Milestone one - Project Initiation Plan

Milestone One – Project Initiation Plan

Fabricant Manufacturing Project

QSO-640 – Project Management

Raeshuna L. Collier

July 9, 2017

Dr. Evelyn Paschal

Introduction

Fabricant Corporation is an innovative designer and manufacturer of essential materials required for solar power, medical, aerospace, and electrical power applications that is distributed throughout the Northeast.  Although Fabricant has evolved and expanded its shareholder base, the CEO is looking for additional ways to remain competitive.  Fabricant’s mission is to supply energy efficient and high quality products at competitive prices.  As the company continues to grow as a leader in conserving energy, research, and advanced technology, the CEO has asked senior management to suggest projects that will align with the company’s strategic initiatives.  The purpose of Fabricant is to reduce the amount of energy that is consumed by a minimum of 20%,  keep the community aware of all eco-friendly issues and apprehensions, and create a return-on-investment by about 15% (MindEdge, 2014).  

After looking over the three projects that was presented by senior management, the CEO decided that they should pursue the industrial lighting retrofit project.  This project was chosen because it demonstrated a high performance in energy use reduction and also because of the tiered incentives on kWh reductions that was being offered (MindEdge, 2014).  To determine if this project meet the objectives of Fabricant, it is imperative that an economic, technical, and organizational feasibility study be done.

A.        Feasibility Study

A feasibility study is used to ascertain the practicability of a project and certifies that it is legally, technically, and economically acceptable (Shen, Tam, & Ji, 2010).  An economic feasibility study is usually done by an organization in order to help them assess the viability, fees, and benefits associated with the project before any financial resources are committed to the project (Mukherjee and Roy, 2017).  Fabricant is wanting to do a complete overhaul of their current lighting system with new and improved energy-intensive lighting fixtures technology.  The initial estimated cost for this type endeavor is $310,000.  However, this estimate will be offset with incentives and rebates in the amount of roughly $245,000.  Consequently, the cost for the entire project will be around $65,000.  According to the CEO, this project is anticipated to save the company more than 1.1 million kWh per year.  This savings on kilowatts will save te company about $142,000 per year in utility costs, which would give them a projected return-on-investment (ROI) of 89%.  Economically, there is the risk that the cost might exceed the estimate and the ROI reduction (Ward and Chapman, 2003).  With a project of this magnitude risks are always associated with the project, but the appraised numbers are still within the scope of the three key business objectives that will allow Fabricant to produce high energy efficiency.

        To determine if an organization technical resources and technical team is sufficient to meet the demands of the project, a technical feasibility assessment should be done.  The assessment will determine if the technical team is experienced enough to convert the idea into a high-level working system (Mukherjee & Roy, 2017).  Fabricant will need to confirm that all of the project team members have the expertise that they need to fulfill the objectives of the project.  They will need to have experts in industrial lighting, environmental and OSHA, logistics and IT, and public relations.  Judging from the project team lists, they have meet these requirements completely.  As with any project, big or small, there will be risks involved.  For example, necessary skills are not readily available, failure in technology, materials not being delivered on time, disruption in the everyday function of the company, and complaints about overtime from employees.  

        To determine how easy the project will fit into the corporation and if the company have the necessary resources to complete the project, it is suggested that the company should perform an organizational feasibility study (Mukherjee and Roy, 2017).   Looking at both the technical and economic feasibility studies, it was determined that the project will definitely meet the key structural objectives for reducing energy consumption by a little under 20%.  It will help to raise the community awareness of environmental issues and apprehensions, but at the same time, generate a ROI of about 15%.  Moreover, to increase community cognizance, the project team suggested that Fabricant show the results of the project in the company’s newsletter and client literature, and on their website.

B.        Strategic Goals

The goals of the industrial lighting retrofit project is to consume less energy, increase community awareness regarding energy consumption, and increase revenue with a 15% return investment.  Based on the checklist model that was done by the project manager, this project demonstrated high performances in energy use reduction, return investment, costs, and length of the project.  The final cost of this project is moderately low at $65,000, and there is an estimated 89% return on investment (ROI).  By upgrading to LED technology, Vaportite fixtures, wireless sensors, and fluorescent fixtures, this project will fit well with Fabricant’s mission for energy efficiency.

C.        Project Charter Template

A project charter is necessary in order to document the pertinent information needed by the decision maker when project funded approval is required.  The major deliverable of this project charter is to identify the purpose for the industrial lighting retrofit project, project costs, high level project schedule, personnel, deliverables, and risks as well as create project acceptance.

Project Charter