MSTM- 6034

Project Management in the Offshore,

Health, Fisheries and Engineering
Technolog En!ironments
Mod"le #$ Project Management F"ndamentals
Gino, F. & Pisano, G., 2006: Teradyne Corporation: The Jaguar
Project.
S"%mitted % Tona Somerton
Tuesday, October 15, 2013
0
Ta%le of &ontents
Overview ....... 2
Problem Statement .... 4
lternatives ....... 4
lternative nalysis .. 5
!ourse o" ction .... #
$e"erences ..... 10
1
O!er!ie'
&om(an$ Teradyne !or%oration
Em(loees$ Over &000
Fo"nded$ 1#&0 by le' ()rbelo"" and
*ic+ (e,ol". !lassmates "rom -.T
)"siness$ Production o" e/ui%ment "or
testin0 semiconductors
Sales$ 11.2 billion in 2004.
Mar*et$ ,orld)s lar0est su%%lier,
,orldwide+
,e("tation$ 3nown "or reliability, test
s%eed and tec4nical %er"ormance
)"siness -nits$
15 Semiconductor test,
25 ssembly Test, 35 6roadband Test,
45 !onnection Systems, 55 (ia0nostic
Solutions.
&"lt"re$ 7n0ineerin0, driven by
%er"ormance. !asual dress, cubicle o""ice
s%aces, encoura0ed individual initiative.
8on0 4ours is t4e norm, recruitment 9
retention were no issue.
O(erating. (roject (rocesses in (lace (rior to the /ag"ar Project$
.ntroduced in t4e 1##0)s: Total ;uality -ana0ement <T;-5, $evolutioni=in0 %roduct
develo%ment <$P(5, 7n0ineerin0 Process .m%rovement Team <7P.T5, 00re0ate Process
%lannin0 <PP5, P4ase:0ate model, and >a"ter:action? review.
Sit"ation$
6y 1##& it is clear t4at T;- is not ta+in0 4old in en0ineerin0. Pro@ects continued
to be late and over bud0et. $P( was introduced alon0 wit4 7P.T, PP, P4ase:0ate
9 >"ter:action? review. *one were used consistently.
Pro0ress remained 4i04ly variable. Some divisions were still over committin0 and
t4ey continued to come u% wit4 unrealistic sc4edules.
.n 2001, to res%ond to a c4an0in0 mar+et, Teradyne senior mana0ement made a
%ivotal strate0ic decision. T4e com%any decided to embrace t4e "le'ible %lat"orm
strate0y, abolis4in0 t4e mar+et:se0ment "ocused %lat"orm, "oldin0 it into a sin0le
%lat"orm en0ineerin0 0rou%, %roducin0 a test system t4at could test multi%le ty%es
o" devices. T4is %ro@ect 0rou% was code:named >Aa0uar?.
T4e %ro@ect was lead by a 25 year veteran o" Teradyne)s en0ineerin0 or0ani=ation,
Aac+ O) 6rien.
critical tar0et date o" Aune 30
t4
, 2004 was decided "or be0innin0 t4e s4i%ment o"
t4e new tester.
2
O)6rien %resented a B5 %a0e %resentation to Senior -ana0ement in -ay o" 2002
detailin0 t4e system arc4itecture, desi0n, and "unction s%eci"ications, tar0et
%er"ormance s%eci"ications and t4e %ro@ect e'ecution %lan.
T4e %ro@ect was or0ani=ed into a set o" %ro@ect teams, eac4 "ocused on a %articular
subsystem tas+. >core team? o" leaders "rom eac4 subsystem team as well as t4e
%ro0ram mana0er 3evin Ciebel and t4e %ro@ect lead O)6rien was "ormed. T4is
team met mont4ly in %erson 9 wee+ly via telecon"erence to ensure a%%ro%riate
levels o" inte0ration across all sites.
Dormali=ed %ro@ect mana0ement tools were used durin0 t4e Aa0uar %ro@ect. T4ese
tools includedE ,or+ brea+down structure, 3:%oint estimation, critical %at4
analysis 9 earned value analysis.
T4e team was "le'ible and res%onded to delays by reallocatin0 resources, never
c4an0in0 t4e "i'ed customer:s4i% date. Fardware remained a4ead o" sc4edule
usin0 t4ese metrics.
Some teams did not rely on t4e %ro@ect mana0ement tools metrics, so"tware)s
metrics indicated issues wit4 com%letin0 %lanned tas+s but, t4ey were >in denial?
and constantly communicated t4at t4ey could catc4 u%.
.n Se%tember o" 2003 Teradyne received word t4at one o" t4e lar0est
semiconductor com%anies in t4e world, l%4aTec4 was about to commit to a
com%etitors system.
Teradyne)s system was not sc4eduled to be ready "or evaluation until Aune, ten
mont4s later. Teradyne convinced l%4aTec4 to wait "or t4em to "inis4 t4eir
%roduct, to 0ive t4em a c4ance to bid on t4e business. l%4aTec4 4ad one
conditionE t4ey wanted t4e system "or evaluation by -arc4 30, 2004.
dditional resources were committed to t4e So"tware team. s t4e deadline
closed in t4e so"tware team s4i"ted its e""ort to "i'in0 bu0s, 4avin0 to ma+e
concessions on ori0inally %lanned "eatures.
On -arc4 30
t4
, 2004, as %romised t4e "irst com%lete system was s4i%%ed "or
evaluation. ll o" t4e 4ardware met s%eci"ications but, so"tware did not
incor%orate all "eatures initially re/uested by t4e customer. T4e so"tware was
"unctional but, was also laden wit4 bu0s. Teardyne s%ent t4e ne't si' mont4s
3
u%0radin0 t4e system "or l%4aTec4. T4eir wor+ %aid o"", in Se%tember 2004
l%4aTec4 selected t4e Teradyne system.
T4ere was a cost to t4is victory, t4e remainder o" t4e %ro@ect: includin0
develo%ment o" "eatures "or ot4er customers: was delayed. So"tware teams were
consumed wit4 "i'in0 bu0s and "ell "urt4er be4ind sc4edule by si' mont4s.
.n t4e >a"ter:action? review. .ssues wit4 t4e a%%lication o" Pro@ect mana0ement
tools are identi"ied and t4ere are lessons to be learned "or "uture %ro@ect
mana0ement at Teradyne. <Cino, D. 9 Pisano, C., 200&5
Pro%lem Statement
.n +ee%in0 wit4 Teradyne)s %rocess o" continuous im%rovement, O)6rien and t4e
senior mana0ement are now be0innin0 t4e %rocess o" dissectin0 t4e %ro@ect to identi"y
lessons learned. .t was evident t4at t4e %ro@ect did not meet customer s%eci"icationsE it
was over bud0et and was beyond deadlines. T4e team 4ad stru00led wit4 t4e use o"
Pro@ect -ana0ement tools. ccordin0 to Pinto 2013, >t4e /uadru%le constraint is t4e
standard o" %ro@ect success.? %ro@ect is seen as success"ul i", t4e %ro@ect is on time,
wit4in bud0et, meets t4e %ro@ects 0oal s%eci"ications, and is acce%table to t4e intended
client. Gsin0 t4is de"inition, t4e Aa0uar %ro@ect was not success"ul.
,4at went wron0 wit4 P- tool a%%lication in t4is %ro@ect "or t4e outcome to be a
%ro@ect t4at wasE over bud0et, o"" sco%e and beyond t4e e'%ected timelines and, w4at can
be im%roved u%on to %revent similar occurrences in "uture %ro@ects at TeradyneH
0lternati!es
%ro@ect mana0er is "aced wit4 a number o" res%onsibilities. mon0 t4ese
res%onsibilities areE selectin0 a team, develo%in0 %ro@ect ob@ectives and a %lan "or
e'ecution, %er"ormin0 ris+ mana0ement activities, cost estimatin0 and bud0etin0,
sc4edulin0 and mana0in0 resources.
." we ta+e t4ese res%onsibilities into consideration and analy=e 4ow O)6rien
a%%roac4ed mana0in0 t4em durin0 t4e Aa0uar Pro@ect, we are able to identi"y t4e %ro@ects
stren0t4s, and evaluate wea+nesses to en4ance "uture %ro@ects.
4
lternatives to success"ully mana0e Teradyne %ro@ects revolve around t4e a%%lication
o" "ormali=ed Pro@ect mana0ement tools. T4ese tools include %rocesses traditionally used
at Teradyne, as well as t4ose introduced "or s%eci"ically "or t4e Aa0uar %ro@ectI
15 Total ;uality -ana0ement 25 P4ase:0ated -odel
35 ,or+ brea+down structure, <,6S5 45 3:%oint estimation <P7$T5
55 !ritical %at4 analysis, <!P5 &5 7arned value analysis, <7J5
naly=in0 eac4 tool a%%lied at Teradyne may reveal w4at 4a%%ened durin0 t4e Aa0uar
%ro@ect and, o""er o%%ortunities to more e""ectively mana0e "uture %ro@ects at Teradyne.
0lternati!e 0nalsis
0lternati!e #$
Total ;uality -ana0ement
Pros &ons
Provides em%loyee %roblem
solvin0 tec4ni/ues 9 tools.
$educes lead time
(ecreases %roduction de"ects
7liminates waste, reduces
%roduction costs.
.denti"ies redundancies, addin0
%ro"it.
.m%roves %roductivity
.m%roves morale
$e/uires e'tensive em%loyee trainin0
Productivity may be reduced durin0
trainin0.
.m%lementation ta+es em%loyees
away "rom duties.
$e/uires c4an0e in mindset, attitude
9 met4ods.
$e/uires clear e""ective
communication ot4erwise "ear o"
c4an0e leads to resistance.
Ta+es time, small incremental
im%rovements.
<3elc4ner, 20135
t Teradyne t4e en0ineers resisted T;- and "elt it was, >an encroac4ment on
t4eir "reedom?. .ne""ective communication and lac+ o" em%loyee education may 4ave
been a "actor leadin0 to t4e resistance and "ailure o" t4is a%%roac4.
-ana0ement t4en "ocused on a %roduct develo%ment initiative, >revolutioni=in0
%roduct develo%ment?. T4e com%any)s %roblems were seen as "allin0 into two cate0ories.
T4e "irst, was over commitment. T4is was addressed by t4e a%%lication o" 00re0ate
Pro@ect Plannin0 <PP5 w4ic4 would see t4e com%anyE only ta+in0 on %ro@ects t4at were
5
ali0ned wit4 t4eir strate0ic %lan andE only committin0 to %ro@ects w4en ade/uate and
a%%ro%riate resources were available. T4e second cate0ory was %oor %ro@ect %lannin0.
Coals and sco%e were not clearly de"ined, %ro@ects tended to e'%and, and became
delayed. -ilestones were not well de"ined and were o"ten missed. Sc4edules 4ad little
ri0or as t4ey were not trac+ed and mana0ement could not tell w4en t4ey needed to
intervene. T4ere was no one individual res%onsible "or a 0iven %ro@ect. T4ese concerns
were addressed by im%lementin0 a %4ase:0ate model.
0lternati!e 1$
P4ase:0ated -odel
Pros &ons
ccelerated %roduct develo%ment
6rea+s down com%le' %rocesses
Provides overview enablin0
%rioriti=ation and "ocus
!ross "unctional, involves
em%loyees
!an be combined wit4 %er"ormance
metrics.
T4e a%%roac4 is se/uential. 7'%erts
believe %roduct develo%ment
s4ould be %arallel.
(oes not su%%ort creation o" new
ideas.
Tension e'ists between or0ani=in0
and creativity.
<!oo%er, 20135
T4e intent o" t4e %4ase:0ate model at Terdyne was to %rovide well de"ined
milestones and review %oints "or %ro@ects. Fowever, Teradyne >did not mandate t4e use
o" any s%eci"ic tools and le"t it u% to individual divisions and mana0ers to decide w4ic4
recommendations to "ollow? <Cino 9 Pisano, 200&5. ,4ile some divisions embraced t4e
a%%roac4 ot4ers i0nored it. Pro0ress varied, and "rustration 0rew. T4ere was very little
be4avioral c4an0e, %ro@ects were still overcommitted and unrealistically sc4eduled.
strict ad4erence to t4e use o" t4ese toolsK models would 4ave decreased t4e sc4edulin0 9
resource issues wit4in t4e com%any. O)6rien attem%ted to address sc4edulin0, bud0etin0
and de"inition o" res%onsibilities wit4 t4e additional tools "or t4e Aa0uar %ro@ectI ,6S,
3:%oint estimation, !P 9 7J.
0lternati!e 3$
,or+ brea+down structure
0d!antages of a good 2)S 3angers of a (oor 2)S
Dorces t4e team to create detailed
ste%s
T4e timeline may be lon0er
6ud0et may be mismana0ed
&
lays t4e 0roundwor+ "or sc4edule
and bud0et
!reates em%loyee accountability.
!reation breeds em%loyee
en0a0ement.
ssi0nments o" team members may
not be clear
7m%loyees are not as li+ely to be
en0a0ed in t4e wor+ because t4ey
are not accountable "or outcomes.
<70eland, 20115
0lternati!e 4$
3:%oint estimation
Pros &ons
Provides boundaries on
e'%ectations around time and costs
6est used in uni/ue %ro@ects w4ere
t4ere are many un+nowns.
Ta+es a lot o" wor+, re/uires 3
estimates.
Still utili=es estimations, actual may
be muc4 better or worse.
<Product 9 %rocess innovation, 20125
0lternati!e 4$
!ritical %at4 analysis
Pros &ons
!an calculate e'actly 4ow lon0 a
%ro@ect will ta+e.
Provides ability to tell customers
com%letion timelines.
.denti"ies w4ic4 activities are time
critical.
Provides o%%ortunity to create slac+
time reducin0 %rocessin0 at critical
%oints to ti04ten u% turn around.
6ased u%on ideal situations, does
not ta+e into account un"oreseen
events.
Timelines may be s+ewed i" t4in0s
0o wron0.
$elies on %ast data to "ormulate
com%letion time %redictions:
di""icult "or new com%anies.
Docuses %rimarily on time, ne0lects
/uality and cost control.
<.n0ram, 20135
0lternati!e 6$
7arned value analysis
Pros &ons
Gses /uantitative metrics to
evaluate %ast %ro@ect %er"ormance.
Predicts "uture %er"ormance
e'tra%olatin0 "rom t4e %ast.
7ncoura0es ta+in0 corrective action
in res%onse to analysis results.
$elies on assum%tion t4at "uture can
be %redicted "rom %ast %er"ormance.
T4ere is no 0uarantee t4at t4e 7J
will be true.
<Fillson, 20045
O)6rien)s "ormation o" a sin0le team was a si0ni"icant c4an0e. T4ese c4an0es
were more t4an %rocess c4an0es t4ey re/uired c4an0es to core cultural values. T4e
B
c4an0e "rom wor+in0 inde%endently to becomin0 a %art o" a lar0er re%ortin0 structure t4at
ma+es cross "unctional decisions was "orei0n and removed %revious autonomy.
Teradyne did use a ,6S durin0 t4e @a0uar %ro@ect. O)6rien)s B5 %a0e %resentation
laid t4e 0roundwor+ "or sc4edule, bud0et, and em%loyee accountability. T4is was an
element t4at 4ad not been underta+en at Teradyne. Coals, sco%e, and milestones 4ad
never been clearly de"ined be"ore. Peo%le resisted t4e tools because t4ey "orced t4em to
commit. $e"usin0 to commit was a %art o" t4e reason w4y t4e so"tware team 0ot critically
be4ind sc4edule.
T4e tools %roduced metrics, advisin0 teams o" w4ere t4ey were in t4e %ro@ect
timeline 4oweverE t4e >red "la0s? were essentially i0nored by some teams, t4e so"tware
team es%ecially. T4is sc4edulin0 issue meant t4e team 4ad to ma+e concessions to meet
deadlines. Ori0inal customer re/uested "eatures were cut to save time c4an0in0 t4e sco%e
o" t4e %ro@ect.
7m%loyee en0a0ement and buy:in was low. T4e tools were new and some
em%loyees "elt t4ey were more cumbersome t4an use"ul. T4e "eelin0 at Teradyne was
t4at, sometimes t4e tools 0ot in t4e way. Jaluable time was s%ent deci%4erin0 tool metrics
and w4et4er t4ey were reliable rat4er t4an res%ondin0 to t4em. ri0id %redetermined
sc4edule became less meanin0"ul over time. T4ey wor+ed to stay on sc4edule but, missed
t4at t4ey were ma+in0 concessions and c4an0in0 t4e %ro@ect deliverables.
T4e metrics t4at were i0nored by mana0ement re0ardin0 t4e so"tware delays may
4ave been avoided i" additional resources were added as soon as t4ey noticed t4e timeline
sli%%in0. ,4en t4e sc4edule was even "urt4er s4ortened t4is %ut enormous %ressure on
so"tware team and t4e end result was a %roduct t4at was not as s%eci"ied initially.
.t was t4e tools t4at allowed t4e com%any to res%ond to l%4aTec4 and t4eir use
made t4em con"ident t4ey could meet t4e milestones. Fowever, t4e @a0uar %ro@ect
i0nored /uality, and cost control w4en %laced under %ressure to meet t4e deadlines, one
o" t4e identi"ied disadvanta0es o" t4e !P.
&o"rse of 0ction
lot o" lessons were learned "rom t4e Aa0uar %ro@ect. Dirst, %ro@ect mana0ement
2
tools are valuable to success"ul %ro@ects 4oweverE t4e %eo%le usin0 t4ese tools must
understand t4e si0ni"icance o" t4e tools and 4ow to utili=e t4em to t4eir advanta0e.
Trainin0 sta"" to understand and e""ectively use t4e %ro@ect mana0ement tools would 4ave
seen a res%onse to metrics, and may 4ave %ossibly avoided t4e so"tware catastro%4e.
Second, tools t4at are bein0 used must be su%%orted and encoura0ed by mana0ement.
Favin0 some teams use t4e tools, and ot4ers not, breeds con"usion and inability to s%ea+
t4e same lan0ua0e w4en re%ortin0 0oals and %ro0ress.
T4e ability to be "le'ible and to miti0ate ris+ is essential to %ro@ect mana0ement.
ll o" t4e tools used in t4e @a0uar %ro@ect were 0ood, valuable tools but t4eir e""ective
a%%lication was lac+in0 due to ine""ective communication t4rou04out t4e %ro@ect. >Tools
ma+e t4in0s better i" %eo%le usin0 t4em acce%t and understand w4at t4ey are "or and 4ow
t4ey wor+? <6rown, 20045. T4is was not t4e case "or t4ose im%lemented at Teradyne
T4ere was very little discussion o" ris+ mana0ement %lannin0. Gtili=in0 ris+
scorin0 analysis and ris+ miti0ation strate0ies can assist teams to deal wit4 un+nowns.
$is+ mana0ement %re%ares teams to identi"y, analy=e, miti0ate and control ris+.
T4e T;- conce%t too+ t4e better %art o" "ive years to be incor%orated in most
as%ects o" wor+ at Teradyne. T4e Aa0uar introduced c4an0es in %ro@ect mana0ement
met4odolo0y t4at would 4ave been better im%lemented, 4ad Teradyne s%ent time u%"ront
to c4an0e t4e or0ani=ational culture. T4ese were si0ni"icant %ro@ect mana0ement c4an0es.
Time to understand, embrace and embed t4em into daily o%erations was re/uired.
." . were O)6rien, . would continue to use all o" t4e identi"ied tools to
success"ully mana0e %ro@ects. T4ey eac4 4ave stren0t4s i" a%%lied correctly. . would
a%%ly t4e lessons learned to "uture %ro@ects at Teradyne. Providin0 com%anywide
education and trainin0 in an e""ort to c4an0e t4e culture to include em%loyee level
res%onsibility, understandin0 and accountability is essential. Teradyne 4ad 0reat %eo%le,
4i04ly educated and ca%able o" deliverin0 but, t4ey sim%ly did not buy:in to t4e %rocesses
t4at O)6rien was attem%tin0 to use. Drustration and decreased en0a0ement lead to delay,
overs%endin0, and a less t4an ade/uate %roduct at %ro@ect end.
,eferences
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