Procurement system for Harley Davidson Motor Company Project Proposal
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1 Procurement system for Harley Davidson Motor Company Project Proposal Kristjan Jõgi Margus Ojanurme Taivo Teder
2 Contents Introduction Background Project objectives Constraints Methods Project activities and products... 5 Table 1. Activities and deliverables Features and benefits Resources and costs Costs... 8 References
3 Introduction We are very thankful for this opportunity to submit this proposal to the Harley Davidson Motor Company in order to provide a possible solution of the new procurement system. The purpose of this document is to give necessary information about project s (Procurement system for Harley Davidson Motor Company) feasibility, adequacy to meet the specified requirements presented by the Harley Davidson Motor Company[12], and this project worthwhileness. We have provided additional information about this project feasibility in the Feasibility Study document[8], actions and people associated with this project in the Organisation Plan document[9], effort estimations and costs and their reasons in the Budget Plan document[10], and risks in the Risk Management document[11]. 1 Background Current situation shows that Harley Davidson Motor Company consists of different purchasing organisations which are located in different areas[1]. Over the years these purchasing sites have adopted independently new methods how to handle procurements, also acquired and developed separate information systems for purchasing or modified the existing systems to meet the needs of local sites. There are more people involved with making purchase order requests than there are individuals in the Purchasing (organisational unit) itself. Company s organisational structure consists of different organisational units (manufacturing, engineering, accounting and other), who are interacting with Purchasing also. Currently the production of motorcycles is somewhat slow because of the complexity of the current procurement system provided and inconsistencies in other information systems at the Harley Davidson Company purchasing sites, which have customised differently. Too much time is spent on preparing procurements and searching for needed spare parts than doing actual valuable and strategic work. In order to get appropriate parts at the best possible cost in terms of quality, quantity, time and location, a new procurement information system needs to be developed which supports the procurement processes and requirements of the Harley Davidson Motor Company and is common and available at all purchasing sites[12]. 3
4 2 Project objectives The main objective is to develop a procurement system for Harley Davidson Motor Company to increase their motorcycle production capacity. The other objectives are as below: reduce complexity of procurement system through intuitive and simple user interface ( e.g. easy to learn; error correction; reduced manual activities: preparing purchase takes no more than 5 mouse clicks; fields are prefilled with required data); reduce complexity of procurement system through commonality (e.g. Harley Davidson Motor Company sites will have common procurement processes in common system) strategic source routing (reduced procurement preparation time and finding the best available supplier in terms of time, money and quality); inventory planning (e.g. time-to-market and regulation of the purchases based on the inventory status); lower the maintainability costs of procurement system (the system is a cloud service, which means no on-site maintenance is necessary and all the work is done in one place where the server station is located); assure scalability of the system (a subgoal which allows to increase the capacity of the resources if needed); system integration with the spare part suppliers nearby. These implementations should manifest themselves as follows: lower inventory and carrying costs; faster delivery times and improved (or stable) quality of motorcycles; increased productivity of employees (procurement system users) thus faster time to produce the motorcycles; improved supplier chain relationships. 2.1 Constraints Time the estimated duration of this project (development of the procurement system for the Harley Davidson Motor Company) is 2 years. We have to stay in that time frame. Money total investment for this project is USD, which is allocated from the Harley Davidson Motor Company budget for the new procurement system and is used to cover the expenses and the functionalities which the new procurement system must incorporate[3]. Skills our development team has previous experience working on projects similar to the current one (over 3 successful projects on developing procurement systems to our clients). [4] Our staff will handle the time pressure and carry out the needed tasks according to their skill, otherwise all the shortcomings (not in the budget, over deadline, inadequate quality) are covered from our own 4
5 budget. Personnel competence and qualification requirements are brought out in Organisation Plan document. [5] Quality quality is managed through quality control, which means for each activity and project deliverable we have to assure that they are with acceptable quality (complete and accurate), e.g. requirements are met, reviewing and testing to evaluate and improve the quality. 2.2 Methods In this subsection we introduce methods which are needed to attain the project objective. We are using spiral software development methodology for larger projects like this one. At the beginning of every iteration: we reconsider all the activities that have been completed so far and what needs to be implemented next; we make an analysis and analysis results indicate if there is something that needs to be improved; we reconsider the requirements if some of the objectives may have changed; receiving positive or negative feedback from our customer (Harley Davidson Motor Company) for the intermediate demonstration and if needed making lists of adjustments proposed by our client and implementing them in the next iteration; checking if we are in budget and on schedule; assigning project activities to the people. Besides that we have organised our work through the issue tracker, also we are having weekly meetings (revisiting what needs to be done and what is completed so far). We are working with technologies that we are familiar with when developing procurement system as a cloud service, e.g. we are equipped with necessary resources such as test servers, workstations, testing tools, IDE-s for developers. The main programming language is Java. Procurement system is going be a on-demand software, which means that no actual software installation is required inside the company facilities, because the system (service) is accessible via Internet as a Internet Browser Application (a cloud service). Also we are developing this software solution for Harley-Davidson company, this means no in-house activities related to the procurement system is conducted by Harley-Davidson company IT department. 3 Project activities and products In Table 1. Activities and deliverables we have shown the activities that are conducted during the project and we have pointed out what are the outcome (intermediate product) of each of the 5
6 activity. More detailed information about activities and personnel are given in the Organisation Plan document [9]. Table 1. Activities and deliverables. Activity Requirements specification Analysis of the previous system Risk analysis Planning (project plan and test plan) System design Implementation (code and test) Testing Demonstration to the client Deployment Final phase (maintenance, user support) Description As a result of communications with customer, the requirements specification document is compiled, which consists of complete description of the procurement system to be developed. Requirements specification process also includes gathering the requirements, defining the purpose and the scope of the system, specific non-functional and functional requirements. Cooperating with the IT staff from the customer side, previous system needs to be analysed to point out all the weaknesses and strengths when the older system were being used. User needs is taken into account during this analysis. This process outcome is the system analysis document with the requirements that can be considered in the system design phase. Defining all the risks associated with this project and compiling a project risk management document. When any kind of risk may occur that is defined in the risk management document, then necessary measures is taken into account to mitigate or eliminate that risk. Risks analysis document content is used as a part of creating project plan document. Considering all the necessary means and activities to be carried out during this project, based on this a project plan document is written. Test manager will conduct a test plan that corresponds to the system requirements. Transforming detailed requirements into system design document, which describes in detail desired features and functionalities of the new system (data models, process diagrams). Converting system design into system functions, also coding and preparing test cases. Testing process includes testing the system modules and performing integration tests after different system components are connected. Presenting the new system to the customer. Customer may give feedback what needs to be improved during the first demonstration and verifying if the system meets the expected requirements so far. At the final demonstration the new system needs to be fully working and ready to be deployed from the production environment into the business environment. The final stage of the development, the new system is put into action and runs in the business environment. This part of the system process focuses on system maintenance (fixing errors, making enhancements) and also user training and support, so that the adoption of the new system by the user can be painless as possible. Deliverable (intermediate product) Requirements specification document Analysis document Risk analysis document Project plan and test plan document System design document with data models and process diagrams System modules Test reports Working system or prototype, feedback from the client Cloud servers, integration reports Error reports and fixes, user manuals and feedback 6
7 4 Features and benefits The benefits ([8], The benefits ) and functionalities that we are offering and which the new procurement system must incorporate are as follows: inventory planning, updating, and inventory just-in-time methods utilisation, e.g. regulation of purchases based on the inventory status; procurement preparation: this functionality is made intuitive and simple enough to increase the employees productivity for not spending too much time on preparing procurement requests; supplier management: connecting new suppliers with the system, integrating the system with suppliers spare part database; results in improved partnership with suppliers; sourcing for spare parts: system tracks the best available supplier nearby, which results in decreased inventory and carrying costs, keeping or increasing the quality of spare parts, the delivery time is faster, so the motorcycles manufacturing time will be faster; maintainability of the system: system can be updated and extended; the system is distributed in the cloud, which lessens the chances for the system to be unavailable; after the system is put into the working environment, maintenance is still provided; scalability of the system, e.g. increasing the capacity of resources (memory, number of cloud server, adding more memory) if needed; commonality of procurement system at all the Harley Davidson Motor Company sites, which results in increased complexity of the procurement system in different company s sites; collecting statistics and creating logs which are needed to have a overview of different user activities and performance 5 Resources and costs Time Time is a limited resource that we can t waste. We have proposed the time for completion 2 years [2], so we will stay in that time frame. In our Budget Plan document we have estimated the time effort in person months, which is divided between our team members[3]. Staff Our team consists of 14 persons: 1 project manager, 1 integration manager, 1 system architect, 1 specification analyst, 1 system administrator, 4 programmers, 1 junior programmer, 1 test manager, 1 tester, 2 user support persons. The team qualifications and roles are brought out in Organisation Plan document [6]. Working space We need a workspace which will be big enough for our staff to work in. The working space has to be equipped with electricity, water, conditioning and heating system and the environment has to be designed to be working friendly. Cost of working space is USD per year[10, Table 9]. 7
8 Working equipment The workspace has to have all the necessary equipment as well. This includes personal computers, software, phones, laptops, servers, printers, scanners, furniture. Cost of working equipment is USD per year[10, Table 9]. By supplying our staff the needed equipment, it will make it more likely to finish the project on time and budget. 5.1 Costs Table 2. Estimated costs. Detail information about the costs are at Budget Plan document [10] Cost type Cost (USD) The cost of workforce ([10], section 3 The cost of workforce ) Additional costs associated with workforce ([10], section 3.2) Other (general) costs ([10], section 4) Total: The total expenses for this project during a two-year time frame are USD. We have provided the information about this project worthwhileness in the Feasibility Study document under the section 7 ( Costs ) [8]. We have showed that the time to get back initial investment is about 2 years for Harley Davidson Motor Company when using this procurement system. References 1. Harley Davidson paper exhibit 2a Company Sites and Functions p. 14, Harley Davidson paper exhibit 5 Breakdown of Purchasing and Materials Professionals Time by Activity p. 17, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Budget plan. Section 5 - Profit margins and reasons, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Budget Plan. Section Scale factors, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Organisation Plan. Section 4.2: Job profile holders, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Organisation Plan. Section 4: People, Harley Davidson paper, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Feasibility study, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Organisation plan, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Budget Plan, K. Jõgi, M. Ojanurme, T. Teder. Procurement system for Harley Davidson Motor Company: Risk management, Harley Davidson paper exhibit 3 p. 15,
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