Furniture Manufacturing in UAE: Project Plan Proposal

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Table of Contents

Background
Project Initiation
Project Scope
Project Planning
Financial Plan (Cost)
Project Performing
Project Closing Actions
Conclusion & Lessons Learned

This work focuses on preparing a detailed and methodical project plan on furniture manufacturing in the UAE (Abu Dhabi) and attempts to come up with the best possible project management practices to ensure that the assignment is completed efficiently in the shortest possible time.

Background

Project Idea and Description

The project idea is to start a furniture manufacturing business in the UAE (Abu Dhabi).
Unlike its competitors, this business will offer its customers furniture at a low cost.
The business will attempt to attract customers by allowing them to pay for (invest in) the quality of the furniture, not for the advertising campaign.
It will be an online-based business; therefore, the costs would be significantly lower – customers would be able to place an order at any time from any location.
The workshop will be situated in Abu Dhabi, and the main product line shall include everything necessary to furnish a home, office, or educational institute.
Customers proximate to the workshop will be privileged as they are exempted from paying for the transportation cost.

Project Purpose and Justification

A huge number of tourists visit Abu Dhabi annually, and hotels are compelled to refurbish their décor to attract them; consequently, there is a strong need for modern furniture in the market.
This business aims to offer furniture with innovative design, made from leather, cardboard, nutshells, wood composites, eco-friendly plastic wood, and high-quality hardwood.
Besides being a furniture manufacturer, an important purpose of the business will be to ensure environmental sustainability and low carbon emissions.
For a competitive advantage, the items must be available at cheaper rates.

Project Objectives

The main objective of this project is to enable the customers of Abu Dhabi to access the best and the most contemporary forms of furniture at relatively lower cost.

The company will engage with local community in order to ensure communal welfare as part of the company’s corporate social responsibility.
The business will start to fully engage in corporate social responsibility from the second year of its operation.
The entrepreneurs believe that ensuring environmental justice should be a key concern for every business entity; as a result, this furniture business would conduct an environmental impact assessment before starting the project.
It will also make sure the operation is as eco-friendly as possible.
The entrepreneurs have the intention of reaching the break-even point by the end of the first year of operation.
In order to ensure that the business is cost-effective and operationally efficient, the owners would try to implement lean management techniques throughout all departments.
These techniques must include a “just in time approach” and measures to ensure economies of scale.
The business would try to undertake cost-effective advertising measures through social media, the corporate website, direct emails, and so on.

Project Initiation

Project Life Cycle

Project Charter

Requests for Proposal (RFP)

This furniture manufacturing company will seek proposals from the contractors to establish a unique outlet. In this case, the request for proposal shall describe the statement of work, requirements for participants, project objectives, evaluation and acceptance criteria, deliverables, items supplied by the owner, bid information, type of contract, payment terms, schedule, and so on.

Proposal

Contract

This furniture manufacturing company will set terms and conditions to sign a contract after May 18, 2017, and both parties must follow clauses to mitigate risks arising from misrepresentation, delays, changed materials specification, errors in price, natural disasters, non-compliance of privacy policy in case of online transaction, and security concerns.

Project Scope

Acceptance Criteria Analysis

It will fulfill the legal requirements of the United Arab Emirates to obtain a commercial license from the Department of Economic Development.
Assurance regarding workplace safety.
Use of high-quality equipment and raw materials.
It will avoid negative influence on the environment; so, it will achieve the level of ISO 14001 and ISO 18001 from the same authority.

Project Deliverables

Organization of the workshop.
Recruiting experienced employees.
Launching a website successfully and ensuring online order placement system.
Starting production of furniture.
Processing the orders of the customers.

Customer Requirements

Stylish furniture at reasonable prices.
Customers seek furniture with environmentally suitable materials.
Clients looking for comfortable furniture.
Satisfaction of clients through products and service.

Stakeholder Management

This furniture manufacturing company is committed to build long-term maximum value.
Integrity and responsible actions strengthen its commercial performance.
Members of support team communicate with employees by maintaining a regular two-way flow of information to motivate stakeholders.

Requests for Commercial and Environmental License

The Department of Economic Development is a license-issuing authority in the UAE; thus, a company applies for a license by meeting the legal criteria and paying the fees. Here, the fees include:

Industrial license fees: AED 250.
Environmental license fees: AED 250.
Activity fees: Subject to activity type.
Main product fees for permanent license: AED 1,000.
Branch product fees for permanent license: AED 500.

Reserving the Trade Name

In order to reserve the trade name, this furniture manufacturing company must pay AED 40 to the Department of Economic Development.

Place Size for Manufactory

The main office will have an area of 10,000 m² and shall include –

A showroom (a great one-stop shop)	450 m²
Three-office space	270 m²
Storage & workshop	200 m²
Garage	30 m²
Service Center	50 m²

Table 1. Place Size.

Project Planning

Scope of Work

Work Breakdown Structure (WBS)

Initial Risks

Exhaust inexorable financial pressure to survive.
Unsuitable temperature conditions may damage the raw materials.
High accident rate is the primary risk in making hotel furniture.
The extent of the noise causing hearing loss in employees.
Threats of substitute products and bargaining power of buyers.
Staff mistakes may cause financial loss.

Information System Development

Responsibility Assignment Matrix

Responsibility Assignment Matrix for Furniture Manufacturing Company.

Sequence of Activities (Milestones Schedule)

Furniture Manufacturing in UAE (Abu Dhabi)
ID:	WBS	Task Name	Duration	Start	Finish
Phase 1:
1	1.	Build the concept and examine it	7 days	Wed 29/ 03/ 17	Wed 05/ 04/ 17
2	1.1	Assess the concept	7 days	Wed 29/ 03/ 17	Wed 05/ 04/ 17
3	1.1.1	Conduct field survey and feasibility study	3 days	Thu 06/ 04/ 17	Sun 09/ 04/ 17
4	1.1.2	Choose location of factory & rent building	2 days	Mon 10/ 04/ 17	Wed 12/ 04/ 17
5	1.1.3	Decide furniture type	2 days	Thu 13/ 04/ 17	Sat 15/ 04/ 17
6	1.1.4	Complete financial forecasting	1 day	Sun 16/ 04/ 17	Mon 17/ 04/ 17
Phase 2:
7	2.	Design the business plan and create a website & bank account	25 days	Tue 18/ 04/ 17	Thu 13/ 05/ 17
8	1	Locate raw materials & stock up; purchase tools for furniture manufacture	3 days	Fri 14/ 05/ 17	Mon 17/ 05/ 17
9	2.2	Choose key suppliers of wood	2 days	Tue 18/ 05/ 17	Thu 20/ 05/ 17
10	2.3	Choose suppliers of equipment and machinery	1 day	Fri 21/ 05/ 17	Sat 22/ 05/ 17
11	2.4	Plan the supply chain and transportation	2 days	Sun 23/ 05/ 17	Tue 25/ 05/ 17
12	2.5	Locate retailers and outlets	2 days	Wed 26/ 05/ 17	Fri 28/ 05/ 17
13	2.6	Develop product catalog for customers & marketing campaign	1 day	Sat 29/ 05/ 17	Sun 30/ 05/ 17
14	2.7	Select an array of designs, patterns, and types of furniture	3 days	Mon 31/ 05/ 17	Sat 03/ 06/ 17
15	2.8	Develop price list of the items	2 days	Sun 04/ 06/ 17	Tue 06/ 06/ 17
Phase 3:
16	3.	Create a detailed internal organization of the business	15 days	Wed 07/ 06/ 17	Thu 22/ 06/ 17
17	3.1	Human resource planning & staff recruitment	5 days	Fri 23/ 06/ 17	Wed 28/ 06/ 17
18	3.2	Identify strengths and weaknesses	1 day	Thu 29/ 06/ 17	Fri 30/ 06/ 17
19	3.3	Determine organizational structure and promotion	1 day	Sat 01/ 07/ 17	Sun 02/ 07/ 17
Phase 4:
20	4.	Check national regulatory requirements	3 days	Mon 03/ 07/ 17	Thu 06/ 07/ 17
21	4.1	Prepare documents requesting commercial and environmental license	5 days	Fri 07/ 07/ 17	Wed 12/ 07/ 17
22	4.2	Prepare documents for trade name reservation & get necessary permissions	2 days	Thu 13/ 07/ 17	Fri 15/ 07/ 17
23	4.3	Infrastructural utilities	3 days	Sat 16/ 07/ 17	Wed 19/ 07/ 17
Phase 5:
24	5.	Experimental operation	15 days	Thu 20/ 07/ 17	Fri 04/ 08/ 17
Phase 6:
25	6.	Launching (opening ceremony)	1 day	Sun 06/ 08/ 17	Sun 06/ 08/ 17

Table 3. Sequence of Activities.

*Figure 9. Sequence of Activities (Milestones Schedule).*

Resource Plan

ID	ResourceName	Type	Initials	Costs	Accrue At	Base Calendar
1	ChiefFinancial Officer	Work	A	120,000	Prorated	Standard
2	Head of communications	Work	M	120,000	Prorated	Standard
3	Chief industry expert	Work	E	120,000	Prorated	Standard
4	Managing Director	Work	A	72,000	Prorated	Standard
5	Project &Administrative Manager	Work	D	30,000	Prorated	Standard
6	Procurement & Risk Manager	Work	P	36,000	Prorated	Standard
7	Interior Designer	Work	R	36,000	Prorated	Standard
8	Financial/Marketing Officers	Work	F	30,000	Prorated	Standard
9	Technical Staff	Work	E	1,500	Prorated	Standard
10	Technical Staff	Work	A	1,500	Prorated	Standard
11	Technical Staff	Work	O	1,500	Prorated	Standard
12	Service Staff	Work	C	4,000	Prorated	Standard
13	Quality Manager	Work	A	3,000	Prorated	Standard
14	Driver	Work	P	36,000	Prorated	Standard
15	Other workers	Work	P	21,000	Prorated	Standard

Table 4. Resource Plan.

Workers

The workers shall act in accordance with the preferences of the people of Abu Dhabi. Furthermore, they would implement the organization’s vision, control the furniture distribution channel, and supply inventory to increase sales and growth. A total of 50 workers, including a factory manager, two production managers, and five logistics personnel are needed.

Suppliers

The workshop will receive supplies of all the essential tools and materials for furniture manufacturing. It should coordinate with other third parties (Al Khaznah Tannery, Al Eskafi Leather Industries, Abaad Wood Industries, and Royal Wood Factory) to collect wood, leather, imitation leather, fabric, metal, and many other materials. In addition, the furniture manufacturing company will import wood from outside the country using the ports of Dubai or Abu Dhabi; in addition, it will also collect equipment and tools from suppliers in China, Italy, and Germany.

Preliminary Roles and Responsibilities

Chief Financial Officer Ameera Al Katheeri, Project Director and Head of Communications Mezna Al Mansoori, and Chief Industry Expert Eslah Al Hammadi are responsible to supply funds to implement the project; the CFO will control and monitor the financial system, the Project Director will analyze the employees’ performances, and the Chief Industry Expert will focus on overall operations management.

Quality Plan

In order to ensure quality, the furniture manufacturing company is committed to complete work in accordance with the specifications, maintain international standards, monitor project progress, evaluate performance of the employees,and deliver products on time; however, Eslah Al Hammadi is responsible for maintaining quality control.

SWOT Analysis

Strengths	Weaknesses
This company would have the capacity to supply a high quality of finished furniture This company will recruit highly trained and experienced carpenters to offer extraordinary furniture to attract hotel furniture customers. Local clients do not have to pay for delivery costs, which will increase market growth.	The financial capability of this company for promotion and market competition with large companies. Lack of experience, cost control, and risk management.
Opportunities	Threats
Workers would work as a team to develop a market in Abu Dhabi. Select business location to become market leader within three years.	It has to compete against many large national and multinational furniture manufacturing companies. Global financial downturn.

Table 5. SWOT Analysis of Furniture Manufacturing Company.

Regulatory Factors

In order to establish and operate a furniture manufacturing company in Abu Dhabi, the entrepreneurs will consider the domestic regulations of the area. The management team will collect a commercial license from the Department of Economic Development, and will strictly follow terms and conditions of the authority to operate the business, to open a new branch, to share profits or losses, and to ensure good governance.

Risks Management Matrix

Risks Management Matrix.

Network Diagram

Financial Plan (Cost)

Yearly Rent

Description	Amount (AED)
Building (Rent)	240,000
Insurance	25,000
Registration Costs	4,000
Extra Charges	20,000
Security	6,000
Total Space 10,000 sq/ft and per meter cost 30 AED	300,000

Table 7: Yearly Rent.

Salary and Fees

Salary and Fees of the Employees
Description	Quantity	Salary per Month(AED)	Amount (AED)
Chief Financial Officer (Ameera Al Katheeri)	1	15,000	180,000
Project Director & Head of Communications (Mezna Al Mansoori)	1	15,000	180,000
Chief Industry Expert & Factory Manager (Eslah Al Hammadi)	1	15,000	180,000
Production Manager & Managing Director	2	10,000	240,000
Project & Administrative Manager	1	2,500	30,000
Procurement & Risk Manager	1	3,000	36,000
Interior Designer	1	3,000	36,000
Financial/ Marketing Officers	1	2,500	30,000
Technical Staff	3	2,500	90,000
Logistics personnel	5	2,500	150,000
Quality Manager	1	lump sum	lump sum
Driver	4	3,000	144,000
Other workers	21	1,000	21,000
		Total	1,317,000

Table 8. Salary and Fees for Employees.

Estimated Budget and Funding

The group consists of three people who will equally invest from their savings accounts to establish the furniture manufacturing company; as a result, they all remain equal partners of the venture, and the distribution of equity investment will be the following:

Name of the Investors	Equity Investment	Amount (DHS)
The Chief Financial Officer: Engineer Ameera Al Katheeri	33.33%	500,000
Managing Director & the Head of Communications: Mezna Al Mansoori	33.33%	500,000
The Chief Industry Expert: Engineer Eslah Al Hammadi	33.33%	500,000

Table 9. Funding for the project.

Total Investment and Depreciation Costs
Investment Description	Amount (AED)	Depreciation Cost (AED)
Office equipment (CNC router engraver & CNC router machining)	95,000	19,000
Furniture	6,600	660
Showroom furniture	16,000	3,200
Finishing &assembling tools	6,000	1,000
Office rent	300,000
Vehicle	80,000	16,000
Salary of the employees	777,000
Initial stock	112,000
Stock based on expected sales	67,400
Unforeseen activities	40,000
Total	1,500,000	39,860

Table 10. Total Investment and Depreciation Costs.

Projected Income Statement for 3 Years

	Year 1 (AED)	Year 2 (AED)	Year 3 (AED)
Sales	1,743,525	2,789,640	4,184,460
Less cost of goods sold	375,000	680,000	1,390,000
More…
Gross profit/net sales	1,368,525	2,109,640	2,794,460
Expenses
Office equipment (CNC router engraver & CNC router machining)	95,000	19,000	19,000
Furniture	6,600	660	660
Showroom furniture	16,000	1,600	1,600
Finishing & assembling tools	6,000	600	600
Office rent	300,000	300,000	300,000
Vehicle	80,000	16,000	16,000
Salary of the employees	777,000	1,317,000	1,317,000
Total expenses	1,280,600	1,654,860	1,654,860
Net profit	87,925	454,780	1,139,600

Table 11. Projected Income Statement for 3 Years.

Project Performing

Engage highest efforts to attain project objectives.
Step-by-step assessment of the progression and the remaining trend.
Re-design necessary changes with narrow the gaps.
Continuous monitoring and progress controlling with baseline analysis.
Change management to ensure stakeholders’ satisfaction.

Project Closing Actions

Assess the design, development, and testing processes.
Compliance with completion criteria.
Collect outstanding payment.
Recognize and evaluate staff planning.
Project implementation.
Archive all acceptance documents.
Assess lessons learned so far.

Conclusion & Lessons Learned

Throughout the implementation stage of the project, the closing phase is one of the most significant sessions for the team members, since at this stage the group will exchange their views and ideas with all the stakeholders and offer opportunities to improve the conditions further through attaining:

Objectives of the project.
Significance of project planning and success with outstanding outcomes.
Clear assignment for eliminating the negative impact for future endeavors.
Conceptualization of the VOC in selection.
Benchmark for the continuous improvement process.

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