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Whirlwind Bikes Excercise – Business Case & Procurement

Paul Naybour Paul Naybour

Published: 7th January 2014

Paul, If you could have a look over my reponses and provide feedback it would be much appreciated.

 

Section 6.1 Business Case

What is the project purpose?

The purpose of the project is twofold.

Develop a design for a pedal bike that shall inspire the public to take up cycling and eradicate the perception that cycling is old fashioned and not cool. By doing so the benefits should be that half a million people will take up cycling reducing health costs, increasing productivity in the workplace and lower carbon emissions polluting the environment.

The purpose of undertaking this high profile project is that it is to be used as a platform to enhance the reputation of Whirlwind bikes so they are seen not only as specialist contractor in the UK but also as a market leader across Europe. Thereby not only realising the immediate financial benefit of £200k profit from this contract but also putting the company in a prime position for future high profile projects across Europe.

What is the scope of the project?

The scope of the project is to design the pedal bike using the internal design expertise resource of Whirlwind bikes. Then identify a specialist contractor to construct the twenty prototypes that are compliant with all aspects of the ITT and align with the project context.

Upon completion of construction the bikes are to be tested over 20,000km across Europe and must meet the standards as laid out in the stringent EU bike safety rules, again using a contractor to deliver the testing phase of the works.

This shall culminate in a launch event of the bike at which time it shall be presented to the public.

What are the strategic risks?

·         Failure to deliver on time resulting in damaged reputation

·         Cost of manufacture of prototypes to meet the required standards of quality

·         Excessive Insurance costs for testing of pedal bikes across Europe

·         Currency exchange rate fluctuation

 

What is the overall schedule?

The overall schedule is twenty one periods.

What are the main assumptions?

·         Materials to construct the bikes will be readily available

·         EUCHA shall issue design approvals and respond to any other relevant correspondence in a timely manner

·         Whirlwind bikes own the license to the design

·         Contractors employed to construct and test have sufficient resource to meet target dates

·         Whirlwind bikes design staff are not re-tasked on another higher priority task and there is no significant issues that will affect the current resource of personnel

·         Health & Safety Insurance can be obtained at a competitive financially compliant cost

 

What are the constraints?

·         Time – The launch date is already set and there shall be significant publicising of the event ongoing through the life of the project

·         Budget – The budget has come from the taxpayers money and there is significant constraint in place to ensure that this does not go over budget

·         People – Getting the maximum effort from the traditionalist cyclists on the project that are against new technologies

·         Weather – Poor weather could significantly increase the time required to complete the bike trials

 

What are the project success criteria?

·         Delivering a quality product that meets the requirement on time and within budget

·         Achieving a ‘zero harm’ accident incident rate on the project

·         Achieving a successful build design and enhancing the Whirlwind bikes public image which shall allow the company to realise the immediate and future potential revenue

·         Reduction in health costs

·         Lower carbon emissions

·         Increased Productivity

 

 

 

6.4 Procurement

What decisions are you going to have to make when deciding which contractor to use?

·         Is there bid financially and technically complaint and comply with all other criteria as detailed in the ITT?

·         Past performance – Has the contractor historically delivered a quality product?

·         Will the contractor agree to a contract with fixed price payment terms?

 

 

  1. Student says:

    Sorry Jim, for hijacking your thread too. I just thought it was a good opportunity to request feedback on this too, as I did it the other day but not posted on this forum yet.

  2. Student says:

    Hi Paul,

    Please also comment on my effort below:

    What is the project purpose?
    The purpose is to produce a new design of bicycle after Whirlwind bikes was granted the 300,000 euro contract from the EUCHA. The EUCHA is aiming to get more people into cycling via a new design of bicycle which is deemed as more appealing (‘cool’) than previous designs. This project is contributing towards the EUCHA’s objective of increasing peoples fitness.
    What is the scope of the project?
    •In scope: designing, building & safety testing the frame, wheels & ancillaries for 20 bicycle prototypes. This includes sourcing the components of the bicycles & providing (subcontracting) the means of testing the bicycle for Health & safety and insurance.
    •Out of scope: Advertising, marketing, distributing the bicycle(s).
    What are the strategic risks?
    1.The EUCHA might cancel the contract due to pressure from the other contract bidders.
    2.Other client orders might be delivered late or not at all, due to the staff working on the EUCHA project, resulting in losing existing clients.
    3.Not meeting the EUCHA project deadline, resulting in contract abortion from EUCHA.
    4.James Mckee could become disinterested with the EUCHA project as he is not interested in new technologies. This could lead to the project not having senior management support.
    5.The exchange rate may change for US dollars and Euros. The carbon provider (Carbon Fibre Products) is based in USA & the contract from EUCHA is in euros.
    6.Not achieving marketing volumes, resulting in WW Bikes not getting the projected £200K annual profits.
    What is the over schedule?
    Project schedule: 12 periods, comprising three implementation phases (called design, build test & integrate). Project milestones: One after design, One after build, One after testing & integrate (the test results will confirm to EUCHA that the product is fit for purpose).
    What are the main assumptions?
    1.The exchange rate will not change for US dollars and Euros.
    2.Supplier estimates will not change
    3.The prototype bike will pass the testing & get EUCHA approval.
    4.Rider Rentals bike testers will write their testing report in sufficient detail.
    5.Aluminium metal will remain more expensive from carbon.
    What are the main constraints?
    1.The bike has to be tested in the EU, not just in England.
    2.The bike has to pass the design phase before gaining full EUCHA approval.
    3.EUCHA enforced project deadline (12 periods away).
    4.The ‘stringent’ EU testing of the prototype bike over 20,000KM.

    What are is the project success criteria?

    1.Meeting the bike launch date in 12 periods time.
    2.The new design saving the economy 800 euros per annum in health costs.
    3.New Bicycle design earning £200K of new profit per annum.

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