MEEM 5001 Enterprise Engineering Strategy Parking Guidance System

MEEM 5001 Enterprise Engineering Strategy Parking Guidance System Parking Group Member: Chan Chun Kit Cheung Chi Ming Kwong Yee Fai Lai Chung Wing Sum Kai Yiu Chi Kan City (50115211) (50165054) (50177772) (50276497) (50369026) (50524565) Course Instructor: Dr. John K L Ho

Company Background • A newly established engineering company in HK in providing effective parking guidance system for all types of parking facilities. • Shareholders of the company are graduates of City University of Hong Kong. • No experiences in business, but the system is creative & able to meet the customers’ needs.

Mission Statement • To be a pioneer for providing efficient, competitive technology and engineering services to multi-storey car parks through application of parking guidance system.

Goals • To recommend & promote the use of innovative parking guidance system in Hong Kong. • To optimize the use of parking spaces & reduce the time in searching free parking space by introducing parking guidance system. • To gain profit for the newly established company in HK on a 39% rate of return in the first three year of business.

Objectives • Guide the driver to find a parking space more efficient & convenient. • Optimize the use of car parking spaces • Provide a long term car parking space solution for users & operators. • Prevent a long queue of cars from forming at the entrance point

Environment Analysis • • • Finding a space in a car park can be difficult and stressful Reduce the time of searching space in order to reduce parking time Look for a solution for reduce air and noise pollution from vehicle in urban area No similar parking management system in HK Suitable for multi-storey car park in crowed district e. g. Central, Mongkok, etc

Environment Analysis • Many car park developers: Improve the facilities No idea to implement the system Look for a solution for reduce traffic problem outside highly-utilized car parks Seek for improving the usage efficiency Seek for efficiency and flexible management system Increase the rate of filling parking space Improve customer service and customer satisfaction

Market Survey • Conduct market survey by questionnaire • Apply Kansei Engineering (KE) - investigate the driver’s feeling towards car parks - to identify the system’s design • Totally 41 questions • 5 points Semantic Differential (SD) scale for rating • Sample size: 150 drivers

Market Survey • The four main parts in questionnaire: Part 1: General opinions towards car parks Part 2: Opinions about different parking guidance systems. The proposed components involved: Auto-allocation of parking space Parking guidance indicator (Numerical indicator, Electronic display board) - Indicating light for parking space Part 3: Overall opinions towards the system Part 4: Personal information

General opinions from survey’s results: • Most of respondents have experience of parking vehicle in highly-utilized car parks - They felt difficult and annoying when looking for parking spaces They don’t satisfied with the current parking indicators Some of them considered the time taken in searching for parking spaces

General opinions from survey’s results: • Parking guidance system can reduce the time looking for parking spaces • Parking guidance system can reduce the time taken for vehicles entering the car parks • There is a need to install a parking guidance system in highly-utilized car parks

Conceptual designs of parking guidance system • Based on survey’s results: - Most of respondents don’t like the computer assigning the packing space to them - They like numerical indicators more than electronic display board at the main entrance and each storey’s entrance - They thought that too much information will distract their concentration in driving - They are welcome to install indicating lights for parking spaces

Key benefits for Drivers, Citizens and Developers For car park developers: • Enhances customer service/customer satisfaction • Increased rate of filling parking spaces • Improved the profit • Prevented excess queues at car parks

Key benefits for Drivers, Citizens and Developers For drivers and citizens: • • • Improved traffic flow Improved road safety More convenient to drivers Reduced parking time Reduced atmospheric and noise pollution

Company Profile - Strength • No competitors • Cost effective for large scale multi-storey car park • Easy to install • Low maintenance cost

Company Profile - Weakness • • No experience due to no such system in HK No experienced staff Uncertain in actual demand No well known brand name

Identified Opportunities • No competitors, profit margin is large • Many cars in HK, but no enough parking space • Multi-stories car park is arising in HK • Resurrection of property market, large shopping mall will increase • Government introduces pedestrian zone, this reduces public parking spaces in crowed district • Future development in mainland China, system can be applied in large city and result in gaining more profit

Identified Threats • Few people will use the car park if parking fee is high • Indirectly affected by poor economic environment • Easy replaced by other high/new technology • Property developers are not rare, their decisions will affect the company development

Organization Wheel (3) (2) (1) Customer

Framework of Organization • 1. ) Core Target – Customer: carpark management companies, facilities management companies of large shopping malls etc. • 2. ) Company Development – Organization: All founders are partners – Teamwork: Partners + In-house staff – People: Services Team (on-site, remote and hotline support)

Framework of Organization • 3. ) Business Development – System Design : simple but innovative, new system for car park management in HK, suitable for multi-storey car parks – Customer Services : meet customers’ expectation through questionnaires – Assembly & Test : local design – Operations : in-house staff

Quality Management • ISO 9000 certified • EMSD’s approved system design • All technicians are registered electrical workers • All components & parts are Ro. HS & WEEE compliance Product

Develop & Evaluate Strategic Alternatives • Two Strategic Alternatives for Operation: 1. in-house engineering services 2. completely out-sourcing • Problems on Strategic Alternatives: 1. control of quality 2. communication 3. competition 4. coordination 5. costs

Alternatives for Operation Strategy of In-house Services Pro Cons * have own facilities/equipment * quicker reaction to problems * better control * good communication * have own facilities/equipment * higher business security * high set up cost * high training cost * cost on own facilities/equipment * no external technical support * complicated management

Alternatives for Operation Strategy of Out Source Services Pro Cons * low set up cost * low training cost * less own facilities/equipment * external technical support * trained personnel available * flexible * loss of direct control * quicker reaction to problems * readily fixed costs * hidden costs * risk

Evaluation of Various Strategies Management Strategies Alternatives of Operation In-house Staff Out-sourcing control of quality communication competition coordination costs

Technology Background Parking Guidance System A displaying system that provides the latest parking information and directs the drivers to free parking space along the shortest possible route

Technology Background Vehicle Detection Technology Ultrasonic Object Detector Technology Inductive Loop Detector Technology

Inductive Loop Detector • A coil of wire is buried under the parking lot and connected to a roadside control box

Ultrasonic Detector

Ultrasonic Detector - Install in the ceiling on each parking lot - Ultrasonic frequencies (25. 8 k. Hz or 24. 7 k. Hz) - To detect the presence of car in the corresponding parking lot - LED is integrated in detector • to indicated two possible states Free (Available) or Occupied - Low construction/installation cost compared with inductor loop detector

Ultrasonic vs. Inductive Loop Criteria for comparison include: Data accuracy, Environmental effect, Reliability, System expendability, Cost and Ease of installation and maintenance. ** Ultrasonic Inductive loop Data accuracy Good (98% or above) Environmental Effect Low Reliability Good System expendability Good Medium Ease of installation/maintenance Easy Difficult Construction cost Medium High

Vehicle Detection Technology • Ultrasonic Detector is selected in our parking guidance system Reference: ** Naoyuki Ushio and Toshiyuki Shimizu, “Loop vs ultrasonic in Chicago: Ultrasonic vehicle detector field test isolating diffused reflection and enduring harsh environment”, 1997

System Architecture of Parking Guidance System

System Architecture of Parking Guidance System

System Architecture of Parking Guidance System

Digital Display and Signage

Financial Analysis Source of Funding Friends Easy to borrow Depends on degree of friendship Bank Loans More flexible High interest rate for small business Government Funding Scheme Tailor-made loan scheme Strict application requirement

Financial Analysis Initial Investment HK $ Annual Expenses HK $ Office Hardware 80, 000 Direct Cost Computer Software with license 80, 000 Labor salary R & D cost 60, 000 Other Direct Cost Marketing Promotion 50, 000 Indirect Cost Working Capital 50, 000 System Maintenance 10, 000 Quality Control & Testing 10, 000 Marketing Promotion 10, 000 Taxes and insurance 60, 000 Other Indirect Cost 30, 000 Total 330, 000 Total 648, 000 30, 000 788, 000

Financial Analysis Net income from each project 1. Ultrasonic detector HK $ 126, 250 2. Microprocessor-based controller 7, 500 3. Equipment rack/housing for the controller 1, 500 4. Central workstation sever computer 12, 000 5. Parking guidance system software with 1 year license 28, 000 6. Hubs/Routers 1, 000 7. Building service provisions 85, 000 8. Related shielded cables 54, 400 9. Uninterruptible power supply 27, 000 10. LED display board 13, 000 11. Consultancy and installation & testing 65, 000 Total cost for 1 project 420, 650

Financial Analysis Income Calculation: Markup price for each project: 40% on the total project cost Selling Price = HK$ 420, 650 X 1. 4 = HK$ 588, 910 Total Income from *projects each year: Total Income = HK$ 588, 910 X 5 = HK$ 2, 944, 550 * Assume 5 projects each year

Financial Analysis Net Profit for each project: Consultancy Income: 80% of the project cost category 11 Consultancy Income = HK$ 65, 000 X 80% = HK$ 52, 000 Markup Profit = HK$ 168, 260 Total Profit for each year = HK$ (52, 000 + 168, 260) X 5 = HK$ 1, 101, 300 Net Profit = Total Profit – Total Expenses = HK$ 1, 101, 300 – HK$ 788, 000 = HK$ 313, 300

Financial Analysis Payback Period: Year 1 Cash Inflow HK$ 440, 520 Cash Outflow HK$ 1, 118, 000 Net Cash Flow HK$ (677, 480) 2 1, 101, 300 788, 000 (364, 180) 3 1, 101, 300 788, 000 (50, 880) 4 1, 101, 300 788, 000 262, 420 Payback period: 3 + [50, 880/(1, 101300 - 788, 000)] X 12 = 3 year and 2 months

Time Schedule Tasks Stage 1: Requirement Study (30 days) (1. 1) Operation and Process Review (1. 2) Technology Review (1. 3) Requirement Checklist Finalization Stage 2: System design and development (100 days) (2. 1) Design of System (2. 2) Coding of System (2. 3) Testing version/ Demo Version Roll Up Stage 3: System testing (60 days) (3. 1) Design of Testing Plan (3. 2) System Acceptance Testing and Pilot Run (3. 3) System Fine-tuning (3. 4) System Final Version Release Stage 4: Training and marketing (60 days) (4. 1) Promotion Start (4. 2) System Training for Supporting Staff Month Month 3 6 2 4 5 1

Conclusions • Strategy plans are fully achieve the mission statements & objectives • The functions of the Parking Guidance System is based on the customers need • No market competitor as a result of high profit margin tends to shorten the payback period

Question & Answer

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