Re-Engineering the Global Engineering Process

In order to increase competitiveness, a global supplier of engineered cooling systems for the power generation industry needed to optimize its global engineering process. After conducting an analysis, ARGO-EFESO developed ISO Engineering Policy and Procedures for the client that are expected to cut project-related engineering hours by an estimated 15-20% across main sites in Europe and 25-50% in China.

Situation

Lack of a standardized engineering process was putting the client at a competitive disadvantage, with engineering costs higher than its competitors. Not only was the client losing project bids; when a project was won, actual engineering costs often ended up above estimates. Delays in producing engineering designs and drawings caused inter-departmental conflict as well as customer penalties, which resulted in further profitability loss.

ARGO-EFESO was tasked to develop a common global engineering process based on best practices from across the different locations.

Our analysis found that the client’s engineering process was highly centralized in a new global organization, with a handful of managers trying to schedule and oversee all processes. At the same time, engineering activities were still extremely decentralized, with each site operating independently in terms of process and design. As a result, similar components would be designed differently across and even within offices, and deadlines would be missed, as the few managers could not actively manage engineering activities across all projects and locations.

Actions

To improve efficiency and lead time — while also improving management and organizational structure — ARGO-EFESO investigated the entire engineering process to identify strengths, weaknesses, and differences and ultimately to learn what was driving the inefficiencies.

Walking through project examples with representatives from across all locations and product groups — Engineering, Sales, Project Management, and Supply Chain across three continents —ARGO-EFESO found that many Engineering delays were a result of incomplete information from Sales or Project Management and lack of communication across groups.

The ARGO-EFESO team developed an ISO Engineering Policy and Procedures to apply globally, across product groups, that clearly defined Engineering’s role in, and expectations for, cross-departmental cooperation. ARGO-EFESO also recommended a new organizational structure, with self-directed work groups aligned with engineering competencies across sites. Group leaders and technology experts now take responsibility for scheduling and tracking the work within their groups, while instituting common technical best practices globally.

Results

ARGO-EFESO developed an implementation and training plan to support the roll-out of the new procedures and organization of global engineering process. And by working closely with those directly impacted by the changes, ARGO-EFESO was able to increase adoption and acceptance.

The result is increased engineering efficiency and design standardization stemming from the new global procedures, closer work management, and knowledge sharing from the organizational redesign. Savings of $1-2 million are expected, with engineering hours reduced by 15-20% across the main sites in Europe and by 25-50% in China.