Engineering project management for the global high technology industry by sammy g shina

Engineering Project Management for the Global HighTechnology Industry About the Author Sammy G Shina, Ph.D., P.E., is a professor of mechanical engineering at the University of Massachusetts Lowell (UML), and has lectured in the University of Pennsylvania’s ExMSE Program and at the University of California Irvine He is the coordinator of the Design and Manufacturing Certificate, the Quality Engineering Certificate, mechanical engineering senior capstone projects, and co-op education for the College of Engineering at UML He is the founder of the New England LeadFree Electronics Consortium, which researches, tests, and evaluates materials and processes for lead-free and RoHS compliance and conversion to nano-technology Dr Shina is an international consultant, trainer, and seminar provider on project management, quality methods in design and manufacturing, Six Sigma, and design of experiments (DoE), as well as technology supply chains, product design and development, and electronics manufacturing, testing, and automation He worked for 22 years in high-technology companies developing new products and state-of-the-art manufacturing technologies Dr Shina received B.S degrees in electrical engineering and industrial management from Massachusetts Institute of Technology, an M.S degree in computer science from Worcester Polytechnic Institute, and a Ph.D degree in mechanical engineering from Tufts University He is the author of several best-selling books on concurrent engineering, Six Sigma, green design, and engineering project management, and more than 100 papers Engineering Project Management for the Global HighTechnology Industry Sammy G Shina, Ph.D., P.E New York Chicago San Francisco Athens London Madrid Mexico City Milan New Delhi Singapore Sydney Toronto Copyright © 2014 by McGraw-Hill Education All rights reserved Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher ISBN: 978-0-07-181537-6 MHID: 0-07-181537-6 e-Book conversion by Cenveo® Publisher Services Version 1.0 The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-181536-9, MHID: 0-07-181536-8 McGraw-Hill Education eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs To contact a representative, please visit the Contact Us page at www.mhprofessional.com All trademarks are trademarks of their respective owners Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark Where such designations appear in this book, they have been printed with initial caps Information has been obtained by McGraw-Hill Education from sources believed to be reliable However, because of the possibility of human or mechanical error by our sources, McGraw-Hill Education, or others, McGraw-Hill Education does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the results obtained from the use of such information TERMS OF USE This is a copyrighted work and McGraw-Hill Education and its licensors reserve all rights in and to the work Use of this work is subject to these terms Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill Education’s prior consent You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited Your right to use the work may be terminated if you fail to comply with these terms THE WORK IS PROVIDED “AS IS.” McGRAW-HILL EDUCATION AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE McGraw-Hill Education and its licensors not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free Neither McGraw-Hill Education nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom McGraw-Hill Education has no responsibility for the content of any information accessed through the work Under no circumstances shall McGraw-Hill Education and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise To my wife Jackie, and our children and grandchildren Contents Preface Acknowledgments The Engineering Project Lifecycle and Historical Development of Engineering Project Management Tools and Techniques 1.1 The 1980s 1.1.1 Design for Manufacturing 1.1.2 Reducing Variability and Optimizing the Design 1.1.3 Design for Quality Tools: Six Sigma and Process Capability Cp and Cpk 1.2 The 1990s 1.2.1 Robust Design of the High-Technology Product 1.2.2 Low Costs for New Products 1.2.3 Time to Market 1.2.4 Meeting Expectations and Customer Satisfaction through QFD 1.3 The 2000s and Beyond 1.4 Conclusions References and Bibliography Discussion Topics Problems Product and Project Perspectives and Managing Different Types of Engineering Projects 2.1 The Overall Product Lifecycle Model 2.2 The Role of Technology in Product Development and Obsolescence 2.3 Technology Product Types and the Project Management Models Needed to Develop Them 2.3.1 Types of Products That Can Be Created with New Technology Adoption 2.3.2 Project Management Structures Needed to Support Product Creation 2.4 Creating an Environment for Successful Project Management 2.4.1 Create a Total Quality Culture within New Product Development Projects 2.4.2 Develop Product Focus Organizations within the Company 2.4.3 Emphasize the Team Focus Approach to Project Management 2.4.4 Implement a Phase Review Process for Project Management Control 2.4.5 Key Processes to Enhance the Project Management Process 2.5 Conclusions References and Bibliography Discussion Topics Problems Project Inception: Benchmarking, IP, and VoC 3.1 Benchmarking of Products and Processes 3.1.1 Attributes of Benchmarking Global Technology Companies 3.1.2 Evolution of Customer Expectations 3.1.3 Concerns about Benchmarking 3.2 Intellectual Property Concerns in New Technology Product Inception 3.2.1 Intellectual Property Trends in High-Technology Companies 3.2.2 Patent Law and Issues of Filing a Patent 3.2.3 Intellectual Property Infringement 3.2.4 Summary of Intellectual Property Issues for New Products 3.3 Voice of the Customer 3.3.1 VoC in Design to Market Products 3.3.2 Quality Functions Deployment 3.3.3 VoC Structured Methods in Design to Customer Projects 3.4 Conclusions References and Bibliography Discussion Topics Problem Voice of the Customer Case Study 4.1 Voice of the Customer Methods and Techniques 4.2 Voice of the Customer as Part of the Lean Product Development Tools and Processes 4.3 Preparing for the Voice of the Customer 4.4 Initiating the VoC; Summary of the Key Steps 4.5 Skill Sets Required for the Host IPT Team 4.6 Supplies Needed for the VoC Activity 4.7 Steps in Understanding VoC 4.8 Start of Affinitization When the IPT Team Does the Groupings 4.9 Label the Groupings 4.10 Analyze the Groupings 4.11 Capturing Customer Intents and Additional Project Success Criteria 4.12 What’s Next? Other Ways to Use the VoC 4.13 Lessons Learned from Use of the VoC 4.14 VoC Process Risks 4.15 Benefits from Using the VoC Process Discussion Topics Chapter Exercise Suggested Discussion for Chapter Exercise Engineering Project Justification, Financial Aspects, and Return on Investment 5.1 The Business Plan for New Products and Its Potential Impact on the Company’s Strategy 5.1.1 New Product Opportunities in Technology Companies 5.1.2 Collecting Data for the Business Plan 5.2 Techniques for Evaluating Projects Based on Economic Analysis 5.2.1 Return Factor or Benefit/Cost Ratio Calculations 5.2.2 Payback Period Calculations 5.2.3 Internal Rate of Return (aka Return on Investment) 5.3 Capital Equipment Planning and Acquisition Decision Based on Economic Analysis 5.3.1 Capacity Planning for Capital Equipment 5.3.2 Capacity Planning for Capital Equipment in the Electronics Industry 5.3.3 Issues with Manufacturing Machines ROI Calculations 5.4 Techniques for Increasing Management Confidence in the Economic Analysis 5.5 Conclusions References and Bibliography Websites Discussion Topics Problems Make or Buy: Subcontracting and Managing the Supply Chain 6.1 The Lean Enterprise Concept and the Supply Chain 6.1.1 Development of Outsourcing 6.1.2 Competency versus Dependency 6.2 The Outsourcing Strategy to Be Considered and the Associated Pitfalls 6.2.1 Operational Issues When Outsourcing at Different Levels of the Product Realization Process 6.2.2 Types and Levels of Outsourcing 6.3 The Changes to the Product Realization Process and Communications with the Supply Chain 6.3.1 Supply Chain Development 6.4 The Supplier Selection Process 6.4.1 Criteria for the Supplier Selection Process 6.4.2 Presenting the Subcontracting Plan to Management 6.4.3 Issue to Address Before Signing a Contract with a Supplier 6.4.4 Outsourcing Quality Issues 6.4.5 Legal and Liability Issues in the Instruction to Bidders 6.4.6 Infrastructure to Manage Subcontractors 6.5 Summary and Case Studies of Subcontracting References and Bibliography Discussion Topics Problems Engineering Project Planning and Execution 7.1 Historical Approaches to Engineering Project Planning 7.1.1 Initial Project Planning Steps and Project Statement 7.1.2 Development Plans for Design to Customer Projects 7.1.3 Development Plans for DTM Projects 7.2 Project Requirements Definitions 7.2.1 Task Identification Plans 7.2.2 Project Planning Methodology 7.3 Engineering Project Scheduling Tools 7.3.1 Project Planning Tools and Techniques 7.3.2 PERT Chart Methodology 7.3.3 Steps in Creating and Implementing a PERT Chart 7.3.4 Example of the Planning of a PERT Chart 7.3.5 Determining Slack (Float) Time Extension 7.4 Methods and Techniques for Reducing Project Duration and Cost 7.4.1 Resource Leveling and Allocation 7.4.2 PERT Example 7.4.3 Estimating Expected Project Completion Time 7.4.4 Gantt Charts 7.4.5 Plans to Be Completed by the PM Prior to Project Start 7.5 The Causes of Engineering Project Execution Problems and How to Mitigate Project Delays 7.5.1 Engineering Project Design Phase Delay Factors 7.5.2 Engineering Project Manufacturing Phase Delay Factors 7.6 Techniques for Monitoring Project Expense Progress and Estimating Project Completion Profile 7.6.1 Earned Value Management System 7.6.2 Project Cost Measurement 7.6.3 Project Variances Extrapolated for Estimates at Completion 7.6.4 Earned Value System Example 7.7 Successful Project Execution and Lessons Learned References and Bibliography Discussion Topics Problems Engineering Project Phases, Control, Communications, Leadership, and Risk Assessment 8.1 The Phase Gate Review Process 8.1.1 Attributes and Metrics of Success for Each Design Phase 8.1.2 New Product Creation for the Global Economy 8.1.3 Phase Gate Design Reviews 8.1.4 Design Review Preparation 8.2 Types of Phase Gate Review Processes 8.2.1 Complex Product Phase Review Process 8.3 Implementing a Phase Gate Process 8.3.1 Changing Traditional Design Communications 8.3.2 Supplier Control and Communications Needs 8.3.3 Phase Review Process Communications Needs 8.4 Project Risk Assessment and Management 8.4.1 Steps in Risk Assessment and Management 8.4.2 Risk Identification and Qualification 8.4.3 Project Risk Analysis 8.4.4 Risk Handling Techniques design to market companies Master production schedule (MPS) Materials-based cost estimating system Matrix project management Maturity stage of product development product and projects costs in Media, characteristics of Meeting management Methods-time measurement (MTM) Metrics benchmarking company attributes project management stand-up area status elements Milestone review Mission statement Mitigating project delays Mock-up phase build Modified products Moore’s law Motorola N New products business plan for cost estimating methodologies cost estimating process creation of for the global economy determination of costs and tracking tools for development process financial and economic analysis tools for intellectual property issues for low costs for opportunities in technology companies project management structures needed to support creation of role of technology in total quality culture for development of use of economic analysis to evaluate New technology adoption New technology product inception, intellectual property concerns in Next generation products Nominal group technique (NGT) O Obsolescence, role of technology in OEMs See Original equipment manufacturers Operations functions of use of stand-up area for Optimization techniques Organizational risks Original equipment manufacturers (OEMs) competency vs dependency design contract manufacturers development of outsourcing outsourcing strategy of Outsourcing advantages of case studies of subcontracting competency vs dependency development of effect of on supply chain infrastructure to manage subcontractors legal and liability issues in bid instructions operational issues quality issues reasons for strategy and pitfalls supplier control and communications needs supplier selection process types and levels of Overall product lifecycle model Overhead costs P Part geometry Partial colocation Participatory management Partner status Partnerships Patent law Patent litigation Payback period calculations Penetrating pricing strategy Percentage (p%) contribution PERT charts determining slack (float) time extension example planning of steps in creating and implementing use of in project scheduling use of to reduce project duration and cost Phase gate review process attributes and metrics of success communications needs complex products design communications design reviews for stages implementing supplier control and communications needs types of Plan optimization Planned value (PV) Planning importance of techniques to reduce project duration and cost Platforms Power distance Preferred status Premium pricing strategy Price performance curves Probabilistic analysis Probability factor (Pf) Problem identification and resolution Process capability, design for quality Process development, types of Product complexity Product cost, relationship of with lifecycle stages Product data, exchange of Product data sheet Product design attributes of stages of product lifecycle reducing process by half Product development benchmarking in commodity stage of customer expectations determination of costs and tracking tools for financial and economic analysis tools for growth stage of maturity stage of outsourced services plan changes project management structures needed to support role of technology in start-up stage of total quality culture for types of use of economic analysis to evaluate new projects Product enhancement Product family follow-ons Product focus organizations marketing production R&D Product inception, intellectual property concerns in new technology Product lifecycle attributes of design stages attributes of manufacturing stages model of R&D investments and Product manufacturing costs Product plan Product realization process changes to operational issues when outsourcing Product technical requirements, defining from voice of the customer data Production department, functions of Productivity managers Profile of engineering changes, comparison of product releases in U.S and Japan Program management, functions of in DTM companies Project communication plan See also Communication plan activities and resources communication protocols email and stakeholder registry and team directory stakeholders technology considerations Project communication techniques Project communications choosing the right medium for collaboration and colocated teams concurrent engineering and dispersed teams effect of distance on role of project managers in use of architecture as a collaboration tool use of communication model in planning and execution Project completion time, estimating Project concept phase Project cost measurement plan relationship of with lifecycle stages techniques for monitoring progress Project delays, mitigating Project economic analysis Project management advantages and disadvantages of organizational structures of collaborative engineering and creating an environment for success history of in high-technology industry Japanese styles of key processes to enhance metrics military style of outsourcing and See also Outsourcing phase review process for product development structures project execution and control phase project planning phase See also Project planning risks structures need to support product creation team focus approach to Project managers decisions due to project schedule slip dilemma of serving multiple objectives major concerns of plans to complete by project start role of in engineering project communications team leadership and interactions technology adoption and Project metrics plan Project monitoring Project phase subdivision Project planning changes estimating project completion time Gantt charts historical approaches to initial steps methodology for reducing project duration and cost Project requirements definitions Project reserve Project risk analysis Project risk assessment and management steps in Project schedule slip consequences of project manager decisions due to Project scheduling tools PERT charts Project statement Project success criteria Project task expense systems Project teams advantages of differences in attributes of success communications conflict management in development stages of dynamics of managing managing meetings of motivating members motivation and compensation policies necessity for resolving conflict role and responsibilities in selecting and launching stakeholder registry and team directory status communications meetings team leadership and interactions understanding and nurturing member skills Project websites Project-development process Project-inception phase Pull communication Purchase decisions for capital equipment Push communication Q QFD See Quality function deployment Qualification process for suppliers Quality advocacy Quality assurance, supplier management program Quality audits of suppliers Quality circles Quality function deployment (QFD) cascade of matrices decision phase of description phase of implementation phase of new product specifications examples organization phase of process improvement example Quality loss function (QLF) Quality of design, Six Sigma and process capability Quality plan Quality systems review Quality-based technology cost model R R&D See Research and development Rapid prototyping Reconciliation Red flag reviews basic elements of Reducing project duration and cost estimating project completion time resource leveling and allocation use of PERT charts for Remote meetings Requirements conflicts Requirements gathering Research and development (R&D) investments in for industrial products responsibilities of Research labs Residual risks Resource leveling and allocation Resource plan Return factor Return on investment (ROI) capital equipment considerations techniques for increasing management confidence in Revolutionary products comparison of with follow-on products intellectual property trends in Risk monitoring and control price performance strategies product development and response plans Risk analysis process Risk assessment Risk factor (Rf) Risk handling techniques Risk identification Risk management Risk management plan Risk priority number (RPN) Risk register analysis of review Risk–benefit analysis Robust design, high-technology projects ROI See Return on investment S Salary curves Saturated design of experiments See also Design of experiments Schedule plan Schedule variance (SV) Schedule variance index (SVI) Schedules, review of after voice of the customer Scheduling tools Screening design of experiments See also Design of experiments Secondary risks Security, communication and Self-directed team project management Sensitivity analysis Sequential phase review process Service review Six Sigma (6σ) benchmarking attributes design for quality Skunkworks Slack time extensions S/N ratio Social factors, effect of on communications SOW See Statements of work Space plans Specifications limits Specifications-driven projects determining customer expectations for Spoken quality Staffing plans Stakeholder registry Stand-up area design essentials metrics and status elements red flag reviews setup and orientation Stand-up meetings Standard normal distribution (SND) Standardization, design and manufacturing Start-up stage of product development project and product costs in Statements of work (SOW) Structured communications Subcontracting plan, presenting to management Subcontractors See also Outsourcing case studies infrastructure to manage Subdivided work description (SWD) Substantive issues, conflict arising from Success criteria Supplier ratings Suppliers control and communications needs criteria for selection process issues to address before signing contracts with qualification process for selection process Supply chain communications with development of effect of outsourcing on lean enterprise concept and plans role of product and project cost selection of supplier selection process use of stand-up area for Surface Mount Technology Association (SMTA) Synchronous communication Synchronous project planning process System architecture change management and developing integration risk organizing around use of as a collaboration tool T Tactical plan Taguchi method Taguchi, Genichi Task identification plan Task interdependence T-downs Team directory Team focus approach Team leadership Team motivation Team process Team-focused project management Teams advantage of differences for communications conflict management in dynamics of managing meetings of motivating members necessity for role and responsibilities in selecting and launching Technical risk Technical specifications, review of after voice of the customer Technology adoption communication and role of in new products Technology companies attributes of benchmarking new product opportunities in Technology cost driver model Technology product development overall product lifecycle model project management models for use of project management structures for Technology turnover Theory of concept design selection Time differences, advantageous use of Time to market (TTM) design products in half the time obsolescence and project management metrics reducing ECO iterations role of technology in new products Top-down management, role of liaison project manager in Top-down project planning process Total assembly time Total quality, new product development projects Total quality management (TQM) Total variance at completion (VAC) Toyota TQM See Total quality management Transferable skills TTM See Time to market U Uncertainty avoidance United States, product design lifecycle in United Technologies Aerospace Systems, ISR Systems See ISR Systems Unspoken quality V Value chain, collaboration across Value-added manufacturing supplier Variability reduction, use of DoE for Variance extrapolation of Variant designs Voice of the customer (VoC) analyzing capture groupings analyzing customer data benefits from using capturing capturing customer intents competitive analysis and conducting the event data collection and analysis defining product technical requirements from document review process gathering customer data grouping the capture ISR Systems methods and techniques key steps lead product development and lessons learned from pre-work process preparing for process risks quality function deployment approach to results of analysis process structured methods in DTC projects supplies needed for Volume sensitivity W Waterfall design Weighted criteria decision making supplier selection Work breakdown schedule (WBS) Working update meetings Z Z distribution See Standard normal distribution Zero defects See also Six Sigma (6σ) ... concurrent engineering, Six Sigma, green design, and engineering project management, and more than 100 papers Engineering Project Management for the Global HighTechnology Industry Sammy G Shina, ... illustrated Engineering project management for the global high- technology industry began to be organized in the last 50 years with the advent of the 1970s, as the Japanese technology industry competition.. .Engineering Project Management for the Global HighTechnology Industry About the Author Sammy G Shina, Ph.D., P.E., is a professor of mechanical engineering at the University of