Custom Woodworking Company—Woody 2000
Summarize the Case
The Custom Woodworking Company is a small-to-medium sized custom furniture and cabinet making company located in Someplace, British Columbia. It is represented by Ron Carpenter, CEO, his wife Emelia Carpenter, the president and their son John Carpenter, the director. The company is privately held with approximately 850 employees. Throughout the years, they quickly gained reputation for attractively designed and well-constructed furniture and built up a loyal staff and work force. In 1989, Due to a mini-boom in commercial construction, Bruce Sharpe, the company’s VP Sales and Estimating persuaded directors to expand their manufacturing business. There were two options for the company to go and there were either stay in the premises and expand or relocate to completely new and more modern facilities. Due to various personal views on this issue and polarization of opinions, Ron Carpenter, also called “Woody”, organized a meeting of directors and key personnel to come to a resolution regarding this matter. Based on the meeting, project concept was settled that the company will remain at the existing property but will expand the current facility by 25%. The premises will be modernized with new equipment, software and hardware and the directors’ premises will be renovated. The budget available for the changes was set at $17 million and a target date of 18 months. The project got the name “Project Woody 2000”. Spencer Moneysworth, VP Finance and Administration were named responsible for the project. He didn’t involve production people into the project but immediately invited EID (Expert Industrial Developers) reasoning that their knowledge of industrial work would result in lower total project cost which didn’t happened because their price and schedule were excessive. The decision has been made that they will be paid an hourly rate covering direct wages, payroll burden, head-office overhead and profit. They will also employ Schemes and Plotters (S&P) for the building and industrial design work. Moneysworth finding out that he needs assistance, gave the running of the project to Ian Leadbetter, young mechanical engineer with no experience and training in project management and without any understanding of “project life-cycle” whatsoever. Project came across several complications such as changing of production train specification, modification of software program, time delays, delays in delivery schedule, and late construction. Significant problems appeared such as bad equipment installation, disorganization, and insufficient knowledge of things that needed to be done resulting in overrunning of the project. The final expenditures exceeded the planned budget and the project was only 85% complete. Woody’s lost control over the project, threw money at every problem to get the plant operational. Their activity in the region fell dramatically and also the demand for their products decreased.
Identify and define central problem or problems.
Several problems appeared during the project life cycle which caused significant delays, project overrunning, exceeded budget spending, and delays in completion of the project and getting the plant operational.
To identify the origin of the problem and why the problem occurred in the first place I would use the Root Cause Analysis. (Mind Tools 1995-2009) RCA involves examining the outlines of negative effects, finding hidden errors and mistakes in the system, and discovering specific actions that contributed to the problem.
The main root causes of the project, I would define as follows: the company did not have project manager that would be...
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