Inventory Specialists, Inc (ISI) Introduction Inventory Specialists, Inc (ISI) is a high-technology company, privately owned and operated for profit. The company was founded about ten years ago by Sid Jones and a small group of experienced software designers who left the Southern Software Co. to set up a small company to produce leading edge inventory management software. The software produced by Jones and his associates are at the high end in quality and advanced design, and have become well known for being very stable, user friendly, and intuitive. The company's highly responsive and effective customer support has earned an increasing demand for its products. The company gradually expanded to include hardware, and three years ago decided to change its name to ISI and enter the inventory management market in areas where innovative engineering, rapid response, and affordable products are required. This venture succeeded beyond Jones’ expectations, and at this juncture the company has a staff of 250 employees and has recently acquired new quarters with space for further growth. Operations The company's gross business is about $95 million per year, one-half of which is expended inhouse and the other half goes for subcontracted services. About 80% of the company's work is for commercial concerns, with the remaining 20% involving state and local government contracts. Commercial programs are generally acquired by competitive bidding in response to a published Request for Proposal (RFP). The contracts ISI has won have been generally of the Fixed Price, Cost Plus Fixed Fee, or Cost Plus Incentive Fee types, depending on the degree of risk involved. ISI is a fully integrated operation including hardware/software development and test laboratories, computing facilities, technical information services and administrative support. Personnel Sid Jones is President and Chief Executive Officer of ISI. His early associates, Rich Reynolds and Gerald Garcia are Vice President for Engineering and Vice President for Business, respectively. Three years ago, Victoria Valley joined the company as Vice President for Programs after 15 years of program management and marketing experience with General Software, Inc. Jean Stapleton, Director of Product Operations, is involved in most management decisions because of her seniority and key function. Of the company's 250 employees some 200 are software and hardware developers and skilled technicians. About 50% of the personnel are engaged in hardware and software development engineering operations; 25% in product integration and test operations; 5% in technical program management; 15% in administrative support and 5% in staff functions. The company is a matrix organization. Program managers are primarily responsible for the accomplishment of the technical work and delivery of the product within budget and schedule, and for interfacing with the customer. Software Development and Product Operation managers are responsible for the actual development and production of the product and for its technical capability and integrity. General Organization The top-level organization of ISI, showing the principal staff and operating functions that report to the Office of the President, is depicted in Figure 1. Because the company is relatively small, the management and staff operations are correspondingly limited. Top management consists of the President and three Vice Presidents, responsible for engineering, business operations, and programs, respectively. At the staff level, the Directors of Quality Control and Human Resources report directly to the President. The Programs Office, managed by Jim Sams, houses the program managers for current major tasks, and reports to the VP for Programs. The marketing function, which in larger organizations is handled by a Director of Marketing and staff, is the responsibility of the VP for Programs. There is no Chief Counsel at the staff level; legal advice is obtained when needed from a consulting legal firm. At the operating level, the VP for Software doubles as the Director of Software Development, while the VP for Business serves as Director of Administrative Operations. These ‘duplicate listings’ are indicated by an asterisk (*). The Director of Product Operations reports to the President. The majority of ISI stock is held by the officers of the company. The President, Vice Presidents and the Director of Product Operations serve as the Management Committee, shown in Figure 1a, which meets semi monthly to report on their respective operations and to advise on program areas. President and CEO Sid Jones Director, Human Resourses Director, Quality Control Dana Deming VP Software/Hardware Development Rich Reynolds * Director, Software/Hardware Development Rich Reynolds Alli Apple VP Business VP Programs Gerald Garcia * Victoria Valley Director, Product Operations Jean Stapleton Director, Administrative Ops Manager, Programs Office Integration and Test Group Gerald Garcia Jim Sams PIT Chief Architect Financial Services Group Installation Group ECA AFG PFF Architecture Group Support Services Group Customer Service ECAG ASG (PCS) Systems Test Group Quality Control Group ETG ETQ Software Development Group Product Improvement Group ETS ETI Hardware Group ETH Figure 1. Top-Level Organization of ISI President and CEO Sid Jones Director, Product Operations Jean Stapleton VP Programs Victoria Valley VP Engineering VP Business Rich Reynolds Gerald Garcia Figure 1a. ISI Management Committee Administrative and Product Operations The organization of the Administrative Operations Department, headed by Gerald Garcia, is shown in Figure 2. It consists of two groups: Financial Services, managed by Ruth Simms and Support Services, managed by Stephen Lota. The former is responsible for contracts and purchasing, accounting, payroll and management information, while the latter handles shipping and receiving, office services, plant services and computer support services. All operations are integrated by extensive use of information networking, with a tradition of teamwork and service. Director, Administrative Ops Gerald Garcia Financial Services Froup (AFG) Support Services Group (ASG) Contracts and Purchasing Shipping and Receiving Accounting Office Services Payroll Plant Services Management Information Computer Services Ruth Simms Stephen Lota Figure 2. ISI Administrative Operations The Product Operations Department organization is illustrated in Figure 3. The Planning, Scheduling and Documentation Staff plans and oversees the flow of work in the department. The Integration and Test Group, managed by Priyanka Moorjani, is responsible for testing components built in-house or contracted out, assembling them, conducting system tests and performing the appropriate quality assurance functions. Director, Product Ops Jean Stapleton Planning, Scheduling, and Documentation Staff Integration and Test Group (PIT) Installation Group (PFF) Integration Product Installation Customer Service Quality Control Product Training (PCS) Software/Hardware Test Figure 3. ISI Product Operations Hardware and Software Engineering Department The Hardware and Software Engineering Department is the largest operating unit of the company with a staff of 130. As seen in Figure 4, it is organized into six groups under the leadership of the Software Development Director, Rich Reynolds. Director Software/Hardware Development Rich Reynolds Chief Architect (ECA) Architecture Group (ECAG) Systems Test Group Quality Control Group (ETG) (ETQ) Software Development Group Product Improvement Group (ETS) (ETI) Figure 4. ISI Engineering Department Hardware Group (ETH) The Architecture Group (ECAG) is comprised of 10 people and is led by Pete Handle. They are responsible for choosing a standard way of pursuing application development and creating, defining, or choosing an application framework for the applications. They are also responsible for recognizing potential reuse in software and hardware applications by observing and understanding the broader system environment; creating component designs; subdivide a complex application, during the design phase, into smaller, more manageable pieces; grasp the functions of each component within the application; understand the interactions and dependencies among components; and communicate these concepts to developers. They also lead the development of functional requirements, interface definitions, and preparation of technical proposals. The 20-member Systems Test Group (ETG), led by Estelle Aker, conducts testing on a complete, integrated system to evaluate the system's compliance with its specified requirements. ETG testing takes, as its input, all of the "integrated" software and hardware components that have successfully passed integration testing and also the software system itself integrated with any applicable hardware system(s). The purpose of integration testing is to detect any inconsistencies between the software units that are integrated together (called assemblages) or between any of the assemblages and the hardware. The eight four person Quality Control Group (ETQ), led by Hector Zapata, is responsible for software and hardware quality control to check whether the project follows its standards processes, and procedures, and that the project produces the desired internal and external (deliverable) products. The Software Development Group (ETS) is led by Robert Burns. This group of 60 people develops the SUS software products which involves writing and mainlining source code and is involved between the conception of the desired software through to the final manifestation of the software. The Product Improvement Group (ETI) is led by Susan Bettersome. This 19-person group is involved in research, new development, prototyping, modification, reuse, re-engineering, maintenance, and other activities that result in new software products. The Hardware Group (ETH) is led by Dave Morrill. This 10-person group is involved in research, new development, prototyping, modification, reuse, re-engineering, maintenance, and other activities that result in new products that require hardware. ISI Cost Structure ISI uses 1880 hours for a staff year calculation of productive direct labor. The average loaded staff year cost by labor category is shown in Table 1. Table 1 Average Labor Cost by Category Labor Category Average Cost per Staff Year ($K) Senior Manager Manager Senior Scientist Scientist Senior Engineer Engineer Senior Technician Technician Senior Administrative Staff Administrative Staff 175 160 175 160 175 140 110 100 70 55 ISI uses a flat rate of $50 per shop worker hour for shop/machine time (CNC, Turning, Sheet Metal, etc). This is a direct charge to the project. ISI uses estimates in estimating travel. In estimating material and subcontract costs, ISI uses vendor quotes. When vendor quotes are not available, ISI uses historical data and comparisons. Figure 3.4 The Automated Picker Package On-line Customer Inventory Transit Project (aka PickPOCIT – pronounced “Pick Pocket”) CONTRACT ANNOUNCEMENT Inventory Specialists Inc. (ISI) has recently been awarded a $9M contract by OK.COM to design, produce, and demonstrate a prototype automated inventory picker and mailer for their company. OK.COM is attempting to rival Amazon in its ability to quickly get orders in the hands of their customers as quickly as possible. The system architecture is based on inventory management hardware and software (IMS) developed by ISI and must take inputs from the Automated Order Taking (AOT) software developed for OK.COM by SAP Software and Solutions. AOT can take orders from both customers on-line as well as from company customer service personnel. If the merchandise is in stock, AOT then generates an order output that the PickPOCIT system must be able to process. PickPOCIT will then automatically locate the product in the warehouse; select the product off the warehouse shelve; box it if necessary, and, depending on the customer selected shipping method (2-day or standard delivery), generate and paste a UPS or USPS mailing label on the box before delivering it to the shipping department. If the shipment is less than 5 lbs., and it is being delivered to an address within 15 miles of the shipping facility, the package will be prepared for delivery to the customer using a drone that ISI will purchase from Drone Delivery Systems, Inc. If the package is to be delivered by the drone, it must be delivered within 30 minutes of the customer’s order. OK.COM will provide the AOT software as “customer furnished equipment (CFE) at no cost to ISI. ISI proposed the PickPOCIT System concept based on the adaptation of its well-proven and low cost IMS hardware and software, and a well-planned OK.COM system integration and performance demonstration program. Previous versions of IMS have been able to: • • • Take in and process 200 orders a minute Utilizing “First-In/First-Out” logic, process, locate, package, and prepare for Shipping an order within three minutes Mean Time Between Repairs – 2500 hours of continuous operation These performance specifications are not to be compromised as a result of this application for the PickPOCIT Project. In short, ISI proposed a Commercial Off-The-Shelf (COTS), Best Commercial Practices, Event Driven approach to the development, production, and demonstration of the prototype system. OK.COM stipulated in their Request for Proposal (RFP) that industry specifications and standards be used and that the prototype system must accept input from the AOT software provided as CFE from OK.COM. ISI is formally certified ISO9000 compliant. ISI proposed a project of twelve (12) months duration and was the lowest price bid. The contract is fixed price ($9M) with a potential additional award fee of 3%, split 60/40 on schedule and performance. PickPOCIT Demo. Contract_V9_5-7-20 1 STATEMENT OF OBJECTIVES OK.COM seeks to acquire, install, and test an automated stock picker and mailer capability to get orders to their customers via a drone, UPS, or USPS depending on the size of the package and/or the delivery time the customer selects. The system must be installed, tested, and operational by next summer in its Baltimore, Maryland warehouse in time for an operational test already coordinated and scheduled for month 11 providing validation with schedule margin in advance of “Black Friday” 2020 holiday shopping rush. If this prototype capability works, OK.COM plans to purchase 50 PickPOCIT systems, one for each warehouse, of which there are 50 warehouses around the United States and Canada. PROJECT PLAN SUMMARY ISI will develop, install, train operators and administrators, and support the demonstration test of the PickPOCIT system. The PickPOCIT project will consist of: 1. 2. 3. 4. Software refinement in order to implement the SAP AOT software. PickPOCIT installation and test at the OK.COM warehouse in Baltimore, Maryland. System Administrator Training. Providing technical and training support during of an operational test during month 11. Major Milestone Events for the PickPOCIT project are: Event Contract Award Project Baseline SEMP (System Engineering Master Plan) TEMP (Test & Evaluation Master Plan) PDR (Preliminary Design Review) CDR (Critical Design Review) System Integration Tests Full System Demonstration Tests System Installation Operator and System Administrator Training Support Operational Test Contract Test Report and all Final Documentation PickPOCIT Demo. Contract_V9_5-7-20 Date August 31, 2019 1 month after award 2 months after award 3 months after award 4 months after award 6 months after award 7 months after award 8 months after award 9 months after award 10 months after award 11 months after award 12 months after award (August 31, 2020) 2
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