Acme Mexico City: Construct And Explain The External And Internal Environment (ONLY PROFESSOR KERN)
Acme Home Improvement de Mexico, SA de CV Project Plan
Team Four: Folasade Bamidele Alibaloye
John C Caputo Garner Frederick Hixson
Hector G Rosado
AMBA 604, Section 9093
Professor Stewart
February 6, 2004
Acme Project Plan 2
Table of Contents
Section Page I.
Executive Summary
3
II.
Introduction
4
III.
Project Organization
5
Organization Chart
5
Project Responsibilities
6
Staffing Plans
7
IV.
Management Process
10
Management Objectives
10
Priorities
10
Monitoring/Controlling Mechanisms
10
V.
Technical Process Plan
11
Computing System
11
Project Plan Modification Process
12
Computer Usage Policies
12
Construction Guideline Support
13
Project Acceptance Process
13
Lessons Learned Documentation
13
VI.
Work Packages, Dependencies, Schedules & Budgets
14
Work Packages
14
Dependencies
17
Project Budget
20
VII. Summary 23 Appendix A Tasks on the Critical Path 24 Appendix B Assignment Matrix 25
James Stewart
Note
A t/c helps the busy reader, is thus positive for project communications, and can serve as a control or check list for necessary project elements.
Acme Project Plan 3
I. Executive Summary
Acme Home Improvements has determined it essential that expansion into international
markets take place immediately. Acme Home Improvements has initiated a joint venture with
local partners in Mexico City to form Acme Home Improvements SA de CV. The intent of this
partnership is to open Acme’s first ‘Do It Yourself’ – (DIY) home improvement store outside of
the United States, to meet the competition head on and establish a foothold in international
markets. This document spells out our plan for the project’s success.
The project’s sponsor is the Acme CEO, Alex R. Fitzgerald. This project is the first step
in his strategic initiative to expand Acme into international markets. Based on assessments, it is
critical that Acme SA de CV complete the opening of this store in 12 months or less with a
budget of up to $7.5 million. A key risk is Acme’s lack of experience in international markets.
As a result, we will rely heavily on our partners to help us mitigate ‘soft’ cultural issues and
navigate local nuances of business. Because of the soft issues, remaining on schedule is a key
driver of project success. To mitigate risks to the project’s critical path, we have built feeding
buffers into the schedule, and added a project buffer to the project end.
Our plan outlines staff responsibilities and a staffing plan for project execution. This
staff has strong support from corporate headquarters, a defined scope, budget, timeline, and
processes by which to execute the plan. Included in these processes is a structured change control
process that ensures changes are relevant, followed through, and controlled.
In addition, this document, and the accompanying project plan clearly identify
dependencies that can impact project execution. We have separated these dependencies into
mandatory, external, and discretionary dependencies (Schwalbe, 2004). Doing this has enabled
us to maximize scheduling efficiency. Acme SA de CV has an established technology
infrastructure to draw upon. Our plan will leverage this technology through wireless local area
networks, corporate servers, and use of project management software. Finally, we will utilize a
feedback process to capture lessons learned for our future expansion into international markets.
James Stewart
Note
This is a reasonable choice/assumption in view of the strategic importance of the Mexican entry to Acme.
James Stewart
Note
This is the thing to do to supplement the team’s knowledge where needed, even after forming a cross-cultural (Mexico-US) team. It’s behind the stated formation of a JV with local interests to pursue the Mexican entry.
James Stewart
Note
Let’s remember this when we reach Week 11, in which an IT plan for the Mexico City store will be developed.
Acme Project Plan 4
II. Introduction
Acme Home Improvements de Mexico, SA de CV intends to build a 100,000 sq ft retail
facility in Mexico Distrito Federal (DF). This effort is part of Acme’s strategy to expand into the
international home improvement markets. Our Mexico City store will be the initial push into
Mexico to meet our competitors head-on outside the United States. This project is critical to
Acme’s long-term strategy to expand beyond the US borders. Headquarters has allocated $7.5
million to complete this task. Strategic alignment with Acme’s long-term goals, experience with
similar projects, and an assessment of the competition dictates that we complete this project
within 12 months.
Our project is a joint venture with local interests. The project will be challenging for
Acme, with inherent risk laying in our inexperience in international joint ventures. ‘Soft’ issues,
cultural human resource issues will be as much of a driver of cost and schedule as the ‘hard’ issues
like planning and execution. It is critical to the success of this project, and perhaps the
organization’s international growth strategy, that this project be completed on time, and on
budget.
The organization anticipates possible schedule delays and cost overruns due to cultural
assumptions and misunderstandings. Knowing that schedule delays will affect costs and
international expansion strategy, we pay particular attention to the project’s critical path (see
Appendix A, and the accompanying MS Project file’s network diagram view). To deal with these
risks, the team has built several feeding time-buffers into the work breakdown schedule, at
constraints along the critical path (Goldratt, 1998). A large project buffer has also been added to
protect the end of the project. Attention to the safety buffers along the critical path will
contribute to the team’s successful execution of the project.
This plan presents an overview of the project organization, including the team’s
organization chart, project responsibilities, and staffing plans. Next, the plan addresses the
organization’s management process related to this project. Management’s objectives, priorities,
James Stewart
Note
This seems a reasonable amount, given that the project includes design, construction, equipping, staffing and training, along with initial marketing and supplying. However, none of us is expected to be an expert in DIY store cost estimation; important is only that cost of the necessary tasks be considered.
James Stewart
Note
Application of Goldratt here will be useful again when we take up critical chain project management in Week 8.
Acme Project Plan 5
and monitoring and control mechanisms are covered in this section. The project’s technical
process plan is covered next, reviewing such things as the IT support and guidelines for the
project, processes for modification, and acceptance of the plan, and the process for documenting
lessons learned on the project. Lastly, this plan discusses the work packages, dependencies,
schedules and project budget. We begin with a look at the project organization plan.
III. Project Organization
Organizational Chart: Acme Home Improvements de Mexico Site Construction & Opening Project Organization Chart
Prepared by: John Tarea, Project Manager
This organizational chart shows the authority and communications organization for the
project. Every one of the team members reports to the Project Manager. Team members are
from different knowledge areas and each will contribute with their knowledge and skills to the
project.
John Tarea Acme Projects
Project Manager
Sade Venda Acme Store Manager
Anita Socio Acme Mexico HR Manager
Donna Promueva Acme Mexico Marketing
Fred Conde Acme Finance
Joe Martillo Construction Manager
Maria Diseño Architectural Contractor
James Stewart
Note
One sees the various functional area skills represented, and as described, a clear chain of command/authority. Tarea appears to come from the project management part of Acme. Acme probably has on staff people who routinely design, construct, etc., etc. its new stores – in other words, it is a partially projectized organization in a structural sense.
Acme Project Plan 6
Project Responsibilities:
Project Sponsor, Alex R. Fitzgerald, CEO Acme Home Improvements. Mr. Fitzgerald
has been CEO of Acme Home Improvements for 10 years. He started with the company 25 years
ago, working in one of the first Acme Stores. He started as a traditional department manager and
worked his way up through Acme’s chain. He attended business school at the University of
Maryland University College. Mr. Fitzgerald has unsurpassed expertise in the DIY Home
Improvement business and has lead Acme through an unprecedented period of growth. Mr.
Fitzgerald has a strategic vision that mandates Acme’s expansion into international markets. His
high level of interest in this project cannot be overemphasized. His role as project sponsor is to
take ultimate responsibility for the project. He must sign off on the project charter, confirm
successful completion of project milestones, and provide leadership and support to the project
manager.
At a recent executive retreat, Mr. Fitzgerald commented, “With the growth of technology,
and productivity, the world has never experienced the level of wealth and opportunity for home-
ownership that it is experiencing now. Our ability to remain competitive and grow is completely
dependent on our ability to expand into international markets.”
John Tarea, Project Manager: John is in charge of managing the whole project, and the
members that are in charge of the project activities. Also, he is in charge of working with the
sponsor and any general people involved with the project. His role is important since he should
be able to manage the problem in an effective manner for the project to meet its goal.
Joe Martillo, Construction Manager: Joe is in charge of managing the construction
activities of the project. As a heavily tasked team member, project planners will watch for
constraints associated with this project resource. To enable Joe meet the construction project
schedule, he has been allocated the necessary budget to contract various local trades-people and
construction specialty firms.
Acme Project Plan 7
Maria Diseño, Architectural Contractor: Maria is the architect that researched
competitive stores in Mexico, became familiar with Acme store designs in the U.S., and designed
the store to be constructed in this project.
Fred Conde, Acme Finance: Fred is in charge of financial oversight of the project. He
will assist team members in analyzing bids, projecting costs, and controlling expenditures.
Sade Venda, Acme Store Manager: Sade will be in charge of managing the store when it
is operational. She will also collaborate with H.R. manager, Anita Socio, and Anita’s staff in the
recruitment, interviewing, and training of new employees.
Anita Socio, Acme Mexico HR Manager: Anita will be in charge of the recruitment
effort and training of the personnel hired to work in the store. She will work closely with the
Store Manager.
Donna Promueva, Acme Mexico Marketing: Donna will collaborate with Maria Diseño
and Sade Venda on the design and layout of the store interior, displays, and inventory. She is to
ensure the store reflects the marketing strategy for the Mexico City market. She is in charge of
performing local market analyses, selecting products, and designing merchandising, advertising
and promotional efforts for the store.
An assignment matrix can be seen in appendix B.
Staffing Plan
The following charts illustrate the project’s staffing and training plans from three
perspectives. The first graph presents baseline staffing plans, not taking into consideration
feeding buffers that will likely push the actual dates closer to the store-opening deadline of March
1, 2006. The second chart depicts preliminary training targets, and the third illustrates contractor
staffing needs.
James Stewart
Note
Putting the future store manager on the project team is a good way to accommodate the transition of the store from project to continuing or process status.
Acme Project Plan 8
Acme Staffing Plan
0 10 20 30 40 50 60 70 80 90
100
Jan Mar May Jul Sept Nov
Project Managers
Acme- Accts, IT, Supt
Lead Contractor
Sub-Contractors
Sub-Contractor Laborers Training Team Functional Leads Department Heads
Store Employees
1 Dec as opening goal
Acme SA de CV Training
0 10 20 30 40 50 60 70 80 90
100
Jan Mar May Jul Sept Nov
Training Team Functional Leads Department Heads
Store Employees
Acme Project Plan 9
0
5
10
15
20
25
30
Jan Mar May Jul Sept Nov
Lead Contractor
Sub-Contractors
Sub-Contractor Laborers
Acme SA de CV Construction Team
Now that we have discussed the project staffing and responsibilities, we turn to the
project management processes, including the objectives, priorities, and monitoring and
controlling mechanisms of the project.
James Stewart
Note
These charts are a quick read, again beneficial to the busy reader, such as CEO Fitzgerald.
Acme Project Plan 10
IV. Managerial Processes
This section of the project plan provides an overview of Acme’s perspective of this
project from the point of view of the top managers. Included in this section will be a discussion
of top management’s objectives, priorities,
Management Objectives The Acme de Mexico project has three primary objectives:
1) Complete the six site component preparation activities on time and at/below cost.
2) Execute the Acme Mexico FD site opening with a staff fully trained and integrated
into the company.
3) Leverage success in Mexico FD to expand and compete across the greater Mexico.
Priorities The first priority is completing the construction site on schedule. Operations must
quickly assess the impact of unknown and unexpected events as they occur. Delays to the
schedule drive up our costs. The second priority, which becomes the first priority as the site
nears completion, is the hiring and training of a store staff. The staff must be fully
knowledgeable and fluent in Acme’s processes and procedures.
Monitoring/ Controlling Mechanisms Acme is new to Mexico and thus requires some very specific tools and techniques to
ensure that we remain in control of the project. Given the amount of variables that we may come
up against in this project we will have a very strong change control process. This change control
process will meet three main goals (Schwalbe, 2004):
1. Influence the factors that create change; ensure that the change is beneficial and
impact to time, scope, and budget is understood.
2. Determine that the desired change has occurred.
James Stewart
Note
Given the presence of established competition from national (eg, Sanborns), European (eg, Carrefour), and other US (eg, Home Depot) DIY store chains, Acme is going to have to fight for market share in Mexico just as in the USA. See Dr. Forbes’s photos of Mexican DIY stores.
Acme Project Plan 11
3. Manage the changes as they occur; trying to minimize the number of changes the
project is subjected to. (p.122).
There are specific criteria that will drive changes. Specifically, we have a management
reserve pot set aside. The reserve will be called upon if our SPI falls below 90%. The additional
capital spent will be tightly focused upon the current problem and prevention of reoccurrence.
Should both our SPI and CPI fall below 90% senior management will become involved to
assess status and affect needed changes.
V. Technical Process Plan
Having now seen the project’s organization plans and managerial process plans, we turn
now to a few technical aspects of the project. This section describes the technical approaches to
control and support this project. In it, we describe the technical processes and approaches
relating to this project’s computing system, computer usage policies, plan modification processes,
construction guidelines, acceptance process, and documentation process of lessons learned. We
begin with an overview of the computing system used to support the project.
Computing System
This project will utilize Acme’s wide area network, via wireless access at the construction
site, temporary office locations, and residences. Utilizing portable personal computers, the
project manager and team will access the various project tools using MS Project, synchronizing
local copies with the master file on the company server.
Acme will utilize MS Project Server and MS Project Web Access features to allow
project team members to view, collaborate, and update project information from various remote
locations and connections. All project plan outputs will be date and time stamped. Modifications
to the plan will be tracked electronically, logging a record of who changed what, and when the
changes were made.
James Stewart
Note
Again this information will be useful in Week 11 when an IT plan is developed.
Acme Project Plan 12
Project Plan Modification Process
Only the Project Manager will be able to modify the schedule, budget, and the work
breakdown structure (WBS) portions of the work plan. Changes resulting in delays greater than
five workdays or adding more than $5,000 to the budget estimate must be approved first by the
project sponsor. All other changes may be made at the discretion of the project manager.
Individual team members will be able to update task completion progress in the work plan. All
changes must be requested on the following Change Request Form:
Change Request Form Project Name: Date Request Submitted: Title of Change Request: Change Order Number: Submitted by: (name & contact information) Change Category: Scope Schedule Cost Technology Other Description of change requested: Events that made this change necessary or desirable. Justification for the change/why it is needed/desired to continue/complete the project: Impact of the proposed change on: Scope: Schedule: Cost: Staffing: Risk: Other: Suggested implementation if the change request is approved: Required approvals: Name/Title Date Approve/Reject (Schwalbe, 2004, p. 630) Computer Usage
Computer use will comply with Acme Home Improvement, Inc.’s corporate computing
policies, available online to employees on the company intranet. Employees can access the
corporate intranet through the company server WAN, or over the Internet.
James Stewart
Note
This is a classic way to control project “scope creep.”
Acme Project Plan 13
Construction Guideline Support
Standards for implementing the site construction will comply with Acme Home
Improvement, Inc.’s Construction Guidelines. Since the guidelines were developed for use in
U.S. construction projects, however, the project team will consult Mexico City based law firm,
Goodrich, Riquelme y Asociados (anonymous, n.d.). The team will coordinate activities related
to zoning, environmental practices, and compliance with other local and federal regulations with
the law firm.
Project Acceptance Process
The project manager is responsible for obtaining sign-off from the project sponsor and
project manager at each milestone, and at project completion. The following form will be used to
document acceptance of the project:
Client Acceptance/Project Completion Form
Project Name: Project Manager: I (We), the undersigned, acknowledge and accept delivery of the work completed for this project on behalf of our organization. My (Our) signature(s) attest to my (our) agreement that this project has been completed. No further work should be done on this project. Name Title Signature Date
1. Was this project completed to your satisfaction? Yes No
2. Please provide the main reason for your satisfaction or dissatisfaction with this project.
3. Please provide suggestion on how our organization could improve its project delivery capability in the future.
(Schwalbe, 2004, p. 633) Lessons Learned Documentation:
Acme Project Plan 14
The project manager is responsible for completing a summary of lessons learned
throughout the project. The lessons will be documented on the form below, added to Acme
Home Improvement’s repository of project lessons learned, accessible through the company
intranet.
Lessons Learned Report Prepared by: Project Name: Project Sponsor: Project Manager: Project Dates: Final Budget:
1. Did the project meet scope, time, and cost goals? 2. What was the success criteria listed in the project scope statement? 3. Reflect on whether or not you met the project success criteria. 4. In terms of managing the project, what were the main lessons your team learned? 5. Describe one example of what went right on this project. 6. Describe one example of what went wrong on this project. 7. What will you do differently on the next project, based on your experience working on this
project?
(Schwalbe, 2004, p. 624) VI. Work Packages, Dependencies, Schedules and Budgets Work Packages
The seven major activities of which Acme’s construction project consists, involve various
work packages. By definition, work packages are tasks at the lowest level of the work breakdown
structure or WBS (Schwalbe, 2004).
The preparation of the site and laying of the foundation is the first course in the
construction process. The foundation is the most important part of construction and requires a
substantial amount within the apportioned budget for building materials, as well as time. This
stage involves the preparation of the site, which may involve some weeding, smoothing and
sectioning, before the laying of the sewer pipes, concrete slabs and the sectioning of drainage
James Stewart
Note
Presumably project manager Tarea has been studying previous lessons learned reports now.
Acme Project Plan 15
gutters. These different tasks are altogether estimated to take a total of about 50 days, a little over
5 weeks or over a month. Factored into the time is the acquisition of the necessary materials and
labor.
The next step is the building of the walls, floor and roof of the structure. Once the
foundation is underway, the next step is to start building the actual store structure. This involves
several work packages including the framing of the floor and walls, and the construction of the
roof of the building. The carving out of the different sections of the store, such as the offices,
break rooms, greenhouse and bathrooms also occur here. The estimated time here is about 45
days. The dependency here is of the ‘Finish to Start’ type (Schwalbe, 2004), which necessitates
that the construction of the walls, floors etc, will not take off before the completion of the
foundation. Since these construction work packages are on the critical path, and the construction
resources could become a constraint, we inserted a fifteen-day feeder buffer to ensure any delays
in the critical path construction activities do not delay the rest of the project.
Next is the installation of the electrical and plumbing fixtures. Pipes are run through the
building at this point for water outlets at designated spots, including the break rooms and
bathrooms. Plumbing fixtures such as water closets, toilets, sinks and drinking fountains are
installed. Electrical work is being done at this point, with the installation of wiring, cabling,
outlets, the installation of electrical generators, and subsequently the connection to service for
both electricity and water. Work here is slated for a total of 45 days.
Building construction wraps up with the finishing of the interior, and the stocking of
inventory. Here, the necessary dry walling, painting and finishing is applied to the interior of the
building, thereafter, the interior decorators take up the job of smoothing and designing to the
specifications provided. Other work packages at this point are floor planning for product location
and shelf arrangement. The last part of the interior is the stocking of the shelves with products;
after all interior fixtures have been tested for safety and durability.
Acme Project Plan 16
The building of the garage is not directly dependent on most of the preceding processes
up to this point, but does necessarily occur after the preparation for the site has taken place. So,
this portion of the project starts after the foundation for the site has taken place and the adjacent
wall has been erected. The construction of this, like the main building, will involve installation of
the garage foundation and the framing of its walls, which are then painted, and ending with the
marking of parking spaces. The schedule for finishing the store and the garage allows for 155
days, which includes another feeding buffer of twenty days.
Acme’s construction plan includes an outer garden, and landscaping for this is for 10,000
square feet. This activity will involve the landscaping of the already sectioned area, which entails
the layering with soil, rock and concrete slab placing as designed; paving installation and finally,
the planting of selected plants and flowers. This is scheduled for a total of 40 days. This time
takes into consideration the various needs of the selected plants and the time needed to ready the
soil for planting.
Throughout these activates, the marketing and promotion planning proceeds. Scheduled
to conclude as the store becomes ready for opening, the marketing work package begins with an
analysis of the market, including a competitive analysis, a consumer analysis, and an analysis of
Acme’s strengths and opportunities in the market. Next, the project calls for the development of a
product, pricing, and promotion plan. Last comes preparation of the merchandising, advertising,
and grand opening promotion plan. These marketing activities are scheduled to take 180 days,
but they do not fall on the critical path, nor do they require resources that appear at risk of being a
project constraint.
The last order of the project is to hire and train the employees for each of the
departments. This process will involve the advertisement of vacancies. It will also involve a
selection process of interviewing, checking of references and candidate consideration. The
training may likely be done in groups and will entail customer service dynamics and necessary
need-to-know information on products being sold. This takes time and has been scheduled to
James Stewart
Cross-Out
James Stewart
Inserted Text
activities
James Stewart
Note
Good. Acme must establish itself in this competitive DIY store market – see again Dr. Forbes’s photos.
James Stewart
Note
It’s really necessary to use a local agency to at least vet the marketing plan, working cooperatively with home office marketers who know what general image they would like to achieve. Perhaps in AMBA 603 you were exposed to some of the humorous mistranslations that have occurred in international marketing, such as the Chevrolet Nova = No va or “doesn’t go” in Spanish.
Acme Project Plan 17
take 65 days, twenty of which are a feeding buffer at this potential constraint along the critical
path for a timely store opening.
Dependencies
Work on the site is dependent upon several things and based on several assumptions.
There is an assumption that we have a specific piece of commercially zoned real estate selected
and purchased. There is also the assumption that we have, in hand, the required permits to begin
construction and open for business. Acme could not begin the joint venture with its local partners
without these items in hand. We would rely heavily on our partners’ knowledge of local and
regional governmental processes and procedures. Our 12-month timeline could not start until this
initial hurdle was cleared.
With permits in hand, construction could begin. The mandatory dependencies are such
that a natural progression of events must occur for the completion of the structure. Each event is
a unique task, however, many are highly dependant on other activities. Certain tasks, like laying
the foundation, have finish-to-start relationships with their predecessors. The foundation cannot
be poured, obviously, until the site is cleared, leveled, and otherwise prepared. Other activities,
like establishing a mobile construction site office, can start simultaneously with another activity,
such as beginning to prepare the site, but no sooner. This would be an example of a start-to-start
relationship. Of course, other dependencies are also possible. Some tasks must finish along with
other activities, while others must finish before another can start. Following is a look at
dependencies in the project.
As already mentioned, the site must be prepared before the foundation can be laid.
Similarly, construction of the walls and floors is dependant upon the foundation being established
first.
Another finish to start dependency involves building the roof. The walls must be finished
before a roof can be constructed. Any delay in completing the wall will push back the start of
constructing the roof. A feeding buffer is inserted at this point on the critical path to guard
James Stewart
Note
The idea here is to maintain friendly, cooperative relations with Mexican authorities and other local stakeholders. In Mexico, permits can be taken away, just as can happen in the USA, and this is necessarily to be avoided, of course.
James Stewart
Note
Corruption is also a consideration in Mexico – as well as in some parts of the USA. One corruption index by countries is found at http://www.transparency.org/cpi/2004/cpi2004.en.html; according to it, in 2004, the USA ranked 17th, and Mexico 64th, in a list of 145 countries. Finland was #1, the least corrupt nation. What might be Acme’s policy on bribes?
Acme Project Plan 18
against slippage on the project schedule by the construction resource, which is used
heavily at this point of the project.
Likewise, the walls must also be constructed before wires and plumbing can be run
throughout the building. Wiring is designated as having a start to start dependency with installing
the generator and electrical circuit boxes. Installing the electrical fixtures, however, is dependant
on three predecessors being completed first. Wires must be run, walls must be dry-walled, and
electrical service must be established with the utility provider.
Much like the electrical fixtures, plumbing fixtures cannot begin to be installed until the
pipes have been run, drywall installed, and water service established with the utility provider.
Finishing the interior presents another series of finish to start dependencies. Walls and
roof must be up before they can be dry-walled. The dry wall must also be installed before they
can be painted. Painting is a necessary precedent to installing the shelves and display units.
Since these activities fall on the critical path where resources are close to being overloaded, an
additional feeding buffer is added here. If any of the string of finish to start dependant activities
falls behind schedule, the feeding buffer will help maintain the project schedule.
Stocking the inventory cannot begin until the interior is finished. We, therefore,
have another finish to start dependency.
The construction of the garage is a task that would drive how much inventory we
can handle, assuming it is used partly to store inventory. With the interior complete we
could stock a certain amount of inventory but the garage would have to be complete
before we could finish taking receipt of our entire inventory. This would really be a both
an external dependency and discretionary dependency.
It is a discretionary dependency in that we could stagger our inventory ordering to
take receipt based on how the store is completed. If for, example the lights take the
longest to receive, from an inventory perspective, we could stagger the completion of the
James Stewart
Cross-Out
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, for example,
Acme Project Plan 19
interior portion of the structure. We could order our lighting inventory while completing
a different area’s interior first and stock it, then come along and finish the interior of our
lighting department in time to take receipt of the inventory.
It is also an external dependency because we do not control the timetable that our
suppliers deliver on. There is inherent risk in setting up a ‘just-in-time’ approach to
taking receipt of inventory. If, for example, our supply of wiring for electrical instillation
is unstable or unpredictable, we may not be able to wire-up our lighting department in
time to take receipt of our staggered inventory order. The extent of discretionary
dependency that we establish is contingent on our tolerance for risk.
Completion of paving and landscaping is purely discretionary. We could build
the parking lot and landscaping almost entirely independent of the rest of the project but
it would not make much sense. This task must simple be finished prior to opening the
business. Most of our vendors would need the paving completed for access to the
property. It would be a start-start for our inventory. It seems sensible to pave the parking
lot simultaneously with paving the garage, making this a start-to-start dependency with
pouring the garage concrete.
Hiring and training employees is both a discretionary and external dependency.
At a macro-level it is externally dependent upon the retail and construction job market in
Mexico City, it we hire, rather than contract for, construction workers. If the construction
market is soft in Mexico City in the window where we are to hire employees, it is likely
we will have many applicants with construction expertise applying for work, in an effort
to supplement their incomes. If the construction market is brisk when we are to hire, we
may have a harder time finding experienced construction labor.
Acme Project Plan 20
As a discretionary dependency, we can begin hiring and training when we deem
best. While it is optimal to train most of the floor employees in a fully stocked facility
that is nearly operational, we could train the core of the store’s management/ department
heads at one of our American stores. It would be desirable for these new managers to see
how a fully functional store runs and meet with US counterparts to gain lessons learned.
Acme SA de CV will groom promising managers at its Mexico City site to open new
stores across Mexico, so it is to our advantage to train new managers as early as possible.
Having discussed the work packages, and task dependencies in the project, we
turn now to a breakdown of the $7.5 million project budget.
Project Budget
Acme Home Improvements de Mexico, SA de CV 12 Month Construction Budget
DIRECT COST DESCRIPTION SUBTOTALED AMOUNT 1
1. Construction Materials Temporary Utilities/Rentals Excavation / Blasting Footings / Drainage Foundation/Waterproofing Retaining Walls Underground Utilities Trenching, Backfill, Rough Grading Concrete Slab City Water / Well & Pump City Sewer / Septic System Sewer/Septic/Underground Connections City Water/Underground Connections Gutters and Downspouts Interior Masonry Rough Framing Materials Structural Steel Trusses Lumber &Other wood types Plumbing fixtures Fire System HVAC Electrical – Lighting, Cabling, etc. Electrical Generators
James Stewart
Note
This is the approach used by Toyota when it opens manufacturing plants in the USA. Employees down to about foreman level are sent to Japan to learn how things are done in the TPS.
Acme Project Plan 21
Exterior Stairs Rough Framing Labor Roofing materials Windows & Exterior Doors Garage Framing Garage Doors Exterior Stucco Exterior Siding/Masonry Exterior Painting Insulation Sheetrock/Taping Vanities Cabinets Interior Trim Interior Doors Hardware – Bolts, screws, cords, etc. Carpentry Landscaping Soil Granite / Rocks Plants Walkway Slabs Interior Shelving units Equipment rental Safety Equipment Other
Total Materials Cost 40% or USD 3.0 million 2. Overheads and Other Costs
Personnel salaries – Direct Project Workers
Consultants / Professionals Administrative personnel Construction Laborers Accommodation Travel Utilities (Phone, electricity, water)
Supplies (Stationery, postage, printing, etc.)
Insurance (Workers Compensation) Teachers / Trainers Other
Total Overheads and Other Costs 20% or USD 1.5 million 2 3. Inventory & Labor Costs
Shipping Products Truck rentals Loading & Off loading Other Labor Duties (Customs & Excise)
Total Inventory Costs 40% or USD 3.0 million 3
Acme Project Plan 22
Considerations: 1 The percentages and USD estimates are based on a USD 7.5 million budget.
2 Wages and Salaries may vary significantly, especially with the current exchange rate of 1USD =
11.1345 MXN and the difference in the cost of living between both countries. This is cheaper in
Mexico and since most labor used will be local, the cost of it may be lower than estimated.
3 It is possible that the cost of inventory may vary from the above stated due to considerations
such as; delays and pressures of delivery, but with more of a leaning towards an
increase.
Assumptions:
The assumption of the total cost for construction materials is derived from the size of the
facility to be built and all that will be required to build it, with a sizeable amount of the cost gong
towards the materials for the foundation and walls.
Mainly personnel wages and salaries rule the total budget amount for the overheads, with a
majority of this going to the professionals or experts in charge of various sections of the project.
The total number of people working on this project, aside from its management committee, is
estimated to be in the neighborhood of 78. The division is as follows:
Approximately 60 for all construction activity and interior work. Among these,
professionals are estimated to be five, with a distribution of 1 garage expert, 2 interior
designers and 2 building experts.
Approximately eight for landscaping duties, with one professional among them.
Approximately 10 company professionals for the initial hiring and training of employees.
The products to be for inventory will likely cost about as many dollars as the construction
effort, if not more, due to shipping, handling and the payment of duties on them.
James Stewart
Note
This seems to be a reasonable number, given your breakdown of assignments for the project workforce.
Acme Project Plan 23
VII. Summary
Acme Home improvement’s international expansion strategy begins with this project. The
company’s joint venture in Mexico City, will lead to the company’s first store outside the United
States. Within twelve months, and $7.5 million, the project team is expected to plan, locate,
construct, and open the company’s first international home improvement store.
This plan provided an overview of the project organization, management processes,
technical processes, work packages, dependencies, schedules and project budget. Accompanying
this document is a MS Project work plan, and Project Charter.
We believe the information contained in these documents lay out a realistic plan to enable
Acme Home Improvements to successfully open its first store outside the U.S. By executing the
plan above, we believe Acme can complete this strategically critical project on time and on
budget.
James Stewart
Note
This is a useful conclusion, allowing Mr. Fitzgerald or another Acme senior management reader to see that the project team believes that it has the resources, time and other guidance necessary to proceed with the project.
Acme Project Plan 24
Appendix A:
Tasks on the Critical Path
Task Duration Start Finish Dependncy Resource Prepare site 40d Mon 2/28/05 Fri 4/22/05 Construction Lay foundation 10d Mon 4/25/05 Fri 5/6/05 2 Concrete & Paving
Site & Foundation Ready 0d Fri 5/6/05 Fri 5/6/05 3 Joe Martillo
Build walls 15d Mon 5/9/05 Fri 5/27/05 4 Construction
Construct roof 5d Mon 5/30/05 Fri 6/3/05 6 Construction
Feeding Buffer 15d Mon 6/6/05 Fri 6/24/05 7 John Tarea
Install floors 10d Mon 6/27/05 Fri 7/8/05 8 Concrete & Paving
Dry Wall 10d Mon 7/11/05 Fri 7/22/05 9 Drywall
Paint 10d Mon 7/25/05 Fri 8/5/05 22 Painters
Feeding Buffer 20d Mon 8/8/05 Fri 9/2/05 23 John Tarea
Stock Inventory 10d Mon 9/5/05 Fri 9/16/05 25 Stock Workers
Interior Finished & Inventory Stocked 0d Fri 9/16/05 Fri 9/16/05 26 Joe Martillo
“Recruit, interview & hire employees” 30d Mon 8/8/05 Fri 9/16/05 27FF Human Resources
Feeding Buffer 20d Mon 9/19/05 Fri 10/14/05 37 John Tarea
Train employees 15d Mon 10/17/05 Fri 11/4/05 38 Human Resources
Employees Hired & Trained 0d Fri 11/4/05 Fri 11/4/05 39 Anita Socio
Project Buffer 82d Mon 11/7/05 Tue 2/28/06 40 John Tarea Note: Feeding buffers have been inserted along the critical path where resource
constraints exist, and a project buffer has been added to protect the end of the project.
James Stewart
Note
A list like this facilitates management emphasis on the critical task, to include by those not able to readily manipulate mpp or other project management software files.
Acme Project Plan 25
Appendix B: Responsibility Assignment Matrix:
Responsibility Assignment Matrix for Acme Home Improvements de Mexico Site Construction and Opening Project
Prepared by: John Tarea, Project Manager Date: 2/5/05
1. 1
1. 2
2. 1
2. 2
2. 3
3. 1
3. 2
3. 3
3. 4
3. 5
3. 6
3. 7
3. 8
4. 1
4. 2
4. 3
5. 1
6. 1
6. 2
6. 3
7. 1
7. 2
8. 1
8. 2
Joe Martillo R R R R R R R R R R R R R R R R R R R R Donna Promueva R R
Anita Socio R R
Construction P P P P P P Concrete & Paving P P P
Electricians P P P P P
Plumbers P P P
Drywall P
Painters P P
Stock Workers P
Landscapers P Human Resources P P
R = Responsible for task P = Performing task
Acme Project Plan 26
Resources:
Anonymous. (No Date). Mexico business opportunities and legal framework. Retrieved
February 4, 2005 from http://www.mexico-trade.com/firm.html#gra.
Anonymous. (No Date). Mexico business opportunities and legal framework. Retrieved
February 4, 2005 from http://www.mexico-trade.com/sense.html#zon.
Goldratt, E. (1998). Critical chain. Great Barrington, MA: The North River Press.
Hampton Group, The. (2001). PMTalk newsletter. The project management knowledgebase
http://www4pm.com. Retrieved February 3, 2005 from
http://www.4pm.com/articles/PMTalk07-24-01.pdf.
Rigby, Ken (2003). Technical Management – a pragmatic approach. 2nd Edition. Retrieved
February 3, 2005 from http://home.btconnect.com/managingstandard/techman.htm.
Reed Construction Data. (2004). RSMeans® preliminary cost estimate. Retrieved January 29,
2005 from http://www.firstsourceonl.com/Means/members/result.asp?
prname=&project=300&gsf=100000&zip=&Calculate.x=24&Calculate.y=2&Calculate=
submit.
Schwalbe, K. (2004). Information technology project management (3rd ed.). Boston: Course
Technology.
State of Texas, Department of Information Resources. (2003, April 17). Planning guideline:
Template project development plan. Retrieved February 2, 2005 from
http://www.dir.state.tx.us/eod/qa/planning/projplan.htm#techplan.
James Stewart
Note
The references consulted appear usefully diverse – good.
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