Project Management - Final Group Project

Project - Drive Unit Assembly Line Move Simulation

Raymonde Corporation is an electric forklift manufacturer in Syracuse, New York and is undergoing some dramatic business changes. Raymonde is undergoing immense cost pressures and finds themselves in a commodity marketplace (only the lowest cost equipment provider will survive). Crowne our "archnemesis" is taking market share away from Raymonde due to their production facility in Juarez, Mexico. Your company executives at Raymonde have decided to outsource non-core competencies from their Syracuse manufacturing facility. They have spent the past year determining what was core to the facility's success. Raymonde's management team would like to outsource the facility's drive unit assembly line. Your team has been selected to develop a project plan for this move. You have sent out an RFQ (see Appendix A) and have narrowed down your choices to two suppliers. They both have agreed to do everything in your quote and meet all of your high-quality standards. You sent an assessment team to check their production facilities and amazingly enough they both received the same score of 98%. Price will be the deciding factor in your choice (tooling is a one-time fee and must come out of your cost savings, see Appendix B). Your team needs to make a decision on the supplier and develop a project plan for this move (both suppliers are in Juarez, Mexico). Your boss would like this move done in ten months but realizes this may not be feasible and is waiting on your team to estimate the project's completion time. Your team knows the following:

1. Your facility in Syracuse needs drive units while you transition this production line. You need to build a "bank" of inventory for the transition period (if you shut down the plant, you could lose your job). Right now, your line is at 70% capacity and is producing 500 units a week (26,000 - 52 weeks in a year). Your current staffing level can handle another 30% increase in demand and is currently working 40 hours a week. If you need to work overtime to build up your inventory you must pay the line workers time and a half. You also need to give the State of New York and the facility employees 60 days notice before you lay them off.

1. Jimmy Dogan $12.00 per hour (Machine Operator)
2. Kyle Pulcher $10.00 per hour (Machine Operator)
3. Tanner Munto $8.00 per hour (Machine Operator)
4. Julia Dunn $15.00 per hour (Machine Operator)
5. Patrick Edsel $15.00 per hour (Assembler)
6. Lucy Cataline $12.50 per hour (Assembler)
7. Frankie Munto $9.00 per hour (Assembler)
8. James Pulcher $10.00 per hour (Assembler)
9. Kevin Toomay $20.00 per hour (Assembler)
10. Alyssa Pinto $15.00 per hour (Tester)
11. Mary Winner ($45,000 - Supervisor salaried, no overtime pay)

1. You must move all of your equipment to the selected supplier. The equipment in question is a seven CNC machines, drill press, and the actual assembly line (which has five stations with fifteen pieces of equipment). This equipment will need to be validated and tested prior to live production once it arrives in Mexico (this usually takes four weeks). Your team needs to transport and ship this equipment (budget $10,000 for shipping & transportation fees).

1. You need to qualify the drive units prior to using these units in production. The approval process for new suppliers is two weeks but since this is such and important supplier your quality and inspection department would like 4 weeks. They want to be as rigorous as possible to insure great quality.

1. You should send a crew of people for four weeks to train the new supplier. This would include the Supervisor, two CNC operators, two assemblers, one tester (CNC operators and assemblers are all at the same level). Since they are going to be laid off once they are finished in Mexico you need to think about how you are going "incentivize" these employees so they go to do the training in Mexico. This is a very delicate matter so think about how you will handle this situation.

1. Below are the people on your project team and they will be with you for the duration of the project. Prorate their salaries based on completion; they are all working full-time on this project and have no other duties. Once the project is over they will be re-assigned within the company.
   1. John Fredo - Project Manager - $200,000 per year - responsible for the project
   2. Mary Price - Manufacturing Engineer - Responsible for transition of equipment - $195,000
   3. Curt Willis - Quality Manager - Responsible for making sure that the Mexican plant produces good units - $80,000
   4. Kristen Super - Drive Unit Consultant (Old Supervisor - she retired but we brought her back J) - will stay with the company after the transition - $65,000
   5. Tom Tabbler - Manufacturing/Project Assistant - can handle miscellaneous tasks - $52,000
   6. Ed Gajewski - Commodity Manager - responsible for the RFQ, contract and supplier relationship - $95,000

1. The firm uses an overhead multiplier rate of 25% for benefits please build this cost into your project for personnel (salaried individuals only).

1. You need to build up the drive unit inventory during the transition period. In your project plan, state that you will build 6 months worth of drive units and use a 10% inventory fee as an added cost to your project (nothing is free in life J). You will need to determine how many weeks that will take based on current capacity and your ability to work overtime. The supplier will not take your leftover component inventory so plan to budget $25,000 to obsolete this component inventory.

1. A work package must be developed for each finished drive unit. Detailed assembly instructions, updated bills of materials and anything else needed to assemble the drive unit; this can be accomplished in one week by one team member.

9.) Your team needs to determine the frequency of team meetings and build into your

plan along with group norms and rules. Also include meetings with the supplier's

transition team.

10.) A site visit with the project team would be advisable. Plan for it to take 1 week. This

cost should be included in your budget (flight, hotel & meals).

11.) Filming the actual assembly process may help the supplier for training purposes.

This should take 2 weeks.

12.) A contract must be completed prior to the move, build in 4 weeks into the plan

The supplier will accept your contract as is which is awesome!

Your Boss would like the following deliverables:

1. A Project Plan (Write up and AON charts)
   1. Project Summary
   2. SMART - Goals/Objectives
   3. Statement of Work
      1. Scope Statement
      2. WBS
      3. Determine Supplier You will work with and potential savings
      4. Savings after Project Cost (this is a one time savings)
   4. Budget - Proposed - Bottoms Up
   5. Risk Management Plan/Risk Register
   6. RACI Chart
   7. Stakeholder Strategy Plan
   8. Payback Plan
      1. Cost Savings by moving the production line to Mexico
   9. Tasks
      1. Tasks - Who is responsible for what
   10. Network Diagram - Network Diagram showing the critical path and ES,EF,LS and LF

Appendix A

Request for Quote

Project - Drive Units

Project Drive Unit

Introduction

Project Scope - Drive Units

Raymonde is looking for a supplier that can design, modify, develop and manufacture electric forklift truck drive units. This supplier will become an "extension" of the company if they are selected. The chosen supplier will be involved with new product development (early supplier involvement) and will also be a key driver in determining our future drive unit capabilities. As part of this deal we will be looking to sell all of our existing drive unit equipment in addition to our entire drive unit inventory as part of this deal.

Projected Volumes for Drive Units

We have 4 drive units currently in production. Projected sales volumes for drive units in 2023 are as follows:

Year Quantity

2023 26,000

Currently we are asking all of the suppliers quoting on this package to quote all four of our driveunits (see attached). Please use our BOM quote sheet on the emails provided (already sent via email) and give a detailed answer to our entire Request for Quote requirements. Failure to do so will eliminate you from our bid process.

Quote Package Structure/Test Plans

Included in the quote package are the following items:

1. Hard copy of the bill of baterials with all associated prints and specifications
2. Attachment containing all drive unit information
3. Approved Supplier List
4. BOM Quote Sheet
5. Letter from Raymonde authorizing you to receive our pricing and information on components from our suppliers

The attached quotation package contains Raymonde drawings, specifications and all else required in the design, development and manufacture of drive units. We would like to request that you review these, as well as the functional and physical (size) requirements of the product and provide us with your suggested changes to the present design. The objective in this instance is to maintain the present quality, functionality, and features of the product, but at a significantly reduced total cost. We will provide you with Raymonde technical resources on an as required basis to achieve this end.

Quality Assurance Requirements

The production, packaging and shipping of these products will require that the supplier incorporate the following into their processes:

1. Reliability Predictions - Bellcore TR-NWT-00322 Method I, Parts Count, Ground, fixed, uncontrolled, @ ambient temp +40 degrees C
2. Solderability Requirements - ANSI/j-std-001, Requirements for soldering electrical and electronic assemblies (current version)
3. Workmanship Standards - IPC-A-610, Acceptability of Metal Assemblies (Current Version)
4. Packaging/Transport - ISTA 2A, International Safe Transit Association
5. Immunity & Emissions - EN50083-2 Cenelec Immunity & Emissions, FCC part 76 Immunity & Emissions
6. Safety - EN60065 Cenelec LVD, UL 1419 UL Safety, CSA C22.2 No. 1-m94 CSA Safety
7. Tolerancing - ASME Y14.5M-1994 Dimensioning & Tolerancing

Please follow the workmanship criteria precedence below:

1. Approved and Documented Engineering Directive
2. Raymonde Quality Supplements
3. IPC-A-610 (assisted by J-STD-001)

Request for Quote Requirements

1. A non-disclosure agreement must be signed prior to receiving quote package.
2. Quote the entire print package. A detailed log must be kept showing any copies made of our drawings and the recipients of these copies.
3. Supplier must fill out our preliminary quality assessment package (see attached). A

full assessment must be completed prior to production of units.

4. Must sign our Raymonde Supplier Owned Managed Inventory agreement .

5. Barcode incoming products with our barcode specifications.

6. Enter into a long-term agreement - 3-5 years.

7. Productivity improvements of 6% annually.

1. Terms of net 90.

9. Rebate program on new business.

10. Monthly billing.

11. Free freight on all in-bound shipments.

12. All requests for quotes must be submitted by 11/22/22 to be considered for current

business.

13. Print packages and copies of the drawings must be returned to Raymonde upon

submission of final quote (Failure to do so will automatically eliminate you from the bid process).

14. Purchase our entire drive unit inventory.

15. Purchase our drive unit equipment.

16. Provide testing on all drive units.

17. Quote hard tooling for all custom components.

18. Please review the package to identify major cost drivers with suggested re-design

details to further reduce costs.

We look forward to your quote!

Regards,

Ed Gajewski

Commodity Manager

Appendix B - Quote Response
Item Number		Drawing #	Quote Qty's used	Their Selling Price to Us	Our Cost to Make the Drive Units	Capital Tooling Requirements From Each Supplier
910968-524	ASSY DRIVEUNIT 6GNA297/48-42/54SM	229661-AS/AS	6,500		710.0000	0.0000
Funk			6,500	$573.70		$20,000.00
Marko			6,500	$609.59		$10,000.00
0910994-304	ASSY DRIVEUNIT 6-DNA498/48-42/4	225160-U/G 0600	6,500		$805.00	$0.00
Funk			6,500	$499.55		$20,100.00
Marko			6,500	$571.76		$29,375.00
0910994-305	ASSY DRIVEUNIT 6-DNA498/48-65/85	225160-U/G 0600	6,500		$910.00
Funk			6,500	$705.98		$25,100.00
Marko			6,500	$776.14		$19,375.00
0911070-802	ASSY DRIVEUNIT NRT-WB2HP	228972-S/C 0601	6,500		$955.00
Funk			6,500	$647.26		$24,900.00
Marko			6,500	$825.71		$19,375.00
Total Drive Units			26,000