Engineering Project Management for the Global High-Technology Industry

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

www.TechnicalBooksPdf.comDiscussion Topics

Problem

4 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

5 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

6 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

7 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 2

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

8 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

8.4.5 Risk Monitoring and Control

8.5 Managing Engineering Project Teams

8.5.1 Team Development Stages

8.5.2 Team Leadership and Interactions with Team Members

8.5.3 Engineering Career Stages

8.5.4 Team Motivation and Compensation Policies

8.5.5 Understanding and Nurturing Team Member Skills

8.6 Resolving Engineering Team Conflict and Managing a Successful

Engineering Team

8.6.1 Understanding the Sources of Conflict and How to

Mitigate Them

8.6.2 Conflict Resolution Strategies

8.6.3 Conflict Resolution Methodology and Settlement

8.6.4 Managing a Successful Team

8.7 Conclusions

References and Bibliography

Discussion Topics

Problems

9 Project Monitoring and Control Case Study

9.1 Key Project Monitoring and Control Processes

9.2 The Daily Stand-Up Board and Area

9.2.1 Area Design Essentials

9.2.2 Metrics and Status Elements

9.2.3 Setup and Operation

9.2.4 Lessons Learned

9.3 Other Uses for Stand-Up: Supply Chain, Operations, Red Flag, and

Risk Register Reviews

9.3.1 Red Flag Reviews

9.3.2 Basic Elements of the Red Flag Review

9.4 Lessons Learned and Chapter Conclusions

Stand-Up Board Exercise

10 Engineering Project Communications

10.1 The Role of the Project Manager

10.2 A Communication Model

10.2.1 Noise

10.2.2 Impedance

10.2.3 Choosing the Right Medium

10.2.4 Using the Communication Model in Planning and

Execution

10.3 Distance and Communication

10.4 Collaboration and Concurrent Engineering

10.4.1 Concurrent Engineering

10.4.2 Collaboration across the Value Chain

10.5 Collocated Teams

10.5.1 The Collocation Environment

10.5.2 Partial Collocation

10.6 Dispersed Teams

10.6.1 Dislocation

10.6.2 Time Differences

10.6.3 Language and Cultural Differences

10.6.4 Remote Meetings

10.6.5 Using Time Differences to Your Advantage

10.7 Technology and Communication

10.7.1 Project Websites

10.7.2 Security and Communication

10.7.3 Exchanging Engineering Product Data

10.8 Architecture as a Collaboration Tool

10.8.1 Developing the Architecture

10.8.2 Change Management and Architecture

10.8.3 Organizing around Architecture

10.8.4 Integration Risk

10.9 The Project Communication Plan

10.9.1 Stakeholder Registry and Team Directory

10.9.2 Communication Protocols

10.9.3 Activities and Resources

10.9.4 Stakeholders

References and Bibliography

Discussion Topics

11 Engineering Project and Product Costing

11.1 Project and Product Cost Relationship with Lifecycle Stages

11.1.1 The Start-Up Stage

11.1.2 The Growth Stage

11.1.3 The Maturity Stage

11.1.4 The Final Stage

11.2 New Product Cost Estimating Methodologies

11.2.1 Activity-Based Costing

11.2.2 ABC for Electronic Products

11.2.3 ABC Summary and Variance from Classical Cost

Accounting

11.3 New Product Cost Estimating Process

11.3.1 Determination of Costs and Tracking Tools for New

Product Development

11.4 Conclusions

References and Bibliography

Discussion Topics

Problem

12 Building and Managing Teams

12.1 Teams versus Groups: What’s the Difference?

12.1.1 When Are Teams Needed?

12.1.2 Differences: The Team Advantage

12.1.3 Selecting and Launching Teams: A Recipe for Success

12.1.4 Team Dynamics: The Four Phases

12.1.5 Roles and Responsibilities

12.2 Managing Events and Activities

12.2.1 Managing Meetings

12.3 Leading People and Managing Performance

12.3.1 Leadership Responsibilities

12.3.2 Motivating Team Members

12.3.3 Team Communications

12.3.4 Managing Conflict

12.4 Our Project Team Leadership Summary

References and Bibliography

Discussion Topics

A ROI Tables

Index

Preface

E

ngineering project management is becoming more important as

technology companies compete in a worldwide market for customers

desiring high-quality and low-cost products. The project manager (PM)

has to be a jack of all trades, a product champion, a great organizer, a leader,

mentor, and motivator of the team; the PM has to be an effective

communicator, a salesperson, a financial analyst, and much more. The PM

today must be an expert in technology, quality, cost, teamwork, supply

chains, and market dynamics. The PM must always balance priorities and

make good decisions regarding resource allocation, schedule variability, cost,

technology adoption, and risk management.

This book attempts to augment the basic project-management principles

of scheduling, tracking, and control of projects with answering many of the

questions posed by the role of technology in new product creation. Why do

some companies thrive in the technology arena, while others start well but

cannot maintain the momentum? Why is it so difficult for companies to enter

some markets? What are the options available to companies for setting new

product price and performance? What types of organizational structures and

methods are needed to successfully manage technical projects? How can

company resources and the supply chain be leveraged?

This book attempts to answer these questions by examining product

lifecycles, project management types, and where they should be used as well

as tools and techniques of quality cost and marketplace. Economic analysis of

the project potential and how to best leverage internal resources versus

supply chains, as well as risk and rewards of project decisions, are also

examined. The book illustrates these principles with examples of current

technology-company policies, some drawn from the headlines and some from

my own experience. I have an extensive history of managing many

development projects, consulting to technology companies, and researching

the tools and techniques of new product creation. In addition, long

conversations and meetings with many of the creators of project management

tools, CEOs, and members of the boards of directors of companies, and

several expert-witness litigation cases, have given me a unique perspective of

the challenges and concerns of global technology companies.

The book also aims to help the PM to become more successful, using the

technical, organizational, financial, leadership, and communications skills

covered in this book. Topics presented deal with the historical development

of the tools and techniques of project management through the last 40 years

and how to successfully use these tools for effectively managing technical

projects. The PM can understand the best use of the management structures

explained in this book, depending on the lifecycle of the product. The use of

financial analysis and tools can effectively augment the PM’s plans and

decisions. Understanding the use of the global supply chain, its opportunities

and risks, can also help the PM in project and product cost formulation and

schedule realization as well as advocating decisions to management. The

effective use of scheduling tools to plan, track, and control projects is

important for the PM in maintaining the product creation schedule and

evaluating and managing its risks. The effective communications skills,

teamwork, and leadership covered in this book will help the PM navigate

successfully through these important but nontechnical issues.

About the Book Organization

This book is intended to introduce newly minted as well as experienced

project managers in technology companies to many of the issues regarding

the use of project-management tools and techniques and how to effectively

apply them for new product creation. It is based on my experience in

researching, practicing, consulting on, and teaching project management for

the last 40 years.

The approach I use in this book is to start with the historical development

of project management tools and then go on to what are the proper conditions

for using these tools, why they were created, and how they became widely

adopted. The following chapters deal with the step-by-step elements of

technology product realization, starting with the technology product lifecycle

and the management organization best suited for each phase of the cycle.

Technology management from research to advanced development to adoption

in new products is explained with examples of organizational structure and

timelines needed. Other chapters discuss the marketing aspects of customer

expectations and finding the best opportunity for new product success, with

tools and examples of using them effectively.

Once the market opportunity for the new product is realized, the hard

work of the PM begins with the business plan and economic analysis for the

project. Issues of how to leverage internal resources and the supply chain and

how to select suppliers are presented. This is followed by the methodology to

organize and plan the development project, how to control projects using

phases and milestones, tracking a project’s progress, and reporting to

management. In addition, the value and use of risk management to estimate

and mitigate risk are illustrated with the definitions of methods used and case

studies from industry.

The final chapters of the book deal with important skill development for

the PM, including communications, leadership, and teamwork. I asked

experienced professionals who deal with these issues to help me by co-

authoring these chapters in order to share their own experiences and insight.

I hope this book will be of value to the neophyte as well as the

experienced project managers in technology companies, in particular, in the

small- to medium-sized companies that do not have the support staff and the

resources necessary to have a well-organized project-management process. It

is beneficial to try out some of the principles and tools of project

management outlined in this book and meld them into the company culture.

The experiences documented here should be helpful to encourage many

companies to venture out and develop new world-class products that can

make them grow and prosper for the future.

Sammy G. Shina, Ph.D., P.E.

T

Acknowledgments

he principles of engineering project management discussed in this

book have been learned, collected, and practiced through my almost 50

years in industry and academia. After graduation from MIT, I worked

in the high-technology industry for 22 years, followed by now 26 years on

the faculty of the University of Massachusetts Lowell. At the university, I

have worked as a teacher, then as a researcher and a consultant to different

companies, increasing my personal knowledge and experience in the fields of

engineering project management, design, manufacturing, and quality.

I am indebted to several organizations for supporting and encouraging me

during the lengthy time it took to collect my materials, write the chapters, and

edit the book—notably the University of Massachusetts Lowell, for its

continuing support for my courses, programs, and certificates, especially the

chairman of the Department of Mechanical Engineering, John McKelliget,

and the ME faculty. They supported me in my research and work on

developing the book materials and approved my plans for academic programs

and certificates and encouraged me to organize, write, and edit this book.

In addition, I want to give my thanks to Steve Chapman, publisher, and

Michael McCabe, senior editor, at McGraw-Hill. Steve was my editor for my

previous four books on green design, Six Sigma, and concurrent engineering.

Michael was my editor for this book. Mike’s humor, encouragement, and

good spirit guided me through this book, and for that I am very grateful. I

also wish to extend my gratitude to Sheena Uprety of Cenveo Publisher

Services for her prompt and efficient editing and production of this book. In

addition, I want to thank Marc Wakim of UML for proofing and editing of

the book; and Sharon Sambursky of SpectraLink Corporation, who lectured

to my classes on the topics of leadership and teamwork; and Srini Swaroop of

Raytheon Corporation for his lectures to my classes on risk management. I

also want to thank the men who contributed chapters to this book—Robert

Campbell, Ralph Jordan, and David Nolte—and who worked together with

me on planning and organizing the topics. Each contributor brought with him

his own deep experience and skill in his specialty. I also want to thank the

many family members who hosted me through the long period of writing the

book, including Brenda Shina of St. John’s Wood, London, and Nancy Shina

Aguirre of Ogden, Utah.

Many colleagues provided review and thoughtful criticism. In particular, I

wish to thank Travis Done, Jack Burnham, and Dick Ugolini of United

Technologies Aerospace Systems. I also thank Tom Bergeron, president of

ISR Systems, United Technologies Aerospace Systems, for his support and

encouragement and for sharing legacy Goodrich/United Technologies

approaches to program management.

Finally, many thanks to my family for emotional support during the

writing, editing, and production of the book, including my wife Jackie, who

edited the book with her superb English, our children—Mike, Gail, Nancy,

and Jon—and our grandchildren, who brought me great joy between the

many days of writing and editing. I also wish to thank the many students who

have attended my classes in engineering project management over many

years and peppered me with questions and challenges to explain the many

topics, which cleared and refocused my mind. I wish them best success in

implementing engineering project management principles and methods in

their companies.

Contributor Biographies

David A. Nolte (Chaps. 4 and 9) is a manager with ISR Systems, United

Technologies Aerospace Systems, Westford, Massachusetts, where he

supports the development and evolution of program management, ACE, and

continuous improvement and lean product development culture. Mr. Nolte

has over 25 years of progressive management and engineering experience in

defense industries, government agencies, and nonprofit organizations. His

experience ranges from field and test engineering to program management.

Robert J. Campbell, Jr. (Chap. 10), is a mechanical engineer with a love for

the technical discipline of precision machine design and the interpersonal

discipline of collaborative development. His father, Robert Sr., taught him

that a good engineer does not get lost in his circuit or mechanism, but instead

maintains sight of the whole. In the years since, Mr. Campbell has been

fortunate to work with and learn from other wise engineers and agile

organizations that put this belief into daily practice. As a consulting engineer,

he had to adapt those practices to development teams that spanned

organizations and continents. Now, through his website

engineerunbound.com, he helps engineers and organizations to not only

overcome the challenges posed by distributed development and remote

collaboration, but to achieve competitive advantage. Mr. Campbell is a

licensed professional engineer, with a masters of management science from

the University of Massachusetts Lowell and a BS in mechanical engineering

from Virginia Tech. With several peers, he holds patents for precision optical

and mechanical systems and devices.

Ralph E. Jordan (Chap. 12) is the former director of Massachusetts’

Executive Office of Labor and Workforce Development’s Office of

Professional Development. Presently, he is a visiting lecturer within the

University of Massachusetts Lowell’s Manning School of Business, where he

lectures on professional communications, managing teams and projects, and

leadership processes. While relatively new to teaching at the undergraduate

level, Mr. Jordan has a long history in training and leading teams in total

quality management, business process reengineering, and lean Six Sigma–

type initiatives within the high-tech and communications industries. He has

held high-level management positions in several high-tech companies. Mr.

Jordan spent several years serving Massachusetts as the undersecretary of

economic affairs. He has led high-tech business initiatives in the Republic of

Korea, Kuwait, and the Republic of Slovenia.

CHAPTER 1

The Engineering Project Lifecycle and

Historical Development of Engineering Project

Management Tools and Techniques

I

n this chapter, the historical perspective for the genesis of modern

engineering project management for high-technology companies will be

reviewed. Emphasis will be placed on the trends of each successive

generation, starting with the 1980s and on to the new century. The trends and

tools of each decade will be outlined as well as the resulting shifts in total

engineering project management experiences. The resulting impact on the

organizational structure of modern high-technology companies, on managers,

engineers, research and development, and the introduction of highly

specialized tools, will be examined. The challenges to the project manager in

terms of completing the project on time and within budget, while having the

new product meet all design specifications with the lowest manufacturing

cost and quality, will be 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 began to make a major impact on

global U.S. companies’ competitive position. Due in part to the oil crisis of

the 1970s, U.S. consumers were looking for more energy-efficient smaller

cars, and in the process, were pleased to discover the higher-quality and

customer-friendly Japanese cars, as compared with their American

counterparts. This created a thirst in American companies for all things

Japanese and began the focus on improving the new product development

cycle and engineering project management. New concepts were adopted

widely and began to take effect, including the following:

• Just-in-time (JIT) to reduce inventories and shorten manufacturing

cycle time

• Total quality management (TQM) to bring together a set of tools

focused on process improvements for the total enterprise

• Quality circles to involve production associates in improving the

manufacturing process and their duties and responsibilities

• Partnering with Japanese companies, such as the GM/Toyota

partnership, to better understand their manufacturing techniques for

auto manufacturing plants in California

• The Taguchi method, which streamlined the difficult topic of design

of experiments (DoE) and took it from the preview of advanced-

degreed statisticians into the hands of project and design engineers

• Quality function deployment (QFD), which focused on better defining

new product specifications using customers’ input and competitive

analysis (QFD will be further discussed in Chap. 3 in this book)

Several American homegrown design, quality, and cost improvement

tools also emerged to meet the Japanese industry challenge. They include the

following tools that were especially aimed at the project development cycle:

• Design for manufacturing/assembly (DFM/DFA) to reduce product

manufacturing cost

• Concurrent/collaborative engineering (CE) to focus on design project

collaboration among the different parts of the organization and

shortening the new product development cycle

• Six Sigma (6σ) to merge the quality issues of design and

manufacturing

These tools and techniques were developed to augment the Japanese-

developed tools for improving new product development quality and

reducing cost. They focused on distinctly American cultural and managerial

nuances, being quite different from their Japanese counterparts.

A historical listing of these changing trends is summarized in Table 1.1.

The chronology of the effect of these trends will be examined for each decade

as follows.

TABLE 1.1 Changing Historical Trends for Engineering Project Management

1.1 The 1980s

During this decade, companies were focused on increasing profits by

matching their global competitors in reducing the cost of new products while

at the same time speeding up their development. In addition, companies were

intent on incorporating new technology into their products as fast as possible

and winning the race for their customers’ thirst for state-of-the-art product

performance. This resulted in the need for quickly introducing successive

new products, with increased technology adoption.

Innovative engineering project management was needed to adopt these

new tools for reducing cost, increasing quality, and shortening development

time. The specific tools and techniques of choice were as follows (to be

explained later):

• DFM tools: Boothroyd-Dewhurst Incorporated (BDI) and GE/Hitachi

(GE/Hit) methodologies

• Variability reduction and design optimizing tools: classical DoE and

the Taguchi method

• Design for quality tools: 6σ and process capability based on Cp and

Cpk methodologies

1.1.1 Design for Manufacturing

DFM concepts were used for inputting feedback from the manufacturing part

of the organization into the design cycle. This would lead to reducing the

number of parts in new products, encouraging the reuse of older parts and

reducing manufacturing cost. The DFM analysis should be performed early in

the design cycle so that recommendations could be fully implemented in new

products. Two techniques predominated:

1. The Boothroyd-Dewhurst Incorporated (BDI) is a system for rating

parts in an assembly by assigning a number to each part on the basis

of part geometry. The numbers resulted in assembly-time estimates

and were then added up to determine total assembly time. There are

two numbering systems, one for the handling and another for insertion

of parts. The resultant estimated assembly time is compared with an

ideal design time and a figure of merit (design efficiency) is

determined. The ideal design time is based on parts geometries that

are symmetrical and easy to insert. The assembly can then be

redesigned, using three simple guidelines to help reduce the number

of parts and assembly time. The process is continued until the

maximum design efficiency is achieved.

The BDI methodology encourages the ease of assembly by

focusing on parts’ geometry to make the parts more symmetrical (or

alternatively exaggerating asymmetry) and for easier part orientation

for subsequent handling by manual or automatic means. In addition, it

encourages the proper aligning of parts for ease of insertion into...