Group2_CIS550_GroupAssignment2

Case 2, Group 2 – David Gates, Rene Rosiles, Juan QuirozCIS 550

Case: The Jaguar Project

Introduction

The case of the Jaguar Project at Teradyne Corporation illustrates the conflict between the hardware

developers and software developers in how each implements the company’s newly adapted policy of

Total Quality Management (hereinafter “TQM”) as it applies the monumental implementation of the

Jaguar Project. The case illustrates the discrepancy that has arisen between the two types of developers

as they attempt to complete their projects while utilizing the aspects of the TQM concept. The central

and apparent conflict within the case is between successful hardware developers and very unsuccessful

software developers. The case also illustrates a more central issue: those teams that develop and follow

a detailed project outline and plan for implementation are more successful than those that do not. The

company culture at Teradyne was one that was initially very relaxed and not focused on planning. This

undoubtedly cost the firm millions. Once a change was initiated those groups embraced it were

successful, those who held onto the old way of doing things simply fell behind. The more subtle and

underlying aspect of the case was that some groups embraced project planning and some did not and

this explained the success of each. The case is an illustration of the power of project planning.

Situation

The situation in the case of the Jaguar Project is that semiconductor industry was

undergoing a major shift. At one point Teradyne was a leader in the sector however changes in

the industry threatened that supremacy. The fact that technology moved at such a rapid pace

and that the types of semiconductor testers had greatly changed posed a major threat to the

company. Should the company fall behind in the development of the new types of

semiconductor testers it was certain to lose market share. However, a greater threat to the

company was that the purchaser of these testers often times forged a very long-term



relationship with its supplier due to technical specifications. Therefore should a company lose a

client it faced the prospect of losing market share for a long time.

The impetus for the change in Teradyne from its former laissez faire attitude to TQM was

the fact that CEO Alex D’Arbeloff felt that the company was losing its “competitive edge”. He

felt this was the case because the company had outstanding employees from leading schools

(such as MIT) but its products were often times delayed in getting to the market and once there

had problems with quality and reliability. D’Arbeloff felt that a change was in order or it would

permanently lose its position as market leader. The main issue that plagued the company was

the overall culture of the company itself. The central issue at Teradyne was the fact that the

company had little oversight over projects once they were given to a particular group. There

was no timetable given for major and minor benchmarks and lack of any sort of scrutiny as it

applied to the processes. Most importantly, CEO D’Arbeloff found that after the process of

utilizing TQM became widely accepted within the company manufacturing quality and

customer service greatly improved. The company was in a better position because of Total

Quality Management.

The case itself consisted of the Jaguar Project and its implementation on a seemingly

stringent schedule. This case also illustrated how well those teams that implemented TQM did

versus those that did not. Those teams that were assigned to the hardware development of

the project went quite smoothly and met all of their deadlines. Those teams that dealt with the

software implementation did not stringently adapt the TQM principals (if at all) and these same

teams became the reason why the project fell so far behind schedule. The software team had



many reasons as to why they fell behind and to a degree some reasons were valid. Experts in

the use of the operating system that was being used were located in Boston while the staff that

was developing the software for Jaguar was located in Agoura, California. However, the early

on project metrics were very clear about the fact that software was falling behind. Irrespective

of the reason or excuse software developers did not adhere to TQM and fell further and further

behind schedule. The company then was presented with a monumental issue, a very large

client AlphaTech threatened to take its business to a competitor. As a result, Teradyne had to

work under a grueling schedule in order to deliver its product or it would lose this valuable

client. In the end Teradyne prevailed and kept the client but this experience only served to

solidify the belief that the company had to universally accept Total Quality Management.

Questions

The fundamental question that arose from the Jaguar Project was whether or not the

implementation of project management tools for the new product development process at

Teradyne Corporation had been a success. In relation to the theme of flexibility versus

discipline in project execution, the project presents the question regarding the effectiveness of

a project execution plan in relations to hardware vs. software development. In other words,

given the complexity of developing the Jaguar testing system, Teradyne needs to analyze the

triggers and/or situations that will warrant a more disciplined approach to product

development (in comparison to a flexible approach).

More importantly, as a result of implementing a brand new testing system, Teradyne

also introduced a learning curve that raises the issues of how management will make sure that

the new project management tools are properly used. Management will need to address staff’s



concerns regarding fully supporting these new tools and at the same time address concerns

about staff behavior not fully buying into the purpose of the new tool set. Due to these issues,

the main concern over the development of both hardware and software using the Jaguar

system becomes a more involved question that includes behavioral biases in relation to

implementation of new processes and tools.

Hypothesis

Historically, Teradyne did not often use a rigorous product management system in the

product development process, relying more on implementation and planning on the go. The

Jaguar project introduced a more rigorous approach to project management, incorporating an

intensive concept development and planning phase, an integrated team structure, and a new

set of tools for project management usage. However, given the culture of the firm prior to

Jaguar, the implementation of the Jaguar project did not account for variations in the rigor of its

uses, evidenced primarily by the software development fiasco in comparison to hardware

development. By not taking into consideration project type when implementing Jaguar,

Teradyne did not address the difference in development and testing that the Jaguar project

uses for both hardware and software.

The role of staff behavior, in addition to the lack of project flexibility in applying a

project management model to the product, has all led to having completed the Ultra Flex

system. However the constant software debugging and development that took place near the

end of the Jaguar development cycle is a result of a lack of product perspective planning. It is

also due to a lack of addressing behavioral differences in staff regarding buying fully into a new

way of doing business development.



Proof & Action

It is clear that Teradyne didn’t have a project management culture. Maybe because of

its market dominance or maybe because of its cutting edge developments, nobody seemed to

care about resource allocation. After their first self-evaluations, it became clear that the

engineering organizations were badly overcommitted on projects, with an alarming over

allocation of 300%. As a reaction to this finding, the company decided to go for a more

structured capacity planning process called Aggregate Project Planning. While this helped fix

several issues, it was a strategy that came from the top (management) to the bottom, it

required a great deal of behavioral change and discipline and the project managers where still

not fully committed because they still didn’t have any project management tools that would

clearly indicate if resources once available would become overcommitted as the project

advanced. The lack of management tools for each specific project was a clear indication that

the company is trying to deal with the symptoms but not with the causes. Projects kept on

being poorly planned with no well-defined milestones or scope. Again management, trying to

cope with the symptoms and trying not to go against the company’s culture, created the

“phase-gate” model for development projects. While this was an improvement, it was an

initiative from top management to force projects into a better defined schedule without

knowing or understanding what was happening in between and it didn’t provide project

managers with tools or strategies to go from one phase to the next one.

The Jaguar project was the first project in which formal project management tools were

used. Some of the tools that were used were the work breakdown structure, the 3-point



estimation, the critical path analysis and the earned value analysis. While it is possible that the

(partial?) success of the project was due to the use of these tools, it is also important to

mention that it was the first time that these strategies were used. Because of this, the staff

wasn’t used to the system and there was resistance from some and ignorance from others.

Alternative

The Jaguar project would have been more successful if the project manager and some of

the engineers had been part of a smaller project in which the use of project management tools

had been enforced. It is very clear that most of the project staff saw, but wasn’t aware of, how

the software side was sliding behind schedule and therefore they didn’t do anything until it was

too late. Senior management was aware of the data but was skeptic around the metric used; as

Conner mentions, “The software’s problem emerged gradually. We just didn’t see it until very

late, but we all knew it was screwed up”. Had they participated in a previous project using

project management tools, they would have been able to pinpoint the software delays from

week one and maybe even apply corrective measures.

Another alternative would have been bringing an outside expert in these management tools

that would have been able to notice the problem with the software side and might have been

able to establish deadlines and clear milestones.

Recommendations

The recommendations for this case are simple ones: adapt and utilize Total Quality

Management. The central conflict within the case dealt with how well the company accepted

and implemented TQM. The Jaguar Project was the perfect opportunity to examine the results

of those units within the company that accepted and implemented TQM versus those units that



did not. This one instance served as a test case of Darwinian proportions. In one respect, it is

very easy to believe all of the reasons why software fell behind schedule but the fact remains

that project metrics indicated there would be a problem with delivering project on time early

on. Management ignored these indications and instead of accepting what the data told them

simply thought that they would catch up.

The maxim that those who forget the past are condemned to repeat it is integral to the case

and Teradyne. There are very clear and concrete reasons why the company exhibited signs of

slippage. The company experienced problems with quality and reliability and chose not to

address these problems. The company culture became one where there was no accountability

and as a result lethargy and indifference set in. The company was composed of highly

intelligent employees but these people accepted the overall company culture. The culture

became one where accountability was lost and the results showed in the company’s work.

All of the above evidence would indicate that the company had all of the best possible

personnel it could possibly find working for them. Ironically enough, the tools were there.

However the implementation or use of those tools was not. The company must change culture

and fully embrace TQM. The key sentence in the case is emblematic of the problem: “one of

the reasons was that the management or senior management team did not pay enough

attention to the data (was) because of its skepticism around the metric”. The culture of the

company will not change until all members of management, especially senior management

accept TQM. The benefits and results of such a culture change are clearly visible from the

results of the Jaguar Project. Again a Darwinian metaphor is quite applicable to the case: to



accept TQM means to survive and thrive, to reject TQM means obsolescence and eventual

death.

Follow up

From Teradyne’s website, http://www.teradyine.com, we can see the actual specifications of

the current UltraFLEX system and the hardware that resulted from the Jaguar project.

Some of the features are the testing speed, the wide range of testing instruments and

scalability. All these features were part of the original Jaguar project objectives.

“Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment used to test semiconductors, wireless products, data storage and complex electronic systems which serve consumer, communications, industrial and government customers. In 2012, Teradyne had sales of $1.66 billion and currently employs about 3,600 people worldwide. The company's divisions, Semiconductor Test Division, Systems Test Group, and Wireless Test are organized by the products they develop and deliver.”

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