Project - Printed Circuit Board Assembly Line Move Simulation

Phillipe Broadband Networks in Syracuse, New York is undergoing some dramatic business changes. They make broadband equipment for the cable TV industry. Phillipe is undergoing immense cost pressures and finds themselves in a commodity marketplace (only the lowest cost equipment provider will survive). Scientific Orlando is taking market share away from Phillipe due to their production facility in Shenzhen, China. Your company executives at Phillipe 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. Phillipe's management would like to outsource the facility's printed circuit board 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 Shenzhen, China). Your boss would like this move done in seven 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 printed circuit boards 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 3,757 units a week (195,396 - 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 (Pick & Place Operator)
2. Kyle Pulcher $10.00 per hour (Pick & Place Operator)
3. Tanner Munto $8.00 per hour (Wave Solder Operator)
4. Julia Dunn $15.00 per hour (Wave Solder 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 (Assembler)
11. Kristen Super ($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 pick and place machine, wave solder, 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 China (this usually takes four weeks). Your team needs to transport and ship this equipment (budget $10,000 for shipping & transportation fees).
2. You need to qualify the circuit boards prior to using these boards 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.
3. You should send a crew of people for four weeks to train the new supplier. This would include the Supervisor, one pick & place operator, one wave solder operator and two assemblers, all of people working in this department are at the same skill level. Since they are going to be laid off once they are finished in China you need to think about how you are going "incentivize" these employees so they go to do the training in China. 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 all of that the Chinese plant produces good units - $80,000
   4. Kristen Super - Printed Circuit Board Supervisor - 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 30% for benefits build this cost into your project for personnel (salaried individuals only).

1. You need to build up finished circuit board inventory during the transition period. In your project plan, state that you will build 6 month's worth of finished circuit boards 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.
2. A work package must be developed for each finished circuit board. Detailed assembly instructions, updated Bills of Materials and anything else needed to assemble the board; 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!

These are the actual questions which need to be solved:

Your Boss would like the following deliverables:

1. A Project Plan (Write up and AON charts)
   1. Project Summary
   2. 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 China
   9. Tasks
      1. Tasks - Who is responsible for what
   10. Network Diagram - Network Diagram showing the critical path and ES, EF,LS and LF