QUALITY IN HIGH-TECH PRODUCT DEVELOPMENT … · This fast track is usually unrealistic TAI...

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TAI RESEARCH CENTREPekka Järvinen /S2001 ProDev

QUALITY IN HIGH-TECHPRODUCT DEVELOPMENT

(Projects)

Pekka J. Järvinen, HUT TAI Research Centre

theory vs. practice and some lessons learned

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Here & Now

Vision

PRACTICAL

ABSTRACT

Beyond theobvious

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X

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Copyright Paul Lillrank, modified

Researchpart ofproject

Developmentpart ofproject

This fast trackis usually unrealistic

TAIresearcher

WHY THEORY?

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WHAT IS QUALITY

• excellence (personal opinion/taste)

• value (value ~ quality/price)

• conformance to requirements (B2B/B2C)

• fulfilment of expectations (B2B/B2C)

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QUALITY DEFINITION

Deliverables:• product• service• attached informationprocesssystems environment

Transaction

Measurable

S e q u e n c e

Repetition

Step 1 Step 2

R

e

s

u

l

t

Step 3a

Step 3b Step 3c

PROCESSES MAY BE REPETITIVE ORSEQUENTIAL

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MANAGING FOR QUALITY - THE LONG TREND

Ancient times

Innateexcellence,

excellentWalterShewhart

Industrial quality

Conformance tospecificationsin a repetitiveprocess

EdwardsDeming

JosephJuran

Quality management

Implementingquality in largelabor intensiveorganizations

Customer focus

Servicesandinformation

KaoruIshikawa

Non-routIne

Bell Lab’s,AT&T

Toyota etc. Japaneseauto industry

Heavy metal &chemical industries

Travel & tourism,

1950 1970 19901920

error-free affordable customized

Professionalism Quality control (QC) Quality assurance (QA) Quality management (QM)

© Paul Lillrank 2000InfoQ

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THE QUALITY BROOM

Quality culture

Quality system

Management withvisions, values,

and competence

Bureaucracy,Processmanagement

ORGANICORGANICMECHANICAL

Degree ofvariability

STANDARDS ROUTINES CHAOS

(QM environment)

(Variation reductionbetween planned and actual output)

(Mass production environment)

(R&D environment)(‘Nerd’ environment)

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INPUT SETINPUT SETINPUT

Target=

Output

Tolerance ofvariation

Tolerance ofvariety

OUTPUT SET

TARGET

Efficiencycriteria

Effectivenesscriteria

OUTPUT SET

TARGETAchievementcriteria

StandardProcess

RoutineProcess

Non-RoutineProcess

Quality and Process PROJECT

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Technical Quality• Artefacts• Variation• Losses from deviations

Strategic Quality• Value proposition (Application)

• Differentiation (Phenomenon)

• Poor trade-off (Downside)

Economic Quality• Deliverables• Variety• Invalid choice

Quality from Business Point-of View

TopMngmnt

MiddleMngmnt

ProcessActors

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(R&D)Project Definition

A project is a sequence of

unique, complex, and connected activitieshaving one goal or purpose and that must becompleted by– specific time

– within budged

– according to specifications.

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Project environment

Consultants

Sub-contractors

Suppliers

Projektitiimi

Customers

Korporaatio

ProjektitiimiProject team

Society

Corporation

Shareholders

Consultants

Sub-contractors

Suppliers

ProjektitiimiProjektitiimi

Customers

Korporaatio

ProjektitiimiProject team

Society

Corporation

Shareholders

Data•raw information e.g. reading of measuringequipment, or result of direct observation• connected with observations of states andevents of the world• bound with source of origin• can be communicated through language,numbers, data graphs and means ofcommunication

Information•data refined for a purpose in a context• bound with source of origin• it has meaning, format, utilityconnection and interpretation

Knowledge•comprehension how things arefunctioning, related and influencingeach other•divided into tacit and explicit parts• relating probability to expectedoutcomes• leaves room for utilisation ofanalogy• acts as basis of DOE

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Critical Phases of Project

• Offer Request

• Offer

• Documentation of Deviations

• Order

• Kick-Off / Start-Up Meeting

• Order Confirmation

• Design (Engineering) Acceptance

• Commence of Production

• Pre-inspection Meeting

• Testing

• Final Documentation / Closing

• Delivery

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IT Lessons LearnedKPMG 1992:• 62% of project managers

had experienced failures• 20% of the causes were due to

defective communicationQUALITY OF INFORMATION

0

200

400

600

800

1000

1200

1400

1600

InformationTime

Coordination

ProcessesTools

Guidance

Chemistry

Control

The most serious quality problems are related to:

Skills

QUALITY OF INFORMATION

0

200

400

600

800

1000

1200

1400

1600

InformationTime

Coordination

ProcessesTools

Guidance

Chemistry

Control

The most serious quality problems are related to:

Skills

Source: A 1999 survey of 880Finnish managers, white-collarsand workers in metal, wood andhospital industries

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Deficiency in s ubmittalof cus tomer's order data

Neglectfulnes s inworkload monitoring

Groundles s promis es

Coding mis takes in inter-company purchas e order

Lack of communication Deficiency in procurement

Production overload

Machinery breakdown

Sick leaves and holidays

Prioritis ation of otherconcurrent projects

Human errors Mis interpretations of cus tomer'ss pecifications and data

Neglectfulnes s of marking anddocumentation requirements

Workload of projectpers onne l

Human errors in trans latingcus tomer wants to work orders

Mis takes in acceptance criteria

Delayed approvals and comments

Delayed decis ion in orderplacement

Contradicting s pecificationsand technical data

Deficiency in document s ubmittal

Changes in purchas e orderduring project execution

Deficiency in documentingverbal agreements

Lacking s tart-up meeting ofproject

Lacking s tart-up meeting ofcus tomer s urve illance

Deficiency in unders tandingof cultural differencies

PROBLEMS

IN

PROJECT

QUALITY

V E N D O R

Engineering andCo-ordination

ProductionSales Office

INTERACTION CUSTOMER

Based on over 300Finnish metal industryprojects in 1985-98

• 50% dealingwith information

• 33% withinteraction

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-10

10

30

50

70

90

110

130Information flow

Planning

Non-systematic process

Schedule problems

Resource planning

Learning from experience

Subcontractor errors

Cohesion problem

Lack of time

Change management

-10

10

30

50

70

90

110

130Information flow

Planning

Non-systematic process

Schedule problems

Resource planning

Learning from experience

Subcontractor errors

Cohesion problem

Lack of time

Change management

Identified problems of traditionalFinnish project contractors

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Mistakes -especially repeated mistakes are costly!

• in manufacturing industry in average 9% (2-25%) of salesare burned as quality costs

• in service industry 20 – 40% of operation costs• in public sector ……? (wild guess 75%)

Quality cost breakdown:prevention 5%appraisal 28%mistakes 67%

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COST OF POOR QUALITY IS RELATIVE TO THEASSUMED ZERO DEFECT LEVEL

Six Sigma


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Marketing Sales Execution Closing LearningMarketing Sales Execution Closing Learning

PROJECT

KICK-OFF

START-UP

Knowledge Management:“the explicit and systematicmanagement of vital knowledgeand its associated processes ofcreation, organisation, diffusion,use and exploitation.”(Skyrme and Amidon, 1997)

KM: 70% people20% process10% technology

(Post Office Consulting, 1999OUBS UNIT 1 ‘ Managing Knowledge’)

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Is KM anything new?

KM = IM + ??• explicit

• what we know

what is known

• people

information &

knowledge

• tacit

• contextual &

cultural

• people

people

Sosiali-saatio

Ulkoista-minen

Sisäistä-minen

Yhdistä-minen

Eksplisiittinen Eksplisiittinen

Eksplisiittinen

Eksplisiittinen

Tacit

Tac

itT

acit

Tacit

SECI-prosessi

Nonaka, Toyama, Konno (2000)

Sosiali-saatio

Ulkoista-minen

Sisäistä-minen

Yhdistä-minen

Eksplisiittinen Eksplisiittinen

Eksplisiittinen

Eksplisiittinen

Tacit

Tac

itT

acit

Tacit

SECI-prosessi

Nonaka, Toyama, Konno (2000)

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Kick-off /Start-up meeting

• Client-Focused• Goal-Directed• People-Oriented

Eff

ectiv

enes

s

Efficiency

- - + -

+ +- +

Vision Statement• vision of success• does the activity help us to achieve our vision?

Team Building• in the same boat together

Project Charter• defines why we are doing the project = mission statement• mutual understanding with the client

Goals• consensus about 3 – 5 most critical goals• too many goals and you will loose the project focus

Barriers/Potential Barriers• per goal

Action Plans• deal with the barriers to accomplish the goals

Progress Measurements• develop methods to track the progress

Roles and Responsibilities• our role• client’s role

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Project Closing (Termination phase)

• Were the goals achieved?• What did we learn?• What were the problems/positive outcomes?• Why they happened?• What should be done to avoid repeated mistakes?• What processes or activities should be improved?• Who is responsible for improvements?• Where and in what form should the lessons learned

be stored/disseminated?• Who are the key persons needing immediate information?••

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Well informed smooth operationvs.

trial and error operation

Sub-contractor

��

Engineering

Receiving

Productionsupervising

Production line

Logistics

Sales

Customer

= activities when doing bythe book

= activities when improvising

Yes

No

No

Yes

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Causes to Quality Problems

Information flowproblems

Qualityproblems

Initial dataproblems

Subcontractingproblems

Tight timeschedules

Lack ofresources

Logisticproblems

Poor workingconditions

Change mgmtproblems

Productionproblems

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Qualityproblems

Initial data problems

Effect of change notunderstood

Changes ininitial data

Change in timeschedule Customer

Too much ispromised

Marketsituation

Customer

Structure ofthe product

changes

Scopeexpansion

Productdevelopment not

completed

Freezing point onplanning not respected

Info needed beforeplanning scheduled to start

Customer’s problemsnot known

Noinstructions

Insufficientinitial data

Conflictingbreakdowns

Lot of issues,difficult to

control

Drawingsnot updated

Handling of offersnot consistent

Unclear definition ofneeded initial data

Customersdecisions late

Insufficientdocumentatio

n

Delayedinitial data

Customer does notknow what is

relevantAll attention in

older ordersPriorisation

problem

Delayed planning Surprisefaults

Unclearresponsibilitie

s

Change inpersonnel (sales-

production)

Insufficient infoflow

Lack of resourcesin planning

Tight timeschedules

Mistake inplanning

No personresponsible

Mistake inthe order

= one of nine problem categories

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Poorunderstanding of

the entirety

Insufficient flowof information

Poor understandingof the consequences

of change

Delayedinitial data

Overlappingactivities

Shortage ofown designresources

Insufficienttraining

Insufficientupdating

of schedules

Revisions of drawingsdon’t reach all

necessary people

Too much information

Lack of owndevelopment res.

Productincomplete

No commoninstructions

Lotus Notes -graveyard

for information

Too manycontact persons

Dirty renewals cause morework in relation to new machines

Concentrationon unessential

Absence ofsupportmaterial

Changes inthe organization

Additionalsales

Staffpolicy

Rush

Unrealisticschedules

Mistakes insubcontracting

Deliveryproblems

Repetitivemistakes

Fragmentationof information

Feedback hasnot reached

right persons

Unclearresponsibilities

Decreasedflexibility

Flexibilitymoved tosuppliers

Different sales andexecution personnel

New productsnot always ready

Insufficientbid preparation

Informationdoesn’t exist

Outsourcingpolicy

Corporationpolicy

Unopenedworking numbers

Change ofgeneration

Personnel fromunits that are

closed down havenot moved with

the business

Insufficient long-termpersonnel management

Wastage rateof key personnel

Poor quality ofsubcontracting

work

Last minutechanges

Things can beunderstood inmany ways

Lack of time

The customerdoesn’t know

what is essential

Inability tomanage thecustomer

Customer

Model specificationimperfect and contradictory

Aspiration toget to the market

Changes ininitial data

Wastage rateof personnel

Twisted experiencedistribution

Delayedautomation

Overload

Behindschedule

Synchronizingproblems of the

schedules

Poor usage ofinformation

Pointlesstransportation

and searching ofgoods

Controlsystem

ofoperations

Production andassembly errors

The following stagesare not taken into account

Problemsin change

management

One doesn’t knowwhere and when togive information Unclear basic

structures anddefinitions of policies

Incoherent andunstable procedures

Schedulechanges

Change inconcept

Attitudes

Feedback notprocessed

Earlier feedbacknot processed

Frustration

Feedbacknot given

Decreased numberof staff, more work

Subcontractingfails

Too manychanges

Physicaldistances

Disconnectednessof the organization

Unnecessarywork

Imprecise reviewat the sales phase

Unclear roles anddelivery boundaries

Pre-assemblynot done

Incompletedeliveries

Product developmenton site

Don’t knowhow to test

Fast cycle,no time to learn

Prototypes withfrequent intervals

Advancemarketing

Mistakein design

Scheduleproblems

Designers youngand inexperienced

Designers unfamiliarwith the paper machine

Designersin a hurry

New productresponsibilities

Insufficientinitial data

Drawingsnot updated

Differentsuppliers

Competitor’smachine

Increasedvolume

Sales doesn’tsay no

Huge numberof bids

Difficultiesin prioritization

Too manyissues to

manage effectively

Differencesof sales and

delivery

Marketsituation

Depression Boom

Poorraw materialavailability

Earlyretirements

Laborunion

houndspeople

Pressureand speed

Stress

Personneldecreased

to minimum

Unable tohire before

the previousemployeehas left

The newgeneration

doesn’t havemodels

Learning throughtry and mistake

Key personnelhas disappeared

A lot ofrenewals

Shortage ofskilled personnel

Experienced stafffired during the

depression

Unattractivebusiness

Positioncirculation

Appreciation

Shortage ofresources at

assemblyreparation

Most of the personneltransferred after

mechanical assembly

Internal producttraining is not

arranged

Resources

Need of skills andgrowth of responsibilitynot noticed in training

Insufficient definitionof needed initial data

Project managementteam is not informed

Everybody don’tknow the schedule

Sales doesn’t knowavailable resources

Holidays are nottaken into account

Cableswrong

Tightschedules

Competition

Sales is forcedto make tight

schedules

Poorpackages

Informationgiven to

suppliers isnot

precise enough

Problems indata transfer Lack of

experience

No time fortraining

No training

Limited numberof trained suppliers

Shortage ofinspection res.

Unable to controlprofessional skills

No time

No inspection

Issues are nottold forward

Instructions arenot followed

Not enough attentionis given to choose thesuppliers/ they are not

demanded enough

Big numberof revisions

Manysuppliers

Desire todecrease number

of suppliers

Electronicdata transfer

Understandingis not controlled

Complexity of theBaan system

Don’t knowhow to use

Management notcommitted

Lacking skillsamong drawers

Drawings not madefor production

Blueprinterrors

No time foundfor inspection

Not heldimportant

Everybodyoptimizes

their own phase

Carelessness

Too easy toproduce information

Development actionsare not taken after reviews

Corrective actions related tolabor protection are forgotten

Non-commitmentto

labor protection

Inability todifferentiate

between essentialand

unessential

Insufficienciesin globalactivities

Limitedsupply indomesticmarket

Internalinstructions are

not followed

Mistakes duecarelessness

Incorrect wayof dimensioning

Lacking knowledgeon customers’ problems

Money

Practicingbusiness more

important

The customerwouldn’t want tostop the machine

Widenedscope

Model picturesare not updated

Ambitionto JOT Operating

withoutbuffers

Decreasing warehousingcosts creates bills ofthousands of marks

Limited numberof meetings with

suppliers

MPM,BRD New responsibilities

Lack ofcontrol

Supplier’sdelay or early

delivery

Problems indelivery accuracy

Valmet wantscheap hours

Suppliers haveuntrained staff

Minordevelopment

effort

It doesn’tfunction as

thought

Suppliersoutsourceactivities

Resources

Unwillingness touse Lotus Notes

Organization trimmedto deliver new machines

Workplace ischanged easier

nowadays

Lack ofsupport

activities

Example: The Knowledge Map

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“Knowledge is like fruit, its context andtiming is the key to its potential and real value.

Unless you can exploit it within that timing,someone elsewill come along and steal it,or you will have to throw it away”(Victor Newman, 2000)

• How should we documentthe closing information?

• Where should it be stored?• How could the dissemination ofknowledge be ensured?

?

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Two research and development projects:• COPQ-project with focus on cost of quality

= COPQ in project environment isanalogous to risk

= Workshop methodology for problemand root cause identification

• Promes-project with focus on performanceefficiency in project delivery chain

= Workshop methodology for problemand root cause identification

Problem items indifferent projects

Sign

ific

ance

Through trial and error: The 3AWS-Procedure

http://www.tuta.hut.fi/laku or http://www.tai.hut.fi/promes

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Sales Planning Design Mfg Logistics Care

CEO

Project 1

Project 2

Project n

Functional inefficiencies = problems

Project risks

Analogy with QM’scommon and specific causes

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Measuring quality(success) inproject environment:

• is often regarded same as measuring success

• several researchers have concluded that measuringa project success in solely objective terms is animpossible task

• whether a project is considered as a success or notis strongly dependent on the stakeholdersperspectives

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PCT application time schedule

PCT II National Entry

0 12 18 19 20 30 months

Filing PCT filing

PCT Publication PCT II Demand

PCT National Entry

The clock starts by filing a patent!

≈≈≈≈ 1.500 FIM≈≈≈≈ 15.000 FIM≈≈≈≈ 15.000 FIM

After this pointn x 100.000 FIM

Case: Quality in timing

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EVERYTHING INVENTED IS NOT WORTH INVESTING

INVENTIONINVENTION

Does it createvalue forend-users ?

Does it createvalue forthe CUSTOMER ?

yes

no

yes

no

End-user value Customer valueNon-value-adding invention

= waste

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INFORMATION QUALITY ATTRIBUTES

States and eventsof the world

MEASUREMENT

DATA standardized symbolicrepresentations

RELIABILITYHow consistently do thesymbols represent the world(data quality)

INFORMATION value-added datain a context

CONTEXT

VALIDITYRelevance of informationin a given context

ACTIONACCURACYThe ability to trigger action(=create value)


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ACCURACY AND PRECISION

ACCURACY

PRECISION

Bad

Good

Bad Good


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QUALITY CONCEPTS

1) Conformance and performance

2) Context dependent

3) Process and product qualityseparate but interdependent

4) Quality is realized as value througha transaction / exchange

5) Quality and price are linkedthrough a value mechanism, e.g.customer satisfaction

6) The value mechanism behavesdynamically

1) Content and form

2) Context and meaning

3) Information quality andinformation system quality

4) Information value realizedthrough what (action) it triggers

5) Quality and action are linkedthrough reliability, validity andaccuracy (attention ???)

6) Information inflation

PRODUCTS & SERVICESPRODUCTS & SERVICES INFORMATIONINFORMATION


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THE VICIOUS CIRCLE IS SNOWBALLING TOWARDSTHE END

Incomplete planning &process managementMissed

dates

Work onprematureplans

Changes latein the process

Emergencies

Overtime

Waste ofresources

Extensive use ofsubcontractors

Coordination

Basic Design -> Work Drawings -> Steel -> Machinery -> Outfitting


QUALITY IN HIGH-TECH PRODUCT DEVELOPMENT … · This fast track is usually unrealistic TAI...

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