Automation Futures PLC

Assessment Brief

Case Study / Brief

The Fundamentals of Project Management course has TWO separate deliverables to be submitted as a single document:

Part A

Project Management Consultancy Report

This should be structured in four sections based on the Case Study – 3500 words (85% of final course grade)

Part B

Reflective Essay

Prepare an analysis into the challenges encountered throughout the Module and the difficulties producing the assessment. Identify clear personal development goals. Briefly from your research highlight the characteristics of a Good Project Manager.

750 words (15 % of final course grade)

Background

Automation Futures (AF) PLC which is shown in Fig.1 is a technology contracting, consulting and product/software development company with extensive experience in the design, manufacture, commissioning and delivery of a range of Electronic/Technology projects but specialising in Automation and New products for a range of clients including Bespoke Automation Factories. It 

operates out of a large Consultancy Practice in The Thames Valley (UK) and a Product Development factory in Ireland (ROI) which develops and manufactures automation plant and Prefabricated Factories for various clients largely in Europe.

The company’s facilities and expertise allow them to offer tailor-made solutions that are highly competitive with other companies in this market. Margins on projects are good given the innovative nature of the business but clients are demanding and require competitive responses in a fast-changing world.

AF PLC has won a major contract to design and build a new engineering Automation plant for a major Train manufacturing client, TTF PLC, based in Germany which will deliver Electronic Component parts including a to be designed Inverter Product specifically aimed at Power Saving for new train fleets. TTF is itself a major supplier to various governments and train operating companies throughout the world. The contract is structured on a risk and reward basis with a target price of £58.5m with a shared bonus if finished early and a shared penalty if finished late.  The target price is extremely competitive and reflects the belief that they have the capacity to improve on the delivery date and thereby earn the bonus. The AF PLC bid was based on a conceptual design provided to them setting out the outputs in terms of product attributes including power saving targets and product availability. AF Plc will have to complete the detailed design of the Inverter product from outline designs prepared by TTF along with the automated production line as part of the Contract and organise installation of the equipment in the New factory in Germany which they will also have to commission and Construct.

TTF will manufacture the Inverter Product from the production line as part of its Train Manufacturing Process.

TTF have acquired the site for the New Factory but AF will have to:

• Design and Construct of the new Factory to fit the automation equipment;

• Design and Develop the Automation plant including the production line software;

• Design the Inverter product including the control software.

Questions.

Part A.

1. Project Definition/Parameters and Risks (20 Marks)

   1. Discuss the relative importance of the various iron triangle parameters in setting the Overall Project objectives that will need to be managed by you as the AF PLC project manager over the course of the project, and how they may inter-relate to each other. (10 marks)

   2. Use the template provided to create a risk register, identifying a maximum of ten risks that AF PLC are likely to face with a construction project of this nature. (10 marks)

2. The main contracted Labour/Staff requirements and the fixed costs for each task are shown in Table 1 are in £m.

   1. Prepare a network diagram showing the critical path and planned duration of the project. Quantify the float on the non-critical tasks. (8 marks)

   2. Using Microsoft Project (or a similar package) prepare a Gantt chart for the project to a professional standard. Calibrate the timescale in weeks. If the project is scheduled to start on Monday 8^th July 2019 determine the planned completion date based on the constraints outlined in table 1 and the brief. (8 marks)

   3. Using the information provided, detail the overall Project Budget and the projected Net profit for the contract (i.e. revenue – costs) (including any bonus or allowing for any penalty) that the company will be aiming to achieve based on the projected completion date and the contract terms.  You are also required to provide an indication of what budget components could impact the point at which in terms of days late the project could become loss making assuming no increases on the initial Project Budget. Show your workings clearly using a spreadsheet (You can submit as a separate spreadsheet file attachment, but the overall figures must be included in the main body of the report) (9 marks)

3. Managing progress and spending (10 Marks). The project started on time, and after 17 weeks of work following on from the Project Review, an intensive analysis of the project was held at the AF PLC Factory. The following information was reported by the project team.

1. Using the Gantt chart, determine the planned progress (%) for each task, after 17 weeks had been completed. Assume that progress is achieved on a linear basis for each task. For example, if a task is planned over the course of 4 weeks, then if 3 weeks have elapsed planned progress would be 75%. Then create a TABLE comparing the planned progress against the actual progress values from table 2. (5 marks)

2. Enter the actual progress values for progress from the revised Table produced in answering Q3a into the Gantt Chart, and using Microsoft Project or similar software reschedule the project with effect from the review date. Produce a revised GANTT Chart AND IDENTIFY the new completion date and COMMENT on the outcome from a commercial perspective detailing any POTENTIAL effect on the Profit from the Project AND the budget cost. (5 marks)

Sample Answer

Automation Futures PLC

Project Management Consultancy Report — Part A

Project: Design & build of Automation Plant and Inverter Product for TTF PLC (Germany)

Contents

• 1.0 Executive summary

• 2.0 Project definition / parameters and risks

• 2.1 Importance of iron-triangle parameters (time, cost, scope/quality)

• 2.2 Risk register (10 risks)

• 3.0 Project schedule — network diagram and critical path analysis

• 3.1 Assumptions and activity list (with durations and logical links)

• 3.2 Forward/backward pass, floats and critical path (textual network)

• 4.0 Gantt summary and planned completion date (start Monday 8 July 2019)

• 4.1 Explanation of Gantt chart (MS Project) — how you can produce it

• 5.0 Project budget, profit projection and break-even lateness analysis

• 5.1 Assumptions and detailed spreadsheet-style workings

• 5.2 Sensitivity: how many days/weeks late before project becomes loss-making

• 6.0 Managing progress and spending after 17 weeks — planned vs actual, reschedule and consequences

• 6.1 Planned progress after 17 weeks (linear progress) — table

• 6.2 Assumed actual progress (Table 2) — example values (replaceable)

• 6.3 Reschedule (recalculating early/late starts) — new completion date and commercial impact

• 7.0 Conclusions and recommendations

• Appendices: A. Activity table and numeric forward/backward pass; B. Example spreadsheet of budget calculations; C. Risk register template (Excel-ready).

Executive summary

Automation Futures PLC (AF PLC) has won a fixed target-price contract (risk/reward) to design and construct a new factory in Germany, develop production equipment and software, and design an inverter product to be manufactured by TTF. The target price is £58.5m. AF bid competitively because management believes it can outperform the schedule and gain shared bonus; conversely it faces shared penalties if late.

This report:

• evaluates the relative importance of time, cost and scope/quality for this complex project and how they inter-relate;

• provides a 10-item risk register;

• proposes a practical activity list, network logic, critical path and planned duration (with start date 8 July 2019) based on explicit assumptions;

• presents budget and profit calculations, including bonus/penalty assumptions, and shows sensitivity to delay; and

• models a progress review at week 17 (planned vs actual), reschedules the project, and comments on commercial consequences.

All key assumptions are shown so you can substitute your own Table 1 and Table 2 figures.

Project definition / parameters and risks

Iron triangle: relative importance and inter-relationships

The “iron triangle” — time, cost and scope/quality — must be balanced. For this AF PLC project:

Time (schedule) is critically important. The contract is target-price with shared bonus/penalty linked to delivery date. Early delivery yields shared bonus; late delivery causes shared penalty. Time therefore directly affects AF’s reward and risk and is a primary objective for the project manager.

Cost is the second critical parameter. AF’s margin relies on controlling direct costs (materials, labour, subcontracts) and overheads. Because the target price is competitive, tight cost control is vital. Note that time and cost interact: schedule compression (to gain early finish) typically increases cost (overtime, subcontractor premium); conversely schedule delay raises indirect and variable costs and may trigger penalties.

Scope / quality is the third but equally essential parameter. This project must deliver to performance specifications (inverter product attributes, power-saving targets, production rates). Failure to meet performance (scope/quality) risks rework, warranty claims and reputational damage which directly affect profitability and future business. Therefore scope/quality cannot be traded off lightly to save time or cost; in this contract failing to meet specified product attributes would breach contract.

Inter-relationships and management focus

As project manager you must manage the interdependence: aggressive schedule targets must not compromise product technical requirements. Any decisions to accelerate work (fast-track or crash) require cost approval and risk mitigation (e.g., extra testing). Given the target-price risk/reward arrangement, the primary objective hierarchy should be: 1) deliver the contractual scope/performance, 2) deliver on or ahead of schedule (to capture bonus), while 3) controlling costs to protect margin.

Continued...