讲解 IFB104TC Project Management 2nd SEMESTER 2023/24

IFB104TC

2nd SEMESTER 2023/24 ASSESSED COURSEWORK

BSc INTELLIGENT SUPPLY CHAIN & BEng INTERNET OF THINGS ENGINEERING

WITH CONTEMPORARY ENTREPRENEURIALISM

Project Management

Group-based Case Study Report

Deadline for group-based submission: 11.59PM on 17th, April 2024 (Week 8) (Beijing time)

IFB104TC Project Management

Group-based Case Study Report

Task:  Submit a group-based case report that incorporates project plan/charter, project WBS, project

schedule network diagram, project risk management, project communication management.  You can

structure report freely except for question2 &3 which require you to apply Project Software with referred templates in the lab classes.

A mission impossible? 30% BOM cost reduction of 50A power system

I. Background and context

Dating back to Aug. 2009, you were assumed to work as a procurement project manager in a

Communication Power System Company, one of your key account customers was China Mobile (China Mobile Communications Group Co., Ltd).  Before Aug.2009, China Mobile’s purchasing organization was decentralized that means each China Mobile provincial subsidiary distributed in Chinese 36 provinces or administrative regions was assigned with an authority to purchase power system equipment and make   purchasing decision on its own.

After Aug. 2009, China Mobile changed its purchasing organization structure and shifted to a centralized

management way which means only the headquarter of China Mobile in Beijing had an authority to acquire power system while the previous purchasing authority owned by each subsidiary must be revoked right away.

In mid-Aug. 2009, the headquarter of China Mobile in Beijing launched a centralized reverse auction which consolidated all annual demand of DC (Direct Current) 50A (Amper) power system from its all subsidiaries

across China, the volume of the bidding is 50,000 systems @ 1 year contract, worth 650 million RMB.  11

vendors participated in the bidding event including your company and your major competitors such as Delta, ZTE, Dynamic, Eltek etc. The bidding evaluation criteria was composed of 50% weighted on technique and

50% on pricing. The bidding competition was so ferocious and so bloody that your company bid a very

aggressive price, 30% lower than the price given to China Mobile in year 2008 and only 2% gross profit

expected if there were no cost reduction carried out forward. Even with so aggressive price bidding, your

company’s price ranked only No.9 among all participants while your company’s technical score ranked No.1. The detailed bidding result of top 5 techniquescore participants is listed below:

According to the feedback from sales department in your company, you knew that it was first time for

China mobile to do centralized reverse auction, and China mobile were still seriously concerned about

product technique performance and quality performance and was very cautious of awarding big share to

alternative competitors.  So, your company’s leading position on techniquescore still can help you to win the biggest market share. The key pending issue is how to keep your company’s profit level after your company’s amazing bid price, 30% lower than last year’s sales price.

As the procurement project manager of your company, you were called to the CEO office with your

supervisor, aprocurement director of your company, to attend a meeting at 8:00AM in the morning of

following day right after China Mobile bidding event.  The main topic of the meeting was: for the sake of the survival of DC power system product line and its profitability requirement, the purchasing department was assigned to reduce the BOM (Bill of Material) cost of 50A power system by 30% accordingly and required to  be completed before deadline April 2010 when the large-scale supply would be shipped to China Mobile.

30% BOM cost reduction sounds a mission impossible, but your company must fight for it, fight for the survival of DC power system product line and fight for DC power system product line colleagues’ salary, bonus and even job safety.

As the procurement project manager, you had to assist your supervisor, the procurement director of your company, to manage the above extremely challenging cost reduction project, what will you do?

II. Group-based Case Report (35% weight +15% peer review, with no more than 3000 words, seven classmates teaming up as a group)

Content of report:  In order to achieve 30% BOM cost reduction of 50A power system, what cost reduction strategies will you take?  In what ways will you get the cost reduced? you are strongly suggested to do some research in product cost reduction area and get familiar with the Specification & Configuration and the BOM cost composition (Appendix 1A/ Appendix 1B/ Appendix 1C) of 50A power system, developing proper cost reduction strategy holistically and partially for each commodity category to ensure hitting your target. The content of your report includes:

1. Project Plan/Charter: referring to the recommended template in class, you are suggested to develop your project plan/charter, which includes Project basic information, project description, project milestones,

project acceptance criteria, project assumptions and constraints and key project stakeholders.  (25 points)

2. Project WBS: referring to the recommended template in class, please develop your project WBS with Cost budget included. (25 points)

3.Developing a Project Schedule Network Diagram: Using Precedence Diagram Method (PDM), develop   your project PERT chart with the help of project management software, find out its critical path and try to apply schedule compression techniques to shorten your project duration. (25points)

4.Project Risk Management: referring to the recommended template in class, please do brainstorming    within your group to identify the risks which could occur in your project, evaluate the identified risks and make a response plan; (15 points)

5. Project Communication Management: referring to the recommended template in class, please make your project communication plan; (10 points)

(Note: Question2/3 are suggested to apply Project Software with referred templates in the lab classes.)

III. Appendix Attachment

Appendix 1A:  DC 50A power system Specification & Configuration

DC 50A power system is named after its 50A rectifier module, which can be optionally escalated to 300A power system configured with 6 pieces of 50A rectifier modules and 600A power system configured with 12 pieces of 50A rectifier modules. DC 50A power system is also configured with one controller module inside.

Appendix 1B: BOM Cost Distribution of DC 50A Power System by Commodity Group

Remark: In your company, one dedicated purchasing professional was assigned to take care of each commodity group.

Appendix 1C: BOM Cost Distribution of DC 50A Power System by Commodity