Quality of review at program milestones

Process Engineer
Integrated Management Systems Incorporated

Introduction

All automotive product programs at Ford (cars, trucks and parts) have 11 or less (depending upon the scale) milestones. These are opportunities for the senior management to review in detail the program progress, assess the program total health and decide on the next steps. FPDS (Ford Product Development System) is a collection of processes developed to help develop a vehicle program.

GYR (Green/Yellow/Red) is assessed for each deliverable at each milestone:

  • Green indicates the team has fully met the criteria for the deliverable
  • Yellow indicates the team has not fully met the criteria but has a work plan to achieve the criteria
  • Red indicates the team has not fully met the criteria but has no plan developed to meet the criteria (obviously requiring help from management)

The milestone is approved if the metrics are green for all the deliverables at the milestone. There are situations when the approval is given even though there are unresolved issues. The program team is responsible for resolving the open issues at a later time.

The main focus of this paper is to discuss what happens when teams move forward through program milestones with open issues that need to be resolved later.

The challenges to the program team include:

  • Late Engineering Changes – These adversely affect supply base performance.
  • Warranty Costs – Vehicle warranty costs include the cost to the manufacturer of satisfying the specific legal warranty provisions for a new vehicle.
  • Product Quality – J.D. Power & Associates measure quality based upon customer satisfaction and publish annual “APEAL” (Automotive Performance Execution & Layout) reports.
  • Engineering Resources – There is an adverse impact on the optimal use of engineering resources due to unanticipated assignments necessitated.

The paper discussion will also include some recommendations to improve the quality of review at milestones.

Project Management Body of Knowledge Context

Project management is an integrative process. See Exhibit 1. Thus, Project Management Body of Knowledge (PMBOK®) has acknowledged the existence of a ninth knowledge area titled Project Integration Management, which constitutes the three processes: Project Plan Development, Project Plan Execution and Overall Change Control (PMBOK Guide®, 2000, 41). These three processes integrate the rest of the 8 key areas in any project: Scope, Time, Cost, Quality, Risk, Human Resources, Communication, and Procurement & Contracts. In a vehicle program flawless execution of the product development process and effective control over the changes during the program life cycle are key factors leading to overall success of the program.

Exhibit 1

Exhibit 1

Management Approval Process

The management approval process is a key part of the FPDS, which is a collection of processes designed to support the entire product development cycle for cars, trucks and parts from the early concept stage through the design, test, build and manufacturing stages until the customer order is fulfilled at the dealers show rooms. There are usually 11(for a major program) or fewer milestones from the program kick off till Job #1 (Job #1 is the start of mass manufacturing and shipping to the dealers show rooms). Each milestone has a set of deliverables that must be fulfilled. Quality Operating System (QOS) maintains these deliverables and the associated metrics. The engineer or the responsible engineering team rates each metric as G (Green), Y (Yellow), or R (Red).

The milestone is an opportunity for the senior management to ascertain the progress by the program team. Every metric associated with every deliverable is expected to be rated green indicating all the deliverables are fully met. A rating of yellow indicates the deliverable is not fully met, but the team has a work plan to achieve the objective without any risk to the program. A rating of red indicates that the deliverable is not fully met and the team has no work plan to achieve the objective. This necessitates senior management intervention and support to the team to resolve the issue.

As a practical matter, many times the milestone review results in approval to go ahead with the program with the understanding that any open issues would be resolved (within the negotiated time frame via containment plans). This is certainly a judgment call on the part of the management since this is where the process discipline is at stake.

Downstream Impacts

The downstream impacts of not meeting all the targets fully at every milestone include:

  • Late Engineering Changes
  • Warranty Costs
  • Product Quality Degradation
  • Lack of Engineering Resources

Late engineering changes

Late engineering changes adversely impact supply base performance. Late engineering changes are disruptive, costly and pose a risk to vehicle program teams.

Typically changes are driven by:

  • Customer satisfaction
  • Quality
  • Cost reduction considering customer satisfaction
  • Manufacturing feasibility
  • Engineering missed objectives
  • Management driven changes
  • Cost reduction study

Late engineering changes could lead to increased warranty costs, impaired product quality, reduced customer satisfaction and disruption in the engineering resources assignment. The change cut-off or the <CC> milestone should freeze all non-discretionary design changes. History indicates otherwise (Exhibit 2). Engineering Sign Off (ESO) refers to the <CC> milestone. Five different product programs had engineering changes ranging from 80% to 384%.

Exhibit 2

Exhibit 2

Warranty Costs

Vehicle Warranty Coverage Costs include the cost to Ford Motor Company of satisfying the specific legal warranty provisions for a new vehicle. “Coverage Cost” is the term used to define the cost of fixing the items that are covered specifically by the legal warranty.

Powertrain coverage costs include the costs to fix, adjust, or replace powertrain items such as engines and transmissions. For 1992 - 2000 models of non-luxury cars and light trucks, powertrain coverage is for 36 months or 36,000 miles, whichever comes first; luxury cars have powertrain coverage for 48 months or 50,000 miles.

Non-Powertrain costs are any costs that are not for powertrain (excluding costs for corrosion and safety restraints). This is the bulk of all warranty coverage costs. For 1992 - 2000 models of non-luxury cars and light trucks, non-powertrain coverage is for 36 months or 36,000 miles, whichever comes first; luxury cars have powertrain coverage for 48 months or 50,000 miles.

Emissions: In the United States, Ford provides a specific warranty that the vehicle will not exceed certain emission standards. Any repairs associated with fixing emissions problems are classified as emission coverage costs. For 1992 - 1994 models, emissions coverage was for five years and 50,000 miles whichever comes first.

Corrosion: Corrosion costs include costs for fixing problems associated with the sheet metal rusting during the warranty period.

Safety Restraints: In the United States, Ford provides a specific warranty that the safety restraints (such as seat belts and air bags) in a vehicle will work properly. Any repairs associated with fixed problems regarding safety restraints are classified as safety restraint coverage costs.

Other Vehicle Coverage Costs: Other vehicle coverage costs can include items such as the freight cost for parts returned to a plant or other facilities for further research regarding why the part failed or the cost of towing a vehicle to the dealership for a warranty repair.

All Vehicle Coverage: The sum of the categories listed above.

Product Quality Degradation

Late engineering changes could lead to warranty costs as mentioned above and also adversely impact the quality of the vehicle due to necessary expediting and violating process discipline.

J.D. Power periodically publishes APEAL rankings. Automotive Performance Execution and Layout (APEAL) measures owners' delight with the design, content, layout and performance of their new vehicles at Three Months in Service. The study furnishes a total industry perspective that gauges which features and attributes make car and truck models stand out to their owners. The study surveys vehicle purchasers and lessees after the first 90 days of ownership. APEAL features two survey mailings, resulting in a higher sample base. More than 100 attributes are organized into categories such as ride and handling, engine/transmission, comfort and convenience. An overall APEAL score is calculated by applying the ratings of these attributes against a statistically derived formula. Exhibit 3 shows the rankings for 2002.

Exhibit 3

Source: J. D. Power and Associates 2002 Interim APEAL Copyright 2002

Exhibit 3

Engineering Resources Disruption

Engineering Resources are allocated to the vehicle programs based upon the size of the program. A scheduling algorithm is used to optimize the use of engineering resources by ramping up and ramping down the engineering teams at appropriate milestones. The late engineering changes add to the unplanned workload. Consequently, the engineering resources would have to be provided, often, at short notice. This could lead to disruption in team morale and work dynamics.

Recommendations

The following are some ways to improve the quality of review at the program milestones:

  • Leadership
  • Process Discipline
  • Metrics to measure deliverables (progress)
  • Six Sigma study
  • IMSI PMA (Project Management Analyst)

Leadership

“Leadership is based on a spiritual quality, the power to inspire, the power to inspire others to follow.”(World Traveler, 2002)

The above Lombardi quote is in keeping with the spirit of Lombardi's most notorious apothegm: “Winning isn't everything; winning is the only thing.” “I wish to hell I'd never said the thing … I meant the effort, having a goal,” Lombardi said. “I sure as hell didn't mean for people to crush human values and morality.”

There is no denying the eternal relevance of the coach's vision of leadership. “Men respond to leadership in a most remarkable way, and once you have won his heart, he will follow you anywhere.”

The leadership on a program team is a shared responsibility at all levels of management. A Design and Release (D&R) engineer leads all the activities pertaining to that part/system (i.e. spring used in brake, complete brake system etc) from the early product direction till its successful incorporation at the production assembly shop and through the post-assembly events including shop manual at the service centers and availability at the parts service centers.

Process Discipline

Process discipline is an integral part of a successful, flawless execution of the entire FPDS, the set of procedures needed to run a complete vehicle program. It is common knowledge that any process is not static in time. There are forums in place to ensure the processes are updated and kept current to reflect the current reality. The engineering teams need to be educated and re-educated on an ongoing basis about the process details and the importance of adhering to the process through storybook scenarios and business cases.

Metrics to Measure Deliverables (Progress)

QOS is a database of metrics maintained by program engineers. The metrics serve to monitor the progress of the deliverables at the milestone and thus the program itself.

“Before we can report on progress or formulate a Progress Metric, we must have a clearly defined vision of success. If we're trying to measure our progress toward a goal, we must be able to articulate that goal. Everyone on the program team needs to recognize, understand, and accept the stated goal as the objective of his or her efforts. The goal must be unambiguous, and unchanging. For a Progress Metric to be effective, our assessment against the goal must be made in the same way, each time we look at our progress.”(Walsh, 2002)

Six Sigma

“At a time when fighting the war on terrorism has become arguably the most important issue facing the USA, authorities are looking into an unlikely weapon to aid their fight: Six Sigma”(USA Today, 2002).

Six Sigma is a set of statistical and management tools that can make leaps in improvement. When something reaches Six Sigma, it has a failure rate of 3.4 per million, or 99.99966% accuracy.

Six Sigma uses an approach called DMAIC, which stands for define, measure, analyze, improve and control. A Six Sigma project would recognize the gap as a defect and go through several steps before attempting a solution.

“Having the loudest opinion doesn't make it right,” says Elizabeth Keim, president of the American Society for Quality and a Six Sigma consultant. (USA Today, 2000. 5B)

IMSI Project Management Analyst (PMA)

An IMSI PMA in a program team is positioned to be effective in all the above areas of recommendations.

  1. Be pro-active.
  2. Use a consultative, facilitative approach.
  3. Be an effective liaison person to interact with the parts suppliers as well as team engineers.
  4. Raise early warning signal to the program team by providing critical information that is accurate and timely. E.g., PMA's in the Explorer platform teams make their own assessment of Red/Yellow/Green weekly. Chief Program Engineer (CPE) reviews these assessments at the Program Steering Team Meetings. See Exhibit 4 for a sample RYG report.
  5. Educate yourself continuously about company initiatives, i.e., FPDS, Six Sigma etc. This sharpens your skills and increases your value to the team.
  6. Commit yourself to process disciplines and be passionate about teaching the rest of the team.

SAMPLE RYG REPORT

Exhibit 4

Exhibit 4

Conclusion

Quality of review at the vehicle program milestones ensures program success. Moving forward with unresolved issues could severely impact the program success. Leadership at all levels of the program teams, discipline to adhere to FPDS, effective metrics and the Six Sigma study are some of the recommendations to ensure the quality of review.

Acknowledgement

Several engineers have contributed to the development of ideas expressed in this paper. The author wishes to convey special thanks to Sudhir Jain, President IMSI, Paul Fitzpatric of Mega Projects and the members of the Explorer Sport/Sport Trac Programs.

References

A Guide to the Project Management Body of Knowledge. (2000). Upper Darby, Pa.: Project Management Institute. p 41

Feds may unleash six sigma on terrorism.(2002, October 31) USA Today. p. 5B

Learning when to win. (2002, October) World Traveler. Northwest Airlines. p. 12

Walsh R. (2002, October). Defining an effective time-based progress metric. Project Management Institute Annual Symposium, San Antonio, Texas, USA.

Author Biographical Data

Name: Ramakrishnan Krishnan
Occupation: Process Engineer,
Product Development Operations,
Ford Motor Company
Address: Bldg.: PDC, Room: 2V-E21M
21175 Oakwood Blvd.
Dearborn, MI 48124
Ph. (313) 323-2438
Fax (313) 248-9597
Education: BS(ME)        U of Madras
MS(ME)       South Dakota State U.
MBA             U of Minnesota
Communication & Leadership:
Toastmasters International: Member since 1980
DTM (Distinguished Toastmaster) - Highest award, 1986
Winner of District International Speech Contest 1990
Hobby: Marathon Runner:
Completed 41 Marathons including:
     2 Boston Marathons (1987 & 1996) and
     24 consecutive Detroit Marathons since 1979
PMI: Member since 1994,
PMP (Project Management Professional), Certified thru December 2004
7 paper publications/presentations: (PMI Annual Conferences)
1994 (Vancouver), 1995 (New Orleans), 1995 (St. Petersburg, Russia),
1996)(Boston), 1997 (Chicago), 2002 (San Antonio)
Project Management Experiences:
Practitioner Since 1973
Teacher, Graduate School Of Business, U of Minn., 1973 – 76
Developed and Taught a course, U of Mich., Dearborn, 1981 - 1990
This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

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