Case 7-1: Bridgecon Contractors Bridgecon is a medium-size construction company
ID: 364311 • Letter: C
Question
Case 7-1: Bridgecon Contractors Bridgecon is a medium-size construction company that specializes in the detail design and construction of bridges that combine steel and concrete elements. The Marketing Division is responsible for the first phase in the Bridgecon project management methodology that includes the identification of an opportunity as well as an assessment of the alignment of the opportunity with strategic guidelines. An opportunity has recently been identified by Marketing: A well-known bridge architect has just completed the concept design of a cable-stayed bridge, intended to cross over electrified railway lines. The senior managers are excited about this opportunity, and this marks the end of the first phase. Bridgecon now enters the second phase— the Estimating phase. This phase includes site visits by the estimating team, review of resources and skills available, a more detailed risk review than the one done during the first phase, as well as a preliminary plan for detail design, procurement, logistics, and construction. The deliverable of this phase is an initial presentation to the customer. The third phase (Pre-contract phase) should lead to a contract signed by both Bridgecon and the customer. In Table 7-6, Activities A and B are required for preparing a bid for building the bridge and form part of the second phase. The project manager who leads the estimating team sets up a number of meetings with stakeholders. First meetings were held with the bridge architect and structural engineers who produced the concept design in order to acquaint the estimating team with the design. The estimating team then meets with subcontractors who might be selected for piling and for fabrication of steel components. The columns “initial duration estimate” and “initial cost estimate” of Table 7-6 are completed subsequent to these meetings. The RFP (request for proposal) for building the bridge indicates acceptance of the plan by the rail authority as one of the criteria for the selection of a contractor. At this stage it is evident that, from the start of Activity D until the completion of Activity S, the operation of one of the railway lines will be impaired, and a preliminary, informal discussion with someone from the rail authority indicates that this might be acceptable. On a subsequent meeting with the rail authorities, concern is expressed about the planned 17 weeks of impaired operation and Bridgecon is requested to reconsider the duration of this period. The estimating team now suggests the following possibilities: • The duration of Activity N could be reduced from 1 week to half a week by hiring additional trucks. The additional cost would be $33,000. • An alternative subcontractor for piling has been approached. This subcontractor indicates that it would be able to halve the time of Activity H and provides a fi rst round cost indication of $960,000 for such an expedited piling operation. • Two steps to shorten the duration of Activity D are possible: First, additional temporary workers could be employed. This would reduce the duration to 3 weeks and increase the cost to $147,000. Second, a team of workers highly skilled in this type of procedure (with their equipment) could be temporarily reallocated from another site to this project, and the estimating team believes that adding this team to the original team and temporary workers would lead to completion of the work within 1 week. The project manager of the other project indicates that such a reallocation would cause him to forfeit an incentive fee of $150,000 for fi nishing his project early. The two project managers agree that, should the reallocation be made, the value of incentive fee would be booked as a cost against the cable-stayed bridge project and transferred to the other project. • The duration of Activity F can also be reduced. A step that would reduce duration to 3 weeks would increase the cost to $730,000 while a further step to reduce duration to 2 weeks would bring the total cost of this activity to $820,000. • An increase of expenditures on Activity Q to a total of $2,929,000 would reduce the duration of this activity to 2 weeks.
Question:Compile a list showing the reduced periods for impairment of the rail operation and the associated additional costs.
Table 7.6 Activities for constructing the cable-stayed bridge. INITIAL COST ACTIVITY ESTIMATE PREDECESSORS ESTIMATE($1,000) G Access road and ramp construction N Transport structural steel components P Erect pylons and fill with concrete Construct main span deck on pre-cast H, K, N, P R Cable-stay installation and lift the bridge deck off temporary supports supports U Roadway surfacing (paving) XFormal hand-over and ceremony AA Project end (milestone Y, ZExplanation / Answer
Answer:- The main problems which are faced by those firms which are having a physical product as in the case of Dell is that these firms require some kind of storage space. infrastructure for logistics and manpower to manage it. One of the main advantages which is there with eBay is that the firm does not have any physical product and the only resource which eBay can think of outsourcing is related to manpower. For eBay , outsourcing the customer support function specially email enquiries can be easily outsourced to other countries. The prime requirement of this outsourcing is that the people must know the language of English which is an international language so many knows about it. Almost 30% of its total email support is outsourced by eBay and it can be increased up to the scale of 50% with the help of Mrs. Daltons three tire plan.
Answer:- There are many critical issues related to the customer service inquires and the most important are social security numbers and credit card numbers, these activities should not be outsourced. There can be some doubt about the security of the communication infrastructure in some of the outsourcing countries along with the reliability of manpower hired in these countries. The investment which is required to ensure the credibility and security will increase the cost of the outsourcing. It will also require to conduct background check on the employees which is again a costly affair.
Answer:- A three party vendor is required in the process indicated by Mrs. Dalton including Build, operate, and transfer who will need to acquire or establish the operating center, staffing and then properly managing it. The main advantage of this model is that the risk associated with the establishment of assets and developing the manpower pool are confided to third party vendor only. While the unproven utilization of this method can be seen as the main demerit of this model. This option can be treated as the hybrid of two options i.e. implementing the outsourcing with the domestic and international vendors and secondly, elimination of middle man buying or creating the staff outsourcing for the eBay business. There are some amount of risks with the first option but it will reduce cost while the second option is best for cost reduction but has greater risks. When it comes to third party vendors in other countries, some level of opportunism can be seen but with the help of contract negotiation, this can be dealt with.
Answer:- They will decide in favor of BOT. In all the three plans , the best risk to reward ratio is related to BOT. This will allow the eBay to have the control over the outsourced assets resulting in cost reduction and have a better quality control . A good amount of research has been conducted by Mrs. Dalton and she will be able to convince the top management with her data.
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