PROJECT

MANAGEMENT
PLAN

CLASS OF 2020

PRANAB JAIN

NOVEMBER • 17 • 2020
 ASSIGNMENT-2
PRINCIPLES OF MANAGEMENT
PROJECT MANAGEMENT PLAN

Submitted By: Pranab Jain (17105084)

TABLE OF CONTENTS

TABLE OF FIGURES............................................................................................................................. 3
INTRODUCTION............................................................................................................................. 3
EXECUTIVE SUMMARY ............................................................................................................... 4
VALUE PROPOSITION ............................................................................................................... 4
GOALS AND DELIVERABLES .................................................................................................. 4
Number one in our core business............................................................................................... 4
Leading in the CASE fields .......................................................................................................... 4
Cultural and organizational transformation................................................................................ 5
CAPITAL AND INVESTMENT-STAKEHOLDERS .................................................................... 5
R&D INCENTIVES FOR INDUSTRY AND PRIVATE SPONSORED RESEARCH ..................................... 5
MANUFACTURING PLANT WITH AN IN-HOUSE R&D CENTERS .................................................... 6
STATE INCENTIVES ..................................................................................................................... 6
PROJECT SCOPE............................................................................................................................. 7
PROJECT OBJECTIVE ................................................................................................................ 7
DELIVERABLES ......................................................................................................................... 7
MILESTONES .............................................................................................................................. 7
PROJECT SCHEDULE SCOPE- GANTT CHART........................................................................... 8
COST MANAGEMENT ................................................................................................................... 8
RESOURCE PLANNING ............................................................................................................. 8
Raw material ............................................................................................................................. 8
Land .......................................................................................................................................... 9
Water ........................................................................................................................................ 9
COST ESTIMATING AND REDUCTION ................................................................................... 9
Cost Model Development Methodology .................................................................................... 9
 ENGINE COST MODEL ............................................................................................................ 10
QUALITY PLANNING .................................................................................................................. 11
OVERVIEW ............................................................................................................................... 11
MANUFACTURING FACILITY DESIGN ................................................................................. 12
PROJECT QUALITY PLAN ....................................................................................................... 13
QUALITY CONTROL AND RISK MANAGEMENT ................................................................ 13
Quality Policy Statement.......................................................................................................... 13
Quality Control Procedures ...................................................................................................... 13
PROCUREMENT MANAGEMENT............................................................................................... 14
GUIDELINES WHILE SOLICITION PLANNING: .................................................................... 14
 Change focus from price to quality ................................................................................... 14
 Establish relationships with suppliers ............................................................................... 14
 Use technology ................................................................................................................ 14
 Learn from recalls ............................................................................................................ 15
SOLICITATION PLANNING......................................................................................................... 15
REQUEST FOR PROPOSAL ...................................................................................................... 15
PROJECT DESCRIPTION............................................................................................................. 15
PROPOSAL ............................................................................................................................... 15
CONTACT PERSON ................................................................................................................... 15
PROJECT CLOSEOUT PLAN........................................................................................................ 16
TABLE OF FIGURES

Figure 1 Mercedes Group-Aims & Objectives ....................................................................... 5

Figure 2GANTT CHART FOR OUR PLANT ....................................................................... 8
Figure 3 Cost Model Development Framework ................................................................... 10
Figure 4 Engine Cost Formula ............................................................................................ 10
Figure 5 Cost vs Volume: Mercedes Engine ........................................................................ 11
Figure 6 Automobile Plant Structural Concept-1 ................................................................. 12
Figure 7 Automobile Plant Structural Concept-2 ................................................................. 13
Figure 8 Safety and Control Procedures .............................................................................. 14

INTRODUCTION

After the successful launch of covid vaccines, lockdown has been lifted completed all over the
world. Post-covid era saw a huge boom in demand of vehicles. To meet the booming demand
the upper management of Mercedes-Benz group has planned to set up a new automobile
manufacturing plant in India.

The following document is a detailed project management plan that defines how the project is to
be executed, monitored, and controlled. It contains various inputs from the project team assigned and
key stakeholders of the project to monitor the setup of facility.

As the work proceeds, the performance of the project is measured against the performance
measurement baseline included in the project management plan.

The scope baseline, schedule baseline, and the cost baseline are also discussed which can be refined,
revisited, and updated progressively.
EXECUTIVE SUMMARY

VALUE PROPOSITION
The Automobile industry in India is in upswing due to the surge of economy and technology.
They have opened the gates for many start-ups and businesses ideas to flourish. The automobile
industry in India will stumble with the halt of the transportation industry being a service
provider, they keep our economy from falling apart. The society of Indian automobile
manufacturers is the crown jewel of the transportation industry, jobs created and business
opportunities they provide are innumerable.

With overall demand increasing, it would be quite profitable to launch our plant under the
“Make in India” umbrella.

GOALS AND DELIVERABLES

We plan to achieve our goals through four strategic focus areas:
 strengthening our global core business (CORE)

 leading in new future fields (CASE)

 adapting our corporate culture (CULTURE), and

 Strengthening our divisional structure (COMPANY).

Number one in our core business

Our goal for Mercedes-Benz Cars is to play the leading role in the worldwide premium segment
over the long term. We also aim to enhance the smart brand’s pioneering role in urban, electric
mobility.

We intend to achieve a 9 % return on sales (EBIT in relation to revenue) for the automotive
business on a sustained basis. This overall figure is based on the return targets for the individual
divisions: 8–10 % for Mercedes-Benz Cars, 8 % for Daimler Trucks, 9 % for Mercedes-Benz
Vans.

Leading in the CASE fields

Connected, Autonomous, Shared & Services and Electric: Our goal is to play the leading role
in each one of these future fields and to generate additional potential by linking the four fields
together. We want to expand vehicle connectivity even further, thus creating added value for
our customers. We also seek to be the leader in the use of digital technologies, both in our
products and services and along the entire value chain.

Cultural and organizational transformation

We aim to change our divisions into legally independent entities, thus further focusing and
strengthening in India.

Figure 1 Mercedes Group-Aims & Objectives

Integrity is extremely important for our company, especially as we are undergoing a phase of
fundamental transformation after a life threatening pandemic. Integrity guides our dealings
with respect to our company and its employees, business partners and customers.

CAPITAL AND INVESTMENT-STAKEHOLDERS

After carefully analysing various financial supports given by central and state government it
has been concluded “Andhra Pradesh” will be the best state to setup manufacturing plant for
our premium segment due to following incentives.

R&D INCENTIVES FOR INDUSTRY AND PRIVATE SPONSORED RESEARCH

 A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act. Weighted
deduction of 200% is granted to assess for any sums paid to a national laboratory, university
or technological institute.

MANUFACTURING PLANT WITH AN IN-HOUSE R&D CENTERS

 Section 35 (2AB) of the Income Tax Act 26, 1961 provides weighted tax deduction of 150%
of the expenditure incurred by a specified company, on scientific research in the in-house R&D
centres as approved by the prescribed authority. Consequently, the weighted tax deductions
will be 100%.

STATE INCENTIVES

Various state in India offers additional incentives for industrial projects. Incentives are
provided in the following: rebates in land cost, relaxation in stamp duty exemption on sale or
lease of land, power tariff incentives, a concessional rate of interest on loans, investment
subsidies/tax incentives, backward areas subsidies, special packages for mega projects. Andhra
Pradesh
 Government of Andhra Pradesh is committed to providing land at concessional rates, along
with 24 hours nonstop power supply.
 Capital subsidy of 50% for common infrastructure in auto clusters and ASMC developers,
up to a maximum of USD 3.07 Million.
 Financial assistance limited to 75% of the cost, subject to a maximum of USD 38,461 for
obtaining patent registration.
 Under marketing incentives, 50% of participation cost with a maximum amount of
USD 7,692 to be reimbursed to at the most 10 MSME units annually, for participating in
international trade fairs.

After tabulating all the incentives, to build an automobile unit of 7000 acres, the BMW require
a capital of 150 million$. Distribution of the capital required is depicted in the graph:
 PROJECT SCOPE

PROJECT OBJECTIVE

To construct an automobile manufacturing unit for premium segment cars to be sold in

India due to rising demand in post-covid era. This plant will play a major role in
strengthening our hold in sub-premium and premium vehicle sector in India.

DELIVERABLES

By 2022, our plant will be churning around minimum of 800 vehicles, of which 60% would
comprise of Mercedes-Benz Cars, 30% Daimler group trucks and rest Mercedes-Benz vans.
This number will boost to 1200 vehicles by 2025.
25,000 job opportunities for skilled and semi-skilled labours would be generated in the
town of Andhra Pradesh.

Setting up R&D centres in 12 IIT’s and 4 NIT’s in south India to boost Mercedes in
technical front.

MILESTONES

2020(achieved) 2022 2025

• Get all the licenses and • Mercedez-Andhra Pradesh • Expand into mutiple
permits from the goverment Plant is functioning at 75% domains of vehicle
regarding land,water and of its capactiy. manifacturing.
electricity usage. • 800 vehicles being • Plant is working at
• 50% Setup of Plant is manufactured daily. maximum efficiency with
completed. • Set up R&D in atleast 6 1200 vehiclesbeing
• Employee 10,000 IIT's and NIT's with the produced daily.
workforce from nearby help of MHRD Industry.
towns.
PROJECT SCHEDULE SCOPE- GANTT CHART

“A detailed Gantt chart with daily progress and milestones is out of scope for this subject as it
contains technical jargons related to automobile industry so I have given a brief to showcase
importance of Gantt charts in project management plans.”

Figure 2GANTT CHART FOR OUR PLANT

COST MANAGEMENT

RESOURCE PLANNING

Raw material

Steel, rubber, plastics and aluminium are four commonly utilized commodities found in cars.
Bhilai Town have iron and aluminium ores which will help us to meet the demand. The plastic
for carbon fibres fitting in premum segments have to be imported from Korea. Due to its
expensive price by 2023, we will expand our plant to manufacture such products in-house to
reduce cost.
We also need electricity for energy requirements and petroleum products, not just for gasoline,
but for the synthesis of plastics and other synthetic materials. Under the initative “Make in
India” the Andhra Pradesh government will provide 5 MW 24/7 electric supply us which will
meet only 80% of our requirements. For other half, contracts have been signed with sunlight
pharma to install solar powers over 150 acres of plant.

Land

5500 acres of land have been cleared for legal and environment requirements with appropriate
licenses for environmental damage, pollution threshold.

A legal team comprising of 8 people are working on getting permits for the rest of 1500 acres.

Water

The automobile plant will also be required in large amount. In house research estimates says
we need 40,000 gallons of water per car. We have river basin near the plant but we need purified
water with PPM <10^-7.

COST ESTIMATING AND REDUCTION

Cost Model Development Methodology

A case study based approach is followed to analyse the cost model development in detail.

The cost model considers new products using either current technology and and/or new
technology, and so needs to distinguish between the two areas. Both current and new
technology cost estimating methods are required because the key deliverable for this research
is to develop a process to cost new technology intensive products, inferring that there is some
carryover of current technology. The case study is based on the Powertrain System.
Figure 3 Cost Model Development Framework

The figure shows how the model processes will flow; the concept for the new and carry over
technology models is also shown.

As one of the most expensive part of a vehicle is engine, major cost reduction techniques will
be focused on it.

ENGINE COST MODEL

A cost model was developed with the equation published that applies to a system production
of 300,000 vehicle units per annum.

Figure 4 Engine Cost Formula

Where; CHV = high volume cost of fuel cell system (USD)

PN = net fuel cell peak power output (kW)

LP = total cell platinum catalyst loading (mg/cm2)

PD = cell peak power density (W/cm2)

Figure 5 Cost vs Volume: Mercedes Engine

By 2022, we can maximize our production to 800 units per day. Although the cost per engine
is high (3000 $), high demand in post covid era can easily compensate it.

By 2025, the net cost per engine would be reduced to (2500$) which will give us a competitive
price in saturated automobile market.

QUALITY PLANNING

OVERVIEW
 Do the right thing, right, first time, every time policy
The construction practices adopted by Mercedes-Benz group is simply “Do the right thing,
right, first time, every time” by following established approved Project Quality Plan (PQP)
and Inspection Test Plans (ITPs) with well narrated method statements and definite
objective checklists/formats.

 Project Management Information System (PMIS)

Project Management Information System (PMIS) was effectively and efficiently used in
day-to-day construction activities for ensuring: an advanced information on construction
activity (what, when, where, who, how, with what), with well repository of documents,
good track on resources, providing precise information to subcontractors and keep a tab on
commercials.
MANUFACTURING FACILITY DESIGN
 The architectural design concept was derived from Blue Lily, the flower of the desert.
 The plan is reducing in a spiral pattern, symbolizing the flourishing Mercedes economy.

Figure 6 Automobile Plant Structural Concept-1

 Seek the model of Future city for Middle East By the beauty of shape & scale
 An effective, well-constructed and well-maintained building is essential for safety and
durability of any structure. The tower has adopted the most stabilized Y-Shape, which
provides stability by building weight shifts to end of the wings and structure considering
both stability, constructability.
 Figure 7 Automobile Plant Structural Concept-2

PROJECT QUALITY PLAN

 Project Quality Planning is a crucial step and it should be done well before construction
work is due to commence.
 It is amalgamated with the traditional project planning in such activities as nomination
of subcontractors and suppliers, determination of construction methods, construction
programming, logistics plan, site layout, identification of manpower requirements and
training needs, material and plant acquisition, etc.

QUALITY CONTROL AND RISK MANAGEMENT

Quality Policy Statement is to ensure a totally technological driven approach that meets
and exceeds competitor’s expectations through effective management and
performance, good co-ordination increased productivity and greater focus on business
objectives.
Quality Control Procedures will be developed in line with the project specification, ITP,
approved relevant documents, submittals and approved method statements. All the
procedures will be developed and submitted formally to the consultant for approval and
accordingly distributed to all concerned.
Figure 8 Safety and Control Procedures

PROCUREMENT MANAGEMENT

GUIDELINES WHILE SOLICITION PLANNING:

 Change focus from price to quality

Make sure that price cannot be the only consideration when looking for suppliers. Opting for
the cheaper option can have undesirable results.

 Establish relationships with suppliers

More than one supplier for a similar product leads to inconsistencies and issues, something that
can be eliminated through cooperation with suppliers and focusing on single-supplier structures
for all the components.

 Use technology

Using supplier management software can streamline the whole procurement process. The
benefits include greater supplier intelligence, improved supplier information and performance
management, and even has a relationship management component.
  Learn from recalls

Examining the reasons behind a recall, either internal or that of a rival’s, can lead to clarity on
potential issues. Based on the information steps can be taken to avoid suppliers who
manufactured these parts, and improve overall product quality.

SOLICITATION PLANNING

REQUEST FOR PROPOSAL

PROJECT DESCRIPTION

Construction of a 7000 acre automobile manufacturing unit in Bhilai Town, Andhra Pradesh.
Mercedes group owns the property. The total projects under consideration include:

 Construction, furnishing and equipping of an automobile plant.

 360 degree 6 FOM, 12 assembly lines able to work independently.
 Upgrades, remodelling and improvements to the “Automobile plant”. Possible
demolition in 2050.
 Payment of associated bond issuance and building costs.

PROPOSAL

The responding individual, firm or organization shall present their Proposals by 2 nd April,.
Proposers must have adequate organization, facilities, equipment and personnel to ensure
prompt and efficient service to the Company. The Mercedes group reserves the right to
inspect the facilities and organization or to take any other action necessary to determine
ability to perform in accordance with the terms and conditions of the Contract.

CONTACT PERSON

Direct any all technical inquiries concerning this Request for Proposals in writing to the
following representative. Questions must be submitted by 2:00 P.M. on 31st January, 2020
Jeff Rasmussen, County Administrative Officer
#565, Sector-9, Ambala City, Haryana
Phone: 541-475-2449
Fax: 541-475-4454
jeff.rasmussen@co.jefferson.or.us
 PROJECT CLOSEOUT PLAN

The project or site manager will confirm that all project requirements have been satisfied, all
work has been completed and all promises have been kept. This is the time to review any
change requests, view all work and go over your initial documentation to ensure that you
have fulfilled your obligations to your client.
Review all legal requirements & ensure that all terms have been met. Meet with any code or
inspection authorities & obtain TOC and other documentation
Review any change orders to ensure that these have been finished prior to client closing.
Review owner's notes to ensure that any requests have been attended to & that the site is truly
ready for handing over.
Files to be included:

 Certificate of Substantial Completion

 Completed Punch list
 Design Team Approvals
 Inspection Certificates
 Certificate of Occupancy
 Lien Waivers
 Final Pay Applications
 THANK YOU !
CONTACT FOR MORE
INFORMATION

JOSH KALPADIA MERCEDEZ INDIA

+91-88456-89078 HEAD
KALPADIA@MERCEDES.COM

ROY JAIN PLANT MANAGER

+91-89460-20166
ROY99@MERCEDES.COM

JOHN BLAKE PLANT SENIOR

+91099234-67853 ENGINEER
BLAKE12@MERCEDEZ.COM