Hotel Furniture Installation Supervision Project of “JW Marriott Hotels” in New Delhi, India

By | May 2, 2014

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Hotel Furniture Installation Supervision[1] Project of

“JW Marriott Hotels” in New Delhi, India

 

1.        Introduction

 

This project paper is written based on the view of a furniture production factory in China which has accepted the tasks of manufacturing of the furniture for a new JW Marriott Hotel in New Delhi, now the factory is evaluating the subsequent offer of installation supervision job and the offered price for this installation supervision project is claimed to be USD 90,000.

 

The major content of this project paper will be evaluating the advantages and disadvantages of taking up the offer of installation supervision in New Delhi, India which is new to the company. As different options and alternatives will appear, the cost and risk of these options will be analyzed as well targeting at providing the management a comprehensive (as much as possible) understanding which will then make the final decision regarding the project acceptance or decline.

 

2.        Background and environment

 

Marriott International, Inc. is an US based word famous hotel group that manages and franchises a broad portfolio of hotels and related lodging facilities (marriott.com 2013). JW Marriott Hotels are among the most luxury hotels operated by the group as well as known by people which are usually classified into the category of 5-star hotels. With the planned opening of the hotel set in Christmas of 2013 and the furniture under production, there is around six month time for the furniture production factory to plan and execute the task of Hotel Installation Supervision[2] if it decides to take the offer of installation supervision as well. Since the company has not dealt with similar cross country assignments in term of hotel installation supervision, it has to consider a number of factors: visa application, board and lodging, transportation, local policy, international human resource plan and assignment, materials, onsite co-ordination, budgeting, insurance as well as a number of possible contingencies such as employees’ infection of local diseases. Of all these factors, the very important rule that the factory will follow is there is sufficient and attractive profitability after considering all these challenges.

 

3.        Critical analysis of the project business case

 

3.1    Review of the project definition and case discussion

 

A project is “a temporary endeavor undertaken to create a unique product, service, or result” (Schwalbe 2011). Cleland and King (1983) concluded four main elements of definition of the term project management:

 

l  A project is a temporary job coordinated by a team;

 

l  A project moves forward along the life cycle;

 

l  The project management process is inherent;

 

l  The project organization is operated against targets of time, cost as well as functionality set outside of the project;

 

Figure 1 Project Management Life Cycle

Source: method123.com 2012

 

As in the case of the project of hotel furniture installation supervision which is under evaluation of the factory, the project has been well involved in these five major elements. The project is obviously a temporary job as the hotel will be open around Christmas according to the client’s plan which means that the hotel furniture installation supervision job needs to be done in a limited time, approximately 6 month from now; secondly, the project is expected to run through a life cycle with typical stages like project initiation, planning, execution and closure and thus meets the requirement of project life cycle; thirdly, the project management will be essential to the project as it considers various factors and coordinate different parties; fourthly, in the case of the project of hotel furniture installation supervision project, the project management will need to ensure that the project is done appropriately against the client requirement, time constrain, budget as well as other functionality set outside of the project. Thus, in these four ways the project of hotel furniture installation supervision will confirm with the definition of a project created by Cleland and King (1983).

 

3.2    Key stakeholder groups of the project

 

The term ‘stakeholder’ can encompass a wide range of interests: it refers to any individual or group on which the activities of the company have an impact (Mallin 2007, p. 49).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chart 1 Key stakeholder groups in the project of hotel furniture installation supervision

 

3.2.1            Hotel owner

 

The hotel owner claim the ownership of the hotel even though it has authorized the operation to Marriott as well as authorized the role of detailed construction and design to the procurement agent, this party is still considered as a key stakeholder groups as the decision made by the owner will be respected by the Procurement Agent who will later translate such decisions into detailed orders to be followed by the furniture factory side. Thus within the project planning stage, the company needs to have more knowledge about the hotel owner.

 

 

3.2.2            Management from Marriott

 

The management from Marriott who has been authorized by the owner of the hotel to carry out the job of daily operation after the opening of the hotel will have strong bargaining power as Marriott side has the right to decline any design, way of installation as well as other behaviors to ensure that the newly built hotel fulfilled its brand expectation as well as brand consistency. Nevertheless, the factory will have little direct conversation with the Marriott management side as it opinions will be translated direct by the procurement agent.

 

3.2.3            Procurement Agent

 

The procurement agent will have the direct critical decisions over the acceptance or decline of the project plan submitted by the factory side. Also, once the job is approved and contract signed, the procurement agent will work together with the factory teams in finishing the whole project and thus timely coordination will be highly necessary.

 

3.2.4            Project Sponsor: Furniture Manufacturer Executive

 

The project sponsor is usually a manager or executive in the organization who has the authority to assign resources to the project (Heldman & Heldman 2007). According to them, the project sponsor is the driving force for the project and thus must be actively included in the project management process. In term of resources to be allocated, they usually cover cash, human labor as well as other resources that are under well control by the project sponsor.

 

 

 

3.2.5            Installation Supervision Team

 

The installation supervision team will play the role of detail plan implantation in given time by guiding the local labor team and finish all jobs required. The selection of the team members as well as the appropriate team leader in forming a stable and effective supervision team will be of great significance and importance.

 

3.2.6            Local labor team

 

The local labor team will be hired by the procurement agent but it would be necessary that the factory can plan the configuration of the local labor team to ensure enough of labor forces and needed labor forces in finishing the needed jobs.

 

3.3    Analysis of project benefits, cost and risks

 

3.3.1            Benefits

 

As mentioned earlier, the furniture production factory in China has accepted the tasks of manufacturing of the furniture for the new JW Marriott Hotel in New Delhi, thus taking the job of furniture installation supervision will be a consequent job that the factory accepts. The benefits could be tremendous as it helps to build the image that the factory has the capabilities to perform an international installation supervision assignment which could be a new business mode. On the other hand, the major advantage of accepting this job is the profit earned if the cost can be controlled well and the budget is well prepared reflecting the possible costs that may be caused.

 

3.3.2            Cost

 

The cost can be monetary as well as non-monetary. In term of monetary cost, tickets, insurance, daily expenditures, materials, document fees, employee salary and tools purchasing would be the major areas to be taken into consideration; in term of non-monetary costs, time duration is the critical issue to be considered.

 

3.3.3            Risks

 

According to John Bartlett (2004, p. 98), project stakeholders may require that risk assessment be used for the risk forecast of the outcome variance or to support specific decisions. For instance, the project risk assessment may be requested by auditors or senior management if they perceive there would be possible great risks that would make the project not investable. The possible risks are listed below:

 

a)        Visa application (delay approval or shortened period of stay approved;

b)        USD-INR Exchange rate variation;

c)        Required tools may be not available in India;

d)       Suspension of the project due to various reasons;

e)        Extension of project due to various reasons;

f)         Extra and unexpected costs;

g)        Infection of diseases;

 

3.4    Solutions

3.4.1            Risk control

 

RiskProbability
(L,M,H)
Impact
(L,M,H)
Risk Reduction ActionsProposedIf it happens: Triggers & ActionsProposed
1Visa application (delay approval or shortened period of stay approvedLHEntrust a professional visa agentNegotiate with procurement agent
2USD-INR Exchange rate variationMLNoneNone
3Required tools may be not available in IndiaHHMake a tool and material checklist submitted to the procurement agentShipped from China
4Suspension of the project due to various reasonsLMBook open ticketsNegotiate with executive of the factory
5Extension of project due to various reasonsMMNoneNegotiate with executive of the factory
6Extra and unexpected costsMLPrepare more cash and bring credit cardNone
7Infection of diseasesLHPrepare a list of medicine to be hand-carried, implement relevant vaccine injection, check the local hospital contactGo to the local hospital

3.4.2            Supervision team configuration

 

TitleNos
Team leader1
Carpenter5
Designers2

 

3.4.3            Schedule

 

The installation supervision team due to the visa constrains will fly three times to the site in India with a total working days of 60.

 

First trip: 6.30-7.19, 20 working days;

Second trip: 8.30-9.19, 20 working days;

Final trip: 10.30-11.19, 20 working days.

 

3.4.4            Budgeting

 

ItemBudget in INRNote
Ticket1,248,000Based on three trips;

Each person INR 52,000 per trip;

8 persons;

Hotel340,0008 persons, 3 rooms,

Based on three trips;

3 star hotels;

60 night of stay;

Employee salaries200,000 
Transportation50,000 
Food340,0008 persons,

Based on three trips;

3 star hotels including breakfast;

60 days of stay;

Visa application111,040Three times application;
Insurance200,0008 persons,

60 days of stay;

Unexpected expenditure200,000 
TTLINR2,689,040

(USD 49,797)

 

 

3.5    Management approval

 

Based on the analysis which will be submitted to the executive of the factory and it is concluded on paper that based on the required profitability rate of 50% and tax rate of 17%, since the offered price (USD 90,000) for this installation supervision project exceeds the USD 87394, it is recommended that the project is profitable and should be accepted. But still the executive of the factory will have the final decision to accept or decline the offer due to his final consideration by combining more factors.

 

4.        Conclusion

 

Based on the above discussion, we can conclude that from paper the project is workable since it provides sound revenue against the sum of the possible costs that have been taken into consideration. In particular the general level of risks is medium indicating that the project is not a high risk project. And also it provides a good chance to penetrate into the hotel business in India, a fast growing market in the current world.

 

5.        Recommendation

 

Three major job can be probed into further:

 

Local security and political stability in the recent years;

Confirmation of illness in New Delhi with embassy;

Further checking of the possibility of air-shipping of the major tools required.

 

The perfection of the above jobs can assist the company to better understand the general environment as well as some possible small difficulties that a cross nation assignment may cause.

 

 

List of references

 

Bartlett, J. 2004, Project Risk Analysis and Management Guide. London: APM Publishing Limited. p. 98

 

Cleland, D. I. & King, W. R. 1983. Systems Analysis and Project Management, 3rd edn, New York: McGraw-Hill.

 

Clarke,A & Chen, W. 2007. International hospitality management. London: Routledge.

 

Fox, W. & Waldt, G. V. D. 2007, A Guide to Project Management. Cape Town: Juta and Company Ltd. p. 91

 

Garbade, K. D. 2001, Pricing Corporate Securities As Contingent Claims. Hong Kong: MIT Press. p. 344

 

Heldman, K. & Heldman, W. 2007. Microsoft Office Excel 2007 for Project Managers. New Jersey: Wiley Publishing, Inc.

 

Jordan, L. & Tuijl, P. V. V. 2006. NGO Accountability: “Politics, Principles and Innovations”. London: Routledge.

 

Kendrick, T. 2009, Identifying and Managing Project Risk. New York: AMACOM. p. 108

 

Lockyer, T. L. G. 2007. The International Hotel Industry: Sustainable Management. London: Routledge

 

Lowe, R. & Marriott, S. 2006. Enterprise: Entrepreneurship And Innovation. London: Routledge

 

 

 

marriott.com 2013. Marriott Hotel Reservations | Find Your Perfect Hotel Room. Accessed on 7th Apr 2013 [online] available: www.marriott.com/

 

Mallin, C. 2007, Corporative Governance. 2nd edn. Oxford: Oxford University Press. P.49

 

method123.com 2012. Project Management Life Cycle. Accessed on 7th Apr 2013 [online] available: http://www.method123.com/project-lifecycle.php

 

Schwalbe, K. 2011, Information Technology: Project Management. Boston, MA: Cengage Learning. p. 35

 

 

 

[1] The furniture factory will only handles the supervision of the installation while the installation job will be outsourced by a local team in India and the local team will report directly to the client of this project.

[2] Furniture production is another key task within this hotel project but it is in another project plan, this paper will majorly deal with the plan for the furniture installation.