1. Squeezing the Juice Out of the Beverage Market
POM+ Project
Squeezing the Juice Out of the Beverage Market
Big Kola Company initiated the POM+ Project in an effort to counteract competition from specialty juice beverages cutting into its soda sales. Based on higher profit margins, increased market exposure, and higher antitoxin levels found in pomegranate juice, the POM+ project is responsible for devising, testing, producing and marketing a pomegranate juice based specialty beverage. The POM+ Project priority matrix has determined that costs is a constraining factor, project scope should be enhanced as available, and the project timeline is flexible. Based on these criterion, Gage Conner, the POM+ Project Manager, has determined the work breakdown structure, depicted the critical path and leveled resource allocation. Unfortunately, with approximately seven weeks left in the schedule, the POM+ Project is over budget and underperforming. Mr. Connor must now consider using the principles of Earned Value Management, getting the most bang for the buck, as he rethinks the POM+ project plan and resource allocation.

2. POM+ Project Introduction Priority Matrix Work Breakdown Structure
Critical Path

3. POM+ Project Resource Allocations Earned Value Cost Indicators
Earned Value Schedule Indicators
Conclusion

4. Introduction Big Kola Company soda sales Losing profits
Emerging Specialty Juice Market
Market Research
POM+ Project
Over the last several years, specialized fruit juices have made a big splash in the beverage industry. Big Kola Company has decided to create its own line of specialty juice beverages in an effort to bolster flagging profits while breaking into new markets. Grape juice beverages were the first to create a specialty juice niche in the beverage market through heavy advertising touting the healthy, antioxidant benefits found in grape juice. Several beverage manufacturing companies followed suit and began marketing their own grape juice based beverages. Big Kola has explored other options and, after months of market research surveys, has developed a list of three potential high-margin drinks: cranberry, blueberry, and pomegranate. While all three are high in antioxidants, Big Kola has decided to produce a pomegranate beverage based on its 71 percent relative ability to eliminate free radicals as compared to 33 percent for blueberries and 20 percent for cranberries (Larson & Gray, 2011). Additionally, pomegranate and its byproducts are very popular in the Middle East and Asia, providing a wider appeal and potential new markets. Ultimately, a pomegranate beverage has a more attractive market appeal and a higher potential profit margin than other antioxidant juices. Big Kola Company has spearheaded this initiative through the POM+ Project led by the project manager, Connor Gage.

5. POM+ Priority Matrix Time Scope Cost Constrain X Enhance Accept
Prior to beginning the POM+ Project, Big Kola Company executives and project management teams decided on the project’s priority matrix. The priority matrix determined the relative importance of the project criterion thus providing guidance over the life of the project in the event the criterion were in conflict. As Nigel Slack stated in "The Importance-Performance Matrix as a Determinant of Improvement Priority" published in the International Journal of Operations & Production Management, the priority matrix may be used in two ways: as a translation method between organizational market aspirations and operations strategy and as a list of ranked competitive factors used to determine decision making (1994). The POM+ project is constrained by costs. The budget, as initially set, should be adhered to and every effort should be made to stay under budget. As a result of declining profits, Big Kola Company simply cannot afford higher costs. It is also important for the project manager to take advantage of opportunities to optimize the scope of POM+ Project. However, Big Kola Company determined it was willing to change the timeline in an effort to mitigate costs or enhance the scope of the project.

6. Work Breakdown Structure
Research & Development
Secure Fruit Suppliers
Initial Production
Distribution
Legal
Prepare Product Launch
Developing the Work Breakdown Structure (WBS) is a major step in the project planning process. It intended to structure the work into measurable, manageable, independent, and integration capable increments (Davies, 1995). The WBS provides a framework for preparing comprehensive "plans and network schedules, develops a job cost system, and outlines job responsibilities. From the WBS the total project can be identified, network scheduling performed, costs and budgets established, project schedules and cost performance tracked, and responsibilities established" (Davies, 1994). Based on the Work Breakdown Structure (WBS), the POM+ Project will take 142 working days to complete. With a project start date of January 3, 2012 the project is estimated to be complete July 26, This timeline is based on eight-hour workdays, Monday through Friday with allowances for federal holidays. To compensate for over-allocation of resources and project constraints, the POM+ Project WBS includes leveling efforts to enhance the project scope and stay within budget. The POM+ Project team capitalized on the total slack within the project's schedule to optimize project resource management. Total slack indicates the amount of time an activity may be delayed without resulting in an overall delay to the project (Larson & Gray, 2011). For example, the POM+ Project initially had 50 days of total slack to select distributors. Based on the initial WBS and critical path network diagram, Marketing, Research and Development, Engineering, and Production resources were over allocated. Through redesigning the WBS, the select distributors task now has six days of total slack allowing the marketing team members to focus their attention on other critical tasks.
(Refer to Table 2, POM+ Project WBS)

7. Critical Path Need survey Set product specs Shelf life report
Secure fruit suppliers
Equipment rehab
According to Mark Cohen, in his article published in AACE International Transactions, "Project Risk Identification and Management", Critical Path Management offers "the most efficient and effective mechanism for generating and monitoring the planning process throughout the entire life cycle of a project. As such, it is one of the most useful tools managers have at their disposal for analyzing and mitigating risk" (2004). The tasks, as indicated in the table three below, depict the tasks comprising the POM+ Project critical path. The critical path depicts the essential start and stop times for key activities which in turn will impact the on-time rate for the POM+ Project completion. The critical path allowed the project manager to identify and track the most crucial activities within the project plan.  

8. Critical Path, continued
Production trials
Quality trials
Quality metrics
Quality training
Prepare product launch

9. Critical Path, continued
Production trials
Quality trials
Quality metrics
Quality training
Prepare product launch

10. Gantt Chart- Critical Path
The POM+ Project has one main critical path and several non-critical activities with significant slack. Therefore, it has been determined to be insensitive. The POM+ Project Gantt Chart with Critical Path demonstrates the POM+ Project critical activities in red and the non-critical activities in blue.

11. Resource Allocations Resource Available Hourly Rate Marketing 5 $80/hr
R&D
Engineering 10
$100/hr
Purchasing 2
$60/hr
Quality 3
Designers
Legal Staff
$120/hr
Production 20
Due to cost constraints, the POM+ project manager assigned resources according as shown in table 4 (view with normal option to see table), POM+ Project Resource Assignments. The WBS was also extended one week from the original timeline to allow resource allocation without going over budget.

12. Earned VALUE Management

13. Earned Value Cost Indicator
CPI- .70
EAC- $2.4 million
BAC- $1.7 million
VAC- $710,000
TCPI- $1.15
According to the May 31, 2012 POM+ Project Earned Value Cost Indicator (CPI) (view with normal option to see table), the project has a return on investment of 70 cents on the dollar. The forecasted cost at completion (EAC) is projected to be $2.4 million dollars, a total more than $710,000 (VAC) dollars over the original budget (BAC) of $1.7 million dollars. As of May 31, 2012, project estimates show the POM+ project will need to earn $1.15 (TCPI) on the remaining work in order to achieve the target budget.

14. Earned Value Schedule Indicator
SPI- .69
SV%- .31
SV- $184,000
Earned Value Management crucial to project success.
According to the May 31, 2012 POM+ Project Earned Value Schedule Indicator (SPI), (view with normal option to see table) the project has completed 69 percent of the work leaving approximately 31 percent (SV%) or $184,000 dollars worth of work to be completed (SV). Based on the lagging SPI and CPI numbers, it is highly recommended that the POM+ Project Manager utilize Earned Value Management (EVM) to determine weak areas within the project and revise the project plan to assist the project with coming in under budget. As Barbara Poletti and Richard Marcoux wrote in their article, "Performance Indicators for Project Management", EVM offers great assistance to project managers by providing important insight "to ensure that a project doesn’t stray from its initial objectives. It can also be used as a forecasting or extrapolation tool to reassess an ongoing project. In addition, its principles can be applied to projects both large and small" (2008, p.24).

15. Conclusion Business savvy Priority Matrix EVM
Big Kola Company's decision to pursue a niche in the growing specialty fruit juice market was a business savvy decision as it allows the company to shore up profit losses, capitalize on the growing specialty juice markets, and break into new markets in the Middle East and Asia. Big Kola Company ultimately decided to offer a pomegranate fruit juice beverage, POM+, based on projected high profit margins, market research, higher antitoxin levels than blueberries and cranberries and an underdeveloped pomegranate niche within antitoxin fruit drinks. While Big Kola Company was constrained by costs, it was able to be flexible with the project schedule to allow optimal resource allocation without going over budget. The POM+ Project estimated completion date was extended from July 19, 2012 to July 26, 2012 to allow for reallocation of over-allocated resources. As of the last update noted on May 31, 2012, the project manager is over budget and has had poor work performance. In order to come in under budget, the project manager must reassess the resource allocation and project schedule.

16. References
Cohen, M. W., & Palmer, G. R. (2004). Project Risk Identification and Management. AACE International Transactions, 1. Business Source Premier, EBSCOhost
Davies, J. R. (1995, November 6). Using work breakdown structure in project planning. Plant Engineering,49(14), Retrieved from 4&v=2.1&u=klnbsouthwest&it=r&p=AONE&sw=w
Larson, E. W., & Gray, C. F. (2011). Project management, the managerial process (5th ed.). New York, NY: McGraw Hill Irwin.

17. References
Poletti, B., & Marcoux, R. (2008). Performance indicators for project management. CMA Management, 82(6), Business Source Premier, EBSCOhost.
Slack, N. (1994). The importance-performance matrix as a determinant of improvement priority. International Journal of Operations & Production Management, 14(5), Retrieved from t.com/docview/ ?acco untid=13979