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ACostE Rallying Point Event

ACostE Rallying Point Event

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ACostE Rallying Point Event

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  1. ACostE Rallying Point Event Cost Engineering – roles & organisations during early product design Steve Wiseall – Rolls-Royce plc Lucy Bolton & Chris Clegg – Leeds Univ Business School 3rd Nov 2009

  2. Agenda • Background and context – Aerospace focus • Leeds University Business School feasibility study • Individual Questionnaire • Open Discussion Questions • Conclusions & next steps • Appendices

  3. Many companies that develop complex products utilise a gated New Product Introduction process, (NPI) • In Rolls-Royce this is called the Product and Introduction and LifeCycle Management process, (PILM) Manages business and technical risk through process • Stage 0 – Innovation & opportunity selection - ongoing • Stage 1 – prelim concept design – typically 6 months • Stage 2 – full concept definition – typically 6 months • Stage 3 – product realization – ~ 24- 30 months • Stage 4 – Production & in-service support ~ 20- 30 years • Stage 5 - Continuing in-service support ~ 10- 20 years • Stage 6 – End of life disposal

  4. 100% 95% Committed Cost 85% 75% 70% Knowledge of the Design CUMULATIVE LIFE CYCLE COST 50% 50% Incurred Cost 25% 18% 7% 1% 0% Conceptual Design Preliminary Design Detail Design Production Product Use New Product Introduction Life Cycle Costs Are Locked In Early Significant opportunity to influence cost outcome TIME

  5. Cost of Correction vs. Time of Detection • Cost outcomes are determined at early stages of NPI process • X10 rule – problems discovered late in the process are expensive to fix • Significant opportunity to influence cost is associated with early stages of design – architecture selection, concept down selection…

  6. Project organisation NPI Fleet Future Programmes Dedicated Engine Project team – NPI, Fleet Operations • Chief Cost Engineer, (Civil - Future Programmes) • Business case iteration • Long range Forecasting, timescales for realisation may be up to 20-30 years • Business cost targets (system - engine) • Short/medium/ long term concept studies, many paper engine studies • Concept down selection – stage 1 • It’s about good decision making and de-risking NOT final design • Major partners may not be fully decided • Chief Cost Engineer (eg Trent XWB) • Sub-system and component preliminary to detail design (NPI) • Design to Target Cost • High fidelity cost models • Cost model integration into design systems to improve balance of design, cost as a design attribute • Integrated Project Team, (IPT) operation & product definition decision making • Supply chain increasingly decided through Stage 2 onwards

  7. In the early stages of design: • Significant opportunity to influence cost, associated with – architecture selection, concept down selection… • Can the concept definition meet the business case cost targets ? – requires a prediction of absolute cost in the future • Architectural choices and concept down selection is the design focus - requires prediction of relative cost differences between concept options, may not require absolute cost ? • Further opportunity at PILM stage 2/3 at component level to support IPT operation to get a better ‘balanced design’ where cost is considered concurrently as a tradeable attribute not a consequence of the design. • New - Cost Methods group formed to help develop and embed the capability to answer these questions and support the application of the capability

  8. Rolls-Royce COST ENGINEERING VISION ‘To embed cost engineering processes, skills and tools into the organisation such that unit cost is understood and ‘ traded’ enabling optimum business solutions (product and supply chain) to be designed concurrently in a timely and efficient manner’

  9. Process People / Organ Information Tools & Methods Adopted Socio-Technical view of Cost Methods capability development Engineers tend to focus on the technological part - Tools and Methods Lessons learnt from IT implementation benchmarking studies and internal RR studies show that to embed changes in a broad way requires an increased emphasis on: organisational design, people, training, skills, roles, support.

  10. Leeds University Business School, (LUBS) Feasibility Study (six months) • Objectives • To gather initial data & information from identified stakeholders on the “As-Is” Cost Engineering environment in Rolls-Royce, (covering processes, tools, roles, organisation, expectations and flow of information) • To benchmark other identified organisations (in the same topic areas) • To feedback and analyse the information and identify areas for improvement • To utilise the outcome of the feasibility study to develop a more comprehensive change programme in 2010/2011

  11. LUBS - Project status Six month feasibility study 2009 Approach • Internal structured interviews • External structured interviews • ACostE event – Questionnaire & round table discussion • Analysis of data • Deliverables • Scenarios planning workshop • Reports – RR internal/external • ACostE report • Two year programme plan Two year programme 2010 2011 2012 • Comprehensive study • Training, trials and workshops

  12. Input to the benchmarking process today… • Audience engagement by inputting your thoughts and ideas on the roles and organisation of Cost Engineering in early product design from within your organisation. • Data collection via two routes: round table discussion and feedback + anonymous questionnaire • These data will be collated & analysed, the proposal is to provide a report that would be published to the ACostE website. • If interested further, please let us know if you want to be engaged in the planned two-year year follow-on benchmark study. Please leave contact details

  13. “Cost needs to be more of a priority” • “There are a lot of people in the organisation with ‘cost’ in their titles who are not actually responsible for cost - So who is accountable?” • “It is a struggle working over different functions and cost is always between these things as there is no ownership.” • “Most people are just not interested in cost and don’t think about it until they are told that a project is not affordable!”It’s really important to have people thinking about cost upfront.” • “A cultural problem; we need to change people’s views of cost.” DRAFT

  14. “We need to have one heartbeat running through the organisation when it comes to Cost Engineering” • “A management push is required; everyone should consider cost whether you are a Cost Engineer or not.” • “There are plenty of good costing tools out there, it’s about getting the people and methods in place.” • “From a people point of view we need to be clear who the owners of the cost are and give them the skills to manage it.” • “It would be really powerful if Cost Engineers worked as a single community, yet still recognising that they have different types of customers.”

  15. LUBS Questionnaire – 18 questions

  16. Key Questions for Round Table Discussions • Based on experiences in your professional career, what have been the biggest barriers and enablers in embedding and achieving a cost-aware culture? 2. Please produce a list of the top five barriers and top five enablers to feedback to the group.

  17. Conclusions & next steps • Individual questionnaire responses and round table feedback will be analysed, a report generated and made available to attendees via ACostE • Proposal that the report will be published on ACostE website under the Engineering & Manufacturing sub-committee • Further engagement opportunity in 2010/2011 in benchmarking project with Rolls-Royce & Leeds University Business School

  18. Appendix

  19. Cost Methods group - positioning

  20. ME - engagement high Model development approach ME - engagement medium MoM Information capture at Op level by commodity house style type including op level scaling rules Stakeholder Requirements capture and analysis Validate information capture and search ability Develop, build and trial cost model Verify, validate and Document cost model Further model trials including link with WECM Publish model Use model Maintain model

  21. Vanguard Cost Modelling System, (VCMS) • Vanguard studio investment after DATUM capability acquisition project – ‘go live’ date Oct 08 • Supports cost knowledge capture, re-use and design iteration & what-if evaluations • Cost models considered in the same way as other analytical models e.g. stress, aerodynamics – vision for MDO • Key cost tool for Chief Cost Engineer - XWB programme • Key features of the product • Visual hierarchical structure • Object-Oriented – library re-use • Risk Analysis capability • Sensitivity • Traceability – units, metadata

  22. Geometry Analysis KBE Optimisation Framework tool Analysis should include Cost in Design Optimisation Move credibility of cost models up maturity / credibility axis to enable MDO/Robust Design with cost included in the trade study