Use the Yorkshire House Foods case study. You will be expected to hand in a report the equivalent of around 5000 words that contains 4 sections

Use the Yorkshire House Foods case study. You will be expected to hand in a report the equivalent of around 5000 words that contains 4 sections
BMS0051 © Pete Wraith / Steve Scott Oct 2010 MK/SPD Oct2012
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End of Module Assignment Autumn Term 2012
BMS 0051 Introduction to Project Management
To complete this assignment, use the Yorkshire House Foods case study. You will be expected to hand in a report the equivalent of around 5000 words that contains 4 sections:
1. A management overview of how you see the project being project-managed including an analysis of project risks. (40%)
2. A revised financial plan, in a spread sheet, taking into account discounted cash flows. You must also provide a text document containing your evaluation of the financial plan. (10%)
3. A project plan or Gantt chart, entered into a software package, showing the major tasks, sub-tasks, resources required, deliverables, their relationship and expected completion times. Use a start date of Feb 4 2013. Remember to include any additional project management tasks. You must also provide a text document containing your appraisal of the value of the software tool. (30%)
4. A briefing paper to your management team on key issues around managing organisational change. (20%)
Hand in Date on or before Friday14 December 2012
You should submit parts 1 and 4, together with the text sections of parts 2 and 3, as a single document, via Blackboard through the Turnitin system. A facility to do this will appear 3 days before the deadline.
The Part 2 spread sheet should be emailed to [email protected]
The Part 3 project plan/Gantt should be emailed to [email protected] making sure that your name appears in all file or folder titles. You may use a .zip folder. Do not use any other type of compressed folders. The course software is Microsoft Project.
If you wish to use any other project software, you must check with the course tutor that that software is acceptable.
.
All parts should be completed on or before 3pm, Friday 14 December 2012
Work handed in up to one week late will be graded to a maximum pass mark of 40%. Work handed in a week after an agreed hand in date will not be graded unless an extension has been approved by Walter Mswaka, your course leader.
Stephen Dufton & Mark Kirby Oct 2012 v5
BMS0051 © Pete Wraith / Steve Scott Oct 2010 MK/SPD Oct2012
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Introduction to Project Management case study: Yorkshire House Foods Ltd.
1 Introduction and background
Yorkshire House Foods is engaged in the production of cooked and processed meats, including sausages, black pudding meat rolls and joints. Manufacturing is carried out on one site employing approximately 184 persons. Customers tend to be small and diverse as opposed to supplying a few major retailers. The company is hoping to expand and work has started on a large additional unit to be built on the same site in order to increase the manufacturing capacity of meat products.
The company currently supplies the food service and wholesale food sectors and is considered to be in the top 12 cooked meat and sausage suppliers in the UK and in the top 3 suppliers who are still privately owned. We estimate that last year the GB pre-pack chilled sausage market was worth around £350 million and the cooked and sliced meat market to be worth £900 million Yorkshire House Foods currently have about 1% of these markets.
The project described here will run alongside the £2 million site investment programme to increase production capacity by a further 50%. Additionally information requirements gathered as part of the programme will feed into a later software acquisition and implementation project.
As a result of these projects it is planned that within the next 5 years turnover would grow to £20 million with a pre tax profit to £1 million. This represents a 48% growth factor which is not unreasonable to expect given the nature of the projects proposed. Growth will be achieved by increasing market share in the food service and wholesale markets, and by penetration into the retail food sector.
1.1 What Problems is the project designed to address?
Though Yorkshire House Foods is a successful business there are some areas for improvement, such as: ? Poorly understood and lack of documented processes with a consequent blurring of roles and responsibilities. Inconsistency in products, wastage and customer care. Poor planning and use of information for decision making. A need to improve skills across the whole company at all levels. Poor communication between managers and employees, with little opportunity for employees to be involved in business decisions. High labour turnover, currently at 100% per annum is expensive in recruitment and training of new employees, many from Eastern / Central Europe. Lost productivity in induction training period and lack of workforce development. This is an issue in terms of both recruitment and retention. We estimate our recruitment costs last year at £120,000. Sales turnover has improved but profitability has fallen. Currently profit/sales =1.6%
1.2 What further opportunities the project will enable: Improve the levels of customer service and product quality, while reducing wastage. Improve management skills and abilities in planning, control and decision making Grow and build new capacity on the existing site but to do so before addressing the problems outlined above will not increase margins. The target is £20 million sales generating £1 million profit = 5% Reduce working capital through better control of inventory, WIP and finished goods stock. Reduce recruitment costs by 50% saving £50,000 to £65,000 per year. Develop an organisational culture where quality and improvement are core motivational elements and thus to be more responsive to change and market opportunities.
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2.0 Timescales and responsibilities
When the plan below was originally written it was expected that a management recruit Gary Gowrie would lead and complete the project over a 20 month period. Recent business imperatives mean that this is no longer acceptable. The Managing Director, John Jones, has
let it be known that he expects this project to be completed by the end of November 2013.
Gary Gowrie has been retained on a one year contract with responsibility for ? Improving manufacturing through process reorganisation. Business process modelling and process re-engineering, measurement and control. Organisation of information for project and production planning decision making and control.
Meanwhile a recent HR graduate Janet Jackson has been retained for a similar period. Her expertise lies in the areas of. Developing management competencies and skills in production management, project and change management. Knowledge of recruitment selection and assessment centres using diagnostic psychometric testing. Knowledge of training needs analysis and developing remedial programmes.
The combined cost of these two contracts is £90k.
In addition to these resources the Company can call on expertise from the University particularly in management development up to 20 days and some additional 20 days project management support from you at £300 per day. You should factor in your project management tasks into the project plan described below.
3.0 Benefits
The outcomes expected from the project will include:-
Provide consistent, quality products to customers and have them delivered on time yet still maintain maximum shelf life. Improved profit margins enabling re-investment for further growth. An improved organisational environment and structure and better trained management team who will more effective in managing processes and supervising staff. Defining KPIs and developing monitoring and feedback systems will allow us to control quality in products and services. Improved reporting information will aid more effective operational planning and decision making. A more tightly integrated core workforce with greater involvement and participation in developing processes will lead to greater efficiency, improved product quality and value added services. We expect measurable Increases in productivity per employee whilst keeping the workforce to existing levels. We also expect to reduce labour turnover in production areas.
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4.0 Summary of The Original Project Plan
Overall the plans will bring about a strategic shift in the way the company organises itself to manufacture processed meat. This must included consistently meeting customer standards, increasing efficiency, profitability and reducing staff turnover.
Stage 1: By making the company aware of “Lean Manufacturing” techniques, to bring about a shift in awareness towards the principles of continuous improvement and staff involvement.
Stage 2: In conjunction with employees, by carrying out an analysis of both the organisational structure and of existing processes we will identify structural problems, operational / quality shortfalls and potential technical improvements in current manufacturing methods and develop KPIs for future processes.
Stages 3 & 4 will result in the redesign of processes and measurement systems, process improvements and supply missing information for effective management and ongoing review. Outputs from these stages will include a system requirements report for the software acquisition team and a new self financing reward structure.
Stages 5 & 6 are designed to embed the necessary culture changes required in both the management and supervisory teams and the wider workforce. A focus on measurement, quality and communication will reduce waste, inefficient production time and energy utilisation. This would also lead to increased levels of customer service and resultant sales growth. We will gain additional production capacity as a result of better planning.
In addition
Stage 7 will review current recruitment and induction training, to develop a core workforce familiar with Lean manufacturing methods and dedicated to continuous improvement.
The costs of implementing the project will include: £150k for training courses, £260k for changes to the company’s IT systems and £250k in staff emoluments. 80% of these costs will be incurred during the project and 20% in the first year after completion.
(These costs are in addition to payments made with the staff on one year contracts)
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,,,
4.1 Anticipated commercial impacts of the project in the table below.
Net Profit Before Tax (£)
phase During Project 1 yr after completion 2 yrs after completion 3 yrs after completion
2,
3 & 4
Efficiency gains from improved quality products and processes.
£55 k
£100 k
£120 k
£180 k
5 & 7
New training programme commences Efficiency gains
£25 k
£ 55 k
£ 80 k
£100 k
7
New Recruitment and selection procedures
£ 30 k
£ 50 k
£ 65 k
4 + 7
Improved staff retention and reduction in staff turnover
£30 k
£ 50 k
£ 60 k
£ 60 k
1,
3 & 6
Improved management competencies. Improved decision making and planning.
£40 k
£125 k
£185 k
£225 k
Total
£150 k
£360k
£495 k
£630 K
4.2 How the commercial impacts in the table above are delivered from each of the associated project outputs.
Stages 2, 3 & 4: In meeting customer standards, with increased efficiency would reduce the costs of poor customer service in respect of retracted and returned product, reduced transportation costs for re-delivery and would lead to increased customer orders based upon confidence in supply, therefore generating growth in turnover. Reduce working capital through better control of inventory, WIP and finished goods stock. Impact is calculated on a 10% reduction of annual transport costs, 20% reduction on working capital costs.
Stages 1,2, 3 & 6: Addressing organisational structure and operational processes, designed KPIs , improved management competencies will lead to better decision making and planning. We will therefore benefit from cost reductions in waste, in efficient production time and energy utilisation. This would also lead to increased levels of customer service and resultant sales growth. We will gain additional production capacity as a result of better planning. Commercial impact is based upon a 10% reduction in labour costs from better efficiencies and nil impact of annual increases in energy costs.
Stages 5, 6 & 7: From developing new manpower plans, skill set requirements, communication and evaluations systems and processes, the commercial impact will be seen in the reduction of costs of selection and recruitment by 50% saving £50,000 to £65,000 per year, costs of ineffective training and cost benefits in more efficient productivity. Improved quality in products, service and waste reduction will have significant commercial impact. Commercial impact has been based upon an increase in net profitability of 1% over the two years.
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N.B. A task cannot start until the previous task has been completed and a stage cannot start until the previous stage has been completed, unless indicated in the table below.
Project Stage 1 – Months Outputs
Task
1.1
1.2
1.3
1.4
Research , Organisational structure analysis and Management awareness raising
? Through observation and interviews:
get an understanding of key products, processes and customers; and establish each manager’s responsibilities, lines of communication, information needs, and quality and customer care requirements.
With University Staff organise and deliver awareness raising sessions for managers and supervisors in appropriate techniques (e.g. Six Sigma concepts, Viable Systems Model (VSM))
Use VSM as diagnostic tool to identify strengths and weakness in Intelligence, Control, Co-ordination and current Implementation of processes. (task 1.3 can start as soon as 1.1 has been completed)
Re-interview managers and process owners to establish scope of next phase and seek commitment to project plan.
1.0
1.0
0.5
0.5
Report on Products/ Processes/ Ownership/ Quality and its regulation
Knowledge Transferred:
Management Team aware of Lean Manufacturing methods, VSM concepts and their roles.
Report on strengths to be consolidated and weaknesses to be addressed
Project plan and scope for next phase agreed Project Stage 2 –
Task
2.1
2.2
2.3
2.4
Business Process Modelling and Analysis
Apply business process modelling tools to model both physical and information processes, including interfaces between different systems
(Task 2.1 can commence once 1.1 has been completed)
Identify weaknesses (delays, wastage, quality problems etc.) in existing processes, measurement and control information and actions
(Task 2.2 can not commence until 1.4 and 2.1 have been completed)
Use systems modelling tools to build a process model of existing operations and establish current performance levels
Complete, validate and gain agreement to the proposed model of physical and information flows and proposed quality requirements and KPIs for each process.
1.0
1.0
0.5
1.0
Analytical report on the structure of physical and information processes
Detailed list of problems and potential solutions
Base line performance measures identified
Proposed model agreed with senior management
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Project Stage 3 –
Task
3.1
3.2
3.3
3.4
3.5
Business Process Re-Engineering & Organisational redesign
? Brief supervisors on proposed changes and involve them in detailed design of alternative processes
(including quality definitions, monitoring and variance reporting, co-ordination and process control sub-systems) and their costings.
Identify risk factors (including training requirements in production planning, inventory control & process control) related to alternatives; and produce weighted ranking and cost benefit models of alternatives and recommendations.
With process owners, establish quality, measurement and control procedures for each new process.
Compare new procedures with models of current operations, clarify changes to management structure and responsibilities, establish scope & impact of change, and propose Change Management Plan & training needs
write new process documentation and detailed system requirements
2.0
0.5
1.0
1.0
1.0
Detailed design of alternative processes
Present business models and cost benefit analysis to senior management for approval and implementation.
Milestone : New Process organisation agreed
New quality, measurement & control procedures agreed by process owners
Change management plan and training needs agreed with process owners & HR dept.
Milestone : New management structure and responsibilities agreed.
System requirements report produced and handed to software acquisition team.
Project Stage 4 –
Task
4.1
4.2
Process and quality measurement & design of reward systems
Set up measurement, recording & process performance calculation models; with process owners, write process instruction sets
(Task 4.1 can commence once 3.4 has been completed)
With HR department, benchmark local pay and reward systems to assess competitiveness; and analyse and assess existing remuneration and reward systems and monitoring procedures.
(Task 4.2 can not commence until 3.5 and 4.1 have been completed)
1.5
1.0
Pay benchmark & savings report presented to the Board.
Milestone : Process owners & operators responsible for process control and quality
Agreed new reward and remuneration strategy with a
review and monitoring process established.
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Project Stage 5 –
Task
5.1
Culture Change : Design quality awareness and review systems
? Review existing employee communication methods with staff and management; develop & deliver new employee communication and awareness programmes (e.g. Quality Circles, canteen and in-house communication systems) with quarterly monitoring and review procedures.
2.0
New communication model established, enabling management & staff to communicate quality & improvement needs across the company.
Project Stage 6 –
Task
6.1
Culture Change: training for managers and supervisors in change management, team working, project planning and financial control.
with HR dept: carry out training needs analysis, by interviewing all management and supervisory staff; identify internal and external providers of courses; negotiate contracts with training suppliers.
1.5
Management awareness and training programme fully planned. Project Stage 7 –
Task
7.1
7.2
Culture Change: workforce training needs analysis.
Working from the new manufacturing model and process documentation, interview employees and managers to identify skill sets required for a model employee in various roles in the company
Design training organisation structure, KPIs and course outlines and hand over to HR officer.
.
1.5
1.0
Ideal model employee profiles established.
Milestone: New induction and training programmes agreed
TOTAL
Sum of total effort in months
20.5

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