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CROSS DOCKING DISTRIBUTION CENTER

FOR
FAST FASHION FORWARD LTD

Student name: Dinithi Oshini Wimalasena

Student ID: 10528457
Unit code: MAN3612
Unit: Project Management

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Table of Contents
1.0 Introduction 4
2.0 Risk Analysis 4
2.1 Risk Register 6
3.0 Procurement Plan 8
4.0 Return on Investment 13
5.0 Payback Period 14
6.0 WBS 14
7.0 Cost Estimates 21
8.0 Critical Path23
8.1 Milestones 23
8.2 Gantt Chart 24
8.3 Network Diagram 37
9.0 Lessons learned 44
10. Refernces 48

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1.0 Introduction
This is the project proposal to build a cross-docking distribution center as per the request of Fast
Fashion Forward (FFF) Ltd. Company is engaged in the apparel distribution industry. Mr Yuresh
Wimaladarma as the business owner intends to reduce the warehouse wastage and reduction in
staff by building this distribution center. Further, FFF Ltd aims to attract investors and sell the
distrubution center after three years. Client expects the project to be completed before December.

2.0 Risk Analysis

Risks can be identified as occurrence of unforeseen events that could impact negatively or
positively in project objectives (Akintoye & MacLeod, 1997). Risk management is the process
that is planned prior to the occurrence of the risk to identify, evaluate, prioritize and resulting in
responding to the factors in order to achieve project goals. Construction projects are complex and
due to the high uncertainty, there could be many risk factors that would generate negative
outcomes.
Risk management process will be shown in the below figure 1:
Figure 1- Risk Management process

(Cernauskas & Tarantino, 2009)

First step in the risk management is identification of potential risks. In this steps, identification of
risks could be done in various ways. Easiest and the mostly used method for identifying risks of
projects is referring to similar projects that were executed. Further, reviews from documentation

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 and other analysis could be followed in order to identify the risks. These includes brainstorming,
SWOT analysis, expert judgement and questionnaires.
Risk assessment is the second step in risk management process. This is done using how often or
how likely will it occur (probability) and the result of the occurrence (impact).

Table 1: Probability and impact matrix

PROBABILITY IMPACT
CATASTROPHIC MAJOR MODERATE MINOR INSIGNIFICANT
5 4 3 2 1
Almost certain 5
25 20 15 10 5
Likely 4
20 16 12 8 4
Possible 3
15 12 9 6 3
Unlikely 2
10 8 6 4 2
Rare 1
5 4 3 2 1

Risk score What do I have to do?

15-25 High Senior Management should Interfere

8 - 12 Moderate Interference of project management

1 -6 Low Controlling through already established operational

procedures

2.1 Risk Register

Source Probability Impact Priorit Strategy Responsibili Review
y ty
1. Unexpecte 3 3 9  Appropriate Project On going
d failure maintenance coordinator
in strategy

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 equipment  Closely
and monitoring
machinery  Servicing
that are machine
mandatory properly and
for the when its due
constructi Prepare plans
on process to outsource
during
breakdowns
2. Delay of 3 3 9  Checking Project Daily
material material coordinator On oing
availability
 Formation of
accurate
estimation
 Communicatin
g effectively
3. Sudden 4 4 16  Making it Project daily
injuries at compulsory manager
the for everyone
constructi to wear Human
on site personal resource
protective manager
equipment
during
construction.
(gloves ,heavy
protection face
shields,
goggles, )
 Providing
safety training
for workers
 Conducting
meetings about
crew safety
 Utilizing
nets/screens to
prevent any
falling
4. Incapabilit 4 4 16 Discussing with the Project One month prior
y to client and agreeing for manager to the agreed date
complete a buffer period (at of completion
the project least 2 weeks)
on time

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5. Cost 4 4 16  Securing Project Review once in
increased reserves to manager two weeks
the finance the
planned project Financial
budget  Ensure project Manager
scope is
defined and
understood
well prior to
commencemen
t
 Track the cost
analysis and
project
progress
 Cost updates
should be
communicated
to the client
6. Fire risk 3 4 12  Fire avoidance Project  Ensure
will be made manager that given
in compliance strategies
with the Electric and are used
regulations mechanical  Installatio
 Smoking will manager n of
be prohibited necessary
in the site equipmen
 Electrical t will be
installations reviewed
will be tested weekly by
prior to the the
installations project
 Procedures team
involving members
generating
heat by sparks,
naked flames,
grindings will
be permitted
with high
inspection
 Installation of
fire detection
alarms and
exits
 Insuring the

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 property
7. Malfuncti 3 2 6  Ensure proper IT manager At the end of the
on of electric project
software connections
are provided
 Ensure
required
software
updates are
done
8. Neighborh 2 3 6  Assessing the Project Daily
ood potential manager
discomfort impacts of
due to the noise due to
high level construction
of noise (vibration)
and dust
9. Heavy 3 4 12  Finish more Project At the beginning
rain and work prior to manager of the project
continued the
wet commencemen
weather t of the wet
season
 Formation of
disaster action
plans during
construction
 Space
allocation to
keep site
equipment and
personnel
secured
10. Theft of 3 3 9  Insurance Project On going
the material manager
materials,  Proper
machinery security
or personnel
equipment at the site
s=  Build a
wall or
fence and
that could
be locked
at the
times of

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 non
working

3.0 Procurement plan

ID No. Date Product / Service Source Quantity Rate per Total

item (LKR)
(LKR)
Interior & Exterior
A1 7- Interior Designing Future 27 hours 600 16,200
May Design
Colombo |
FDC
Interiors
A2 10- Exterior designing SMI 16 hours 600 9,600
May Engineering
(Pvt) Ltd
A3 2- Industrial sliding Three Sinha 8 2250 50,000
June doors Industries

A4 Windows and 15
Windows frames
A5 4- Flooring Mercantile 800 sq ft. 250/sq.ft 200,000
June Fortunes
(Pvt) Ltd
A 20- Sinks, M M IIyas & 4 2500 10,000
May Son (Pvt)
Taps, Ltd 4 2500 10,000

Commodes, 4 3500 14,000

Urinals 2 3000 6,000

Piping 35,000
9- Concrete ready- P&S 1 500,000 500,000
June mix Construction
(substructure & (Pvt) Ltd
superstructure)

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 20- Paints Asian paints 10l 5500 55,000
May (Pvt) Ltd
17- Roofing JKL 800 sq.ft 450/sq.ft 360,000
June sheets and Roofing
roof supplies
shingles Pvt Ltd
12- Asbestos survey Mascons 8 hours 750 6,000
May (Pvt)
Limited
22- Temporary fences Mascons 2 3,200 6,400
May (Pvt) Ltd

13- Excavation Nuwani 4 hours 800 3,200

May services Construction
(Pvt) Ltd.

Ground levelling 5 hours 800 4,000

22- Container cabins Hybrid 2 155,000 310,000
May Cargotecture
Development
(Pvt) Ltd
25- Electrical cables ACB Cables 30 10 3,000
May and wires PLC

Extension cords
and power outlets

29- Soakage pits Samagi 1 1,500 1,500

May Concrete
(Pvt) Ltd
19- Light bulbs Ace 25 150 3,750
May Hardware
Fans (Pvt) Ltd 10 2250 22500

Switches 50 135 6,750

FUSE boxes 2 4250 8500

23- Internet facility Dialog 3 2250 6,750
July and routers Axiata plc
19- Ducts, pipes and Amano 1 15,000 15,000
July Gutters Lanka
Engineering
(Pvt) Ltd
23- Inventory ACB Cables 1 2500 2500
May management PLC

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 software

Microsoft Office 1 2500 2500

360 & Adobe
Photoshop
19- Bricks & mortar, Asian 1 18,000 18,000
May Hardware
Cement, (Pte) Ltd

Sand and

other Raw
Materials

Ladders

Wheelbarrow

Paint mixer and

brushes

Appliances and other Equipment

C1 16- Conveyor belts AKJ Pvt Ltd 4 90,000 360,000
May
16- Forklifts DON Lanka 4
May
Hoist 1
Bulldozer J.D 1 65,000 65,000
Transport
Cement Mixer Services

Pile divers

Loaders

Cranes
Ventilation fans 80,000 80,000
PKP
Fans Hardware 1
(Ceiling & stand) Ltd

Ergonomic Chairs

Tables

Dustbins

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 16- Stationery Toss 1 5240 5250
may stationery
19- Air Conditioners Abans Pvt 10 25,000 250000
May Ltd
Air Conditioner
Vents 10 25,000 250000
20- Scaffolding RK Holdings 1 10,000 10,000
May equipment
21- Personal safety Safety First 1 25,000 25,000
May equipment Pvt Ltd

Safety signs
19- Computers Barclays Pvt 1 50,000 50,000
May Ltd
Printers

Fax & scanner

CCTV Cameras
System

Finger print
scanner & security
alarm

20- Fire Extinguishers PRP 1 50,000 50,000

May Holdings

Generator

4.0 Return on Investment (ROI)

Return on investment measures the performance of the investment. ROI figires are frequently
calculated by the shareholders as it expresses the extent an organization made gains out of the
capital utilized (Zamfir, Manea & Ionescu, 2016). In simplified terms, this indicates to what
degree of invested amount has the business or entity made profits or losses. The equation to
compute ROI is as indicated below,
ROI = (Net profit/Cost of investment) × 100%
Various projects cater profits in numerous ways. FFF aims to benefit the organization with the
cross-docking distribution center the focal point is on expected savings and it includes savings
from the sources of stock and employment. Due to the innovative inventory storage method the
computed expected saving from reduced stock in each year can be perceived.

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 o First year – 258,300 LKR
o Second year – 387,450 LKR
o Third year – 1,291,500 LKR

Total amount of savings derived from reduced stocks in all three years can be identified as
1,937,250 LKR. Further, savings resulted in reduction of employees per year is 3,228,750
LKR and for all three year it equates to 9,686,250 LKR. Therefore, total savings of this
project is 11,623,500 LKR.
According to the FFF’s cross docking arena project cost break down is explained below. In order
to compute the total cost for all four bays, the costs given per bay has been taken and multiplied.
Labor - 1,549,800 LKR per bay × 4 = 6,199,200 LKR
Materials - 258,300 LKR per bay × 4 = 1,033,200 LKR
Equipment - 129,150 LKR per bay × 4 = 516,600 LKR
Total direct cost of the project equivalents to the sum of labor, material and equipment costs
which is 7,749,000 LKR
Since information regarding the cost and the savings of the project is discovered through the
above calculations, ROI calculations and the interpretation of the figure could take place as
shown below.
ROI = (Net profit/Cost of investment) × 100%
= [(11,623,500 LKR – 7,749,000LKR)/ 7,749,000 LKR] × 100%
= 50%
ROI figure equals to 50% indicates positive net returns from the project. Further, whole returns
are greater than the costs associated with the project. Therefore, the project client has
implemented a return generating project.

5.0 Payback Period

Payback period focuses on computing the time utilized to recover or payback the initial
investment. When there are difficulties in forecasting long term cash flows payback period
method is utilized. Further, these calculations are formed in order to evaluate projects that area
usually associated with high risk.
Payback period = initial investment/ net cash flow per period
Since the cash flows are uneven the above equation does not assist calculations therefore, the
below table depicts calculations clearly. Previous calculations revealed the total cost of
investment as 7,749,000 and the cash inflows were from savings of the reduced stock amounts

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each year and the employee reduction. In order to compute the total cash flow of each year,
savings from employee reduction amount per year was added to the reduce stocks savings below
("Payback method - formula, example, explanation, advantages, disadvantages | Accounting for
Management", n.d.).
Table – Payback period calculations for uneven cash flows
Year Unrecovered Required Cash inflow Unrecovered
investment at the amount of (LKR) investments at
beginning of the investment the year-end
year (LKR) (LKR) (LKR)
0 7,749,000 7,749,000
1 7,749,000 3487050 4,261,950
2 4,261,950 3,616,200 645,750
3 645750 4,520,250 0

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 Payback period of uneven cash flows = Years before the recovery + (unrecovered investment at
the beginning of the year/ Cash flow during the year) X 12
= 2 + [(645750/4,520,250) X12]
= 2 + 1.7 = 2 years and 1.7 months

2 years and 1.7 months of payback period indicates that amount of time period requires for the
initial investment of 7,749,000 LKR to reach at a break-even point. Decisions regarding
investment desirability is directly impacted by the payback period. When considering among two
investments the board of directors would straight look at the payback period and mostly go for
the shorter payback periods as they could cover the investment in few years (Kagan & Drury,
2020). However, considering the situation in FFF, even though the payback period is 2 year and
1.7 months the investment follow up with a 50% ROI. Therefore, both figures indicate a
desirable state.

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6.0 WBS

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7.0 Cost estimates

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8.0 Critical path
Critical path identifies the longest path it takes for the project completion and below mentioned
milestones of the project are in line with the Gantt Chart.
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8.1 Milestones
Milestone Due Date Actual Date
Initiation of Construction 04/04 04/04
First Installment payouts and 16/05 19/05
delivery of supplies to location
Completion of foundation 03/06 09/06
including Installation of conveyor
belts
Completion of electrical wiring 15/06 23/06
All accessories and equipment 22/06 25/06
placed and functional
Installation of software and 29/06 04/07
systems and beginning of tests
Successful software and Employee 10/07 12/07
training
Project Completion 23/07 27/08

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8.2 Gantt Chart

Figure 2- Gantt Chart

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Network Diagram
Figure 3 – Network Diagram

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Network diagram clearly indicted the critical path that the project will be taken into
consideration. In the above diagram critical path is highlighted. The components in critical path
will be as follows,
1.1 Project Initiation
1.1.1 Identify client requirements and develop project scope with the client on-site
1.1.2 Identify major stakeholders and discuss stakeholder requirements
1.2 Planinng
1.2.1 Resource planning
1.2.2 Time and cost estimation
1.3 Recruitement of project workforce
1.4 Assessment of risk
1.5 Legal documentation
1.6 Designing
1.6.1 Developing Interior Design

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1.62 Developing Exterior Design
2. Construction of Site and Building
2.1 Clear site
2.2 Purchase of Materials
2.3 Accommodation
2.4 Utilities
2.5 Substructure
2.6.3 Roof
3. Interior Fixtures and amenities
3.2 Conveyor Belt Zone
3.3 Electricals
3.3.5 install security and cctv devices
3.3.6 Install Ventilation Fans
3.3.7 Install computers and internet routers
3.5.1Ensure piping and water is available to ablution zone
3.5.2 Install piping to ablution zone
4. TEST , REVIEW AND CLOSURE
4.1.5 Review Risk protocols
4.1.6 Review the Legal documentation
4.2 Final Site Walkthrough
4.2.2Review the end result
4.3 Review Site Interior
4.4 Site Functional Testing
4.4.3 Testing Floor zone
4.5 Site Handover

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9.0 Lessons Learned

Projects involve complex endeavor, separate operations, and tasks therefore each of the
undertakings are associated with myriad challenges. Sources of these challenges are mostly
linked to the stakeholders and most challenges consist of issues relating to the contract,
performance volatility of the project, competition and staff turnover. Challenges in the project
allows ramification as the lessons learned from each project could be reused and use as
guidelines for future projects. Further, retrospective studies can be identified as effective and
efficient was of transferring and distributing beneficial knowledge on the good and bad.
Comparing the elements in the project that went according to the plan, elements that could
improve or performed better should be reviewed prior to moving towards future projects.
According to the PMBOK lessons learned can be recognized as, “the learning gained from the
process of performing the project. Lessons learned may be identified at any point. Also
considered a project record, to be included in the lessons learned knowledge base”. The above
definition specifies that experience is centralized, could occur throughout during the project
lifecycle.
Fast Fashion Forward (FFF) Ltd owner decided to build a cross docking distribution center as the
potential benefits arising from the project were captured such as savings resulting from reduction
of staff and reduction of warehouse wastage. However, FFF aimed to construct the cross docking
distribution center in September this year with two delivery and dispatch bays. Project was able
to deliver its deliverable on time without any time lags as the project manager and the project
team forecasted the possible risks and implemented appropriate risk responses strategies and
contingency plans in order to pre-empt, mitigate, avoid and transfer the potential risks.
Constructional lags were minimized as the project was inspected by the engineer to assure the
work was implemented in an accurate, effective, and efficient manner that will contributed
towards the final outcome and on-time completion of the project.
Architect Mr.Sunil Rathnayake was able to successfully use his specialist knowledge regarding
constructions and superior level drawing skills to satisfy the client with a great cross docking
distribution center which is also functional, sustainable and safe. Successful procurement
planning can be seen in the project. Well planning and proper coordination among the architect,
project team, project manager and project client has resulted in the success. Required items were
purchased quite early in the time of project as the information gathering on tangible and
intangible requirements were properly identified. Suppliers were then selected upon analysis,
based on the quotations and proposals received. Team has been able to negotiate in an excellent
manner to gain the best prices for the required procurements within a liter periods of time in
order to mitigate any extension of time and cost (scope creep). Therefore, major project-based
deliverables including conveyor belts were purchased as planned in the work breakdown
structure.
IT management had excellent coordination with the project electrical manager and the team
members. After acquiring required software and hardware requirements for the projects the team
coordinated with electrical team members in the process of installations. Various tests and

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reviews were done in an appropriate manner in order or refrain from any malfunction operations
at the distribution center upon handling over to the client since the client has objectives of
finishing the project before December. This can be due to the undeniable demand for the apparel
goods during the new year and Christmas. As client plans to sell the distribution center in the
future profit maximization during the years prior to the selling is crucial. Therefore, the
maximum support awarded by the stakeholders of the project is mesmerizing.
Communication is an integral element for the projects to remain in the accurate track and focus
on the assigned tasks. Large amount of weight related to implementing communication plans is
on the project manager. The communication management table attached in the previous
document provide sound knowledge about the communication channels/methods and the
frequency. Therefore, project status reports were communicated to the project client or the
business owner through on-site meetings and via email. Project team was equipped and prepared
to provide these reports as needed and required. Divisional managers and engineer we suppose to
update the project manager in checkpoints and status of the project by on site meetings and
email. Budget reports were communicated monthly to the project sponsor. Notices and roster
schedule updates and alerts were delivered to all workers via text messages, phone calls and
emails on a weekly basis (Sunday). Communication to division managers, architects, workers,
project engineer, all supplies, service providers and subcontractors were also done on weekly and
when required basis. However, this communication plan was effective for the project success and
the timely competition. Therefore, it is suggested that to follow similar or improved version of
the communication plan in future projects.
Even though proper financial documents were made and all the factors were taken into
consideration by the finance manager, the amount of reserves as stated in the cost estimate was
not realistically sufficient for a project to overdone any unforeseen future event during the
process. Reserves play a major role in a project as it allows project manager and the project team
to implement the project in the desired way of the client. The importance of reserves in a project
has been considered by the financial manager and included yet the underlying aim which is
appeared as a provision of clause in the project was not taken into consideration. Therefore, the
lesson learned was to measure how realistic reserves are.
Human resource manager had been able to recruits sufficient amount of skilled labor in order to
complete the project without time lags. However, some employees needed further training
related to construction projects. At the situation of the cross-docking distribution center, it was
manageable but in the future projects this could be used as a lesson learned to select and recruit
most appropriate candidates with highest skills and knowledge in order to minimize the further
time or cost associated with training.

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 10.References

 Akintoye, A., & MacLeod, M. J. (1997). Risk analysis and management in construction.
International Journal of Project Management, 15(1), 31–38.

 Cernauskas, D., & Tarantino, A. (2009). Operational risk management with process
control and business process modeling. The Journal Of Operational Risk, 4(2), 3-17. doi:
10.21314/jop.2009.061

 Payback method - formula, example, explanation, advantages, disadvantages Accounting

for Management. Accounting for Management. Retrieved 18 June 2020 from
https://www.accountingformanagement.org/payback-method/.

 Zamfir, M., Manea, M., & Ionescu, L. (2016). Return on Investment – Indicator for
Measuring the Profitability of Invested Capital. Valahian Journal Of Economic
Studies, 7(2), 79-86. doi: 10.1515/vjes-2016-0010

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