Assessing Success and Establishing Baselines

Making a corporation effective at responding to changing needs requires engaging in business project management. The method enables businesses to assess their operations, define objectives, and work toward achieving the objectives. A business's top managers are in charge of creating its BPM. To effectively execute the BPM, however, they require the assistance of less experienced employees. A baseline is established as the first step in the BPM design and implementation process, upon which all subsequent aspects will be based. Managers must ensure the data is correct and have a thorough understanding of the baseline.
Setting parameters to direct the execution of the plan is crucial before beginning a BPM project. ABC Tire also has to decide what outcomes related to the project will indicate the company has achieved its objectives. Having the goals will help evaluate the whole process and determine whether or not it has been a success of a failure.

The exact number of tires sold, the cost of material used to manufacture one tire, the cost of labor in manufacturing the tires, the average retail price of a tire and the amount of revenue generated from each tire need to be evaluated. The value of material used in making one tire is equivalent to the total cost of materials used in production divided by the total number of tires sold. ($672080.32/27669 tires=$24.29 per tire). The cost of labor per tire is equivalent to the total cost of labor divided by the sum of tires sold ($313280.56/27669=$11.32). To find the average profit per tire we multiply the average selling price of a tire by the total number of tires sold then subtract the total cost of material and the total cost of labor. The obtained figure is then divided by the total number of tires sold. (27669*$122.13-$672080.32-$313280.56)/27669=$86.52. The 2009 baseline can then be considered.

Percentage increase or decrease in cost of material per tire is then determined as the initial cost of material minus the current cost of material divided by the current cost of material times hundred percent ($24.29-$21.23)/$21.23=14.41% Indicating an increase.

Percent decrease or increase in the cost of labor per tire is the initial cost of labor per tire minus the current cost of labor per tire divided by the current cost of labor per tire ($11.32-$12.12.67)/$12.67=-10.64% indicating a decrease.

Percentage decrease or increase in average profit per tire is equal to the initial profit per tire minus current profit per tire divided by current profit per tire ($86.52-$85.10)/85.10=1.67% indicating an increase.

Total number of Tires Sold



Materials

Cost Per Tire

Labor Cost Per Tire

Average Retail Price Per Tire

Average Profit Per Tire

22,594

$21.23

$12.67

$119.00

$85.10



Total number of Tires Sold



Total Materials

Cost

Total Labor

Cost

Average Retail Price Per

Tire



27,669



$672,080.32



$313,280.56



$122.13





Materials

Cost Per

Tire

Labor

Cost

Per Tire

Average

Profit Per

Tire

% Increase or

Decrease in

Materials cost

Per Tire

% Increase or

Decrease in

Labor cost Per

Tire



% Increase or

Decrease in

Average Profit

Per Tire



$24.29



$11.32



$86.52



14.41%



-10.64%



1.67%



Importance of ensuring base data is accurate

The importance of reliable data in business project management cannot be overemphasized. Information is critical in determining the baseline. Without a benchmark, a project cannot be implemented successfully (Bruin & Doebeli, 2015). It is vital to ensure the baseline is accurate so as to determine how fast process can be accomplished. Current processes are evaluated based on the baseline. Having one process being accurate will make the whole process inaccurate. Similarly, the baseline is essential in determining how efficient a method is (Rosemann & Vom Brocke, 2015). Having false value will result in a wrong impression of how useful the whole process is. An inaccurate baseline will make it difficult to schedule production processes, evaluate how effective they are and assess how future operations will be done. With an inaccurate baseline it becomes difficult to forecast future operations and set objectives an organization can achieve (Bruin & Doebeli, 2015). Baseline determines how various issues related to a project will be carried out. Having a false impression of the baseline will complicate multiple operations of project, which can lead to its failure.

Was the project successful? Why or why not?

The project had three part. The project aimed at lowering the cost of labor per tire, increasing the amount of profit ABC generates from each tire and reducing decreasing the cost of material. ABC Tire managed to two out of the three objectives of the project. ABC tire was able to reduce the cost of labor per each tire they produce by 10.64%. Similarly, the company was able to increase the average profit associated with each tire sold by 1.67%. The only goal the project failed to meet was reducing the cost of material used on each tire. The cost had increased by 14.41%, which is against their project objectives. Achieving more than half of the set goals can be a success. ABC Tires is thus considered to have successfully executed the project. The company, therefore, need to embark on working out how the remaining objectives can be achieved when it implements it another BPM project.

















References

De Bruin, T., & Doebeli, G. (2015). An organizational approach to BPM: the experience of an Australian transport provider. In Handbook on Business Process Management 2 (pp. 741-759). Springer Berlin Heidelberg.

Rosemann, M., & Vom Brocke, J. (2015). The six core elements of business process management. In Handbook of business process management 1 (pp. 105-122). Springer Berlin Heidelberg.