project managment car modification shop

ContentsExecutive Summary.....................................................................................................................................2

Project Description......................................................................................................................................3

Project Scope...............................................................................................................................................4

WORK BREAKDOWN STRUCTURE (WBS).....................................................................................................7

RESPONSIBILITY MATRIX.............................................................................................................................8

GANTT CHART..............................................................................................................................................9

NETWORK DIAGRAM.................................................................................................................................10

Risk Assessment and planning...................................................................................................................15

Financial Analysis.......................................................................................................................................20

SOCIAL IMPACT ASSESSMENT...................................................................................................................23

Executive Summary

The Modifiers is a car modification project started among four partners. Nowadays there is a trend

among youngsters in car modification, so the thought of starting a car modification was based on

reaping out sufficient income out of the project. This is an equity based project and the partners have

invested in it. There are four partners in the project and all of them have participated in the project

equally. The Project is named as “The Modifiers “, the modification parts are imported from Japan. The

professional engineers and supporting staff is hired to provide professional services to the customers.

The project is managed very effectively and all the aspects of project management are applied and

required assessments has been conducted carefully under the supervision of partners/ Project team.

The report consists of the several activities that come under the project management and that are

defining the project scope, laying down the Work Breakdown structure to make the project easy, the

Network Diagram is drawn to understand how the project will progress and to clear the

misunderstandings, Risk Analysis has been done to identify potential risks, responses and contingency

plans are then developed to tackle the potential risks and Social impact assessment of the project has

also been conducted to ensure the social compatibility of the project with the environment. These all

processes will help us to conduct our project in a systematic manner

Project Description

We are the partners doing this project together. The idea of our project is to start a small business of car

modification and customization. We the partners have planned out that the our workshop for car

modification will be Shop # 486, Al Khair Plaza, Abpara Market Islamabad, Which is provided by one of

our partners to reduce the initial setup cost. Considering the foreign exchange rates the estimated cost

of our project is PKR 1050000 which is collected and shared by the partners. And the estimated time in

which this project will be completed is 80 to 90 days. We will need 2 skilled car engineers who have

already worked on customization of cars and 4 skilled workers to support them, who must have a little

bit of experience in car engineering works. This business is related to the automotive industry “car

customization shop”. We are bringing all types of customized products for almost all make and models

of cars in Pakistan. This business is unique in the sense that no one in Pakistan is bringing customization

at such a big level. Now a days people are really fond of fabricating their cars so that’s why we are very

hopeful that we will have a success right from the start of the business. Currently we are opening a shop

in Islamabad and for our future plans we will open more shops in other cities of Pakistan.

Project Scope 1-Defining Project Scope:

a. Objectives of the Project:

To cater the car modification needs of young generation. To provide our customers with durable and Quality products. To complete our commitments with our customers in given time. To earn substantial Profits, by controlling our costs. To complete the project within its allocated time.

b. Project Deliverables:

The list of products that we will provide is basically divided into three types,

1. Performance parts

Engines Forced induction Gear boxes (transmission) Tires Turbo/Super charger Brakes Nitrous oxide Suspensions Fuel injectors etc.

2. Visual parts

Bumpers (Front and Rear) Side skirts Spoilers Hoods Roof scopes Rims Lights designs HIDs Exhausts Window tints (up to 10 grades) Stereo systems, woofers etc Paints

c. Milestones:

We are four members conducting this project having expertise in different areas. Following are the milestones for the group members of the project.

Irfan ullah spent 4 years in Japan and had good relations with cars modification parts dealers in Japan. So he will be helping us in making contracts and deals with the car dealers, and rest of the imports process.

Ali Raza is expert in designing the vinyls for the cars and had impressive knowledge about sound systems of cars, so he will be assisting us in this regard.

Mohsin Kamal will take care of the business, inventory, customers, after sales services and warranty.

Ali Farooqui is expert in marketing, and will promote our product and services to our target market.

d. Technical Requirements:

Technical requirements for our project Include:

Complete and Separate Tool kits for engines and body parts. Welding Machines Paint Machines Generators Hydraulic car uplifting Deck

e. Limits and Exclusions:

Limited finances are our preliminary constraint. So car customization workshop will only be launched in Islamabad initially and the other cities of the country will be excluded, at least for the first year.

We will initially launch our business in Islamabad and rests of the three cities including Lahore, Karachi and Peshawar are in our domain of business. But at the initial stage we will exclude the rest of the three cities due to financial constraints.

f. Review with the Customers:

Now a day’s car modification is becoming famous among young generation. We conducted several verbal interviews with our friends as well as colleagues, and general public, and found that there is huge demand for the business which we are going to conduct.

g. Project Scope Statement:

“The project is basically to open a for profit business to produce and provide high quality spare parts and customization for the existing makes and models of cars in Pakistan. The main scheduled milestones of our project are to acquire a shop, acquire necessary machinery and human resource, and to acquire some components of customization through imports within the total budget of PKR 800000 and is planned to be completed in 40 days time.”

2- Establishing Project Priorities:

Project’s priorities are basically the tradeoffs i.e. importance related to time, cost and scope of the project.

Budgeted cost for our project is Rs. 1050000, and the estimated time for or project is 40 days.

Constraints:

Time is the major constraint in our project i.e. we have planned to complete it in 40 days but due to delays in placement of machineries from the suppliers and imports of our product from Japan and Dubai.

Enhancements:

The estimated cost of our project is Rs. 1050000, we will try to cut our unnecessary costs and enhance it so as to meet the requirements of our project within the estimated cost limit.

Project Priority Matrix:

Time Performance Cost

Constraint

Enhance

Accept

_____

_____ ______

The Modifiers

Partnership Contract

Customer orders

WORK BREAKDOWN STRUCTURE (WBS)

Appoint Workers

Procurement Workshop

Engineers Support StaffEngines

Water and phone Service

Wall Painting

Electricity and Gas Connection

Display Racks

Equipment and Machinery

Welding machine

Paint Machine

Steel cutters

Turbo/Super charger

Brakes

Nitrous Oxide

Suspension

Fuel Injectors

Spoilers

Rims

HIDs

Exhaust

Music System

Hydraulics

Tools Kits

Gear Box

Tires

Shop Acquisition

RESPONSIBILITY MATRIXFollowing is the responsibility Matrix of Our Project. Tasks are identified and the concerned personnel accordingly with their tasks are mentioned below. Their responsibility as well role as support / assistance is mentioned in the matrix.

TASK IRFAN ULLAH

MOHSIN ALI RAZA

ALI FAROOQUI

Staff A

Staff B

Staff C

Staff D

Staff E

Staff F

Relationship with Dealers

R s

Importing arrangements of Spare Parts

R s

Agreements; Letter of Credit, guarantee

R S

Documentation of Shop plus agreements

R S

Customer Relationship

R S

Inventory Management

R S S S

Warranty Claims and After Sales Services

R

Designing the vinyls

R S

Sound systems of cars,

R S

Marketing S R S

Advertisement S R sMechanical Work

R S S

Engineering R S SPaint Jobs R S SElectronic Wiring

R S S

Visuals and Tyre Works

R S S

R = RESPONSIBILITY, S=SUPPORT / ASSISTANCE

GANTT CHART

Partnership Contract

Shop Acquisiton

Wall Painting

Seperate Electricity Meter

Separate Gas Meter

Fixing of Welding Machine

Fixing of Paint Machine

Fixing of Steel Cutters

Fixing Of Car Uplifting Machine

Display Racks/ Shop Design

Appoint Workers (Engineers)

Appoint Workers (Support Staff)

Engines

Turbo

Nitrous Oxide Kits

Fuel Injectors

Hydraulics

Exaust

Music Systems

Gear Box

Tires

Suspension

Brakes

Spoilers

Rims

Venyls

Customers Orders

AB

CD

EF

GH

IJ

KL

MN

OP

QR

ST

UV

WX

YZ

AA

0

2

4

4

4

14

19

24

29

37

47

50

53

53

53

53

53

53

53

53

53

53

53

53

53

53

63

2

2

10

10

10

5

5

5

8

10

3

3

10

10

10

5

5

10

5

5

5

5

5

10

10

5

15

2

4

14

14

14

19

24

29

37

47

50

53

63

63

63

58

58

63

58

58

58

58

58

63

63

58

78

GANTT CHARTEnd Duration Start

NETWORK DIAGRAMActivity Descrpition Preceding Activity Activity TimeA Partnership Contract None 2B Shop Acquisiton A 2C Wall Painting B 10D Seperate Electricity

MeterB 10

E Separate Gas Meter B 10F Fixing of Welding

MachineC,D,E 5

G Fixing of Paint Machine

F 5

H Fixing of Steel Cutters G 5I Fixing Of Car Uplifting

MachineH 8

J Display Racks/ Shop Design

I 10

K Appoint Workers (Engineers)

J 3

L Appoint Workers (Support Staff)

K 3

M Engines L 10N Turbo L 10O Nitrous Oxide Kits L 10P Fuel Injectors L 5Q Hydraulics L 5R Exaust L 10S Music Systems L 5T Gear Box L 5U Tires L 5V Suspension L 5W Brakes L 5X Spoilers L 10Y Rims L 10Z Venyls L 5AA Customers Orders M,N,O,P,Q,R,S,T,U,V,W,X,Y,Z 15

Next Page

4 C 14 0 Wall

Painting

4 10 14

0 A 2

0 Partnership Contract

0 2 2

2 B 4

0 Shop Acquisiton

2 2 4

4 D 14 0 Electricity

Meter4 10 14

19 G 240 Paint

Machine19 5 24

14 F 19 0 Welding

Machine14 5 19

4 E 14 0 Gas Meter

4 10 14

G H

Activity L is the Preceding Activity of M,N,O,P,Q,R,S,,T,U,V,W,X,Y,Z

Next Page

24 H 290 Steel Cutters

24 5 29

29 I 37 0 Car

Uplifting Machine

29 8 37

37 J 47 0 Racks Shop

Design 37 10 47

47 K 50 0 Appoint

(Engineers)

47 3 50

50 L 53 0 Appoint

Staff 50 3 53

53 N 63 0

53 10 63

53 M 63 0

53 10 63

53 O 63 0

53 10 63

53 P 585 58 5 6353 Q 58 5 58 5 63 53 R 63 0

53 10 63

Following are the Critical Paths from the Network Diagram are :

M AA

N AA

A B C F G H I J K L O AA

R AA

X AA

Y AA

Z AA

M AA

N AA

A B D F G H I J K L O AA

R AA

X AA

53 S 58 5

58 5 63

L 63 AA 78 0 Customers

Orders63 15 78

53 T 58 558 5 63

53 U 58 5 58 5 63 53 V 58 5

58 5 63

53 W 58 5 58 5 63

53 X 630

53 10 63

53 Y 63 053 10 63 53 Z 58 5

58 5 63

Y AA

Z AA

M AA

N AA

A B E F G H I J K L O AA

R AA

X AA

Y AA

Z AA

Risk Assessment and planning

Potential Risks

The Potential Risks associated with this project are given below:

Delays in the imports of spare parts

Fluctuation in forex rates

Electricity Failure

Delays in Machinery Installation

Injuries due to Machinery (cutters and welding machines etc)

Damaged spare parts

Worker quitting without prior notice

Fire in shop

Government/ Traffic police laws

Risk Assessment Form

Risk Assessment Form

1. Very Low, 2. Low, 3.Medium, 4. High, 5. Very High

Risk Event Likelihood Impact Detection Difficulty

When occur


3 3 4 Airport

Fluctuation in forex rates 4 4 2 Entire project

Electricity Failure 4 3 2 Entire project


1 3 1 Start of the project

Injuries due to Machinery (cutters and welding

machines etc)

1 5 1While cutting and

welding the metals

Damaged spare parts 2 3 1

While receiving and placing the

spare parts/ Entire project


2 3 2Throughout the

project

Fire in shop 2 5 3While Operating

gas welding machines


3 5 4Throughout the

project


As the spare parts will be imported from Japan so delays in the dispatching and receiving of the spare parts can occur both at the airports and at the warehouses (Suppliers warehouse and The Modifiers warehouse). Impact of delays in imports of spare parts can result in little delay in the project. Likelihood of occurrence of delays is low.


The spare parts will be bought from the dealers in Japan and the transaction will be made in US Dollar. As the currency of Pakistan is fluctuating a lot, sometimes it goes up and sometimes it sharply falls with respect to US Dollar. The impact of these fluctuations will be affecting The Modifiers in terms of higher cost. And Likelihood of its occurrence is high.

Electricity Failure

In Pakistan the Electricity shortfall is rising with the passage of every year and to manage the electricity WAPDA is shedding the load daily 8-14 hours depending on the living area. The impact of load shedding will be high in terms of delays in customization of cars. The Likelihood of electricity failure is very high.


Delays in the procurement and installation of machinery and other equipment can occur because of lack of communication or because of the late supplies of that machinery from the supplier. The impact would be medium as it can extend the estimated completion time of the project.

Injuries due to Machinery (cutters and welding machines etc)

Improper use of machinery like Steel cutters and welding machines can cause injuries ranging from minor to severe. The impact would be very high as it would stretch the completion time of the project because of replacing the severely injured worker and extra cost will be incurred. Likelihood of such injuries is low as most of the workers know how to operate the machinery.

Damaged spare parts

Spare parts can be damaged while loading/ unloading and can be damaged if they are not kept in the right shelf or in dedicated racks. For example: If the paints are kept together with mufflers and spoilers or any other metals, there is a possibility that if any accident occurs then it might fall onto the spares and can cause unwanted stains. Impact would be medium as the spare parts or the metals can be cleaned. Likelihood is low in this case.


The worker might quit due to personal reasons without prior notice which might delay the project for a very little time as the labor force in Pakistan is abundant and cheap. Likelihood is low and the impact would not be a serious one.

Fire in shop

The mishandling of Gas operated welding machines and other equipment can cause fire in the workshop and it can ruin the whole project and might lead to dissolution of the project. The impact will be very high while the likelihood is low.


There are several Government/ Traffic police laws which can affect the car customization Workshop project. For example: Those cars which have mufflers installed in them sound very loud and disturbing and because of this noise the Islamabad traffic police have banned them. And in future there is possibility that government might impose such laws which can lead to closure of the business. Impact will be very high as the whole project will be in jeopardy. Likelihood is medium because the traffic laws in Islamabad are getting strict day by day.

Risk Response Matrix

Risk Event Response Contingency Plan

Trigger Who is Responsible


Accept

Get the spare parts in the local market(even at

higher price)

When the flight is late for more than 6 hours

Irfan Ullah


Avoid

Exchanging the currency to US Dollars at the project start

When the difference

increases by more than 1

rupee

Irfan ullah

Electricity Failure AvoidInstalling

Generators

When the load shedding exceeds 3

working hours

Mohsin Kamal


TransferOutsource the

machinery installation

When the machinery is not installed on the specified date

Mohsin Kamal

Injuries due to Transfer Outsourcing When the injury Staff A

Machinery (cutters and welding machines etc)

employee health insurance

caused is severe in nature

Damaged spare parts Mitigate

Extra set of different parts

should be available in the

inventory

When the damaged part in the inventory is

discovered

Mohsin Kamal


MitigateHaving Backup worker for each

job

When the employee quits the job or fired.

Irfan Ullah

Fire in shop MitigateInstall Fire

Extinguishers

When anything in the workshop catches fire

Staff A


AvoidGet license/

Approval from government

When the rules and regulations

are violatedIrfan Ullah

Financial AnalysisThe Modifiers is a project which is being initiated by four friends on the basis of partnership. All of us are nearly experts in our field and started the project. At the start of our project we projected a cost of 10.5 Million Rupees while giving consideration to all the costs and expenses which are going to be incurred. But for the initial outflow we shall take only Rs. 8 Lac and the rest of the amount is kept for unforeseen expenditure.

Financial Analysis is carried out to inquire that whether the project which is going to be started is feasible in terms of costs incurred and return gained from the project. For this purpose we have used the following capital budgeting techniques that will help us deciding either to go with the project or not.

1. NET PRESENT VALUE:

Denoted by NPV, is a discounted cash flow approach to capital budgeting. With the present value method all the cash flows are discounted to present value using the required rate of return. If the result is zero or more the project is accepted, if not it is rejected.

Formula:

NPV= Present value of Cash Inflow-Present value of Cash Outflows.

Months Cash FlowsDiscount Rate @ 5 % Present Value

0 800,000 1 800000

1 60,000 0.9524 57143

2 90,000 0.9070 81633

3 140,000 0.8638 120937

4 180,000 0.8227 148086

5 200,000 0.7835 156705

6 350,000 0.7462 261175

PV 825680NPV 25680

Hence on the basis of NPV, which turned out to be positive, we will accept the project.

2. INTERNAL RATE OF RETURN:

Denoted by IRR, it is the discount rate that equates the present value of expected cash outflows with the present value of expected cash inflows.

The acceptance criteria for a project being accepted or rejected are that if the IRR exceeds the required rate of return the project will be accepted otherwise rejected.

IRR= Lower Discount rate+ { Diff B/w LDR and HDR(NPV of LDR/ Summation of NPVs of LDR+HDR)}

MonthsCash Flows D.R @ 5 % P V D . R @ 8 % P V 2

0 800,000 1

800,000 1 800000

1 60000 0.9524 57,143 0.9259 55556

2 90000 0.9070 81,633 0.8573 77160

3 140000 0.8638 120,937 0.7938 111137

4 180000 0.8227 148,086 0.7350 132305

5 200000 0.7835 156,705 0.6806 136117

6 350000 0.7462 261,175 0.6302 220559

PV 825,680 PV 732834

NPV 25,680 NPV -67166

IRR 5.90%

Hence the internal rate of return for our project is greater than the required rate of return we should accept the project.

3. RETURN ON INVESTMENT: Denoted by ROI, measures the overall effectiveness in generating the profits, with the available assets. i.e. earning power of the invested capital.

Formula: ROI = Net profit after taxes / Total Assets.

The Modifiers Projected Income Statement

Net Sales 60000Less ; CGS 15000

Gross Profit 45000

less: Selling & Admin Expenses 18000

Earning before Interest and Taxes 27000

Less : Interest Expense 0

Earning before taxes 27000

Less: Taxes 6500

Net Profit After taxes 20500

ASSETS

Current Assets

Cash 200000Inventory 100000

Total Current Assets 300000

Fixed Assets

Plant & Machinery 400000Other Long term Assets 100000

Total Fixed Assets 500000

Total Assets 800000Putting the values in the formula we get,

ROI = 20500 /800000 = 2.6 %

SOCIAL IMPACT ASSESSMENTAny activity which is taking place has its impact on surroundings. The impact can be positive or negative. The Modifiers is a project that is based on the modification of cars to make them look stylish and attractive. This trend is heavily popular in European countries, where youngsters modify their cars .This modification trend is now becoming popular in our young generation and youngsters have a lot of craze for it.

The parts of cars used in vehicles for modification purposes that make them attractive and stylish have somehow negative social impact too. Modification parts create noise pollution in the environment due to the mufflers and exhaust kits used in vehicles. The HID,s light have sharp beams and impact the night vision of the other drivers on roads.

After modification of their cars, the drivers involved in activities like racing with other vehicles, this often results in accidents that even lead to the deaths.

project managment car modification shop

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