THE COST ENGINEERS - ACostE 2011/CostEngrR… · · 2018-01-17The Association of Cost Engineers...

The Association of Cost Engineers

ACOSTE CONFERENCE 2011

50th Anniversary

www.acoste.org

The Role of the Cost Engineer during

the Early Stages of Design within the

Aerospace Industry: An Organisational

Behaviour Perspective

Lucy Bolton

Socio-Technical Centre (STC)

Leeds University Business School


Introduction Case Study Organisation

• Multi-national engineering organisation

• Aerospace industry • Long term collaborative relationship with Socio-Technical Centre (STC) over 10 years. • Only group of social scientists in the world working as part of their academic network.

Case Study Project • Runs until Spring 2012

• Part of a wider change initiative which aims to redesign the New Product Introduction process:

‘Pre-work, not Re-work’

• Focus on the cost bidding process during the early stages of design

• Working closely with Cost Engineers involved within the process

Socio-Technical Centre

• Leeds University Business School

• Multi-disciplinary research centre

• Experts in Socio-Technical Systems Theory

(STST)

• Bringing together engineering components and

components of human behaviour within systems


“We aim to make Leeds leader in the field of socio-technical systems design, to create processes and environments that are a

result of marrying an understanding of human behaviour with technical expertise” (Prof Chris Clegg – Director)

The STC Approach • Systems function at their best when social and technical aspects are

jointly optimised.


Technology

Systems &

Procedures

Goals &

Metrics

Work &

Structures People

Culture

STST → Organisational Change


• Though sometimes framed differently, socio-technical principles are shared by organisational change theorists

Clegg’s Socio-Technical Principles

1. Design should reflect the needs of the business, its users & their managers 2. Design involves multidisciplinary

education 3. Design is an extended social process 4. Design is Systemic: All aspects of a

system are interconnected; thus none should take precedence over another in system design.

5. Systems & their design should be owned by their managers & users

Guidelines for Successful Organisational Change

1. Diagnosis of an organisation’s problem is

key for any change programme 2. A multi-disciplinary project team should

be involved throughout the change management process

3. Change should be managed as a continuous process

4. A systems approach to change, encompassing all major business, human, organisational & technical issues

5. End-user involvement with users owning, leading and managing change initiatives

See Clegg (2000); Clegg & Walsh (2004); Antoni (2004); Meyer & Stensaker (2006); Axtell, Pepper, Clegg, Wall & Gardner (2001).

The Application of STST

• Although there is support for STST, the uptake and application of these

principles and practices has been poor.

• Organisations often find it difficult to develop

an integrated approach to change.

• The STST approach maintains that the systems

and their design should be owned by their

managers and users.

• Another key feature of socio-technical design involves multi-disciplinary

education, bringing together people from different roles and disciplinary

backgrounds that have different skills, experience and expertise to offer the

design process.


Create a “pull not push” with a change initiative (Clegg & Walsh, 2004)

Push

Change

Initiative End-Users

Pull

Change

Initiative End-Users

End-User Ownership

• Change is pushed upon end-users

and handed over only during

implementation

• Resistance to change

• Ineffective at meeting goals

• Change initiative is pulled through

and owned by the people who will

manage and use new ways of

working

• Requires proactive environment

Clegg, C., & Walsh, S. (2004). Change management: Time for a change! European Journal of Work and Organizational Psychology,

13 (2), pp. 217-239.

Multi-disciplinary Approach


Knowledge

Management

Practitioners

Modellers

Cost

Engineers

Computer

Scientists

Organisational

Psychologists

Technical

Engineers

Socio-Technical Systems

Technology

Systems &

Procedures

Goals/ Metrics

Work &

Structures People

Culture

• When designing an engine an organisation may be very good at looking at

the different systems and considering how they will impact on each other if

changes are made.

• However, a company may not do the same when implementing changes

within the organisation e.g., roles, culture, attitudes, behaviours, working

practices etc.

Objectives 1. Analyse current “As-Is” cost bidding process

with a focus on the ‘social’ aspects e.g., roles,

responsibilities, goals, organisational design,

engagement and information flow.

2. Capture requirements for a new, improved process.

3. Provide a description and associated

process map of the “To-Be” cost

bidding process.

4. Develop a change programme plan to

manage the transition to new ways

of working.


Methods


• Participants are at all times end users and their managers

Traditional

Methodologies

• Literature reviews • Questionnaires • Interviews • Focus groups • Observation • Diary methods

Non-Traditional

Methodologies

• Process mapping: Plexus Planning

Process Modelling Tool

• Lessons Learnt

Process Modelling Tools


Technique/Tool Summary of Feasibility

Plexus Planning Modelling Tool Process models can deal with large networks of dependency; Multi-dimensional

views; Easy to use & understand

P3 Signposting (or CAM) Can create large, complex models; Very academic & training required

ARIS Useful for bringing whole systems together; Complex programme to learn & use

MEGA Strong in design & simulation; Complicated toolset requiring training

Role Activity Diagrams (RAD) Focus on responsibility of roles and interactions; Easy to use & intuitive to read &

understand

Social Network Analysis (SNA) Maps relationships & flows between people; Easy to view and understand; Limited in

representing process

Scenario Planning Strategic planning tool to consider future scenarios; Enables participants to consider

role designs and responsibilities; Encourages participation/engagement; Easy to use

Soft Systems Methodology (SSM) Supports and structures thinking about, and interventions in, complex organisational

problems; Not a very structured approach

Organisational Modelling Tools Effective at visualising organisational systems and increasing their transparency;

Very subjective and can be open to biases.

“As-Is” System Overview


Technology •Cost Modelling

•Tools

•Innovation

•New Technologies

Systems & Procedures •The Bidding Process

•Pre-work

•Cost Information

•Cost Optimisation

•Data Reuse

•Iteration

•Systems Thinking

•Long-term Strategy

•Process Management

•Risk Management

•Lessons Learnt

Goals & Metrics •Cost Targets

•Changing Requirements

•Timescales

•Deadlines

•Reviews

•Tracking Cost

Work & Structures •Organisational Structure

•Engagement between teams

•Project Priorities

•Nature of cost

•Global Location

People •Roles & Responsibilities

•Communication

•Cost Ownership

•Commitment/Buy-off

•Team-working

•Resource

•Skills

•Meeting Effectiveness

Culture •Cost Culture

•Openness

•Customer Pressures

•Risk Averse Culture

•Improvement Efforts

Key Findings


Pre-work

• Too much “invention on the hoof” • Vicious cycle

• Need for off-the-shelf solutions for Engineers to work with

• Pre-work/earlier engagement would also make timescales

more manageable

Risk Averse Culture

•New Technologies can make it difficult for Cost Engineers

to tie down cost

•Commitment issues

Cost Culture

• Cost tends to “come out at the end”

“...It is very dynamic...it

can be hard to try &

keep up...”

“Sometimes you have

to take a leap of faith,

and there is that lack of

faith...a lack of belief”

Key Findings (2)


Lack of Early Engagement

• Pre-warning for those putting together the cost for a bid

•Difficult to allocate resources

• Better communication of changing requirements

• More engagement and sharing of information

„Over the Wall‟ Communication

• ‘Waterfall method’

• Various disciplines work on

their areas of design before

throwing it ‘over the wall’ to

another function.

• Little integration between

Engineers and the phases in a

process.

• Benefit in recognising systems

as social systems as well as

technical entities.


Clegg, C.W., Waterson, P.E., & Axtell, C.M. (1997). Software development: some critical views. Behaviour and Information Technology, 16(6): 359-362.

Issues Facing the Cost Engineer • Cost priority compared to other attributes

e.g., weight, reliability

• Cost ownership

• Complex nature of cost

• Recognition

• Established career path

• Systems thinking i.e., the ‘bigger picture’


“It could be the best process

in the world...but it’s not

going to deliver anything

without the cultural &

behavioural changes as

well...”

Cost Behaviours =

function of (Capability x Motivation x Opportunity x Support)

The four elements of cost behaviours:

• Capability (i.e., involving training, skills, competencies)

• Motivation (i.e., reward, recognition, pay, career development)

• Opportunity (i.e., empowerment, autonomy, role)

• Support (i.e., cost culture, role models, group norms, leadership)

Strengths of the Process

• Awareness of engagement issues

• Co-location

• Team-working ability

• Roles and responsibilities lie in the right place

• Adequate skills

• Improvement efforts evident within the organisation

• Everyone has a desire to get it right

• Cost is slowly becoming more a priority


Process Mapping

• Issues around the

engagement points

• Need clearer launch

and sign-off points for

cost

• The need for more

consistency and stability

throughout process


Workshops

• A number of workshops held

following “As-Is” Analysis

– Interactive

– End-users present i.e., cost community

– Bring together key stakeholders

– Validate findings & highlight key issues

• Process mapping:

– Add in activities/actions using post-its

– Iterate

• Requirements capture: – Summarise the key requirements for an improved

cost bidding process


“To-Be” Requirements • Requirements reported include:

o Earlier engagement -> reduce silo behaviours

o Improve the ‘pass’ between groups

o Improved communication within organisation & with customers

o Pre-warning/improved visibility

o Long-term balance for off-the-shelf solutions

o Further co-location

o Establish the role of the Cost Engineer


Practical Implications This work will help to: • Ensure that changes are based on genuine business needs • Create practical rather than faddish solutions • Sustain new ways of working through involvement of end-users

• Produce a more efficient cost engineering system • Familiarise the organization with the socio-technical approach so they may

apply this in future change projects

• Create a learning organization that can be more globally competitive

• Put socio-technical design principles on the map in commercial organization change projects



Job

Crafting

Communication

Effectiveness

Social/Organisational

Networking

Sub-cultures

Organisational

Change

Socio-Technical

Systems Theory

Process

Modelling

Theoretical Implications

• Possible areas of investigation:

Summary • Clear problems with integration, standardisation and

communication due to the existence of several sub-cultures.

• Indicative of systemic problems.

• However, starting to think in a systemic way.

• Reactions very positive as people begin to see potential of the socio-technical approach.

– Showcasing the value of a socio-technical agenda to commercial organisations.

– Cementing socio-technical theory’s place on the academic map.

– Promoting the application of organisational psychology in non-traditional areas of application and amongst other disciplines such as Engineering.


Thanks

[email protected]

www.acoste.org


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