Neumann Engineering Limited was founded in 1912 half a mile south of the Coventry city centre. They initially made components for motorcycle industry then they became specialists in sub-contract press work and welded assemblies.
In the year 1995, Neumann Engineering Limited decided that the Coventry city centre site was not large enough to meet their increasing demand. Unfortunately the land prices were too high near city centre so plan of extending their current site (City centre site) was dropped. The company bought a large plot six miles away from city centre near the junction of M6 motorway. The company was not in a position to build the complete unit. Do to insufficient funds the company was able to build only the assembly plant.
The owner’s son was put in charge of the newly formed site and his father managed the city centre site. Many new press machines weighing huge tons were bought by the Neumann Company for their press work, to improve productivity. Large coils of steel strips are delivered from West Bromwich by 30 tonne articulated lorry. The city centre site is small and the lorry cannot enter the site, so they had unloading problems. Since the other unit of the company is in the satellite site the transportation was a great head-ache for the management.
Now every other company moved out from city centre and it was replaced by shops and hotels. Neumann is the only company still remains in the city centre and now facing several problems. Now the Company has decided to move the whole unit to the satellite site. As a Coventry University student and an employee of Neumann Engineering Limited, I like to give some suggestion to the managing director of the company regarding the relocation of Central site to satellite site.
2. BUSINESS CASE INVOLVED
2.1 IS RELOCATING THE COMPANY NECESSARY?
Yes, of course it should be relocated because the city centre site is very old and many complaints are being made to the local authority regarding the unsightly appearance of the company. Now the Coventry city centre is fully occupied by plenty of shops and hotels and it is the only company still in the city centre site. The company produces lot of noise during pressing work which irritates the public and the houses near by. So it should be moved to the out skirts of the city.
2.2 ALTERNATIVES FOR THIS PROJECT
In my opinion the only other choice for the management is try their best to buy few lands near the company in city centre and extend the company unit, which was planned and dropped then twelve years ago.
There are certain drawbacks on in implementing it because the company have to invest huge sum of money (capital Investment) to buy land near city centre and it is hard to get permission from the authorities to extend the company in the busiest place.
2.3. PROBLEMS EXISTING IN THE COMPANY
Analyzing this project, the following are considered to be some of the problem that may exists in the city centre site right now.
1. Transportation problem
2. Small working space
3. poor construction and poor maintenance
4. Public nuisance (Noise pollution)
2.3.1. TRANSPORTATION PROBLEM
As the city centre site is small the huge Lorries carrying raw materials such as huge steel strips for pressing, unable to enter inside the site. This makes the unloading of steel strips harder and uncomfortable. Need specialised equipments to carry the huge steel strips from the Lorry to the Pressing machines. During transportation the overloaded steel cropping skip and fell on the road and this causes many motorists to shred their tyres. Recently the company paid compensation to the motorists and they got police warning too for this activity.
2.3.2. SMALL WORKING SPACE
The city centre sites possess small working space, so this prevents the further establishment of the company. There is literally no space to place new press machines to increase the productivity.
2.3.3. POOR CONSTRUCTION AND POOR MAINTENANCE
The press machines were of huge weight and need specially constructed building to withstand the pressure of the press. In the beginning of the company in 1912 they had not constructed the building to withstand stand huge pressure of a 250 ton press machine because as the company was started to make components for the motorcycle industry. Now the site is poorly maintained and is in a critical situation.
2.3.4. PUBLIC NUISANCE
The press machines causes noise pollution. Presently the Neumann Engineering is the only company present in the city centre and it is surrounded by huge shops, hotels and university so the noise produced by the press causes irritation to the shops near by and to the public.
3. IS THE DECISION TO MOVE THE SITE IS WISE?
In my view, the problems that have mentioned above are some of the major problems. So to solve the above problems the alternative method that I have suggested before will not work out because on extending the site in the city centre will not bring an end to the traffic problem and public nuisance. The other two problems discussed earlier can be solved but need a huge capital investment to resolve it. So I suggest the company has taken wise decision to move the whole unit from city centre site to the satellite site near the M6 highway on the outskirts of the city centre and of course, I support it.
4. IS RELOCATING THE SITE POSSIBLE?
Why not? Nothing is impossible, where there is a will, there is a way. If the company is ready to take burden on their shoulders and face few risks it is possible. The employees in the company should support the company’s decision and dedicate themselves to work extra time for few months until they shift the components from the city centre site to satellite site.
4.1. IMPLEMENTATION OF THE PROJECT
The project of moving the site can be done by proper planning. There are many advantages and disadvantages on shifting the site.
4.1.1. ADVANTAGES ON MOVING THE COMPANY SITE
• Transportation problems can be solved.
• Investing huge amount of money (capital) on buying a land in city centre can be saved and rather (capital) it can be used to develop the site in the M6 highway.
• Since the satellite site is in the out skirts of the city the public nuisance is reduced.
• Since they are going to set up the entire factory working unit in a single place, it reduces the labour cost.
• It is easy to manage the work too if the entire site is set up in a single site.
• It increases the productivity of the press.
• It decreases the product cost.
4.1.2. DISADVANTAGES ON MOVING THE COMPANY SITE
• Causes major labour problem
• Shifting the press machines from city centre site to the M6 motorway site involves risk of cease in productivity for some days.
• Dismantling and reassembling it takes a long time for the company.
4.2. STACKHOLDER ANALYSIS
As for as this project is concerned stockholders play an important role as they take important decision involved in this project. These are all the stockholders whose decision can affect the project
1. Managing director
2. Technical director
3. Team leaders
4. Staff workers (unskilled labours)
5. skilled labours
6. Local building inspector
7. Planning officer
10. Bank(If money is borrowed)
12. Local residents
13. Project workers
Here the stockholders can be divided into primary, secondary and tertiary according to their power to influence the project.
4.2.1. Mapping of stack holders
Stack holders can be mapped depending upon their attitude, some stack holders may have negative attitude towards the project and some stack holders may have positive attitude towards the project. For example let us consider local authority may have negative opinion about the project that this project may fail and some stack holders like team member will have positive attitude that this project will succeed and wins the contract. Here the stack holders can be mapped depending upon their interest and power. Some stack holders will have low interest and low power whose ideas should not be taken seriously. Stack holders should be given importance depending upon their status in this project, a simple example is in this project the project planning team holds the key so this task should be given to the person having high interest and high power in this project hence their view should be considered carefully.
5. TIME AND COST
This project is a combination of both time as well as cost; because this project has a schedule time within which a project has to be completed as well the project has a financial appraisal within which it should be completed. Usually time-related process is done in the project planning stage. When the project is implemented the schedules needed to be updated at regular interval throughout the whole project. It should be monitored carefully. If the project has any delays then suitable steps should be taken before it cross the risk stage. This project can be divided based on man-hours, Labour rates, materials, services, set-up charges, over heads and rental charges.
6. STEPS TO BE TAKEN BEFORE STARTING THE PROJECT
• Each and every stage of the project should be planned properly.
• The senior staffs and technicians should be consulted and should consider their opinion before planning.
• Financial appraisal of the management should be made stronger to withstand any risk.
• Company should give workers more incentives and motivate them to work for extra hours during the shifting process
• Since the new site is far away from Coventry city centre the company should convince the workers by providing transport to them, pick up and drop daily.
• Proper outline and building permission should be got from the government and the public authority to start the project.
6.1. PLANNING PROCESS
Planning is the key role in this project so the planning committee should be made consisting of at least three chief engineers, two chief mechanics, four skilled labours and a team leader. Leaving anyone of the above in the committee will make a great mess in the later stage of the project while implementing it in future.
Tasks to be considered by the planning committee
The planning committee should consider the following factors
1. Estimation of time take for getting permission to build the factory
2. Analysis of how much pressure that the new building unit should be capable of in withstanding the pressure made by the 250 ton press.
3. Estimation of money required to carry on the project work.
4. Should apply for loan if they running out of the estimated budget.
5. Estimation of time it will take to build and completion the factory unit
6. Estimated day to start dismantling the huge press machines
7. Source of transport of the huge machines after dismantling
8. Time it will take to dismantle the machines and the time will take to re assemble it in the new site
9. Plan how they carry the work without affecting the productivity, when they dismantle the press machines.
10. They should sign the contract with other companies if they go for any contract.
11. Risks involved should be carefully calculated.
12. Solutions to the risks involved should be analysed and should be ready to face it.
6.2. NON FINANCIAL FACTOR
Non financial factor plays a major role in this project as this project requires high amount of team work. The following are considered to be the non financial factor involved in this project
1. Team work
2. Quality circle
3. Improving working style
Project will be successful only with the help of team work and particularly for this project team members and staff are the vital stack holders and hence the project can be easily implemented only with help of team work.
Quality circle is considered to be other important aspect for this project because the staffs here are from different working circle and have their own methodology of working. So it will be beneficial to the project if the staff members meet regularly and share their views which will progress the project further.
Working style is the other criteria which cannot be neglected. The working style should be properly planned and must be implemented properly. Since a wrong movement in the project will collapse the whole project work.
7. KEY MILESTONES
The key milestones of this project is
1. Implementing the plans in time
2. reduce the cost of relocation
3. Satisfying the workers
4. Satisfying the public and customers.
7.1. CAN THE COMPANY BE SHIFTED WITHOUT AFFECTING THE PRODUCTIVITY?
In my view my answer will be definitely yes, why not? During the time of dismantling the press machines the press work cannot be handled out it is definitely true but it can be handled by alternative methods. Some suggestions of mine are described below
1. Can reduce the commitment of orders for particular span of time until they shift the machines to the new site and start production.
2. Company can convince the workers and make them to do the particular work for over time by giving incentives and do the work expecting to be affected during the time of dismantling particular machines and reassemble it before itself and store the products in the stock before the project is implemented. After one process is over then the staffs should be engaged to do other work done by other machines and do product overtime. By the mean time the machines dismantled here should be assembled in the new site and continue the process there. This saves the time and cost and will not let the productivity of the company go down.
3. Company can sign contract with some contractors to do the job for them till the project process expected to be completed.
7.2. WHO TAKES RESPONSIBILITY OF THE PROJECT
The planning committee leader, project leader and the managing director should take responsibility in completing the project successfully. The planning committee holds the key and the managing director should support him financially and mentally to do this project. Project leader should take care of the planned project given by the planning committee. It is the project leader’s job to look after whether the planned work is done on time, and if any delay, he should handle it carefully..
7.3. MAIN AREAS OF WORK
The main areas of the work should be taken care. In this project the main areas were
1. Planning committee (planning the time taken to do particular job)
2. interaction with workers
3. calculation of risks (money factors, available labours)
4. project manager (responsible for doing job according to the plan)
8. NEW PROBLEMS FACED BY THE COMPANY DUE TO THE RELOCATION PROCESS
On relocating the site from city centre to the satellite also contains many problems.
1. Since the satellite site is far away from the city centre the workers have to travel a long distance and they need to spend lot of money in travel.
2. Traffic conjunction will sometimes cause problems for the labours turn up to work on time.
3. There were very less houses near the satellite site so skilled and unskilled labours nearby the new site will be very less.
8.1. SOLUTION TO THE ABOVE STATED PROBLEMS
1. The company can take the responsibility of picking and dropping the staffs daily.
2. They can train the unskilled labours available nearby by teaching them how to work with the machines.
9. MAIN ACTIVITIES IN THIS PROJECT
1. Planning team selection
2. Group interaction meetings
3. Getting permission from local authorities to build new factory unit
4. Building contract
5. Analysis of pressure made by the press machines
6. Making specialized floors for the factory unit to withstand the machine pressure
7. proper communication between the remote site and satellite site
8. Convincing the labours to do more job during the time of relocation
9. Project manager should make sure that the plan is properly followed
10. making contracts with other companies (to do some parts for them during the period of dismantling and assembling the machines)
11. Apply for the loans if needed.
12. Transport contract
13. dismantling the machines
14. assembling the machines
15. Frequent discussions with all the staffs during the project is going on
16. Giving power supply to the machines in new site
17. Checking the machines after assembling.
9.1. GANTT CHART
9.2. IMPLEMENTATION OF THE PROJECT
• First the company should start building the company unit in the satellite site.
• The company professionals should consult the mechanics and take a note of how many days will take to dismantle each machine and assembling it again and calculate the days accordingly during planning process.
• The company should sign contract to carry the huge dismantled machines from city centre site to satellite site since in my view giving contract for transporting reduces the cost of transport.
• After the above process were over then the machines can be dismantled and transported to the satellite site in the M6 motorway.
• Then once the dismantled parts reaches the satellite site, company should appoint some engineers in satellite site to assemble it, so that the work wont be affected further.
It is recommended to dismantle the machines one by one instead of dismantling all the machines at same time since if only one machine is dismantled at a time then only one process will be affected which can be compensated by keeping stock in the inventory before dismantling it. In the mean time the next step processing machine should be used to do products and should be ready for dismantling and at the time the next machine is dismantled, the machine which was dismantled earlier should be ready to use in the new site. This should be take care by the project manager.
9.3. APPROXIMATE DAYS TAKEN FOR EACH TASK IN THE PROJECT
TASK JOB DAYS/MONTHS
1 Planning process 1 month
2 Getting permission to build the new factory unit 20 days
3 Building contract selection 20 days
4 Building the whole new factory unit (includes flooring etc) 4 months
5 Dismantling the machines (12 machines) 3 days for each machine approx(36 days to 40 days)
6 Assembling the machines (12 machines) 4 days for each machines (48 days to 60 days)
7 Giving power supply to machines/ electrical work 5 days
8 Checking the assembled machines 2 days
Tendering and contracting
This is the first step in this project. The company has to first prepare a tender. Tenders involving details such as inviting share holders to the company and applying loan in the bank etc then contract are made with the people having part of liable rights in the companies’ new project.
Clearing out the factory area
Then in the next step the area in which new factory unit setup is to be started is selected and a plan is made and then area is cleared by all means and then the area should be made readily available for construction work.
Civil engineering and architecture work
In the following step construction work is carried out, this work takes sufficient time in completing the project. Civil engineering work takes about 4 month in completing the project. It can be started only when tendering and clearing out of factory area is completed.
Here all the electrical work takes place. It takes a time period of 1 month to complete it as it involves lots of wirings. This work can be done only after completing construction work.
Purchasing new equipment in this project takes longer period since it has to be dismantled from the city centre site and then it has to be fitted again. At first the dismantled equipment has to be transferred to new factory site and then equipment has to be floored and fitted it takes sufficient long period of 1 month.
Training program for staff and team building
Then team building activity and training program for staff take place. This is important task because they have to train the unskilled labours living nearby the factory.
9.4. PROJECT RELATES TO MURPHY’S LAW
Murphy’s Law is “if failure to consider uncertainty and risk will lead to continual’ fire-fighting’”. So risk should be carefully analysed and learnt before starting the project.
9.5. RISKS INVOLVED IN THIS PROJECT
Common risk involved in this project
The common risks involved in this project is if any one of the planned work is delayed due to environmental or labour problems or other problems then the project will fail completely and lose many customers. Other risk is if the dismantled parts are damaged during transport then it will make confusion after assembling and again need repair.
The technical risk involved in this project is proper dismantling and assembling of the same in the new site. Dismantling and assembling should be carried on by group of experts in press machines since if the machine break down it will take other 10 days to dismantle it again and assemble it.
The management has many risk involved in this project. The management should convince their customers during the time of relocation. The management should not take more orders from the customers at the same time they should not ignore them, since ignoring a customer will affect the company badly in many ways. It is management’s responsibility to convince the customers and try to satisfy their needs even during the project work is carried out.
If the company fails to do the work according to plan and if they make a delay in the product and not satisfying the customers by giving the products in time during the time of the project then they definitely going to lose valuable customers.
9.6. Involving stakeholders in the risk analysis
As this project is concerned, the main stakeholders were project managers, team leaders and skilled labours. To identify the major risk involved in this project, it should be analyzed carefully with all the members in the team because as they are involved in the team they would give some valuable tips. In our project case risk involved can also be identified by the following
By brainstorming a big list of potential risk involved in the project can be identified and then from the list created by brainstorming we can evaluate the risk and classify it under categories as high risk, medium risk and low risk. According to the category of the risks the risks can be omitted or considered seriously.
Each and every individual member of team can be interviewed about what are the risks involved in this project according to his prospective and the risks told by each person in the team is analysed deeply and it can be considered if it has more probability to affect the project.
The company should take similar situations during the past into consideration or should analyse how the other similar companies done this job into consideration and compare with their plan they made and if they found anything can improve the project and reduces the risk then they should implement other ideas that other companies used to do the project secure and safe.
9.7. PROJECT IMPROVEMENT
Project can be improved further after they successfully done their relocation of site. The project can be improved by
1. Placing the machines one near other. This reduces the labour cost because moving the finished the parts of one machine to the next stage machines will be easier.
2. Store room of raw materials can be placed near by the machines; this too reduces the labour cost and time.
10. BUSINESS CASE
The business case is the measurement of business benefits going to be obtained by this project. If little or no business benefit can be identified the project should not be started. If the company has no benefit after finishing the project will lead in closure of the company. The company should calculate expected benefit on doing the project. Tangible and intangible benefits should be measured and well analysed.
The company should analyse when they get the capital cost returned. They should have a clear budget on the working capital and the pay back period. The company should consider the rate of return also.
ARR= (average profit before tax / initial capital outlay)
10.1. PROJECT SHOULD ADOPT MCGREGOR’S THEORY Y
“McGregor’s Theory Y assumes that
• Work is a natural play
• People will exert self- direction and self-control in achieving objectives to which they are committed
• Commitment to objectives is a function of the rewards associated with their achievement
• Under proper conditions persons accept and even seek responsibility.
• The capacity of imagination, ingenuity and creativity in the solution of organisational problems is widely distributed in the population.
I recommend McGregor’s Theory Y in implementing this project to make the project successful. Every person in the team should take responsibility of the work given to them by the team and they should have capacity to solve the problems.”
(Ref: class notes)
11. RECOMMENDATION TO THIS PROJECT
This project will be really successful if it is handled by main stake holders because they are really worried about the future because if the project fails then they have high risk of losing their jobs. The company should employ only educated people, so that they can further improve the standard of the company. Job security should be given to the workers in order to motivate them. The company can invite few share holders to join the company in order to support them .In brief, this project has many positive ideas in order to achieve success.
Even though this project has involved in lot of risk factors in it, this project will be a successful project. It is a bold and clever decision taken by the management to transfer the whole company unit to a single site. In my view the company had worked for it for twelve years to start this project, since they already got land in the year 1995 itself. It is the high time for the company to implement this project because the delay in time increases the risk factors of the company. So going for this project with right planning and right involvement by the team members will surely make the project cent percent successful.