PROJECT FORMULATION, APPRAISAL, AND MILL MANAGEMENT; Chance of lifetime; Review report

1. BAHIR DAR UNIVERSITY
ETHIOPIAN INSTITUTE OF TEXTILE
AND FASHION TECHNOLOGY
MSc OF FASHION TECHNOLOGY
PROJECT FORMULATION, APPRAISALAND MILL
MANAGEMENT
Chance of lifetime; Review
By: Kibrom Asgele
Date: May 22/2019
Bahir Dar, Ethiopia

2. HIGHLIGHT

3. PROJECT PLANNING
• Project planning is a discipline for stating how to complete a project within
a certain timeframe, usually with defined stages, and with designated
resources.
• Planning is the most important phase in any project .
• Good project planning begins with a definition of the requirements, such
as:
The statement of work,
Work breakdown structure,
Specifications,
Timing, and
Spending curve.

4. By: Kibrom Asgele
Chance of a
Lifetime

5. BACKGROUND
Sometimes opportunities
come up for project
managers, and they must
evaluate the risks and the
rewards.
This case involves an
experienced project
manager with:
•A well-secured position in a large company
•Was given the opportunity to join a start-up
company.
•Unfortunately, although some of the critical
decisions were his hands, they had a serious
effect on his future and career.

6. HISTORY

7. SIGNS OF A POOR ECONOMY
• Jason had been experimenting with the design of long-lasting batteries
that could be used in battery-powered cars.
• He designed two different types of batteries that had much longer lives
than existing batteries under development by larger companies.
• Economists predicted the cost of gasoline at the pumps could increase by
50 percent or more from $2 per gallon to $3 or more per gallon.

8. Cont.
• Jason believed that the timing was right to go out on his own, but he was
earning a little over $40,000 a year as a high school science teacher.
• Jason needed start-up funding. His family was willing to provide him with
$50,000, but Jason knew that this was certainly not enough.
• Originally Jason thought that the best approach would be to go with
investment bankers who were willing to lend him $2 million with
ownership of 75 %.
• His friend was able to convince a group of investors to provide start-up
funds of $500,000.

9. HIRING A PROJECT MANAGER
• Jason believed that:
Eventually he could sell his patents at a reasonable price,
Obtain contracts to install his batteries in cars,
He could work as contractor performing the installation work and with
government agencies creating fleets of electric-powered vehicles for them.
• In any event, Jason needed a project manager and he hired Craig
with $50,000 initially and 35 % ownership after two years.
• It was clear at this point that a large portion of the start-up costs
would be spent just on writing unwelcome proposals for work on
electric-powered vehicles and batteries.

10. AWARDING CONTRACTS
• The unsolicited proposals sent to automotive manufacturers fell on deaf
ears.
• Government agencies, however, were very interested in Jason’s ideas.
• Jason and Craig were now drawing salaries in excess of $125,000 thanks to
the government contracts.
• Jason’s dream was coming true, his salary was three times after, He was
rapidly paying off his $500,000 start-up debt.
• The news media was discussing the need for electric-powered vehicles.

11. SEVERAL MONTHS LATER
• Jason and Craig began writing unsolicited proposals for follow-on work
due contract time on ending.
• Gas prices appeared to have leveled off, but the news media was still selling
the need for electric vehicles.
• Selling of his company?
• Craig tried to explain to Jason that the company had no real business
plan and the government could fail to renew the contracts.
• Jason refused to consider selling the company.
• Two weeks later, the government agencies announced that the contracts
would not be renewed.

12. Challenge
• Jason going out on his own for starting up the company.
• Jason needed start-up funding.
• Jason needed a project manager.
• Both the automotive manufacturer and the battery company told Jason
that their offer to buy the company was good for only one week. This was
certainly not enough time to wait and see if the contracts would be
renewed with the government. A decision had to be made.

13. 1. Was Jason right in wanting to start up his own
company?
Of course he was right.
• Starting up a business can give you:
1. Flexibility.
2. More spare time (eventually).
3. Call the shots.
4. Set your own deadlines.
5. Sell how you want to sell.
6. Create your own environment.
7. Pursue your passion.
8. Create something from scratch.
9. Meet new people and Build a team.
10. Create jobs and Help people.
• And the time was also perfect to
introduce/apply his batteries
into the market.

14. 2. Did Craig make a good decision in giving up a
potential $150,000 salary as a project manager to work
with Jason?
Yes:
• Difficult to navigate through the deteriorations from the
contract renewal from the government and the buy offers of the
bigger companies.
• He knew the down of the company through 20 years experience,
if there were no threat he would had better become 35 % owner
share holder after 2 years.

15. 3. How does a project manager convince executives that
they (the executives) are making bad business decisions?
How many clients did Jason’s company have? Who were
the company’s competitors, and what was the financial
strength of the competition?
• Craig tried to explain to Jason that the company had no real business plan,
the government issues.
• Jason’s company had one client “the government agencies”.
• The “automotive manufacturers” were the competitors of the Jason’s
company.
• Jason and Craig were drawing salaries in excess of $125,000, rented a
large warehouse and hired four licensed auto mechanics, so the financial
strength of competition was good as start up company.

16. 4. If you were in Jason’s position, would you have sold
the company? If so, what would you then do with your
life?
• I would have listened to Craig(20 years of experiences) and sold the
company.
• Sometimes, risk disciplines poised for growth.
• I would do the same thing what Jason did first “design something valuable
and new” and start up new business in a way that there is no difficulty with
the government and easy to penetrate the market.

17. 5. Is it true that some project managers put their careers
at stake each time they take on a new project? Can we call
this career risk management?
No:
• Risk Management is the process of identifying, analyzing and responding
to risk factors throughout the life of a project and its objective.
• And “some project managers put their careers at stake each time they take
on a new project” is meant that there is difficult, risk and undeniable
content of hard work with the project managers while doing the project.

18. Thank you