Project management principles and practices

Project Management

The project selected for this study is the opening of a new restaurant in New York City. This restaurant will be named: "Home Grown." It will be fashioned after the restaurant-creation in the television program "Fifteen" in the U.K. Food Network, a cable television channel has decided to open the restaurant by hiring fifteen trainees. The trainees will be taught all the requisite skills to chefs. Along with that they will also be able to assess the related needs of the restaurant industry. Jamie Oliver, the mastermind behind "Fifteen" in the U.K. has been selected to head this project along with his sous-chef who would be monitor the daily operations in NY City. The restaurant is to open on Christmas Eve, 2004 and it is hoped that it will be a success. Food Network has a budget of ten million dollars earmarked for this project. Any profits from this restaurant will be directed to funding education and training of underprivileged teenagers in NY City in the culinary industry.

Introduction: Project outline and scope

The project discussed in this report tracks the needs of setting up a new upscale restaurant in New York City, USA. Following the media coverage of "Fifteen" by celebrity chef Jamie Oliver, the U.S. television network Food TV has decided to sponsor a program operated along similar lines. This report proposes a business plan. This plan entails the setting up of "Home Grown" in time for the peak holiday season of Christmas 2004.

History of the organization

Food TV is a commercially, very successful cable network channel in the U.S. It has becoming increasingly popular with the viewers. It has been cited as the major player in causing a food revolution in the U.S. The network is constantly on the lookout for new and innovating programming that can reduce the mystique surrounding high-end cuisines. Food TV seeks to encourage the average viewer to dabble in the art of fine cooking. The successful adaptation of "Iron-Chef" a Japanese food cooking competition in the spring of 2004 has spurred executives to look for similar options in other countries. Chef Jamie Oliver's "Fifteen" provided the bases for setting up a similar show in the U.S.

Food TV executives had a meeting with Oliver. They agreed to sponsor this new venture under his leadership fully. The location selected is New York City in the U.S. And the "trainee" chefs will be selected from the city as well. The new restaurant (as has been mentioned above) will be called "Home Grown." Its location will be downtown Manhattan, close to Wall Street and the business districts. The budget allocated for this project is $10 million for the initial setup cost. This money will also cover expenses for first year operations. Any profits from this venture would be donated to a center for disadvantaged youth for training and educational needs.

Project Outline and Objective

Prior to actual commencement of this new project, the network needs to ensure that all the objectives behind the intricate task of setting up a restaurant are adequately investigated. The project is a combination of a television show and a real life restaurant setup. For the purpose of this report, only the needs of setting up the restaurant have been investigated and analyzed. It is assumed that the network will provide only the necessary support and will not impact the head chef and planners' decision-making.

The main objectives of this project are listed as follows:

Selection the location for the restaurant

Designing and setting up facilities

Selection of the 15 trainees for the first year by Mr. Oliver and his assistant chef.

Training of the individuals selected

Menu creation and service execution

It is imperative that the restaurant be opened on Christmas Eve 2004 and within the budget allocated by the network. The trainees are also expected to perform and learn the art of cooking and kitchen organization.

Needs of the project

Although the network undertakes this endeavor with Oliver, it is assumed that Oliver's assistant chef who is New York-based will be responsible for the day-to-day operations of training the interns and the overseeing of the progress of the restaurant renovation and interior design. Identifying the needs for each project and developing an appropriate request for proposal is very critical. (Gido & Clements, 2003)

There are various challenges with respect to building code and local area compliance. These have to be dealt with at the onset of the project, during the location renovation and setup. (Kerzner, 1979)

Every restaurant project requires people to be wholeheartedly involved in the achievement or completion of a set of goals or objectives, in this case the opening and successful operation of the restaurant. Of all the assets that any employer possesses, the human element can provide the most variability and therefore requires the greatest attention. (Kerzner, 1982)

Communication between the network's managers, the project manager, Mr. Oliver and the assistant chef is very important. It is important that every individual associated with this project, especially the project manager, understand the basic concept that the reason why a project is conceived, planned and executed is to serve a final customer. (Martin, 1976; Pruitt, 1999) The ultimate goal of this restaurant should be to train the interns and use their services to operate a successful restaurant

Stakeholders identified for this project

Studies indicate that many of the problems experienced in projects are of a management, organizational or behavioral nature" and rarely due to inadequacies in technique or skill. This is especially true of software related projects. (Clifton & Fyffe, 1977) For this project, the major stakeholders identified are as follows:

The TV network sponsoring this new project. Being a very successful food cable TV network, the organization would like to, with this restaurant, make a philanthropic overture, and as a result get into the good (or better) graces of its viewers. All proceeds from profits will be used for training and educating teenagers who are interested in the culinary field, and who would otherwise have not had the chance to obtain quality training. The network would however, be generating revenues from the creation and televising of fifteen episodes of the entire project with commercial sponsors to balance out the investment of $10 million for the startup of the restaurant. After the 2nd year, the restaurant would be financially self-supporting. Though, but the network would be involved in any decision-making.

The "trainees" selected for the restaurant is an internal stakeholder. Often, an employee of the organization is important as he or she truly represent the "heart and soul" of an organization. Modern organizations are of the opinion that their employees are the internal customers of the organization. (Keller, 2002) The trainees will operate in the restaurant for two years after which they will be considered trained. At the same time, after the first year, a new group of 15 trainees will be selected and this process will be undertaken for every year the restaurant will be in business. Mr. Oliver has signed a contract with the network to mentor the trainees for a period of 5 years. The contract could be renewed or another chef could be selected for the next five years.

An important external stakeholder is the customer who will be patronizing the establishment after it has been setup. The external market is very important for any organization. (Kotler, 2000) The need for the external customer's approval is very important and often the variables and influences acting on the external client can be very interlinked. (Kotelnikov, 2004) Often, the driving factor for many of the strategies planned by an organization is the external customers.

Suppliers and distributors to the restaurant are also important stakeholders. Factors such as logistics and distribution of products based on supply and demand, customs of source location and destination location, religious and political consideration and food preferences are all important considerations for any successful project. (Farrell, 2002) For the food industry, the freshness of ingredients and their availability often dictates the menu and the quality of the food served.

Milestones for "Home Grown"

Milestone

Task

Description and comments

Pre-project

Contract

The network has to establish a contract with Mr. Oliver to start the restaurant and establish a working partnership and team for the project. This includes signing on any assistant chefs for the project and the team definition. This team has to have a high degree of interdependency and interaction. (French & Bell, 1999) A temporary location is also selected at this stage for the training.

First Phase

Trainee & Location selection

The program needs to select 15 trainees. Advertisements for this program will be made on public television and radio. The program will select disadvantaged teenagers from poor neighborhoods who have the desire to enter the field but cannot afford formal training.

Location is very critical for any restaurant. NYC is an ideal location. The city has a sizeable population to support the launch of an upscale restaurant and at the same time offer the restaurant sufficient number of new trainees every year.

Second phase -- Part I

Renovations

After selecting the location and the site for the restaurant, the next stage is the restructuring of the area for the restaurant needs. Plans for restructuring will need to be drawn up by engineers and architects and submitted to the network and Mr. Oliver for approval. These plans then have to be submitted to the city/government building agencies in NYC. In addition, compliance as per FDA and EPA guideline will also have to be ensured during this stage.

At this stage, making the necessary arrangements with the distributors for the restaurant needs will also have to be established. Items such as fresh fruit and vegetables, meat, cheese and other items will have to be supplied to the "real" kitchen during the training stages and then to the restaurant.

Second phase -- Part II

Training of the recruits

The 15 trainees selected will have to be trained in the basic art of "cooking" using practical example for the training. This training will be conducted in a "real" kitchen of Mr. Oliver and the assistant chefs. This "real" kitchen will be in a temporary location until the restaurant is completed. All trainees will receive a stipend until the restaurant is opened after which they will be offered a salary commensurate with their experience and their performance.

Third Phase

Pre-occupancy evaluation and trainee relocation to site

At this stage the renovations are completed and the restaurant will have to pass the required inspections needed for occupancy and operation. The training it is hoped can be moved to the restaurant location by the beginning of December where the trainees will have the opportunity to work with the equipments and gadgets that might be unique to the establishment. Workflow understanding and practical tasks can be understood with real setups. Menu planning will also be decided at this time along with the selection of other staff such as the waiters, bus boys, cleaners and maintenance crew. In addition, a manager for the front restaurant will be responsible to ensure that waiters and other supporting personal understand and understand their responsibilities. A level of trust and respect will help get the best output from ever member. Team activity also changes as the team moves through various stages and periods in the group's existence. (Foster, 2003)

Fourth Phase

Marketing and advertisement

Publicity for the new location is important. The end consumers (external customers) are also the driving force behind any organization. (Rabin, Miller, & Hildreth, 1989) This marketing campaign will start from the end of September and will intensify over thanksgiving right up to Christmas.

Fifth Phase

Opening day

Home Grown opens on Christmas Eve. Food critics and celebrities are invited to review and sample the restaurants offerings.

Sixth Phase

Review

After the first month, the entire operations will be reviewed for operational functioning and cost effectiveness. This review will also consider the criticisms and comments of the food critics and the areas for improvements.

Seventh Phase

Close of project

After the sixth month the running and operations of the restaurant will be officially handed over to a dedicated business manager and will cease being a project-operated endeavor for the food network. The lessons learnt will be documented and reviewed.

Task and project analysis

Work Breakdown Structure (WBS)

Analysis of the WBS

The WBS presented above identifies the major steps needed to undertake this project. "A good WBS simplifies the project by dividing the effort into manageable pieces." (Hobb & Sheafer, 2003)

The red shaded section of the WBS identifies the final objective of the project -- opening a restaurant in NY City and train 15 underprivileged teenagers in culinary art in the process. The green shaded section identifies the basic segregation of the tasks and the important constraints that are present. The third level identifies the individual departments/process or work functions that have to be accomplished in the process in order to complete the project.

One of the main issues that most projects face is overshooting the initial budget and non-adherence to the time of launch. (Leemann, 2002) For this project, with the hoopla surrounding opening during the holiday season, a delay could be disastrous. There is no opportunity after the holiday week for the restaurant to drawn in large crowds. In addition, in the weeks following the holidays, other issues such as greater resistance to spend money due to overspending on presents and gifts creates a bad timing for a restaurant launch. Marketing of the restaurant is also an important part of the project. Targeting the appropriate market for the high-end cuisine is important. (Guiltinan & Paul, 1988) The financial culture within an organization also affects the marketing culture in any market. (Kerin & Peterson, 2004) Marketing strategies should also observe the general code of ethics when preparing and distributing marketing material. (Penrose, 1959)

Scheduling and sequencing the various tasks is also essential. It is essential that every task identified in the WBS be assigned an ID and an estimated start and finish date. It is important when creating the schedule that all the important variables that have the potential to push back the opening date be verified. For example, the date for the chefs to take over the completed restaurant is December 1st 2004. The aim then is to get the trainees comfortable with the operations and the equipment in the new kitchen. If for some reason there is a delay in the process the latest that the kitchen and restaurant can be allowed is December 15, 2004. The project time frame is very stringent and short. It is important that all the tasks undertaken are completed in the manner that is needed. An abbreviated schedule for only the major tasks is provided below and provides a snapshot of the needs of the project.

Task ID

Task Description

No. Of days

Start date

Finish date

Floats

Meeting and contract discussion

2-Jul-04

4-Jul-04

Advertise for Trainees & Hiring

5-Jul-04

20-Jul-04

Location identification

5-Jul-04

12-Jul-04

Renovations

12-Jul-04

30-Nov-04

Training for recruits

20-Jul-04

24-Dec-04

Marketing & Advertisement

25-Oct-04

24-Dec-04

Open "Home Grown"

24-Dec-04

Project Review & Closure

28-Jun-05

30-Jun-05

Gantt chart can help the project manager understand and track the constantly changing needs of the project at different stages.

Cost Estimate and cash flow

The network has assigned a maximum of $10 million for the project for the first year. This cost is however, the maximum and Food Network is aggressively working towards reducing the actual cost. There are some important variables that have the potential to impact the cost of this project. Some of the more salient ones are discussed below:

Location cost: real estate in New York is one of the highest when compared to any city in the world. In addition, the locale -- Wall Street -- has very high rental costs. Food Network is considering renting the area and not outright purchasing it dues to the financial constraints. The lease life and the contract for the property might also impact the cost of the rent. For example, the rent might be more costly for a shorter term of 5 years than a longer term of 20 years. Decision makers for the project have to evaluate the various models and determine the most cost effective and viable option for this project.

Renovation cost: The cost of creating and atmosphere that is commensurate of a high-class dining area can vary significantly based on the type of design and decor selected. Mr. Oliver prefers a more casual decor that is elegant and refined rather than traditional "stuffy" hotel dining-decor. New York houses a number of fining dining establishments such as Atelier, Jean Georges and Le Crique, to name a few. (Gourmet, 2004) The ability of this restaurant to differentiate itself is very important. Often, decor and ambience are some of the secondary defining factors for a restaurant, the primary one being the food serviced and the menu offered.

Building code compliance and government permits: Opening a restaurant requires permits and clearances from various federal, state and city government agencies. In addition, building permits and occupancy criteria might also impact the cost of the entire project. It is critical therefore to understand the specific needs based on the location for this project.

The cost of training the interns: while the salaries and compensations for the Executive chef and the assistants might be stable over time. The cost of training the interns might be higher than expected especially if the interns need more (than allotted by the project guidelines) time for basic and introductory training for the task. In addition, the hidden costs of operation such as the lost time and cost of replacing equipment, and the cost of the food that is necessary for the training is also important.

Project Organization structure and leadership

The external and internal environment within which a restaurant operates is very important. (Child, 2001) While business ethics and project goals might be the same for both parties the manner in which they are accomplished might differ drastically. It is important therefore, that all individuals involved in the project understand the needs of the project and are able to work cohesively together to attain these needs. A project team consisting of representatives from the television network and Mr. Oliver's supporting staff can help the individuals in the group stay focused.

Leadership is very important at every stage of the project. In a project type of operation, most of the tasks undertaken are one of a kind or at least have some level of uniqueness attached to them. Although Oliver and his assistants might have undertaken a similar project in the U.K., the differences in work ethics and cultural differences might impact the success of this new project. Better cost-control is possible in a project if all internal stakeholders are able to evaluate the conditions facing the project honestly. It is hoped that this project empowers individuals involved in the project to develop their involvement and responsibility in the culinary industry. The environment in which the trainee works plays an important role in the life of the trainee. (Doloi & Jaafari, 2002)