Contents

Executive Summary...................................................................................................2 Project Description.....................................................................................................3 Project Scope..............................................................................................................4 WORK BREAKDOWN STRUCTURE (WBS).....................................................................7 RESPONSIBILITY MATRIX.............................................................................................8 GANTT CHART............................................................................................................9 NETWORK DIAGRAM.................................................................................................10 Risk Assessment and planning.................................................................................15 Financial Analysis.....................................................................................................20 SOCIAL IMPACT ASSESSMENT...................................................................................23 SOCIAL IMPACT ASSESSMENT

Executive Summary

The Modifiers is a car modification project started among four partners. Nowadays there is a trend among youngsters in car modification, so the thought of starting a car modification was based on reaping out sufficient income out of the project. This is an equity based project and the partners have invested in it. There are four

partners in the project and all of them have participated in the project equally. The Project is named as The Modifiers , the modification parts are imported from Japan. The professional engineers and supporting staff is hired to provide professional services to the customers. The project is managed very effectively and all the aspects of project management are applied and required assessments has been conducted carefully under the supervision of partners/ Project team. The report consists of the several activities that come under the project management and that are defining the project scope, laying down the Work Breakdown structure to make the project easy, the Network Diagram is drawn to understand how the project will progress and to clear the misunderstandings, Risk Analysis has been done to identify potential risks, responses and contingency plans are then developed to tackle the potential risks and Social impact assessment of the project has also been conducted to ensure the social compatibility of the project with the environment. These all processes will help us to conduct our project in a systematic manner

Project Description
We are the partners doing this project together. The idea of our project is to start a small business of car modification and customization. We the partners have planned out that the our workshop for car modification will be Shop # 486, Al Khair Plaza, Abpara Market Islamabad, Which is provided by one of our partners to reduce the initial setup cost. Considering the foreign exchange rates the estimated cost of our project is PKR 1050000 which is collected and shared by the partners. And the estimated time in which this project will be completed is 80 to 90 days. We will need 2 skilled car engineers who have already worked on customization of cars and 4 skilled workers to support them, who must have a little bit of experience in car engineering works. This business is related to the automotive industry car customization shop. We are bringing all types of customized products for almost all make and models of cars in Pakistan. This business is unique in the sense that no one in Pakistan is bringing customization at such a big level. Now a days people are really fond of fabricating their cars so thats why we are very hopeful that we will have a success right from the start of the business. Currently we are opening a shop in Islamabad and for our future plans we will open more shops in other cities of Pakistan.

Project Scope
1-Defining Project Scope:
a. Objectives of the Project: To To To To To cater the car modification needs of young generation. provide our customers with durable and Quality products. complete our commitments with our customers in given time. earn substantial Profits, by controlling our costs. complete the project within its allocated time.

b.ProjectDeliverables:
The list of products that we will provide is basically divided into three types, 1. Performance parts Engines Forced induction Gear boxes (transmission) Tires Turbo/Super charger Brakes Nitrous oxide Suspensions Fuel injectors etc.

2. Visual parts Bumpers (Front and Rear) Side skirts Spoilers Hoods Roof scopes Rims Lights designs HIDs Exhausts Window tints (up to 10 grades) Stereo systems, woofers etc Paints

c. Milestones:

We are four members conducting this project having expertise in different areas. Following are the milestones for the group members of the project. Irfanullah spent 4 years in Japan and had good relations with cars modification parts dealers in Japan. So he will be helping us in making contracts and deals with the car dealers, and rest of the imports process. Ali Raza is expert in designing the vinyls for the cars and had impressive knowledge about sound systems of cars, so he will be assisting us in this regard. Mohsin Kamal will take care of the business, inventory, customers, after sales services and warranty. Ali Farooqui is expert in marketing, and will promote our product and services to our target market. d. Technical Requirements: Technical requirements for our project Include: Complete and Separate Tool kits for engines and body parts. Welding Machines Paint Machines Generators Hydraulic car uplifting Deck

e. Limits and Exclusions: Limited finances are our preliminary constraint. So car customization workshop will only be launched in Islamabad initially and the other cities of the country will be excluded, at least for the first year. We will initially launch our business in Islamabad and rests of the three cities including Lahore, Karachi and Peshawar are in our domain of business. But at the initial stage we will exclude the rest of the three cities due to financial constraints. f. Review with the Customers: Now a days car modification is becoming famous among young generation. We conducted several verbal interviews with our friends as well as colleagues, and general public, and found that there is huge demand for the business which we are going to conduct.

g. Project Scope Statement: The project is basically to open a for profit business to produce and provide high quality spare parts and customization for the existing makes and models of cars in Pakistan.The main scheduled milestones of our project are to acquire a shop, acquire necessary machinery and human resource, and to acquire some components of customization through imports within the total budget of PKR 800000 and is planned to be completed in 40 days time.

2- Establishing Project Priorities:

Projects priorities are basically the tradeoffs i.e. importance related to time, cost and scope of the project. Budgeted cost for our project is Rs. 1050000, and the estimated time for or project is 40 days. Constraints: Time is the major constraint in our project i.e. we have planned to complete it in 40 days but due to delays in placement of machineries from the suppliers and imports of our product from Japan and Dubai. Enhancements: The estimated cost of our project is Rs. 1050000, we will try to cut our unnecessary costs and enhance it so as to meet the requirements of our project within the estimated cost limit. Project Priority Matrix:

Time

Performance

Cost

_____

Constraint

_____

______

Enhance

Accept

WORK BREAKDOWN STRUCTURE (WBS)

The Modifiers Partnership Contract Appoint Workers Procureme nt Workshop Customer orders

Engine ers

Support Staff

Engines

Gear Box

Shop Acquisition Electricity and Gas Connection

Turbo/Su per Nitrous Oxide Fuel Injectors HIDs Music Exhaust Tools Hydraulic System Kits s

Tires

Suspensio n Brakes

Water and phone Service

Wall Painting Spoilers Rims Weldin g Paint Equipment Display Machine and Racks Steel cutters

RESPONSIBILITY MATRIX
Following is the responsibility Matrix of Our Project. Tasks are identified and the concerned personnel accordingly with their tasks are mentioned below. Their responsibility as well role as support / assistance is mentioned in the matrix. TASK IRFA N ULLA H R MOHSI N ALI RAZ A ALI FAROOQ UI Sta ff A Sta ff B Sta ff C Sta ff D Sta ff E Sta ff F

Relationship with Dealers Importing arrangement s of Spare Parts Agreements; Letter of Credit, guarantee Documentati on of Shop plus agreements Customer Relationship

Inventory Management Warranty Claims and After Sales Services Designing the vinyls Sound systems cars, Marketing Advertiseme nt Mechanical Work Engineering Paint Jobs Electronic Wiring Visuals and Tyre Works of

R S S R R

S S s R R S S S S R R R S S S S S S

R = RESPONSIBILITY, S=SUPPORT / ASSISTANCE

GANTT CHART NETWORK DIAGRAM

Activity A Descrpition Partnership Preceding Activity None Activity Time 2

Contract B C D E F G H I J K L M N O P Q R S T U V Shop Acquisiton Wall Painting Seperate Electricity Meter Separate Gas Meter Fixing of Welding Machine Fixing of Paint Machine Fixing of Steel Cutters Fixing Of Car Uplifting Machine Display Racks/ Shop Design Appoint Workers (Engineers) Appoint Workers (Support Staff) Engines Turbo Nitrous Oxide Kits Fuel Injectors Hydraulics Exaust Music Systems Gear Box Tires Suspension A B B B C,D,E F G H I J K L L L L L L L L L L 2 10 10 10 5 5 5 8 10 3 3 10 10 10 5 5 10 5 5 5 5

W X Y Z AA

Brakes Spoilers Rims Venyls Customers Orders

L L L L M,N,O,P,Q,R,S,T,U,V,W, X,Y,Z

5 10 10 5 15

4 0

C 14 Wall Painting 10 1 4

0 0 0

A 2 Partners hip Contract 2 2

2 0 2

B 4 Shop Acquisit on 2 4

4 0 4

D 14 Electricit y Meter 10 14 1 4 0 1 4

1 9 0 1 19 9

G 24 Paint Machine 5 24

F Welding Machine 5

19

4 0 4

E 14 Gas Meter 10 14

Next Page

G 24 0 H 29 Steel Cutters 5 2 9 29 0 2 9

H I 37 Car Uplifting Machine 8 37

24

3 7 0 3 7

J 47 Racks Shop Design 10 47

4 7 0

5 K 0 Appoint (Engine ers) 3 5 0

5 0 0 5 0

L 53 Appoint Staff 3 53

Activity L is the Preceding Activity of M,N,O,P,Q,R,S,,T,U,V,W,X,Y,Z

4 7

Next Page

53 N 0 53 O 5 M 5 10 3 3 0 0 53 P 5 10 55 3 10 3 5 5 53 Q 8 5 58 5

63 6 63 63 3 58 6 3 63 6 5 3 8 6 3 6 3 6 3 5 8 5 6 8 35 8 6 3 6 3

53 0 L 53 53

10 S

5 53 T 53 U 58 5 5 5 58 55 58

6 3 0 6 3

AA 78 Custome rs Orders 15 78

5 3 5 5 3 5 5 5 3 8 5 0 8 5 3

V W X 5 5 10

58 58 63 63 63 63

53 Y 0 5 Z 3 53 10 5 5 8 the Network Diagram are : 5

6 3 58 6 3

63 Following are the Critical Paths from M AA N AA AA R X Y Z M AA N AA AA R X Y Z M AA AA AA AA AA AA AA AA AA

N A B E F G H I J K L O R X Y Z

AA AA AA AA AA AA

Risk Assessment and planning

Potential Risks
The Potential Risks associated with this project are given below:

Delays in the imports of spare parts Fluctuation in forex rates Electricity Failure Delays in Machinery Installation Injuries due to Machinery (cutters and welding machines etc) Damaged spare parts Worker quitting without prior notice Fire in shop

Government/ Traffic police laws Risk Assessment Form

Risk Assessment Form

1. Very Low, 2. Low, 3.Medium, 4.High, 5. Very High Risk Event Delays in the imports of spare parts Fluctuation in forex rates Electricity Failure Delays in Machinery Installation Injuries due to Machinery (cutters and welding machines etc) Damaged spare parts Likelihoo d
3

Impact

Detection Difficulty
4

When occur

Airport

Entire project

Entire project

Start of the project

While cutting and welding the metals

While receiving and placing the spare parts/ Entire project

Worker quitting without prior notice Fire in shop Government/ Traffic police laws

Throughout the project While Operating gas welding machines Throughout the project

Delays in the imports of spare parts As the spare parts will be imported from Japan so delays in the dispatching and receiving of the spare parts can occur both at the airports and at the warehouses (Suppliers warehouse and The Modifiers warehouse). Impact of delays in imports of spare parts can result in little delayin the project. Likelihood of occurrence of delays is low. Fluctuation in forex rates The spare parts will be bought from the dealers in Japan and the transaction will be made in US Dollar. As the currency of Pakistan is fluctuating a lot, sometimes it goes up and sometimes it sharply falls with respect to US Dollar. The impact of these fluctuations will be affecting The Modifiers in terms of higher cost. And Likelihood of its occurrence is high. Electricity Failure In Pakistan the Electricity shortfall is rising with the passage of every year and to manage the electricity WAPDA is shedding the load daily 8-14 hours depending on the living area. The impact of load shedding will be high in terms of delays in customization of cars. The Likelihood of electricity failure is very high. Delays in Machinery Installation Delays in the procurement and installation of machinery and other equipment can occur because of lack of communication or because of the

late supplies of that machinery from the supplier. The impact would be medium as it can extend the estimated completion time of the project. Injuries due to Machinery (cutters and welding machines etc) Improper use of machinery like Steel cutters and welding machines can cause injuries ranging from minor to severe. The impact would be very high as it would stretch the completion time of the project because of replacing the severely injured worker and extra cost will be incurred. Likelihood of such injuries is low as most of the workers know how to operate the machinery. Damaged spare parts Spare parts can be damaged while loading/ unloading andcan be damaged if they are not kept in the right shelf or in dedicated racks. For example: If the paints are kept together with mufflers and spoilers or any other metals, there is a possibility that if any accident occurs then it might fall onto the spares and can cause unwanted stains. Impact would be medium as the spare parts or the metals can be cleaned. Likelihood is low in this case. Worker quitting without prior notice The worker might quit due to personal reasons without prior notice which might delay the project for a very little time as the labor force in Pakistan is abundant and cheap. Likelihood is low and the impact would not be a serious one. Fire in shop The mishandling of Gas operated welding machines and other equipment can cause fire in the workshop and it can ruin the whole project and might lead to dissolution of the project. The impact will be very high while the likelihood is low. Government/ Traffic police laws There are several Government/ Traffic police laws which can affect the car customization Workshop project. For example: Those cars which have mufflers installed in them sound very loud and disturbing and because of this noise the Islamabad traffic police have banned them. And in future there is possibility that government might impose such laws which can lead to closure of the business. Impact will be very high as the whole project will be in jeopardy. Likelihood is medium because the traffic laws in Islamabad are getting strict day by day.

Risk Response Matrix

Risk Event Delays in the imports of spare parts Fluctuation in forex rates

Response

Contingency Plan
Get the spare parts in the local market(even at higher price) Exchanging the currency to US Dollars at the project start

Trigger

Who is Responsible
IrfanUllah

Accept

When the flight is late for more than 6 hours When the difference increases by more than 1 rupee When the load shedding exceeds 3 working hours When the machinery is not installed on the specified date

Avoid

Irfanullah

Electricity Failure Delays in Machinery Installation Injuries due to Machinery (cutters and welding machines etc) Damaged spare parts Worker quitting without prior notice Fire in shop Government/ Traffic police laws

Avoid

Installing Generators

Mohsin Kamal

Transfer

Outsource the machinery installation

Mohsin Kamal

Transfer

Outsourcing employee health insurance

When the injury caused is severe in nature

Staff A

Mitigate

Extra set of different parts should be available in the inventory Having Backup worker for each job Install Fire Extinguishers Get license/ Approval from government

When the damaged part in the inventory is discovered When the employee quits the job or fired. When anything in the workshop catches fire When the rules and regulations are violated

Mohsin Kamal

Mitigate

IrfanUllah

Mitigate

Staff A

Avoid

IrfanUllah

Financial Analysis
The Modifiers is a project which is being initiated by four friends on the basis of partnership. All of us are nearly experts in our field and started the project. At the start of our project we projected a cost of 10.5 Million Rupees while giving consideration to all the costs and expenses which are going to be incurred. But for the initial outflow we shall take only Rs. 8 Lac and the rest of the amount is kept for unforeseen expenditure. Financial Analysis is carried out to inquire that whether the project which is going to be started is feasible in terms of costs incurred and return gained from the project. For this purpose we have used the following capital budgeting techniques that will help us deciding either to go with the project or not.

1. NET PRESENT VALUE: Denoted by NPV, is a discounted cash flow approach to capital budgeting. With the present value method all the cash flows are discounted to present value using the required rate of return. If the result is zero or more the project is accepted, if not it is rejected. Formula: NPV= Present value of Cash Inflow-Present value of Cash Outflows.

Mont hs
0 1 2 3 4 5 6

Cash Flows
800,000 60,000 90,000 140,000 180,000 200,000 350,000

Discount Rate Present @5% Value

1 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 800000 57143 81633 120937 148086 156705 261175 825680 25680

PV NPV

Hence on the basis of NPV, which turned out to be positive, we will accept the project. 2. INTERNAL RATE OF RETURN: Denoted by IRR, it is the discount rate that equates the present value of expected cash outflows with the present value of expected cash inflows. The acceptance criteria for a project being accepted or rejected are that if the IRR exceeds the required rate of return the project will be accepted otherwise rejected. IRR= Lower Discount rate+ { Diff B/w LDR and HDR(NPV of LDR/ Summation of NPVs of LDR+HDR)} Month s 0 1 2 3 4 5 6 Cash Flows D.R @ 5 % 800 ,000 1 60000 90000 140000 180000 200000 350000 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 PV PV 80 0,000 5 7,143 8 1,633 12 0,937 14 8,086 15 6,705 26 1,175 82 5,680 PV 0.6302 220559 73283 4 0.6806 136117 0.7350 132305 0.7938 111137 0.8573 77160 0.9259 55556 1 800000 D.R@8% P V2

25, NPV 680 NPV IRR

67166 5.90%

Hence the internal rate of return for our project is greater than the required rate of return we should accept the project. 3. RETURN ON INVESTMENT: Denoted by ROI, measures the overall effectiveness in generating the profits, with the available assets. i.e. earning power of the invested capital. Formula: ROI = Net profit after taxes / Total Assets.

The Modifiers Projected Income Statement Net Sales Less ; CGS Gross Profit less: Selling & Admin Expenses Earning before Interest and Taxes Less : Interest Expense Earning before taxes Less: Taxes
6500 0 2700 0 18000 2700 0 6000 0 15000 4500 0

Net Profit After taxes ASSETS Current Assets Cash Inventory Total Current Assets Fixed Assets Plant & Machinery Other Longterm Assets Total Fixed Assets Total Assets
ROI = 20500 /800000 = 2.6 %

205 00

2000 00 1000 00 3000 00

4000 00 1000 00 5000 00 8000 00

Putting the values in the formula we get,

SOCIAL IMPACT ASSESSMENT

Any activity which is taking place has its impact on surroundings. The impact can be positive or negative. The Modifiers is a project that is based on the modification of cars to make them look stylish and attractive. This trend is heavily popular in European countries, where youngsters modify their cars .This modification trend is now becoming popular in our young generation and youngsters have a lot of craze for it.

The parts of cars used in vehicles for modification purposes that make them attractive and stylish have somehow negative social impact too. Modification parts create noise pollution in the environment due to the mufflers and exhaust kits used in vehicles. The HID,s light have sharp beams and impact the night vision of the other drivers on roads. After modification of their cars, the drivers involved in activities like racing with other vehicles, this often results in accidents that even lead to the deaths.