Team Number: Three By signing on Table 1 each member acknowledges his or her agreement with the stated contribution to the overall assignment made by each team member. Name Student No Contribution Signature Sorabh Jain, u4281996 B Kenny Kuo u4495139 A Petrus Ralda u4477079 A Jarrod Wood u4505588 A Table 1: Membership and Individual Contribution. Use the following convention to state each member contribution to the total effort • A = very good contribution, the team member went above the expected participation level. • B = good contribution, the member participated as expected and was diligent in performing the assigned tasks. • C = less than satisfactory contribution, the member participation and contribution was less than the average for the team. • D = the member had minimal participation on the team effort, shown lack of commitment to the team and significantly increased other members’ workload. • E = the team member did not contribute at all to the team. The team shall discuss and agree on the contribution level for each team member. Your signature on Table 1 indicates your agreement with the assessment of contribution. A lack of signature will indicate dissatisfaction with the attribution. Please note, if half or less than half of the team sign the contribution assessment, a penalty of 5% will apply to the assignment’s mark. To encourage the teams to strive to perform as a team, penalties will be assigned to students that perform below the minimum expected level (see Table 2). Individual contribution to the team’s effort. Penalty to be applied to the assignment’s mark for the particular student A 0% B. 0% C 15% D 50% E 100% Table 2: Human Resources Mismanagement Penalties. This page is confidential and will NOT be seen by the class. The lecturer will delete this page before releasing the document for class access on the web site.>
  • 3. Acknowledgment Walter Fernandez is grateful to the author of this template, David Tuffley, who generously allowed him to modify the template and to use it at ANU. Plagiarism ✍ Plagiarism will not be tolerated. It is the responsibility of the team to ensure that proper citation and quotation conventions are followed. Failure to observe this rule will result in a zero mark for the entire assignment, regardless of the magnitude of the infringement. Further action(s) might be considered on a case-by-case basis. i of v
  • 4. Contents Contents..................................................................................................ii 1. Executive Summary............................................................................1 2. Project Introduction ...........................................................................3 3. Project Integration Management.......................................................4 3.1. Project Plan Development.................................................4 3.2. Project Plan Execution.....................................................4 3.2.1. Work Authorisation and Status Reviews........................................4 3.2.2. Change Requests..........................................................................5 3.3. Integrated Change Control...............................................5 4. Project Scope Management...............................................................6 4.1. Initiation.............................................................................6 4.1.1. Product Description .......................................................................6 4.1.2. Strategic Plan.................................................................................6 4.1.3. Project Selection Criteria ...............................................................7 4.2. Scope Planning................................................................7 4.2.1. Product Description........................................................................7 4.2.2. Project Charter...............................................................................7 4.3. Scope Definition................................................................8 4.3.1. Scope Statement............................................................................8 4.3.2. Work Breakdown Structure (WBS).................................................8 4.4. Scope Verification.............................................................8 4.4.1. Critical Success Factors.................................................................8 4.4.2. Evaluation Measures......................................................................9 4.5. Scope Change Control......................................................9 4.5.1. Scope Changes..............................................................................9 4.5.2. Corrective Action............................................................................9 4.5.3. Lessons Learnt.............................................................................10 5. Project Time Management...............................................................11 5.1. Activity Definition.............................................................11 5.1.1. Activity List...................................................................................11 5.2. Activity Sequencing........................................................15 5.3. Activity Duration Estimating.............................................17 5.3.1. Basis of Estimates........................................................................17 5.4. Schedule Development...................................................18 5.4.1. Project Schedule..........................................................................18 5.4.2. Schedule Management Plan........................................................18 5.4.3. Resource Requirement Update....................................................18 5.4.4. Constraints and Assumptions......................................................18 ii of v
  • 5. 5.5. Schedule Control.............................................................19 5.5.1. Schedule Updates .......................................................................19 5.5.2. Corrective Actions........................................................................19 6. Project Cost Management................................................................20 6.1. Resource Planning..........................................................20 6.1.1. Resource Requirements Planning................................................21 6.2. Cost Estimating..............................................................23 6.2.1. Cost Management Plan................................................................23 6.3. Cost Budgeting................................................................23 6.3.1. Project Budget .............................................................................24 6.4. Project Schedule and Risk Management Plan................25 6.5. Cost Control....................................................................25 7. Project Quality Management...........................................................27 7.1. Quality Planning..............................................................27 Framework 2: Quality Statements and Policies.....................28 7.1.1. Quality Management Plan............................................................28 7.2. Quality Assurance...........................................................30 7.3. Quality Control................................................................30 7.4.1 Rework 36 7.4.2 Customer Dissatisfaction ..............................................................37 7.4.3 Missed project expectations .........................................................37 7.4.4 Poor utilisation of resources .........................................................37 8. Project Human Resource Management..........................................39 8.1. Organizational Planning..................................................39 8.1.1. Project Interface...........................................................................39 8.1.2. Staff Requirements......................................................................39 8.1.3. Roles and Responsibilities Assignments .....................................40 8.1.4. Staffing Management Plan...........................................................40 8.1.5. Organisational Chart....................................................................42 ..............................................................................................42 8.2. Staff Acquisition..............................................................42 8.2.1. Staffing Pool Description..............................................................42 8.2.2. Recruitment Practices..................................................................43 8.2.3. Project Staff Assigned .................................................................43 8.2.4. Project Team Directory.................................................................43 Name 43 Role 43 Functional area.....................................................................................43 Phone 43 Mobile Ph 43 Fax 43 Email 43 8.3. Team Development.........................................................44 8.3.1. External Feedback.......................................................................44 The Project Manager is to evaluate the team’s performance informally as required and formally every quarter or on completion of the allotted task for the project. Categories for iii of v
  • 6. the assessment criteria include: budget/cost consumed during the project lifecycle versus forecast, each member’s output with regard to the overall project schedule and the required quality. After internal assessment within the project team, PM is to seek senior management/director for feedback on if the expectations have been met. Expectations of any stakeholders and customer satisfaction must be achieved. . .44 8.3.2. Performance Improvements.........................................................44 8.3.3. Input to Performance Appraisals..................................................44 9. Project Communication Management............................................46 9.1. Communications Planning...............................................46 9.1.1. Communications Methodology.....................................................47 Bottom-Up (vertical) .............................................................................48 Middle-Out (horizontal) .........................................................................48 9.2. Stakeholders .................................................................48 9.2.1. Communications Management Plan............................................49 9.3. Information Distribution...................................................51 9.4. Performance Reporting...................................................51 9.4.1. Change Communications Process...............................................52 9.5. Administrative Closure....................................................55 10. Project Risk Management..............................................................57 10.1. Risk Management Planning..........................................57 10.1.1. Organisational Risk Management Policies ................................57 10.1.2. Roles and Responsibilities ........................................................57 Table12: Roles and Responsibilities of project team ...........................57 10.1.3. Stakeholder Risk Tolerances.....................................................58 10.1.4. Risk Management Plan.............................................................58 10.2. Risk Identification ........................................................59 10.2.1. Risk Categories..........................................................................59 10.2.2. Project Risks .............................................................................60 10.3. Risk Response Planning..............................................62 10.4. Risk Monitoring and Control.........................................63 10.4.1. Workaround plans......................................................................63 10.4.2. Risk Database............................................................................64 11. Project Procurement Management...............................................65 11.1. Procurement Planning...................................................65 11.2. Solicitation Planning ....................................................66 11.3. Solicitation.....................................................................67 11.4. Source Selection...........................................................67 11.5. Contract Administration.................................................67 11.6. Contract Closeout.........................................................68 Once the contract is complete, the suppliers will send a written letter to the organisation that the contract is complete. And if the organisation wants to renew it the PM will have the power to renew it.......................68 The PM will have the power to terminate the contract in between if the suppliers are not fulfilling the evaluation process. And another supplier will be given contact...............................................................................68 iv of v
  • 7. 12. Conclusion.......................................................................................69 13. Appendix 1.......................................................................................70 14. References.......................................................................................71 v of v
  • 8. Tables Table 1: Activity List …………………………………………………………………………11 Table 1: Membership and Individual Contribution.............................b Table 2: Human Resources Mismanagement Penalties.....................b Frameworks Framework 1: Activity Sequencing Network..........................................................................16 Framework 2: Quality Statements and Policies.....................................................................29 Framework 3: Quality Management Implementation Plan..................................................31 Framework 4: Quality Control Process...................................................................................37 Framework 5: Channels and Structure of Communication..................................................49 Framework 6: Change Management Communication Process............................................56 Graphs Graph 1: Four Histograms Showing Hours of Work for Project Team Members............43 vi of v
  • 9. 1. Executive Summary This project plan has been developed to address the development of a strategy to secure the supply chains and raw materials required for the production of Bio fuels for the aviation and military aviation industries. This relates to the information systems, commercialisation, business processes and real-time monitoring systems projects within the broader Bio- Solar program. The supply chain of manufacturing firms is a systematic network of suppliers, factories, warehouses, distribution centres and retailers through which raw materials are acquired, transformed and delivered to customers. This project has been selected because it is an integral part of the overall program, for the company to enter the bio fuel market. The scope of the project is to develop a strategy to identify raw materials, logistics, suppliers and ongoing security of these for the production of bio fuels. The business need addressed by the strategy is to facilitate and support the production process by ensuring ongoing supply of raw materials to be used in the production process, once this is established. This is important to the business because without a strategy to secure these supplies the business may falter before it has had a chance to properly establish. This project strategy sets out the requirements relating to scheduling, budgeting, accuracy, human resources, communication, risks and procurement to develop the strategic plan to how to acquire the relevant resources. This project is congruent with the strategic plan and long-term objectives of the organisation. This is reflected particularly strongly by the will to enter the bio fuel production markets The product to be produced at the end of this project is a strategy that will ensure the security of the raw materials and supply chains required to produce bio fuels for the aviation and military aviation industries. This project has a budget of AUSD350,468.00, and is estimated to take a total of seventy eight (78) days to complete. The performance standard to be met is high, given the importance of establishing a strong and sustainable supply chain. This will be subject to approval by the Program Director and relevant stakeholders; hence they hold the performance assessment delegation. Page 1
  • 10. The major risks to this project are related to internal measures within the project manager’s control. These include: lack of adequate staffing, IT failures, lack of resources related to the ongoing support of senior management and the lag times associated with these issues. Page 2
  • 11. 2. Project Introduction The supply chain of manufacturing firms is a systematic network of suppliers, factories, warehouses, distribution centres and retailers through which raw materials are acquired, transformed and delivered to customers. In order to optimise performance, supply chain functions must operate in a coordinated manner (Infosys Technologies 2008). Raw material acquisition, logistics, transportation and resource management, scheduling and dispatching are some of the key functions of the bio-fuel production supply chain. The effectiveness with which the supply chain is managed at the tactical and operational levels enables timely dissemination of information, accurate coordination of decisions and management of actions among people and systems (Production Planning Inc. 2008). This project plan sets out the requirements relating to scheduling, budgeting, accuracy, human resources, communication, risks and procurement to develop the strategic plan to acquire the relevant resources. The goal of the strategic plan is to organise the supply chain as a network of cooperating, intelligent agents, each performing one or more supply chain functions, and each coordinating their actions with a central coordination office. Our focus is in planning the development of this strategy to ensure the construction of intelligent supply chain systems in a manner that guarantees that agents use the best communication, coordination and problem solving mechanisms available, with minimal programming effort (Infosys Technologies 2008). The strategy should be mindful of the changing dynamics of the contemporary business culture and constant volatility in the political, legal, technological, social, and economic environments. The project plan will enable the executors to setup appropriate supply chains in the uncertain environments outlined above. Page 3
  • 12. 3. Project Integration Management This section details the processes to be used for integration of change into the project. It coordinates the various elements of the project as well as making trade-offs among competing objectives and alternatives to meet or exceed the stakeholder’s needs and expectations. 3.1. Project Plan Development The project plan that follows has been created so as all parts that overlap are consistent with each other. This is to ensure that there are no issues of contention for the project manager or the project officers. The project plan includes the following subsidiary plans and documents: • Project Charter • Product Description • Scope Statement • WBS • Project Time Management Plan – Milestones • Project Cost Management Plan – Estimates • Project Quality Management Plan • Project HR Plan – Key Staff Expected Costs and Efforts • Project Communication Plan • Project Risk Management Plan • Project Procurement Plan 3.2. Project Plan Execution 3.2.1.Work Authorisation and Status Reviews The project will require work orders to be created by the project manager. There will be no other authority that can endorse the commencement of work. This is because the Project Manager is the one in on the status review meetings and as such will know best about the timings for start and finish dates. These orders can only be endorsed in writing from the project manager and must be signed by that person, unless sent via email. Page 4
  • 13. 3.2.2.Change Requests For any change requests impacting on this project, a formal submission of a Change Request Form is required. This must include strong justification and rationale for the change. This must be submitted to and approved by the project and program managers. Both project and program managers will reserve the right to contest the change based on practicalities and delays caused, costs incurred and quality effects. Once approved, the requested changes will be integrated in to the project plan, which will be disseminated to each stakeholder, including the effects on costs, timeliness and quality. 3.3. Integrated Change Control When a change request is lodged relating to any of the nine components of this project plan, senior management, the project and program managers must consider the changes to the scope; schedule; cost; quality/performance; risk and contract administration. This is to ensure the changes in one area are replicated across the whole project. To ensure documentation of corporate learning from this project, a “lessons learned” paper will be completed at the conclusion of the execution phase of this project. Page 5
  • 14. 4. Project Scope Management The scope of this project has been detailed below and broken into the following areas: initiation; planning; definition; verification and change control. 4.1. Initiation The project has been authorised by Dr Walter Fernandez as part of the bio fuel solar energy program. It was authorised because it has been identified as a significant business need for the company as it enters the new market of bio fuel production for the aviation and military aviation industries. The business need that this project has been developed to address is the development of a strategy to secure the supply chains and raw materials required for the production of Bio fuels. This is important to the business because without a strategy to secure these supplies the business may falter before it has had a chance to properly establish. This is the plan for the initial planning phase of the project, it is anticipated that once the project enters execution phase a new or modified plan will be established updating the various changing criterion. The main purpose of the project is to develop a strategic plan that will identify and secure the raw materials required for bio fuel production in the aviation and military aviation industries. 4.1.1.Product Description The product to be produced at the end of this project is a strategy that will ensure the security of the raw materials and supply chains required to produce bio fuels for the aviation and military aviation industries. This strategy will be actionable and simple to avoid any confusion for those that will implement the strategy. 4.1.2.Strategic Plan This project is congruent with the strategic plan and long-term objectives of the organisation. This is reflected particularly strongly by the will to enter the bio fuel production markets. Page 6
  • 15. 4.1.3.Project Selection Criteria This project has been selected because it is an integral part of the overall program, for the company to enter the bio fuel market. This will contribute to a growth in market share and also assists the company with public perception issues such as assisting to decrease the reliance on fossil fuels. The product of this project is a strategy that will seek to identify the appropriate suppliers and therefore will lower costs and ensures that the production process is adequately supplied with raw materials. 4.2. Scope Planning 4.2.1.Product Description For a description of the product of this plan, please refer to topic 4.1.1. 4.2.2.Project Charter The business need: The business need that this project has been developed to address is the development of a strategy to secure the supply chains and raw materials required for the production of Bio fuels. This is important to the business because without a strategy to secure these supplies the business may falter before it has had a chance to properly establish. Product Description: The product to be produced at the end of this project is a strategy that will ensure the security of the raw materials and supply chains required to produce the bio fuels. This strategy will be actionable and simple enough to avoid any confusion for those that will implement the strategy. Project Manager: The project manager for this project is to be Petrus Ralda. Petrus will have the full authority over the budget and resources allocated to this project. No further seeking of resources will be accepted unless it is presented by Petrus. Constraints: • Budgets and time • Limited availability of suitable Human Resources Assumptions: It is assumed that: Page 7
  • 16. • There will be constant easy access to the Program Director; • The sponsor will continue to be supportive of the project; • Bio fuel will not be superseded by another type of technology before production begins; • The strategy document will not be required before the current due date; 4.3. Scope Definition 4.3.1.Scope Statement The scope of the project is to develop a strategy to identify raw materials, logistics, suppliers and ongoing security of these for the production of bio fuels required to enter the commercial and military aviation industries. The business need addressed by the strategy is to facilitate and support the production process by ensuring ongoing supply of raw materials to be used in the production process, once established. 4.3.2.Work Breakdown Structure (WBS) Below is the Level 1 WBS, a level 2 version can be found in Appendix 1. 4.4. Scope Verification This section seeks to identify the critical success factors and evaluation of those factors upon delivery of the strategic plan to the stakeholders. 4.4.1.Critical Success Factors There are a number of critical success factors that will mean the project has been successfully completed. They are as follows: 1. The strategy addresses all aspects of the scope, including raw materials required for aviation fuel production, identification of suitable suppliers and logistics for transporting raw materials; 2. The strategy is timely; Page 8
  • 17. 3. The strategy is easily implemented; and 4. The strategy is well written and easily understood. 4.4.2.Evaluation Measures There is only one way that the stakeholders and customers can check the quality of this strategy and that is by reviewing it prior to approving expenditure. As a result, the strategy will be delivered to the stakeholders once it has been completed and edited. This will be an initial review to attain whether the goals have been met, or whether more work needs to be done. This will avert a mismatch in perceived outcomes and allow enough time for correction of any major errors. 4.5. Scope Change Control This section defines how planning and management of changes to the scope, via change request, is carried out. This section also details how any scope management plans; corrective actions and lessons learnt documentation should be completed. 4.5.1.Scope Changes Please refer to section 3.2.2 Change Requests, for the appropriate process for making scope changes. 4.5.2.Corrective Action Where a scope change request has been submitted and approved, the following corrective actions shall apply. 1. It will be integrated into the project plan; 2. New costs, timeframes and quality effects will be detailed; 3. All new tasks will be integrated into the WBS and assigned; 4. All cost increases will be factored into phasing and overall budgets; and 5. The scope verification adapted to suit new deliverables. If there has been an unrecoverable slippage to the timeline, unrelated to a scope change, there is to be a report to both the project manager and subsequently, the program manager as soon as the slippage is identified. If the slippage can be recovered through additional hours, without risking life, then overtime can be paid to the relevant workers. Page 9
  • 18. In the event of a major slippage, a corrective action report (CAR) will be created giving options of how to proceed. This will include the amount required to get back on time, the quality drop that will be required to get back on time or the time that will be lost. This will be disseminated to the program manager and internal stakeholders. 4.5.3.Lessons Learnt All changes, corrective actions and rationale for decisions regarding corrective actions are to be documented and approved by the Project Manager, as soon as completed. The full documentation of change requests and corrective actions is to be recorded in a central database to enable corporate learning. Page 10
  • 19. 5. Project Time Management This section covers the intended strategies to manage time for the life of the project. It includes defining and sequencing of the activities and estimating their duration. 5.1. Activity Definition 5.1.1.Activity List Please see below the activity list for this project. All constraints and assumptions are listed in the project charter, in the scope initiation section (4.1.1). Table 1: Activity List Activity Level 1 Level 2 Level 3 Description Research and Data Collection Research raw materials required Gather information of relevant raw materials for biofuel production Research Journal to create Aviation Articles fuel. Research availability of raw materials Gather information of relevant raw materials for biofuel production Research Journal to create Aviation Articles fuel. Gather information of other kinds of biofuels already being produced from current Research other producers of biofuels already biofuels, in the produced industry. Research Preliminary commodity market investigation of the to ascertain who market for supply sells these raw and demand, cost materials and their and availability of current price, as the raw materials. Page 11
  • 20. determined by the market. Research existing suppliers Review all industry websites regarding the manufacture of biofuels, to determine who the Research industry approved suppliers websites are. Review environmental websites regarding the manufacture of biofuels, to determine the environmental Research record of the environmental suppliers in point protection websites 10 Research cost, Obtain the data quality, reliability relating to cost, and availability of quality, reliability the suppliers from and availability of point 10 the suppliers. Analysis Link the raw materials with appropriate suppliers. illustrate the links between suppliers and each raw Create a matrix material Identify the most appropriate Evaluation of supplier for each suppliers raw material. Analyse how to obtain ongoing supply of the raw materials Collate the data relating to the abilities of each supplier to Engage potential maintain an suppliers for ongoing supply of information the raw materials Determine the viability of each supplier to Evaluation of maintain an suppliers ongoing supply of Page 12
  • 21. the raw material by comparing each of their company information packs. Conduct a Cost-benefit analysis for each raw material Compare the remaining viable suppliers for each raw material on the basis of cost versus benefit. Given that the list has been whittled to only those who can supply the raw Evaluation of material on an suppliers ongoing basis. Drafting Initial outline in dot point form Preliminary brainstorming of ideas on initial Brainstorm draft. Cut the overall list of ideas to key Harvest valuable useful potential ideas solutions. Create an initial draft Further explore the list of ideas and Elaborate on list of cull the ones that key ideas will not work. Write the strategy Draft initial in the form that it document will be presented. Correct any mistakes, check for flawed logic and check assumptions to ensure high Review draft quality. Edit Peer review Peers to review Line supervisor to review for how it fits with the Line Supervisor company's Review direction. Final draft Page 13
  • 22. Conduct any further research, as outlined Conduct any further throughout the edit research and review phases. Input changes and review to ensure Enter any changes quality Approvals Process Identification of stakeholders Identify the relevant stakeholders for approval of the Internal strategy Identify the relevant stakeholders for approval of the External strategy Coordination of approvals Manage the signing off of the strategy by senior Internal internal Endorsement stakeholders. Notify those external stakeholders of the External completion of the notification strategy Implementation and execution Communication Gather relevant parties for a meeting/lecture on the contents of the strategy. Also distribute to them Distribute to via electronic internal executors means. Manage Stakeholders Ensure the funding remains in place by continually communicating the Secure ongoing importance to the support decision makers. Review of effectiveness Page 14
  • 23. Evaluation Review the performance of each supplier for each raw material they are Performance responsible for Review delivering. Conduct another cost-benefit analysis to ensure value for money is Cost-benefit still being analysis achieved. Confirm the ongoing relationship with the supplier or inform them of the change, as Communication required. 5.2. Activity Sequencing For this portion of the plan we have used the Precedence Diagramming Method (PDM). See below for the Project Network Diagram. Framework 1: Activity sequencing networking Page 15
  • 24. Page 16
  • 25. 5.3. Activity Duration Estimating The Work Breakdown Structure contains the times that have been estimated, as shown below. 5.3.1.Basis of Estimates This is a list of further assumptions that were taken during development of the estimates. Table 2: Assumptions of WBS Activity Repetitions Assumption Research Activities 4 Number of researchers on the project team. Link Raw Materials 1 There is a supplier for every raw material Ongoing supplies 1 Raw materials can be supplied on an ongoing basis Page 17
  • 26. Brainstorm 1 There are enough valuable ideas produced Editing 1 Peers and supervisor will provide feedback on time Internal Approval Process 1 The schedule of approvals will completed on time by the senior management Approval Process 1 Correctly identified the relevant stakeholders Ongoing Support of 1 There will be an ongoing Stakeholders support from the senior decision makers 5.4. Schedule Development This section details the start and finish dates and how to manage the timelines for the project. The schedule assumes that the standard hours of the project are 8 hours per day 5 days per week, excluding public holidays. 5.4.1.Project Schedule To view the project schedule, please refer to the Gantt chart attached in Appendix 1. 5.4.2.Schedule Management Plan Internally, if there is a schedule change or if a delay in any specific task is identified before the activity becomes late, the Project Manager is to reallocate the necessary resources according to the changes that have occurred. 5.4.3.Resource Requirement Update In the event of corrective actions being approved by the Project Manager, where there are cost or resource implications, these are to be tracked and included in the budget. This will be done by formal notification to the project accountant via email and followed up in writing. 5.4.4.Constraints and Assumptions The constraints on this section include standard hours to be worked, because it limits the ability of workers to complete tasks by their allotted time. Page 18
  • 27. The assumptions for the schedule are: the number of required employees can complete their allotted task on time; attendance of the employees will remain constant as full-time. Finally, there will be no significant and unrecoverable ‘lags’ in the proposed schedule. 5.5. Schedule Control 5.5.1.Schedule Updates A schedule update is considered to be anything that changes the start or finish time of another work activity down to the level three tasks. These include any level four tasks or below that affect higher-level tasks. To assist in schedule management once a task is complete, the WBS will be updated via the online software. In addition, the person in control of completing the work activity is to advise the project manager and anyone whose task it will affect. For more information on the channels of communications and how to communicate with these specific stakeholders, see the communications section of this plan at section 9. 5.5.2.Corrective Actions In the event of a completion time that will affect another task either by allowing it to start earlier or forcing it later, a formal schedule update request must be submitted to the project manager with a corrective actions proposal including an estimated cost of any such proposal. If accepted by the project manager – with no corrective actions available – they will notify the project sponsor, program manager and any relevant internal and external stakeholders. In addition, the project manager will inform the other team members affected about the change to schedule and seek any possible corrective actions from that work group to get the project back on time. Page 19
  • 28. 6. Project Cost Management This cost management plan serves to effectively and efficiently allocate resources for development of a strategic plan for security and transportation of raw materials for production of Bio-fuel for the commercial and military aviation industry. The main components of the project cost management section include resources planning, cost estimation, cost budgeting, and cost control. Significantly, the cost management plan serves as a control mechanism for standard comparison, a baseline from which to measure the difference between the actual and planned use of resources (Project Management Institute, 2000). The project manager should deploy resources to accomplish planned project objectives – drawn from the WBS – hence, resources usage should be monitored carefully to detect over or under utilisation of resource expenditures (Meredith J. and Mantel S, Jr. 2006). When making cost estimations and allocating costs to resources requirements of the project, cost control measures are established to cater for changes to the budgets of individual work activities, with significant consideration to uncertainties such as inflation interest rate increases, corporate taxes, and income taxes (Meredith J. and Mantel S, Jr. 2006). Cost estimations are made considering the market prices for goods and services of the Australian economy and in conformance with current Australian labour laws and minimum wage standards/requirements. 6.1. Resource Planning Resource planning is one of the core components of this project plan. Core resources determination is explicitly based on the Work Breakdown Structure (WBS) and project scope statement presented in project scope management section. Consideration must be equally given to physical resources such as computers, printers, telephones, copy papers, and human resources and intangible resources such as time and energy (Debbie 2003). The quantity and quality of resource requirements to develop the strategic plan for security and transportation of the bio-fuel production program are presented in the project budget in section 6.3, cost budgeting. Identified resources should facilitate implementation of the tasks in the WBS and are consistent with organisational policies. The resource requirements planning table below presents the summary of all resources in quantity, type, and quality needed to efficiently complete both high and low level work activities from initiation to termination of the project. Page 20
  • 29. 6.1.1.Resource Requirements Planning Table 3: Resource Requirements Activity WBS Resource Quantity Quality/ Type level Activities Requirements 1 Project Manager 1 1. Bachelors degree level or Management above 2. 3-4 years project management experience 3. Good interpersonal, communication, problem solving, and negotiation skills 4. Able to display high professionalism, general management, and coordination capabilities Accountant 1 1. First degree in accounting qualification 2. 2-3 years accounting work experience 3. High level analytical and problem solving skills 2 Strategy for The resources required under this high level activity are based security of on the following low-level activities. suppliers 2.1 Research for Research 2 1. First degree qualification raw materials Officers in Business or commerce field 2. Have strong research, analytical, communication, and reporting skills 2.2 Research Research 2 (same as 1. First degree qualification current Officers above) in Business or commerce suppliers field 2. Have strong research, analytical, communication, and reporting skills 3 Data Analysis The two research Officers are to analyze their research findings on raw materials and current suppliers and prepare reports respectively. All research methods and data analysis methods, techniques, instruments must be reliable and proven to maintain quality outcome. Page 21
  • 30. 4 Drafting/ Drafting officers 2 1. Secretarial and Business documentation administration qualification 2. 2 years business administration work experience Computer/laptop 2 HP computers with MS windows Vista application Printer 1 HP Laser network printer Reflex A4 white Copying Paper 4 reams 5 Approvals Project Officers 2 1. First degree Process qualification in Business and commerce field/ logistics management discipline 2. 2 years similar work experience 3. Have strong planning, coordination, organisation, and communication skills 6 Implementatio Project Officers 2 (same as 1. First degree n and above) qualification in Execution Business and commerce field/ project management discipline 2. 3 years plus project officer work experience 3. Have strong planning, coordination, leading, controlling, organisation, and communication skills 7 Review of Project manager to plan, organize, and coordinate meetings to Effectiveness effectively control and management project implementation efficiency. Further to ensure that project is on schedule and no deviations from initial plan. Page 22
  • 31. 6.2. Cost Estimating Cost estimations are made considering market prices for goods and services in the Australian economy and in conformance with current Australian labour laws and minimum wage standards/requirements (Australian Human Resources Institutes 2003). When making cost estimations and allocating costs to core resources requirements, significant consideration is given to uncertainties such as inflations, interest rates, corporate tax, and income tax. A 10% contingencies cost is built into the initial individual cost structures as a measure to cater for changes to the budgets of individual work activities. The budget is therefore flexible to cater for any uncertainties and the budget itself forms the cost control mechanism (Meredith J. and Mantel S, Jr. 2006). The units (per man hours, per quantity, and per day) determinants of total cost estimations for every resource requirements are based on the individual work requirements of the WBS. For simplicity and ease of reference, all cost estimations are presented in concert with the cost budgeting section. 6.2.1.Cost Management Plan The project cost budget presented in section 6.3 will be employed as an effective resource expenditure control and management mechanism. Every activity in the WBS, both high and low levels, is allocated a cost and that is the cost baseline/benchmark to be used to measure project budget performance during the project life. Significantly, the cost budget serves as a control mechanism for standard comparison, a baseline from which the project manager can measure differences between the actual and planned use of resources (ROI Institute 2004). Current or potential deviations detected must be rectified whilst notifying project sponsors, project team, customers, and other relevant stakeholders, through their preferred communications medium (Meredith J. and Mantel S, Jr. 2006). 6.3. Cost Budgeting Resources planning and cost allocation is forecast, giving adequate consideration to the individual high and low /sub level activity requirements of the work breakdown structure. The budget is planned to facilitate achievement of the objectives of the project, hence the ultimate objectives of the historical Bio- Solar program. From the cost estimations, the following project budget is planned to fully implement the project from initiation to completion (Project Management Institute, 2000). Page 23
  • 32. 6.3.1.Project Budget Table 4: Project Budget Activit Activities Resources Requirements Estimated Cost. Total y level AU$ AU$ Manager 110,000-125, 000 187,500 1 Project Management 60,000-80,000 Accountant 2 Strategy for security of suppliers 2.1 Research for raw materials 1. Senior research Officer Researcher 1 = @ $40/hour 8000 2. Junior research Officer Researcher 2 = 14,040 @ $30/hour 5,040 3. Provision for Cost for 1000 information download 2.2 Same Research Officer Research current suppliers will be used. 3 Data Analysis 4 1. Senior Analyst/ writer Writer 1 = 11,520 @ $40/ hour Documentation/Drafting 2. Junior Analyst/ writer Writer 2 = $7680 @ $30/ hour 1500 X 2 = 3000 25,750 3. 2 x Computer/laptop 500 4. 1 x network printer 5. 4 x A4 reams copying 50 paper 6. Overhead costs 2000 1000 7. Administrative costs 1. Stakeholder meeting 1000 2. Venue Hire 2000 5 Approval Process 3. Refreshments 1000 4500 4. Transport hire @$100/ 500 per day 1. Senior Project Officer 1 =20,800 @ $40/hour 6 Implementation and 2. Junior Project 2 =15,600 Page 24
  • 33. execution Officer@$30/hour 37,300 2 X 200 3. 2 x Telephones 500 4. Meetings 7 Review of Effectiveness 1. Review Meetings 500 500 Project Budget 269,590 Provision for 26,959 Administrative Overheads 10% Contingency Provision 10% 26,959 Provision for Risk 13,480 Management 5% Provision for Change 5% 13,480 Management Total Project Cost 350,468 Labour costs are based on the Australian Human Resources Institute 2008 Salary survey services. 6.4. Project Schedule and Risk Management Plan The WBS is the basis from which the baseline cost is determined. The project budget is based on the WBS where resource requirements (time and quantity) are scheduled from initiation to completion. A contingency cost estimation of 10% of each resource is built into and allocated to every resource and activity to cater for any price changes through inflation and/or government policy shifts. Any changes or potential changes to project schedule must be catered for and the project manager must take necessary measures where possible to inform relevant stakeholders for approval of immediate corrective actions (Project Management Institute, 2000). 6.5. Cost Control Deviations from the cost baseline should signify critical cost performance signals of the project. Budget overrun or under utilization should be importantly considered as a major change to the budget (Project Management Institute, 2000). Hence, the project accountant must investigate the cause of the variance and make necessary recommendations to the project manager for corrective actions where who must undergo quick and immediate auditing. The project accountant will remain a key Page 25
  • 34. professional to keep track of project cost performance throughout the project life. Most importantly, conduct budget reviews in every planned milestone and project phase. The strategies for cost control actions to be taken by the project accountant include: a) Monitoring cost performance to detect and understand variances from plan, b) Ensuring that all appropriate changes are recorded accurately in the cost baseline. c) Preventing incorrect and inappropriate or unauthorised changes from being included in the cost baseline, and d) Recommend the project manager take necessary actions to bring cost within acceptable limits. Based on the project accountant’s recommendations, the project manager should: a) Schedule meetings and Inform appropriate stakeholders of the changes; b) Ensure that changes to the cost baseline are minimised, authorised and agreed upon by all stakeholders; and c) Take necessary actions to rectify the changes and manage actual changes when and as they occur. Page 26
  • 35. 7. Project Quality Management The final deliverable of this project is a quality plan that will be used by the project manager to develop a strategy to identify and secure raw materials, logistics, and suppliers for ongoing production of bio fuels for the main Bio-Solar program. The business need addressed by the strategy is to facilitate and support the production process by ensuring ongoing supply of raw materials to be used in the production process. Hence, the project manager must ensure quality management at all phases and milestones from research to documentation, to approval, and to implementation are maintained and controlled. Project Quality Management must therefore be taken seriously as a critical process necessary to ensure that the project will satisfy customer requirements. The project manager should place sufficient emphasis on implementing, managing, monitoring, and controlling all strategies and measures prescribed in the Quality Planning, Quality Assurance and Quality Control sections below to achieve the desired project outcome or deliverable (Brooke B. et al. 2006). 7.1. Quality Planning Quality planning establishes the basis from which the project manager will monitor and control quality. Based on the approved project scope and outcome, the critical components of the quality plan are the quality statements and the quality policies (Meredith J. and Mantel S, Jr. 2006). The project manager is expected to use the quality statement and policies to monitor and control quality throughout the project but particularly at all milestone points through to the final product (Project Management Institute, 2000). The quality policies are based on the following three main and important quality statements - which are focused on the final product, the strategic plan. Page 27
  • 36. Framework 2: Quality Statements and Policies 1. The final product of this project must be of highest standard, quality, and meets the approved performance specifications and requirements of the client and top management. Quality 2. The final product must be easy to read, translate, interpret, Statements understood, and implementable by all critical stakeholders. 3. The final product must be flexible and compatible to accommodate any changes and deviations in the cost baseline, time baseline, and performance specifications. 1. Recruit skilled, knowledgeable, qualified, experienced, and professional research and project officers including project manager and project accountant. 2. Specific job descriptions of every project member must be detailed to monitor and control quality. 3. Proper and consistent scheduling must be done to ensure consistent performance by all team members. Quality 4. Research and data collection sources must be current, reliable, genuine, Policies and up to date. 5. Data analysis tools and techniques must be appropriate and relevant for the project. 6. Frequent quality review meetings must be conducted to ensure quality specifications are met at every milestone point. 7. Detailed editing must be done to ensure quality 8. Change and risk management plans must be carefully followed to monitor and control changes and risks 9. Final project plan must be of quality, standard, and specifications that satisfy the needs of the critical stakeholders, 10. All schedule, cost, and performance management and control plans must be strictly followed to identify and manage changes, mitigate risks, and ensure quality project outcome. 7.1.1.Quality Management Plan This quality management plan ensures that the project manager effectively manages the implementation of the quality policies and describes the procedures and framework for implementing quality assurance and quality control. Monitoring and controlling of quality will be conducted mainly through a review and auditing process (Project Management Institute, 2000). The members of the review and auditing team include the project accountant, senior research officer, and senior project officer and lead by the project manager. Their specific job responsibilities are described in table 3 below. Page 28
  • 37. Table 5: Quality review and Audit team Quality Review and Audit Team Job Responsibilities Project Manager- Team Leader 1. Quality monitoring and control review and audit process and arrange audit meetings. 2. Quality policies are implemented throughout the entire project. 1. Ensure that project is on budget and cost associated with quality control is Project Accountant- Cost Auditor accounted for through critical milestone audit points. 2. Conduct professional audits and report any changes that will affect quality 1. Ensure that all research and data gathering sources are reliable and current Senior Research Officer- Chief Editor 2. Ensure that research is professionally conducted 3. Edit drafts and report to review team on status and progress 4. Make draft reports and plans available to review team at every review meeting for milestones completed 1. Ensure that quality is maintained at all milestone points Senior Project Officer-Performance Auditor 2. Ensure that all critical events and activities are carefully implemented 3. Audit for any deviations, identify cause, and report for corrective actions Knowing the members of the quality audit and review team and their respective responsibilities, the project manager should use the quality review and audit meeting plan framework below as a quality management plan. This plan is made as a closed looped quality monitoring and control system. Framework 3: Quality Management Improvement Plan Page 29
  • 38. Quality Resolutions and Quality Audit and Deviations/Defects in recommendations review team Meeting time, cost, and adopted and plans Convened performance made for immediate specifications identified corrective actions and thoroughly discussed. Reports on the Approved Quality PM to report to corrective actions improvement stakeholders on including normal recommendations and critical changes in audit reports are resolutions are scope, cost, schedule, ready for the next implemented by and performance for quality audit and respective project teams approval and review meeting additional resources 7.2. Quality Assurance The project manager must use the quality management plan to ensure that project quality is maintained. The project quality review and audit team serves as the quality assurance mechanism for systematic monitoring and controlling of quality. Senior management and project clients approved quality standards must be maintained or improved throughout the project life cycle to provide confidence and trust in the final outcome of the project. The quality management and improvement plan – the closed looped quality audit and review process – also serves as a continuous quality improvement mechanism for the project manager to systematically monitor and control (Project Management Institute, 2000 and Meredith J. and Mantel S, Jr. 2006). 7.3. Quality Control The final deliverable of this project is a strategic plan for security and transportation of raw materials. This should primarily ensure development of an effective and efficient inbound supply chain system to facilitate achievement of the objectives of the bio-solar program. Quality control is considered very critical in all phases of the project to achieve its objective. The quality of the product (strategic plan) of this project importantly depends on how well the project performance process is controlled and monitored (Meredith J. and Mantel S, Jr. 2006). The project manager and the project team should therefore ensure that the project performance process, costs, and time are carefully monitored to detect unusual changes from normal implementation variances/deviations. Corrective actions should be immediately taken to ensure that the project performance is on Page 30
  • 39. schedule/time, budget, and within the planned standards and quality. The following table presents the quality management, improvement, and checklist plan for the project throughout the entire project life, significantly from the performance process, costs/budget, and schedule/time control perspectives (Mayberry County Nonprofit Technology Assistance Agency (NTAA) 2005). Table 6: Quality Control Plan Activity Activities Performance Process Cost/ Budget Time/ Schedule level 1. Project manager 1. Project 1. Time/schedule 1 Project must ensure that Accountant must audits must be Management performance and conduct financial conducted to process audits are and cost audits at ensure that done at all all milestone lower level milestone points points throughout activities are throughout the the project life implemented on project life time to achieve 2. Report any higher level/ 2. Report any process variances from the milestone and performance cost baseline to activities deviations to project manager relevant to take necessary 2. Causes of stakeholders and actions delays or early take immediate execution must corrective actions be investigated and necessary actions immediately taken to ensure quality Strategy for Research on current suppliers and type, kind, quantity, and quality of 2 security of raw materials is a crucial milestone activity of the project. The research suppliers method, type, time allocation, sources of information, and qualifications and skills of research officers are critical for quality research outcome. This high level activity is the core activity of the project; hence, adequate funding and time must be allocated to achieve high performance and quality. 1. Research problem/ 1. Adequate funding 1. Sufficient time area must be must be allocated must be 2.1 Research for properly stated and for quality allocated for raw materials specifically defined research quality research outcome outcome 2. Appropriate 2. Research must research design, 2. Research must be be conducted methodology and conducted within within the type must by the planned planned employed budget schedule/time 3. Genuine and 3. Any 3. Any delays/ reliable sources of deviation/variance over-run to the data are used for to the cost scheduled time literature review baseline must be must be notified notified and and investigated Page 31
  • 40. 4. Research officers investigated 4. Corrective must be qualified actions must be 4. Corrective actions and have immediately must be necessary research taken to rectify immediately taken skills and to rectify knowledge 1. Research problem/ 1. Adequate funding 1. Sufficient time Research area must be must be allocated must be 2.2 current properly stated and for quality allocated for suppliers specifically defined research quality research outcome outcome 2. Appropriate 2. Research must research design, 2. Research must be be conducted methodology and conducted within within the type must by the planned planned employed budget schedule/time 3. Genuine and 3. Any 3. Any delays/ reliable sources of deviation/variance over-run to the data are used for to the cost scheduled time literature review baseline must be must be notified notified and and investigated 4. Research officers investigated 4. Corrective must be qualified actions must be and have 4. Corrective actions immediately necessary research must be taken to rectify skills and immediately taken knowledge to rectify 1. Appropriate data 1. Adequate funding 1. Sufficient time 3 Data Analysis analysis methods must be allocated must be (qualitative or for quality data allocated for quantitative) must analysis quality data be used to analyse analysis 2. Data analysis 2. Data analysis data must be must be 2. Data analysis conducted within conducted within process must be the planned the planned clearly defined and budget schedule/time free of personal 3. Any delays/ 3. Any influences and over-run to the deviation/variance subjective scheduled time to the cost information must be notified baseline must be 3. Analysed data must notified and and investigated be accurately investigated 4. Corrective tabulated and actions must be 4. Corrective actions presented for immediately must be documentation taken to rectify immediately taken to rectify 1. Results of analysed 1. Adequate funding 1. Sufficient time 4 Documentation data must be must be allocated must be /Drafting accurately for allocated for documented documentation, quality including documentation 2. First draft written 2. Documentation overhead costs and edited by process must be research officers 2. Documentation Page 32
  • 41. 3. Second draft process must be executed within written and edited executed within the planned by research officers the planned schedule/time budget 3. Any delays/ 4. Third draft written over-run to the for project manager 3. Any scheduled time and team’s edition deviation/variance baseline must be before the final to the cost notified and draft goes to project baseline must be investigated sponsors, director, notified and 4. Corrective clients, and investigated actions must be stakeholders for 4. Corrective actions immediately approval must be taken to rectify immediately taken to rectify 1. Quality research 1. Adequate funding 1. Sufficient time output (project must be allocated must be 5 Approval plan) must be ready for project plan allocated for Process for presentation presentation professional and approval. presentation of 2. Planning and the project plan 2. Official presentation coordination 2. Planning and plan must be process for project coordination coordinated plan presentation process for must be executed presentation 3. Project plan to be within the planned must be officially and budget executed within professionally presented to project 3. Any the planned sponsors, director, deviation/variance schedule/time clients, and to the cost 3. Any delays/ stakeholders for baseline must be over-run to the approval notified and scheduled time causes/sources baseline must be 4. Project plan must notified and investigated be approved for investigated implementation 4. Corrective actions must be 4. Corrective 5. Any comments and actions must be immediately taken criticisms for immediately to rectify improvement must taken to rectify be noted and 5. Funding actions taken provisions must 5. Time allowance must be made to accordingly be made for any cater for any changes to the changes to the cost baseline scheduled time during the baseline presentation 1. Implementation 1. Adequate funding 1. Sufficient time should be must be allocated must be 6 Implementation according to for strategic plan allocated for and execution strategic plan implementation strategic plan implementation 2. Implementation 2. Implementation 2. Implementation process should be process must be process must be according to executed within executed within planned quality the planned the planned Page 33
  • 42. procedures and budget/costing schedule/time standards 3. Any delays/ 3. Any over-runs to the 3. Performance deviation/variance scheduled time audits/checks must to the cost baseline must be be conducted baseline must be investigated and through meetings at notified and identified every key causes/sources 4. Corrective milestones/ investigated actions must be deliverables 4. Corrective actions immediately 4. Any deviations must be taken taken to rectify must be accounted immediately sources for and sources rectification 5. Time allowance identified for 5. Budget provisions must be made to immediate must be made to cater for any corrective actions cater for any changes to the contingencies scheduled time during the course baseline of strategy implementation 1. Performance 1. Adequate funding 1. Sufficient time audit/risk must be allocated must be management for strategic plan allocated for Review of committee must be implementation strategic plan 7 Effectiveness established reviews implementation review process 2. Performance 2. Review process 2. Review process audits/checks must must be executed must be be conducted within the planned executed within through meetings at budget/costing the planned every key schedule/time 3. Any milestones/delivera deviation/variance 3. Any delays/ bles over-runs to the to the cost 3. Any baseline must be scheduled time deviations/changes notified and baseline must be must be accounted causes/sources investigated and for and sources investigated identified identified for 4. Corrective actions 4. Corrective immediate actions must be must be taken corrective actions immediately immediately taken to rectify rectification sources 5. Budget provisions must be made to 5. Time allowance must be made to cater for any cater for any contingencies changes to the during the course scheduled time of strategy baseline Framework 4: Quality Control Process Project management Page 34
  • 43. Suppliers and Raw Materials Research Data Analysis First Milestone First Quality audit point Research PM meeting with information and Research Officers Report Strategic Plan Documentation and drafting Second Milestone Second Quality audit point Strategic Bio Fuel PM, Research & Project Inbound Supply Officers Meeting Chain Plan Strategic Plan Presentation and Approval Third Quality Audit Point Change Review and Certification Meeting Implementation and Execution Fourth Quality Audit Point Performance Progress review/audit committee meeting Review for Effectiveness Page 35
  • 44. Quality planning, control, and monitoring are considered continuous processes throughout the life of the project. Most importantly, quality audits and review meetings are planned for at every milestone points as illustrated in framework 1, quality control process above. This is to ensure that project is implemented according to approved scope and performance specifications, quality, budget, and timeline. It is important that the project manager follows the specified quality plan and control process (Meredith J. and Mantel S, Jr. 2006). 7.4. Assumptions and constraints While project quality control and management plans are carefully formulated and established to achieve planed quality goals and objectives, it may not be implemented according to these plans in practice. Hence, the following four assumptions are made for the project management and team’s consideration. 7.4.1 Rework Proper and adequate project planning is considered the standard protocol of the Bio fuel production program; hence, this project’s probability for significant final product rework is rated 0.099%. It is assumed that the quality plans, controls, framework, and processes established are sufficient for the project manager to ensure flexibility and cater for unexpected project changes such as extra requirements, performance deviations, scope creeps, staffing needs, budget and time constraints. Furthermore, the quality program is also assumed to have taken into consideration the project's complexity and risks, hence bottom line is not affected and project costs are not doubled or tripled from initial cost forecasts as a direct result of rework. The project manager should also identify reasons for poor quality and demonstrate how quality affects the overall project performance and deliverable (Crisologa Lapuz 2008). Page 36
  • 45. 7.4.2 Customer Dissatisfaction This project is designed to produce a quality product (strategic Plan) that will ultimately satisfy the demands/expectations of the customers. The project manager is therefore assumed to continuously review and set proper quality expectations, and clearly communicate and demonstrate how stakeholders’ requirements are incorporated and presented in the project's output. Project manager should ensure that all involved parties (customers and stakeholders) are on the same page, and maintain open lines of communication and a unified direction. This is especially important when new requirements affect in- progress projects. In these scenarios, the project manager should help the invested parties and determine an optimal way to incorporate changes. The project manager should provide options on how the new changes can be incorporated and identify the risks associated with the changes to help ensure continued quality (Crisologa Lapuz 2008). 7.4.3 Missed project expectations Without proper quality control, project output can easily miss performance targets and customer expectations. Therefore, it is assumed that the project manager will accordingly perform quality checks/audits at every project milestones/deliverables to meet the project objectives and strategic goals. Project manager should keep project efforts aligned with project targets, by executing planned audits at major quality checkpoints and taking corrective actions throughout the project life cycle (Crisologa Lapuz 2008). Conducting project team reviews and manager reviews are considered common practice to keep efforts on target. Project managers should also consider involving customers and stakeholders to review the project before deadlines for all major deliverables. 7.4.4 Poor utilisation of resources Poor project quality plans can negatively affect the project team’s capabilities to utilise project resources effectively. Conversely, poor utilization of resources can negatively affect the project deliverable, ultimately customer, and stakeholder satisfaction. The project manager is therefore assumed to resolve this problem by implementing the project according to quality control and management plans, hence avoid running a higher risk of greater project failure. It is also assumed that there are adequate project resources and proper resource alignment is made and allocated to every activity for successful project outcome. The project manager is assumed to perform his responsibilities to ensure that project deliverables are coordinated along with proper quality controls that are integrated within a holistic project management approach (Crisologa Lapuz 2008). Page 37
  • 46. Page 38
  • 47. 8. Project Human Resource Management This section addresses the staffing processes and issues relating to the project. This includes: organisational planning; staff acquisition and team development. 8.1. Organizational Planning 8.1.1.Project Interface The project interface will be interpersonal in nature, meaning that communications and reporting relationships will be kept internal to the project team. The reporting relationships are detailed in the organisational chart under section 8.2.1. 8.1.2.Staff Requirements Table 7: Staff Recruitment Criteria Position Title Project Phase Skills Project Manager (PM) All Communication Interpersonal Problem Solving Time Management Negotiation Coordination Professionalism and confidence. Accountant (Acc) All Degree in Accountancy CA/CPA qualification Analytical Problem solving Researchers (R) 1 – Research Research Analytical Communication (written) Reporting Analysts / Drafters (W) 2 and 3 (analysis and Research drafting) Analytical Communication (written and oral) Page 39
  • 48. IT Project Officers (PO) 3 – 6 (Drafting, approval, Coordination implementation and review) Liaison Planning Communication Time management 8.1.3.Roles and Responsibilities Assignments Table 8: Assignment of Roles and Responsibilities Employment Type PHASE PM Acc R1 R2 W1 W2 PO 1 PO 2 Research I C P P I I - - Analysis I C I I P&A P&A - - Documentation I C - - P&A P&A I I Approvals P, A & S C - - I I P P Implementation S&A C - - - - P&A P&A Review P C P - P - P P P = Participant; A = Accountable; R = Review; I = Input; S = Sign off; - = nil involvement; C = consult on budget. 8.1.4.Staffing Management Plan The numbers of hours required by category are listed in the histograms below. These are indicative and the number of hours is likely to be more, but not the duration in weeks. The exit strategies for both the researchers (leaving in week 6) and the analysts/writers (leaving in week 12 are to be arranged with the home groups. This means that it the functional manager will ensure that there is either another project to go to or their job to go back to. The employees are to be informed of their future in the company before they step across onto the project. This will ensure the researchers and analysts stay with the company, because they will feel like there has been no loss of status or unnecessary build up of work. How these employees will be selected is detailed in staff acquisition in section 8.2. Below are the indicative hours to be worked by each classification of worker, in histogram form. Graph 1: Four Histograms showing hours of work Page 40
  • 49. Project Manager and Accountant 800 700 600 Hours Worked 500 Project Manager 400 Project Accountant 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Week Project Officers 600 500 Hours Worked 400 Project Officer 1 300 Project Officer 2 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Week Analysts/drafters 350 300 Hours worked 250 200 Analyst/Writer 1 150 Analyst/Writer 2 100 50 0 12 13 15 1 2 3 4 5 6 7 8 9 10 11 14 16 17 Week Page 41
  • 50. Researchers 250 200 Hours worked 150 Researcher 1 100 Researcher 2 50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Week 8.1.5.Organisational Chart Please see below the organisational chart for this project. PROGRAM DIRECTOR PROJECT MANAGER Senior Senior Accountant Senior Drafter Project Researcher Officer Junior Junior Projec Junior Drafter Researcher Officer 8.2. Staff Acquisition This section details what attributes the project staff should have and how they will be acquired. 8.2.1.Staffing Pool Description It is anticipated that the project manager will be able to hand pick their team, and as such should use the following template Page 42
  • 51. to assist in the decision making process. Below is an example of the template that should be used. Table 9: Project team selection criteria Category Responses Rating Previous Experience Personal Interests Personal Characteristics Availability Competencies Proficiencies 8.2.2.Recruitment Practices It is expected that all staff for this project will come from within the company, and as such will have already been through the process used by the company. 8.2.3.Project Staff Assigned All staff, once selected will be required to work on a full-time basis for the length of time they are required for their role, as detailed in the WBS. 8.2.4.Project Team Directory The template below is to be used by the project team when taking down details of relevant members and stakeholders. F Page 43
  • 52. 8.3. Team Development 8.3.1.External Feedback The Project Manager is to evaluate the team’s performance informally as required and formally every quarter or on completion of the allotted task for the project. Categories for the assessment criteria include: budget/cost consumed during the project lifecycle versus forecast, each member’s output with regard to the overall project schedule and the required quality. After internal assessment within the project team, PM is to seek senior management/director for feedback on if the expectations have been met. Expectations of any stakeholders and customer satisfaction must be achieved. 8.3.2.Performance Improvements Each team member is to be assigned their own individual schedule of tasks, and these will be used as a benchmark for measuring work improvement and effectiveness in the future. Any conflicts within the team should be dealt with immediately with fairness and sensitivity, and should focus on the issues, not the personalities involved. The PM needs to be sensitive and consult if necessary with others who witnessed or were involved in the incident. 8.3.3.Input to Performance Appraisals The PM is to set the standards and criteria of performance appraisals as set out above and these are to follow the SMART theory (Specific, Measurable, Attainable, Results oriented, and Time specific). If any team member requires significant development during the project, then this is to be factored into the planning for that individual’s workload. The PM will also identify upon completion a number of development areas and align either courses or on-the-job training/experience to develop the team member. On a monthly basis, each project staff member is to provide feedback, whether positive or constructive to other members that they have worked with in this project. This should be a formal anonymous process whereby individuals do not feel threatened and know that the feedback is only to assist them to get better in the future. At the completion of each major work task that the individual is responsible for the PM will evaluate the performance against the requirements of the customer, Page 44
  • 53. sponsor and programme director. At the completion of the project, all team members will undergo a full performance assessment including the performance and improvement of performance on each different work task that they undertook. Again the PM will seek to identify courses/ training that will assist the team member to get better at their given role. Page 45
  • 54. 9. Project Communication Management The Project Communications Plan is the most important component of this project plan. Hence, the communication management plan process for this project is to ensure timely and accurate generation, collection, analysis, dissemination, storage and ultimate disposition of project information. The communications plan establishes the critical links, networks, and reporting structures between the project manager, sponsor, stakeholders, and project members/team that are necessary for success of the project. Timely dissemination of knowledge about the project is essential to the project’s success. Project participants naturally desire knowledge of what the status of the project is and how they are affected; hence management must provide required information on time. The more that people are educated about the progress of the project and how it will help them in the future, the more they are likely to participate and benefit (Meredith J. and Mantel S, Jr. 2006 and Project Management Institute, 2000). This plan provides a framework for informing, involving, and obtaining buy-in from all participants throughout the duration of the project. The project manager needs to manage all critical networks, points, and parts of the communications planning, information distribution, performance reporting, and administrative closures to successfully achieve the objectives of the project. 9.1. Communications Planning A pure project organisation is suitable for this project, which means all personnel; financial, accounting, administrative, implementation, management, and control functions are executed as a self contained unit to achieve the project objectives of time baseline, cost baseline, and performance objectives and goals. The performance, time, and cost objective outcomes should be tied to the main program and directed towards achieving the objectives and goals of the Bio-Solar program. The communication plan therefore follows the pure project organisation chain of command/channel of communication which is simple but considered very effective and comprehensive to facilitate successful achievement of project and program objectives and goals. The organisational structure below should facilitate the project’s communication process and the line direction of communication between all project stakeholders (Meredith J. and Mantel S, Jr. 2006). Framework 5: Channels and structure of communication Page 46
  • 55. Project Client & Bottom Program Sponsor Stakeholders Up Program Director Bio-Solar Program PM Supply PM PM Pond Chain Mgt Information Mechanization Systems Vertical Communication Project Accountant Senior Research Officer Research Officers Top Senior Project Project Officer Officers Down Middle out Horizontal communication 9.1.1.Communications Methodology Based on the above pure project organisation and communication structure, this project should utilise three dimensional communications methodologies for effective communication between all project stakeholders. Top-Down (vertical) It is critical that the project manager and his or her team seek support and direction from the program director, sponsor, and client. Change proposals from these stakeholders must be communicated effectively through the project manager. The project manager must continuously communicate with its team to keep the project on time, on budget, and achieve Page 47
  • 56. performance quality. The top-level stakeholder leadership of the project organisation is critical for a unified project and program goal achievement. This should be seen as 'hands-on' change management for the success of the project (Debbie 2003). Bottom-Up (vertical) The project manager must update performance progress reports and communicate changes in time, budget, and performance (quality) or scope to the top-level stakeholders. There must be no surprises, every contingency must be accounted for and immediately reported. The project team must always provide timely and accurate reports to the project manager on their specific task performance and any changes to their individual schedules, budget, and task scope. The project manager must make sure that the communication requirements in this network are executed and followed by all concerned to keep the project on schedule, avoid surprises and ensure quality (Debbie 2003). Middle-Out (horizontal) All the project managers of different projects within the Bio- Solar program need to establish strong communication between them to maintain alignment of their individual project objectives and goals to the objectives and goals of the main program. The project manager of this project must establish and maintain effective communication with other project managers to ensure compatibility of this project to the other complementary projects. There must also be effective communication between the project team to ensure proper coordination between complementary tasks and alignment of work units to project goals and objectives (Debbie 2003). 9.2. Stakeholders The important stakeholders for this project must be given equal preferences in keeping them informed of the progress of the project’s performance. Effective communication is very crucial for the success of this project. The project manager must know that communication is a two way process. The project manager must constantly report on project performance via status reports to the project director, clients, sponsor, and other stakeholders and must also be prepared to communicate bad news. Effective communication skills are needed for conflict management within the project team. The important stakeholders of this project include: 1. Program Sponsor 2. Program Director 3. Project Client Page 48
  • 57. 4. Steering Committees (Risk management, Audit, change management, Performance review) 5. Project Manager 6. Project managers of other projects 7. Project team 8. External Stakeholders (Media, Government etc...) 9.2.1.Communications Management Plan The communication requirements of all the project stakeholders, communication methodologies, type of communication, and frequency of communication necessary to facilitate effective implementation of this project plan are presented in the table below. Adequate consideration is paramount for the success of this project. Table 10: Communication Plan Communication Stakeholders Requirements Modes and Frequency and Mediums communication points Performance End of milestones/ Written Reports Program Sponsor reports Deliverables Project Plan Written Plan End of the Project Status reports Written Brief Monthly Change requests Written Request End of Project Program Director Project Plan Written Plan Time of Occurrence Status Reports Written Reports Every Milestone Project Client Change Requests Written Request Time of Occurrence Project Plan End of the project Risk Reports Steering Audit reports Written report Committees (Risk management, presented at Change reports on member’s meeting Audit, change cost, time, and management, performance Performance review) Performance Reviews Page 49
  • 58. Written audit report Every milestone Audit Report point Client requests Sponsor Written requests When requested Committee requests Project Manager Director requests Team requests Team meetings When requested Performance Written report Every milestone reports point Conflict Team meetings On occurrence Directions, Continuous instructions and Written advice Beginning of every communication task through meetings Written goals and objectives Project Team Performance of Beginning of every specifications/job task descriptions Written job specifications and Continuous Performance descriptions appraisals and motivation Financial Rewards Bank Accounts Fortnightly External Business Laws, policies, Report when Stakeholders environment regulations, and necessary/ as and (Media, regulatory and ethical standards when need arises Government etc policy compliance All stakeholder communications are critical inward requirements. It is assumed that the outward communication of one stakeholder becomes the inward requirement for another stakeholder. Page 50
  • 59. 9.3. Information Distribution The project manager must ensure that all performance reports, change proposals, audit reports, and other needed information is made available to all the relevant stakeholders on time, in the required format, and accurately. In reference to the communications plan in 8.1.3, the project manager must make sure all stakeholders follow the modes of communication in providing each other’s communication requirements. The main communication modes for distribution of project information are written hard copy reports, briefs and meetings. However, the project manager can maintain urgent communication between top-level stakeholders and the project team through email. The project manager must maintain project records in an organised fashion through colour coding for written reports, briefs, memos, letters, and minutes and specific folders for electronic copies (Project Management Institute, 2000). 9.4. Performance Reporting Performance reporting is one of the important parts of the communications plan. Project manager should make sure that all necessary information on progress and status of the project and how resources have been utilised to achieve the milestones must be reported accurately, in the right format, and on time. Providing the needed information in precise but in detail and as simple as possible is very crucial for effective communication of the requirements of the stakeholders. Hence, this project should focus on reporting on every milestones on the scope, schedule (time baseline), cost (cost baseline), and performance (quality) including any changes, risks, and procurement requirements (Project Management Institute, 2000). The Project Manager must be at the centre of coordinating with all the stakeholders for the milestone status, monthly progress, change and risk management, and final project deliverable reports, briefs, and meetings. Every stakeholder should participate in the reporting and meetings. The Project Manager should prepare in advance for the reporting activities to avoid delays and achieve milestone objectives. All performance should contain the following information in accordance with the project scope and plan. 1. Summary of tasks completed in milestones on cost, time, and quality 2. Summary of any critical changes and risks, including recommendations, 3. Summary of tasks scheduled for completion for the next milestone, and Page 51
  • 60. 4. Summary of issue status and resolutions. The following performance reporting matrix should be a necessary plan for compulsory reference. Table 11: Performance Reporting Matrix Report types Project Project Change and Final Status Progress Risks Deliverable Techniques Written Monthly Bi-monthly Final review Performance reports, written written before Audits/reviews briefs, to and reports, briefs, reports, briefs, presentation for meetings on to and with to and with approval and every meetings top meetings top after approval milestone level level for with top level stakeholders stakeholders implementation stakeholders Written Monthly Bi-monthly Final review Variance reports at written reports written reports before Analysis every by project by project presentation for milestone team to team to approval points by manager manager project team to manager Written Monthly Bi-monthly Final review Financial Audits reports on written reports written reports before every from from presentation for milestone accountant to accountant to approval from manager manager accountant to manager Written Monthly Bi-monthly Final meeting Change and reports and written reports written reports before risks meetings at and meetings and meetings presentation for management every all change and all change and approval and meetings milestone risk risk after the between all management management approval for change and committees committees implementation risk management committees 9.4.1. Change Communications Process The information contained within the project plan will likely change as the project progresses. While change is both certain and required, it is important to note that any changes to the Page 52
  • 61. project plan either through schedule, cost, or scope will impact at least one of three critical success factors: 1. Available Time, 2. Available Resources (Financial, Personnel), and 3. Project Quality. The decision by which to make modifications to the project plan (including project scope and resources) should be coordinated by the project manager for approval using the following five-step process. Page 53
  • 62. Framework 6: Change Management Communication Process Step 1 As soon as a change in project scope, schedule, cost, and performance (quality) is identified, the project manager must document the changes as accurately and as precisely as possible. Step 2 The project manager must then review the changes and determine the causes and associated impacts to the project and forward changes, along with a recommendation, to the top level stakeholders and relevant committees for review and decision Upon receipt, the top level stakeholders and relevant committees Step 3 should reach a consensus opinion on whether to approve, reject or modify the request based upon the information contained within the project manager’s recommendations and their own judgment. Should they be unable to reach consensus on the approval or denial of a change, the issue will be forwarded to the project sponsor, with a written summation of the issue, for ultimate resolution Step 4 If required under the decision matrix or due to a lack of consensus, the project sponsor shall review the issue(s) and render a final decision on the approval or denial of a change. Step 5 Following an approval or denial (by the relevant committees or project sponsor), the project manager should take necessary remedial actions or notify the original requestor of the action taken. There is no appeal process. . Page 54
  • 63. 9.5. Administrative Closure Successful execution of all the project management functions such as planning, organising, staffing, implementing, coordinating, leading, controlling, monitoring, and evaluating by the project manager significantly depends on effective and efficient communication. The project manager is expected to spend almost 95% of the project management time communicating with the team members, client, top management, and other critical stakeholders to ensure consistent performance and quality achievement. The project is expected to meet the approved objectives of performance specifications of quality, on budget, and on schedule and satisfy the business need of the client and sponsor. After completion of the project with meeting these objectives, the next critical part is how to effectively communicate this product to the client and sponsor (Project Management Institute, 2000). The project manager should ensure the following criteria are done before, during, and after the presentation of the strategic plan to the client, top management, and sponsor. 1. The project manager must conduct project closure at every milestone to ensure that the project meets the objectives of approved performance specifications, quality, budget, and schedule and proper records are kept for monitoring and control, 2. Before final presentation, a final review meeting must be conducted to ensure the project outcome (strategic plan) reflects the approved quality and performance specifications, 3. Arrange and coordinate project launch/presentation meeting according to project schedule, 4. To convince the project client, sponsor, and top management to formally accept the final product (strategic plan), the project manager’s presentation should focus on: a) Communicating the achievement on the approved project scope specifications, b) The achieved objectives of performance (quality, budget, and schedule (time), and c) The business benefits to the client, sponsor, and top management. 5. Allow time for project client, sponsor, and top management to respond and officially accept the project, Page 55
  • 64. 6. After the acceptance, officially close the presentation by confirming that the project has met the business needs of the client, sponsor, and top management, and 7. Finally arrange for archive of all-important documentation – including milestone closure reports, final project strategic plan, and correspondence, project review and audit meeting minutes, change management, and risk management reports. Page 56
  • 65. 10. Project Risk Management This section details the risk management plans for the project including the probability of an occurrence and the consequences on the project’s objectives, affecting the target output in schedule, budget, and/or quality. It also contains the processes for risk identification, analysis, evaluation and control. 10.1.Risk Management Planning 10.1.1.Organisational Risk Management Policies The predefined approaches to risk analysis for this project plan are the qualitative risk assessment method, in which a probability versus consequences rating matrix is setup. The organisation is to select appropriate employees as members of the Risk Management Committee. The project manager must be included since direct assessment of risk is related to the project. 10.1.2.Roles and Responsibilities Table12: Roles and Responsibilities of project team Role Responsibility Decision-making Authority Project Team Member  Understand the user needs and Low business processes  Communicate project goals, status and progress throughout the project to personnel in their area  Review and approve project deliverables  Coordinates participation of work groups, individuals and stakeholders  Provide knowledge and recommendations  Helps identify and remove project barriers  Assure quality of project plan is up to the standards  Identify risks and issues and help in resolutions Project Manager  Manages project in accordance to High the project plan  Provide overall project direction Page 57
  • 66.  Direct/lead team members toward project objectives  Handle problem resolution  Manages the project budget and schedule Risk Management  Assess any risk-type activities High Committee  Response to individual risks  Approves major funding and resource allocation strategies, and significant changes to funding/resource allocation  Resolves conflicts and issues  Provides recommendations to the Project Manager Senior  Assess/evaluate/approve the overall Medium Management/Director project Stakeholders  Provide project oversight and Medium guidance  Review/approve project elements 10.1.3.Stakeholder Risk Tolerances The Risk Management Committee must gather necessary details regarding the extent to which stakeholders will accept risk. This will be done by interviewing agencies, organisations and businesses, which are involved in the Risk Management Plan, and indicating who will need to be assessed as the project continues. 10.1.4. Risk Management Plan The information contained within the Project Plan will likely change as the project progresses. While change is both certain and required, it is important to note that any changes to the Project Plan may impact at least one of three critical success factors: Available Time, Available Resources (Financial, Personnel), or Project Quality. The decision to make modifications to the Project Plan, including project scope and resources, should be coordinated by the Project Manager. Identified risks must be monitored continuously to ensure that countermeasures can be employed at the earliest possible time in the process. The PM and Project Officers must continuously scan the environment for new risks, and develop strategies to combat them. The template to be used for risk management is below: Table 13: Risk Management control template Page 58
  • 67. Activity Potential Probability Impact Risk Responsible Time- Monitor / Hazards / Rating Rating Control Person Frame Review Risks Measures Source: Adapted from Australian Refrigeration Council Ltd, 2008. The methodology for risk management plan is detailed in the table below. Table 14: Risk Management Plan Step Processes required 1 As soon as a change which impacts project scope, schedule, staffing or spending is identified, the Project Manager will document the issue. 2 The Project Manager will review the change and determine the associated impact to the project and will forward the issue, along with a recommendation, to the Risk Management Committee for review and decision. 3 Upon receipt, the Risk Management Committee should reach a consensus opinion on whether to approve, reject or modify the request based upon the information contained within the project website, the Project Manager’s recommendation and their judgment. Should the Risk Management Committee be unable to reach consensus on the approval or denial of a change, the issue will be forwarded to the Project Sponsor, with a written summation of the issue, for ultimate resolution. 4 If required under the decision matrix or due to a lack of consensus, the Project Sponsor shall review the issue(s) and render a final decision on the approval or denial of a change. 5 Following an approval or denial (by the Risk Management Committee / Senior PM / Stakeholders), the Project Manager will notify the original requestor of the action taken. There is no appeal process. 10.2. Risk Identification 10.2.1.Risk Categories Technical, quality and performance risks – This involves all risks associated with technical activities such as IT systems; quality risks such as drafting; and performance related which in this project relates to quality. Project Management Risks – This includes all risks associated with managing the project. This includes allocation of resources. Organisational risks – This includes all risks associated with ongoing organisational support such as resourcing and continued maintenance of the project as a priority. Page 59
  • 68. External risks – This includes all risks relating to things out of our control, such as legal and regulatory changes such as an OH&S regulation regarding how to transport CO2. 10.2.2.Project Risks The probability and consequences ratings in the table below are based on a qualitative analysis and the overall rating is based on the matrix as detailed below: High M H H Medium M M H Probabilit Low L M M y Low Medium High Consequence Source: Adapted from Standards Australia Risk Management AS/NZS 4360: 2004 Table 15: Probability of Risk Occurrence Matrix # Risk Probabilit Consequence Ratin Mitigation Strategy y g 1 IT systems Ensure that back up failing for an copies of drafts are extended made by all team period of members. Seek time High Medium High notification from power company of any scheduled or unscheduled power outages. 2 Staff Specify in the charter required for and the HRM section of the project this plan that those will not be employees from other released to functional areas be Medium High High complete assigned to the project work. manager for the duration or their work tasks plus the review time. 3 Resourcing Make sure that the is removed charter includes full from this transfer of control of project to a the budget for this Medium High High higher project to the project priority manager and project accountant. Ensure that there is a commitment Page 60
  • 69. in writing, via the charter, to the full funding of this project. 4 Managers Provide clear ‘hurt and editors statements’ detailing do not what happens if the complete deadline is not met their Medium Medium Med when presenting drafts assigned or decisions to senior duties in the managers. timeframe agreed 5 Lack of Inform the sponsor of interest or this issue and progress support from on it at each meeting. If senior a sense of this is management happening, then inform Medium Medium Med the sponsor and have them reinvigorate the excitement towards the project at their level, whilst managing the project. 6 The quality Train the staff to be of the staff is able to do what is not high required or reject some enough Medium Medium Med of the names in preference of more suitably experienced people. 7 OH&S Sign up to get updates requirements from the law websites regarding the and OH&S regulators transport of for each state. This will some or all notify us of any change of the raw well before it occurs. materials – causes a Low High Med delay in research and analysis stage based on interpretatio n of the law. 8 The time As with financial, allocation is ensure every key insufficient stakeholder has a copy Low High Med of the schedule. Again, ensure the change management processes are followed. Page 61
  • 70. 9 The drafters Ensure meetings are do not conducted specifically produce to convey expectations something Low Medium Med for researchers, analysts that requires and customers. minimal editing 10 Conflicts As with the above with financial resource issue, resources ensure that there is from another documentation (charter) project to demonstrate the full Low Medium Med control of the budget is with the project manager and not the functional business areas. 10.3. Risk Response Planning If a risk comes to fruition all team members must follow the same process. This is detailed in the table below. Table 16: Risk Response Plan Step Processes required 1 Inform all team members and the PM and fill out a line in the risk register – see template 1/3 below. 2 The PM must review the risk and inform the Risk Management Committee of the risk and a timeline and strategy for the mitigation of the risk. There is a template risk treatment schedule (template 2/3 below) that must be completed as well as an action plan (template 3/3 below) with more detail, to be filed for further use. 3 The PM informs all team members via identified communication methods (email, bulletin boards and in person, where appropriate) of the new addition to the risk schedule and action plans. Table 17: Risk register, treatment schedule, and action plan Templates Template 1/3 – Risk Register Risk Register Compiled by:………………..…... Date:……… Reviewed by:…………………..… Date:……... Function/Activity: …………………………….. Risk Level Category What and Consequence Likelihoo Existing of how can it d Controls Risk happen Page 62
  • 71. Source: Adapted from City of Rockingham, Western Australia, 2008. Template 2/3 – Risk Treatment Schedule Risk Treatment Schedule Compiled by:……..…….……….. Date…….…… Reviewed by:……………………..Date……..…… Function/Activity:…………………………. Risk Possible Preferred Risk Risk Action Time How will Treatment Options Rating Rating person frame it be Options BEFOR AFTER monitored E ? Source: Project Management Certification and Training, 2004. Template 3/3 – Risk Action Plan RISK ACTION PLAN Item Risk Location/Function Summary (RECOMMENDED RESPONSE AND IMPACT) 1) Proposed Actions 2) Resource Requirements 3) Responsibilities 4) Timing 5) Reporting/Monitorin g Source: Project Management Certification and Training, 2004. 10.4. Risk Monitoring and Control This section identifies the processes used to monitor and control risks to the project either identified or not. It involves how to report new risks, where risk knowledge is held (database). 10.4.1.Workaround plans There will be risks that have not been identified previously that may come up during the project. These will need to follow the same identification processes that have been outlined in part 10.2 and the response planning that is identified in part 10.3. Page 63
  • 72. If the risk management committee deems that the risk is substantial enough to impact the feasibility of the project in to the future, then the corrective actions, detailed under scope control (written change requests) must be followed and the project and programme managers, stakeholders and customers informed. 10.4.2.Risk Database All identified risks; once paperwork is completed using the identified templates is to be entered into the risk management database. This will allow the risk management committee to monitor and control all risks and assess if change management needs to be implemented to avoid unexpected project failure. All staff will have access to add or retrieve information from this database because all staff will need to deal with different risks as part of their ongoing duties. Page 64
  • 73. 11. Project Procurement Management The Procurement Management sets forth guidelines and processes that are to be followed to ensure measurable and satisfactory performance against contractual obligations. This section describes the functions and activities necessary for the team to manage supply chain management. Additionally, it defines and documents the selection, procurement and management of suppliers and vendor efforts, ensuring quality performance and on time delivery at the best-cost value to the organisation. 11.1.Procurement Planning The purpose of this plan is to describe the processes, governing procedures, roles and responsibilities, personnel (experience), and tactical steps to be used in executing the subcontracts, purchase orders and material logistics scope for the supply chain management. It includes acquiring the raw materials from the suppliers and the logistics services provided by external sources that are not part of the organisation. According to the WBS and staff responsibilities (Section 8.1.3), the two research officers will research the raw materials and suppliers and analyse the market condition. The project manager will decide the Terms & Condition for working with the suppliers, which will be mentioned in the contract that will also contain the cost and quality standards of the raw materials and the machinery required. It will be decided by the project manager and the project accountant whether to rent or purchase an item. A Time and Material (T&M) contract will be signed between the organisation and the suppliers. The contract documents will be held by the project manager and can be reviewed from time to time according to the situation. The Statement of Work will be provided by both parties detailing how they are going to work and what the parallel arrangements will be if problems arise. This will be open to change, but must follow the stated change management procedures outlined in Integrated Change Control. (Systems Integration Division 2004) Page 65
  • 74. 11.2. Solicitation Planning It involves the preparing of the documents needed to support solicitation. These are controlled documents, maintained by the organisation. They will be available through contacting the PM only, which all of the supplier’s administrators and buyers will have access to. The project manager will act as a Procurement manager. The procurement manager will lead the effort to develop the solicitation document that states the business need and requirements for the desired work. The solicitation document consists of a Statement of Work and/or Request for Proposal .The solicitation document shall be developed using the guidance of the procurement manager and the managing director (Systems Integration Division 2004). It will clearly describe the tasks and deliverables required, and the contract terms that will apply. The users and stakeholders of the desired product/service will be consulted when developing the solicitation requirements and required deliverables to ensure the solicitation document accurately reflects their business needs (Systems Integration Division 2004). The solicitation document will include the requirements to be fulfilled as part of providing the product or service, either by referencing a separate requirements document (e.g., a Requirements Specification Document) or by explicitly including them in the solicitation document. It will also include or reference the evaluation criteria that will be used to evaluate and accept the requested product or service (Systems Integration Division 2004). . The procurement manager will develop a Proposal Evaluation Plan for valuating the proposals. It will describe the specific evaluation criteria (such as qualifications, methodology for completing the work, references and cost), and the methods that will be used to apply the criteria. The criteria must be documented and approved by the Procurement manager prior to the release of the solicitation document. The procurement manager can/may recruit additional team members or other stakeholders to assist with the proposal evaluations based on the stakeholders’ expertise in pertinent subject areas and their past experience with solicitations. The Procurement Manager will train the proposal evaluation team members on the purpose of the solicitation, the requirements, evaluation criteria and evaluation methods for the solicitation prior to reviewing any proposals. Page 66
  • 75. 11.3.Solicitation The procurement manager will work with the MD to conduct the solicitation in accordance with the process requirements of the chosen contract type and according policies and practices. The Procurement Manager will provide a mechanism for bidders to ask questions and to receive clarification and responses to the requirements of the solicitation and the solicitation process (Systems Integration Division 2004). The Procurement Manager will lead the evaluation team members in the review and evaluation of received proposals. The team will evaluate the proposals in accordance with the Proposal Evaluation Plan and documented evaluation criteria, and will select the most qualified bidder based on the evaluation criteria (Systems Integration Division 2004). The bidders’ cost and schedule estimates will be reviewed for comprehensiveness and reasonableness. The winning will be selected based on the proposal meeting the solicitation requirements and providing the best value based on scoring from the evaluation process (Systems Integration Division 2004). 11.4.Source Selection The project manager and his team members will use experience and judgment in determining the number of bids and the most advantageous combination of price, quality, delivery, service and dependability when making purchases for the Company. It is organisation policy to procure material and service requirements competitively to the greatest extent possible. Therefore, the project manager and his team members apply their skill and experience to conduct negotiations and obtain competitive bids whenever it is in the best interest of the company and its customers (Systems Integration Division 2004). 11.5.Contract Administration Once a supplier has been selected, and at the conclusion of negotiations, the selection must be approved by PM. Once those approvals are obtained, the contract is awarded to the supplier. The contract will be specifically tailored for inclusion of all Customer data elements, Statement of Work and Specifications. (Systems Integration Division 2004) Page 67
  • 76. All data is shown on the contract including but not limited to part number, quantity, schedule, cost, terms and conditions, quality codes, etc. Detailed information, special instructions, and other requirements will be also included in the contract. The contract documentation will be maintained in a uniform file format as mandated by the PM and is maintained in the contract administrator’s office file. Suppliers will be monitored on cost and schedule performance to their original commitment. Monitoring consists of routine telephone calls, e-mail, formal monthly Technical Exchange Meetings (TEM), which cover contractor Cost and Schedule Performance, and allows the parties to discuss any other issues or concerns, such as staffing issues, contractual issues, etc (Systems Integration Division 2004). Supplier progress on each item procured includes, but is not limited to, a review of adherence to quality requirements, completion percentage based on original schedule commitment, critical materials deliveries, tests, key progress demonstrations, risk mitigation points, and cost incurred to date. Design Reviews and Technical Exchange Meeting minutes are the responsibility of the Program Manager. The performance of the four (4) Cost plus Award Fee contractors will be formally evaluated every six months, measured. Formal criteria will be issued prior to the start of the evaluation period, which outline specific criteria that the contractor must adhere to (Systems Integration Division 2004). 11.6.Contract Closeout Once the contract is complete, the suppliers will send a written letter to the organisation that the contract is complete. And if the organisation wants to renew it the PM will have the power to renew it. The PM will have the power to terminate the contract in between if the suppliers are not fulfilling the evaluation process. And another supplier will be given contact. Page 68
  • 77. 12. Conclusion The focus was in planning the development of the strategy to ensure the construction of intelligent supply chain systems, in a manner that guarantees agents use the best communication, coordination and problem solving mechanisms. This should have minimal programming efforts, so the whole strategy is planned keeping in mind the importance of scheduling, budgeting, accuracy/quality, human resources, communication, risks and procurement to develop the strategic plan in every possible detail. As the company enters the new market of bio fuel production for the aviation and military aviation industries, it is important to develop a strategy to secure the supply chains and raw materials required for the production of Bio fuels. The benefits of the outcome of this project is that it will allow the program manager to execute a strategy that will enable the company to secure raw materials and resources without expending additional resources (human and otherwise). Another benefit is the ability for the company to secure resources in a structured and orthodox way, further ensuring efficiency savings. The future requirements of this project will be a follow up execution project whereby the strategy created is carried out to physically create strong supply chains. Strict adherence to the policies and procedures contained within the above project plan will enable efficient and effective execution of the objectives. This will mean that there will be a coherent and executable strategy once this plan has been completed. Page 69
  • 78. 13. Appendix 1 Page 70
  • 79. 14. References Australian Human Resources Institute (2008). Available : http://www.hr-careers.com.au/resources/salary-serveys.cfm. Accessed on the 5th of October Australian Refrigeration Council Ltd, (2008). Risk Management Planning Template. Available: http://www.arctick.org/pdf/Risk%20Management.doc. Accessed 1 October 2008. Brooke B., Cen C., Reece S., and Andrea Freeman (2006). Project Plan: Management of Libraries and Archives. Available:www.slais.ubc.ca/COURSES/libr559f/04-05 wt2/portfolios/C_Campbell/Files/final-PMP/PDF/Adobe Acrobat. Accessed 3rd of September, 2008 City of Rockingham, Western Australia, (2008). Risk Management Plan Template. Available: http://www.rockingham.wa.gov.au/pdf/Health_and_Environme nt/public-events/risk-management-plan-template.doc. Accessed 1 October 2008. Crisologa Lapuz (2008). Project Management -sample project plan templates. Available: www.docstoc.com/search/sample-project-plan-templates/ - 53k . Accessed 3rd of September 2008 Debbie Whitson (2003), Project Plan for Odessa Mobile Technology. Available: http://www.search.org/files/doc/sample %20project%20plan.doc sample project Accessed on the 3rd of September, 2008 Infosys Technologies, (2008). Creating Supply Chains In Flat World. Available. http://www.infosys.com/default.asp. Accessed 3rd of September, 2008. Mayberry County Nonprofit Technology Assistance Agency (NTAA) (2005). Sample Project Plan for the TechAssist Program. Available: http://www.LearnShareProsper.com/tools/ project_plan_sample.pdf . Accessed on the 3rd of September, 2008 Meredith J. and Mantel S, Jr. (2006). Project Management. A MANAGERIAL APPROACH. 6th ed. John Wiley & Sons, Inc. Page 71
  • 80. Production Planning. (2008). Supply Chain Management. Available: http://www.productionplanning.com/supplychainmanagement.a sp. Accessed 1 September 2008. Project Management Certification and Training, (2004). Project Manager’s Articles and Templates. Available: http://www.4pm.com/articles. Accessed 1 October 2008. Project Management Institute (2000), A Guide to the Project Management Body of Knowledge (PMBOK Guide), 2000 edn. Project Management Institute, Newtown Square, Pennsylvania, USA ROI Institute (2004) Sample plan. Avalable :www.roiinstitute.net/tools/11/ - 5k. Accessed on the 3rd of September, 2008 State Services Authority. (2004). Risk Management Matrix. Available: http://www.ssa.vic.gov.au/CA2571C900701857/W ebObj/risk_assessment_matrix(table)/ $File/risk_assessment_matrix(table).pdf Accessed on 20 September 2008. Systems Integration Division (2004), SID Policy on Procurement Management. California Health and Human Services Agency Data Centre. http://www.bestpractices.osi.ca.gov/sysacq/downloads/OSI %20Policy%20on%20Procurement%20Mgmt %20(2452_6).PDF Accessed on 5th October 2008 Page 72