More Related Content
Viewers also liked
Viewers also liked (10)
Similar to Project Management Group Final doc
Similar to Project Management Group Final doc (20)
Project Management Group Final doc
- 2. 1 Summary Printed Circuit Board Assembly Line Move The Phillipe Broadband Network, Inc. (PBNI) executives have approved the Print Circuit Board Assembly Line Move project in efforts to regain market share from the rivaling Scientific Orlando. The company will outsource their non-core competencies from the Syracuse manufacturing facility to Guadalajara, Mexico. Santa Maria has been chosen as the most cost effective supplier. Santa Maria will be responsible for designing, modifying, developing, and manufacturing printed circuit board (PCB) assemblies. The project is scheduled to take 10 months and 5 days to complete, starting on January 2, 2017 and expected to end on October 27 2017. The overall budget is $2.2mil with a payback period of 17 months and 23 days, and total project savings of $9.23mil. Additionally, the Syracuse facility will produce six months’ worth of inventory bank with a holding cost (including obsolete inventory) of $1.3mil, to ensure that there is no disruption in production.
- 4. 3 Project Scope 1. Scope Statement The project – Print Circuit Board Assembly Line Move has been approved by Phillipe Broadband Networks, Syracuse, New York to outsource non-core competencies from the Syracuse manufacturing facility to Guadalajara, Mexico. The purpose of this project is to reduce costs and recoup market share. The scope of this project includes all aspects including budgeting, planning, logistics, production of inventory bank, quality assurance and training. The Syracuse facility will produce six months’ worth of finished circuit boards. All necessary equipment will be relocated to the Santa Maria facility within seven months of project start; and validated and tested prior to live production within four weeks and project completion is estimated at approximately 10 months. Circuit boards will be qualified and inspected by the QA department at least four weeks prior to production. Supplier personnel will receive four weeks of training by Phillipe Broadband Networks personnel. 2. Goals • Complete 6-month Inventory bank by June 16, 2017. • Relocate Printed Circuit Board Assembly Line to Mexico and complete transition by October 27, 2017 • Reduce manufacturing costs, with total savings of $9.3mil. • Ensure quality standards and training requirements are maintained by Santa Maria facility. 3. Supplier Selection Summary • Savings from Peterstar = $ 9,188,521.92 • Savings from Santa Maria = $11,427,908.83 • By the cost estimates above, it can be concluded that working with Santa Maria will be a more cost effective solution for Phillipe Broadband Networks. • The Capital tooling requirements are higher for Santa Maria, but the total costs are still lower than Peterstar by $2.24 million, based just on the prices of the two suppliers.
- 9. 8 Final Budget, Savings & Payback Period WBS Code Activity Description Type Cost 1.0 PCB Inventory 1.1 Inventory Fee Direct $1,305,276 1.1 Obsolete Component Costs Direct $10,000 1.1 Labor Costs (including overtime) Direct $185,152 Total $1,500,428 2.0 Project Team 2.1 Project Team Salaries Direct $515,096 2.3 Incentives Budget Indirect $19,344 2.5 Severance Package Direct $82,225 2.6 Site Visit Direct $13,200 2.8 Supplier Meetings Indirect $3,100 Total $632,965 3.0 Equipment Logistics 3.1, 3.2 Shipping and Transportation Direct $5,500 4.0 Production and Assembly Line Training 4.1 Travel Costs (Training Team) Indirect $34,250 5.0 PCB Work Package 5.1, 5.2 Bill of Materials and Assembly Line Instructions - Printing and Publishing Indirect $1,000 Miscellaneous + Contingency costs Indirect $25,588 Grand Total $2,199,731 Savings (choosing Santa Maria as the supplier) $11,427,909 Project Savings $9,228,178 Payback Period (in years) 1.48
- 10. 9 Schedule WBS Task Name Start End Weeks 1.0 PCB Inventory Reserve 2-Jan-17 16-Jun-17 23.0 1.1 Assembly Line Supervision 2/Jan/16 16/Jun/17 23.0 1.1.1 Pick and Place 2/Jan/16 16/Jun/17 23.0 1.1.2 Wave Solder 2/Jan/16 16/Jun/17 23.0 1.1.3 Assembly 2/Jan/16 16/Jun/17 23.0 1.2 Obsolete Components 16/Oct/17 26/Oct/17 1.0 2.0 Project Team 2-Jan-17 27-Oct-17 43.4 2.1 Budget 2/Jan/17 4/Jan/17 0.6 2.2 Employee Schedule and OT 2/Jan/17 5/Jan/17 0.8 2.3 Incentive and Benefit Plan 2/Jan/17 5/Jan/17 0.8 2.4 Notification of Termination 10/Apr/17 10/Apr/17 0.2 2.5 Severance Package 10/Apr/16 10/Apr/17 0.2 2.6 Site Visit 28/Aug/17 1/Sep/17 1.0 2.7 Contract 5/Jan/17 22/Feb/17 4.0 2.8 Supplier Meetings 14/Apr/16 2/Oct/17 Discretely distributed 3.0 Equipment Logistics 19-Jun-17 25-Aug-17 10.0 3.1 Packing Equipment 19/Jun/17 23/Jun/17 1.0 3.2 Shipping and Transport 26/Jun/17 21/Jul/17 4.0 3.3 Equipment Setup 24/Jul/17 28/Jul/17 1.0 3.4 Validation and Testing of Equipment 31/Jul/17 25/Aug/17 4.0 4.0 Production and Assembly Line Training 24-Aug-17 22-Sep-17 4.0 4.1 Dispatch Training Team 24/Aug/17 25/Aug/17 0.4 4.2 Team Training Schedule 25/Aug/17 25/Aug/17 0.2 4.3 Supplier Training 28/Aug/17 22/Sep/17 4.0 4.4 Training Video 11/Sep/17 22/Sep/17 2.0 5.0 Quality Assurance 25-Sep-17 20-Oct-17 4.0 5.1 QA and PCB Qualifications 25/Sep/17 20/Oct/17 4.0 6.0 PCB Work Package 23-Oct-17 27-Oct-17 1.0 7.0 Termination of Employees 27-Oct-17 27-Oct-17 0.2 PCB Assembly Line Move 2-Jan-17 27-Oct-17 CP = 43.4w
- 11. 10 Network Diagram The network diagram shows all parallel tasks, along with the Critical Path in the red. The critical path suggests that the project should take approximately 44 weeks (10 months and 5 days) for completion.
- 12. 11 EVM Exercise 1. Budgeted at Completion (BAC) = $850,000 2. Planned Value (PV) = 6 months completion on 12 months given time = 6/12x100 = 50 = 50% x $850,000 = $425,000 3. Earned Value (EV) = Actual % complete x BAC = 50% x $850,000 = $425,000 4. Actual Cost (AC) = Money Spent on Project = $623,000 5. Cost Variance (CV) = EV – AC = $425,000 - $623,000 = -$198,000 6. Schedule Variance (SV) = EV – PV = $425,000 - $425,000 = $0 7. Cost Performance Index (CPI)= EV / AC = $425000 / $623000 = 0.682 8. Schedule Performance Index (SPI) = EV / PV = $425,000 / $425,000 =1 9. Estimated at Completion (EAC) = BAC/ CPI = $850,000 / 0.682 = $1,246,334.31 10. Estimated to Completion (ETC) = EAC – AC = $1,246,334.311 - $623,000 = $ 623334.31 11. Variance at Completion (VAC) = BAC - EAC = $850,000 - $1246334.31 = - $ 396334.31 12. To Complete Performance Index (TCPIc) = BAC – EV)/ Remaining Funds = $ 850,000 - $425,000 / $227,000 = 1.872 13. The project is on time (As Schedule Variance is zero) 14. As TCPIc > 1, the project is over budgeted
- 13. 12 Appendix Project Team Salaries $515,096 Name Salary Salary with benefits Total pay during project JF 150000 187500 $158,653.85 MP 95000 118750 $100,480.77 CW 70000 87500 $74,038.46 KS 45000 56250 $47,596.15 TT 42000 52500 $44,423.08 EG 85000 106250 $89,903.85 Benefits multiplier 1.25 Labour Cost $185,152 Benefits Multiplier 1.25 Overtime Multiplier 1.50 Labourer Rate # of weeks to complete inventory bank (+training hrs if applicable) # of regular hours/week # of OT hours/week Total hours (including OT) Total Pay (OT=5h/week) JD 12 23(+4) 40 5 1195 $18,787.50 KP 10 23 40 5 1035 $13,656.25 TM 8 23 40 5 1035 $10,925.00 JD 15 23(+4) 40 5 1195 $23,484.38 PE 15 23(+4) 40 5 1195 $23,484.38 LC 12.5 23 40 5 1035 $17,070.31 FM 9 23 40 5 1035 $12,290.63 JP 10 23 40 5 1035 $13,656.25 KT 20 23(+4) 40 5 1195 $31,312.50 AP 15 23 40 5 1035 $20,484.38
- 14. 13 Travel Costs $47,450 Site Visit Cost per person Total Flight 650 $3,900.00 Lodging 120 $720.00 Transportation allowance 100 $600.00 Daily allowance 90 $540.00 # of days 5 $13,200.00 Training Team Cost per person Total Flight 650 $3,250.00 Lodging 120 $600.00 Transportation allowance 100 $500.00 Daily allowance 90 $450.00 # of days 20 $34,250.00 Supplier Meetings $3,100 Site Visit Cost per person # of people Total Flight 650 2 $1,300.00 Lodging 200 2 $1,200.00 Transportation allowance 100 2 $600.00 # of days supplier visits 3 Incentives $19,344 Labourer Incentive Bonus JD $3,744.00 JD $4,680.00 PE $4,680.00 KT $6,240.00 Severence $82,225 Labourer Severence Pay JD $7,800.00 KP $6,500.00 TM $5,200.00 JD $9,750.00 PE $9,750.00 LC $8,125.00 FM $5,850.00 JP $6,500.00 KT $13,000.00 AP $9,750.00
- 15. 14 Item Quantity Peterstar (per unit price) Capital Tooling Costs Total Cost Santa Maria (per unit price) Capital Tooling Costs Total Cost Our Cost (per unit price) Total Cost 910968-524 48,849 $74 $6,000 $3,600,171 $110 $9,375 $5,353,362 $210 $10,258,290 0910994-304 60,500 $100 $5,100 $6,022,775 $72 $9,375 $4,341,480 $125 $7,562,500 0910994-305 55,123 $106 $5,100 $5,841,936 $76 $9,375 $4,197,065 $114 $6,284,022 0911070-802 30,924 $47 $4,900 $1,461,468 $26 $9,375 $795,056 $65 $2,010,060 Total 195,396 $16,926,350 $14,686,963 $26,114,872 Miscellaneous Costs $20,805 Contingency Costs $4,783 Spanish Translator $2,923.08 Training Overtime $1,860.00 Labourer Overtime (20h) JD $360.00 JD $450.00 PE $450.00 KT $600.00 Shipping Cost $5,500 Instruction Manual and BOM Printing $1,000 Obsolete Inventory $10,000 Inventory Fee $1,305,276