Question

Pick three of the following control tools and identify situations where that particular tool might be useful:

1. EVM
2. Benchmarking
3. Critical Ratios

Answer 1

EVM: Earned value management (EVM), earned value project management, or earned value performance management (EVPM) is a project management technique for measuring project performance and progress in an objective manner.

Scenario:  Email is a great channel for a 1:1 straightforward conversation. It’s not so good for complex back-and-forth communications between a group of people. Messages can get lost in translation, buried in people’s inboxes, or accidentally deleted.

Solution: A better option is to use EVM , that allows estimators, control account managers (CAMs) and engineers to log in and update their task status and notes with ease and automatically route to-dos to the next in line—all in one centralized location. Better still, when you work with ProjStream, we can help you create a process framework that enables electronic approvals and a data trail associated with workflow signoff.

Benchmarking:

Benchmarking is a way of evaluating performance metrics in a given organization by comparing them to similar performances in one or more (usually external) sources – these may be competing organizations, an industry standard or a compilation of industry bests.

J.D. Powers and the Auto Industry

The J.D. Powers Company provides the automotive industry and its customers with benchmarking that establishes how well various aspects of an automotive product satisfy buyers. The coverage is comprehensive and produces rankings in several areas:

• Initial Quality: Assesses car quality by "analyzing problems reported by owners in the first 90 days of ownership."
• Dependability: Uses reports by the original owners of three-year-old autos to determine which are the most reliable.
• Overall Performance and Appeal: Powers' Automotive Power Execution and Layout study uses the responses of more than 80,000 buyers to establish how satisfied they are with their vehicles after the first 90 days. J.D. Powers notes that auto manufacturers rely on the APEAL metrics for future production and design decisions.
• Sales and Service: Uses several specific benchmarks, such as customer satisfaction related to original tire equipment, to create a profile of each automobile related to its sales and service performance.  

One of the company's most popular benchmarking sites (Compare Cars) allows prospective buyers to compare four different vehicles of their choice with respect to price, chassis, internal and external dimensions, accessories, power train, safety, EPA classification, seating and manufacturer's warranty. The company also provides an individual profile for each selected auto, assessing the vehicle's overall ranking among all similar vehicles and rating them "Among the Best," "Better Than Most," "About Average" or "The Rest."

Critical Ratios:

The critical ratio (CR) is a rule used in priority sequencing of work waiting for processing at a work center. The CR priority index number is created by the formula (due date – today's date) divided by the total shop time remaining. If this rule is used for sequencing, the job with the lowest CR is scheduled first. A CR less than 1 indicate that the job will be late, and a CR greater than 1 indicates that the job can be completed ahead of the due date if no unexpected delay occurs.

A machine center in a job shop for a local fabrication company has five unprocessed jobs remaining at a particular point in time. The jobs are labeled 1,2,3,4 and 5 in the order that they entered the shop. The respective processing times and due dates are given in the table below
Job number Processing Time Due Date
1 11 61
2 29 45
3 31 31
4 1 33
5 2 32
After each job has been processed, we compute
(Due date-Current time)/Processing time
known as the critical ratio and schedule the next job in order to minimize the value of the critical ratio. The idea behind critical ratio scheduling is to provide a balance between SPT(shortest processing time), which only considers processing time, and EDD(earliest due time), which only considers due dates. The ratio will grow smaller as the current time approaches the due date, and more priority will be given to those jobs with longer processing times. One disadvantage of the method is that the critical ratios need to be recalculated each time a job is scheduled.