1 | P a g e

The Custom Woodworking Company

10

STATEMENT OF WORK WOODY’S 2000

ENRIQUE DE LA FUENTE

2 | P a g e

1. BACKGROUND AND BUSINESS OVERVIEW

1.1 Executive Summary In this case study, there are two different problems to be addressed. Firstly, the strategic vision and management problems normally related with the business, i.e. market vision related with the crisis and new opportunities, change in generation, different perspectives in management. And secondly, the project itself. It consists in the increase of the production capacity, implementing new equipments and new industrial organization. Here in our project proposal, we are going to described only the development of the increase in productivity. It is not going to be treated the other problems related with the strategic vision of the company. We assumed that the vision of the company is already established. Our commitment is to develop the increased in capacity and new features in the new part of the existing factory.

1.2 Background The Custom Woodworking Company is a small-to-medium sized custom furniture and cabinet making company, established in 1954 by Ron Carpenter and Emelia Carpenter. Over the years they obtained a good reputation between the clients and the workers. In the recent years, after the incorporation of their son John Carpenter, the production moved to the subcontract work supplying and installing counter-tops, cabinets and similar fixtures for new commercial construction. Also they have produced millwork for the construction world. In the 1989 there was a mini-boom in the commercial construction. Woody’s directors insisted in the new market opportunities and the necessity to increase space and the company’s production efficiency. There were two possible solutions, change plant location or increased the surface in the existing facilities. The final decision was to enlarge the facilities due to avoid the interruption to production while relocating their existing equipment.

2. PROJECT OVERVIEW STATEMENT 2.1 STATING THE PROBLEM OR OPPORTUNITY Due to the economical perspectives, the management board will be incharge of increase the production, the plant space in 25% and the modernization of the production lines. This will convert the Custom Woodworking Company into one of the most developed wooding company in the XXI century.

2.2 ESTABLISHING THE PROJECT GOAL

The main scope to this project is the overall increase the production of the factory and the client satisfaction adding capacities to the different departments.

To obtain this objective the project has a close budget of 17 million dollars. The dead-line for this project is in 18 month. The name of the project will be WOODY 2000 The responsible of this project will be Spencer Moneysworth.

3 | P a g e

This project excludes the market risks and other necessities of departments not related with production. Marketing and sales, strategic vision and consumer relations are not defined in the project .They are not facts to be included in the risk of the project. These constrains could be considered as dependent of the result, but not a factor to be included in the project.

2.3 DEFINING THE PROJECT OBJECTIVES The objectives of this project are:

Increase the production capacity (in the example not consider quantity) Increase the flooring of the plant in 25% Install air condition Install free-dust painting and finishing shop Additional compressor capacity Completely install a semi-automatic woodworking production train. Renovation the President and Executive Vice Presidents' offices

2.4 IDENTIFYING SUCCESS CRITERIA 4 main success criteria:

Finishing ontime, in 18 month. Finishing on budget, 17million $ Finishing on quality, the semi-automatic woodworking production train and the free-

dust painting and finishing shop Design and fisnish of the Manangement Board offices

3. SCOPE TRIANGLE

3.1 COST The maximun cost allowed by the management board will be 17 million dolars. It is important to mantain a good control over the budget, in order to avoid deviations and incurr in possible financial charges

3.2 TIME The maximum time to project execution will be 18 months. No delays are permitted. The management board will be establish milestones to control the development of the proyect. Any deviation has to be properly reported to the Project Manager. The estimation of the time is based in the Delphi techinque, which is developed by the consulting company of Win Easly.

3.3 RESOURCES Always the resources are limited. In this case, we are working with internal human resources represented by the Project Manager (I. Leadbetter), the Financial Manager (Spencer Moneysworth), the production manager (Miles Faster), and the budget controller (Kim Cashman). And also external human resources, General Contractor Project Manager (I. Kontrak), Design subcontractor (R. Schemers), and all the technical subcontractors and suppliers. Apart the human resources, we need to take into consideration the physical facilities, the equipment to be used and the inventory.

4 | P a g e

3.4 QUALITY This is one of the main factor to the work we have to develop. Always is divided in two types, the product quality and the process quality. The first, is determinated by the Conditions of satisfaction (COS) established by the client, in our case the management board of the company. The second, is the quality developed by the project team in order to obtain the final product according to the neccesities the owners have. Process quality has to be developed in every stage of our project life cycle, from the planning, following by the launching, then the controlling, the accepation and the closing.

3.5 SCOPE This is the critical point to define the COS. In our project the original idea is to increase the space avalible in the company production plant in 25%. Also it is important to develop an increase in production quantity and quality by the installation new semi-automatic equipment. The last point, but not less important is the redecoration of the management board offices. From my opinion the small details are important, and the really success in this project is based in this last part. Managers have to be satisfied with their new offices to avoid the unsatisfaction of the client.

5 | P a g e

4. TASK AND WORKS 4.1 WORK BREAKDOWN STRUCTURE Sumarizing this are the main activitires and task to develop:

1 PLANNING 165 days 2 DESIGN THE NEW AREA & REQUERIMENTS 160 days 3 DESIGN NEW EQUIPMENTG AND SITUATION IN PLANT 150 days 4 PLANNING AND BUDGETING PROJECT 5 days 5 EXTERNAL 117 days 6 POURING FUNDAMENTS AND WALLS 54 days 7 SITE CLEARING AND EXCAVATIONS 63 days 8 CONSTRUCTING THE HALL 156 days 9 INSTALL PLUMBING 28 days

10 INSTALLING MECHANICAL 35 days 11 INSTALLING ELECTRICITY 31 days 12 PAINTING WALLS 68 days 13 MOUNTING WALLS 46 days 14 INSTALLING STEEL STRUCTURE 42 days 15 INSTALLING THE NEW EQUIPMENT 138 days 16 PROGRAMING AND TESTS 84 days 17 M. EQUIPMENT DUST FREE PAINT SHOP 48 days 18 PRODUCTION TRAIN 54 days 19 STARTING UP PRODUCTION AND CLOSING 5 days 20 CLOSING PROJECT- CLIENT FEEDBACK 5 days

6 | P a g e

7 | P a g e

4.2 TASK DURATIONS In order to determined the duration of each activity we are going to develop a table based

on the wide-band delphi technique, which consist on the conjuction of the delphi technique and the 3 point-method.

4.2.1 WIDE-BAND DELPHI TECHNIQUE

Optimistic

Most likeable Pesimistic

1 PLANNING 165 days 2 DESIGN THE NEW AREA & REQUERIMENTS 160 days 140 160 180 3 DESIGN NEW EQUIPMENTG AND SITUATION IN PLANT 150 days 140 150 160 4 PLANNING AND BUDGETING PROJECT 5 days 4 5 6 5 EXTERNAL 117 days 6 POURING FUNDAMENTS AND WALLS 54 days 44 52 72 7 SITE CLEARING AND EXCAVATIONS 63 days 41 67 69 8 CONSTRUCTING THE HALL 156 days 9 INSTALL PLUMBING 28 days 12 30 36

10 INSTALLING MECHANICAL 35 days 29 35 41 11 INSTALLING ELECTRICITY 31 days 20 33 34 12 PAINTING WALLS 68 days 56 65 92 13 MOUNTING WALLS 46 days 20 40 96 14 INSTALLING STEEL STRUCTURE 42 days 41 42 43 15 INSTALLING THE NEW EQUIPMENT 138 days 16 PROGRAMING AND TESTS 84 days 51 89 97 17 M. EQUIPMENT DUST FREE PAINT SHOP 48 days 7 56 57 18 PRODUCTION TRAIN 54 days 52 54 56 19 STARTING UP PRODUCTION AND CLOSING 5 days 20 CLOSING PROJECT- CLIENT FEEDBACK 5 days 4 5 6

8 | P a g e

4.3 RESOURCES Column1 RESOURCE COMPANY TYPE

1 Spencer Moneysworth Finnacial Director Wage 2 Miles Faster VP Production Wage 3 Kim Cashman Controller Wage 4 I. Leadbetter Woody's Project Manager Wage 5 I. Kontrak EDI Project Manager Wage 6 GENERAL CONTRACTOR EDI General Manager Material 7 C. Droppe (Charlie) I. C. Rain Ltd, water equipment Wage 8 WATER EQUIPMENT I. C. Rain Ltd, water equipment Material 9 B. Leakey (Bert) Classic Cladding Co, Roof Wage

10 FINISHING Classic Cladding Co, Roof Material 11 D. Rivett Beam Construction Ltd. Steel structure Wage 12 STEEL STRUCTURE Beam Construction Ltd. Steel structure Material 13 R. Schemers Schemers and Plotters (S&P) Wage 14 DESIGN Schemers and Plotters (S&P) Material 15 A. Dent Tinknockers Associates, mechanical contractors Wage 16 MECHACNICAL INSTALATIONS Tinknockers Associates, mechanical contractors Material 17 O. Volta (Olaf) Zapp Electric Co., electrical sup. Wage 18 ELECTRICAL INSTALLATIONS Zapp Electric Co., electrical sup. Material 19 E. Forgot (Eddie) Piecemeal Corporation, equipment supplier Wage 20 PRODUCTION TRAIN Piecemeal Corporation, equipment supplier Material 21 W. Easley (Win) Project management consultants Wage 22 CONSULTING Project management consultants Material

4.3.1 RESOURCE BREAKDOWN STRUCTURE

9 | P a g e

4.3.2 STAFFING, ROLES , RESPONSIBILITIES Primary role of the project team is assist to the coordination meeting developed every week. The first week is going to be the kick-off meeting in order to introduce the whole team who is going to develop the project. This is the representation of the roles and responsablities of every member of the team:

4.4 ESTIMATING COST

4.4.1 COST BUDGETING

Column1 RESOURCE COMPANY TYPE COST COST2 1 Spencer Moneysworth Finnacial Director Wage 25/hora 0 2 Miles Faster VP Production Wage 25/hora 0 3 Kim Cashman Controller Wage 25/hora 0 4 I. Leadbetter Woody's Project Manager Wage 25/hora 0 5 I. Kontrak EDI Project Manager Wage 25/hora 0 6 GENERAL CONTRACTOR EDI General Manager Material 0 450000 7 C. Droppe (Charlie) I. C. Rain Ltd, water equipment Wage 25/hora 0 8 WATER EQUIPMENT I. C. Rain Ltd, water equipment Material 0/hora 700000 9 B. Leakey (Bert) Classic Cladding Co, Roof Wage 25/hora 0

10 FINISHING Classic Cladding Co, Roof Material 0 1900000 11 D. Rivett Beam Construction Ltd. Steel structure Wage 25/hora 0 12 STEEL STRUCTURE Beam Construction Ltd. Steel structure Material 0 3000000 13 R. Schemers Schemers and Plotters (S&P) Wage 25/hora 0 14 DESIGN Schemers and Plotters (S&P) Material 0 450000 15 A. Dent Tinknockers Associates, mechanical contractors Wage 25/hora 0 16 MECHACNICAL INSTALATIONS Tinknockers Associates, mechanical contractors Material 0 500000 17 O. Volta (Olaf) Zapp Electric Co., electrical sup. Wage 25/hora 0 18 ELECTRICAL INSTALLATIONS Zapp Electric Co., electrical sup. Material 0 1950000 19 E. Forgot (Eddie) Piecemeal Corporation, equipment supplier Wage 25/hora 0 20 PRODUCTION TRAIN Piecemeal Corporation, equipment supplier Material 0 4500000 21 W. Easley (Win) Project management consultants Wage 25/hora 0 22 CONSULTING Project management consultants Material 0 250000

10 | P a g e

4.4.2 COST CONTROL

TASK HOURS DAYS COST TOTAL 1 PLANNING 165 days $1.219.800 2 DESIGN THE NEW AREA & REQUERIMENTS

$482.000

3 R. Schemers 1.280 160 days $25 $32.000 4 DESIGN 1 160 days $450.000 $450.000 5 DESIGN NEW EQUIPMENTG AND SITUATION IN PLANT

$480.000

6 R. Schemers 1.200 150 days $25 $30.000 7 DESIGN 1 150 days $450.000 $450.000 8 PLANNING AND BUDGETING PROJECT

$257.800

9 I. Kontrak 40 5 days $25 $1.000 10 Spencer Moneysworth 40 5 days $25 $1.000 11 I. Leadbetter 40 5 days $25 $1.000 12 Kim Cashman 40 5 days $25 $1.000 13 Miles Faster 40 5 days $25 $1.000 14 Miles Faster 0,004 0 days $25 $0

15 W. Easley (Win) 103,219 12,902 days $25 $2.580

16 I. Leadbetter 0,634 0,079 days $25 $16 17 Kim Cashman 0,049 0,006 days $25 $1 18 I. Kontrak 8,091 1,011 days $25 $202 19 CONSULTING 1 164,6 days $250.000 $250.000 20 Spencer Moneysworth 0 0 days $25 $0 21 EXTERNAL 63 days $468.600 22 POURING FUNDAMENTS AND WALLS 432 54 days $25 $10.800 23 SITE CLEARING AND EXCAVATIONS

63 days

$457.800

24 GENERAL CONTRACTOR 1 117 days $450.000 $450.000 25 I. Kontrak 312 39 days $25 $7.800 26 CONSTRUCTING THE HALL 156 days $10.013.400 27 INSTALL PLUMBING

28 days

$705.600

28 WATER EQUIPMENT 1 28 days $700.000 $700.000 29 C. Droppe (Charlie) 224 28 days $25 $5.600 30 INSTALLING MECHANICAL

35 days

$507.000

31 A. Dent 280 35 days $25 $7.000 32 MECHACNICAL INSTALATIONS 1 35 days $500.000 $500.000 33 INSTALLING ELECTRICITY

31 days

$1.956.200

34 ELECTRICAL INSTALLATIONS 1 31 days $1.950.000 $1.950.000 35 O. Volta (Olaf) 248 31 days $25 $6.200 36 PAINTING WALLS

68 days

$1.906.800

37 FINISHING 1 34 days $1.900.000 $1.900.000 38 B. Leakey (Bert) 272 68 days $25 $6.800 39 MOUNTING WALLS

46 days

$1.904.600

40 B. Leakey (Bert) 184 46 days $25 $4.600 41 FINISHING 1 23 days $1.900.000 $1.900.000

11 | P a g e

42 INSTALLING STEEL STRUCTURE

42 days

$3.033.200 43 D. Rivett 336 42 days $25 $8.400 44 STEEL STRUCTURE 1 42 days $3.000.000 $3.000.000

45 I. Kontrak 439,314 54,914 days $25 $10.983

46 I. Leadbetter 552,686 69,086 days $25 $13.817

47 INSTALLING THE NEW EQUIPMENT 138 days $5.033.400 48 PROGRAMING AND TESTS

84 days

$254.200

49 CONSULTING 1 21 days $250.000 $250.000 50 W. Easley (Win) 168 84 days $25 $4.200 51 M. EQUIPMENT DUST FREE PAINT SHOP

48 days

$254.800

52 MECHACNICAL INSTALATIONS 1 24 days $250.000 $250.000 53 A. Dent 192 48 days $25 $4.800 54 PRODUCTION TRAIN

54 days

$4.524.400

55 PRODUCTION TRAIN 1 54 days $4.500.000 $4.500.000 56 E. Forgot (Eddie) 432 54 days $25 $10.800

57 I. Kontrak 364,427 45,553 days $25 $9.111

58 I. Leadbetter 179,573 22,447 days $25 $4.489

59 STARTING UP PRODUCTION 5 days $257.425 60 CLOSING PROJECT- CLIENT FEEDBACK

5 days

$257.425

61 I. Leadbetter 40 5 days $25 $1.000 62 Miles Faster 40 5 days $25 $1.000 63 I. Kontrak 40 5 days $25 $1.000 64 Spencer Moneysworth 40 5 days $25 $1.000 65 Kim Cashman 40 5 days $25 $1.000 66 GENERAL CONTRACTOR 1 5 days $25 $25 67 I. Leadbetter 24 3 days $25 $600 68 Spencer Moneysworth 3 0,375 days $25 $75 69 CONSULTING 1 12 days $250.000 $250.000 70 W. Easley (Win) 3 0,375 days $25 $75 71 I. Kontrak 48 6 days $25 $1.200 72 Miles Faster 6 0,75 days $25 $150 73 Kim Cashman 12 1,5 days $25 $300

TOTAL 7718,997 548 $16.992.625

12 | P a g e

5. CONSTRUCTION OF THE PROJECT NETWORK DIAGRAM

13 | P a g e

6. MANAGEMENT APPROACH

6.1 PROJECT MANAGEMENT LIFE CYCLE Once the goals and objectives are clearly defined we have to elaborate a descriptive plan to develop the project, we need to decide the Project Management Life Cycle to follow. In this case the best suitable PMLC would be the Adaptive PM. Due to the design part of the project, and the complex of the industry, it could be a plus to use a flexible approach to treat all the possible problems. The cycle to follow will be:

The first step is to organize a kick off meeting for all components and players of the project. Here we are going to present the objectives, goals and methods to achive success in this project. No exclusions are important.

Secondly, a good time line plan must be agree and confirm with all players. Some tecniques must be used, Gantt charts and Network Diagram.

Thirdly, control mechanisms has to be develop and agree by all members. Lastly, the final project submision and feedback must be developed.

6.2 RISK AND CHANGE MANAGEMENT The involvement of the management board is crucial for the success of the project. It is important to follow the 4 phases in the risk management life cycle:

Risk identification, in this case the lack of coordination between departments Risk assesment, once the risk is identify, the next step is the evaluation of the possible

repercutions for the hole project. Risk mitigation, after the evaluation it is important to look for a clever response to the risk Risk Monitoring and control, it could be convinient to develop mechanisms to test the

correct elimination of the risk

7. PROGRESS REPORTING AND CLOSING STAGE Connecting to our approach of project life cycle, it could be important to create the mechanisms to update the development of the project. Sometimes, we could use the weekly meeting or the department information to evaluate the rithm of the project. One important point is to have clear the critical path of the project, and to evaluate the task in which are not possible to be delayed. Also could be important to have some alternative in order to solve problems caused by the murphy’s law. In the closing stage, we need to pay attention to the client acceptance procedure. If the documents are not fulfill in that moment, they never will. And in the future any actions could be a disaster for the project manager. It is important to take into consideration the conducting of a post implementation audit, and generating a final report with all the as built documentation.

8. GANTT CHART

14 | P a g e

15 | P a g e

9. APPENDIX 10.1 FORMS AND TEMPLATES DOCUMENTS Documents to use in the project:

Meeting Memo Individual or Workgroup Status Report template Monthly Project Status Report template Deliverable Acceptance Form Change Request Form Change Request Log Issues Log

10.2 OTHER RELATED DOCUMENTS AND CLIENT ACCEPTATION Initial Risk Management Report Statement of the work Conditions of Satisfaction Project Proposal Project Overview Statement Resource Breakdown Structure Work Breakdown Structure Gantt Chart Project Network Diagram Cost budget

10.3 REFERENCES

Dulewicz V, Higgs MJ. Design of a new instrument to assess leadership dimensions and styles. Henley Working Paper Series HWP 0311. Henley-on-Thames, UK: Henley Management College; 2003.

Knutson, Joan. Project management for business professionals, John Wiley, 2001 Lessard, Charles Stephen. Project management for engineering design, Morgan & Claypool Publishers,

2007 Lester, Albert. Project management, planning and control : managing engineering, construction and

manufacturing projects to PMI, APM and BSI standards. Elsevier/Butterworth-Heinemann, 2007, 5th edition.

Lock, Dennis. Project Management in Construction, Ashgate Publishing, 2004 Muller, R. & Turner, J.R. (2007) ‘Matching the project manager’s leadership style to project

type’. International Journal of Project Management, 25 (1), January, pp. 21-32. Pinkerton, William J., Achieving project bottom-line succe$$, McGraw-Hill, c2003 Reiss, Geoff. Project management demystified : Today's Tools and techniques, E & FN Spon, 1995, 2nd

edition. Richman, Larry. Project management step-by-step, Amacom, c2002. Wideman, M. (n.d.) Project management case study: the custom woodworking company — Woody

2000 project [Online]. Available from: http://www.maxwideman.com/papers/woody2000/intro.htm (Accessed: 20 April 2010)

Wysocki, Robert K.. Effective Project Management: Traditional, Agile, Extreme, 5th Edition. John Wiley & Sons, 042009.