Categorizing Engineer-to-Order Companies Through Their Project Execution Strategy

Project Execution Strategy and Planning Challenges

“…Consequently, most ETO projects lack a clear overview over the project status, which, in turn results in cost overruns that could have been avoided through a planning and control process that considers the choice of PES. In this article we continue the work published at APMS 2016, where we proposed a classification of ETO co mpanies based on their approaches to PES [3]. Through several of our research projects, we mapped PES for ten No rweg ian ETO co mpanies and the categories identified are: 1) vertically integrated type of company, 2) design and engineering, 3) production and testing type [3].…”

“…In this article we continue the work published at APMS 2016, where we proposed a classification of ETO co mpanies based on their approaches to PES [3]. Through several of our research projects, we mapped PES for ten No rweg ian ETO co mpanies and the categories identified are: 1) vertically integrated type of company, 2) design and engineering, 3) production and testing type [3]. The first category owns most of the processes in each project phase.…”

“…1. Phase-based project management [3] Many of the phases described here are either handled internally (specialized daughter companies) or by suppliers. Most phases are comp leted more or less concurrently due to pressure on the lead-time [3] and close collaboration between customer and p roject team.…”

“…Within this management segment, which we identify as Pro ject Execution Strategy (PES), we analy ze how the decision process approached at this level affect the project p lanning and control activit ies. PES is defined as management tactics applied by project-organized companies to plan, control and co mplete a pro ject according to customer requirements [3]. The decision on which type of PES to apply is based in most of the cases on issues like 1) the size of the company and its position on the specific market; 2) the necessity to lower total project cost; 3) search for new and specialized knowledge, etc.…”

“…We analyzed ETO co mpanies producing different types of customized products (ships, cranes, etc.) and we found that applying traditional project planning methods does not consider the choice of PES [3]. Furthermore, considering that more than 75 percent of the ETO product's value is built by involving suppliers of products and services [5], the impo rtance of choosing the right planning p rocess and methodology is important.…”