This report discusses a project plan for implementing a catering service for employees within the organization premises. It covers the project life cycle stages, application of PLC, cost benefit analysis, and more.
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Running Head: OPERATIONS AND PROJECT MANAGEMENT Operations and Project Management: Assignment 2 Name of the Student Name of the University
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1OPERATIONS AND PROJECT MANAGEMENT Table of Contents 1. Introduction..................................................................................................................................2 2. Discussion and Analysis..............................................................................................................2 2.1 Overview of the Case Study..................................................................................................2 2.2 Description of the Project Life Cycle and its Stages.............................................................2 2.3 Application of PLC in the Given Project...............................................................................3 2.3.1 Business Case.................................................................................................................3 2.3.2 Project Plan.....................................................................................................................4 2.3.3 Cost Benefit Analysis.....................................................................................................4 2.3.4 Work Breakdown Structure............................................................................................5 2.4 Effectiveness of PLC in the Given Project............................................................................7 3. Conclusion...................................................................................................................................7 Bibliography....................................................................................................................................8
2OPERATIONS AND PROJECT MANAGEMENT 1. Introduction The primary purpose of this project is to initiate a catering service for the employees of the organisation so that they do not waste time and create congestion while moving around in the locality for lunch. In addition to create solution for the time wasted for lunch and the congestion in the locality, the company also wants to develop a CSR (Corporate Social Responsibility) in which it wants the employees to supplied with healthy food for lunch. In this report, a discussion has been published regarding a project plan that will be implemented for supplying lunch for the employees from within the organisation premises. 2. Discussion and Analysis 2.1 Overview of the Case Study Due to the absence of catering services, the employees need to move outside the organisation premises for lunch. Due to over-congestion of employees (the organisation has currently 1250 employees working), the locality has been facing problems and moreover, the employees are forced to have extended lunch breaks that are significantly reducing their actual shift timings at work. In addition, the outside food the employees have for lunch are not healthy and many employees often fall sick and take leaves from their work. In order to take care of these issues, it is suggested for the organisation to supply food in form of catering services to the employees. There are two methods for achieving this goal – hire an external caterer for supplying food to the employees or construct an employee canteen within the organisation premises where the employees can have food for lunch. The second option is more viable as in spite of having significant amount of initial investment, the company can control the quality of the food delivered to the employees during the lunch time. 2.2 Description of the Project Life Cycle and its Stages A project life cycle is defined as the entire process in which the overall project is planned, prepared, executed and closed. Generally, a project life cycle consists of four main stages – project initiation, project planning, project execution and project closure. These stages of a project are explained as follows.
3OPERATIONS AND PROJECT MANAGEMENT Project Initiation– This is the first stage of any project in which the project requirements are gathered, analysed and discussed. Generally in this stage, a project proposal is submitted to the authority that explains the overall purpose and goals of the project, the expected outcomes, a rough timeline and the roadmap that will be followed for the project. The project proceeds to the next phase when the proposal is approved by the management. Project Planning– In this phase, the overall plan for the project is developed. The plan includes identification of the project scope and objectives, development of work breakdown structure, estimation of detailed timeline, budget, development of quality standards, estimation of resources, identification and mitigation of risks associated with the project and others. The final outcome of this phase is a detailed project plan document that contains all the relevant aspects as determined in the planning process. Project Execution– This is the main phase of the project in which the planned activities are executed in order to reach the final goal / outcome of the project. In addition to reaching the end goal of the project, it is also required the complete the project within the specified time and budget that have been specified during the project planning phase. Budget and time overshoot can cause significant financial losses for the company and hence, any overshoot needs to be avoided. Project Closure– This is the final phase of the project life cycle in which the overall outcome of the project is reviewed and appraised. In addition, all remaining activities like submission of documentation, making the pending payments and others are completed. Once the project review is complete, it is closed by the project manager along with sign off from all the stakeholders associated with the project. 2.3 Application of PLC in the Given Project 2.3.1 Business Case The project involves construction of an employee canteen within the organisation premises for supplying healthy food for lunch. In addition to providing healthy food to the employees, it can also be a source of minor additional income for the company by selling the lunch food. Apart from this, there is no other business opportunity as this project is solely
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4OPERATIONS AND PROJECT MANAGEMENT conducted in order to reduce staff movement around the locality during the lunch break and provide healthy food options for the employees. 2.3.2 Project Plan In this project, an employee canteen will be built within the organisation premises for providing lunch to the employees at minimal costs. For this project, a contractor will be hired who will construct and set up the canteen as per the requirements on the property space provided by the organisation. After the canteen is ready, a team of chef and canteen staff will be hired who will cook and serve food to the organisation employees only. 2.3.3 Cost Benefit Analysis The cost benefit analysis is conducted based on the following estimated values. Cost Benefit Analysis Construction Materials$15,000.00 Construction Equipments$12,500.00 Construction Workers' Wages$40,000.00 Other Costs$7,500.00 Total Development Cost$75,000.00 Canteen Maintenance$1,500.00 Kitchen Supplies$4,000.00 Chef and Canteen Staff$3,500.00 Total Operational Cost$9,000.00 Income from Lunch Sale$1,50,000.00 Other Income$- Total Benefit$1,50,000.00 Discount Rate Used10.00% Based on these values, the cost benefit analysis is conducted as shown in the following.
5OPERATIONS AND PROJECT MANAGEMENT Project Cost-Benefit Analysis Analysis Variables: Discount Rate Used10.00% Annual Benefits1,50,000.00$ Annual Operational Costs9,000.00$ One-Time Development Cost75,000.00$ Year of Project 012345TOTALS Economic Benefit$0.001,50,000.00$1,50,000.00$1,50,000.00$1,50,000.00$1,50,000.00$ Discount Rate1.00000.90910.82640.75130.68300.6209 PV of Benefits$0.00$1,36,363.64$1,23,966.94$1,12,697.22$1,02,452.02$93,138.20 NPV of all BENEFITS$0.001,36,363.64$2,60,330.58$3,73,027.80$4,75,479.82$5,68,618.02$5,68,618.02$ One-Time COSTS(75,000.00)$ Recurring Costs$0.00(9,000.00)$(9,000.00)$(9,000.00)$(9,000.00)$(9,000.00)$ Discount Rate1.00000.90910.82640.75130.68300.6209 PV of Recurring Costs$0.00(8,181.82)$(7,438.02)$(6,761.83)$(6,147.12)$(5,588.29)$ NPV of all COSTS(75,000.00)$(83,181.82)$(90,619.83)$(97,381.67)$(1,03,528.79)$(1,09,117.08)$(1,09,117.08)$ Overall NPV4,59,500.93$ Overall ROI 4.2111 Figure 1: Cost Benefit Analysis of the Project (Source: Created by Author) 2.3.4 Work Breakdown Structure The work breakdown structure for the project is shown in the following table along with the estimated schedule for each activity. WBSTask NameDurationStartFinishPredecessors 0Construction of New Lunch Canteen for Organisation Employees126 daysTue 06-08-19Tue 28-01-20 1Project Initiation15 daysTue 06-08-19Mon 26-08-19 1.1Discussion with Board2 daysTue 06-08-19Wed 07-08-19 1.2Discussion of the Problems2 daysThu 08-08-19Fri 09-08-192 1.3Proposal of Solutions2 daysMon 12-08-19Tue 13-08-193 1.4Agreement on a Particular Solution1 dayWed 14-08-19Wed 14-08-194 1.5Feasibility Testing of the Proposed Solution3 daysThu 15-08-19Mon 19-08-195 1.6Submission of Project Proposal5 daysTue 20-08-19Mon 26-08-196 1.7Milestone 1: Approval of the Project0 daysMon 26-08-19Mon 26-08-197
6OPERATIONS AND PROJECT MANAGEMENT 2Project Planning19 daysTue 27-08-19Fri 20-09-19 2.1Formation of Project Team2 daysTue 27-08-19Wed 28-08-198 2.2Determine Scope of the Project2 daysThu 29-08-19Fri 30-08-1910 2.3Determine Project Objectives1 dayMon 02-09-19Mon 02-09-1911 2.4Estimate Schedule of the Project2 daysTue 03-09-19Wed 04-09-1912 2.5Estimate Project Budget2 daysThu 05-09-19Fri 06-09-1913 2.6Specify Quality Standards4 daysMon 09-09-19Thu 12-09-1914 2.7Identify Risks Associated with Project3 daysFri 13-09-19Tue 17-09-1915 2.8Develop Risk Management Plan3 daysWed 18-09-19Fri 20-09-1916 2.9Milestone 2: Finalise Project Plan0 daysFri 20-09-19Fri 20-09-1917 3Project Execution78 daysMon 23-09-19Wed 08-01-20 3.1Hire Construction Contractor5 daysMon 23-09-19Fri 27-09-1918 3.2Procure Materials3 daysMon 30-09-19Wed 02-10-1920 3.3Provide Property Space for Construction2 daysThu 03-10-19Fri 04-10-1921 3.4Construction of the Canteen25 daysMon 07-10-19Fri 08-11-1922 3.5Setting Up the Kitchen Area15 daysMon 11-11-19Fri 29-11-1923 3.6Setting Up the Dining Area15 daysMon 02-12-19Fri 20-12-1924 3.7Milestone 3: Handover to the Organisation0 daysFri 20-12-19Fri 20-12-1925 3.8Recruit Chef and Canteen Staff10 daysMon 23-12-19Fri 03-01-2026 3.9Specify Food Menu3 daysMon 06-01-20Wed 08-01-2027 3.10Milestone 4: Finalise the Operations of the Canteen0 daysWed 08-01-20Wed 08-01-2028
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7OPERATIONS AND PROJECT MANAGEMENT 4Project Closing14 daysThu 09-01-20Tue 28-01-20 4.1Submission of Project Documentation5 daysThu 09-01-20Wed 15-01-2029 4.2Review of the Project3 daysThu 16-01-20Mon 20-01-2031 4.3Appraisal of the Project3 daysTue 21-01-20Thu 23-01-2032 4.4Complete Residual and Pending Payments2 daysFri 24-01-20Mon 27-01-2033 4.5Stakeholder Sign Off1 dayTue 28-01-20Tue 28-01-2034 4.6Milestone 5: Final Closing of the Project0 daysTue 28-01-20Tue 28-01-2035 2.4 Effectiveness of PLC in the Given Project As shown in the work breakdown structure above, it is evident that the project follows the four stages of project life cycle (PLC) along with regular activities and milestones. Although strictly following the general PLC is not absolutely necessary, it is recommended for use as it gives a structured approach to any project. The work breakdown structure shown is the evidence that PLC is very much effective for the project as the project owners can approach it easily step by step. 3. Conclusion Finally, it can be concluded that organisation can proceed with this proposed project as the projected cost benefit is positive and there is sufficient return on investment for the company. Furthermore, the proposed project is in line with the company objective to use its CSR policy in providing a healthy lifestyle option for the employees.
8OPERATIONS AND PROJECT MANAGEMENT Bibliography Fleming, Q.W. and Koppelman, J.M., 2016, December. Earned value project management. Project Management Institute. Harrison, F. andLock,D., 2017.Advancedprojectmanagement:astructuredapproach. Routledge. Heagney, J., 2016.Fundamentals of project management. Amacom. Kerzner, H., 2017.Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons. Kerzner, H., 2018.Project management best practices: Achieving global excellence. John Wiley & Sons. Meredith, J.R., Mantel Jr, S.J. and Shafer, S.M., 2017.Project management: a managerial approach. John Wiley & Sons. Schwalbe, K., 2015.Information technology project management. Cengage Learning. Turner, R., 2016.Gower handbook of project management. Routledge. Verzuh, E., 2015.The fast forward MBA in project management. John Wiley & Sons. Walker, A., 2015.Project management in construction. John Wiley & Sons.