Manufacturing Concepts To Pm

Applying Manufacturing Concepts to Project Management Introduction

– Look at the operation time - as a part

Successful Enterprise Resource Planning [ERP] implementers have used best practices from Manufacturing in their ERP Projects often as a part of preparatory work In this document, we take a closer look at two concepts from the world of manufacturing and their applicability to Project Management Two Concepts:

– Manufacturing Cycle Effectiveness – Bill of Manufacturing and Optimization Concepts

–

of the throughput time. It can be a small or major part of the throughput time - depending upon how you manage your manufacturing cycle

– Apply these simple concepts to every –

activity of a Project Ensure that you don’t contribute to delays, which do not add value to the end objective / your deliverable

– Also apply these to your day-to-day activities in personal life, and see the impact!

Manufacturing Cycle Effectiveness [MCE] Bill Of Manufacturing [BOM] MCE

Processing Time /

Throughput Time

Throughput Time

Many of us are familiar with Bill Of Materials [BOM]

Processing Time +

– Bill Of Materials, is a parent-child

Inspection Time + Movement Time + Waiting / Storage Time Processing Time

Set-up Time + Operation Time

– None of these elements can be zero – Industrial Engineers with special skills, plan –

the plant layout, to optimize processing, movement and wait times They select suitable machine tools to optimize the set-up time, operation time and investments

relationship built as per technical sub systems – For example in a car, the Bill of Materials for the power train would consist of engine, transmission, propeller shaft, differentials, axles and their sub level components – Similarly there would be a different Bill Of Material structure for electrical system, hydraulic system etc... – All these are from the Designers’ point of view - as experts in the respective field design the power train, electrical systems, hydraulic systems etc... The Bill of Materials, if used as it is, is not suitable for optmization in manufacturing

© Ganesh Srinivasan, 2006. All international rights reserved. This information cannot be reproduced or distributed without legal permission from me [[email protected] ] or [[email protected] ]

Applying Manufacturing Concepts to Project Management We need to make / rebuild the parent-child relationships as per manufacturing process

Optimization Concepts

– The engine and transmission, along with

Before getting into optimization concepts, let us understand some definitions

some components from electrical system, hydraulic system etc... is normally made as a sub assembly – Many other sub assemblies are made and fed to the required stage in the assembly line. Examples of some sub assemblies are indicator lamps [both LH and RH], Wheel Assemblies etc... – All these sub assemblies and components are fed to the respective stage of the assembly line.

Manufacturing is generally classified as

– Continuous: like in petroleum refining, paint manufacturing etc.. or

– Discrete: like manufacturing of automobiles, computer hardware, telecom, equipment, consumer durables etc..

– In continuous manufacturing, there are

fewer inputs / raw materials added at respective stages and the process once – The parent-child relationships, built as per started, goes on, uninterrupted. You don’t manufacturing stages /processes are called start the line, until all materials are available as Bill Of Manufacturing – In discrete manufacturing, the number of components are large and material shortages are possible, as you start the – Visualize the assembly line as a project manufacture / assembly. Hence you need plan and the sub assemblies and different optimization concepts / components being fed to the respective methodologies stages as sub projects / activities

– A typical project can be compared to the – Leading manufacturers across the world have successfully optmized manufacturing resources and processes Similar Optimization concepts, can be applied to Project Management as well

– We often mix up and get confused between Bill of Materials and Bill of Manufacturing in Project Management – For example in the case of IT Projects, UNIX, Windows, Java, .net are technology based activities [Bill of Materials] – What we need often, is planning of activities based on billable stages / deliverables, which are irrespective of the technologies [similar to Bill of Manufacturing]

discrete manufacturing scenario - with all its positives and limitations Let us further define sub levels of discrete manufacturing:

– ETO:- Engineered To Order - examples are manufacturing of power plant equipment, nuclear reactor, boiler etc.., where in the product and its sub systems are designed and manufactured as per order

– MTO:- Made / Manufactured To Order typical examples would include custom configured desk top computers

– ATO:- Assembled To Order - very similar to MTO with subtle differences. The typical examples would include contract manufacturing of Washing Machines, iPods, Television sets etc.

© Ganesh Srinivasan, 2006. All international rights reserved. This information cannot be reproduced or distributed without legal permission from me [[email protected] ] or [[email protected] ]

Applying Manufacturing Concepts to Project Management – PTO:- Procured To Order - very similar to

Have a closer look at the chart below

ATO, except that the goods are procured rather than being assembled

Visualize the project, the sub projects, groups of tasks and simple tasks as equivalent of Finished Goods, Sub Assemblies, Components and Raw Materials

– MTS:- Manufactured To Stock - typical examples would include FMCG items like detergent cakes, coke / Pepsi, some consumer durables like washing machines, iPods etc. The time to market / time to deliver is lowest to highest in the following order

– – – –

Some thoughts:-

– What are raw materials and components? They are a set of standardized and reusable commodities [best practice: Japan has developed a nation-wide standard for commonly used bolts, nuts, washers etc. I did not notice similarstandardization, while working with few American Companies] – In IT projects, we build reusable routines as components – Can we look at a similar approach to any project in general?

MTS ATO / PTO MTO ETO

DE-COUPLING POINTS IN PLANNING

Raw Materials

Compo nents

Sub Assemblies

Finished Goods

ETO

Forecast Based

Order Based

Order Based

Order Based

MTO

Forecast Based

Forecast Based

Order Based

Order Based

ATO / PTO

Forecast Based

Forecast Based

Forecast Based

Order Based

MTS

Forecast Based

Forecast Based

Forecast Based

Forecast Based

© Ganesh Srinivasan, 2006. All international rights reserved. This information cannot be reproduced or distributed without legal permission from me [[email protected] ] or [[email protected] ]

Applying Manufacturing Concepts to Project Management – Can we standardize some processes, to

– HP, Dell, CISCO, IBM offer custom start with, if not physical components, of configured products many projects running in any company? – Similar is the story with some auto – Tools like Six Sigma come in handy here, to manufacturers. Many Japanese auto makers operate in MTS scenario as well standardize small little set of activities, processes etc., – Samsung, LG, Sony, P & G are typical examples of MTS scenario – Many more examples can be illustrated The ‘Order’ in the diagram below is like a typical Project while the ‘Forecast’ refers to reusable components - standardized When it comes to Project Management, processes, physical things [like we think that every project is like a power prefabricated construction materials] etc., plant [typical ETO]

Let us look at some examples of what manufacturing companies have done

Consciously or unconsciously are we making things complex? - I can quote many examples from failed SAP implementations

Many have moved closer to MTS / ATO / MTS scenario, even though they typically belong to ETO category

Can we reorient ourselves to move towards MTS / ATO / MTO scenario?

TO REDUCE CYCLE TIMES, TO OPTIMIZE RESOURCES, THE KEY IS TO MOVE CLOSER TO MTS / ATO FROM ETO / MTO SCENARIO

Raw Materials

Compo nents

Sub Assemblies

Finished Goods

ETO

Forecast Based

Forecast Based

Order Based

Order Based

MTO

Forecast Based

Forecast Based

Forecast Based

Order Based

ATO / PTO

Forecast Based

Forecast Based

Forecast Based

Order Based

MTS

Forecast Based

Forecast Based

Forecast Based

Forecast Based

© Ganesh Srinivasan, 2006. All international rights reserved. This information cannot be reproduced or distributed without legal permission from me [[email protected] ] or [[email protected] ]