Abstract

This report contains work done on the business case of relocating a company from its
central site to its satellite site. Relocation projects are very complex for organisations,
because they don’t tend to have the experiences and skills of these kinds of projects.
Failure on this kind of project can be very catastrophic, careful planning has to be
done to make sure all the risks are identified and mitigated against. Therefore the
report also includes stakeholder identification and analysis as part of helping to
identify who will be affected by the project, and how will they react. Will they react
to help the project or hinder its success?

Robert Monageng i MBA Engineering Management

Acknowledgements
I would like first and foremost to thank God, for giving me the knowledge, to be able
to complete this piece of work, and for giving me the loving and supporting parents he
has given me. Without them I would have never even registered for this course. This
piece of work is dedicated to my late father, who had to pass last year (2006) before
seeing me graduate, and go into the working environment, something that would have
really made him happy. I would like to give many thanks to Mr Rob Mansfield for the
job well done in increasing my knowledge in Project Management, which I first
encountered in Coventry University, when I did my undergraduate final year. Many
thanks also go to Coventry University for giving me the chance to register in this
marvellous course. I would like to thank my partner Kitso, for the continued love and
morale support she has been giving me, without you things would not be the same.
Last but not least, I would like to thank all the individuals and organisations who
directly and indirectly helped me with the information and the writing style of this
report.

Robert Monageng ii MBA Engineering Management

Table of Contents

1.0 Introduction........................................................................................................1
1.1 Proposed Project.............................................................................................1
1.2 Project Aim....................................................................................................1
1.3 Project Scope..................................................................................................2
2.0 Business Case.....................................................................................................2
2.1 Do nothing option..........................................................................................3
2.1.1 Benefits of doing nothing.......................................................................3
2.1.2 Costs of do nothing option.....................................................................3
2.2 Relocation option...........................................................................................4
2.2.1 Benefits of relocation option..................................................................5
2.2.2 Costs of relocation option......................................................................6
3.0 CSR and Company Law Reform Bill.................................................................7
4.0 Which option is to be taken?..............................................................................8
4.1 Relocation Project..........................................................................................9
4.1.1 DIY.........................................................................................................9
4.1.2 Multi-Contract Strategy.......................................................................11
4.1.3 Turn-Key Strategy................................................................................11
5.0 Project Stakeholders.........................................................................................12
5.1 Stakeholder map...........................................................................................13
6.0 Project Milestones............................................................................................16
7.0 Main activities and Gantt Chart.......................................................................16
8.0 Work Breakdown Structure..............................................................................19
9.0 Recommendations to Managing Director........................................................21
10.0 Conclusion........................................................................................................21
11.0 References........................................................................................................22
12.0 Bibliography.....................................................................................................22

Robert Monageng iii MBA Engineering Management

1.0 Introduction

This report looks into the qualitative business case of a proposed project, of relocating
a factory from the central site to the satellite site. Projects involve change, and change
should not just be made because of change’s sake, it should be tried by all means to
convince all the stakeholders involved that this is change for the good. Even though it
has to be admitted that sometimes it is not possible to convince everyone. This project
can turn to be a disaster if careful planning of the project and risks involved with it are
not identified and mitigated against. Because companies rarely relocate, relocation
projects are stranger projects to them, and it is unlikely that companies relocating will
have the necessary experience and expertise to undertake the relocation project in
house, (PROjEN n.d). For this project to be a success, everything has to be considered
so that the constraints of time and money are managed effectively so the project is
done on budget, and completed on time to minimise disruptions to production and all
the stakeholders involved.

The proposed project is to relocate the main factory site, (central site) to the satellite
site.

1.1 Project Aim

The aim of the project will be to carry out this project, with minimal disruption to the
production and stakeholders involved and also carried out on time with minimal costs.

1.2 Project Scope

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The project will involve everything from the design of the new factory building,
construction of the factory, and the suitable floors and equipping the factory with
internal systems, right on until the actual movement of machinery from the central site
to the new site (satellite site).

2.0 Business Case

For every proposed project, which serves to answer a particular question or help
whatever need is needed; there are always at least two options to the problem if not
more than two. All these options needs to be evaluated carefully, their costs, benefits,
uncertainties and risks analysed before any option is undertook as the right one. This
analysis of the benefits, costs and risks involved in either option is part of the business
case for the project or either option. The business case, in the earlier stages of the
project seeks to justify whether a project is justified in terms of value for money, is
the project in line with the company’s strategic direction, is the project achievable and
also whether the project is affordable, (OGC 2007). In the later stages of the project
the business case continues to assess whether the project still offers value for money
in light of any changed circumstances and the delivery of promised business benefits,
(ibid). In this case, there is only one proposed project, and this means there can only
be two options to the question or problem identified, with the need for doing
something. The two options in this case are:

1. Do nothing to the current situation option

2. To relocate the central site to the satellite site option (Project)

The two options shall now be appraised and argued for, to see which option is the best
option to take.

2.1 Do nothing option

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This option involves doing nothing to the current situation, and in many
circumstances it will be the favoured option, since people generally do not like change
or there is that fear of the unknown. In this case it might prove to be the popular
option with the staff, because the central site is within walking distance of their
homes. And the relocation option involves moving the site to a distance which they
will not be able to walk to; probably they will need to be driving due to the nature and
geographical position of the new site (satellite site), which is located six miles away
on the outskirts of Coventry, near a junction on the M6 motorway. Currently there are
not so many, if at all there is public transport to areas like this. Even if there was
transport, the transport will probably be less regular and will involve an additional
cost to the staff having to commute to work.

2.1.1 Benefits of doing nothing

1. Land and building: If the company choose not to do anything, there will not be
any costs associated with having to construct a new factory.

2. Personnel costs: This option will not introduce the necessity of maybe having
to increase personnel wages to cover their costs if the company relocated to
help them with increased expenditure with having to travel to work.

3. Business disruption: This option will not introduce the risk to production
disruptions which might certainly be introduced by the other option of having
to relocate the central site to the satellite site.

2.1.2 Costs of do nothing option

1. Land and buildings: Even though this option does not involve the construction
of a new factory or any purchase of land, which is in effectively a benefit to
the company, the company cannot afford to do nothing to the current building.
The company has always intended to move to the satellite site (new site) so the
main factory building has been neglected in terms of maintenance, now the
building at this time needs urgent structural restorations. And if these

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 structural restorations are to be major, it might need to comply with the
building regulations, for which the local government authorities have to be
notified about it so that they can give building permissions. Without building
permission it might not be possible. The danger to this is that, the authorities
might hinder this option because they have been getting a lot of complaints
from the general public about the noise levels of the company’s operations.
And also they have been getting complaints about the inconveniences to
transport that the company causes to them sometimes when offloading their
raw material, which have to be offloaded in the road, because there is
insufficient factory yard space for the lorries delivering the material to park in.

2. Also the character of Coventry city centre is changed, and most of the
factories which used to be here have either closed or moved away from the
centre, replaced by housing, the university and hotels. So this situation also
does not favour the location of this factory, because it is one of the factors that
will be considered when considering whether to allow the company building
permits for the structural restorations, and chances are there is a possibility the
local authorities might refuse it.

3. There is also the question of the company adopting Corporate Social

Responsibility, (CSR) and also the liability of the company to the general
public under the Companies Law Reform Bill, which is expected to be made a
law by either April or October this year. These shall be looked at later on the
report.

2.2 Relocation option

This option, whether is adopted now, or it is not adopted, in the long run it is going to
have to be taken. Twelve years ago, the company saw the need to expand its capacity,
because its output was not meeting the demand from its customers. It was decided
then to purchase land which will allow expansion of capacity, and the land just off the
M6 motorway was bought. At the time, the company was strained on cash and a
whole relocation could not be carried out due to finances. The intention has always

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been to move to the satellite site, so now would be the right time to do it. This is
because the company does not really have many options to choose from, it cannot
afford to do nothing, because even doing nothing incorporates doing something that is
structural restoration. Therefore like it has been stated there is not much choice.

2.2.1 Benefits of relocation option

1. Land and buildings: This option will allow the sale of the central site land and
factory buildings, generating cash for the company. It will also alleviate the
problem facing the company of having to do building maintenance on two of
its factory buildings.

2. Personnel: This project might be able to bring savings on labour costs. Jobs
which were duplicated as a result of the introduction of the satellite site might
be shed when the two factories operate under one roof. It will also bring an
end to the money currently being paid to technicians for travelling between the
two sites on duty. Another saving will be on lost time, which has been
resulting due to commuting between the two sites.

3. Other benefits: This option will result in other benefits like the savings of
having to transport WIP between the two sites for processing, which costs
money and time. It will eliminate the risk of the lorry being involved in
accidents when having to transport WIP between the two sites. The journey
times between the two sites introduces lost time which is anything between 15
minutes and sometimes 50 minutes depending on traffic. It has also been
stated that when coming back from the satellite site, most of the time the lorry
returns empty, which is a major loss, (the lorry is in effectively transporting
air!). There might be some tax allowances on the value of the money spent on
this relocation project. And lastly but not least certainly this project will result
in some forms of economies of scope, (electricity, water, etc).

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2.2.2 Costs of relocation option

1. Land and buildings: Certainly this option will come with considerable costs
for building work, because it involves the construction of a new factory
building which will house the production area and the administrative area
(offices). These building costs will also include provisions of services
associated with the building, like lighting, plumbing, air conditioning,
drainage systems, etc. It will also include fees which will have to be paid to
architects who are going to draw the building plans etc. And possibly it might
include having to decommission the current central site building before the
land can be sold.

2. Personnel costs: This project might involve having to pay some redundancy
payments to those staff that might be affected by the merger of the two
factories, since some jobs which were duplicated might have to be shed. To
try to win the support of the project from central site production floor workers,
and other central site employees it might involve not only using intrinsic
factors, but might involve using extrinsic factors like wage increments to
cover their cost of having to travel to the new site for work. This option will
also involve relocation costs, which will cover paying for people who will
come and help with the relocation of machinery, which in no way can the
company be able to move it itself.

3. Business disruption: However efficient the project management can be of this

project, there might still be some disruption to the day to day running of the
business resulting from this relocation project. It might also involve some
disruption to the customers and suppliers of the company.

4. Other potential costs: There will be certainly other costs associated with this
option, like the employee’s transport to work. If some of the workers do not
drive, the company will have to consider whether it will arrange transport for
the workers or make those who cannot drive redundant and hire people who
can be able to get themselves to work. There is also the cost of raising the
capital needed for this project, which have to be considered.

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3.0 CSR and Company Law Reform Bill

In today’s society, unlike in the earlier years, it is highly recognised that businesses
and society are interdependent, and the well being of one depends on the other,
([Link] 2004). It is from this interdependency between organisations and the
society and the need for a balanced system that Corporate Social Responsibility,
(CSR) came from. ([Link] 2004) sees (CSR) as ‘‘the voluntary actions that
business can take, over and above compliance with minimum legal requirements,
to address both its own competitive interests and the interests of wider society’’.
In every operation that companies undertake, they need to concern themselves
with how they behave in the society. And it can be seen here that Neumann
Engineering is currently behaving in an unrespectable way because they have
been complaints to the local authorities on the noise and obstruction to vehicles
which have been arising from Neumann Engineering’s operations. All these
things bring a bad public image of the company, and the company needs to
concern itself about them. According to a lecture delivered as part of the Project
Management module, (M28EMD), under the equator principles, which might
become law under the company law reform bill of 2006, many banks will not
want to do business with companies that do not comply with their environmental
and social policies, (Mansfield 2007). This might mean in the long run, it might
be difficult for Neumann to be financed by banking institutions if its corporate
behaviour does not change.
The Company Law Reform Act of 2006, which is expected to be law in April or
October of this year (2007), (dcode 2005), will govern how businesses can carry
themselves and also regulations on CSR. According to a lecture on M28EMD, this
law will state how directors should have regard to the following things in all the
decisions they take, like the regard to the interests of employees, the need to foster the
company’s business relations with its suppliers, customers and others, the impact of
the company’s operations on the community and the environment, etc (Mansfield
2007). Whichever option is chosen from the above options, of the do nothing option,

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or the relocation option, the above elements will have to be considered, because the
company could find itself being challenged in the courts of law if any of the
stakeholders to the option took felt they had a case.

4.0 Which option is to be taken?

After considering the two options available in this situation, the do nothing option and
the relocation option a decision will have to be made on which option will be took.
Clearly the relocation option will cost the company a considerable amount of money
as when compared to the do nothing option. But in this case when coming to a
decision, the decision should not be based only on cost, but in the overall benefits of
the option. After all whether the company moves now, or the relocation is pro-longed
ultimately the day will come that this relocation will have to be done. Also this
relocation option is in line with what the company realised twelve years ago, that in
order for the continued survival of the company, the company will have to move.
When considering CSR, even if the company choose not to relocate, it will still have
to spend a lot of money in addressing the complaints from the local public about the
unsightly appearance of the building when compared to its environmental
surroundings. What has to be born in mind is that by the time of Neumann
Engineering’s inception in 1912, the character of this environment was not like it is
now, now there are hotels, residential and university buildings surrounding the
factory. Another factor which is of crucial importance is the noise pollution produced
by the operations of the factory, which they have been complaints about. This
situation will have to be remedied as well, and it has the potential of costing the
company lots of money. One more important factor, which cannot be overlooked, is
the complaint about obstruction from vehicles caused by offloading of materials on
the public road, which cannot be done inside the factory yard since it is too small, a
solution will have to be sought to this problem. Therefore considering all the above
options and their benefits and costs, considering CSR and Company Law Reform Bill,
it will be advisable to relocate production to the satellite site. This relocation project,
will in the long run support the company’s corporate strategy, will be good for
attaining sustainable competitive advantage, it will probably increase the company’s

Robert Monageng 8 MBA Engineering Management

revenue, and save operating costs. Ultimately this relocation project will be needed
for business survival.

4.1 Relocation Project

For this project to be successful, because failure can be catastrophic for the company,
the management will have to consider the McKinsey 7-s framework, which helps
about things to consider when doing a project. This framework includes asking
questions like is the project, really in line with company strategy, what sort of
organisational structure exists in the company that might hinder or help the project,
systems of how the work is going to be done and monitored. It also includes questions
on who needs to be involved in the project, (staff), what sort of skills are they
supposed to have, will the company culture (style) help or hinder the project, and who
are the people who are going to be affected by this project, (stakeholders).

The amount of work which needs to be done for this project to be successful is
enormous and the company is by no means in any position to undertake this project in
house. There are several work packages, which shall be shown later in the work
breakdown structure, which will require services of people and resources outside of
the company. And these will have to be hired from contractors. There are different
contract strategies that the company can choose to use, decisions being based on
whether the company has got the skills to do that job in house and what sort of risk is
the company willing to take, and the cost of each strategy is different. These strategies
are as follows, Do it yourself strategy, (DIY), Multi-Contract Strategy, and Turn-Key
strategy, and they will be briefly explained below.

4.1.1 DIY

This will involve carrying out the whole of the project in house, and clearly this is not
an option the company can take because, the company does not have the expertise of
doing projects like this, and does not even have the resources to do it. There are
several regulations within the UK, which govern projects like this, and the company

Robert Monageng 9 MBA Engineering Management

will have to have certified people to do the job, and the company should also be
certified to carry out the work. Some of these regulations are as follows, (Haas-Tek
2007),

 Construction (Design and Management) Regulations (CDM) 1994

 Health and Safety at Work Act 1974
 Lifting Operations and Lifting Equipment Regulations (LOLER)1998
 Provision and Use of Work Equipment Regulations PUWER 1998
 Work at Height Regulations 2005
 The Confined Spaces Regulations (1997)
 Control of Substances Hazardous to Health (COSHH) (1988)

As it can be clear from here the company is not certified to carry out the job, since it
is not certified to most of these regulations, apart from having two certified press
setters who comply with the PUWER 98 regulations. The company also does not have
the machinery needed to move the big presses which the company has. A specialist
contractor with the required machinery to move the equipment will be needed; some
of the machines which might be needed are as follows, (Haas-Tek 2007),

 lifting jacks
 mega lifts
 all terrain cranes
 specialist machine skates
 fork lift trucks from 2 Te to 16 Te
 battery operated and gas fuelled trucks
 VersaLift
 Valla crane

Clearly as it can be seen above, certainly the company will need to engage some
contractors to help with the different parts of the work involved in this project, as the
company cannot really do all the elements of the work in house.

4.1.2 Multi-Contract Strategy

In this option, the company can choose to engage different contractors at different
stages of the project performing different jobs. For instance the company can choose
to have a different company producing the drawings for the factory, then a different

Robert Monageng 10 MBA Engineering Management

company constructing the building, then maybe a different company helping with the
movement of machinery from central site to the satellite site. The advantages of this
contract strategy will be that it has the potential of minimising costs of the project.
But the main disadvantages would be that the company will carry a lot of risk when
the project fails. It could be suitable if the company had the necessary experience in
these kinds of projects. It may also introduce the risk of the project taking longer than
scheduled, which might end up bringing production disruptions and cost the company
a lot of money. Remember the project aim is to carry out this work with minimal
costs, on time and minimal disruptions to the production.

4.1.3 Turn-Key Strategy

There are several companies which can help the company with this project, from day
one up until the completion of the project. These are companies with enormous
experience on these kinds of projects, companies with the required material handling
equipments and certified to do the job. Some of these companies include, but are not
limited to these, like Ainscough Vanguard, PROjEN, Haas-Tek, etc. The turn-key
strategy has the advantages that it limits the risks of the project, since it is being done
by people with experience. And the disadvantages of this strategy are that the turn-key
strategy option tends to be more expensive and may lead to loss of control of the
project. This will be the right option for the company basing on the experiences
encountered when the first relocation of the assembly area was made twelve years
ago. If the company carried out that project through multi-contract and it was
successful, probably may be this project can be carried out the same. But if it was
carried out through turn-key strategy and the company felt they did not learn much
from it, then turn-key will be recommended on this project.

5.0 Project Stakeholders

According to the Project Management module, (M28EMD), a stakeholder in a project

is any individual or organisation that has a demonstrable interest in the outcome of a

Robert Monageng 11 MBA Engineering Management

project, (Mansfield 2007). They are also identified as anyone who participates in a
project and is affected by its results, (ibid). According to (BS 6079-2 2000) a
stakeholder is defined as ‘‘a person or group of people who have a vested interest in
the success of an organisation and the environment in which the organisation
operates’’. Stakeholder analysis or identification is very important in every project,
because it can help identify what could be the potential risks to the project. According
to M28EMD, any differences between stakeholders should usually be resolved in the
favour of the client, (Mansfield 2007) but there is also recognition that sometimes this
is not possible. The Company Law Reform bill also makes this a bit difficult, because
stakeholders can actually take a company to court if they feel their views have not
been addressed amicably. The stakeholders to this project will be as follows;

1. Client (Neumann Engineering owner’s)

2. Management team
3. Project manager
4. Contractors
5. Technical team
6. Lorry driver
7. Trade union shop steward
8. Production shop floor workers
9. Local community within central site
10. Local community within the satellite site
11. Local authorities
12. Suppliers
13. Customers

After all identifying all these stakeholders, the next step is to identify the risks they
might pose to the project, and this is done below

5.1 Stakeholder map

Stakeholder Interest Level Reaction Power Response

Client The project High Will make High. These Explain the
(Neumann should be sure that all are benefits of the

Robert Monageng 12 MBA Engineering Management

Engineering carried out with things effectively project fully
owners) minimal which can the project to them. And
disruption to sabotage the sponsors. make sure you
production, on project get their full
time and at low should be commitment,
cost. removed. without it the
project will
certainly fail.
Management The project High Can High Explain fully
team should be sabotage the the benefits of
carried out for project, and the project,
the good of the make sure it and make sure
company, not becomes you get their
just for change’s costly and it full
sake. takes along commitment
time,
ultimately
affecting
production.

Project To deliver the High If he/she High. Engage fully

Manager project on time, feels not He/She will on all
with minimal respected be the one decisions.
disruption and due to some ultimately
minimal cost. decision responsible
taken for the
without successful
him, over delivery of
looked, can the project.
sabotage the
whole
project.
Contractors Will be High Will High. All
interested in sabotage Contractors agreements
delivering the project if powers will with the
project to the not satisfied be high, contractor
required with the more will have to
specifications level of pay especially if be honoured
and on time, and and method it is turn- and at the
to budget. of pay key very least,
agreed. strategy. contact them
if anything
with regards
to the project
changes.
Technical Will be High May not Medium. Keep them

Robert Monageng 13 MBA Engineering Management

Team interested to agree to They will informed
know how the participate have about the
project will in the medium details of the
affect them, project if power to project, and
since they stand they are not influence where they
to lose the travel fully outcome, might be
expenses they informed because if it needed to
have been about it. is turn-key assist.
getting for they might
travelling not be
between the two needed for
sites. These the
people can also successful
help with the delivery of
technical details the project.
of the project.
Lorry driver Will be High May Low. Alone Inform him
interested to sabotage the he will have how the
know how the project, if he low power. project is
project is going feels he going to affect
to affect his might stand him, and
work, since the to lose his make sure he
trips he has been job if the understands
making between project is all the reasons
the two sites will successful. behind the
not be needed. project.
Trade Union Will be High May lead High. He Inform him
Shop interested to the has about the
steward know how the production managed to project, and
project will floor lead several how the
affect their workers to short strikes company will
wages, whether strike, if he before over help them to
they will have feels they pay and get to work.
an increment to will get a working Engage him in
cover their raw deal. conditions decisions, to
increased travel help win his
costs to work. support and
influence to
others.
Production Same as trade High Can High. Keep them
Shop floor union shop sabotage the Combined informed, and
workers steward. successful effect will make sure
delivery of be high. they
project. understand
how the
company will
help them.
Local Interested to Low Will not High. Inform them
community know that the affect the about the
within factory will be project in a project, and

Robert Monageng 14 MBA Engineering Management

central site. moving after all major how the
the complaints manner, if relocation
they have been there are might affect
having about the little them.
company. disruptions
to their
daily lives.
Local Interested to High Will High Inform them
community know how the sabotage the about the
within the factory site will project, if project, and
satellite site. change their they feel try to
landscape view, their quality minimise as
and how of life will far as possible
business there be all the effects
will affect their significantly the project
lives. The affected in a and the
factory site is in bad way. company’s
a rural area. And may operations
block there will
planning have on the
permission. quality of
their lives.
Local Interested to High. May High. Inform them
authorities know where the completely about the
company is sabotage the project and try
moving to, and project if to get their
how they are not satisfied support.
going to carry it will be
out the project carried out
(Health and safely, and
safety) if they do
not know
where the
company is
moving to.
Suppliers Will want to High May refuse Low. Inform them
know where the to continue about the
company is to do project, and
moving to, and business how it will
how that is with the affect them.
going to affect company if
them doing not satisfied
business with about the
the company. project.
Customers Same as High Same as High Same as
suppliers. suppliers. suppliers.

Robert Monageng 15 MBA Engineering Management

6.0 Project Milestones

The project milestones will depend mostly on which contract strategy has been
chosen. If a DIY strategy is chosen the milestones will probably be different from if a
multi contract strategy or a turn-key strategy is chosen. The milestones shown below
are based on the company adopting a turn-key contract strategy.

1. The first milestone will be achieved or realised when the tendering process
and contract award has been complete. This is after the company has got a
company which will work with it as a partner to help deliver the project.

2. The second milestone will be realised after the design plans for the factory
and yard usage have been agreed between the contractor and the company.
And these design plans have been approved by the local authorities, and
planning permission has been granted.

3. The last milestone will be realised after the successful completion of the
construction of the factory building and internal systems have been achieved,
together with yard landscapes have been completed. And also the successful
relocation of the factory has been achieved.

7.0 Main activities and Gantt Chart

There are several assumptions which have been made to come up with these main
activities on the project. These assumptions are as follows, senior management have
given a go ahead to the project, the project manager has been chosen, and the project
will be delivered through a turn-key contract strategy. With the contractor working
hand in hand with the project manager to be the point of contact for the company and
the contractor. The main activities will be as follows and the Gantt chart will be
shown on the following page, it has been produced on MS word;

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 1. The project manager will inform, and solicit views of Neumann Engineering
central site and satellite staff on the project. Ensuring he educates everyone
involved on the benefits of the project and how it will affect them, and how
the company will help those affected by the project. The local communities
might also be informed about the project at this stage.

2. Assuming that the internal discussions to define project requirements have

been done. The company will send out pre-qualification questionnaires, to
companies that can help deliver the project.

3. When the questionnaires return, the company will short list potential
contractors and invite them on an individual basis to a meeting to interview
them.

4. A decision on which contractors qualify for the project will be reached and
invitation to tender documents will be sent to them.

5. Receipt of tender documents will be received and evaluated, and a suitable

contractor chosen. Then before agreeing to the tender, payments, and payment
methods will be agreed between Neumann Ltd and the contractor. After
agreements on pay, have been reached contract formation will be done.

6. The contractor will have possibly seen the satellite site and seen what sort of
machineries are going to be relocated before contract formation is done. After
contractor formation is complete, the contractor will produce the detailed
factory plans, including floor layouts, floor specifications needed to sustain the
heavy press machines and factory yard plans.

7. Mean while the contractor is preparing the technical drawings, the project
manager can inform the suppliers and customers about the relocation project.

8. The contractor will bring the technical drawings to Neumann Engineering, to

discuss if the company is happy with them.

Robert Monageng 17 MBA Engineering Management

 9. From the meeting, if the drawings pass the green light, the contractor will then
go and apply for planning permission on behalf of the client. If granted then
work can begin at the satellite site.

10. After the construction work is complete at the satellite site, and all the internal
systems have been put in place, the yard prepared. The relocation work will
begin.

11. Meanwhile the construction work is going on the contractor will draw up a
lifting plan, and make sure that all the regulations will be adhered to when
moving the machinery. This plan will be discussed with the project manager,
who will communicate it to the whole company.

12. Once the construction is complete the relocation of equipment and furniture
will begin. This will start with equipment being dismantled by the contractors,
possibly with the help of Neumann Engineering staff, so they can feel a sense
of ownership of the project.

13. Loading and moving of the equipment and furniture will begin once
dismantling has been done. But this dismantling and loading of equipment,
moving and installation can be done in parallel (ladder activities) to reduce the
linear duration of the activities.

14. Installation will be done once the equipment reaches the satellite site (new
site).

15. Once the equipment has arrived at the satellite site, the contractor, possibly
with the help of Neumann Engineering technical staff will commission the
equipment.

16. The relocation will be complete once all equipment and office furniture have
been moved.

Robert Monageng 18 MBA Engineering Management

8.0 Work Breakdown Structure

Continuing to assume the project will be done through a turn-key contract strategy,
with the contractor working alongside a project manager chosen in house, the work
breakdown structure will look like the following. This project, even though it might
be thought to be purely technical, it will involve change, which will have an impact
on peoples lives, therefore the Human Resource department will also have to be
involved. (Please see following page)

Neumann Engineering
Relocation Project

Robert Monageng 19 MBA Engineering Management

 Technical Human Resource Finance

INFORM STAFF ABOUT ROJECT AND HOW LIKELY

Contractor IT WILL AFFECT THEM. USE DIFFERENT METHODS Control of overall budget
TO GAIN COMMITMENT TO PROJECT. INTRINSIC
AND EXTRINSIC FACTORS

Technical Drawings Factory Construction Internal Systems Relocation

Planning Permission Foundations Heating Lifting Plan

Brickwork Electrics Dismantling

Roof Water Packing

Floors and doors Partitioning Lifting

Windows Production Floor Loading

Tool rooms Transporting

Offices
Offloading

Canteens
Assembly

Toilets and Showers

Commission

9.0 Recommendations to Managing Director

Depending on how the first relocation project, twelve years ago was carried out, and
lessons learned from it, this project can either be done on a multi-contract strategy, or

Robert Monageng 20 MBA Engineering Management

completely on a turn-key strategy. The advantages and disadvantages of these
strategies have been identified earlier. In this report, assumptions were made on that
the project will be done on a turn-key strategy, with the main contractor working hand
in hand with the project manager, who will be a full time Neumann engineering
employee. This will help bring a sense of ownership of the project to the company,
and it will help eliminate one of the disadvantages of this strategy, of the sense of loss
of immediate control of the project. This project, can spark a wage row if not
implemented properly, therefore the company should be willing to assist the
employees with transport means to the new factory or consider increasing their wages
to cover the costs of transport. Where ever possible, the company should negotiate
with the contractor to engage as far as reasonably safe and practical Neumann
Engineering staff on the project so they will have a sense of ownership of the project,
because this will bring one of the intrinsic motivations to the employees of a sense of
achievement once the project is complete. And this method might also help reduce the
cost of project labour. The other factor that can be considered is whether the actual
movement of machinery can be carried out during long holidays like Christmas or
Easter, to reduce production disruptions.

10.0 Conclusion

This report, set out to analyse and draw up a business case for the relocation of the
central site to the satellite site. What has been realised is that even though this
relocation will cost the company some considerable amounts of money, it is a worth
while option. Because whether it is postponed at this time, this option will eventually
have to be taken.

11.0 References

1. PROjEN (n.d) Factory and Site Relocation [online] Available from

Robert Monageng 21 MBA Engineering Management

 < [Link] > [22 January 2007]
2. OGC (2007) Business Case [online] Available from
< [Link] > [23
January 2007]
3. [Link] (2004) What is Corporate Social Responsibility? [online] Available
from < [Link] > [23 January 2007]
4. Mansfield (2007) Project Management .Lecture delivered for module
M28EMD btw 08-19 January 2007 at Coventry University
5. dcode (2005) The Company Law Reform Bill explained [online] Available
from < [Link]
[13 January 2007]
6. Haas-Tek (2007) Industrial lifting equipment, access plant and material
handling equipment [online] Available from <
[Link] > [24 January 2007]
7. BS 6079-2 (2000) Project Management-Part 2: Vocabulary

12.0 Bibliography

1. PROjEN (n.d) Factory and Site Relocation [online] Available from

< [Link] > [22 January 2007]
2. OGC (2007) Business Case [online] Available from
< [Link] > [23
January 2007]
3. [Link] (2004) What is Corporate Social Responsibility? [online] Available
from < [Link] > [23 January 2007]
4. Mansfield (2007) Project Management .Lecture delivered for module
M28EMD btw 08-19 January 2007 at Coventry University
5. dcode (2005) The Company Law Reform Bill explained [online] Available
from < [Link]
[13 January 2007]

Robert Monageng 22 MBA Engineering Management

 6. Haas-Tek (2007) Industrial lifting equipment, access plant and material
handling equipment [online] Available from <
[Link] > [24 January 2007]
7. BS 6079-2 (2000) Project Management-Part 2: Vocabulary
8. Turner, R.J. (1993) The Handbook of Project Based Management. Berkshire:
McGraw-Hill

Robert Monageng 23 MBA Engineering Management