Franklin Electronics

Group#9

Anirudh Kandrika (u113147)

Binoy Lobo(u113148)

Mamsha Rath(u113149)

Mayank Srivastava(u113150)

Md. Ali Tabish(u113151)

Meenakshi Behera(u113152)

Melisha Ghosh(u113153)

Case Overview

In 2003, Franklin won an 18- month

labor intensive product

development contract by

Spokane industries

It was a cost reimbursable contractCost target of $2.66 million and fixed

fee of 6.75% on the target

Contract required usage of Earned Value cost Schedule report which was

new to Franklin

First contract by Spokane Industries that was a

cost reimbursable

contract

Franklin Electronics

Contract HighlightsManagement Group• Project Manager Assigned by Spokane• Local cost Accounting Department was set up• 2 line manager were appointed

Work Breakdown Structure • 45 work packages • 1st four moths : 4 work packages to be implemented

Fewer Interchange meeting• Implementation of earned value measurement• Spokane’s faith in EVM to get necessary and meaningful information

Are the vice president’s comments correct?

The vice president’s comments are reflective of the project status derived from data computed using the EVMS

The trend identified through this method is reflective of actual cost overruns and schedule slippage

The statements are not totally accurate

What information did the vice president fail to analyse ?

The president failed to analyse the variance the variance

Cost Variance CV = BCWP(EV) - ACWP(AC)

Schedule Variance (SV) = BCWP(EV) - BCWS(PV)

• The Cost Variance does not increased by 78%

• The Schedule Variance does not increased by 45%

What additional information should have been included in the status report?To complete the analysis of the status report, it is must to include• Budget at completion (BAC)• Estimate at completion (EAC)• the Critical Path.

Budget at Completion

• The budget at completion is the sum of all BCWS allotted to the project

• here it is 121k for end of month 2 and 299k for end of month 3

Estimate at Completion

• It is the sum of all direct and indirect costs to date plus the estimate of all authorized work remaining

• EAC for month-end-2= 139.82 and EAC for month-end-3= 328.429k

Does Franklin Electronics understood EVM?

Franklin Electronics needs a better understanding of EVMS. Earned value measurement reports need to include other project related parameters such as

Project Plan•Evaluate and manage the

project•Updated throughout the

life-cycle of the project

Recourses Needed•Capital and Human

Resources

Percentage of Work Completed•Report about the

completed work and current status

•The PERT network Diagram

Does Spokane Industries understand the project management?

Earned Value Measurement

Schedule Variance (SV)

Measurement of the schedule performance for a project. Gives an idea whether project is

ahead or behind the baseline schedule.

Cost Variance (CV)Measurement of the

budget performance for a project.  Tells the

management whether project is above or

below budget.

Schedule Performance Index

(SPI)Measures the progress achieved against that which was planned.

Cost Performance Index (CPI)

Measures the value of the work completed

compared to the actual cost of the work

completed. 

Reports printed out from EVM system

Performance Reports• Indicate physical

progress till date

Status Reports• Analyze project progress

till that point. Calculate SV & CV

Projection Reports• Calculate SPI, CPI as

well as any other forward-looking projection

Exception Reports• Identify exceptions, problems or

situations that exceed the threshold limits on such items as variances, cash flow, resources assigned etc

Continued…Franklin Electronics was implementing EVMS for the first time

The status report prepared by them was extremely simple and should have included more details regarding the project like percentage of work completed. Elements of critical path could have been employed to build a project schedule model.

EVMS is just a tool to analyze the progress of a project

EVMS only covers cost and schedules and, therefore, no quality control is factored into EVMS

EVMS does not tell the whole story on evaluating a project and might not accurately represent what is necessary for a project to achieve specific functionality

Spokane Industries decision to rely only on the EVMS reports was a big NO!!

The EVMS reports could have been used by both Spokane Industries & Franklin Electronics to discuss matters which are hampering the project on the table & come out with mitigation plans

Advantages of EVM over meetings

• Saves time• Gives a more

detailed information about the whole project

• Would give information via the earned value status reports

For Franklin Electronics

• EVM is a new concept

• Cost Accounting group not happy to learn EVM

• EVM would mean lack of communication

For Spokane Industries

• Assigned a consultant to Franklin

• Had tremendous faith in the ability of EVM

• Did not mention EVM would be a part of all contracts

Does EVM serve as a replacement for interchange meetings?

To continue the contract and discuss the current situation in details

Give a complete status report like performance reports, Status reports

Rearrange the schedule

Continue with interchange meetings for first few months till Franklin is familiar with EVM.

Recommendations that Project Manager could Give

Thank You !!!