Project Report - Establishing of MATALAN Middle East Distribution Centre

Establishing of MATALAN Middle East Distribution Centre
Project of Tharanga Jayalal – Supply Chain Solutionist
January 2011

January 2011
Table of Content
Preface to the project..................................................................................................................3
1: Initiating the Project
1:1. Purpose ...........................................................................................................................4
1:2. General Objectives...........................................................................................................5
1:3. Specific Objectives...........................................................................................................5
1:4. Tasks & Responsibilities ..................................................................................................5
2: Planning the Project
2:1. Work Breakdown Structure (WBS) ...................................................................................7
2:2. Schedules – Project Calendar.........................................................................................8
2:3. Critical Path Analysis .......................................................................................................9
2:4. Resources Allocation & Budgeting .................................................................................11
2:5. Staffing...........................................................................................................................13
2:6. Communication Plan ......................................................................................................14
2:7. Contact Information........................................................................................................15
2:7. Risk Management Methodology, Risk Response Plan & Risk Analysis ..........................16
3. Execution the Project
3:1. Execution of the Project Plan .........................................................................................17
3:2. Status Report: Project Execution Plan (PEP) .................................................................18
3:3. Change Log: ..................................................................................................................19
3:4. Quality Management in Project Execution......................................................................19
4. Delivering the Project
4:1 Documents Transfer........................................................................................................19
4:2. Training & Releasing of Staff..........................................................................................19
4:3. Releasing of Other Resources .......................................................................................20
4:4. Project Closure & Lessons learned ................................................................................21

January 2011
Preface
One of the leading fashion retailer in United Kingdom “MATALAN” made it’s
overseas debut in the Middle East Region in the year 2008. Currently operating 03 retail
stores in UAE, & 01 in Jordan with an expansion plan of 16 more retail stores across the
region by 2015. MATALAN is solely distributed in the Middle East by the Business
Trading Company (BTC), Doha, Qatar and the business unit has named “MATALAN
Middle East”.
“MATALAN Middle East” interests in supporting new stores opening and its
continues supplies, improving store replenishment process and reducing supply chain
costs by operating a “Central Distribution Center (CDC)” for the Middle East region.
Herein the proposed set up calls “MATALAN Middle East Distribution Centre” or
“MATALAN MEDC”.
The management of “MATALAN Middle East” wishes to consider the outsourcing
option fulfilling the said logistics requirements.
In this report “MATALAN Middle East” discuss the complete Project Life Cycle
(PLC) by four phases: - Initiation - Planning – Execution - Delivering & Closure.

January 2011
Phase 01: Initiating the Project
1:1.Purpose:
Establish a Regional Distribution Centre (MEDC) for MATALAN Middle East &
outsource its management” to 3rd party logistics (3PL) in-order “MATALAN Middle East”
to focus on their co-business activity of Retailing”
NOW: Existing Logistics Set-up of Matalan Middle East:
THEN: Projected Logistics set-up of Matalan Middle East:
MEDC
JAFZ - UAE
Stores in
Jordan
Stores in
Saudi
Arabia
Stores in
Oman
Stores in
UAE
Stores in BahrainStores in Qatar
Stores in
Kuwait
MATALAN
CDC - UK
Arabian Centre - Dubai UAE
Lamcy Plaza - Dubai UAE
Al Baraka – Jordan
MATALAN CDC - UK Dalma - Abudhabi UAE
Arabella – Jordan

January 2011
1:2: Generic Objectives:
a. Find the best fit cost module to run the operation.
b. Discover the most efficient operation process to manage the Logistics Activities.
c. Select the most reliable service provider / s for a long term business partnership.
1:3: Specific Objectives - Activities to be outsourced:
a. Establishing & Operating the DC of MATALAN Middle East
b. Inbound Transportation, Sea, Air & Land
c. Distribution of goods to MATALAN stores within UAE territory
d. Distribution of goods to MATALAN stores across Middle East region / Out of UAE
1:4. Tasks & Responcibilities:
(Definitions: - SMT: Senior Management Team, COO: Chief Operating Officer,
HRD: Human Resources Department, HRM: Human Resources Manager, LogD:

January 2011
Logistics Department, LogPM: Logistics Project Manager, LC: Logistics Coordinator,
SUP: Supplier / service provider, LegD: Legal Department, CLO: Chief Legal
Officer, PA: Personal Assistant)
Responsibility
# Task Department Owner
1 Implementing of the Logistics Department to MATALAN ME SMT COO
2 Recruiting of a Logistics Project Manager HRD HRM
3 Recruiting of Logistics project staffs HRD HRM & LPM
4 Project scope walk through for project team members LogD LPM
5 Analyze & possible solution / solutions definition LogD LC / LPM
6 Identifying potential suppliers & initial discussions LogD LPM
7 Creating the RFQ / RFP LogD LPM
8 RFQ /RFP Distribution LogD LC
9 Technical support to suppliers for proposals submission LogD LC
10 Rate analyzing & short listing most convenient proposal / s LogD LPM
11 Further negotiations for rates with shortlisted supplier / s LogD LPM
12 Selection of service provider / s LogD LPM
13 Drafting of Service Contracts LogD & SUP/ s LPM / SUP
14 Contracts Review LogD & SM COO
15 Official Contract signing LegD CLO
16 Go Live LogD & SUP/ s LPM
17 Closure LogD LPM

January 2011
Phase 02: Planning the Project:
2:1. Wrok Breakdown Structure (WBS):

January 2011
2:2. Schedules:
Project Calender:
Description
Start
Date
Duration
Days End Date
Implementing of the Logistics Department (LD) to
MATALAN ME 1-Feb 28 1-Mar
Recruiting of a Logistics Project Manager (LPM) 10-Feb 42 24-Mar
Recruiting of Logistics Coordinators (LC) 31-Mar 14 14-Apr
Project scope walk through for project team members 30-Apr 7 7-May
Analyze & possible solution / solutions definition 30-Mar 21 20-Apr
Identifying potential suppliers & initial discussions 2-Apr 35 7-May
Creating the RFQ / RFP 20-Apr 21 11-May
RFQ /RFP Distribution 12-May 3 15-May
Technical support to suppliers for proposals submission 15-May 21 5-Jun
Rate analyzing & short listing most convenient proposal / s 6-Jun 4 10-Jun
Further negotiations for rates with shortlisted supplier / s 11-Jun 14 25-Jun
Selection of service provider / s 25-Jun 7 2-Jul
Drafting of Service Contracts 7-Jul 14 21-Jul
Contracts Review 22-Jul 7 29-Jul
Official Contract signing 1-Aug 4 5-Aug
Go Live 15-Aug 30 14-Sep
Closure 15-Sep 7 22-Sep

January 2011
Project Calender on Gantt Chart:

January 2011
2:3. Critical path analysys:
Critical path:
B:E:G:H:I:J:K:L:M:N:O:P:Q
42+ 21+21+3+21+4+14+7+14+7+4+30+7 = 195 Days
Start
2
3
4 5
7
6 8 9 10 11 12 13 14 15 16 17 18
A=28
B=42
C=14 D= 7
E=21
F=35
G=21 H= 3 I=21 J= 4 K= 14 L= 7 M=14 N=7 O=4 P=30 Q=7

January 2011
2:4: Resources Allocation & Budgeting:
Project Resource / Month Feb March April May June July Aug Sep Oct
Human Resource Executive (HRE) 0.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00
Logistics Project Manager (LPM) 0.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.00
Logistics Coordinator (LC) 0.00 0.00 1.00 2.00 2.00 2.00 2.00 2.00 0.00
Cost Plan
HRE @ $2725 Per Month $0 $2,725 $2,725 $0 $0 $0 $0 $0 $0
LPM@ $ 6800 Per Month $0 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $0
LC@ $ 2000 Per Month $0 $0 $2,000 $4,000 $4,000 $4,000 $4,000 $4,000 $0
Equipment for LPM Office Set-up $0 $1,200 $1,200 $1,400 $1,400 $1,400 $1,400 $1,400 $0
Consumables $0 $250 $250 $250 $250 $250 $250 $250 $0
Total per month $0 $10,975 $12,975 $12,450 $12,450 $12,450 $12,450 $12,450 $0
Cumulative cost $0 $10,975 $23,950 $36,400 $48,850 $61,300 $73,750 $86,200 $86,200

January 2011

January 2011
2:5. Staffing:
Organization Breakdown Structure (OBS):
Additional Information on OBS & its advantages:
Simple & straightforward staffing solution deploys to the project since the “Logistics
Project Manager” who acts as the entire project head with his / her subject specialty of
Logistics & Service Outsourcing. His / Her subordinates are experienced Logistics
coordinators in the same “Logistics” industry and carrying out specific tasks assigned by
“Logistics Project Manager”.
Though the project cost is bit high due to hiring of experienced individuals for junior
functions in the project, it gives a great advantage for the “After Project Operation
Management” of MATALAN Middle East Logistics Department.

January 2011
2:6. Communication Plan:
#
Communication
Activity
Communication
Method
Audience Frequency Leader Deliverables
1
Kick-off
meeting
Face to face
COO,
Project
Team
Once LPM
Objectives and A
to Z project plan
2 Progress review Face to Face
Project
Team
Monthly LPM
Progress,
Difficulties &
Possible solutions
3 RFQ Drafting Face to Face
Project
Team
Start &
End
LPM
Contents,
templates of
quotations
4
Discussion with
suppliers
Face-to-Face
Sales &
Marketing
people of
Suppliers
Once per
Supplier
LPM
Identify potential
and capable
suppliers
5
Distribution of
RFQ to
potential
suppliers
E-Mail
Service
Suppliers
Once LC
Provide
completed RFQ
including
quotation
templates,
Submission cut
offs AND follow-
up for
acknowledgement
6
Technical
Support to
Suppliers in
submitting
proposals
Telephone, E-
mail, face to
face as
required
Service
Suppliers
As
required
LC
Provide technical
information about
the project &
expectation
7 Cut-off remind E-Mail
Service
Suppliers
Once LC
Reminding of the
proposal closing
dates
8
Receiving of
Proposals
E-Mail
From
Supplier
Once LC
Receiving of
complete
proposal
Report continued to next page

January 2011
#
Communication
Activity
Communication
Method
Audience Frequency Leader Deliverables
9 Acknowledgement E-Mail
Service
Suppliers
Once LC
Acknowledging
of the proposals
in professional
manner
10
Discussion with
shortlisted
suppliers
Face-to-face
Shortlisted
Service
Suppliers
As
required
LPM
Negotiating
rates,
processes, and
understanding
the reliability.
11
Briefing to COO
of the final
selection
methodology &
it's Outcome
Face-to-face COO Once LPM
Achievement &
further actions
12
Announcing of the
selected service
provider /
providers
E-Mail
Selected
Service
Supplier /
Suppliers
Once LPM
Appreciation of
the proposal &
status of
selection
13
Contract t Drafting
Meeting
Face to face
Selected
Service
Supplier /
Suppliers
Twice LPM
Contract
Drafting &
Reviewing
14
Operation Ramp-
up Meeting
Face to face
Project
Team,
Selected
Service
Supplier/
suppliers
Twice LPM
Understanding
of the
deliverables
15
Project Closure
Meeting
Face to face &
E-Mail
Project
team
Once COO
Final Review &
Appreciation
Contact information of the project office:
Project Manager, MATALAN Middle East Logistics & Logistics Service procurement
project. Lamcy Plaza, Dubai. Tel: +971553774117, t.jayalal@matalan-me.com

January 2011
2:7. Risk Management Methodology:
Risk Response Plan:
Risk Category Possible Risks Involved Proposed Solution
Responsible
Department &
Individual to
Manage the risk
1 Staffing Risk
Leaving of project staffs in
between the project
Contracts with Employees
not to leave until the project
end
HR- HRM
2 Technical Risk
Getting select of one
single supplier for all the
services
Try best to select multiple
service suppliers for keep the
service competition
LD - LPM
3
Organizational
Risk
Possible influence for the
final decision in selecting
suppliers that effect the
project outcome against
expectation
Clear & high level order from
Senior Management for
influential positions to leave
along the decision making
practice to COO & LPM
SMT - COO
4 External Risk
Cross leaking of tender
information by staff to
other suppliers
Educate project members on
laws of tender management
SMT - COO
Risk Analysis:
Risk Probability Severity Detection Difficulty When
Staffing Risk Medium High Low Throughout
Technical Risk Medium Medium Law Finalization
Organizational Risk Medium Medium Medium Post-finalization
External Risk High High High Post-finalization
Risk
Categorizing
Risk
Identification
Risk
Response
Development
Risk
Control

January 2011
Phase 03: Execution of the Project
3:1. Executing the Project Plan:
Upon completion the planning stage, below are the activities that wish to carry-out by
project team to execute the project.
a. Creating of the RFQ / RFP:
A well defined document that include organization background and its product,
services wish to outsource, expectations, its service level, KPI methodology &
cost model. expected. Proposals are called in CPPC (Cost plus percentage of
cost) basis.
b. Response to RFQ / RFP:
Dully completed proposals that covers the expectation defined on the RFQ /
RFP.
c. Selecting of Suppleir/ suppliers:
A well designed selection process to followed to select the best fit service suplier
/ suppliers to each service. All shortlisted suppliers will be allowed to
demonstrate their proposed operational processes face to face with project team.
The steering committee (COO & LPM) who finally decide whom to offer
contracts with considering various factors. Project team suggestions were highly
considered in the stearing comitee decision.
d. Announcing of the selected service supplier / suppliers:
All the participants will be addressed by MATALAN Middle East on the status of
their proposals. Selected supplier / suppliers will be invited for the further steps of
the project and unsuccessful proposals will be notified with a thanking letter for
participation.
e. Creating of Contract / s:
Individual contract will be signed with suppliers for each service. Contracts to be
designed collectively with Matalan Logistics Project Team & respective supplier
with using standard terms and conditions of both parties. Each contract will be
split to THREE parts.

January 2011
Part One: Responsibilities & legal bindings in acoordance with organization,
industry & UAE laws.
Part Two: Service level agreement (SLA) that provides complete services and its
level of delivery.
Part Three: Key performance Indicators (KPI) & matrix that monitor the SLA
effectively. A process of applying financial penalties will be imposed for key
activities in services that effect the Matalan Business in a failure of the service.
3:2. Status Report – Project Execution Plan (PEP):
- The major activities of the project delivarables will be monitored by the PEF
Green Achieved
Ongoing
Failed in terms of on time achieving
# Task name
Start
date
End
date Status
A Resources Arrangement
A:1: Implementing of the Logistics Department 1-Feb 1-Mar Green
A:2 Recruiting of a Logistics Project Manager (LPM) 10-Feb 24-Mar Green
A:3 Recruiting of Logistics Coordinators (LC) 31-Mar 14-Apr Green
B Major Tasks / Activities
B:1 Creating the RFQ / RFP 20-Apr 11-May Green
B:2 RRFQ /RFP Distribution 12-May 15-May Green
B:3
Rate analyzing & short listing most convenient
proposal / s 6-Jun 10-Jun Green
B:4 Selection of service provider / s 25-Jun 2-Jul Green
B:5 Drafting of Service Contracts 1-Aug 5-Aug Green
B:6 Go Live 15-Aug 14-Sep Green
B:7 Project Ends 22-Sep Green
-

January 2011
3:3. Changes & Log:
- Any changes in the plan or original circulars must be logged -
#
Change
Requires
Reason for
Change
Change
Approved
Change
Communicates to
Date change
Communicates
Date change
Effects
1 N/A N/A N/A N/A N/A N/A
2
3
`
3:4. Quality Management in Project Execution:
In this project, the quality expected are “delivering tasks on time, applying industrial best
practices in selecting service suppliers for better outcome & controlling the
confidentiality on rate proposals” that submitted by multiple suppliers for same service.
Activities that carried-out to control quality are:
- Holding periodic inspection
- Ensuring authorized approaches and processes are followed
Phase 04: Delivering of Project
4:1. Documents Transfer:
Upon completion the documentation specified in 3rd stage, below listed documents will
be transferred with required authorizations to close the project.
- Dully signed contracts including SLA & KPI.
- Operation commensment approval & instruction.
- Billing & banking information.
4:2. Training & Releasing of staff:
As described in the “staffing” stage (2:4.), individuals that involve the project, “Logistics
Project Manager & two Logistics Coordinators” shall move to the newly established
logistics department of Matalan Middle East. They will continue with the organization as
the monitoring team of outsourced services. This is one of the major reason for select
experienced subject specialists as project team members at the beginning of project.

January 2011
Logistics Project Manager:
Moves to the organization management team as “Regional Logistics Manager” for
Matalan Middle
Logistics Coordinator (LC) - Warehousing:
Moves to the organization as it is “LC – Warehousing” to monitor the outsourced
activities related to warehousing operation, and function reports to the Logistics
Manager”.
Logistics Coordinator (LC) – Freight Movement & Distribution:
Moves to the organization as it is “LC – Freight Movement & Distribution” to monitor the
all the freight movements and function reports to the Logistics Manager”.
The budget to accommodate them in the organization already set before begin the
project as (setting up of logistics department to Matalan Middle East) and therefore the
project budget shall no longer continues for accommodating them.
Further more, there will be no special training for the staff who carry-out the operation
since services are outsourced to subject specialist organizations. Selected 3PL
organizations shall arrange own training programs for their employees who involve for
the project carry-out.
4:3. Releasing of Other Resources:
Other than man power resource that discussed above in 4:2, the only resource remain
to be released by end of the project is the project office that cost $1200/- a month. The
proposed logistics department will be relocated to the DC service provider’s office as an
Logistics Implant starting from 1st October.

January 2011
4:4. Project Closure & Lessons learned:
The project will be closed by end of September exactly as projected in critical path
analysis within 195 days.
Lesons to be learned:
- Identifing of streanths and weeknesess of service supliers while the project
period in-order manage them in efficiant manner after completing the project.
- Build relationship in the project stage with the service supliers for a better &
long term business relationship.
- Understand the Service Level Agreements (SLA) & study them thourioughly
at the project duration in-order to manage / monitor KPI after outsourcing te
services to supliers.
- Identify best operation practices and various cost models that proposed by all
propasals (dispite of selected or not) that submitted to apply those while the
operation is running in future.
- The major finding will be a secondary solution and potential service supliers
within rejected proposals, if need in future use for an event of service failure
from selected suplier / supliers.

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