Project planning and cost control in a food service equipment industry

Abstract

This thesis is the study and recommendation of a project planning and cost control system within a foodservice equipment industry that is a job shop in nature, in order to arrive at more efficient ways for carrying out project activities. As a result of the current problems facing in each project, such as material shortages, the fact that many projects are required around the same time, and the lack of a person who is directly in charge of the project, delays in the production and installation of the foodservice equipment occur. Together with the fact that there are large differences between the estimated and the actual costs of the project, the control of the project can not be done efficiently. In order to reduce the damages that may result from late deliveries, as well as to increase the ability to control the project costs, certain improvements were made by utilising the concept of pre-bid project planning, the tracking of project schedule using gantt charts, including the establishment of a new work function especially for the management of the projects. With respect to cost controlling measures, several forms were designed for recording data on project activities, so as to enable the monitoring of the costs of the project. Because the tracking of the project schedule and costs require fast and accurate data processing, hence, the Project Management Information System was developed for this purpose. The data gathered using various forms are entered into this information system for further processing, and reports on the project status are generated for further management use. From the betterment of the preparation and control, as well as the improvements in the coordination between the production and installation department, resulted in the reduction in the material shortage from 13.16% down to 0.96%, and the products which did not conform to the requirements at the job site was reduced from 9.87% down to 1.90%, leading to the on-time commissioning of the project. Both the new Cost Estimation System, which enable more accurate estimates, and the Project Management Information System have also helped in making the actual costs comply with the figures previously estimated, and thus, the variances between the estimated and the actual project costs were reduced from 17.39% down to 0.24%