Technological Educational Institute of Piraeus

MSc ADVANCED INDUSTRIAL AND MANUFACTURING SYSTEMS
Module: Industrial Project Management

Assignment: Implementing an Inventory & Asset Management System in Marwin Machine Tools Ltd

Module Leader: Dr Georgios BESSERIS Students’ Names: Georgios G. ROKOS & Ioannis KOUROS

Students’ Signatures: ___________________________

Date: March 2011

Technological Professional Institute of Piraeus

Table of Contents

Chapter 1. Introduction ........................................................................................................2 Chapter 2. Problem Definition and Response .....................................................................3 Chapter 3. Documentation and Deliverables ......................................................................5 Chapter 4. Monitoring and Controlling .............................................................................15 Annex I. Report to Shopkeeper .........................................................................................17 References ..........................................................................................................................28

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Technological Professional Institute of Piraeus Chapter 1. without undermining or misplacing Inventory Management Control. thus Inventory Management tasks aggravate the Shopkeeper’s job. employing approximately 120 people. namely in that of small hand tools. there already exist some modules/parts of an ERP system that do not call for modifications. Two distinct versions of the project are displayed in this paper. The project is deployed from its conception to its closeout. The second version was developed due to space limitation appearing in the version version. the WBS as well as the Gantt Chart would not be presentable in 75 tasks. in terms. That is because such information are of vital importance and the company does not risk their management by an employee other than the Shopkeeper himself. 2 . Although the company operates in a highly competitive business field. identified as FIS. also known as Enterprise Resource Planning (ERP). The first one follows an elaborate approach of ERP implementation projects. As a result. In Marwin’s case. The objective of the following project is to harmonize the Shopkeeper’s activities. Inventory Management tasks displace the rest of activities a Shopkeeper should normally shoulder and a General Management gap threatens the organization’s smooth function. affect other sectors of the organization. The Inventory Database is currently handled through MS Access. The latter may only be attained with the adoption of a new Inventory and Asset Management System. which is not to be either incorporated in the new system or replaced by a new module. the company possesses a Purchasing System. For instance. Inventory and Asset Management Systems are both parts of a wider corporate Management Information System (MIS). broken down into approximately 75 tasks and subtasks and the second one is a simplified and diminished illustration of the first. which is the normal adoption and operation of the project plan. it has not yet implemented a reliable Inventory and Asset Management System. The goal of this project is uniquely to ameliorate Inventory and Asset Management related processes which will. Introduction Marwin Machine Tools Ltd is a small-to-medium sized manufacturing company. The company’s Shopkeeper is currently the person in charge of entering the input-output information into the Access DB.

A project plan consists of the following elements (Lewis.Technological Professional Institute of Piraeus Chapter 2. Juran. 2006) 3 . In Marwin’s case. based on the musts. the Mission Statement will ensure that the project will not be disorientated. the problem can be resumed as follows (Problem Statement): Marwin Machines Tools operates in two shifts and its current inventory tracking system is operated manually by the shopkeeper. so as to know what we are dealing with. but also a political tool. a project is a step-by-step problem resolution approach. 2007. the wants. A Mission Statement does not only constitute a written declaration of the project’s direction. Once the Problem is Stated. defines project as “a problem scheduled for solution” (Juran & Godfrey. Those are its “raisons d’être”. Dr. losing precious time and risking the accuracy inputted data. Work Breakdown Structure (WBS) Schedules Required resources Control System Major contributors Risk areas with contingencies. The employees make their requests for clothing or equipment by completing a sheet and then the Shopkeeper mitigates the data from the sheet to an Access database. In that case. when possible The very first step of a project is the identification of the problem. the secondary desires of the company and inspired by the company’s vision. 37-38)             A Problem Statement A Mission Statement Project Objectives Project Work Objectives/Requirements Exit Criteria End-Item specifications. The inventory system is not updated automatically and the company is mandated to conduct spot checks in the warehouses every now and then to ensure that the data are in accordance with the actual inventory status. 1999). acting as a negotiation principle (Cobb. As the project proceeds. one of the fathers of JIT and a Quality Management guru. changes of its plan may be required by certain stakeholders. pp. In fact. the Mission Statement may be concluded. especially when eventual conflicts arise during the project’s rollout. Problem Definition and Response Project Management is applicable in problematic situations.

2007).  An application with flexible reporting capabilities. Time-limited).  A networked solution. delivered by July. Realistic. The Project Objectives constitute the goals of the mission and a more elaborate presentation of the answers to the problem. Measurable. The Problem Statement.Technological Professional Institute of Piraeus In Marwin’s example. The target audience is primarily the company’s Shopkeeper and secondarily other Top Management members as well as people belonging to the category of “project clients”. 4 . The Problem and Mission Statements. the Mission Statement and the Project Objectives sketch the problem and an outline of the answers to the problem. since they would fundamentally restructure the project’s concept and orientation. Attainable. which will enable ubiquitous Inventory management. as well as the Project Objectives should be treated as beacon. diminishing hence Inventory errors. In Marwin’s project. showing the way to success to the Project Stakeholders. rather than missing 15 minutes of work time every time a spot checkup is performed. Mistakes or modifications to the above should not be permitted. Project objectives should me SMART (Specific. this summer. the Mission Statement could look like the following: The mission for this project is to develop a new Inventory & Asset Management System that will facilitate tracking procedures. accessible out of the keeper’s office. (Lewis. the Project objectives would be the following: Provide the Shopkeeper with:  An automated tool to aid in the tracking of inventory.

also identified as “Milestones”.Technological Professional Institute of Piraeus Chapter 3. known as “Deliverables”. Milestones include the surrender of documents. Deliverables are a crucial part of a project. by the Project’s Officer. in particular. Documentation and Deliverables A project is a group of tasks and a sum of work. should be scheduled to be reached at given moments so as to facilitate progress tracking. vendor Benchmarking reports Change management plan Change requests Organizational restructure report Key performance indicators report Software and hardware user manuals Contract with vendor Hardware’s & software’s warranties Evaluation sheets User acceptance tests Personal authority guidelines Daily work reports Risk assessment Business case 5 . The latter constitute verbal notes that describe which phase or process is completed when a milestone is reached and how. Marwin’s Project Work Objectives (the deliverable items during the project’s deployment) are explicitly described below. The most rational path to Project Time Management is setting up points that will act as progress beacons. If it is to be controlled. not only for monitoring and control reasons but also for functional purposes. Bainey (2004) suggests that a special role for Deliverable Management issues should be guesstimated when launching a project. Such points. the project should be accompanied by tangible elements at points that signalize the completion of tasks. software. Nevertheless. in simple projects like that of Marwin Ltd. Milestones can be placed at both Phases of a PLC and Processes and may be combined with “Exit Criteria”. Documents: • • • • • • • • • • • • • • • • Current analysis report Contracts with consultant. Tables 1. His work commences concurrently with the Project Definition. hardware and other tangible elements. 2 and 3 describe the activities of a Project Deliverable manager per management frame. Deliverable Manager’s tasks could be treated by other project team members and.

Bainey. Report to the program steering committee with direct accountability to the PM executive. Document integrated prioritized projects and justifications for allocated value of the project to the business and IT.Technological Professional Institute of Piraeus • • • • Training documentation ROI assessment (Cost/Benefit Analysis) Cost estimation End-Item Specifications Report Other deliverable items: • • • • • • • Software package (CDs) Server PCs Modem/router Barcode printer Barcode scanners Cables Responsibilities Business Management What BSA Approach to Delivery -How Timing . applications. Report on allocation of funds at various phases of the PLF for the entire project Manage portfolio of projects deliverables within the funds allocated by program steering committee. Develop integrated program schedule for IT and business support initiatives. and keep program working committee informed of current direction of the projects. Project Definition Project Definition Project Execution Project Execution Project Execution Project Execution Table 1: Program Delivery Manager Major Responsibilities: Business Management Source: Integrated IT Project Management. 2004 6 . technology) or program architecture documentation.When Project justification Funding allocation Deliverables approval Steering committee BIS Assemble and present integrated business and IT architecture (data.

Bainey. effort. scope and quality objectives Manage integrated business and IT resource plan for business. best practices and templates to enable cost effective and efficient project delivery Project Execution Project Definition & Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Table 2: Program Delivery Manager Major Responsibilities: Project Management Source: Integrated IT Project Management. schedule. and advise on contents and structures Maintain a project file/repository for all IT projects Manage projects using integrated project plan as baseline Monitor project performance at appropriate milestones for schedule.When Quality Management Contract Management Risk Management Change Management Issue Management Communications Management HR management PMO processes Advise project managers on applying IT PDLC/phases and PM delivery processes Review project charters for integration. 2004 7 . cost and quality baseline Conduct change request reviews for the approved change requests in the change management plan Conduct Issue request reviews for the approved issue requests in the issue management plan Manage communications management plan and recommend corrective actions Manage PSM and recommend corrective actions Provide policies.Technological Professional Institute of Piraeus Responsibilities – Project Management What IT PDLC Scope Management/ Requirements Management Scope Management/ Project file Scope Management/ Project planning Scope Management/ Project progress tracking Cost Management Approach to Delivery -How Timing . consistency and completeness. guidelines. IT and PM budget and expense authorization Conduct QA reviews of the approved quality management plans Conduct contract reviews for the approved contract management plan Manage risks and evaluate the impact on the current scope. cost.

The milestones set for the project are depicted in table 4. Manage the resource allocations by reporting on the contents and recommend solutions to the appropriate management team Manage the integrated DA by reporting on the contents and recommended solutions to the appropriate management team Manage the integrated AA by reporting on the contents and recommended solutions to the appropriate management team Manage the integrated TA by reporting on the contents and recommended solutions to the appropriate management team. 8 .Technological Professional Institute of Piraeus Responsibilities – Technology Management What Cost Estimating Approach to Delivery -How Timing .When Resource Allocations DA AA TA Applications support services Manage the cost estimates by reporting on the contents and recommended solutions to the appropriate management team. Manage the integrated applications support model by reporting on the contents and recommended solutions to the appropriate management team. 2004 The Inventory and Asset Tracking System implementation project at Marwin Ltd is composed of four phases (PLC) and various processes and tasks. Bainey. Project Execution Project Execution Project Execution Project Execution Project Execution Project Execution Table 3: Program Delivery Manager Major Responsibilities: Business Management Source: Integrated IT Project Management.

Consultant. User Guide Manuals Signed Business Case 5/4/2011 Decision to approve Project Plan Delivery of personal Project Team authorization Development directives Personal Sheet identifying authorization levels Printed Training Notes . Vendor Chartering Hiring of a skillful consultant. approved by Shopkeeper Contract Approval by CoRIT. HW. Network. Initialization of system’s normal function. Shopkeeper. SW. Financial Manager Examination and acceptance of proposed procedures Conclusion of Team Staffing and Member Selection Contract.Technological Professional Institute of Piraeus Milestones Phases/ Processes Exit Criteria Deliverable Completion Date 11/3/2011 Selection of Inventory Management Specialist/Consultant Procurement Decision Approach of Inventory Management Specialist Selection of SW. 30/3/2011 Warranties. HW. ROI Assessment Onward and Upward Final Estimation of actual Financial report cost payback time Table 4: Marwin’s Project Milestones & Exit Criteria 9 .User Manual CDs 12/4/2011 Delivery of training documentation Training Completion of 2-day training process 15/4/2011 SW release delivery Initial App Development Project Formulation of SW’s general functionality Successful testing from user’s side 26/4/2011 User Acceptance Personal sheets 16/5/2011 depicting acceptable system performance 1) CDs 2) Signed Approval Document 15/6/2011 1/6/2011 Delivery of final SW release Shakedown Completion of changes and bug-fixings.

Labor. In Marwin’s case. is presented below. etc Definition of Organizational changes. Networking. equipment. DB. Implementation of Inventory & Asset Management System Chartering Project Development of detailed project plan Project Team Development Business modeling and reengineering Execution of change management plan Initial App Development Shakedown Upgoing and Ongoing Post implementation investment audit Continuos Improvement Presketh of Business Case Bugfixing and rework Current State Analysis Approach of Inventory Management Specialists Definition of key performace indicators Selection of HW. incentives Decicion to proceed and appove project plan System performance tuning Problem Resolution Process and procedure changes Adding people to accomodate learning and shakedown needs Delivery of final SW release Installation Testing Bugfixing Rollout & Startup Training User Acceptance Testing Figure 1: Marwin’s WBS Once the tasks are identified. Implementation Vendor Communication to organization Initial Plans for how system will be rolled out. It illustrates the family tree of a project in a graphical and hierarchical format. the resources required to bring them off should be recognized. the WBS. facilities and capital are the most common resources needed in a project. 10 . SW.Technological Professional Institute of Piraeus The Work Breakdown Structure (WBS) is among the first reports to be delivered. following the simplified approach of the project development. supported.

Production Manager 7. Project Manager/Shopkeeper 2. Lau and Kuang (2001).Technological Professional Institute of Piraeus In an ERP implementation project. According to Nah. Figure 2: Project’s Requirements 11 . Vendor’s Technician 5. Inventory Manager 8. the factor Labor constitutes. Project Officer 3. CoR IT 9. the human contributors to the project would be the following: 1. an ERP implementation project presumes the constitution of a cross-functional team composed of both external consultants and internal staff. Consultant 4. in fact. Accountant 10. Financial Manager 6. In Marwin’s example. Workers The general requirements (including equipment) for the Marwin Project are depicted in Figure 2. the Project team.

4.Technological Professional Institute of Piraeus Figures 3. 6 and 7 are snapshots taken from the PPD file demonstrating the resource usage. Figure 3: Resource Usage (1) Figure 4: Resource Usage (2) 12 . 5.

Technological Professional Institute of Piraeus Figure 5: Resource Usage (3) Figure 6: Resource Usage (4) 13 .

Scheduling with overloaded resources is a deemed to fail strategy and a rather common error in project realizations. The schedule of Marwin’s project is attached in Annex I of this paper. the plan should be adjusted to resource availability per chronic period. 14 .Technological Professional Institute of Piraeus Figure 7: Resource Usage (5) The use of resources should be scheduled in a time –efficient manner. Tasks that may not be displaced or retarded without prolongating the delivery of the overall project form what is called the Project’s Critical Path. If certain tasks can take place concurrently without affecting the overall cost.

This can be attained though: 1. 4 . c. Asking team members for daily work reports. b. What is important for the company What we are trying to accomplish Which points of work are more vital to track and control What are the critical points in the project at which control should be placed Although monitoring performance is of major importance in a Project. 3. Status reviews: Checking on the schedule ii. Applying the KISS (Keep It Simple. taking corrective actions on time is equally crucial. 3 . milestones facilitate the control of a project. As described in the previous chapter. Process reviews: Checking on how something is done iii. d. Yet. Lewis (2007) argues that prior to formulating a control system.Technological Professional Institute of Piraeus Chapter 4. Response to control should be prompt. Establishing reviews i. Design reviews: Tests Each Process Review meeting should be followed by a report containing: 1 . the Project Champion should:      Clarify to project team members their proper objectives Make sure that team members have a personal plan aligned with the project plan Provide team members with adequate resources and skills Feedback performance assessment to performers Set authority framework for each member The design of a Control System presupposes that the Project Leader has straightened out: a. 2. 6 . they are not the only progress tracing means. Current project status through Earned Value Analysis Future status: Expected deviations and corrective actions Status of critical tasks Risk Assessment Information usable to other projects Constraints of process review 15 . Stupid!) principle and checking whether reports are read by their recipients or not. 5 . 2 . Monitoring and Controlling Monitoring and Controlling are two procedures that should be treated as one.

16 . The risk assessment of Marwin’s Project is adopted from Marcus and Tanis’ (2000) proposed Project Life Cycle mode and illustrated in Annex I. Risk identification should start as soon as the project is conceived and continue throughout the project’s execution. or the Budgeted level of effort actually performed ACWP (Actual cost of work performed) at a given moment Cost Variance= BCWP-ACWP Schedule Variance= BCWP-BCWS Forecasting risks associated to the project through a Risk Assessment report is also a critical as well as trying issue. Status and process review meetings should therefore occupy with eventual obstacles.Technological Professional Institute of Piraeus The Earned Value Analysis usually includes the following computations:        Cost variance: Compares cost deviations of work performed Schedule variance: Compares planned and actual work performed BCWS (Budgeted cost of work scheduled) to be done in a given moment or effort level supposed to be performed in that period BCWP (Budgeted cost of work performed) in a given period.

The report is entitled Implementing Wasp in Marwin Tools Ltd. The author of this report will be. feel free to contact me at 6945454544. Antony Jenkins General Manager Marwin Tools Ltd Dear Mr. Anthony Frisk 17 . the project officer. 2011 Mr. due to space constraints. on the other hand. awaiting approval by the shopkeeper to proceed. If you should have any questions concerning my project/paper recommendation. Sincerely.Technological Professional Institute of Piraeus Annex I. A Recommendatory Report to Marwin’s Shopkeeper Implications: The project manager will be the Shopkeeper himself. The project is currently at the end of the first phase of its PLC. The content of this report concentrates on a plan to implement an ERP system in Marwin. TRANSMITTAL LETTER March 30. also referred to as project charter. As aforementioned. two versions of the PPD file are developed. please. Jenkins: I am submitting to you a report to let you know the benefits and the procedure of an Inventory and Asset tracking system implementation.

Scope Inclusions: 1. The inventory system is not updated automatically and the company is mandated to conduct spot checks in the warehouses every now and then to ensure that the data are in accordance with the actual inventory status. The tracking of assets or inventory outside of the Shopkeeper’s i. An interface between the Shopkeeper’s application and FIS (internal Purchasing system). Mission Statement: The mission for this project is to develop a new Inventory & Asset Management System that will facilitate tracking procedures. which will enable ubiquitous Inventory management. Project Work Objectives: Provide the Shopkeeper with…  An automated tool to aid in the tracking of inventory. 3.e. 2.Technological Professional Institute of Piraeus Implementing Wasp in Marwin Tools Ltd Problem Statement: Marwin Machines Tools operates in two shifts and its current inventory tracking system is operated manually by the shopkeeper.  An application with flexible reporting capabilities. 4. The formal creation of a Purchase Order. Interface between the barcode printer software and the Shopkeeper’s application. The target audience is primarily the company’s Shopkeeper and secondarily other Top Management members as well as people belonging to the category of “project clients”. losing precious time and risking the accuracy inputted data. The employees make their requests for clothing or equipment by completing a sheet and then the Shopkeeper mitigates the data from the sheet to an Access database. 2. Interface between the Employee Database and the Shopkeeper’s application. Scope Exclusions: 1. In addition to reports and forms used by the Shopkeeper. accessible out of the keeper’s office. diminishing hence Inventory errors. delivered by July. The tracking of Shopkeeper inventory including both equipment and clothing. rather than missing 15 minutes of work time every time a spot checkup is performed.  A networked solution. 3. this summer. 18 . vehicles etc. there is a requirement to provide inventory reports for the City of Raleigh’s internal auditors.

Technological Professional Institute of Piraeus Project Summary: Figure 8: Overview. maintained and upgraded Definition of Organizational changes. Vendor Market Research Offer Demand Offer Accumulation Offer Evaluation Selected Products’ Presentation Internal Company Meetings Procurement Decision Communication to Organization Detailed Information of Shopkeeper Initial Information of related managers Initial plans for how system will be rolled out. Project Summary. DB. Networking. Management Specialist Set up of appointments with Inv. incentives relation to system performance Decision to proceed and approve project plan Phase II: Project Development of detailed project plan Status and Process Review Meetings (Ongoing Project & Risk Management) Project Team Development Negotiations & Preassignments Staffing Delivery of personal authorization directives Training HW Installation – Training Ground Preparation Training of project team members and acquisition of supportive skills Prevision of training documentation Business modeling and reengineering Execution of change management plan Initial App Development SW configuration SW customization System Integration Software release delivery Integration of SW bolt-ons and/or legacy systems Data cleanup and conversion Documentation Testing Bugfixing Rollout & Startup User Acceptance Phase III: Shakedown Bugfixing and rework System performance tuning Problem resolution Process and procedure changes Adding people to accommodate learning and shakedown needs Delivery of final SW release Phase IV: Onward and Upward Post Implementation investment audit ROI Assessment Continuous business improvement Table 5: Project’s Life Cycle Model 19 . Management Specialists Actualization of appointments Selection of Specialist Definition of key performance indicators and process of measurement Selection of SW. HW. Elaborate version Project’s Life Cycle (per Marcus) Phase I: Chartering Conception of Business Case Current State Analysis Approach of Inventory Management Specialist Quest for Inv. supported.

documents. schedule and/or budget Errors in data migration Mistaken assumption that costs will be taken care of by operations budgets Configuration and/or customization errors Lack of communication with consultant Vendor delivery and SW performance issues Difficult-to-use SW Diminishing testing and/or training for scheduling reasons Lack of reporting Phase 3: Shakedown Business disruption Wrong issue/problem diagnosis Lack of post-training skill building Inadequate use of system Overdependence on “key user” Resistance to Change Phase 4: Onward & Upward Error in outcome estimation No updates Unavailability of configuration documents Turnover of trained staff Inability to manage outcomes No organizational learning about IT projects. enterprise systems Table 6: Project’s Risk Assessment 20 . training Difficulty acquiring skills in SW usage Poor knowledge from the vendor’s and/or consultant’s side Unsuccessful management of scope.Technological Professional Institute of Piraeus Risk Assessment (per Marcus) Phase 1: Chartering Wrong SW. HW and/or partner decision Discrepancy between business plan and tech plan Utopian business case and project objectives Poor performance indicators Inadequate contracting with vendor and/or consultant Lack of post-implementation support Belittling Change Management Taking organizational requirements amiss Phase 2: Project Staffing project team without cross-functional representation Low-quality SW.

Figure 8: Gantt Chart & Critical Path: A snapshot taken from PPD’s file report Technological Professional Institute of Piraeus 21 .

the fact that Inventory related errors will be eliminated and that the Shopkeeper.Technological Professional Institute of Piraeus Conclusion/ Recommendation Given that the cost of the project is approximately 100000€ (all resources taken into account). will save many hours from his everyday work. 22 . the head of the company. proceeding with the implementation is highly recommended.

Sylva. (2004). M.-S. North Carolina. Cobb. A. J. (2000).. 286-296. PMI. & Kuang. Cincinnati: Pinnaflex Educational Resources. & Tanis. 173-207). (2006). & Godfrey. McGraw Hill. C.. (1999). W. R. Project Management Body of Knowledge (PMBOK). F. A. Integrated IT Project Management: a model-centric approach. J. Juran.). M. Framing the Domains of IT Research: Glimpsing the future Trough the Past (pp. (2001). Markus. Norwood: Artech House. Nah. Critical factors for successful implementation of enterprise systems. California: Sage Publications. L. 23 . B. J. Thousand Oaks. T. In R. Juran's Quality Handbook (5th Edition ed. L. K.-H. Zmud.Technological Professional Institute of Piraeus References Bainey. Business Process Management Journal . (1996). F. Lau. 7 (3)... Leading project teams: An introduction to the basics of Project Management and Project Team Leadership. The Enterprise Systems Experience-From Adoption to Success.

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