Prior to beginning work on this assignment, Read Chapters 3 and 5 of the course textbook, Contemporary Project Management: Plan-Driven and Agile Approaches. Review the Walmart Case St

(cheerful music) – [Narrator] The traditional way to assess a business' success is looking at their income statement, company value, or profit. However, in the early 1990s, John Elkington coined the phrase "triple bottom line" to broaden what we understand to be a business' overall success. Instead of one bottom line, Elkington argued there should be three: people, planet and profit. This encouraged businesses to think beyond their profit motive, and consider their commitment to CSR. – [Dr Matthew Davis] So if you think about people, planet and profit, we can think about how that might influence firms in the way they operate. So if you're starting to account for not just the financial costs and benefits of the operations, but also the impact that what you do has on the planet and the environment, and also people, social cost, well, suddenly things which are very profitable might suddenly seem less viable if there's a high environmental cost. And the triple bottom line is all about trying to get firms to think about how they balance and take account of those different costs. – [Narrator] Founded in the UK in 1884, Marks & Spencer is a retailer which now operates in 56 territories. It has over 1035 stores in the UK, and 428 worldwide, as well as the international online business M&S.com. It employs around 80,000 staff worldwide, and turns over 10.7 billion pounds annually. Years before Elkington conceived of his triple bottom line theory, Marks & Spencer recognised the three key areas of sustainable business. – [Carmel McQuaid] Marks & Spencer has been trading for a long time, over a hundred years, and we have the luxury of having an archive and a lot of learning from through the generations. What's really interesting is there's a thread, a common thread throughout, which existed before and after CSR was a thing that people talked about, and it is that M&S is at its very best when it serves customers, colleagues, shareholders and communities in which we trade. And that sums up, really, "people, profit, and planet" because we recognise that, if for us to be at our absolute best, if we can maximise that across all the stakeholders, then that's when we really start to win things. – [Narrator] Profit, or economic performance, comes from offering products customers want at the right price. It also takes into account taxes paid, jobs created, and the general growth of the business. Planet, or environmental performance, is assessed by the company's emissions, air, water, energy and waste. People, or social performance, includes labour practices, community impact and human rights. A triple bottom line encourages companies to create their own corporate social responsibility strategy. To be a success, they need to create a sustainable business model that balances each of these three areas. – [Carmel McQuaid] In terms of our business model, we think very much about customer first and making sure that we deliver exceptional products that don't cost the Earth for those customers, whether that's clothing or food. Within that then, for food it becomes very clear– food that doesn't cost the Earth also means it doesn't exploit people and it doesn't exploit animals. And wherever possible, we have a much more positive impact. And similarly in clothing, it has to be great quality, stylish clothing, but not at the expense of workers, and certainly not at the expense of the environment. – [Narrator] A sustainable approach to people and the planet can also have a positive impact on a company's profits. – [Dr Matthew Davis] Corporate social responsibility, I think, can help firms to be more profitable, to innovate, to maybe improve their brand and win more customers. But only when it's done with a real clear strategy. – [Narrator] Marks & Spencer have created a measurable strategy with Plan A. They have targets across three pillars: transforming health, communities and the planet. (bright percussive music) – [Narrator] Evaluating a business using triple bottom line methodologies can be difficult. Some areas are hard to measure reliably, and there is no legal requirement to report on it. So, how do you evaluate financial, social, and environmental performance? Evaluating profit is the easiest part. A company's financial statements will disclose their profit levels and overall worth. To evaluate their impact on the planet, a business must assess their emissions and create targets. M&S extended their targets to include empowering their suppliers to reduce emissions. – [Carmel McQuaid] We came along with our sustainability program, and we had ran awareness sessions and education for our suppliers. And we're like, "We really want to save emissions. This is the impact we're having on the planet. We really want to get after reducing energy, reducing waste, reducing water consumption…" We got them to share best practice with each other. We turned one of the supplier sites into a green factory. And he came back a year later and he said, "Wow, that unlocked the extra 20% discretionary effort from my workforce." Because it might be five o'clock at night and they're thinking about "Do I bother to turn all this equipment off? It'll just make the company a little bit more profitable." But actually once they were thinking about, "I'm doing this for my kids, my community, for the planet," that was when it kicked in. (enchanting whimsical music) – [Narrator] The area most difficult to evaluate is people. However, M&S have been able to track their impact on people through their supply lines. – [Carmel McQuaid] Sourcing our products ethically is the foundation of what we do, especially for a brand that has so much trust from our customer base. One of the things we found over the years is that there's been a move away from– there's a traditional focus on auditing and checking and compliance against policies and standards on ethical standards– I think the industry has recognised that we need to go beyond that now and think about how can we positively impact lives of workers in the supply chains. And that is a much more interesting area which has driven a lot of benefits because as soon as you start talking to the supply base about how can we improve productivity of the workforce, as well as improving their livelihoods, as well as improving their working conditions, that's when its starts to really add value to the worker, to the factory and to ourselves. (calm music)

Walmart Case Study

A firm known as International Logistic Services, or ILS, has acquired an existing warehouse and

transportation provider in your selected country for Walmart. ILS has an excellent reputation as

a firm concerned about profit, people, and the planet. That is, they strive for the triple bottom

line. ILS is located within the vicinity of one or more Walmart stores. The acquisition, however,

has inherited many problems, including safety, disregard for the environment, and financial

issues.

The newly acquired logistics service has 100 employees. ILS recently appointed a new director

of logistic services–DLS– who will sponsor the project to improve operations, recognizing that a

strategic objective is to win Walmart's business. You have been selected as the project

manager.

The DLS has asked you to develop a project charter. The Project Management Institute, PMI,

defines a charter as a document issued by, or approved by the sponsor, to officially undertake

the project. The charter enables the project manager with authority to obtain resources, and to

plan the project, and eventually execute the project.

The sponsor has specified constraints for the project as follows—

• The business was acquired for $400,000. Thus, benefits that accrue from this project must justify the investment.

• Project costs should not exceed $100,000.

• The project is expected to start in February and be completed by December in Year Zero.

• Net benefits of the project should be $150,000 per year for the first five years, starting in Year One. In Year Six, assume that the salvage value is $400,000.

Your charter must include a summary of the project’s scope and limitations, and a business

case for the project.

The business case should include the application of the corporate social responsibility values to

resolve the inherited problems; how the project will enable the corporate strategy to win

Walmart's business, net present value for the project, using the data provided and calculated in

MS Excel. Attach the Excel document as an appendix to the charter.

• Summarize the results of your calculations in the body of the project charter.

• Describe a milestone project schedule that includes five to seven elements. A milestone

is a high-level task that includes a top-down estimate of the project duration and the start

and end times. Predict risks, unexpected threats, and opportunities that may occur

during the project.

• Outline the resources you will need for the project: team members, materials, and funds.

State your plan to form a high-performing project team.

• Identify five important groups of stakeholders that you should consider for the project.

Stakeholders include any party that has an interest in a project.

Why is this assignment important to you? Writing an effective project charter will help you

develop skills to effectively initiate a project.

As you write this assignment, consider that you may write as many as 50 to 100 charters during

your career, as many project leaders and sponsors have done. Many times, charters are called

by other names, such as request for proposal, budget justification, authorization for funding, and

so on. If you have any questions, be sure to ask your instructor.

BUS 633 PROJECT MANAGEMENT CASE STUDY

Logistics Service Improvement Project

The logistics service improvement project case study is the base for the assignments for Weeks

1, 2, and 3. Wherever “country” is mentioned, substitute the name of the country you selected

for the Walmart case study.

Overview International Logistics Services (ILS), a firm with $5 billion in annual revenues, provides

inventory storage—that is, a place to store goods near the point of sale—and last-mile delivery

services to customers worldwide. ILS’s values are based on the triple bottom line of profits,

people, and planet (Slaper & Hall, 2011). The firm’s mission is to provide reliable, accurate, and

consistent inventory management and local delivery services in a socially responsible manner.

In addition to inventory storage, ILS also provides cross-dock services at strategic locations

around the world. They also own fleets of trucks in each country to deliver goods directly to

retail outlets or consumers. Thus, ILS offers their customers a unique value proposition as a

specialized third-party logistics provider. ILS’s focus on providing logistics services to their own

customers enables the latter to effectively and efficiently serve their consumers in a just-in-time

manner with minimal stock-outs. ILS’s customers include Walmart, car dealerships, and other

retailers that serve consumers directly.

Employee Retention ILS pays wages and has benefits in the top quartile of each country they serve. ILS has a

reputation for treating their associates well, so that they will, in turn, extend the same courteous

attitude to their customers and thereby achieve a triple bottom line. ILS competes effectively

because it attains higher productivity and lower employee turnover leading to low costs.

Expansion Strategy As part of its global expansion strategy, ILS has acquired a warehouse and a truck fleet in the

country. This is the first logistics operation that ILS has acquired in this country. A specific

strategic objective is to obtain Walmart as a customer. Walmart currently uses ILS in other

countries.

ILS recently acquired a warehouse in the country, which employs 50 warehouse employees and

50 drivers. ILS paid $400,000 for the business. Additionally, they have allocated $100,000 upon

recognizing that the facility has a number of issues.

ILS will form a project team that will work with existing employees to resolve the issues during

Year Zero. Given that the problems can be solved, ILS expects to see a net cash flow (revenue

– costs + depreciation add back) of $150,000 per year starting in Year One. Moreover, they are

assuming a five-year investment life with a salvage value of $400,000 for continued earnings

from Year Six and beyond. ILS plans to secure business from Walmart and other customers in

the area surrounding the warehouse once the current issues are resolved. Getting business

from Walmart is a strategic objective.

Inherited Issues The logistics service currently in the country has experienced low customer satisfaction, safety

issues, and wasted resources resulting in financial losses. Employee turnover was 25% in the

warehouse last year before ILS acquired the business. The facility is not meeting the values for

a company striving to maximize the triple bottom line that involves financial, social, and

environmental concerns (Slaper & Hall, 2011).

There are several specific issues which include:

• In 2018, there were 13 lost time accidents in the warehouse and two serious accidents

while transporting inventory to a customer’s facility.

• Electric bills are high, and energy is wasted. Lights are often left on after hours.

• The warehouse is disorganized. Often, inventory cannot be located in the warehouse,

leading to late deliveries even though the warehouse is not congested.

• Equipment is outdated and maintenance costs are excessive, in addition to high fuel

consumption.

• Associates have received only informal on-the-job training in their positions and on

safety procedures.

• Processes are not documented.

Your Role Upon closing the purchase, ILS appointed a new director for logistics services (DLS) who will

sponsor the project team to improve operations at the newly acquired business. You have been

selected as the project manager. Although the project has been approved, the DLS needs to

obtain final approval for the project charter from the executive vice president for global

operations and the chief financial officer.

The DLS has asked you to develop a project charter for his approval by this coming Monday

and the essentials of a project management plan are due within three weeks (Project

Management Institute, 2017). The DLS indicated John (operations expert) and Alice (business

analysis expert) from the U.S. can serve on the project team. Harriet, Harry, and Harvey are

also available as advisors in the United States as they are experts in global technology,

robotics, and solar power. Lena will also be an advisor to the team as an expert in lean methods

(Mirdad & Eseonu, 2014).

The DLS has asked you to work with the local human resources manager to form a project

team. The project should be completed and fully implemented by the end of Year Zero. The local

business development manager has excellent relations with Walmart’s logistics procurement

team in the country and should be kept updated on the team’s progress. Upon completion of the

current project, the DLS will form another project team to develop a bid for Walmart’s business.

References Mirdad, W. K., & Eseonu, C. I. (2014). A conceptual and strategy map for lean process

transformation. Proceedings of the 2014 Industrial and Systems Engineering Research

Conference, 263 –273.

Project Management Institute (PMI). (2017). A guide to project management body of knowledge

(PMBOK Guide) (6th ed.). Newtown Square, PA: PMI.

Slaper, T. F., & Hall, T. J. (2011). The triple bottom line: What is it and how does it work? Indiana

Business Review.