Project Report - Establishing of MATALAN Middle East Distribution Centre

Establishing of MATALAN Middle East Distribution Centre

Project of Tharanga Jayalal – Supply Chain Solutionist

January 2011




January 2011

Table of Content

Preface to the project .................................................................................................................. 3

1: Initiating the Project

1:1. Purpose ........................................................................................................................... 4

1:2. General Objectives ........................................................................................................... 5

1:3. Specific Objectives ........................................................................................................... 5

1:4. Tasks & Responsibilities .................................................................................................. 5

2: Planning the Project

2:1. Work Breakdown Structure (WBS) ................................................................................... 7

2:2. Schedules – Project Calendar ......................................................................................... 8

2:3. Critical Path Analysis ....................................................................................................... 9

2:4. Resources Allocation & Budgeting ................................................................................. 11

2:5. Staffing ........................................................................................................................... 13

2:6. Communication Plan ...................................................................................................... 14

2:7. Contact Information ........................................................................................................ 15

2:7. Risk Management Methodology, Risk Response Plan & Risk Analysis .......................... 16

3. Execution the Project

3:1. Execution of the Project Plan ......................................................................................... 17

3:2. Status Report: Project Execution Plan (PEP) ................................................................. 18

3:3. Change Log: .................................................................................................................. 19

3:4. Quality Management in Project Execution ...................................................................... 19

4. Delivering the Project

4:1 Documents Transfer ........................................................................................................ 19

4:2. Training & Releasing of Staff .......................................................................................... 19

4:3. Releasing of Other Resources ....................................................................................... 20

4:4. Project Closure & Lessons learned ................................................................................ 21



January 2011

Preface

One of the leading fashion retailer in United Kingdom “MATALAN” made it’s

overseas debut in the Middle East Region in the year 2008. Currently operating 03 retail

stores in UAE, & 01 in Jordan with an expansion plan of 16 more retail stores across the

region by 2015. MATALAN is solely distributed in the Middle East by the Business

Trading Company (BTC), Doha, Qatar and the business unit has named “MATALAN

Middle East”.

“MATALAN Middle East” interests in supporting new stores opening and its

continues supplies, improving store replenishment process and reducing supply chain

costs by operating a “Central Distribution Center (CDC)” for the Middle East region.

Herein the proposed set up calls “MATALAN Middle East Distribution Centre” or

“MATALAN MEDC”.

The management of “MATALAN Middle East” wishes to consider the outsourcing

option fulfilling the said logistics requirements.

In this report “MATALAN Middle East” discuss the complete Project Life Cycle

(PLC) by four phases: - Initiation - Planning – Execution - Delivering & Closure.



January 2011

Phase 01: Initiating the Project

1:1.Purpose:

Establish a Regional Distribution Centre (MEDC) for MATALAN Middle East &

outsource its management” to 3rd party logistics (3PL) in-order “MATALAN Middle East”

to focus on their co-business activity of Retailing”

NOW: Existing Logistics Set-up of Matalan Middle East:

THEN: Projected Logistics set-up of Matalan Middle East:

MEDC JAFZ - UAE

Stores in

Jordan

Stores in

Saudi

Arabia

Stores in

Oman

Stores in

UAE

Stores in Bahrain Stores in Qatar

Stores in

Kuwait

MATALAN

CDC - UK

Arabian Centre - Dubai UAE

Lamcy Plaza - Dubai UAE

Al Baraka – Jordan

MATALAN CDC - UK Dalma - Abudhabi UAE

Arabella – Jordan



January 2011

1:2: Generic Objectives:

a. Find the best fit cost module to run the operation.

b. Discover the most efficient operation process to manage the Logistics Activities.

c. Select the most reliable service provider / s for a long term business partnership.

1:3: Specific Objectives - Activities to be outsourced:

a. Establishing & Operating the DC of MATALAN Middle East

b. Inbound Transportation, Sea, Air & Land

c. Distribution of goods to MATALAN stores within UAE territory

d. Distribution of goods to MATALAN stores across Middle East region / Out of UAE

1:4. Tasks & Responcibilities:

(Definitions: - SMT: Senior Management Team, COO: Chief Operating Officer,

HRD: Human Resources Department, HRM: Human Resources Manager, LogD:



January 2011

Logistics Department, LogPM: Logistics Project Manager, LC: Logistics Coordinator,

SUP: Supplier / service provider, LegD: Legal Department, CLO: Chief Legal

Officer, PA: Personal Assistant)

Responsibility

# Task Department Owner

1 Implementing of the Logistics Department to MATALAN ME SMT COO

2 Recruiting of a Logistics Project Manager HRD HRM

3 Recruiting of Logistics project staffs HRD HRM & LPM

4 Project scope walk through for project team members LogD LPM

5 Analyze & possible solution / solutions definition LogD LC / LPM

6 Identifying potential suppliers & initial discussions LogD LPM

7 Creating the RFQ / RFP LogD LPM

8 RFQ /RFP Distribution LogD LC

9 Technical support to suppliers for proposals submission LogD LC

10 Rate analyzing & short listing most convenient proposal / s LogD LPM

11 Further negotiations for rates with shortlisted supplier / s LogD LPM

12 Selection of service provider / s LogD LPM

13 Drafting of Service Contracts LogD & SUP/ s LPM / SUP

14 Contracts Review LogD & SM COO

15 Official Contract signing LegD CLO

16 Go Live LogD & SUP/ s LPM

17 Closure LogD LPM



January 2011

Phase 02: Planning the Project:

2:1. Wrok Breakdown Structure (WBS):



January 2011

2:2. Schedules:

Project Calender:

Description Start Date

Duration Days End Date

Implementing of the Logistics Department (LD) to MATALAN ME 1-Feb 28 1-Mar

Recruiting of a Logistics Project Manager (LPM) 10-Feb 42 24-Mar

Recruiting of Logistics Coordinators (LC) 31-Mar 14 14-Apr

Project scope walk through for project team members 30-Apr 7 7-May

Analyze & possible solution / solutions definition 30-Mar 21 20-Apr

Identifying potential suppliers & initial discussions 2-Apr 35 7-May

Creating the RFQ / RFP 20-Apr 21 11-May

RFQ /RFP Distribution 12-May 3 15-May

Technical support to suppliers for proposals submission 15-May 21 5-Jun

Rate analyzing & short listing most convenient proposal / s 6-Jun 4 10-Jun

Further negotiations for rates with shortlisted supplier / s 11-Jun 14 25-Jun

Selection of service provider / s 25-Jun 7 2-Jul

Drafting of Service Contracts 7-Jul 14 21-Jul

Contracts Review 22-Jul 7 29-Jul

Official Contract signing 1-Aug 4 5-Aug

Go Live 15-Aug 30 14-Sep

Closure 15-Sep 7 22-Sep



January 2011

Project Calender on Gantt Chart:



January 2011

2:3. Critical path analysys:

Critical path:

B:E:G:H:I:J:K:L:M:N:O:P:Q

42+ 21+21+3+21+4+14+7+14+7+4+30+7 = 195 Days

Start

2

3

4 5

7

6 8 9 10 11 12 13 14 15 16 17 18

A=28

B=42

C=14 D= 7

E=21

F=35

G=21 H= 3 I=21 J= 4 K= 14 L= 7 M=14 N=7 O=4 P=30 Q=7



January 2011

2:4: Resources Allocation & Budgeting:

Project Resource / Month Feb March April May June July Aug Sep Oct

Human Resource Executive (HRE) 0.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00

Logistics Project Manager (LPM) 0.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.00

Logistics Coordinator (LC) 0.00 0.00 1.00 2.00 2.00 2.00 2.00 2.00 0.00

Cost Plan

HRE @ $2725 Per Month $0 $2,725 $2,725 $0 $0 $0 $0 $0 $0

LPM@ $ 6800 Per Month $0 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $0

LC@ $ 2000 Per Month $0 $0 $2,000 $4,000 $4,000 $4,000 $4,000 $4,000 $0

Equipment for LPM Office Set-up $0 $1,200 $1,200 $1,400 $1,400 $1,400 $1,400 $1,400 $0

Consumables $0 $250 $250 $250 $250 $250 $250 $250 $0

Total per month $0 $10,975 $12,975 $12,450 $12,450 $12,450 $12,450 $12,450 $0

Cumulative cost $0 $10,975 $23,950 $36,400 $48,850 $61,300 $73,750 $86,200 $86,200

mailto:PM@$800%20per%20day

mailto:LPM@%20$%206800%20Per%20Month

mailto:LC@%20$%202000%20Per%20Month



January 2011



January 2011

2:5. Staffing:

Organization Breakdown Structure (OBS):

Additional Information on OBS & its advantages:

Simple & straightforward staffing solution deploys to the project since the “Logistics

Project Manager” who acts as the entire project head with his / her subject specialty of

Logistics & Service Outsourcing. His / Her subordinates are experienced Logistics

coordinators in the same “Logistics” industry and carrying out specific tasks assigned by

“Logistics Project Manager”.

Though the project cost is bit high due to hiring of experienced individuals for junior

functions in the project, it gives a great advantage for the “After Project Operation

Management” of MATALAN Middle East Logistics Department.



January 2011

2:6. Communication Plan:

#

Communication Activity

Communication Method

Audience Frequency Leader Deliverables

1 Kick-off meeting

Face to face COO, Project Team

Once LPM Objectives and A to Z project plan

2 Progress review Face to Face Project Team

Monthly LPM Progress, Difficulties & Possible solutions

3 RFQ Drafting Face to Face Project Team

Start & End

LPM Contents, templates of quotations

4 Discussion with suppliers

Face-to-Face

Sales & Marketing people of Suppliers

Once per Supplier

LPM Identify potential and capable suppliers

5

Distribution of RFQ to potential suppliers

E-Mail Service Suppliers

Once LC

Provide completed RFQ including quotation templates, Submission cut offs AND follow-up for acknowledgement

6

Technical Support to Suppliers in submitting proposals

Telephone, E-mail, face to face as required

Service Suppliers

As required

LC

Provide technical information about the project & expectation

7 Cut-off remind E-Mail Service Suppliers

Once LC Reminding of the proposal closing dates

8 Receiving of Proposals

E-Mail From Supplier

Once LC Receiving of complete proposal

Report continued to next page



January 2011

#

Communication Activity

Communication Method

Audience Frequency Leader Deliverables

9 Acknowledgement E-Mail Service Suppliers

Once LC

Acknowledging of the proposals in professional manner

10 Discussion with shortlisted suppliers

Face-to-face Shortlisted Service Suppliers

As required

LPM

Negotiating rates, processes, and understanding the reliability.

11

Briefing to COO of the final selection methodology & it's Outcome

Face-to-face COO Once LPM Achievement & further actions

12

Announcing of the selected service provider / providers

E-Mail

Selected Service Supplier / Suppliers

Once LPM

Appreciation of the proposal & status of selection

13 Contract t Drafting Meeting

Face to face

Selected Service Supplier / Suppliers

Twice LPM Contract Drafting & Reviewing

14 Operation Ramp-up Meeting

Face to face

Project Team, Selected Service Supplier/ suppliers

Twice LPM Understanding of the deliverables

15

Project Closure Meeting

Face to face & E-Mail

Project team

Once COO Final Review & Appreciation

Contact information of the project office:

Project Manager, MATALAN Middle East Logistics & Logistics Service procurement

project. Lamcy Plaza, Dubai. Tel: +971553774117, [email protected]

mailto:[email protected]



January 2011

2:7. Risk Management Methodology:

Risk Response Plan:

Risk Category Possible Risks Involved Proposed Solution

Responsible Department & Individual to

Manage the risk

1 Staffing Risk Leaving of project staffs in between the project

Contracts with Employees not to leave until the project end

HR- HRM

2 Technical Risk Getting select of one single supplier for all the services

Try best to select multiple service suppliers for keep the service competition

LD - LPM

3 Organizational Risk

Possible influence for the final decision in selecting suppliers that effect the project outcome against expectation

Clear & high level order from Senior Management for influential positions to leave along the decision making practice to COO & LPM

SMT - COO

4 External Risk Cross leaking of tender information by staff to other suppliers

Educate project members on laws of tender management

SMT - COO

Risk Analysis:

Risk Probability Severity Detection Difficulty When

Staffing Risk Medium High Low Throughout

Technical Risk Medium Medium Law Finalization

Organizational Risk Medium Medium Medium Post-finalization

External Risk High High High Post-finalization

Risk

Categorizing

Risk

Identification

Risk Response

Development

Risk

Control



January 2011

Phase 03: Execution of the Project

3:1. Executing the Project Plan:

Upon completion the planning stage, below are the activities that wish to carry-out by

project team to execute the project.

a. Creating of the RFQ / RFP:

A well defined document that include organization background and its product,

services wish to outsource, expectations, its service level, KPI methodology &

cost model. expected. Proposals are called in CPPC (Cost plus percentage of

cost) basis.

b. Response to RFQ / RFP:

Dully completed proposals that covers the expectation defined on the RFQ /

RFP.

c. Selecting of Suppleir/ suppliers:

A well designed selection process to followed to select the best fit service suplier

/ suppliers to each service. All shortlisted suppliers will be allowed to

demonstrate their proposed operational processes face to face with project team.

The steering committee (COO & LPM) who finally decide whom to offer

contracts with considering various factors. Project team suggestions were highly

considered in the stearing comitee decision.

d. Announcing of the selected service supplier / suppliers:

All the participants will be addressed by MATALAN Middle East on the status of

their proposals. Selected supplier / suppliers will be invited for the further steps of

the project and unsuccessful proposals will be notified with a thanking letter for

participation.

e. Creating of Contract / s:

Individual contract will be signed with suppliers for each service. Contracts to be

designed collectively with Matalan Logistics Project Team & respective supplier

with using standard terms and conditions of both parties. Each contract will be

split to THREE parts.



January 2011

Part One: Responsibilities & legal bindings in acoordance with organization,

industry & UAE laws.

Part Two: Service level agreement (SLA) that provides complete services and its

level of delivery.

Part Three: Key performance Indicators (KPI) & matrix that monitor the SLA

effectively. A process of applying financial penalties will be imposed for key

activities in services that effect the Matalan Business in a failure of the service.

3:2. Status Report – Project Execution Plan (PEP):

- The major activities of the project delivarables will be monitored by the PEF

Green Achieved

Ongoing

Failed in terms of on time achieving

# Task name Start date

End date Status

A Resources Arrangement

A:1: Implementing of the Logistics Department 1-Feb 1-Mar Green

A:2 Recruiting of a Logistics Project Manager (LPM) 10-Feb 24-Mar Green

A:3 Recruiting of Logistics Coordinators (LC) 31-Mar 14-Apr Green

B Major Tasks / Activities

B:1 Creating the RFQ / RFP 20-Apr 11-May Green

B:2 RRFQ /RFP Distribution 12-May 15-May Green

B:3 Rate analyzing & short listing most convenient proposal / s 6-Jun 10-Jun Green

B:4 Selection of service provider / s 25-Jun 2-Jul Green

B:5 Drafting of Service Contracts 1-Aug 5-Aug Green

B:6 Go Live 15-Aug 14-Sep Green

B:7 Project Ends 22-Sep Green

-



January 2011

3:3. Changes & Log:

- Any changes in the plan or original circulars must be logged -

#

Change Requires

Reason for Change

Change Approved

Change Communicates to

Date change Communicates

Date change Effects

1 N/A N/A N/A N/A N/A N/A

2

3

`

3:4. Quality Management in Project Execution:

In this project, the quality expected are “delivering tasks on time, applying industrial best

practices in selecting service suppliers for better outcome & controlling the

confidentiality on rate proposals” that submitted by multiple suppliers for same service.

Activities that carried-out to control quality are:

- Holding periodic inspection

- Ensuring authorized approaches and processes are followed

Phase 04: Delivering of Project

4:1. Documents Transfer:

Upon completion the documentation specified in 3rd stage, below listed documents will

be transferred with required authorizations to close the project.

- Dully signed contracts including SLA & KPI.

- Operation commensment approval & instruction.

- Billing & banking information.

4:2. Training & Releasing of staff:

As described in the “staffing” stage (2:4.), individuals that involve the project, “Logistics

Project Manager & two Logistics Coordinators” shall move to the newly established

logistics department of Matalan Middle East. They will continue with the organization as

the monitoring team of outsourced services. This is one of the major reason for select

experienced subject specialists as project team members at the beginning of project.



January 2011

Logistics Project Manager:

Moves to the organization management team as “Regional Logistics Manager” for

Matalan Middle

Logistics Coordinator (LC) - Warehousing:

Moves to the organization as it is “LC – Warehousing” to monitor the outsourced

activities related to warehousing operation, and function reports to the Logistics

Manager”.

Logistics Coordinator (LC) – Freight Movement & Distribution:

Moves to the organization as it is “LC – Freight Movement & Distribution” to monitor the

all the freight movements and function reports to the Logistics Manager”.

The budget to accommodate them in the organization already set before begin the

project as (setting up of logistics department to Matalan Middle East) and therefore the

project budget shall no longer continues for accommodating them.

Further more, there will be no special training for the staff who carry-out the operation

since services are outsourced to subject specialist organizations. Selected 3PL

organizations shall arrange own training programs for their employees who involve for

the project carry-out.

4:3. Releasing of Other Resources:

Other than man power resource that discussed above in 4:2, the only resource remain

to be released by end of the project is the project office that cost $1200/- a month. The

proposed logistics department will be relocated to the DC service provider’s office as an

Logistics Implant starting from 1st October.



January 2011

4:4. Project Closure & Lessons learned:

The project will be closed by end of September exactly as projected in critical path

analysis within 195 days.

Lesons to be learned:

- Identifing of streanths and weeknesess of service supliers while the project

period in-order manage them in efficiant manner after completing the project.

- Build relationship in the project stage with the service supliers for a better &

long term business relationship.

- Understand the Service Level Agreements (SLA) & study them thourioughly

at the project duration in-order to manage / monitor KPI after outsourcing te

services to supliers.

- Identify best operation practices and various cost models that proposed by all

propasals (dispite of selected or not) that submitted to apply those while the

operation is running in future.

- The major finding will be a secondary solution and potential service supliers

within rejected proposals, if need in future use for an event of service failure

from selected suplier / supliers.

Project Report - Establishing of MATALAN Middle East Distribution Centre

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