Teradyne’s Jaguar Project

Analysis
INTRODUCTION
Teradyne, a leading manufacturer of semiconductor test equipment, embarked on a multiyear effort
to improve its product development capabilities and to implement more formalized project
management approaches. Examines the development of a new-generation tester that involved
significant hardware and software design. For this, the company decided to implement new
approaches to project management and project teams. Invites discussion of the effectiveness of these
approaches and the general lessons for the management of product development.

In this case study which is a more realistic case than the projects before. This means it will need all
the members to combine the relevant knowledge and the problems to come up with critical
conclusion. In addition, we should practice our capabilities on collecting information, data or
reasonable diagrams to make the conclusion reliable.

The execution of the project was followed in the below steps:

1. Analyzing the features of these two approaches and make comparison

2. Analyzing Project Management Tools effect and evaluation.

3. Analyzing the consequences of using the project management tools in Jaguar project and
summarizing the lessons should be taken away.

4. Conclusion of the project

ANALYSIS OF OUR APPROACH

Task Description
According to the hints uploaded by supervisor, this task will be explained by analyzing the features
of these two approaches and make comparison. Doing so could give team members a general idea
about the whole project and build steady base for the further questions.

Traditional Strategy
Teradyne is a world leader in manufacturing different kind of testing equipment. But the issues like
late product launch in the market, quality and reliability issues etc. were hindering in the way of
company to be competent. This later urged the CEO Alex D.Alberoff to deploy total quality
management TQM tools to address all the problems of the company. In TQM different tools are
applied to increase performance. This can be done by first doing issue analysis or other Quality
management techniques to find issues and then providing solutions for those issues. Issues in the
industry are identified from all departments of the company and it also depends on the goal of the
company or what is it that they want to achieve. Like in the case of Teradyne they were losing their
competitive edge so they wanted to again become competitive so they found issues which were
making them uncompetitive and then addressed them to achieve the goal. After the completion of
projects everything was discussed (post mortem) to identify the issues and benefit through TQM in
order to enhance the practices and develop new strategies.

Organization Structure: The structure of the Teradyne was dedicated project teams because many
projects were running at the same time. Teradyne’s strategy was to invest heavily in research in order
to remain competitive. Moreover, Jaguar was one of the critical projects in Teradyne’s history which
will have significant impact on its future goals.

Reference to: “During this time Teradyne had also diversified into other related electronic test
markets. In 2004, Teradyne had five major business units—Semiconductor Test, Assembly Test,
Broadband Test, Connection Systems, and Diagnostic Solutions.”

One most important thing to be noted is that Teradyne’s manufacturing facility only focused on final
assembly and testing the equipment while all the parts and subsystems of the new products were
outsourced to other companies. Teradyne also owns smaller sales and engineering organizations.

Depending on the sensitivity of the semiconductor devices and the SOC (System on chip is the
customized minicomputer) increases the need of extensive detail in research and work. To perform
such tasks Teradyne’s focus was heavily on research, hence, they outsourced the manufacturing of
the components and subsystems. Additionally, they also outsourced the sales and marketing to
smaller organizations to remove the hassle and put more emphasis on the research and development
projects.

Reference to: “The company’s internal manufacturing focused on final assembly and test
(subsystems and components were outsourced). In addition, the company had sales and smaller
engineering organizations dispersed throughout its major global markets, including Japan, China, and
Germany.”

Project Selection: One of Teradyne’s problem was project selection. The Company was
overcommitted to projects and those projects which did not have any direct impact on the
company’s strategic goals were being selected and thus these projects were consuming more
resources and in return the projects with a strategic value were suffering with resources and hence
delays in project completion and over budget problems were arising.

Reference to: “Unfortunately, by 1996, it was clear that TQM was not taking hold in engineering, as
projects continued to be late and over-budget, sometimes by a factor of two.” & “The engineering
organizations throughout the company were badly overcommitted on projects (capacity utilization
was estimated to be as high as 300%).”

Project Planning: Project Planning in Teradyne before the product development strategy was poor
because total quality management TQM is a reactive tool and TQM is applied when the problems
are already aroused and the system under consideration has defects to be removed. This strategy
allowed the system to become faulty first. In return, the project planners take the project planning
easy and just a formality

Following problems were faced as a result:

1. Unclear Goals.

2. Project expansion latterly by engineer’s and market’s fluctuation.

3. Unclear Milestones.

4. Project schedules were defined with laxness. Unrealistic schedules.

5. No structured method for project tracking.

6. No project manager (reference to: there was no one individual responsible for the entire project)

7. Failed coordination and communication due to absence of any periodic or systematic approach.

Traditionally, Teradyne’s culture was very informal and casual to promote equality among the
employees. For this purpose, status in company was based on performance. Dress was casual and
everyone including executives had cubicle offices and individual initiative was encouraged. But this
culture reduced the efficiency due to casual behavior of employees which was developed by the
company’s culture. Moreover, Phase gate model was developed but it was not being followed
properly.

‘Jaguar’ approach
Traditionally, Teradyne’s organization structure was dedicated project teams as the company was
operating by investing in different R&D projects. Then in order to enhance the performance Alex
D’Arbeloff launched TQM in early 1990s. This strategy removed many defects but as a reactive
strategy it was not able to address project execution problems. Hence, in 1996 D’Arbeloff launched
a separate initiative to address the traditional project execution which was named as Revolutionary
Product Development RPD. But company’s culture was resistive to implement this strategy. An
important part of RPD was phase gate model, so it was left open to divisions to whether they adopt
or not but this also brought issues in the monthly EPIT meetings because some divisions adopted
the strategy suddenly

while others ignored it.

Furthermore, customers of Teradyne i.e. semiconductor manufacturers had diversified into different
kind of semiconductor devices and therefore more economical solution for them was a single testing
platform which has the ability to test different kind of semiconductor devices. These changes in the
market of Teradyne and increasing competition urged the organization to take radical steps and
provide a new direction to the company.
Organizational Structure: Previous organizational structure of Teradyne was dedicated project
teams. While on the other hand the Jaguar project was based on balanced matrix system. It is
because when two engineering stations at different locations were being merged, as a new
strategy, there were already some projects running. A balanced matrix structure kept those projects
running and hired people from different departments to make a core team and sub teams were
made according to availability of employees and requirement of resources of project at different
time phases. Later, one of the project of Teradyne, memory business, was abolished made almost
60 talented engineers available. Once the organization structure was defined the next step they
defined they defined the priorities for Jaguar project.

Project Priority: According to Mike Bradley, President of semiconductor department,

“We had a strong installed base of customers committed to our existing platforms. Going to a single,
leveraged platform meant disrupting this installed base. This was risky, to say the least. And it
meant that timing was absolutely critical.”

While defining the customer focus company’s management addressed different scenarios and it
was devised that time is the most crucial entity as well as Teradyne’s future was based on this
project so the company was also willing that the project goes flawless, which concludes that
performance of the project should have to be enhanced. The third entity cost can be compromised
on because for a this much important project company was willing to provide any kind of support.

Time Performance Cost

Constrain

Enhance

Accept
“The most critical decisions in product sizing are not around what you do, but around what you don't
do. In the past we tended to go “all in” on front-end sizing, and we disfeatured the system later
when we couldn't hit the schedule. On the Jaguar, we had to take the opposite approach to be sure
we would hit the market window? This was an uncomfortable change, but one we had to make.”

This was because the previous strategy was based on TQM which is a reactive measure and the
mistakes which were corrupting the system were proving to be costly. This is why they needed a
proactive strategy which can make the system durable against the threats and risks which are
almost obvious. This proactive strategy was actually the phase gate model which was developed
but it was not being followed strictly due to casual culture of organization. Project management
tools, team structure, organizational structure and culture was upgraded according to the
Jaguar project needs.

New Risks:

1. It will disrupt the installed base which is risky

2. Much more conceptual work that the staff was not familiar with

3. The team couldn't move before the senior management on the Phase 2gate which could cause
some frustration

4. The efficiency should be concerned when different project teams working together

Comparison
Area Similarity Difference

Organizational As the organization The traditional organizational

structure structure was different structure of Teradyne based on
but the sub-teams different market areas and
according to expertise individual system was built for
 were the same as were each of the customer base, while
before. on the other hand in the new
strategy a single platform with
the autonomy to test multiple
equipment was to be built and
organization structure was
reorganized by merging the
engineering facilities.

Project The project execution Although phase gate model was

Execution strategy was based on same but in the traditional
phase gate model and strategy people were still not
it was followed in both paying much attention and were
strategies not following the phase gate
model. Contrary to that, following
phase gate model process was
must for further work.

Organization Teradyne’s traditional Although the culture was same

Culture culture was very but work regulations and
informal and easygoing procedures were strictly being
based on values of followed in the later strategy.
Teradyne i.e. equality,
hard work etc. and in
the newer strategy it
remained same.

Project Tools Previously QFD was Many new tools were used in
used to improve the order to check the progress and
process by issue quality of work like WBS, critical
 analysis and this path analysis which was absent
meeting stated in case in the traditional technique.
study was part of that
QFD practice.

Project In both the strategies To facilitate the use of tools a

Scanning phase gate model different program management
served as a department was made while in
measurement checklist. the previously there was no
check and balance program. A
software called primavera was
also used for this purpose.

ANALYSIS OF PROJECT
MANAGEMENT TOOLS
Task Description
In the history, the Teradyne’s managers who want to change the existing project management
frame tried to implement strategies. Many useful tools of project management, for instance,
fishbone diagrams and seven-step problem-solving were published at that time. Later Teradyne’s
supervisor created the other solutions to deal with these two issues.

Teradyne allocate its resource for different departments based on different device market segment
of each market. All tasks are decided by individual management of each divisions. This strategy
established the decision and responsibility to specific division on each development task, it also
increased the complexities and limits the front office to integrate the resources. Teradyne senior
management decide to set up a single consolidated platform which is integrated by a range of
functions in 2001.
This is the second task regarding Jaguar Project and it is emphasized that Jaguar Project is a
matter-of-fact event requiring deep analysis rather than the projects and topics we talked about in
the history.

1. Discuss the impacts that the project management tools Teradyne implemented with Jaguar
project.

2. Evaluate the performance of Jaguar project.


3. Analyze how these tools affect the performance.

Determining the impacts

The first question is about characterizing the impacts on which the project management tools have.
And our team choose to support Jack O’Brien’s perspective.

This view reflected the common opinions especially in engineers. Conceptual work is far more
different from what they usually did before, so it is predictable that these conceptual structures or
tools will affect the moral conditions of the employees.

Furthermore, it will also destroy the installed strategy which indeed made the company blooming.
This could lead to lack of confidence of the employees when executing projects.

There are several advantages that are important mentioned in last task:

1. More intensive and detailed project plans.

2. Continual team cooperation.

3. Regular project progress meeting and project process tracking.

4. Make reasonable specifications to satisfy the customers' needs.

5. This strategy could reallocate resources for the particular team and to ensure resources are used
properly.

6. Identified teams working on specific task.


7. Advanced group development and structure contribution.

There are some advantages of each management tool:

1. Work breakdown structure: This strategy could divide the responsibility of every department in
detail. It could help the PMs of this project find out the relation of every sub-project clearly. WBS
could help PMs to find the milestones of the project which is easily to be ignored. WBS can also
help PMs to divide the responsibility of each task and choose a supervisor.

There are also some other benefits:

1) Organizational responsibilities.

2) Easier monitoring of work definitions.

3) Progressive work management.

4) Planning evaluation.

5) Risk management.

6) Constant improvement of processes.

However, there are also many challenges:

1) Increased work burdens on management and management functions on planning, organizing,

monitoring, and review.

2) Risk of Potential demarcation.

3) More required active management of interfaces

2. 3-point estimation: This strategy could help PMs to make the schedule for the project. PMs use
this strategy infer three duration of work: the optimistic, the most likely, and the pessimistic. This
duration will help PMs to make a general plan and schedule of the project. Besides, this predicted
duration will help supervisor of each sub-project to judge the situation of the work.

There are also some other benefits:

1) Clear project objectives and scope.

2) Listed project assumptions and constraints.

3) Compute the various cost scenarios and estimate and average accordingly.

However, this tool also increases the risk of creating false optimism.

3. Critical path analysis: This strategy could help PMs to find out and analyze important tasks in
the project. Every important task will be showed by this way clearly. This will benefit to both
employees and PMs. For employees, they will focus on the most important task and for the PMs,
they could easily to prepare some emergency plans in order to counter some urgent situation in
these tasks.

There are also some other benefits:

1) Makes dependencies visible between the project activities.

2) Enables the calculation of the slack of each activity.

3) Increases visibility of impact of schedule revisions.

However, for large and complex projects, it will create thousands of activities and dependency
relationships which makes it difficult to print the project network diagram.

4. Earned value analysis: This strategy could help PMs to analyze the actual time and cost of the
project and confirm the situation of the project. Use three elements: ACWP, BCWP, BCWS to
analyze the situation of the project in every milestone. Through the Earned value analysis diagram,
the PMs could find out some problems like, over cost or behind schedule. Then, the PMs could
figure out these problem or change the plan in time.

There are also some other benefits:

1) It tracks the project from various perspectives such as work, time and money.

2) Steps can be taken to bring project back on track before delaying.

However, the challenges include:

1) It does not consider the quality of projects.

2) Required time and relevant data are a lot in big and diverse projects.

Assessment of the performance

Historically, in ASIC development, the company would spend most of their resources on
development and very few on test. On Jaguar they reversed the ratio. It means the resources and
efforts are mostly distributed on software. Hardware development matched the schedule and most
of the products could met the target specification. Engineers are more sensitive to the problems in
hardware development. And the tangible deliverables in the process can be acknowledged
transparently during the hardware development period.

While the hardware subsystems were largely able to keep on track, software development emerged
as a problem. Most of the developers on Jaguar had never worked with IG-XL before. A few had
limited familiarity with an older generation of IG-XL. The experts on the IG-XL plat form were
located in Boston and were focused on extending and fixing the FLEX code base. These experts
had little time to spend on Jaguar development. Furthermore, there were frequent statements to the
effect that, "If FLEX doesn't succeed, there won't be any market for Jaguar. And Jaguar
development team underestimated the extent of the learning curve on the new platform. The
software developing program postponed badly and the schedule was not met. The costs results in
an increase about 35% as well. Compared with hardware structure, software structure are harder to
be integrated into one system.

Part of the reason why hardware department performances better than software department can be
that hardware department has more resource than software department. And this is the prime
reason why the software development is not very successful compare with hardware development.
Hardware department took place too much resource and this is one reason which lead to the failure
of software development.
Analysis of the project management tools
1. These tools help management team to show the detailed responsibility for each department.

2. Effective project tracking system and regular project progress meeting make it possible to have
an overall look of Jaguar Project for the senior managers and these tools also helps to collect the
project data which probably contributes to have a direct effect of further projects in the future.

3. Management team uses the data which is offered by 3-point estimation make general plan and
schedule of the project.

4. A well-organized and comprehensible scheme enables the managers and engineers to reach
desired goals and achieve those goals within specific time and cost perimeters.

5. WBS helps management team to find out milestones in the project.

6. Critical path analysis helps management team to analyze the important task in the project.

7. These project management tools not only reduces the frequent project delays and over- budget
but also the risks.

8. The new strategy develops new organizational capabilities and a better flexibility which results in
an increase quality and quantity by enhancing the project effectiveness.

9. Management team use these data prepare emergency plans in order to counter some urgent
situation in these tasks.

10. Earned value analysis helps management and employees to evaluate the situation of the
project.

11. Earned value analysis also help managers to change and improve their plan in time. 12.
Engineers are focus on goals.

13. Continual team cooperation improves growth and development of teams as it inspires team
members to continue to look for ways to perform more efficiently. Engineers will not just focus on
practical applications and pay more attention to project management.

14. Single flexible platform strategy enhance standing and competitive edge in the marketplace.
Teradyne’s great performance would obtain more opportunities to expand the services and succeed
as well.
15. Identified teams working on specific task narrows the focus and make it easier to control the
respective tasks.

Problems:

1. The mixture of the tools utilizing help them see different things that are happening.

2. These methodologies would provide a robust means to communicate the project status to
management and to identify critical issues that required senior management's action or support.

3. Too often, team members didn't know 'how to get value from the tools they were using and
thought they 'could have figured out what was wrong without them'.

The tools had encountered resistance.

4. Most people did not understand the point of the tools.

In general, the tools do not help you focus on what decisions to make, they only provide data and
details on the progress of tasks. And the amount of data they provide can be overwhelming.

Tools Impact

Work This tool enabled the project managements to complete

Breakdown the detailed phase 2 of the project phase gate model so
Structure that major funding can be released. A detailed definition of
the project increased the performance of the project
because clear explanation of milestones and a high
amount of certainty about the tasks to be done.

3-Point This estimation helped in the creation of the project

Estimation schedules by considering an optimistic, a pessimistic and a
most likely scenario for each task defined in the work break
down structure. These estimates enabled to set the date
according to most likely option and project date was
dragged back to march 2004 and then these estimated
 contributed in a way by increasing the performance and
efficiency of the team and getting the project done till
march 2004.

Critical Path Critical path analysis was done on the data provided by the
Analysis primavera software to check the delay in other task due to
delay in one task. This tool helped to timely identify the
delays and issues so that it can be addressed and lately
increasing the efficiency of the team.

Earned Value Earned value was a metrics which was used to check the
Analysis completion of the tasks and analysis shows the amount of
tasks done in a specified period and this enabled to identify
the amount of task completed and as a result concluded
they amount of delay in each task. These tools enabled the
program management to raise a flag whenever a response
or action is needed for improvement.

Program This tool was project management and was used to

Management facilitate the use of tools on the project and was part of the
core team.

Program This web based software enabled the project to put all the
Scheduling data of the tasks on an online platform and then by
(Primavera) performing different analysis on this scheduling data gives
some outputs and shows the performance of the teams at
different sites and also provided information about the
tasks of other sites.
CONSEQUENCES AND FEEDBACK
Task Description
This task will be analyzing the consequences of using the project management tools in Jaguar
project and summarizing the lessons should be taken away from the Jaguar project by Teradyne.
Doing so could help team members to consider this case study in-depth.

1. Discuss the consequence of using the project management tools in Jaguar project.

2. Analyze and give some feedback to the Jaguar project.

3. Discuss the lessons should be taken away from the Jaguar project by Teradyne.

Unintended Consequences
Unintended consequences of using the project management tools. After reviewing the feedback by
the employees of Teredyne in the case study and analyzing the consequence of Jaguar project, we
listed the unintended consequences and their reasons.

1. Delay of the project

Unclear goal of the project plan is the first reason of this consequence. In the earlier project plan,
Teredyne didn’t make a clear goal. This make the lack of goal focus in Jaguar project. Because of
some employees and managers have skepticism about the project management tools. Teredyne
lost their efficiency and speed.

2. Some of the project management tools are not efficiency

The senior managers want to use project management tools to increase efficiency and supervise
situation of the project. However, because of the employees and project managers are lack of
training. They can only use these tools inflexibly. They lost in the huge amount of data. Meanwhile,
some tools are not used in the right way.
3. Lose of motivation in the work

To the engineers, these project management tools changed the ownership of the engineers’ work.
Engineers only response to part of the project now, so they lose their motivation to the whole
project. To the managers, because of managers were reporting back to senior management
through huge amount of data they were more focusing on how to tackle the senior management
instead of behaving as a motivated work.

The lessons should be taken away

Part 1: Unsuccessful points

1. Some engineers don't accept project management tools.

2. Some senior managers have skepticism about these tools.

3. Unbalanced distribution of Company resource.


4. Use project management tools inflexible.


5. Lack of supervision during the project.


6. Too much data for the managers and engineers.

Part 2: The lessons

According to these points, we find some solutions to counter esch of the unsuccessful point. These
solutions are the lessons should be taken away by Teredyne:

1. Train the engineers to understand and use these project management tools.


2. Train the senior managers to handle data and use them.


3. Make clear prroject goal and balanced distribution of company resource.

4. Change and improve these tools to adapt Teredyne itself and use these tools more flexibly.


5. Increase supervision of each department to ensure the situation of each team.

CONCLUSION
Summary of ‘Jaguar’ project

Less Acceptance of new strategy by employees: When the decision was made that the
company is going to make a major transition in the way it is doing business and changing the
organizational structure, the consequences of these actions were not put on table. Furthermore,
stakeholders like senior managers, employees, department managers and other concerned people
should have been consulted throughout the process and all their concerns should have been
considered during the decision process. This would have identified most of the future problems and
above all would have given the employees a sense of acceptance. Then most of the people could
have embraced this new strategy by themselves as their personal motivation. The lesson here for
the management is not to force anything on the employees because it will remove the interest and
motivation factor from the project which is the critical driving force of the project.

No Implementation Plan: While in the new strategy senior management focused on increasing the
attention, focus and amount of detail for defining and implementation of the project but they didn’t
put much attention in how to tackle the issues which will arise after forcing this new strategy on the
employees.

Lack of training: Furthermore, all the tools and new strategy was implemented without providing
essential training to the employees about how the new strategy will work, what are the basic
components of the new strategy, phases of implementation of strategy, how to react to this strategy,
what capabilities will this strategy bring to the project and how it will equip employees to tackle the
problems which were previously made. This would have been achieved by providing training to
employees for the new strategy which could have enlightened them about the massive negative
impacts of the problems caused in the past due to absence of this strategy and not following the
procedures and then logically removing their skepticism by providing training on this new strategy.
Increased Efficiency: After the deployment of this strategy there is an increase in the efficiency of
tasks and an immense data is present to provide support for identifying issues which were
previously unable to detect. This new ability has increased the efficiency of project. Above that, this
new strategy has targeted the changing market and was successful in grabbing the elite customers.

Hence, Seniors should adapt this strategy meanwhile increasing the efficiency of this strategy by
responding to the issues using the traditional Quality function deployment QFD technique.