Case 12.1 Status Report for the LOGON Project

The Logon Project began as scheduled in May 2010. In late Septemberafter the project had been underway for 20 weeksMidwest Parcel Distri- bution (MPD) Company, the customer, requested Frank Wesley, the project manager, to prepare a written summary status report about progress to date.

Appendix C has information on the budget and

dates for scheduled milestones and deliverables. Prepare the report as if you were Frank. Note that the report is for MPDs top management, and should address issues of most importance to them: deliverables and other requirements, schedule, and budget, as noted in Appendix C. The report should also note any problems encountered to date, anticipated challenges, and recommended suggestions or changes to the plan.

APPENDIX C

To: SEE DISTRIBUTION Ref. Job No.: 90401 From: Frank Wesley, Project Manager Date: 1-3-10 Subject: Logistical Online System Project

Project Summary Plan

The Project Summary Plan for the Logistical Online System Project for the Mid- west Parcel Distribution Companys Chicago distribution center has been modi- fied to include your suggestions and approved by everyone in distribution. Cop- ies of this document are herewith sent for use in the performance of contract requirements.

FW:es Enclosure

Distribution:

Julia Melissa, Project Engineer Sam Block, Fabrication Manager Noah Errs, Quality Control Supervisor Larry Fine, Software Manager Sharry Hyman, Design Manager Brian Jennings, Assembly Supervisor Frank Nichol, Site Operations Manager Emily Nichol, Assembly Supervisor Robert Powers, Drawing Supervisor Burton Vance, Purchasing Manager

Appendix C Project Master Plan for Logistical Online System Project 647

Memorandum

Logistical Online System Project Summary Plan

I MANAGEMENT SUMMARY

On September 5, 2009, the Midwest Parcel Distribution (MPD) Company awarded the Iron Butterfly Company (IBC) the contract for the Logistical Online (LOGON) System to be installed at MPDs Chicago distribution facility.

The project consists of designing, fabricating, and installing a parcel transport, storage, and database system, for automatic placement, storage, and retrieval of stan- dardized shipping containers. The system uses an overhead conveyor track system, conveyor-robot transporter units, and a computerized database for automatic place- ment and retrieval of parcels and record keeping.

Iron Butterfly is the prime contractor, and is responsible for the design of hard- ware and software, fabrication of component parts, system installation, and check- out. The major subcontractors are Creative Robotics, Inc. (CRI), Steel Enterprises, Inc. (SEI), United Plastics Co. (UPC), and CompuResearch Corp. (CRC). Iron Butterfly will provide overall project management between CRI, SEI, and UPC Corp. and related contract administration. The project manager is Mr Frank Wesley, and the project engineer is Ms Julia Melissa.

The project will commence with basic design on or before May 17, 2010 and final system approval by MPD Co. will happen on or before May 2, 2011. The principle subtasks are shown in Item 7.

The price of the contract is $14,520,000, fixed fee with limited escalation, based on a target final approval date of May 2, 2011. Total expenses, tabulated in Item 8, for labor, overhead, materials, subcontracting, and general/administrative are $13,140,270. The agreement provides for an escalation clause tied to inflation indices for material expenses for the steel conveyor track and rack support systems. A penalty of $10,000 a day will be imposed on IBC for target completion overruns. Contingency arrangements in the agreement allow for reconsideration of the penalty in event of disruption of work for labor dispute with management.

II PROJECT DESCRIPTION

On September 5, 2009, IBC was awarded the contract for the LOGON System Project. The award followed a 4-month competitive bidding review by the MPD Company of New York. The system is to be installed at MPD Co.s main Chicago distribution facility.

The project consists of designing, fabricating, and installing a parcel transport, storage, and database system (LOGON) for placement, storage, and retrieval of stan- dardized shipping containers. The system will substantially improve the speed of parcel handling, increase the utilization of storage facility space, enhance record keeping, and reduce labor costs at the facility. Anticipated ancillary benefits include reduced insurance premium and shrinkage costs.

The system uses an overhead conveyor track system, conveyor-robot trans- porter units, racks with standard size shipping containers and storage buckets, and a

Appendix C Project Master Plan for Logistical Online System Project

computerized database for automatic placement and retrieval of parcels and record- keeping. The system works as follows:

Upon a parcels arrival at the distribution center receiving dock, it is placed into one of three standard-sized parcel buckets that are electronically coded as to parcel item and shipping destination. This code is relayed to a master database from any of four terminal work stations. The work stations are connected via a DEM-LAN network to a CRC Model 4000 server with 128 gigabytes storage with back-up to retain infor- mation about parcel description, status, storage location, and destination. The system keeps track of available storage space, and reallocates buckets for optimal space utili- zation; upon request it provides reports about system status and performance.

The parcel buckets are attached to a robot transporter mounted on an overhead track-conveyor system (Item 1). The transporter carries the bucket to a suitable vacant storage slot within a shipping container located on a rack in the facility. The computer determines which shipping container has a vacant slot of sufficient size and containing parcels going to the same or nearby destination as parcels in the transport- ers parcel bucket. The transporter then conveys the bucket to the appropriate ship- ping container and unloads it into the vacant slot. Shipping containers are stacked three high in seven rows of racks (Items 2 and 3). The facility holds 400 containers, each with 150 cu. ft. of storage capacity.

When a truck going to a specific destination is to be loaded, the destination is keyed in at the dock terminal workstation so the database system can identify all ship- ping containers with parcels going to the same or nearby destinations. The system then routes the robot transporters to the appropriate shipping containers for retrieval of parcel buckets. The system has four robot transporters that operate indepenently and simultaneously. The transporters retrieve the buckets and transport them back to the loading dock for placement of parcels into departing trucks. The longest retrieval time in the system is 8 minutes. The system will employ neural network technology that will enable it to improve on its ability to place and retrieve containers.

IBC is the prime contractor, and is responsible for the design of hardware and software, fabrication of components, system installation, and checkout. The major subcontractors are CRI, which will supply the major components for the robot trans- porters; SEI, which will supply the overhead track-conveyor system and storage racks; UPC, which will supply the shipping containers and parcel buckets; and CRC,

which will supply the terminal workstations, DEM-LAN network, neural network software, CRC4000 computer, as well as software development support and installa- tion of computer hardware.

Structural tests performed by M&M Engineering Corp. indicate that the present ceiling structure of the facility can support additional loads of up to 600 pounds per square inch. The LOGON system would add a maximum of 325 pounds per square inch, including parcel weight, and thus can be installed directly to the existing ceil- ing frame without additional reinforcement. Structural tests performed on walls and floors also indicate sufficient strength to support the system with 2.1 safety factor.

During system installation, MPD has arranged for alternate, temporary storage at another facility and rerouting of most parcel traffic to its other sites.

Design information about MPDs Tulsa facility will be utilized to try to initially move the project to an advanced stage. Remaining design work will use as much as possible of work that has been done already, without compromising confidentiality of clients, on previous, similar projects.

III ORGANIZATION ADMINISTRATION

III.1 ProjectAdministration

Correspondence on project matters will be between the project manager for IBC and the project director for MPD. Project personnel may correspond directly with the cli- ent or subcontractors for information, but must provide the project manager and proj- ect director with copies of memos and conversations.

The account number assigned to the LOGON project is 9010000. Work pack- ages and tasks will be assigned subaccount numbers at the time when work package instructions and schedules are authorized. A single invoice for the project accounts as a whole is acceptable for billing at monthly intervals.

III.2 Project Organization and Responsibility

The organization of IBC for the performance of the LOGON project is shown in Item 4. Administrative and managerial responsibilities are summarized in Item 5.

The project manager, Mr Wesley, is responsible for all client contact, reporting of progress, adherence to contractual commitments regarding schedule and technical performance, and monitoring of budgetary expenditures. He and his staff will report directly to Mr Ed Demerest, vice president and project director for MPD Co.

The project engineer, Ms Melissa, is responsible for establishing specifications and system delivery to meet technical requirements. She will supervise the prepa- ration of design requirements and drawings, estimate quantities, check drawings and calculations, and ensure that system technical requirements are fulfilled at the site.

The fabrication manager, Mr Block, is responsible for managing procurement, assembly, and related work at the IBC plant. He will ensure that delivered parts from subcontractors meets requirements, coordinate assembly of robotic transporters, track conveyor, and storage rack subsystems, and sign off final approval for assem- blies prior to shipment to the site.

III.3 SubcontractorAdministration

Key personnel at the four primary Bill Plante

Terry Hemmart Delbert Dillert Lynn Duthbart Elmer Hyman

subcontractors CRI, SEI, UPC, and CRC are: Project coordinator, CRI Manager, manufacturing, SEI Customer representation, UPC

Systems engineering representative, CRC

Customer representative, CRC

Changes to the respective agreements requested by a subcontractor or by IBC will be acted upon by the IBC project manager, Mr Wesley, upon receipt of a written proposal from the subcontractor.

Correspondence to subcontractors concerning technical matters will be directed to the previously named first four parties or their substitutes. Software specifications- related work with CRC will be coordinated by the CRC customer representative. Proj- ect telephone conversations between IBC and subcontractors shall be noted in hand- written memos and copies sent to the IBC project engineer.

Progress reports shall be prepared by the CRI project coordinator, the SEI manufacturing manager, the UPC customer representative, and the CRC systems engineering representative for presentation at weekly meetings to be held at IBCs Chicago office for the duration of scheduled involvement. Other meetings may require attendance by other individuals as required by the subcontractors or requested by the project manager. The following meetings are included in the respective subcontractor agreements.

CRI 5meetings SEI 3meetings UPC 2meetings CRC 5 meetings (software development) CRC 8 meetings (site system integration)

The subcontractors will provide information and perform services on the project as follows:

CRI will perform all work associated with procurement, manufacturing, and component functional tests of parts and subassemblies according to specifica- tions, plans, and drawings provided by IBC. Parts and components for four robotic transporters will be delivered to IBC per the criteria and dates specified in the agreement.

SEI will perform all work associated with procurement, manufacturing, and functional tests of parts and subassemblies per specifications, plans, and draw- ings provided by IBC. Parts and components for the complete overhead con- veyor track system and seven storage racks will be delivered to IBC per criteria and dates specified in the agreement.

UPC will perform all work associated with procurement, manufacturing, and component functional tests of parts and subassemblies per specifications pro- vided by IBC. Plastic containers and parcel buckets will be delivered to the MPD Chicago distribution facility in quantities and according to dates specified in the agreement. One plastic container and one each of three-size parcel buckets will be delivered to the IBC facility for tests per the agreement.

CRC will perform all work associated with development, programming, and tests of LOGON system robotic transporter control and neural networking soft- ware and system database per specifications provided by IBC. Software will be delivered to the IBC facility per the agreement.

CRC will transport, install, and perform component and integration tests for checkout of four terminal work stations, DEM-LAN network, CRC4000 server, NN software, back-up system, and peripheral hardware per criteria and dates specified in the agreement.

IBC will provide overall project management of CRI, SEI, and UPC and related

contract administration, and legal, accounting, insurance, auditing, and counselling services as may be required.

III.4 Client Interface

Key personnel associated with the project for MPD Company are:

Ed Demerest Lynn Joffrey Cecil Party Mary Marquart

Project director, Chicago Administrative assistant, Chicago Financial manager, Chicago Operations manager, New York

Changes or modifications to the agreement requested either by MPD or by IBC will be acted upon by the operations manager upon receipt of a written proposal from IBC.

Correspondence with MPD will be directed to the project director. Project tele- phone conversations between IBC and outside parties shall be noted in handwritten memos and copies sent to Ms Joffrey.

Progress reports shall be prepared by Mr Wesley, IBC project manager, for pre- sentation at monthly meetings to be held at MPD Co.s Chicago office. Other meetings may require attendance by other individuals as required by MPD or requested by Mr Wesley. Mr Wesley shall also convene a mid-project review and a project summary at the MPD New York office. Fifteen meetings are included in the agreement. MPD Co. will provide information and perform services on the project as follows:

1. Perform all elements of work associated with vacating the site prior to the date in the agreement for commencing of system installation.

Provide surveys, design criteria, drawings, and preliminary plans prepared under previous agreements or received through requests for proposals for the LOGON system.

Provide design criteria, drawings, and plans prepared for the automated parcel storage and retrieval system at MPD Co.s Tulsa facility.

Obtain all internal, municipal, state, and federal approvals as may be necessary to complete the project.

Provide overall project management between MPD, IBC, and CRC Corp., and legal, accounting, insurance, auditing, and consulting services as may be required by the project.

The contract administrator is the operations manager. Changes or modifications to the agreement with MPD, requested either by MPD or IBC, shall be subject to a written proposal by IBC to MPDs contract administrator through IBCs project manager.

The financial manager is responsible for approvals of monthly expense summa- ries provided by INC and monthly payment to IBC. MPD is responsible for securing necessary support from electrical and telephone utilities for system hook-up, and for making available to IBC all criteria, drawings and studies prepared for the Chicago site facility and the Tulsa facility automated system.

III.5 ManpowerandTraining

No additional manpower requirements beyond current staffing levels are envi- sioned to perform services for this project. Five personnel from IBCs design group have been enrolled in and will have completed a robotics seminar before the project begins.

III.6 UserTraining

Two systems operations manuals and 16 hours of technical assistance will be pro- vided. Thereafter, ongoing operator training will be the responsibility of MPD.

IV TECHNICAL SECTION

IV.1 Statement of Work and Scope

The major tasks to be performed are the design, fabrication, installation, and checkout of the LOGON system for the Chicago distribution center of MPD Co. The work will be executed in accordance with the conditions set forth in the specifications in IBCs proposal and confirmed in the agreement.

Subtasks required to perform the major tasks are shown in Item 6 (letters below refer to task designations on Item 6):

Perform basic design of overall system (H).

Prepare detailed design specifications for robotic transporter, conveyor track,

storage rack systems, and shipping and parcel containers to be sent to CRC, SEI,

and UPC (J, I, M, N).

Prepare specifications for the software and DEM-LAN and CRC 4000 system

interface (L).

Prepare detailed assembly drawings for robotic transporter units, conveyor track system, and storage rack system (O, K).

Prepare drawings and a master plan for system installation and test (P).

Fabricate robotic transporter units, conveyor track, and rack support subassem-

blies at IBC facility (U, V).

Perform functionality tests on transporter units at IBC facility (X).

Perform structural and functional tests of conveyor track and rack systems at

IBC facility (W).

Perform installation of all subsystems at MPD Chicago facility site (Y).

Perform subsystems checkout and overall system final checkout at MPD site (Z).

IV.2 Schedule and Calendar

The project will commence with basic design on or before May 11, 2010; installation at the site will begin on or before January 10, 2011; and final system approval by MPD Co. will be on or before May 2, 2011. The schedule for significant aspects of the project is in Item 7. The indicated milestones are:

1. Commence basic design 2. Basic design review 3. Transporter and conveyor design review 4. Computer system specs review 5. Hardware group A and B review 6. Begin installation at site 7. Final user approval

May 11, 2010 July 26, 2010 September 6, 2010 September 20, 2010 November 29, 2010 January 10, 2011 May 2, 2011

Starting dates for activities that are dependent on results of reviews will be adjusted to allow for significant changes in the length of predecessor activities, although no adjustments are anticipated.

Work package instructions and a detailed schedule for basic design have been distributed. Subsequent schedule and work package information will be distributed and discussed at review meetings.

The schedule of contract deliverables is given in Section IV.9.

IV.3 Budget and Cost

The price of the contract is $14,520,000, fixed fee with limited escalation, based on a target final approval date of May 2, 2011. Expenses and fees will be billed and are payable monthly as incurred. The agreement provides for an escalation clause tied to inflation indices for material expenses for the steel conveyor track and rack support systems. A penalty of $10,000 a day will be imposed on IBC for target completion overruns. Contingency arrangements in the agreement allow for reconsideration of the penalty in event of disruption of work for labor disputes.

Principal tasks, subtasks, man-hours, and dollars to perform them have been esti- mated. Total expenses, as tabulated in Item 8, for labor, overhead, materials, subcon- tracting, and general/administrative are $13,140,270.

Expenditures of direct labor are under immediate control of department heads in design, fabrication, procurement, and customer service departments because they assign personnel to the project.

The project manager is responsible for man-hour and direct expenses, and will receive biweekly accounting of time and money expenditures.

IV.4 Information Requirements

Most of the information required by IBC to perform under the terms of the agreement has been supplied by MPD Co. A limited amount of site information will be obtained from additional required surveys performed by IBC. MPD will assist in survey work to expedite the project.

IV.5 Documentation and Maintenance

Functional managers will send biweekly expense and progress reports to the project manager. The project manager will send monthly project summary reports to func- tional managers and to other managers and supervisors listed in distribution.

Cost, performance, and progress documentation will be maintained and reported through the company project cost accounting system.

The project manager will prepare a final summary report for IBC and MPD com- pany archives.

The project manager is responsible for maintenance of all project files. All copies of project documents sent outside IBC will leave only under his direction.

IV.6 Work Review

Internal review of work produced in each of the design, fabrication, procurement, and customer service divisions is a responsibility of the division head for each of the functional disciplines.

IV.7 Applicable Codes and Standards

Track conveyors, storage racks and supporting structures, electrical harnesses, and radio transmitters are to be designed to the applicable standards of AATOP, ASMER, OSHA, the Illinois Building Requirements Board, and the City of Chicago.

IV.8 Variations, Changes, Contingencies

The agreement with MPD defines the conditions for considering a change in com- pensation or penalties due to a change in the scope of work or cost of steel-fabricated materials, or unanticipated stoppage of work for labor dispute. It describes the proce- dure whereby authorization for such a change may be obtained from MPD.

The agreement, Paragraph 9.2, under prime compensation, states:

Whenever there is a major change in the scope, character, or complex- ity of the work, or if extra work is required, or if there is an increase in the expense to the CONTRACTOR for steel-fabricated materials as negotiated in the agreement with the responsible SUBCONTRACTORS, or if there is a stoppage of work resulting from a labor dispute with management, the CONTRACTOR shall, upon request of the CLIENT, submit a cost estimate of CONSULTANT services and expenses for the change, whether it shall

involve an increase or a decrease in the Lump Sum. The CLIENT shall request such an estimate using the form provided herein (Attachment F). Changes for reasons of labor dispute with management will be reviewed and determined according to the conditions specified (Attachment G).

During system installation and tests, MPD has made arrangements to reroute 70% of its Chicago parcel business to other centers. The remainder will be stored at an alternate facility near Chicago. In the event of a schedule overrun, the reroute plan will remain in effect. MPD requires 30 days notice of anticipated schedule overrun to extend the agreement with the alternate Chicago storage facility.

IV.9 Contract Deliverables

All items are to be assembled, installed, and in operation at the site in accordance with technical specifications in the agreement.

Subcontractors will transport components and parts to the IBC plant per this schedule:

cont'd

FOR A BETTER UNDERSTANDING OF THE QUESTION I WILL PROVIDE YOU WITH A PDF LINK SO THAT YOU MAY UNDERSTAND IT BETTER. The question is in chapter 12 and will be CASE 12.1

http://www.petronet.ir/documents/10180/2323250/Project_Management_for_Engineering,_Business,_and_Technology,_Fourth_Edition_,Butte

FOR MORE INFO PLEASE USE THE LINK PROVIDED...ITSIN CHAPTER 12 CASE STUDY 12.1

Elaine Strand Assistant Julia Melissa Project engineer Design Drawing Software Sharry Robert Larry Hyman Powers Fine Frank Wesley Project manager Sam Block, Fabrication manager Site Group A Group B Purchasing Quality operations Le assembly control Frank Brian Emily Burton Noah Nichol Jennings Nichol Vance Errs Elaine Strand Assistant Julia Melissa Project engineer Design Drawing Software Sharry Robert Larry Hyman Powers Fine Frank Wesley Project manager Sam Block, Fabrication manager Site Group A Group B Purchasing Quality operations Le assembly control Frank Brian Emily Burton Noah Nichol Jennings Nichol Vance Errs