EMIS 7365 - Fall’19

Case Study 8: Franklin Electronics

Kulandan Singh
(International Student)

To be reviewed by: - Prof. Dr Nand M. Singh

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Table of Contents

1. SYNOPSIS ...................................................................................................................................1

2. CASE STUDY RESPONSES ......................................................................................................2

3. GEM (PROJECT OBJECTIVES AND ITS BENEFITS) CHAPTER 11: PLANNING ................3

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1. Synopsis

Spokane Industries has contracted Franklin Electronics for an 18-month product

development contract. Franklin Electronics is new to using project management
methodologies and have not been exposed to earned value management
methodologies. Even though Franklin and Spokane have worked together in the past,
they have mainly used fixed price contracts with little to no stipulations.

For this project Spokane Industries is requiring Franklin Electronics to use formalized
project management methodologies, earned value cost schedules, and schedules for
reports and meetings. Since Franklin Electronics had had no experience with earned
value management, the cost accounting group was trained in the methodology in order
to bid for the project. Franklin Electronics won the contract because they had the lowest
price.

They developed a work breakdown structure that consisted of 45 work packages with 4
of the work packages being delivered in the first 4 months. They also developed a
simple status report consisting of the work packages due, budgeted cost for work
scheduled, budgeted cost for work performed, actual cost for work performed, cost
variance and price variance.

When they deliver the first status report, the Franklin Electronics project manager is
called into an emergency meeting because Spokane Industries vice president is
unhappy with the progress.

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2. Case Study Responses
Question 1: Are the vice president’s comments about cost and schedule variance
correct? What information did the vice president fail to analyze?

The vice president comments are not correct. This is because the rate of last period’s
variance should base on ACWP and BCWS rather than cost and schedule variance.

The vice president failed to make a correct estimate of the overrun, which, upon
calculation should be $272,283. This amount equals to 10.24% of the total budget and
the schedule. In addition, the project is behind schedule by 15.05%, which is
approximately 2.7 months of delay if the company does not find a solution to the
problem. This vice president also failed to consider the phases of the project.

Question 2: What additional information should have been included in the status
report?

The status report should have also included the EAC and schedule analysis. The report
should have also included the reasons for the problems that led to the overrun or
schedule delay, and the ways of solving these problems. Trend analysis of the project
performance based on a set timeline to show what will happen and when. A process
performance chart would have also helped in controlling the project.

Question 3: Does Franklin Electronics understand earned value measurement? If

not, then what went wrong?

The company does not understand earned value measurement. This is because the
company used the wrong calculations and using earned value measurement as a
replacement for interchange meetings.

Question 4: Does Spokane Industries understand project management?

Spoken industries do not understand project management. This is because of a poor

knowledge of earned value measurement. Furthermore, it did not consider the
importance of communication throughout the project. The company focused mostly on
costs with little regard to other factors. In addition, the company is not familiar to project
management phases and tools.

Question 5: Does proper earned value measurement serve as a replacement for

interchange meetings?

The earned value measurement tool is not a communication tool. However, it can help
to promote efficiency in interchange meetings. The EVMS helps to provide clear
information about a project’s status and problems in it which can be smoothly cleared or
cause conflicts.

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Question 6: What should the project manager from Franklin say in his defense?

The project has two main problems, which are a cost overrun and the project running
behind schedule. As such, the Franklin manager’s defense must show a solution for
controlling the time and a plan to control the cost. As such, the manager should say that
the company would develop a plan to control the time and budget and will be able to
solve the problem.

3. GEM (Project objectives and its benefits) Chapter 11:

Planning
A project objective describes the desired results of a project, which often includes a
tangible item. An objective is specific and measurable, and must meet time, budget, and
quality constraints.

Objectives can be used in project planning for business, government, nonprofit

organizations, and even for personal use (for example, in resumes to describe the exact
position a jobseeker wants). A project may have one objective, many parallel objectives,
or several objectives that must be achieved sequentially. To produce the most benefit,
objectives must be defined early in the project life cycle, in phase two, the planning
phase.

Benefits of the Well-Written Objective: A well written objective is crucial because it

can affect every step of the project life cycle. When you create a specific objective, you
give your team a greater chance of achieving the objective because they know precisely
what they’re working towards. Clear project objectives also support the current
emphasis on total quality management: every member of the team can consider
themselves responsible for quality, because the whole team can see the desired
outcome from the beginning of the project.

All types of endeavors can benefit from objectives. As an individual, you may use an
objective to target exactly what to plan for. For example, you may know you want to go
to graduate school but finding an objective will help you to understand that you want to
obtain a sociology degree at your local community college and to graduate in six years.
A small nonprofit group may use objectives to determine that success for a recycling
education program is when 40 percent of households in a county request free
composting bucket. A construction company might use objectives to keep a building
project on schedule and within budget.

No matter what the project type, templates can make the job easier, from crafting the
objective statements to planning the project.

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