Project Management is nowadays a core skill and activity for every company, as in this fast paced world, every business need to be changing constantly to adapt themselves to the market in order to remain in it and make the best profit out of it. So, sooner than later these changes will have to be implemented. These can come in as diverse forms as a company website user interface update, a development of new car line, a re-structure of company departments to better face delivery of BAU or the construction of new facilities to increase installed capacity. The success of all these changes implementations, not only to company results but also measured as performance of BAUs are inextricably linked with the way the projects to implement them are managed and controlled.
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Changes in companies are usually driven by 2 main factors: to deliver new products that meet, or even exceed, customer expectations and to improve the way the BAU activities are managed to deliver a better customer service with improved costs to increase profit.
Within the Automotive industry, while the 80’s were all about improving quality and the 90’s about taking advantage of globalisation synergies after the internet boom, the twenty first century is all about speed. On one hand, customers expect more new models faster, spotless quality, incredible levels of optimization and competitive prices. This has led to a fierce competition, driving, for instance, vehicles life reducing from seven to eight years to three; infotainment technology changing every year with new features, etc. On the other hand we are facing turbulent geopolitical situations, quickly changing, both in economy and with regulations, so automotive companies have to be able to adapt quickly to optimise their reaction times and profits.
All this has driven every single automotive company to invest huge resources in optimising and standardizing their Project Life Cycles to make them shorter and to make better use of resources. While 15 years ago we were looking at a full new vehicle project life cycle of six to eight years, most companies are now in the region of four years, from concept to handover and operation.
In this document we will review project life cycles applied to the automotive industry, with a quick glance at the most important gateways and a view of Jaguar Land Rover’s PCDS (Product Creation and Development System), JLR standard Project Life Cycle.
Project management is defined by APM as “the application of processes, methods, knowledge, skills and experience to achieve the project objectives” (Knowledge, 2016). It can also be defined as the practice of initiating, planning, executing, controlling and closing the work of a team to achieve specific goals, meeting specific success criteria at the specific time. Is this second definition which tells us the importance of the Project Life Cycle in a phased approach.
Project management has been practiced informally since the Egyptian times. However was only 50 years ago when the industry start to apply systematic project management tools and techniques to implement changes and materialise on a profession. (Portny, 2011).
The primary challenge of project management is to achieve all of the project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. The primary constraints are scope, time, quality and budget. The secondary, and more ambitious, challenge is to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives. The object of project management is to produce a complete project which complies with the client’s objectives.
Project management is applied on several phases of the project in different forms, from generation of idea of a new product, development of products and finally to implementation, handover and close out. Those stages, or phases, of a Project are what is called Project Life Cycle, which can be seen as the connexion between the Project Management Methods and the final Products.
Automotive industry is constantly changing. Like in every market, but more accused within the automotive industry than in others, Customers are demanding more complex and customizable products, which increases vehicle complexity, not only from a product development point of view, but also from BAU activities point of view, take new lean logistics with exponentially increasing part diversity. Join to all this the necessity to drive costs down due to the huge competition in a flooded market, which is driving OEMs toward huge amounts of globalization and de localization.
And if this all weren’t enough, nowadays, more new vehicles are being launched to the market each year than ever before to answer customers’ demands.
To be able to cope with this fast changing and hugely competitive environment, automotive companies are constantly changing the way business are conducted, from product development, to marketing strategies or internal IT systems. To be competitive, efficient and effective in delivering these changes, it is vital to have standard efficient processes and tools in place.
OEMs are seeking both growth and cost reduction to optimize profitability. These is only achieved by constantly introducing changes, which is one of the several definitions of a Project: a temporary endeavour designed to produce a unique product, service or result with a defined beginning and end (usually time-constrained, and often constrained by funding or staffing) undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value (The Definitive Guide to Project Management, 2007)
APMP (Associate Project Management Professional) defines project management as application of processes, methods, knowledge, skills and experience to achieve the project objectives. (Knowledge, 2016).
Within the huge diversity of Project Management models the APMP proposes one based on Product Lifecycle Management (PLM). This model offer methods, tools and techniques to decrease the time to market of a new product.
The PLM model is based on the Waterfall lifecycle. This project life cycle model has been used for decades and prove its ability to deliver projects in time, within budget and to desired levels of quality. It was first formalised when American department of Defence published a Standard for software development (DOD-STD-2167A – 1988).
Due to its well define structure, this model was immediately adopted and widely used by project managers regardless the type of project and industry, as its applicability is universal.
After years of used, this structured approached was officially standardized through the publication of ANSI/PMI 99-001-2008 and IEEE 1490-2011, ISO 21500:2012. The model was adopted by Programme Management Institute (PMI) and developed on the form of guide for project management. (Project Management Body of Knowledge Guide -PMBOK Guide).
The stages, or phases, were renamed to be used outside the software development industry to something that every project can be broken into:
Every project has a beginning, a kick off in which the idea of the project is lined out and the first concept of the products, team, time and constraints is drawn; a project definition phase in which the project is planned in more detail, products broken down, activities defined and planed and costs estimated to create the realistic scenario in which the project will develop so to get approval and funds secured; a development phase in which the project activities are conducted to create the products, moving the project to completion; the execution stage in which the products are released and started to being tested and a finish (either successful or unsuccessful) in which the products are handed over to operations as usual and the project is closed out. As it seems obvious, each phase of the project will have different requirements, objectives, deliverables, stakeholders, etc.
Taken together, all these phases represent the path that a project takes from the concept to the final product and it is referred to as the project “life cycle.” (Kay, n.d.)
Each of these phases is more likely to be more effectively managed if we plan and control what should be completed at each phase. Besides, to be able to move to the next stage we should stablish control points to assess if the planned objectives for each phase have been achieved and the work packages delivered and if it we should move to the next, delay or if the project is no longer of interest to the company and should be stopped before continuing committing resources and funds to it.
This control points are also known as Gate-Ways, and the assessment at each Gate-Way are commonly known as Gate-Way reviews, which are scheduled before the end of a phase to assess progress, quality and problems, so recovery plans can be put in place before the actual “passing” though the Gate-Way moment.
At each gate decision point the current project status should be compared to the approved business case and plan. (Heisler, 1995). With the information provided, the programme sponsor would make the decision to allow, or not, the project to progress onto the next phase and release and allocate the required resources. Another possibility is to stop the Project if its business case is deemed not valid or profitable anymore.
Sometimes the project won’t arrive at a Gate-Way meeting all the objectives for that particular stage. The whole team then should, together, assess the risk of the outstanding activities not being done before progressing. If the risk is considered acceptable and a recovery plan drawn that provides a contingency the project could continue to the next stage. Sometimes it will face the scenario of a delay at the Gate-Way as the risk of progressing to the next stage (releasing of funds to order tools for new parts without the design frozen, proven and validated) can be deemed too big but the project is not cancelled either, getting the organization in huge distress so to recover the situation in the minimum amount of time possible.
The continuous monitoring, with clear objectives for each phase, gives the Project team full control of the project, highlighting the most concerning areas and allowing the team to focus its resources where they are most required to solve any situations on a timely manner.
Below we can see a simplified example of the JLR PCDS Phases with each Gate Way identified. We can clearly identify this model with the one we talked earlier, though it is a little bit mixed in terms of activities, as we’ll see later:
- Strategy = Concept
- Delivery = Definition
- Launch = Implementation
- Market = Handover
- Close Out
There are more gateways than the ones highlighted on the above picture, though those are the ones that give entrance to the specific phases. Below we can see an extract of the PCDS main gateways and milestones:
PCDS, Product Creation and Delivery System, is JLR Project Management system to deliver a vehicle into market by managing the three key inter-related constraints for a Project success, bringing balance to e ach of them:
- Provides a generic Process Framework of Phases, Gateways, Processes and Deliverables that when employed and managed support the delivery of a Vehicle Projects.
- Generic timing is tailored to suit a specific Vehicle Project, whether a brand new Vehicle or the refreshing of an existing one. There are several different PCDS templates depending on scalability, allowing each different Project to choose the best for its necessities, making the whole system adaptable and flexible.
- Outlines the expectations of a Project to successfully achieve Project Gateway requirements at the Gateway Governance Forum.
This is the first phase of every project, where the idea is kicked off. At these first steps the project content and boundaries are still, most likely, very diffuse. The target at this stage is to identify the business need and a product that can deliver the benefits, with a first draft of project duration and costs. All this together will justify the undertaking of the project or, if deemed not worth it, will justify the cancelation or suspension of it.
During this phase, the Project Sponsor will nominate the Project Manager and a Project team will be created, with representatives of several functions to support on the construction of the Business Case which will justify the undertaking of the Project.
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JLR PCDS V3.0 outlines the main activities and deliverables for the strategy phase, which goes between the “Kick Of” Gateway (KO) and the “Project Strategy Confirmed” (PSC) Gateways by Business function so every single area of the company is represented and everybody confirms feasibility and objectives of the Project before entering into the “Delivery” phase:
Once the Business Case has been approved and the funds secured the project is ready to go into detailed planning and, later, into the delivery stage. We enter now in the phase in which the Project Plans are defined. The Product requirements are captured and defined, along with testing procedures to validate the products against them; the scope of the Project is refined, in more detail and with more accurate information from all the business functions, the work required to deliver the project is defined and durations and costs estimated, etc.. All this information is contained in the Project Management Plan (PMP). ). This plan is a living document for project control and execution. (Kay, n.d.) PMP should contain as a minimum:
- Work Breakdown Schedule (WBS): A visual representation of the scope breakdown into a more manageable work sections.
- Project schedule and milestones – The contents of this section will define deliverables required at each phase to meet the project target and control points to assess the progress. Project schedule is usually represent on Gantt chart.
- Communication plan: Defining a cadence for Steering team meetings and reviews for project updates, support and escalation of issues.
- Risk Management Plan: It is important to identify the risk as early as possible. Typical risks include over optimistic time schedule and cost estimates.
- Resources plan; define the project team organisation, roles and responsibility.
In JLR’s PCDS V3.0, even though the delivery phase is clearly identified and separated from the Strategy and Launch phases, it is more aligned with Product development stages than traditional Project Management Phases. Therefore, at the last steps of the Strategy Phase, the Planning activities are already being conducted, if some not finished already. The delivery phase has, as well, iterative stages of planning, on a rolling ball approach, more than having everything planned to the very last detail at the PSC gateway. This approach is typical of large scale and complex projects: high level plans are set at the strategy and planning stages, but the more detailed ones are being done on a rolling ball approach as project environment can change massively during time and the Project needs to be flexible to adapt to these changes.
In JLR’s PCDS V3.0 the delivery phase goes from the “Project Strategy Confirmed” Gateway until the “Final Design Completion” Gateway, where the final design of the vehicle has been confirmed as meeting requirements by the first of the prototype builds: M1. During this phase, the main activities will be:
- Vehicle design is confirmed through several iterations and confirmed as intention for the final product; communicated to engineering to replicate with industrial means.
- Detailed engineering started and initial engineering proposal assessed to meet product requirements, first with virtual series (cost saving) and then with the first Prototype full build, the M1. These vehicles will be heavily tested to confirm the engineering solutions for the vehicle can meet customer requirements. Another, lighter and earlier prototype build can be conducted, depending on the newness of the technology to be used. These are the so known mules, or X1 vehicles.
- Supplier nomination process concluded by the PA gateway, all the selected suppliers are on board by this Gateway.
- Also, at PA, the biggest amount of money is unlocked to buy tooling to produce parts for the Project. After this Gateway, pending the passage through “Final Design Completion” the Project enters in the final phase before going into the market, the “Launch”. PA is also considered as the last Gateway in which the Project could be stopped, as the biggest investment is made as this point. Therefore, it is critical that all the work packages, mostly from a planning perspective, are finished when arriving at PA so the Gateway Forum has the best level of information possible to made the best decision for the business.
This is the last stage before starting production, or handover to BAU, for non production Projects.
The execution/implementation/Launch phase ensures that the PMP deliverables are executed accordingly. This phase involves proper allocation, co-ordination and management of human resources and any other resources such as material and budgets. The output of this phase is the project deliverables.
In JLR’s PCDS V3.0, the “Launch” phase develops between the FDJ and the J1 Gateways, which is, from when the design is finished and frozen until when everything is confirmed within the Plant to start serial Production, which is confirmed at the J1 Gateway.
The main activities would be:
- Engineering Completion: By working with the suppliers, the final engineering of each part is finalised and the Suppliers tools done and tested. First off tool parts are manufactured and, with these, the second Prototype Build is done: VP or Verification Prototype. The intention of these build is to test not only the engineering design meet the Vehicle requirements (Customer and Legal) but also that the Supplier’s Tools, and in some cases also the Processes, can produce parts that also meet these requirements. In hose processes are also tested and fine tuned, like BIW (Body In White) and Paint facilities.
- Manufacturing processes are defined and training planned. Some of the VP vehicles are used to train Plant Operators on assembly processes, as well as to define in detail the assembly process. From these two activities is normal that changes are made to the product, not affecting its features, but to polish some parts, making them better suited for assembly, for example.
- Homologation activities kick off: On a project as complex a whole vehicle, and with so many different legal requirements, the homologation activities are long and resource consuming. Some of the VP vehicles will be destined, not only for Engineering Verification testing, but also for homologation activities, such as environmental emissions or crash test.
- The main sub Gateway of this phase would FEC, or Final Engineering Completion. By “passing through” this Gateway the project is confirmed to have met the Product Requirements outlined during the Strategy phase and it is ready to go into production. The Project Manager and sponsor will be allowed then to commit the resources to “launch” the vehicle into the plant. This stage is what is more known as “Launch”, as the vehicle enters the plant and the Pre Production Builds are conducted.
- These Pre Production Builds are mostly two: Tool Trial (TT) and Pre Production (PP). The intention of the first is to try out all the manufacturing processes, both in house and at the supplier base. This will tense, for the first time, this processes, confirming they are able to deliver, in time, to cost and quality (Just in Time philosophy) the product. These vehicles will be used for the so called PV testing (Production Verification) to confirm that what has been built using industrial processes still meets product requirements. During VP the testing is called DV (Design Verification). The last build before going into serial production is the PP, as a last trial to fine tune and polish processes, complete training of BAU operators and users.
- The other main Launch activity will be the marketing plans initiation and the Press Release, usually done with PP vehicles, as they would be the most refined ones so far.
The Launch phase finishes with the Job 1 confirmation, with the confirmation of entering full serial production and ramp up, once it has been confirmed all the processes are capable of delivering parts and vehicles in time, to cost and quality. Let’s not forget that the product has been validated as meeting requirements twice: at M1 during the delivery phase and at VP during the first half of the Launch phase.
Once the execution is finished the handover to the end customer, or “Business as Usual” operators, starts. The aim of this stage is to ensure the new products or project deliverables are handed over as smoothly and effectively as possible to the business for their operation and for them to start realizing benefits.
The Project team will support the BAU teams in their first stages operating the new products, closing out outstanding issues or laying plans for their resolution using BAU processes. This phase is complete by the customer “buying off” the project deliverables from the Project team and with the handover agreed and complete.
In PCDS, this handover doesn’t start at the end of the Launch phase, but with a progressive profile since the vehicles enter the factories, more or less at FEC, with a finished handover to the current operations teams, PVT, by FSR, which is considered the end of the Project.
Main activities of this phase would be:
- Assembly processes confirmation and operators training.
- Logistics processes testing and logistics operators confirmation of serial production intent, as well as logistics routes testing and confirmation.
- Suppliers confirmation of Run at Rate, ending in approval of full PSW, Part Submission Warrant.
- Dealers network Product training and confirmation of capability
- Dealers Network fill up with Product to start sales at SOS milestone, Start Of Sales
- Project Lessons Learnt forums are conducted and lessons learnt recorded for future use. In most cases, standard Project Management and Engineering design rules are modified as a result of these activities for future projects to be more effective and efficient.
After the Project has been successfully handed over to the final customer (BAU) and they have approved the product and incorporated it in their daily business, the Project Team can be dismantled. The Project Manager will hold a Project Review before dismantling the team and update the project budget, as well as to compare the Project KPIs to the success criteria and analyse Project Management Performance.
All this will be captured within the Project Report, along with the final Lessons Learnt repository and knowledge will be feedback to the Project Teams to improve future performance.
In JLR’s PCDS this Close Out happens as the end of the Handover Phase, by the FSR Gateway, where the Project Teams of every function are dismissed.
As we have seen, the ability to introduce new innovative products to the market quickly, efficiently, ahead of the competition and with new features which both surprise the customers and beat the competitors in range on offer has become critical in the last 20 years. Besides, with the appearance of new quickly developing markets with a whole new range of expectations and the incorporation of new competitors in new, non-traditional, mobility solutions (Tesla, Sharing car companies) have reduced dramatically the time and cost an automotive company can spend in developing new products.
The obvious necessity of, besides the above, maximizing profit in a fast changing macro economical world has made the automotive companies to rethink their Project Management approaches to make them more efficient and effective. Focus has been done in the integration and coordination of multiple functional areas, with more and more “virtual” work and scheduling in sequence. This increases the risks of a failing product or having to repeat expensive developments or testing, but at the same time has made the OEMs develop new ways of managing their Projects.
Jaguar Land Rover mantra has been, over the las few years, “Develop more Products Faster”. In this direction, a huge investment has been done to develop the several iterations of a Project Management Methodology, both for whole vehicles as well as for Powertrain Units, embarking themselves on a learning curve to find the best standard, efficient and effective way of managing their projects; crystalizing on the “Product Creation and Development System”, or PCDS, in which they are at its third iteration with the recently published version 3.0.
Project Management represents the combination between know-how, abilities, instruments and project’s techniques in order to fulfil its requirements. PCDS methodology articulate lesson learned and catch the best practices which allow the company to move forward and improve performance in future projects. Jaguar Land Rover on the last 10 years has doubled the company portfolio, one of the enablers for this progress was the use of a programme management methodology.
PCDS methodology ensure all aspects of the vehicle are compatible, key points synchronize and the progress measure. By section the project on a more manageable size and reviewed the status on an agree sequence; current Vs planned. (Heisler, 1995).
These sequence reviews (Programme/ Engineering/Desing) allow the project manager to ensure the agree job is delivered on time, within the cost budget and to the agreed quality; acting like a regular health check of a project.
The use of this these reviews are not guarantee project success but they will raise the probabilities to bring new product to the market faster on an efficient manner. There is some learning that the team need to incorporate from recent experiences and gateway criteria will be review and update to accommodate new product requirements.
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