Manufacturing Revolution, Product Development, And Cost Analysis
Jim Ryan of Computer Aid pointed out, during the SEER / Tracer alliance conference, that the manufacturing revolution was able to provide continuous cost reductions and dramatically lower costs. He had examples of:
- Steel 8 hours / ton vs. 25
- GM: 28 hours per car vs. 100
- GE: Constant stream of 10% per year cost reductions
- Motorola, Et Al: Six sigma 3.4 failures per million
The way this was achieved:
- Measure like crazy
- Establish aggressive targets
- Use data to make decisions
- Recognize and reward accomplishments and progress
- Create a learning culture
- Treasure every cycle of learning
Jim points out that all these approaches apply directly to information technology but… we have not seen the revolution occur. He showed how IT productivity has remained flat or slightly declining over the years.
Jim also pointed out that productivity between the 1st and 4th quartile is about 6 times higher than the first quartile
The core principals of the IT revolution are:
- Defined Standard Repeatable Processes
- Process, Performance Product Metrics
- Quality Focus (Quality checks early, not just checklists at the end… code reviews, design reviews)
- Standard cost model…
- End to End process management
- Metrics
- Continuous Improvement
Jim has seen a 50% cost reduction in the work using these approaches within Computer Aid. These are supported by Tracer.
I (Dan) will be speaking on estimate maturity and how Similar results can be achieved by focusing on estimating process maturity. Estimating process maturity should be part of a mature project management process.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Related posts:
- “But the Product Meets The Specs…” Poor Analysis, Cost Overruns and Risk I recently got the clever idea to purchase a folding bicycle so I could have a decent bike when on...
- Alpha Acquisition Process And Impact On Cost Analysis The Alpha Acquisition process may provide a cost savings to both government and contractors. The following is from the Defense...
- Economics For Product Development Decisions… My First Inkling I had to smile when I was clearing out old documents and found my rationale for reimbursement of my tuition...
- Considerations for CMMI Level 4 for Systems/Software product development and deployment From Galorath’s Dr. Denton Tarbet: CMMIis a model that can be applied to effect a change in the way an...
- Tongue In Cheek Definition of Cost Analysis From an Aerospace Corporation course: “The art of estimating the cost of acquisitions. It involves using incomplete, inaccurate, and changing...
Comments
Leave a Reply
Project Prediction Infographic
