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Lean Manufacturing, Basics, Principles, Techniques

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Front-End Processes

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 product.

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 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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