Question
DesignAll Inc. designs, tests, and manufactures test equipment. Over the weekend, the president of the company was reviewing a business magazine and came up with
DesignAll Inc. designs, tests, and manufactures test equipment. Over the weekend, the president of the company was reviewing a business magazine and came up with what he thought was a brilliant idea. Pizza shops need to have their employees fold pizza boxes that arrive at the shop flat. Folding is not difficult but it takes time. If the pizza shops had a machine that could fold pizza boxes of various sizes, that would free the employees to concentrate on making pizzas. It could eliminate the time to fold pizza boxes and reduce the overall per unit cost of a pizza. The president thinks DesignAll Inc. can design, build, test, and manufacture this machine to sell to pizza shops across New England, for starts. The president sends a memo to all the department managers and functional leads regarding his "brain child" project that he is calling the WIDGET PRO Pizza Box Folding Machine. The memo from the president describes his new business idea he is calling the WIDGET PRO Project. The president indicates the project has a high potential for increased revenue.
Memo from President:
Good morning,
At my request, the Marketing Department has completed a Business Case Analysis on the possibility of selling a Pizza Box Folding Machine, that I call WIDGET PRO, to pizza shops across New England. Marketing did a survey of pizza shops, and have reported that 20% of the 3,500 independent pizza shops in New England would potentially purchase a WIDGET PRO. That represents a total of 700 independent pizza shops. I believe an initial low-rate production of 200 units can be manufactured for sale as a test run. If the results are positive, the company will plan on further production of additional units, depending on sales. The objective is to design and test a WIDGET PRO prototype in eight months, and manufacture 200 units in four months. That's a duration of 1 year to produce, manufacture, and sell 200 WIDGET PRO Units. The Systems Engineering department has developed a detailed Statement of Work (SOW) that describes the requirements for WIDGET PRO, and the work that needs to be performed on the WIDGET PRO Project. I want the project to begin on 2 January 2023. The goal is to have 200 WIDGET PRO units ready for sale by August 2023, and have all 200 units sold by the end of the year. The company will invest no more than $750,000 on this project. I have confidence that the project management ability and skills will provide the leadership necessary to successfully achieve these goals.
Regards,
President DesignAll, Inc.
Business Case Analysis:
The American Pizza Community is a coalition comprised of the nation's largest pizza companies, regional chains, small business franchise owners, suppliers and other entities that make up the American pizza industry. The coalition was formed to advocate for policies affecting pizza companies and operators of all sizes and to support programs that allow the industry to grow and create jobs. The President of DesignAll, Inc. requested the Marketing Department to perform a market analysis for all pizza shops within the New England area to determine the possibility of selling units that can automatically fold pizza boxes. The first step taken was to identify if any other company currently produces pizza box folding units. The research indicated that, to date, there are no companies that manufacture pizza box folder units. There is a strong possibility that our company could corner the marketplace for 10 years with a patent. If successful the economic growth for the company could be large for some time, especially if the company goes national. Marketing surveyed 130 pizza shops within key districts across New England. The result showed that 35% (46 shops) of the surveyed pizza shops indicated manually folding pizza boxes puts a strain on time lost to make pizzas, or adds additional cost to have an employee solely fold pizza boxes. When asked if they would consider purchasing a pizza box folding unit, 20% of the surveyed pizza shops indicated they would consider it, dependent on the price of the unit. Business Drivers: There are 3,500 pizza shops in the New England area, according to the American Pizza Community 2020 report. A STRONG DEMAND estimates that 30% of the pizza shops in the New England area would purchase WIDGET PRO in the first year. This results in 1,050 units being sold in the first year of full production. With an initial price of $2,200, initial sales is estimated to be $2.3 Million. With an initial investment of $750,000, this equates to a 51.7% Return on Investment in the first year. Our manufacturing department has indicated it can produce 1,600 units annually, or 6.5 units on a daily basis. A WEAK DEMAND estimates that 10% of the pizza shops in the New England area would purchase WIDGET PRO. This would result in 350 units being sold. With the estimated price of $2,200, total revenue would equate to $770,000. With the initial investment of $750,000, a WEAK DEMAND would result in a 1.3% return on investment; near break-even ROI. A good marketing/advertising campaign could achieve the Strong Demand Scenario. DesignAll, Inc. representatives will visit all pizza shops in New England and emphasize WIDGET PRO's low cost, small size, reliability, and responsive customer service. Final Recommendation: It is the recommendation of the Marketing department that DesignAll, Inc. pursue producing WIDGET PRO. A STRONG DEMAND shows and ROI of 200%. Our manufacturing department indicates it can produce sufficient quantities of WIDGET PROs to support a STRONG DEMAND. Although a WEAK DEMAND results in a $20,000 ROI, the analysis shows the WEAK DEMAND is a small risk compared to the excellent ROI for a STRONG DEMAND.
Statement of Work (SOW).
INTRODUCTION A Pizza Box Folding Machine, called the WIDGET PRO shall be designed, a prototype unit built, software developed and integrated, testing performed on the prototype unit, and an initial production of 200 WIDGET PRO units.
2.0 DESIGN OF WIDGET PRO 2.1 PRODUCT SCOPE: The WIDGET PRO shall be manufactured according to the following specifications: 2.1.1 WIDGET PRO shall be no taller than 4', no wider than 20", and no longer than 44", with 20" reserved for the Pizza Box Bin and 24" reserved for the Main Housing.
2.1.2 The Pizza Box Bin shall hold up to 50 unfolded pizza boxes.
2.1.3 The Unit's Main Housing shall be located in the center of the unit containing the motor, platform chain, electronics, folding widgets, and the Control Panel.
2.1.4 The Control Panel shall contain an On/Off Switch, a Count Meter, and a Count Display.
2.1.5 The Count Display shall display error messages when the WIDGET PRO malfunctions. The error messages shall be in plain English and easy to understand.
2.1.6 The DesignAll Inc. logo shall be engraved in the left center portion of the Control Panel.
2.1.7 The unit shall contain a Pizza Box Platform located on the right side of the unit where the folded pizza boxes shall be placed
2.1.8 The Pizza Box Platform shall include, the Folding Arms and Flat Box Stabilizer Arm.
2.1.9 Six casters shall be placed on the bottom of the unit; four at each corner and two in the center. Each caster will have a lock mechanism so when applied will prevent WIDGET PRO from moving during operation.
2.1.10 Widget Pro shall be made of aluminum for lightweight and ease of movement. The aluminum shall be charcoal gray.
2.1.11 WIDGET PRO shall take no longer than 6 minutes to fold all 50 boxes. This equates to 5 seconds per box.
2.1.12 Software modules shall be developed that controls the operation of the WIDGET PRO Unit.
2.1.13 The software shall be integrated with the assembled hardware prior to unit testing
3.0 PROTOTYPE TESTING 3.1 The prototype unit shall be subjected to a 4-week Environmental Test under high temperature, operation with dust, crumbs, and flour in the environment, with no-load operation. 3.2 The WIDGET PRO unit shall undergo a 1-week Acceptance Test. The unit shall operate uninterrupted under normal operating environment and use, with no failures. 4.0 MANUFACTURING 4.1 Manufacturing Plan shall be developed when a Make-or- 5.0 MARKETING 5.1 The Marketing Department shall analyze the market beyond the New England areas. A Marketing Plan will be complete within 7 weeks after contract award. 5.2 The Marketing Department shall execute the approved Marketing Plan no later than 8 months after contract award. 6.0 WIDGET PRO Website 6.1 The Graphic Department shall be responsible to design and launch a WIDGET PRO website that is easily accessible to any pizza shop no than 3 months after contract award. 7.0 WIDGET PRO Sales 7.1 The Sales Department shall market WIDGET PRO across New England through the end of 2023. 7.2 The Sales Department shall manage the delivery of the WIDGET PRO to purchasing pizza shops. The WIDGET PRO shall be delivered within 21 days of order placement.
Question: Read the documents with the following goals: Understand the "constraints" the president has placed on the project Understand the results of the Business Case Analysis Report The work that needs to be performed to design, build, test, and manufacture the WIDGET PRO Unit When you have completed reading the documents, respond to the following questions: End-of-Case Study Questions:
What are the three primary constraints of the WIDGET PRO Project? NOTE: looking for the specific constraints, NOT the definitions of each constraint.
What is the outcome of the project? What are the specific reasons that the WIDGET PRO is considered a project?
Which Development Approach would you plan to use for the WIDGET PRO Project? Why?
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