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TOC-IT Case Study Lessons learned in TOC-IT projectmanagement Wärtsilä Do Ligtelijn and Patrick Severijns 4 October 2010.

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Presentation on theme: "TOC-IT Case Study Lessons learned in TOC-IT projectmanagement Wärtsilä Do Ligtelijn and Patrick Severijns 4 October 2010."— Presentation transcript:

1 TOC-IT Case Study Lessons learned in TOC-IT projectmanagement Wärtsilä Do Ligtelijn and Patrick Severijns 4 October 2010

2 WÄRTSILÄ CORPORATION Presentation name / Author Do Ligtelijn General Manager Propulsion Technologies - Hydrodynamics Research & Development E-mail: Patrick Severijns Project Manager E-mail:

3 Introduction Wärtsilä MerchantOffshore Cruise and Ferry Navy Special Vessels

4 Sterntube Seals Lineshaft and sterntube bearings FPP Water jets Efficiency rudder Controls Transverse thruster Steerable thruster CPP Gears Medium and slow speed Engines Wärtsilä ship power products

5 WIO sites Licensees sites (2-stroke, not Wärtsilä owned) Joint Venture (J/V) Slough, UK Propulsion –Synthetic bearings Havant, UK Propulsion- Face seals R&D Bermeo, Spain W46 R&D Vaasa, Finland W20, W32/32DF/34/SG R&D Ecotech Rubbestadneset, Norway Propulsion – Gears, CPP R&D Bryansk, Russia 2-stroke with BMZ Poznan, Poland 2-stroke with H. Cegielski Rijeka, Croatia 2-stroke with Treci Maj Drunen, The Netherlands Propulsion – CPP, FPP, LMT R&D Automation – Propulsion Controls engineering Trieste, Italy W26, W38, W46/46DF, W50DF, W64 R&D Santander, Spain Propulsion – Blades, CIPS Zwolle, The Netherlands DTS – Component Machining Qingdao, China J/V: 2-stroke with QMD Hanoi, Vietnam 2-stroke with Vinashin Khopoli, India Propulsion – Gears, Components, Auxiliaries Shanghai, China J/V: WQDC Wärtsilä Auxpac 20, 26 2-stroke with Hudong Zhenjiang, China J/V: Zhenjiang Propulsion – FPP, Shaft lines, Blades, Hubs 2-stroke with CME Wuxi, China Propulsion – TT, LCT, Components, Seals Mokpo, South Korea J/V: WHEC W50DF Ulsan 2-stroke with Hyundai Changwon 2-stroke with Doosan Toyama, Japan Propulsion – Lip seals, Bearings Kobe 2-stroke with Mitsubishi Aioi 2-stroke with Diesel United Ariake 2-stroke with Hitachi Trondheim, Norway Automation – Power Drives Stord, Norway Automation – Propulsion controls, Power drives, Power distribution, Vessel automation Lingang, China 2-stroke with CMD Helsinki, Finland Ecotech Winterthur, Switzerland 2-stroke R&D Itaguaí, Brazil 2-stroke with NUCLEP Dalian, China 2-stroke with DMD Yichang, China 2-stroke with YMD Hefei, China 2-stroke with Rong’An Zhuhai, China 2-stroke with ZYMP Introduction Wärtsilä

6 Trieste, Italy W26, W38, W46, W46F, W50DF, W64 Bermeo, Spain W34SG, W50DF Winterthur, Switzerland 2-stroke: RT-flex, RTA Vaasa, Finland W20; W32/32DF/34SG, Ecotech Havant, UK; Slough, UK Face Seals, Synthetic Bearings Toyama, Japan Rubber Seals & Bearings Stord, Norway Electrical & Automation systems Trondheim, Norway Frequency converters Rubbestadneset, Norway CPP, Gears Espoo, Finland Fuel cells, Ecotech Drunen, The Netherlands CPP, FPP, Thrusters WIO R&D ~740 employees R&D spending 2010: EUR 141 million Continuous strong focus on R&D and life cycle solutions will further strengthen Wärtsilä’s position as technology leader Turku, Finland Ecotech

7 Introduction Wärtsilä MEUR2009 Order intake3 291 Order book at the end of the period4 491 *) Net sales5 260 Operating result before nonrecurring restructuring items638 % of net sales12.1 Operating result592 % of net sales11.2 Profit before taxes558 Earnings/share, EUR4.30 1) Cash flow from operating activities349 Gross capital expenditure152 1) Earnings per share excluding nonrecurring items (EPS including nonrecurring items total EUR 3.94). *) Cancellations amounting to EUR 410 million have been eliminated from the order book during the review period January- December 2009.

8 R&D within Wärtsilä Spread among several proces steps R&D division is responsible for tooling of operational engineering R&D division is responsible for product development IT division is responsible for infrastructure and general business systems only (Engineering software lies within R&D) Pre salesEngineering Work preparation ConstructionAfter sales R&D-made tools

9 Gaps in how R&D supports engineering Effort for making a design is unnecessary high –Due to current software support There is an increased risk of delivering products that don’t fully comply with classification rules –Due to non central management of them We risk providing wrong data to customers –Due to lack of version control (e.g. Excel) Dependency on key employees is high –Due to limited documentation “Strategy: First consolidate current software to single platform on which new R&D tool innovations can be launched”

10 Business case for change Strategic benefits –Allow adaptability to change (allow for better competitive edge) –Single manageable environment to secure Wärtsilä engineering knowledge (sustain competitive edge) Short term benefits –Increase efficiency and quality of designs –Reduce risk of non compliance (penalties) –Better predict final design in proposal phase (=margin) “Global MT confirms the strategic benefits and shortterm benefits”

11 Involvement of external consultant Initial project (Archimedes) start in 2004, to be carried out by internal people only. Project progress was very slow because intended resources had to be shifted to other projects. –After project started new urgent projects came up, overloading the critical resources (specialists) End of 2007 it was decided to outsource part of the work, especially typical software engineering work. “Focus your critical resources on tasks which really can’t be outsourced”

12 Which partner to choose Garansys was selected because in Dutch IT business reviews they are reported as high quality company with clear business views and on-time delivery track record. Distinction with other IT companies is that service is not based on time- material principle as experience learns that it can take much more time and money than budgeted Before project start a joint study was performed to (re-) define the project approach, budgeting and planning and main direction of solution. Result: projectsize 2000 function points, project duration 2,5 year. “Invest in a good study to get a realistic view of the project (scope/time/budget) and you can really control them”

13 How to achieve success? How to prevent scope creep How to control the project time- and budget wise How to create companywide support How to build and maintain a succesfull relationship with a contractor “How to prevent the 75% chance (Standish 2009) my project will NOT deliver the correct solution within time and budget”

14 TOC-IT TOC-IT Scopemanagement –A clear business case in which there is a tangible link between the value and IT solution (scope decisions can be made upon it) –Steering Committee and project team focused on project goal and allowed only scope changes that were absolutely necessary to reach the project goal. –Joint focus on keeping project as small as possible. How do we prevent scope creep “Make the project goal more important than the solution”

15 TOC-IT TOC-IT Budget and Time –Used uniform indicator for scope (function points) throughout the entire project (fixed fp price) –Split program in multiple subprojects (max 6 months duration) –Critical Chain Project Management (CCPM) was applied to deliver each subproject on time –Based on mutual dependencies and constraints the optimal size project team was created and the program planning was drafted up based on this capacity. –Mutual penalty construction for late delivery (based on CCPM) How to control the project time- and budget wise “Create a explicit damage indicator (penalty) for project delays in order to prioritize resources and activities”

16 TOC-IT TOC-IT Best practises –Communicate business case and importance to organisation –Create a “project champion” –Motivation resources is a constant project activity –Tune your way of working for/with a specific project/customer –Create a team that crosses organizational boundaries (supplier/customer) How to create companywide support “Make sure your project has a face and a value”

17 TOC-IT TOC-IT Best practises –Align project goals and assumptions –Align KPI’s (e.g. earning model) –Keep focus on what goal you try to achieve –Invest in tuning the way of working How to build and maintain a succesful relationship with a contractor “Make sure the project success means success for all involved”

18 Results Time required for making a design is shortened up to 40% Each subproject has been delivered on time Program remains within initial budget (2008) to this date First subprojects have been taken into production without any downtime End users are enthousiastic about “Archimedes”

19 My Experience Invested time in mutually agreeing on the business case appears to be crucial throughout the project to keep focus Invest in mutual relations, and do not be afraid to replace people in the teams if needed (both sides) Splitting a large project into sub projects is essential to keep the flow Keeping focus remains difficult, but should be done at almost all cost We learned end developed way of working after each sub project Stop being nice to each other if project results are at risk Commitment of people (users) is a continuous concern and needs specific attention (e.g. dedicated kick-off of each sub project or user group)

20 Lessons learned Don’t be afraid to disappoint your end-users and focus on the project goal (= business case). Create a clear projectgoal and owner to keep people motivated Optimize and respect the knowledge transfer Focus your critical resources on tasks which really can’t be outsourced Use damage indicator to stay on track Create a flow within the project (starting subprojects) “Consolidate the minimum scope to ensure ongoing business adding a foundation for launching software tool innovations”

21 WÄRTSILÄ CORPORATION Presentation name / Author Do Ligtelijn General Manager Propulsion Technologies - Hydrodynamics Research & Development E-mail: Patrick Severijns Project Manager E-mail:

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