Project Management Business Plan for a Logistic Company

Student’s name

Name of university

Introduction to the Project

FOWADS LOGISTICS Company will be a sustainable logistic company headquartered in Rochester, New York. The company will have branches in Buffalo and Syracuse. These branches will undertake local business and local delivery as well as delivery between the three cities. The customers will be able to drop off the items of the local branch. Besides, they will be able to order online or via the phone answered by the company staff.

The majority of ordered items will be delivered on the same day, especially between any two of the three cities. Where the same day delivery is not possible, the effort should be made in order to deliver on the following day. In all operations, FOWADS LOGISTICS must strive to achieve and maintain sustainability, waste and pollution reduction.

The project will commence on May 1, 2013 and finish on July 16, 2015. The budget of the project will be $4.2 million. Mike Jeffreys, the founding CEO of FOWADS LOGISTICS Company, will head the project.

Introduction to Sustainable Logistics

Logistics refers to the integrated management of all activities needed to move products smoothly through the supply chain (Schwandt & Franklin, 2010). Increased awareness on matters related to the environmental issues and society, growing significance for the economic drivers of sustainability together with the hyped political action and regulation has resulted in the increased demand for the products of sustainable logistics such as carbon offsets (Mckinnon, 2010). Both the business customers and end consumers give preference to eco-labeling in order to become a standard.

FOWADS LOGISTICS Company will undertake a range of logistical activities from freight transport, inventory management, storage, material handling and information processing. The company structure is shown in the figure below:

Figure 1: Company Framework

FOWADS LOGISTICS will co-ordinate all these activities in a manner that fulfills the customer requirements at the minimum possible cost. In addition, FOWADS LOGISTICS will be a company, which pays special attention to the external costs of logistics related to climate change, noise, air pollution, vibration, and accidents in order to achieve a more sustainable balance between the economic, social and environmental objectives.

As a logistic company dealing in the services such as transportation, warehousing, inventory management as well as the order processing and packaging, FOWADS LOGISTICS will have a substantial environment impact. As a result, the company will make balance between its need earn a profit, on the one hand, and reduction of energy usage, waste and carbon footprint, on the other hand.

Through the Environ solutions department, the company will incorporate waste, recycling and energy together with the environmental compliance to reduce its carbon footprint, save money and time, and meet the environmental requirements. Thus, the firm must adopt the fuel efficient transportation, electricity management together with the solar energy systems. Special attention will be afforded to health maintenance of both the local and global environments. The company will offer the solid organizational support through the provision of extra resources, employee training and motivation for the green practice. In general, Forwards Logistics looks to be different from the other players in the industry by a thorough knowledge relating to the green practice in logistics. In this respect, the company should undertake the following practical implications:

• The business and its management will be in touch with the environmental effect of its logistics activities. The managers will support the adoption of green practices through the senior management commitment. For the purpose of green supply chain achievement, the firm should engage with the environmental regulators in order to gain an understanding of its environmental performance.
• The company must make the benefits of fuel-efficient vehicles, technologies and other green practices clear and easily understandable to all stakeholders. There will be the consistent human resource efforts such as the awareness-raising programs and staff training (Schwandt & Franklin, 2010).

Project Charter

Project Description

The aim of the project is to establish a new sustainable logistics company, FOWADS LOGISTICS, in Rochester, NY, with branches in buffalo and Syracuse cities. The company will offer third-party logistics to the companies and individuals in the three cities. The company will have the corporate divisions: (1) Mail, (2) Express, (3) Forwarding/Freight, (4) Supply Chain/Corporate Information Solutions, and (5) Financial Services Division.

The focus is made on sustainable logistics because of the growing concern over climate change among many companies and citizens in the United States, especially in the industrial urban centers like New York. Thus, sustainability is a matter of considerable concern for many entrepreneurs and their customers. It would be a pleasure for FOWADS LOGISTICS Company to provide the sustainable solutions. In terms of waste and pollution reduction, FOWADS LOGISTICS will emphasize on reduction of carbon emissions by providing with the carbon-neutral shipping services. The company will also make it a public commitment for a clear-cut carbon efficiency goal.

It is the company’s belief that the pursuit of sustainable logistics will significantly transform the American logistics industry.

Project manager

The Project Manager will be Mike Jeffreys, the founding CEO of FOWADS LOGISTICS Company.

Authority level

The Project Manager will have the following responsibilities:

– promote better mutual understanding among the employees about the project specifications, proposal, drawings, contract as well as the schedule for completion of a project;

– manage the planning and implementation of the business strategy;

– serve as a central point of contact for all submittals, RFI’s, and change orders

– be primarily responsible for the financial performance of the project;

– manage the planning and implementation of necessary changes in the workforce and the equipment requirements within the company (Mckinnon, 2010);

– be responsible for management of the continuous efficiency process and quality improvements within the company;

– offer assistance in the interface between the IT/technical developments and operational requirements for the base and two branches (Morosini, 2009);

– be responsible for managing the creation and solution design process of new company projects;

– be responsible for specification, development, testing, and implementation of any new hardware and/or software requirements for the company;

– be responsible for the layout design and implementation of all operations for the reason of storage and working areas;

– be responsible for managing the planning and procurement/recruitment processes of workforce and the equipment requirements for all operations;

– be responsible for the design and implementation of all above tasks in compliance with the established corporate Health and Safety policies;

– organize and head the meetings needed as a part of the project, develop the action plans, and monitor the action items;

– coordinate the resolution of customer complaints and challenges experienced from time to time.

Objectives

Start Date: May 1, 2013

Completion Date: July 13th 2015

Budget Limit: $4.2 million

Business case

FOWADS LOGISTICS will strive to promote safe, cost effective and sustainable logistics for the companies in its area of coverage. State-of-the-art technology will be used to enable quick scheduling and movements of the orders or specifications. The company will also be keen to establish the working relationships with a wide network of most reputable and reliable carriers in the state, where integrity and on-time bill payment are highly appreciated. Furthermore, FOWADS LOGISTICS will deliver consistent high quality along with on-time performance in order to attain quickly and maintain a strong base of satisfied and loyal customers. The company will adopt an aggressive pricing targeted model that is competitive with the rivals and attractive to the customers. Thus, it can attain the exceptional profit margins. More importantly, FOWADS LOGISTICS will have strong dedication and commitment to the environmental responsibility, where the focus lies on the conservation of natural resources. Therefore, the company will be engaged in the development and promotion of best industry practices. The company is expected to command a market share of 25 percent by the end of the second year, since its inception and growth will be a formidable challenge for the industry leaders within five years.

Product deliverables

• Project Management
• Administration
• Legal Team
• Architectural design
• Procurement

 

SIGNED AND APPROVED BY

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Team Organization

The base station in Rochester will be headed by Mr. Mike Jeffreys, who is also the overall manager of the Fowads Logistic project. Two customer service centers will be housed at the ROC headquarters. The main tasks of both customer services will be to pick online and phone orders from the customers. Totally, the six tracks and drivers will be designated to pick up and deliver the ordered packages in ROC, while package unloading and sorting will be done by four workers. Two drivers will deliver the consignments to the Buffalo station, and another two drivers will make the item delivery to the Syracuse branch. The team organization will be the same at both Buffalo and Syracuse as that at the main base in Rochester, New York.

The Project Manager, Mike Jeffreys, is a 44 year-old B.A. holder from the University of Harvard. He has great civic, academic, and business experience in the global transportation, business services, and other logistic-related tasks. Mr. Jeffreys is also a current member of the U.S. Aviation Hall of Fame. He will be responsible for the overall administration of the project.

FOWADS LOGISTICS will run the package delivery service using the outright employees as opposed to relying on the independent contractors. The reason is that the contractor model is not a reliable long-term success strategy. Though, it is a short-term cost cutting approach, which offers the instant rapid growth, but is not entirely sustainable. The use of in-house employees will be beneficial in the long run, because the company will offer more valuable package such as the insurance premiums to the team resulting in more loyalty and motivation and, in turn, better service to the customer (Morosini, 2009). Starting at a lower-pay job e.g. part-time package handler, the employee will be able to move up the ranks to a job category like a driver at least after four years.

Figure 2: Project Team

 

Linear Responsibility Chart Figure 3 Project Mngr. Administrator Procurement D. Technical Operations Manager Lawyer Functional Operations Manager Establish project plan A R R R R R Control the budget and schedule A C Implement the project plan A R R R R R Close the project plan A C C C LEGAL Receive Waste Control Plans A I I R Prepare Environmental Impact Statement A R Create Topographical Plan A R Submit the Environmental Compliance Documents A R Pollution Prevention and Control permit A I I R Monitor all Activities in Compliance with State & Federal Regulations waste management license A R DESIGN Perform Feasibility Study of the waste and pollution management A R C Design the Architectural Plan of the Waste management A Monitor progress of the construction A R I ADMINISTRATION Reports of Expenses vs. Budget A R Receive & Track all Monies A R Pay All Expenses A R Prepare Periodical Financial Statements A R Prepare Payroll Checks A R File All Federal & State Reports A R C Send All Tax Liabilities A R C PROCUREMENTS Select Vendors for Purchases/Rentals A R Place Purchase Orders for Materials A I R Verify All Deliveries for Materials A R Maintain Inventories A I R I Place standby stock in case of emergency A STORAGE AND WAREHOUSE OPERATIONS Storage of products A C Staging of products A C Waste and pollution management A CARE AND FEEDING Coordinate efforts to supply internal support from various organizations A Provide customer service control A Solicit support and services from Resident Agency organizations A

 

R: Person who does the task.

A: Person, who owns the task, is ultimately accountable for its completion.

C: Person who has in-depth knowledge and must/may be consulted.

I: Person who must be informed but not necessarily consulted.

Project Scope

Product Scope Description

1. I) Mail – FOWADS LOGISTICS will offer the mail delivery services for the corporate and individual customers in the area of coverage, i.e. Rochester, Buffalo and Syracuse. The letters will be less than 50 grams. The mail division will have the following business units: mail communication, print services, dialogue marketing, and parcels.
2. II) Express – this division will deal with courier transportation, express and parcel in the area covered the usage of road transport under the Fowads Logistics brand. It will be subdivided into three according to the cities, i.e. Rochester, Buffalo, and Syracuse.

III) Forwarding/Freight – this division of the company will carry the goods by road under the FOWADS LOGISTICS brand. It will consist of two business units: FL Forwading and FL Freight.

IV)Supply Chain/CIS – this division will provide contract logistics together with corporate information solution customized for the customers. Two business units will be the next divisions: (1) FL Supply Chain (offering the warehouse transport and warehousing services, and value-added remedies for the customer’s whole supply chain; (2) CIS (dealing with collection, digitalization, printing, storage and attaining of all types of customer documents) (Tobelmann, 2011).

1. V) Financial Services – FOWADS LOGISTICS Financial services will operate through Bank of America, which has many account holders in the state.

            Project acceptance criteria

• On a budget
• On a schedule
• Efficient utilization of the purchased materials. The residue of materials must be less than 7%.
• The purchasing team will record all made purchases.
• The electrical, plumbing and water systems are set up as described in the contract meeting the requirements/standards.
• The offices meet the industry standards.
• The accredited and experienced realtor, engineers, contractors, director of purchases, risk manager, and lawyer
• The professionally trained workers
• The injuries in the workplace are limited to 3; no death of worker during construction.
• No harmful environmental pollution during construction
• Approval signature by the project manager at the end of facility construction
• Project management
• The weekly written reports from the purchasing department & construction team of the Project Manager.
• Selection and purchase of the materials as agreed with the engineer and general contractor
• Setting up of the construction equipment
• Cleaning up of the construction area

Project deliverables

?          Size of the offices: 24 (300 × 50 feet), 5 (200 × 50 feet), and 5 (200

× 30 feet)

?          Inspection

?          Risk management, certificate and the procedures

            Electricals

?          The materials bought by the purchase department

?          The materials Delivered by Captre Electrical Supply (NY)

?          Design by City Electrical Co., Inc. (Syracuse, NY)

?          Set up by Maynards Electric Supply, Inc. (Rochester, NY)

?          Inspection

           Legal team

• Interviewed & hired by the Project Manager.
• There is no construction of company offices; facility will be leased.
• Advertisement (television, radio, or newspaper) is not a part of this plan.

Project exclusions

Project constraints

• Budget limits: $4.2 million
• Designated start date: May 1, 2013
• Target completion date: July 16, 2015
• Total space needed: 3.6 million square feet
• Size of offices: 24 (300 × 50 feet), 5 (200 × 50 feet), and 5 (200 × 30 feet)
• Building type: warehouse and office combination
• Project team resources will be available whenever needed.
• Required hardware resources will be available whenever needed.
• Required customer resources will be available whenever needed.
• The larger percentage of the project team will be familiar with the technical environment and operating environment.
• Access to the necessary specialized skills of industry and experts will occur as required.
• A “full-time” resource will be at least 35hrs of efficient work within a week.

Project assumptions

Delivery assumptions

• The provided things will be subjected to a certain amount of review cycles.
• Lead-in time of equipment will be known and, thus, foreseeable.

Environmental assumptions

• No manufacturing will be realized outside the budget.
• All arising issues will be settled in due time.
• The project organization will be implemented.
• The system components will be integrated using the minimum of rework.

Budgetary assumptions

• The statistics employed in preparation of the estimates is at least 95% accurate.
• No external consulting will be used.

Functionality assumptions

• The scope of the project will be limited to that described in the project charter.
• The project’s formal charter as well as the scope of change procedures will be adhered as far as needed.
• Inspection
• Standard operating procedures
• Specification
• Certificate
• Project plan

Project configuration management requirements

Project documentation

Changes in control plan

Any changes of plan control will be clearly and promptly communicated by the Project Manager for the project team as well as the project stakeholders. Every change suggested for the project environment will be thoroughly defined, evaluated, and then approved before its implementation (Mckinnon, 2010). The new project roles and responsibilities will be effectively communicated, as well.

Work Breakdown Structure (WBS)

The diagram below shows the work breakdown structure with regard to the project. The structure shows the tasks that must be performed starting from the highest office of the project manager to the subsequent tasks that have to be done:

Figure 4: Work Breakdown Structure (WBS)

 

Project Budget

The table presents the cost associated with the main things from the WBS. In the same way, it is composed of the total budget and the percent of the budget that is set aside for the stated operation.

Figure 5: Project Budget

                                           

Quantity Cost/Day Duration in Days Total Cost % of Allocated Budget PROJECT MANAGEMENT    $562,000 13% General and Administrative Costs $70,000 Labor Costs 1 $600.00 670 $402,000 Contingency Costs $90,000 LEGAL $528,000 12% Law Firm Labor Costs 2 $800.00 35 $56,000 Law Firm consultant Environmental Permit Fees 1 $200.00 295 $59,000 7 $200.00 $413,000 ARCHITECTURAL DESIGN $236,600 5% Feasibility Study (Water and Air) 2 $900.00 26 $46,800 Design the Architectural Plan 2 $850.00 70 $119,000 Monitor Progress 1 $200.00 354 $70,800 ADMINISTRATION $650,360 15% Finance 2 $460.00 458 $421,360 Accounting 1 $250.00 458 $114,500 Payroll 1 $250.00 458 $114,500 PROCUREMENT   $4184,900 54% Labor Costs 4 $200.00 800 $640,000 Drivers 6 $200.00 500 $600,000 Transportation costs 1 $100 100 $100 All Materials for the transportation and waste management $1,200,000  Insurance 10  $300 300 $900,000 Hardware 2 $70 20 $2,800 Depreciation 3 $100 40 $12,000 Office Supplies 3 $200 50 $30,000 Gas & vehicle 10 $800 100 $800,000 $6,161,860 100%

 

Project Schedule

The diagram is a snapshot of the project schedule that is designed from the Microsoft Project software. The project begins from Wednesday 5/1/2013 and terminates on Thu 16/5/15. Details (appendix A and B).

Figure 6: Project Schedule

The Table shows start time, end time and duration of the main items from the project schedule

Figure 7: Duration of major items from the project schedule

Task Name                                                Duration     Start Time   Finish Time

STORAGE AND WAREHOUSE OPERATIONS 40 days Wed 2/5/14 Mon 3/31/14 PROCUREMENTS 50 days Thu 12/4/14 Wed 2/11/15 ADMINISTRATION 485 days Tue 2/5/13 Wed 12/3/14 DESIGN 450 days Sun 6/2/13 Fri 2/13/15 LEGAL 430 days Tue 11/12/13 Tue 2/10/15 PROJECT MANAGEMENT 670 days Wed 5/1/13 Thu 11/12/15

 

Open Issues and Pending Decisions

The repair of the damaged offices’ equipment like the furniture and telephone is the one pending issue that is required finishing. The offices need maintenance and as well as the equipment, while, on the other hand, the wires have some of them depreciated. This leads to the exposed wires that are quite risky to work with them. These elements of the office are vital for the efficient operation of the company. These issues are not included in the total budget. Hence, a proposal is made that these costs must form a part of the budget for the successful completion of the project. This decision is awaiting the reply from Mr. Ronald Coth.

References

Guide, V.D.R., & Jr., Pentico, D.W. (2003). A hierarchical decision model for remanufacturing and re-use. International Journal of Logistics: Research and Applications, 6(1-2), 29-35.

Mckinnon, A. (2010). Green logistics: Improving the environmental sustainability of logistics. London: Kogan Page Publishers.

McLeod, F. (2007).. Developing innovative and more sustainable approaches to reverse logistics     for the Collection, recycling and disposal of waste products from urban centers.    Retrieved from: http://www.greenlogistics.org/SiteResources/9d09bda8-a985-4241-b4ce-        bc6ddaf7ea31_Reverse%20logistics%20report%20WM10.pdf

Morosini, E. F. (2009). Sustainability and effectiveness in global logistic Ssystems. Munich: GITO mbH Verlag.

Potter, A., Mason, R., and Lalwani, C. (2006). Analysis of factory gate pricing in the UK grocery supply chain. International Journal of Retail and Distribution Management. Retrieved from:            http://www.cardiff.ac.uk/carbs/research/working_papers/logistics/Analysis%20of%20Fac          tory%20Gate%20Pricing%20in%20the%20UK%20Grocery%20Supply%20Chain.pdf

Schwandt, A., & Franklin, R. J. (2010). Logistics: the backbone for managing complex organizations. Bern: Haupt Verlag AG.

Sobotka, A., & Czarnigowska, A. (2005). Analysis of supply system models for planning construction project logistics. Journal of Civil Engineering and Management 11 (1), 73-82.

Tobelmann, M. (2011). Public policies on sustainable logistics and the impact on third-party logistics provider. Munich: GRIN Verlag.