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Iron powder is used for manufacturing complex automobile parts, to cut stainless steel ingots, as a flux in welding rods and melting stock for manufacturing special quality steel. The iron powder is broadly classified in two types; one is water atomized and second is sponge iron powder. The water atomized iron powder is manufactured by first melting the steel followed by water atomization of steel to from iron powder and finally heat treating the powder (annealing) to achieve the desired properties.
The project scope is a tool to define how the project is going to perform it activities to achieve the desired goals. The scope incorporates the interest of all the stakeholders by doing the stake holder analysis and identifying the resources and capabilities of the team and the company. The scope also involves doing the risk analysis and make necessary changes to accommodate the risk factors.
In India ABC Ltd. has a manufacturing plant with two production departments, one department is melting and atomizing where raw atomized powder is manufactured and in the second department annealing is done. The demand for the iron powder was increasing because most of the major car manufactures were setting their plants in India and the substantial investment in infrastructure by the government was driving welding and steel industry. The current market demand was around 18000 MT iron power in 2007 and it was expected to increase to 25000 by 2010. The melting plant capacity of ABC ltd in India was 15000MT water atomized powder and in 2007 company achieved sales of 16800MT which included both atomized and sponge iron powder grades.
The five year strategic plan of the company identified melting plant as the bottleneck to achieve the projected sales growth and revenue. As a result top management decided to enhance melting plant capacity from 15000MT to 25000 MT in 2008. The top management termed this strategic project as 'On To The Next Level' project. The project was of strategic importance to maintain the desired growth rate and market leader position.
The project team was formed consisting Process Engineer, Maintenance Engineer, Production Manager , Project Manager, Maintenance Manager, Project Consultant and Works In charge.
The project requirements were discussed by the project team members to arrive at the possible actions to be taken to meet the strategic goal and then a final meeting was held to get approval from Managing Director. The changes suggested by MD were incorporated .
Defining the Scope
To define the scope various tools were used, such as Expert judgment, Stakeholder analysis and Alternative techniques.
ABC Ltd. is a part of number one iron powder manufacture in the world with manufacturing facilities in Sweden, North America, Brazil, and China having similar manufacturing set up, so company discussed various projects with the experts in the group to finalize the projects. Company consulted with experts to check the feasibility of the projects in terms of cost, time and local supplier availability to carry out the work.
The key stakeholders analyzed were the
1 Annealing Plant which further processes the iron powder manufactured in the melting and atomizing plant. The project will reduce annealing plants dependency on importing the material and hence reduce inventory levels.
2 All employees of the company because success of the project is directly linked to future of the employees
3 Atomizing Plant for improved productivity and reduced over head cost
4 ABC Ltd itself for maintaining the market leader position and to achieve future growth plan
5 The Top management as the sponsor of the project
This technique was presented three options, one was to install a ladle furnace which company do not use, the second was to use a spare shell and whenever arc furnace needs relining using the single minute exchange of dies (SMED) concept interchange the furnace shell and third option was to replace the current furnace which requires lining with water cooled shell furnace. Further analysis decided to use third option to replace current furnace with water cooled shell.
The project started on 11 January 2008 with the strategic goal to increase the melting and atomizing capacity to 25000 MT from current 15000 MT.
The project had seven major deliverables as, to increase the arc furnace capacity by replacing the old brick lined 5 MT arc furnace with new water cooled 5.5 MT arc furnace, to install oxygen lancing system to reduce the melting time by 18 %, to increase the furnace arc furnace power input capability from 2400 KWH to 3300 KWH, to strengthen the melting shop structure to support 20 MT over head crane from current 10 MT over head crane, design and develop 6 MT capacity liquid metal handling ladles, to lower the atomization platform by 1.4 meters to accommodate bigger ladle and smooth operation of new crane, upgrade the belt filter system to handle 100 MT / Day powder from current 72 MT/ Day, to modify the current rotary powder dryer to handle 100 MT/ Day.
The project excludes training of production operators for new melting practices because of adoption of new technology. This work is the responsibility of production team and hence not included in the project scope.
The project updates were decided to take place between the project manager, project consultant, works in charge and managing director of ABC Ltd weekly via email exchanges and face to face power point presentation in the first week of the month and in written project document. The project was expected to finish by 31 Dec 2008 with total capital expenditure of £0.40 million.
The project assumed support from top management as it was a mix of Top down and Bottom up approach and also the project expected to receive the financial support and on time flow of capital from the finance department.
The major risk associated with this project was inability to complete the project on time as there were 7 major subprojects identified and as this is a process industry incompletion of any subproject will fail to deliver the desired increase in the productivity.
Creating a Work Breakdown Structure (WBS)
According to PMBOK " WBS is a deliverable oriented hierarchical decomposition of work to be executed by the project team to accomplish project objectives and create the required deliverables, with each descending level of WBS representing an increasingly detailed definition of the project work." ( A Guide to the project management body of knowledge, 4th ed.).
For this project the first level deliverables were the eight sub projects identified by the team. Each project then analyzed in detail to the activity level which can be managed by single person The following diagram shows the WBS for 'On To The Next Level Project' at ABC ltd.
Project Planning using MS Project
The project to achieve the increase in production from 15000 MT to 25000 MT required enhancing the capacity in all the major production steps/ processes and the production shop civil structure. There were eight major projects identified and due to limited man power there was problem allocating resources. The project team included a full time project consultant, factory work in charge, project manager, process engineer, maintenance engineer, maintenance manager and production manager. It was also important to keep plant shutdown to minimum level as it would directly affect the annealing plant and on time delivery of material to the external customers.