PJM 6025 Northeastern University Create a Work Breakdown Structure Project

W17735
COLIN CO.: NEW PRODUCT DEVELOPMENT
Professor Chong Wu, Professor Hubert Pun, and Zhenhua Zhang wrote this case solely to provide material for class discussion.
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Copyright © 2017, School of Management, Xiamen University and Richard Ivey School of Business Foundation
Version: 2019-01-09
COLIN CORPORATE’s headquarters were located in Santa Barbara, California, in a quiet and elegant
three-storey building. It was March, and neglecting the bright spring day outside, Kelly Shawn, director
of marketing, sat in her office but could not concentrate. Client Jamie Croce’s words lingered in Shawn’s
ear: “The Bristol project needs to be launched by Thanksgiving Day. This is one of the most important
garment steamer projects we plan to develop. Please make sure everything is on schedule.” However,
according to the current original equipment manufacturer (OEM) project-development model, both the
project schedule and the project’s quality were at risk of not meeting Croce’s request. Shawn stepped
away from the laptop and looked out the window at the palm trees moving gently in the breeze. She took
a deep breath. It was time to rethink the next step in the plan.
COLIN CORPORATE
COLIN CORPORATE (COLIN) was founded in 1946, after the end of the Second World War—a critical
period for the U.S. economy. The business started out manufacturing electronic dry irons. Its original
corporate owner, Chris Martin, paid significant attention to product quality and customer service. Soon
after COLIN was founded, its dry iron products gained wide recognition. For 70 years, COLIN had been
recognized as the number-one brand of garment care products, including dry irons, steam irons, and
garment steamers. The garment steamer was a new product category, having been developed only in the
past 20 years. With improvements in people’s living standards, the garment steamer became more and
more popular because it was convenient, simple to use, and could remove wrinkles from fabrics without
touching the clothing, which eliminated the risk of scorching. The garment steamer product accounted for
30 per cent of COLIN’s total sales and 50 per cent of the company’s total profit (see Exhibit 1).
COLIN had a flat organizational structure. The interdepartmental relationships ran in parallel. Under the
general manager of the company were seven senior vice-president positions: sales, marketing, finance,
research and development (R&D), operations, supply chain, and quality. These senior vice-presidents led
their respective teams to perform their functions (see Exhibit 2).
COLIN had its own industrial design and R&D group, and had 20 years’ experience in garment steamer
product development; however, COLIN did not manufacture the products it developed. The garment
steamer manufacturing was outsourced to OEM suppliers in mainland China. Each year, COLIN
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developed approximately 10 new garment steamer products. The product development lead time for a
new product with a medium degree of complexity was approximately 10 months: two months for the
design, quotation, supplier selection, and design finalization; two months for tooling fabrication; two
months for production of the first component article, product qualification tests, and certification; two
months for the component and assembly pilot and production; and a final two months for product
shipment to the distribution centre and to retail stores. During the entire development period, the COLIN
project team at the U.S. headquarters were in intensive communication with both the OEM suppliers and
COLIN’s subsidiary corporation project team in Zhongshan, Guangdong Province, China.
The OEM suppliers COLIN selected and co-operated with had vertical manufacturing ability, which
meant they could complete the entire manufacturing process in house, from the manufacturing of the
component parts to the assembly of the finished goods. In this way, the product quality could be
controlled to the highest degree. When a new product needed to be developed, COLIN’s R&D team
created the design internally, then the sourcing leader sent the design drawings to the OEM suppliers for
their production price quotation. In general, COLIN selected the supplier based on factors such as cost,
quality, speed of delivery, and service.
COLIN also developed some original design manufacturer (ODM) projects, sometimes working with
existing OEM suppliers and sometimes with other finished-goods suppliers. When a customer needed a
new product but COLIN’s internal design resources were occupied or the product was targeted at an open
price point (OPP), internal development did not provide any cost advantage, and COLIN would then
move into ODM development model. Annually, COLIN’s work was made up of approximately 70 per
cent OEM projects and 30 per cent ODM projects (see Exhibit 3).
THE BRISTOL PROJECT
According to Shawn, the Bristol project was one of COLIN’s most promising projects. It could finally
resolve the most common customer complaint about garment steamer products: steam did not last long
under low temperatures. With the currently available garment steamer products, when the set-up
temperature was low, steam would begin to drip after one minute; when the set-up temperature was high,
there was a potential risk that the hot steam could damage clothing. The Bristol product was designed to
use dual heater plates but a single heater system, which avoided incurring a large cost and maintained a
constant steam under low temperatures. COLIN had a patent on this new technology.
The Bristol was targeted at a unit price of US$109,1 which made it a mid-priced product, although its
function would be superior to similarly priced products offered by COLIN’s competitors. If the Bristol
could be launched according to plan in fiscal year 2017, it would lead to estimated sales of $20 million,
which was very high for the first year of a product’s launch.
Shawn led COLIN’s retail market team and knew that consumers always wanted to see different and
special products. She had been employed at COLIN for eight years; she worked the first two years in the
sales department and then moved to the marketing department. In an attempt to meet customers’ changing
needs, garment steamer brands were constantly innovating—offering new functions, new materials, new
technologies, or a new appearance. Retailers such as Kmart and Costco annually reviewed the new
products available. Any underperforming products were replaced by new products that offered better sales
potential. Shawn commented that “If our company cannot deliver new product on time, and the [currently
1
All currency amounts are shown in U.S. dollars unless specified otherwise.
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available] product doesn’t perform well, then our display shelf will be distributed to our competitors. We
can see severe competition and how important it is to develop the new product on time.”
Kmart was one of COLIN’S major retail customers. Purchasing manager Jamie Croce from Kmart was a
very meticulous person:
We plan to test sales in 500 stores. According to the test sales result, we will determine whether to
promote this product nationwide—in 2,500 stores. We will leave the aisle shelf available to Bristol.
The company’s website will introduce Bristol one month ahead of its in-store availability. We will
also use Twitter, Facebook to recommend this product. This is one of the most important garment
steamer projects for us this year; anything going wrong will not be accepted.
Achieving the development agreement with Kmart on the Bristol project was a milestone, but Shawn had
no time to celebrate. She felt that a tough journey had just started. One of her major concerns was the
project timeline. Customers she communicated with about the Bristol project raised some critical-toquality (CTQ) product factors such as steam volume and temperature, which had all been revised.
Kmart’s new-product internal review procedure was also very slow. Shawn had spent six months
following the Bristol project’s progress, which had recently been moving forward according to schedule.
For the Bristol products to enter the market quickly, Kmart required a one-month shorter launch time than
for other OEM projects. Reducing the timelines by one month was a big problem, as product development
included many tasks: product design, supplier selection, component confirmation, qualification and
certification, and mass production of the components and finished goods. In the end, a shorter production
development time would also affect product quality. If COLIN abandoned the Bristol project, the
discussion and collaboration with Kmart over the past six months would be lost and would become
meaningless. Furthermore, losing the project would affect the subsequent year’s total sales. However,
continuing with the project meant that the product might not be delivered on time, which could lead both
COLIN and Kmart to lose their reputations with customers. COLIN would also be penalized. “It is really
a difficult choice,” said Shawn.
Shawn considered all the possible solutions, such as seeking a supplier to complete the design so that
COLIN could omit the first component article. Using the ODM supplier, which was usually very fast,
could save time compared to going through the OEM project-development procedure. Alternatively,
could she identify opportunities to save time in the current OEM procedure? Could any tasks be worked
on in parallel? Shawn felt she could not resolve this situation by herself; she decided to hold a Bristol
project meeting and to consider the comments of other department leaders regarding how to complete this
project on time.
CURRENT OEM PROJECT EXECUTION AT COLIN
COLIN currently had no dedicated project manager in new-project development. The Bristol project was
being managed by a product manager from the marketing department (see Exhibit 4). Shawn’s team had
four product managers: Sally, Daniel, Christa, and Robert. Sally and Daniel had been with the company
for 10 years, and they worked well on project management. Christa and Robert had been with the
company for three years and one year, respectively, and they were not as professional in their project
management work. For example, Shawn had attended a project meeting held by Christa, and one of the
engineers, Kevin, had argued with Christa. Kevin had doubted Christa’s project timeline and said he was
too busy to complete Christa’s project design on time. Robert had also complained in front of Shawn
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about the project team he was leading. Sometimes, the quality engineer and the design engineer differed
on an issue, and they were quick to argue with each other during project meetings. Their conflicts slowed
the decision-making processes and affected the projects’ timelines.
Under the current organizational structure, product managers needed to spend much of their time doing
product introductions, maintaining customer relationships, conducting market research, and supporting
the sales functions. They did not have enough time to perform their project management role. Delays in
COLIN’s new-product development had become common. In the previous year, COLIN had developed
12 projects, and seven projects had been delayed. Some projects had been delayed due to the product
manager’s overcommitment to a customer, and some were delayed due to technical issues. The project
timeline tracker had also not been developed very well. Sometimes, when a project was developed to the
middle stage, someone suddenly discovered a task that needed to be done but had not been listed in the
project’s timeline tracker. These problems led the project’s development time to exceed the time
estimated in the original plan. In addition, due to time zone differences, when OEM suppliers in China
encountered problems and their queries needed a response from the U.S. team, they could not always
receive a timely response, and this led to more delays.
COLIN’S OEM project management lacked a common set of expectations regarding processes (for
example, using weekly meetings or email communication to manage projects); instead, the management
format for each project depended on the project manager’s personal style. Some project managers were
very proactive, providing comments and suggestions and following the progress of projects’ development
closely; but some project managers relied on other team members to allocate their time to work on
projects and exhibited a weaker influence on project execution. Project timelines did not have buy-in from
all team members and did not represent the progress of projects accurately.
The quality of OEM products also varied. Among the engineering team, some engineers had worked with
the company for more than 20 years. The products they designed had fewer problems, and their projects
progressed relatively smoothly when moving to mass production. Some of the younger engineers,
however, lacked design experience. The products they designed typically encountered more problems
during the development stage, which led to more customer complaints after the products were sold.
Shawn and the R&D director, Frank Pennings, were both aware of these issues, and they considered
making changes to the current project management and product design processes; however, other tasks
always seemed to occupy their attention, and they had not yet had sufficient time to think deeply about
the next steps for improving the processes.
COLIN’S SUPPLIERS AND CUSTOMERS
ALICE CORPORATION (ALICE), one of COLIN’s major suppliers, was located in Xiamen City, Fujian
Province, China. Besides providing OEM and ODM garment steamer products to COLIN, ALICE was
also proactive in developing co-operative opportunities with other major garment care brands, such as
Koninklijke Philips NV (Philips) and the Bosch Group (Bosch)—the two leading brands in Europe and
Mexico, respectively—and Akai—the leading brand in the United States. These brands were COLIN’s
direct competitors in the garment care business.
COLIN also had a business segment that provided private-label products to large retail customers who
had their own brands. For example, Kmart had its own brand, Natural, which included clothing, small
home appliances, and other household products. Kmart had no design team or manufacturing factory.
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Instead, its private-label products were all supplied by business partners or ODM suppliers. The privatelabel business represented 5 per cent of COLIN’s business. COLIN purchased ODM products from its
own suppliers and then supplied these private-label products to supermarkets or big retailers.
Shawn had recently heard that representatives from Kmart and ALICE had been meeting to explore the
possibility of Kmart purchasing its private-label products directly from ALICE; however, Shawn was not
overly concerned. In the past, another of COLIN’s customers had gone to COLIN’s supplier to buy
private-label products directly; however, two years later, the same customer had returned to COLIN.
Shawn was confident that COLIN could provide customers with a one-stop solution because of its
comprehensive capabilities in R&D, project management, supply chain management, and customer
service. Customers that worked with COLIN needed only to clearly communicate what they wanted, and
COLIN would take care of everything. However, customers that went directly to the ODM suppliers
needed to spend much time discussing product specifications and CTQ requirements, following up on the
product development progress, performing quality audits for each shipment from suppliers, and dealing
with customer service and complaints regarding product quality. If customers compared only the unit
cost, then going directly to the manufacturer plants would lead to savings; however, if they considered the
total cost and service efficiency, COLIN was the more reasonable choice for private-label products.
BUREY CORPORATION (BUREY), another supplier that had long co-operated with COLIN, was
located in Zhongshan City, Guangzhou Province, China. BUREY had a world-class operating facility and
could provide large quantities of high-quality products within a short time. During its long co-operation
with COLIN, BUREY had always maintained a high service level. Since it had a substantial
manufacturing capacity and consistent high-quality performance, BUREY also provided private-label
products to Kmart. However, these private-label products were basic models only, not innovative
products. Compared with ALICE, BUREY was weaker at R&D. It lacked core patents and competitively
innovative products. BUREY mainly completed the manufacturing process in accordance with the
customer’s design.
THE EXECUTIVE MEETING
Shawn held a two-hour meeting to discuss the Bristol project and invited her colleagues from R&D,
sourcing, quality, and marketing. She began by reviewing the background of the Bristol project, the
customers’ CTQ factors, the expected launch time, and the current difficulties. She then asked the team to
provide their comments.
The R&D director, Frank Pennings, was the first speaker:
We need to consider the Bristol project very carefully. We should make sure we have enough time
and resources to complete this project. If we just speed through this project and push the timing,
even skipping some necessary steps, it will be very risky for product quality. In recent years, our
NPI [new product introduction] timing has been getting shorter and shorter, meanwhile product
quality is becoming more unsteady. Use Orono as an example. Usually, a garment steamer newproduct development needs around 10 months. But Orono only took eight and a half months under
pressure from the customer. Although we launched that project on time, we received a complaint
about a dripping issue soon after it launched. In order to resolve this issue, we had to improve the
design, rework the finished goods, and compensate the consumer. Our spending has exceeded
US$500,000 for this quality issue. We cannot develop a project similar to Orono at whatever
condition.
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The Orono project Pennings mentioned was developed in 2014; in order to meet a customer’s timeline
request, the project was rushed to market. At the beginning, the marketing department had a very positive
forecast for this project and the sales potential was good, but almost within a day, Orono encountered
customer complaints. Sales, marketing, sourcing, quality, and engineering—all departments—were pulled
in to this emergency. Even today, the customer service team continued to receive complaints from end
users about the Orono product dripping issue. “Let’s think about whether we move ahead or put a hold on
the Bristol project,” Pennings emphasized.
Shawn responded to Pennings’ opinions promptly:
Although the Orono project was not developed successfully, we have held several meetings to talk
about it and summarized its failure reasons, such as lacking customer CTQ [elements], lacking a
full qualification test; communication with suppliers was not clear. Now, if we develop the Bristol
project, we can just refer to the lessons we learned on the Orono project. This year, our new
projects’ quantities are not so high. If we give up the Bristol project now, the new product
contribution to sales will be below our target. In addition, our competitor Akai has already posted
advertisements on what they will launch—a new garment steamer with constant steam. As far as I
know, it is similar to our Bristol project. If we don’t launch Bristol this year, some end users who
want to buy our brand will move to Akai. This will be harmful for our brand and our sales. COLIN
has been a market leader for a long time. We don’t want to be a follower.
Sally voiced her concerns: “If we decide to move on the Bristol project, how can we select the proper
supplier? Are we going to use OEM or ODM for this project? Can we meet the launch deadline?” Shawn
found that the meeting was filled with questions, and she tried to steer the discussion to resolving the
deeper issues.
Simon Suffert, the senior sourcing manager, spoke up:
Could we ask ALICE and BUREY to quote on the Bristol project? Let’s see their proposed
timeline, then make a final decision. BUREY has done some private-label business with Kmart;
ALICE has also developed many ODM projects with us before. Their capability is trustworthy. We
can rely on them to do ODM design, and our engineer can take responsibility for the qualification
and certification. If that works, I have full confidence that ALICE and BUREY can meet the
project timeline. The Newport project was developed in that model, and the timeline was shortened
by about one month.
Pennings reminded Suffert,
The Newport project was quite simple; the steam volume was not adjustable. That product didn’t
need to move. It was an OPP [opening price point] product. Bristol is an MPP [medium price point]
product. It has four wheels, and is the first product that can supply constant steam under low
temperatures. If we choose to go with ODM, we cannot control the detail design, and the risk of
quality problems will increase.
Sally commented:
Supplier selection needs to be considered together with the project development model. If we
decide to go with ODM and shorten the lead time, we may go with ALICE. They already had a
product with a constant steamer feature on sale in the U.S. market for a year. The product connects
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with power and achieves a pre-set temperature, and the steam brush will release constant steam.
Our patented feature is that our product has a button to control the steam on and off. Regarding the
operational experience, COLIN’s patent will be superior to ALICE’s patent. But ALICE’s product
is also acceptable, as we learned during market research.
Shawn, who was sensitive to the project’s timeline, responded:
If ALICE has already had a similar product for sale and has a patent to shorten the Bristol timeline
and meet our sales target, why don’t we just leverage their patent? Our patent hasn’t been applied
on a physical product yet. Wouldn’t doing so just represent a higher risk? If ALICE could just
change the product appearance to Bristol and share the existing components from their current
products, wouldn’t that be a good way to speed up the time to market?
Pennings, who was reluctant to choose the ODM option, commented:
If we go with ALICE’s patent, in order to share the service part, we would have to change our
design direction for the next round of new products and still use ALICE’s patent for our constant
steam product series. If this happens, we will be in a very passive position. If ALICE choses to
implement a price increase next year, we would be forced to accept. And if we go with ODM but
give ALICE our patent, there is no doubt that we will grow our competitor. But if we insist on
using our own patent with the OEM option, we can easily move to other OEM suppliers if ALICE
has any cost or service issues.
Although COLIN’s dual heating plate patent had not yet been applied on a physical product, the
application of the new technology would still take time. Based on his technical experience, Pennings was
confident that COLIN could realize this process on the Bristol project in the standard 10 months’
development time.
Luis Almanza, from the quality department, had his own view:
In the past, we have only run the ODM option with the OPP product, and the sales were relative
small. According to the sales forecast, Bristol’s annual sales will be over 200,000 units. We should
pay high attention to the quality risk. As I heard, although ALICE’s product has been selling for a
year, they sold only about 2,000 units. This small quantity cannot prove any product quality
reliability.
FINAL DECISION
Listening to the heated discussion, Shawn fell quiet. In what direction should the project go? She needed
to come to a decision as soon as possible. The meeting had lasted almost two hours, and still no
agreement had been made. How should COLIN move to the next step? Shawn looked out the window of
the meeting room at the bright spring day outside. She took another deep breath.
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EXHIBIT 1: COLIN CORPORATE’S INCOME STATEMENTS, 2015–2016 (IN US$ MILLION)
2015
Net sales
Expenses
Cost of goods sold
Sales and administrative
Research and development
Depreciation
Other expenses
Operating expenses
Interest expense
Taxes
Net earnings
2016
44.1
67.1
19.7
6.8
9.2
2.0
0.4
38.1
1.6
1.4
3.0
30.3
10.9
13.2
2.4
0.8
57.6
2.1
2.3
5.1
Source: Company files.
EXHIBIT 2: COLIN CORPORATE’S COMPANY STRUCTURE
Note: VP = vice-president
Source: Company files.
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EXHIBIT 3: COLIN BRAND GARMENT STEAMER
Source: Company files.
EXHIBIT 4: COLIN CORPORATE’S PROJECT TEAM
Department
Marketing
Sourcing
R&D
Quality
Project Team Member
Product Manager – Sally
Orono
Newport
✓
✓
Product Manager – Stephen
✓
Sourcing Leader – Richard
✓
Sourcing Leader – William
✓
Engineer – Erik
✓
QE – Tyler
✓
✓
✓
Engineer – Kevin
QE – Luis
Bristol
✓
✓
✓
Note: R&D = research and development; QE = quality engineer.
Source: Company files.
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Project Scheduling and Costing
Assignment: Create a Work Breakdown Structure (WBS)
Overview and Rationale
For this assignment, you will draft a Work Breakdown Structure (WBS.) The concept of a
WBS should be familiar to you as it was addressed in prerequisite classes for this class.
There are also “refresher” materials contained within this class.
Program and Course Outcomes
This assignment will serve as the foundation to future course remaining assignments and is
directly linked to the following key learning outcomes from the course syllabus:
•
Construct a WBS with deliverables, work packages, activities, and milestones
allowing the development of a realistic schedule and cost estimate
You will also have the opportunity to evidence the following skills through completing this
assignment:
•
Critical thinking and analysis
Essential Components and Instructions
For this assignment you will first need to identify a case study project to use throughout the
class. Please choose your case study from one of the case studies identified within class
materials (refer to the Course Introduction module for a list of these case studies.)
The Assignment: Create a WBS
You will be creating a WBS for the case study project you have selected. You need to ensure
that your WBS captures the entire scope proposed in your discussion in sufficient detail.
Remember that the WBS does not contain activities, it only contains deliverables. Also, your
entire project should be completely original; no templates or previous class work is
allowed.
Format
Below are some key guidelines you will want to ensure you follow in all elements of this
assignment. Think of this short list as a quality control checklist, along with the attached
grading rubric:
•
•
•
•
•
•
•
•
Captures full scope of project
Deliverables oriented; the WBS does not include any activities
Uses the adjective / noun format for all deliverables
Captures relevant project management oriented deliverables
Contains 30 – 40 lines of detail
Decomposes the project to at least two levels of deliverables, at a minimum
Contains a WBS code (1.0, 1.1, 1.1.1, etc.)
Created in MS Project
Please be sure to review the attached rubric. It along with these assignment instructions
will ensure you have a solid understanding of the assignment requirements.
The WBS Assignment Rubric
Assessment
Element
Required
Components
(50%)
Above Standards
All deliverables and work
packages support the
task. The scope of the
project goes beyond the
requirements in the
WBS.
Meets Standards
The scope of the project
is fully addressed in the
WBS. The deliverables
and work packages are
written correctly and
contain the minimum 3040 lines of detail.
Approaching Standards
The scope of the project
is mostly addressed in
the WBS. A majority of
the deliverables and
work packages are
written correctly. The
WBS contains fewer than
30 lines of detail
Below Standards
Some deliverables and
work packages are
provided but does not
capture all of the
project’s scope. The WBS
contains fewer than 30
lines of detail and the
deliverables are not
written in the correct
format
Not Evident
No deliverables or work
packages are connected
to the project’s scope.
The WBS contains fewer
than 20 lines of detail
and the deliverables are
not written in the correct
format
Analysis
(25%)
Goes well above
requirements of the
assignment to deliver
new information and/or
relevant new techniques
Examines learning
experiences and their
selected project in a
professional and
personal context but lack
in-depth analysis
Begins to challenge
learning experiences and
their selected project in
a professional and
personal context but lack
in-depth analysis
Does not move beyond
description of the
learning experiences
Grammar &
Clarity
(25%)
Expresses ideas and
opinions in a clear and
concise manner with
obvious connection to
the assignment
In-depth analysis of the
selected project and
learning experiences and
how they led to
understanding course
concepts via authentic
examples
All work grammatically
correct with no
misspellings or
grammatical mistakes.
Expresses scope and
work packages clearly
and concisely in a
manner appropriate to
the assignment.
Minimal errors in
spelling, grammar,
sentence structure
and/or other writing
conventions but the
reader is able to
understand what the
writer meant.
Frequent errors in
spelling, grammar,
sentence structure,
and/or other writing
conventions that distract
the reader.
Uses unclear language
and fails to express
abstract ideas and
explain concepts
accurately

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