Understanding enough of the customer's requirements to start designing, building, and procuring items is very important in reconciling the conflicting objectives of having an absolutely accurate understanding of the customer's requirements and meeting delivery dates. The phase in which this occurs is often called the "front-end processes." For most companies operating on an ETO basis, this is the most demanding part of the project. The expression "front-end processes" is generally understood to include
• securing a workable requirements definition
• bidding and estimating
• preliminary design
• partial engineering release.
The engineer in an ETO environment is very involved throughout the life of the project. Also, engineering is more hands-on and involved with the customer, bidding and estimating, project management, contracts, manufacturing, and procurement.
An engineer working in an ETO environment generally has a good suite of technical tools and systems.
Engineering activities are a significant contributor to overall costs and consume a considerable percentage of the overall delivery lead time. In some situations, engineering generates the majority of costs and consumes much of the overall lead time. Since an ETO project is very engineering-centric, resource planning and scheduling of engineering is extremely critical. In certain segments of the ETO community, particularly complex mechanical machinery, there is a shortage of skilled engineers. This situation amplifies the need for constraint management, resource planning, scheduling, and accurate status visibility across the engineering organization.
Since meeting the delivery date is absolutely critical, engineering will often release component and subassembly data to manufacturing and purchasing before the final assembly unit is fully engineered. This
means that engineering, manufacturing, and procurement work in parallel. Because some of the design requirements can and do change, there is typically a steady stream of rework. This situation makes the planning and control of the project more difficult. Most of this is the result of balancing an incomplete requirements definition with the need to meet delivery due dates. But, some of this is the result of "islands of automation and information." This can be corrected and will be discussed later in this paper.
Manufacturing and Procurement
The manufacturing and procurement phase is an execution phase. Often the engineering data that is received and the lead time to deliver are less then adequate, particularly near the end of a project. Most suppliers and the manufacturing staff are flexible and skilled. Often the manufacturing staff is in short supply and better described as craftsmen, not factory workers. The systems used for detailed planning and scheduling are separate from the project planning system.
Installation is a demanding and often complex phase. The work takes place in front of the customer, and there is no place to hide! After the initial installation, there may be acceptance testing and changes in the installation. Customer training frequently follows and possibly more changes. The design engineer may, depending on the complexity of the equipment, be onsite and involved. Configuration management is critical during this phase and impacts the ability to supply spare parts and maintenance services in the future. Inaccurate configuration records translate into poor customer service and high costs in servicing the equipment in the future. The equipment being delivered is very expensive and important to the customer's ability to build and ship
Spares Management and Onsite Support
Although this is not strictly speaking part of the project, it does impact the ability to support current projects. The life span for specialized equipment may be 10 to 40 years or more. This is an incredibly long time to maintain spares and configuration records. If a customer's machine goes down and the required part is not in stock, manufacturing or purchasing must be extremely responsive in delivering the part. This places another demand on limited resources. Feel the tension?
Figure 1 graphically depicts the project lifecycle.
In summary, the combination of uncertainty and the intensified need to deliver on time mandate that a rational, cohesive, and integrated requirement definition, engineering design, planning, control, and cost management framework is in place. We will discuss one later in this paper.
THE ORGANIZATIONS OR DEPARTMENTS THAT PARTICIPATE IN THE PROJECT LIFECYCLE
The ETO environment has four roles or disciplines not normally associated with traditional discrete manufacturing:
• bidding and estimating
• project management (except for capital projects and new product
• installation management.
In addition, there are two roles that have a superficial similarity but are different in either level of authority or technique:
• engineering—very active throughout the project lifecycle. The de
sign engineer is king!
• project accounting—it's a costing function, but the technique is radi
cally different from standard costing.
To Be Continued
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