Ontologia Logistica para Proyectos A Pedido

Journal of Manufacturing Technology Management
The role of coordination in avoiding project delays in an engineer-to-order supply

chain
Mario Henrique Mello Jan Ola Strandhagen Erlend Alfnes
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Mario Henrique Mello Jan Ola Strandhagen Erlend Alfnes , (2015),"The role of coordination in
avoiding project delays in an engineer-to-order supply chain", Journal of Manufacturing Technology
Management, Vol. 26 Iss 3 pp. 429 - 454
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The role of coordination in Project delays

in an ETO
avoiding project delays in an supply chain
engineer-to-order supply chain
Mario Henrique Mello, Jan Ola Strandhagen and Erlend Alfnes 429
Production and Quality Engineering Department, Received 13 March 2013
Norwegian University of Science and Technology, Trondheim, Norway Revised 10 December 2013
10 February 2014
8 March 2014
Abstract Accepted 17 March 2014
Purpose – ETO supply chains produce high-value products on a project basis. The occurrence of delays
is a major problem that impacts the performance of a company and its supply chain. The purpose of
this paper is to analyze the cause of delays and to understand the role of coordination to mitigate them.
Design/methodology/approach – An in-depth case study was conducted to identify problems
that delay a project and to examine such problems from a systemic perspective. Based on data from
interviews, group meetings, field observations and documentation, a pattern is proposed to explain the
relation between coordination and lead time.
Findings – Conceptually, to reduce the project lead time a higher level of concurrency is necessary.
However, more concurrency increases the interdependencies between activities, something which
demands more coordination effort. Since the coordination mechanisms applied are not appropriate to
cope with the increasing coordination effort, a number of problems appear causing reworks and
delays which increase the lead time.
Research limitations/implications – The main limitation is that the authors are not able to
distinguish which particular project characteristic influences the adoption of a specific coordination
mechanism. Further research is required to examine the effect of various coordination mechanisms
across a higher number of projects.
Practical implications – Practitioners can benefit from discussions in this study to comprehend
how coordination can improve the delivery performance in ETO supply chains.
Originality/value – This study contributes to a better understanding of coordination in ETO supply
chains by making sense of problems that delay the project. Matching the coordination mechanisms
with the required coordination effort, which is based on the project characteristics, is a way to avoid
delays and reduce the lead time.
Keywords Coordination, Complex projects, Concurrent project development,
Interface engineering-production, Shipbuilding industry
Paper type Research paper
1. Introduction
In engineer-to-order (ETO) supply chains, companies are responsible for performing
different activities during a project, such as: design, engineering, procurement,
logistics, manufacturing, assembling and commissioning (Hicks et al., 2000; McGovern
The authors acknowledge the Research Council of Norway (Norges forskningsråd) and companies
that are supporting and financing us (first and fourth authors) through the project Innovation in
Global Maritime Production 2020 (IGLO-MP). A special acknowledgement is dedicated to all the
managers, engineers and project members who provided the relevant insights and valuable
discussions throughout this study. Yet, this paper reflects and presents the authors’ viewpoints and Journal of Manufacturing
the respective companies involved are not responsible for any statements made or use that may be Technology Management
Vol. 26 No. 3, 2015
made of the information contained in this paper. pp. 429-454
The authors want to thank the anonymous reviewers for their relevant contribution for © Emerald Group Publishing Limited
1741-038X
improving this paper. DOI 10.1108/JMTM-03-2013-0021
JMTM et al., 1999). In such companies, the product differentiation occurs at the design
26,3 stage (Hoekstra and Romme, 1992). This means that each product is designed to satisfy
specific needs which vary from one customer to another. ETO companies are mainly
dedicated to produce capital goods (Hicks et al., 2001). Shipbuilding, heavy equipment,
offshore oil and gas, and construction are typical examples of sectors which operate as
ETO supply chains (Gosling and Naim, 2009). Such type of supply chain typically
430 serves niche markets, which have none or few competitors, and customers, who may
accept to pay a higher price for a product that perfectly fits their needs (Stavrulaki and
Davis, 2010). ETO companies do not have a stock of finished products to immediately
satisfy a specific customer need (Bertrand and Muntslag, 1993). Consequently, the
customer is exposed to the total product lead time (Amaro et al., 1999; McGovern et al.,
1999; Bertrand and Muntslag, 1993).
The occurrence of delays is a major problem that impacts the performance of a
company and its supply chain (Stavrulaki and Davis, 2010; Hicks et al., 2001). Long
delays and reworks are common in the development of large engineering projects
because these projects require several refinements during the implementation stage
that increase lead times and costs (Caron and Fiore, 1995). In particular, engineering
and production activities involve a reciprocal interdependence which demands
considerable coordination effort (Konijnendijk, 1994). For example, a high number of
engineering revisions need to be handled through manufacturing because engineering
work is not finalized before production takes place (Hicks et al., 2001). Furthermore, due
to increasing levels of outsourcing, engineering and production need to be coordinated
when these activities are not performed at the same company (Hicks et al., 2000).
Considering this context, competitive advantage emerges from the ability of coordinating
internal and external processes (i.e. Caron and Fiore, 1995; Konijnendijk, 1994; Hicks et al.,
2001; McGovern et al., 1999).
Conceptually, coordination is a relevant aspect of the decision-making process that
maintain the order and stability of a system (Malone and Crowston, 1994). To be fully
coordinated, a supply chain requires that all decisions are aligned to accomplish a
global system objective (Shin and Robinson, 2002). The literature has shown that most
companies commonly fail to coordinate activities involving functional interfaces across
multiple business units (i.e. Hui et al., 2008; Pandit and Zhu, 2007; Sherman, 2004; Mihm
et al., 2003). Some common types of coordination problem includes: poor communication,
inadequate initiating structure, inadequate external support, inadequate cooperation,
organizational structure inhibiting coordination, ambiguities in authority relationships,
amongst others (Sherman, 2004). According to Sherman, “While the research literature
is relatively well developed on coordination within teams or functions, research on
coordination across interdependent team, department, or divisional interfaces is not well
developed”. Indeed, coordination has been addressed mainly from a logistics perspective
(Romano, 2003). The requirements of coordination may change according to the nature
of activities performed in the supply chain. Engineering, or product development, which
encompasses concept, basic design and detailed engineering, is an integral element of
the ETO supply chain that typically is a separate business process in other types of
supply chains (Hicks et al., 2000). Nowadays many ETO companies have been sourcing
production to low-labour cost countries, and retained engineering as a core expertise.
This decision has created a barrier between engineering and production that has resulted
in the occurrence of protracted delays leading to poor on time delivery (Hui et al., 2008).
The amount of outsourcing activities have been increasing without considering the
associated risks (Kumar et al., 2009; Hansen et al., 2013).
Considering an ETO supply chain, the purpose of this paper it to analyze the Project delays
cause of project delays and understand the role of coordination in mitigating them. We in an ETO
use the term coordination to designate the inter-functional coordination between
companies. More specifically, the focus is the engineering and production when these
supply chain
activities are not carried out at the same company. Based on an in-depth case study
conducted in a complex project, we identify problems that have delayed the project and
examine such problems from a systemic perspective. The main research question is: 431
RQ1. How can coordination affect the lead time in an ETO supply chain?
This research question is broken down into in three aims that follow:
(1) identify the problems that delay the project;
(2) describe the mechanisms that are causing delays; and
(3) discuss the role of coordination in avoiding delays.

Initially, the paper synthesizes the main body of knowledge regarding the topic. The
methodology gives an overview of the research method, data collection and analysis.
Then, a case study performed in an ETO supply chain describes several problems
based on data from interviews, group meetings, field observations and documentation.
The analysis of these problems reveals a pattern that explains the relationship between
coordination and lead time. Based on this pattern, we discuss directions to improve
coordination. Finally, the conclusion summarizes our findings and provides
recommendations for future studies.
2. Background
2.1 ETO supply chain: characteristics and challenges
ETO supply chain produces low volume of a high variety of products and allows
customers to demand products which satisfy exactly their needs. Each customer order
requires some degree of engineering work to adapt an existent design or create a
completely new design. Hence, inventory of finished goods does not exist in ETO
supply chains (Stavrulaki and Davis, 2010). Despite the attempts to incorporate standard
components, products are treated as an individual project (Hicks et al., 2001). Value is
created mainly developing customer-specific solutions and integrating sophisticated
systems (Amaro et al., 1999). Consequently, ETO supply chains need to maintain a highly
flexible production in order to completely customize a product as the customer wants
(Wortmann et al., 1997).
The high degree of product customization required by individual customers has a
direct impact on the project lead time (Konijnendijk, 1994). The greater the degree
of customization the longer the lead time, since more activities are performed after
receiving the order (Amaro et al., 1999). Thus, one of the major challenges for ETO
supply chains is to prevent the lead time from being unacceptably long (Stavrulaki and
Davis, 2010). Hicks et al. (2001) suggests that improving delivery is dependent on both
reducing lead times and increasing the reliability of estimates. Indeed, long delays and
rework are common in the development of complex projects in ETO companies because
such projects require several refinements during the implementation stage that
increase lead times and costs (Caron and Fiore, 1995).
The completion of projects in a timely manner is one of the most important measures
for efficiency that covers the timeliness and amount of resources required during the
project (Brettel et al., 2011). In the project management literature several methods have
JMTM been proposed for completing projects on-time, including: Critical Path Method (CPM),
26,3 Program Evaluation and Review Technique (PERT), Earned Value Management
(EVM), Critical Chain Project Management (CCPM), amongst others (Kerzner, 2009;
PMI, 2004). Despite of the variety of methods available, in practice a project is rarely
completed within the specified time (Assaf and Al-Hejji, 2006). Some researchers
suggest that the underlying theoretical basis of project management is not satisfactory
432 and there is no consensus about which methods to adopt (Koskela and Howell, 2002).
In fact, the project management field is more applied and interdisciplinary than other
management disciplines so it is generally difficult to justify the field as an academic
discipline (Kwak and Anbari, 2009).
In ETO companies, the cause of project delays varies substantially from one project
to another due to existence of various forms of uncertainties (Elfving, 2003; Gosling
et al., 2012). Uncertainty has been recognized as one of the major factors leading to
delays in complex projects (i.e. Atkinson et al., 2006; Mihm et al., 2003; Tatikonda and
Rosenthal, 2000 amongst others). Essentially, uncertainty makes it is difficult to predict
the outcome of a project activity hence on-time performance is undermined (i.e. Swink,
2003; Tatikonda and Rosenthal, 2000; Ignatius et al., 2012). A number of studies have
focused on identifying and categorizing the various sources of uncertainty in order
to implement uncertainty reduction techniques (i.e. De Meyer et al., 2002; Atkinson et al.,
2006; Childerhouse and Towill, 2004 amongst others). With reference to ETO supply
chains, coordination has been pointed out as one of the elements of project management
most frequently associated with uncertainties (Gosling et al., 2012).
Basically, the three major phases that require coordination in ETO are: tendering
(sales/marketing), product development (engineering) and product realization
(production) (Hicks et al., 2000). Coordination of these processes requires specific
coordination mechanisms which can be used in a situation of limited standardization
and rarely any repeat orders (Konijnendijk, 1994). High project complexity arises due to
deep product structures, sporadic demand for different items requires various methods
of production, and overlapping of engineering and production activities (McGovern
et al., 1999). In particular, engineering and production activities involves a reciprocal
interdependence which demands considerable coordination effort (Konijnendijk, 1994).
According to Hicks (2001) “Missing information and engineering revisions caused
by the overlapping of manufacturing and design activities are major sources of
uncertainty that complicate the management of ETO manufacturing”.
In some ETO supply chains, production may also be outsourced with the
corresponded supply chain being controlled by the engineering company (Stavrulaki
and Davis, 2010). For example, in the past, shipbuilding companies were responsible for
performing in-house most of the activities to produce a vessel including the production
of some main equipment. Nowadays, sourcing can cover almost every phase performed
in shipbuilding. The so called “full shipyard” became an “assembly shipyard”
(Andritsos and Perez-Prat, 2000; Held, 2010). With the recent intensification of the
globalization process some shipbuilding companies started to outsource activities
worldwide (Holte et al., 2009). To ensure those projects are delivered on time, shipbuilding
companies have to coordinate a range of activities across several project partners globally
distributed (i.e. Held, 2010, Andritsos and Perez-Prat, 2000; Holte et al., 2009; Mello and
Strandhagen, 2011). In general, ETO companies have increased outsourcing while the
product has become more sophisticated and innovative. Therefore, coordinating
engineering and production activities has considerable scope to improve the supply chain
performance (Hicks et al., 2001; Gosling and Naim, 2009).
2.2 Interface engineering and production Project delays
In ETO supply chains, engineering and production represents the two main flows: in an ETO
non-physical (information flow) and physical (material flow), respectively (Bertrand
and Muntslag, 1993). The interdependency between information and material flows
supply chain
gradually increases as products move from engineering to production, consequently
changes at late stages of engineering have a higher impact on the efficiency of
production (Simchi-Levi et al., 2008). Managing information and material flows requires 433
a systems approach to identify, analyze and coordinate the interactions among the
entities (Shin and Robinson, 2002). Engineering is a central activity in ETO supply
chain that directly influences production (Rahman et al., 2003). Both engineering and
production activities require specific capabilities that should be coordinated to enable
that the final product is delivered on time (Hicks et al., 2001; McGovern et al., 1999;
Konijnendijk, 1994).
The importance of coordinating engineering and production is more evident

when production is outsourced. In an article in the Harvard Business Review, Treville
and Trigeorgis (2010) have discussed the case of Flexcell, a Swiss company offering
lightweight solar panels, which was able to meet its delivery commitments manly
because design engineers and production people were all located at the same company
site. Flexcell has decided to not outsource production after value the synergy between
engineering and production to deliver customized products on time and to directly
manage problems. According to Treville and Trigeorgis, the proximity of engineering
and production has facilitated coordination; consequently Flexcell was able to take
advantage of its innovation capability combining customization and responsiveness.
Indeed, the engineering-production interface has a significant influence in the
coordination costs, especially when products are complex (Novak and Eppinger, 2001).
Novak and Eppinger (2001) suggest that companies produce in-house complex
products and outsourcing simpler ones in order to benefit from having invested for
coordinating engineering and production. According to them, such investment takes
places during the engineering, but the benefits of this investment are determined during
the production as a classical example of contractual incompleteness. Still, they recognize
that complex product may be difficult to produce in-house, thus there is balance in terms
of how much outsourcing is feasible considering the coordination costs.
2.3 Mechanisms for achieving coordination

The organizational theory provides the basis for understanding coordination
(i.e. Thompson, 1967; Van Der Ven et al., 1976; Galbraith, 1973; Mintzberg, 1983).
The Thompson’s (1967) seminal study “Organizations in action” of is still regarded as
one of the most important references on coordination. He suggests that in complex
organizations, interdependent functions cannot be isolated in order to minimize the
coordination effort. According to him, to manage the different forms of interdependence
various types of coordination mechanisms are necessary. The higher the
interdependence, the higher the need for communication and interaction hence more
coordination effort is required (Thompson, 1967; Van Der Ven et al., 1976). The
challenge of coordination increases when interdependent activities are performed
by different partners (Galbraith, 1973). Due to the diversity, uncertainty and
interdependence of activities, more coordination effort is necessary to maintain the
consistency of the decisions made (Galbraith, 1973).
To cope with the coordination effort, Thompson (1967) suggests three types of
coordination mechanisms: standards, plans and mutual adjustment. Standards characterize
JMTM the establishment of routines and rules that assure consistent actions through several units.
26,3 Second, plans consist of setting pre-defined goals by which actions from each unit are
governed. Third, mutual adjustment involves communication across several units
during the course of the action. Later on, Van Der Ven et al. (1976) have added teams
as an additional type of coordination mechanism. Conceptually, teams are set up with
representatives from each unit and have the authority to develop and implement
434 solutions. More specific mechanisms to coordinate engineering and production under
conditions of uncertainty and time constraints on projects were studied by Adler (1995).
Based on Thompson (1967) and Van Der Ven et al. (1976), Adler proposes 12
coordination mechanisms as shown in the Table I.
The coordination effort increases from “standards” to “teams” as well as the
correspondent coordination costs. A short description of such mechanisms is gives as
follows (for more details, see Adler, 1995):
• Compatibility standards. Standards used to maintain a certain degree of consistency

within the organization.
• Capabilities development schedule. A task force sets up a schedule to develop
capabilities but with no authority over the execution.
• Coordination committees. Forum that meet regularly to enable mutual coordination
of activities.
• Joint development. Teams develop together and implement solutions.
• Design rules or tacit knowledge. Rules based on learning from previous projects
or designer’s tacit knowledge of manufacturing.
• Sign-offs. Manufacturing signal that it accepts or refuses the responsibility for
making a product.
• Producibility design reviews. Review conducted with the aim of ensuring that
producibility considerations are respected.
• Joint teams. Bring manufacturing engineers into the design process to advice
designers.
• Production flexibility. Use of flexible machines that produce a variety of items in
an efficient way.
• Exceptions resolution plan. Plan for the resolution of exceptions (producibility
issues not solved during design).
Table I.
Typology of
mechanisms to
coordinate
engineering and
production Note: (based on Adler, 1995)
•
Project delays
Engineering changes. Coordinates the implementation of changes proposed by
marketing or required by customers. in an ETO
• Transition teams. Design engineers move to manufacturing on temporary supply chain
assignments to perform design revisions.
Other authors addressing coordination mechanisms with focus on the engineering and
production interface, includes: Ettlie (1995), Twigg (2002), Vandevelde and Dierdonck 435
(2003), Terwiesch et al. (2001) and Petersen et al. (2005). In principle, any mechanism
applied to overcome companies’ barriers may contribute to improve coordination. For
example, job rotation and mobility (Ettlie, 1995), sharing preliminary information
(Terwiesch et al., 2001), cross-functional teams (Griffin and Hauser, 1992), etc. In Adler’s
study, the choice of a specific mechanism takes into account the influence of
uncertainty which he represents in the dimensions of novelty and analyzability. While
novelty is solved earlier in the project adopting more interactive mechanisms,
analyzability needs to be addressed in the later phases because it depends on generating

more information (i.e. drawings, specifications). Contingency theorists such as Lawrence
and Lorsch (1967) and Burns and Stalker (1961) suggested that companies operating
under uncertainty and change require a more flexible organizational structure relying on
cross-functional teams in order to support later adjustments. Recent studies have shown
that autonomous teams can improve the ability of a project team to collect appropriate
information to reduce uncertainty (e.g. having freedom and a high degree of
communication) and to form more accurate interpretations to reduce ambiguity
(e.g. working closely together and being freed from management interpretation)
(Patanakul et al., 2012; Sarin and O’Connor, 2009). Despite the recent advances, the
choice of coordination mechanisms is still an open discussion in the literature.
2.4 Summary of the literature

ETO supply chain has many sources of uncertainty with respect to demand, cost, price,
specification, duration of processes and lead times (i.e. Gosling et al., 2012; Hicks et al.,
2001; McGovern et al., 1999; Konijnendijk, 1994; Caron and Fiore, 1995). Uncertainty
increases the managerial complexity, and deteriorates the performance in ETO supply
chains (McGovern et al., 1999). Overlapping engineering and production activities is
regarded as one of the main sources of uncertainty because engineering work is not
finalized before production takes place (Hicks et al., 2001). Moreover, due to increasing
levels of outsourcing, engineering and production need to be coordinated when these
activities are not performed at the same company (Hicks et al., 2000). Coordinating
engineering and production is essential to cope with uncertainty and provide flexibility
in ETO supply chains (Stavrulaki and Davis, 2010; Gosling et al., 2012). In the literature,
however, few studies are addressing the need for coordination in ETO supply chains
(i.e. Gosling and Naim, 2009). Also, the fragmentation of vertically integrated ETO
companies into a supply chain is still a contemporary phenomenon which lack more
empirical research. Both engineering and production are fundamental processes to
fulfill a customer order in the ETO context that demands a better coordination.
3. Research method
3.1 Overview
An in-depth case study was carried out in a shipbuilding project in order to identify
problems delaying the project and to examine their major causes. This method helped
us to collect empirical data and describe causal mechanisms with a richness of details
JMTM that is normally difficult to achieve using other research methods (Yin, 2009).
26,3 While a single-case study is often criticized by not enabling generalization of the
findings (that is true especially in the case of theory testing), it can provide a significant
contribution to knowledge and theory building (Yin, 2009). In theory building and
theory extension, in-depth case study is one of the most applicable methods due to its
extensive qualitative description and contextual analysis (Meredith, 1998).
436 Our study was part of a research project developed in close collaboration with
companies in the shipbuilding industry. The case is a project to design and produce
a special type of vessel known as offshore support vessel (OSV) which is used
to support offshore operations in oil and gas platforms. In general, an OSV is very
sophisticated and customized. Each vessel is designed to fulfill the requirements from a
specific customer order. Such vessels are produced in very low volume, normally small
series of two to six, and each vessel has a set of particular characteristics which
distinguish one from another. From this perspective, shipbuilding is a representative

setting to study the ETO context.
3.2 Data collection

Basically, two companies were considered: a ship designer and a shipyard. These
companies are responsible for the designing (ship designer) and producing (shipyard)
the vessel. The main unit of analysis is the interface between these companies, and
embedded units correspond to the departments within each company. Formally, an
interface is defined as the contact point where interdependent organizations interacts
as they seek to cooperate to achieve some larger system objective (Wren, 1967). According
to Wren (1967), the concept of interface provides a focal point for concentrating the
managerial effort in order to achieve coordination. We seek to understand how
the activities carried by the ship designer can delay the activities performed by the
shipyard (and vice versa), and how interdependent activities between these companies
were coordinated across different departments. For example, we asked the people from the
engineering department at the shipyard about what problems can delay the project, and
we requested them to relate those problems with a specific department in the ship
designer. Thereafter, we asked questions related to the type and extent of coordination
mechanisms applied to manage each interface. Our main interest was to better
comprehend the role that coordination plays in terms of delivery performance.
The companies signed the contract in the end of 2009 to deliver the vessel
approximately two years later, and the data were obtained mainly in October 2010 and
May 2011. To collect data, we spent a total of five weeks visiting the companies and
each visit took from one to two weeks. In addition to that, phone calls and e-mails were
used to confirm the information obtained. The construct validity was obtained using
multiple sources of data such as semi-structured interview, analysis of documentation
and on-site observation. We performed 32 interviews and each interview took about
one hour. To compare different views, these interviews were carried out with managers
across several departments including design, engineering, procurement, logistics,
production and project management (Table II). We selected interviewees based on their
experience with shipbuilding projects.
In order to avoid bias, we cross-checked data from interviews against project
documentation and on-site observation. Contracts, schedules, drawings, specifications,
standards and reports were the main types of documentation used. Due to commercial
sensitivity, data on costs were not available. On-site observation helped to contextualize
the problems identified and make sense of their criticality. A case protocol was used to
guide the data collection including the following questions. What are the major problems Project delays
in this project? How often do these problems happen? How can these problems affect the in an ETO
lead time? Why are these problems happening? How could these problems be mitigated
or avoided? And, more specific questions were made according to the answer from
supply chain
interviewees.
At the end of each company visit, group meetings were held in order to validate data
and to discuss results of preliminary analysis. These group meetings enabled the 437
participants to make sense of problems and potential solutions. Two groups meetings
were carried out with the ship designer and one with the shipyard. Such group
meetings have shown valuable to gain deep insights about the value of coordination
for mitigating delays (Shani et al., 2008; Karlsson, 2009).
3.3 Data analysis

To analyze the data, first we sought to highlight the main problems delaying the
project. Based on data from interviews, we were able to identify several coordination
problems (Table III). Documentation analysis and on-site observation helped us to
confirm the occurrence of these problems during the project. Next, we translated these
problems into an influence diagram (Figure 4). Such diagram helped to make sense of
these problems and develop a more comprehensive analysis. The use of influence
diagram was useful for mapping the mess associated with complex projects
(Gharajedaghi, 2006). According to Gharajedaghi (2006), mess is a system of problems
containing elements which are highly interrelated. Through the influence diagram
these complicated linkages between events can be comprehended (i.e. Towill, 1996).
Using the influence diagram we were able to generate a number of insights on potential
cause-effect relationships.
The influence diagram was used as a preliminary step in order to develop a causal
loop diagram (Figure 5). The rationale for using the causal loop diagram was to
understand causal relations between variables. The causal loop diagram helped
to explain how the lack of coordination impacts the project performance. The literature
has highlighted the applicability of causal loop diagram to understand the effects of
delays in complex projects (Williams, 2003). According to Williams (2003), the main
argument for using causal loop diagram is to show the systemic inter-relationships,
which caused the various ramifications of the delays, are build up. Although the causal
loop diagram is a qualitative technique, it can also be used as a preliminary step prior
to the application of other quantitative techniques (e.g. system dynamics model)
(Williams et al., 2003).
Based the on causal loop diagram, a pattern has been proposed to explain potential
cause-effect relationships. This pattern helped to validate the empirical data
and to explain the occurrence of problems delaying the project (internal validation).
We have observed that this pattern is consistent with many other related studies
Department
Planning/ Design/ Procurement/ Production/ Total Group
Company Sales project mgt engineering logistics testing interviews meetings
Table II.
Ship designer 1 2 3 10 1a 17 2 Overview of
Shipyard 0 7 2 4 2 15 1 interviews and
Note: aSite engineer group meetings
26,3
438
JMTM
the project
Table III.
Summary of
problems during
Problem Quotation Confirmation
Delay to deliver drawings “Deliver the drawings in the right time is the most difficult thing for Documentation: project planning scheduling
us because we are missing information [from equipment suppliers]” (Ship designer)
Project Manager (Ship designer)
Poor quality of “Many of these shipyards are not making drawings themselves, On-site observation: little specification was
documentation and they do not have a good understanding of what is really needed provided by an engine supplier (Ship
for the engineering department to do good drawings. They don’t designer)
understand at all our need for documentation” Project Manager
(Ship designer)
Product changes after “Drawings from all the blocks were updated. I start to build, and Documentation: drawings from structure
production starts then they [ship design & engineering] start to replace the drawings were in the version G (Shipyard)
for updated versions. For example, they [ship design &
engineering] say that ‘the inspection door cannot be placed there
anymore, close it and open a new one in another place’” Planning
Manager (Shipyard)
Long time to find and “So the big killer for us is HVAC [Heating, Ventilation and Air On-site observation: the participation in a
correct errors Condition] system that is the area where we do the biggest mistakes meeting has shown the difficulties of project
and it cost the biggest money and we don’t find out about the partners to agree on a solution (Shipyard)
mistakes until very late in the project. That is the major problem”
Engineer Manager (Ship designer)
High number of quality “There is a well-know standard defining that the maximum Documentation: hour allocation reports (Ship
problems capacity of transportation for certain products is 800 m3. But, they design and engineering)
[ship design and engineering] sent us a design where the total
capacity of the tanks was 900 m3. I realized the mistake and
informed my team, but the tank was already built” Application
Engineer (Shipyard)
Information flow is not “Sometimes we make a notification to someone of the structure On-site observation: 3D CAD model was
integrated design, but this information does not go through other disciplines showing a beam crossing a bedroom that was
such as accommodation. And now we [at the shipyard] are not visualized in the 2D drawing (Shipyard)
struggling because there is a beam crossing a furnished
compartment” Design Engineer (Shipyard)
(continued )
Problem Quotation Confirmation

Little visibility of processes “I need to assembly an engine that comes from a supplier abroad, On-site observation: there is not information
and I don’t know anything about this engine. I will give you an from production feeding back engineering
example, we assembled the thruster, and now we have to remove (Ship designer)
this thruster to change its base because the base was 70 millimeters
larger than it should be” Planning Manager (Shipyard)
Partners may over evaluate “If people at shipyard have not made this type of vessel before, On-site observation: several new employees
their own skills then, of course, they will realize that there are new solutions which without previous experience (Shipyard)
they have never used. They may think that this is a very easy
vessel because the hull is a small one. And, often, an offshore vessel
is small, but it has a lot of equipments in a small area” Supply Chain
Head (Ship designer)
Delays to deliver “The equipment arrives there [harbor], then it goes to the customs. Documentation: Control of equipments
equipments If any information is missing […], then all the documentation needs acquisition (Shipyard)
to be corrected […]. The equipment will not be released […], and it’ll
take from two to three weeks. During this time the equipment stays
at the harbor and the company has to pay a storage fee, moreover
this delay will have impact on the production” Supply manager
(Shipyard)
Occurrence of unpredictable “Sometimes the equipment arrives at the customs [at the harbor], Documentation: progress reports (Shipyard)
events and they are on strike. We have cases in which we had to abandon
the equipment in the customs, and buy a new one to come by
airplane” Planning Manager (shipyard)
Processes are difficult to “The link with the ship design & engineering demands more On-site observation: recently the shipyard has
follow up attention and needs to be followed up frequently. Because it may increased the staff to follow up the project
happen that information is stuck in the middle of the process (Shipyard)
waiting for someone to make a decision. For example, the list of
electrical cables that we are struggling to have here [shipyard] was
already available there [at the ship designer], but nobody sent it
because of the size of the file” Project Manager (Shipyard)
Project delays
Table III.
supply chain
439
in an ETO
JMTM (i.e Hui et al., 2008; Terwiesch et al., 2002; Loch et al., 2003 amongst others). This
26,3 indicates the potential for extending our findings to other types of ETO supply chains
(external validation). The use of a pattern supported by the literature is recognized
as one of the most desirable techniques for case study analysis (Yin, 2009).
440 4. Case study

4.1 Overview of the shipbuilding project
The shipbuilding project involved several companies including: ship designer,
main equipment suppliers (i.e. main engines, tunnel thrusters, electrical generators,
propellers, cargo systems, electrical and communication systems), material suppliers
(i.e. accommodation, windows, steel plates and profiles, pipes, electrical cables, and
heating, ventilation and air condition system), shipyard and shipowner.
The sales process started with the shipowner informally contacting the ship
designer to discuss potential projects. To develop a conceptual design, the ship designer
carried out an interactive tendering process to understand the shipowner’s needs and
requirements. Such requirements supported the ship designer in defining the main
parameters of the design (i.e. power, speed, gross tonnage). Each design is based on
vessels previously developed to other customers. The work of the ship designer in the
design phase is performed under the risk of not reaching a contract with the shipowner.
When the chances of winning the contract are higher, then the ship designer work more
closely with the shipowner in order to develop a completely new concept taking into
account more specific requirements of the operation.
Throughout the tendering, the ship designer had to contact equipment suppliers
and shipyards to evaluate the costs, technical specifications and delivery slots. These
companies had to interact and to agree on technical and commercial issues. For each
equipment at least two suppliers are technically validated to the bidding process where
delivery and price are negotiated. When the shipowner agreed with the conditions
offered to produce a vessel, the shipowner signed a contract with the shipyard to build
the vessel, the shipyard signed a contract with the ship designer to develop the
engineering package (drawings and technical specifications) and the shipyard signed
a contract with the main equipment suppliers to deliver the equipment based on the
specifications provided. The project represented a significant investment, thus contracts
are established to secure the companies involved from the uncertainties in the business
and regulate relationship between them. Before ordering a vessel, the shipowner
had already a contract with an oil and gas company. This contract defined among other
things when the vessel shall start operating and included penalties in case of delays and
bonus for early delivery.
The project started as an adaptation to an existing design. However, due to the
number of changes and their impact on other systems, the project ended up
as a customer-specific design. From the ship designer perspective, just a small change
in the size of the vessel had a significant influence on the selection of main engines,
electrical generators, structural components, etc. Besides, the project had a number
of innovative systems hence main equipment suppliers had to provide specifications
for systems that they had never produced before. Lastly, the shipyard had never
produced a similar vessel in terms of size and number of systems, and there were
uncertainties regarding the shipyard’s experience and technology to build the vessel.
In many ways, the uniqueness of the project situation contributed to increase the risks
of delays.
The shipbuilding project comprised nearly 3,000 activities which were organized in Project delays
different phases. The production of the hull was the longest activity. In order to reduce in an ETO
this long lead time, the engineering and production were performed concurrently.
The ship designer prioritized the work in the structure engineering in order to enable
supply chain
the shipyard start producing the hull as soon as possible. Due to long lead times to
deliver raw materials, the shipyard had to buy a large amount of steel plates and
profiles all at once to build the hull based on preliminary specifications. However, as 441
these specifications changed during the engineering, additional raw materials were
needed and the hull had to be modified. The perception is that this situation had also
generated reworks and delays.
Delays were a critical issue during the shipbuilding project due to high costs
involved. To prevent delays, the shipowner followed the project execution closely and
monitored the progress of several phases with his own personnel at the shipyard.
When delays happened in critical activities, the shipowner increased the pressure on
both the ship designer and the shipyard to deliver the vessel on time. Nevertheless, due
to the high number of uncertainties regarding the product and the project activities,
these companies could not guarantee that delays will not happen again.
Following a summary of the main characteristics of the shipbuilding project:
• there was a need to handle specific customer requirements;
• the project involved multiple companies;
• interaction between project partners was needed as the project evolved;
• companies shared incomplete specifications of the product;
• there was a high number of project activities;
• the product had a deep structure which embeds several systems;
• the product had sophisticated systems which had few suppliers;
• the product had several innovative systems that had not been used before;
• there was a high level of interdependence between different systems;
• the engineering and production was not performed in the same company;
• the relationship between companies was driven by contractual agreements;
• on time delivery was a very important issue to customer satisfaction;
• the engineering and production were performed concurrently; and
• significant product changes had occurred during the project.
4.2 Concurrent project development

In this shipbuilding project, engineering and production were the two main activities
as they were responsible for the highest lead times. Engineering was related with
requirement analysis, concept design, basic design, detailed design and equipment
sourcing. And, production consisted of logistics, manufacturing, building and
commissioning. The ship designer was the focal company considering the information
flow, while the shipyard was the focal company from the perspective of the material
flow. Engineering and production were performed concurrently, consequently there
were significant interdependencies between information and material flows.
JMTM Production has started three months after engineering, as shown in the Figure 1.
26,3 The engineering and production were planned to be concluded within ten and 19
months after the launching of the project, respectively. The companies had a tight
schedule, thus the level of concurrency between engineering and production was higher
than usual. Due to several problems during the project, engineering and production
were delayed in two and three months. Consequently, the delivery of the whole project
442 was delayed and the costs overran the budget considerably. In that respect, the
interface between engineering and production was one of the main sources of problems
causing reworks and delays.
4.3 Main problems during the project

To build the vessel, thousands of drawings were developed including 3D models
and their respective 2D isometric views. To make these drawings, the ship designer
continually demanded technical documentation from the main equipment suppliers. Some
of these suppliers had agreements with the ship designer while others with the shipyard.
In general, the ship designer had difficulties to obtain technical documentation from
equipment suppliers associated with the shipyard. Such suppliers did not have
contractual obligations with the ship designer consequently they were not committed to
deliver documentation on time.
Throughout the project, there was a massive back and forth flow of information.
The project partners did not have an integrated database. Each company was using a
different ERP and CAD systems which were not compatible. In general, e-mail was the
most common way of sharing project data. As a result, there was little visibility of
the processes and decisions going on across different project partners. When a problem
was found, normally it was too late to avoid delays. In many cases, delays during the
project were related with the poor quality of documentation. For example, even when
the equipment suppliers sent the equipment on time, the delivery of the equipment
at the shipyard was delayed because the documentation to release the equipment at the
customs was incomplete. In some situations, delays were also related to unexpected
events (i.e. absence of workers or weather condition) but there was no mitigation
plan previously developed.
Product changes occurred relatively frequent, and they were complicated to
manage. When the ship designer updated a drawing because an error was found or a
change was made, there were also many other related drawings that had to be updated.
As many systems of the vessel are interdependent, changes in one of them ended up
affecting many others. Moreover, a number of customer changes occurred by the end
of the project when parts of the vessel were already built.
Although both companies in this case study have experience from other shipbuilding
projects, such experience had not being used to avoid delays. Somehow, each project had
Launching of
the project
Delivery of
Engineering Delay the project
Figure 1.
Baseline for Production Delay
Time
engineering and [Months]
production
0 3 10 12 19 22
its own challenges which were not highlighted in the early phases. For example, the ship Project delays
designer ended up using more man-hours than initially planned because the amount in an ETO
of rework was underestimated. Furthermore, the shipyard had little experience and
knowledge to produce the vessel hence it was necessary more interaction with ship
supply chain
designer in order to understand drawings and specifications. Such interaction consumed
a considerable amount of main-hours from the ship designer.
Conflicts between the ship designer and the shipyard arose as the shipyard did not 443
agree on paying for additional man-hours of the ship designer. The shipyard argued
that more interaction was required due to the lack of design specifications and
design errors. From the ship designer perspective, the shipyard did not have enough
production capability to cope with incomplete design specifications and design issues.
The shipyard’s production constraints were not considered by the ship designer in the
beginning of the project consequently a number of adaptations had to be performed
on site.
A number of quotations from interviews were selected to illustrate the problems
described above (Table III).
The project documentation helped us to clarify the information gathered and to
confirm the problems pointed out during the interviews. The occurrence of these
problems created delays that have increased the lead time. An evidence of such
delay is clear in the progress reported provided by the shipyard (Figure 2). Remaining
four months to delivery, the project was still delayed approximately 30 per cent,
and the costs for both the ship design and shipyard were considerably higher
than expected.
On-site observations have been employed to check in loco some of the evidence from
the interviews. For example, the vessel was designed to have six tanks to transport
different types of material. This type of tank was very innovative and had been never
used before. When these tanks were built and assembled into the vessel, there was not
enough space to assemble the pumps due to design errors (Figure 3). The ship designer,
equipment supplier and shipyard had great difficulties to find a solution that would fit
both technical and operational criteria. It took almost nine months for the companies to
agree on a solution. Visiting the shipyard, we had the opportunity to attend, as an
observer, one the meetings to discuss this problem. It was possible to notice that rework
not only cause delays but also a conflicts, disappointments and distrust between
project partners.
100
90 Progress of
the Project Planned
80 Delay
70
60
Real
% 50
40
30
20
Figure 2.
10
The progress
0 of the project
Fev Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Fev Mar Apr May Jun Jul Aug Sep
at the shipyard
Chronological time [Months]
JMTM 4.4 Coordination mechanisms used during the project
26,3 Various coordination mechanisms have been used to coordinate the activities between
ship designer and shipyard, as show in the Table IV. To compare the extent to which
these coordination mechanisms were used, we estimated the relative frequency they
were applied during the project. Based on case study data, we rated the coordination
mechanisms as “Not at all”, “Very little”, “Somewhat” or “To a great extent”. The range
444 between the highest frequency and lowest varies from 0 to 6 times. Basically the
intention was to improve our perception of how coordination was done in practice.
In essence, the coordination throughout the project was fundamentally based on
standards and plans. There was little or no use of mutual adjustments and teams.
A description that follows explains the usage of the coordination mechanisms applied:
• Compatibility standards. Some basic information regarding the production
resources has been considered, for example the lifting capacity of cranes in the
shipyard was considered to define the number of blocks to divide the vessel.
• Coordination committees. Project managers from both companies have been in
contact one another throughout the project execution, but they role was follow up
activities rather than problem solving.
Tank
63 mm
Figure 3.
An example
of problem that
delayed the project
Pump
Not at Very To a great

Coordination mechanism all little Somewhat extent
Pre-project phase Compatibility standards |
Capabilities development schedule |
Coordination committees |
Joint development |
Engineering Design rules or tacit knowledge |
Sign-offs |
Producibility design reviews |
Joint teams |
Production Production flexibility |
Table IV. Exceptions resolution plan |
Mechanism used to Engineering changes |
coordinate Transition teams |
engineering and Note: The | indicates to which extent each coordination mechanism were applied during
production activities pre-project, engineering and production phases
• Design rules or tacit knowledge. Some engineers at the ship designer have tacit Project delays
knowledge about production. However, such knowledge has been diluted as in an ETO
several new engineers without production experience had been hired.
supply chain
• Sign-offs. Formally, production had to approve the engineering work. There was
a time limit of two weeks to assess drawings and send feedback to ship
design. Nevertheless, in practice, it was easier for production staff to approve the
drawing and ask for corrections later on. 445
• Manufacturing flexibility. Production had enough flexibility to handle product
variants. The problem is that such flexibility had a very high impact on
productivity since the workflow is not streamlined.
• Engineering changes. Most product changes during the project were very poor
managed and production was not involved to discuss such changes.
• Transition teams. The ship designer had allocated a field engineer at the shipyard
to support problems solving. Still, a single field engineer was not enough given the
number of project problems.
5. Analysis and discussion

5.1 Analysis of problems delaying the project
The case study provides us a description of several problems which have delayed the
project. Our main challenge is to make sense of these problems in order to enable a
comprehensive analysis. Considering this, a systemic perspective was adopted to show
the linkages between diverse project situations (Figure 4).
An important milestone during the shipbuilding project is when the vessel is
scheduled to enter into operation. To avoid penalties with the oil and gas company, the
shipowner put pressure on both the ship designer and shipyard to deliver the vessel as
early as possible. To shorten the lead time, the ship designer and the shipyard increase
the level of concurrency between engineering and production activities. The vessel has
several innovative systems that have never been used before, and these systems
require a number of adjustments and changes. Moreover, the vessel has a deep product
structure and the interdependencies between them are difficult to predict. To which
extent changes in one system are affecting activities related to other systems are
unknown. Due to high number of project activities, changes have several ramifications
which are not obvious. Hence increasing the level of concurrency makes changes more
difficult to coordinate.
Since the vessel is developed and produced according to the shipowner’s needs,
such needs naturally change as the project evolves (i.e. new standards/regulations,
new technology or new contracts). All these changes need to be coordinated across
various departments in different companies. Considering the fact that engineering and
production are not performed in the same company, it becomes more complicated to
follow up activities, to integrate the information flow, and to have a good visibility
of processes. More concurrency increases the interdependencies among activities,
something which requires more communication and decision. Under this condition, the
ship designer and the shipyard are not able to effectively coordinate the project.
Such lack of coordination is one of the major causes of reworks and delays
(delays are also reinforced by rework). Of course, rework is not only due to the lack of
coordination, there are also other problems such as lack of experience and skills, high
number of quality problems and long time to correct errors. But, if coordination is
26,3
446
JMTM
situations
Figure 4.
analyze the project

Influence diagram to
Poor quality of
documentation
Contractual
Delays to deliver penalties
Delay to deliver equipments
drawings
Product changes
after production
starts Pressure to reduce Deep product
the lead time structure
Occurrence of
Occurrence of
unpredictable Innovative product
delays
events
Increasing level
of concurrency
Long time to find High customized

and correct errors product
Generation of
rework
Coordination is
difficult High number of
project activities
High number of
quality problems
Little visibility of
Partners may over the processes Processes are
evaluate their own Information flow is difficult to
skills not integrated follow up
Separation of
engineering and
production
activities
missing then all these problems tend to increase the rework even more. For example, Project delays
the structure drawings were changed after production had taken place but production in an ETO
people were not notified of these changes until it was too late to avoid the structural
components from being produced. The same rationale applies to explain delays. Due to
supply chain
lack of coordination, delays spread over other activities. Consequently the cumulative
impact of delays was amplified.
Delays were common throughout the project, in particular delays to deliver 447
engineering drawings and equipments. Such delays were influenced by the quality of
technical documentation. Due to the high degree of uncertainty regarding the final
product it was difficult for the ship designer and the main equipment suppliers to provide
good quality documentation. In addition, there were a number of delays in production
because of the occurrence of unpredictable events (i.e. long periods of rain, absenteeism
and staff turnover). Even though coordination alone may not be enough to completely
eliminate such delays, the adoption of more effective coordination mechanisms can
enable a much faster response to problems and therefore to minimize their impact.
5.2 Understanding the role of coordination

Based on insights from the project we have analyzed, it is possible to identify potential
cause-effect relationships from which a meaningful pattern is derived (Figure 5).
Such pattern helps us to understand the effect of coordination on the lead time.
To meet the customer’s expectations in terms of delivery, the companies tend to
increase the level of concurrency in order to reduce the lead time (B1 – balance loop). The
mindset that more concurrency is beneficial to reduce the project lead time is still
common in practice. However, more concurrency increases the interdependence between
engineering and production even more. Hence, more interaction between engineering and
production is necessary to handle product changes and to cope with the high number of
project activities. Such interactions increase the coordination effort required, something
which can increase the coordination costs substantially. In reality, it is difficult to
precisely estimate the coordination effort required consequently the level of coordination
applied is underestimated. This coordination gap generates a number of problems
causing reworks and delays that increase the lead time (R1 and R2 – reinforcement
loops). Finally, a longer lead time increases the pressure to deliver the project even more.
These findings are consistent with the related literature. The concept of
“coordination gap” has been defined by Gerwin (2004) as “instances in which the
required coordination is greater than actual coordination”. According to Gerwin (2004),
Coordination Coordination
effort required effort applied
+
+
R1 +
Pressure on Level of Coordiantion–
delivery concurrency gap
+
B1
Figure 5.
R2 + Pattern that explains
Project Delays + Rework the causal
lead time –
+ relationship
+
JMTM the coordination applied depends on both the ability to coordinate and willingness to
26,3 work together. The lack of proper coordination can affect the project performance in
terms of development time and product quality. For example, Ford and Sterman (2003)
argue that increasing concurrence as a response to delivery pressure aggravates delays
and degrades quality. Valle and Vázquez-Bustelo (2009) mention that in situations
where changes are not predictable or under control, concurrence may generate large
448 problems of communication, integration and rework. Indeed, when activities are carried
out concurrently, changes are often reported as a threat for the performance (Bogus
et al., 2005; Ford and Sterman, 2003). Normally, innovative designs take more time to
converge into a solution since a higher number of configurations are taken into account,
and a higher number of revisions occur that delay production (Terwiesch et al., 2002).
Loch et al. (2003) have shown that overlapping project activities increases the
coordination effort required even when all components and their interactions are
very simple. Moreover, the fact that engineering and production are not performed by
the same company increases substantially the coordination effort. Hui et al. (2008) have
demonstrated that outsourcing production of complex products creates coordination
challenges which lead to poor project performance when companies do not maintain
high levels of dominance over the activities performed.
5.3 Directions to improve coordination

An evaluation of the coordination gaps leads to specifying conditions under which
coordination can be improved (Gerwin, 2004). Considering the constraints on
coordination, the level of concurrency should be very limited in project situations which
are similar to the situation that we have analyzed. Nevertheless, given the high number
of interdependencies between systems, some degree of concurrency is required to avoid
that production constraints are met when engineering has already been far advanced.
For example, innovative products usually have a significant amount of rework that
usually remains unknown until production takes place (Terwiesch et al., 2002; Loch
et al., 2003). Some authors have identified a vicious circle of never-ending rework
between different stages when activities are carried out in a “sequential” approach
(Caron and Fiore, 1995; Handfield, 1994). Possibly, there is an ideal level of concurrency
taking into account the characteristics of each project situation. In this sense, the
coordination mechanisms applied in the project have to be compatible with
the coordination effort required otherwise coordination is not effective (Gerwin,
2004). We believe that using more interactive mechanisms, it may be possible to cope
with increasing levels of concurrency in order to reduce the lead time.
We have observed that a number of project characteristics increase the coordination
effort, such as: deep product structure, substantial product changes, interdependent
engineering disciplines, incomplete information about the final product, high number
of project activities, use of innovative systems and disintegration of engineering
and production. In general, heterogeneous and dynamic environments exceed the
organization capacity to adapt and coordinate and require interactive coordination
mechanisms (Thompson, 1967; Galbraith, 1973). In the scope of engineering and
production interface, examples of more interactive mechanisms include: coordination
committees, joint development, producibility design reviews, joint teams, engineering
changes and transitions teams (Adler, 1995). Matching the coordination mechanisms
with the coordination effort based on the project characteristics is a way to avoid
delays and reduce the lead time. Although the use of more interactive mechanisms
increases the cost of coordination, such cost is compensated by higher degree of
flexibility and adaptability (Thompson, 1967; Takeuchi and Nonaka, 1986; Clark and Project delays
Fujimoto, 1991). With reference to this, Gerwin states that “When a joint project has in an ETO
relatively small [coordination] gaps, the direct costs of coordinating will be lower.
It will also take less time to coordinate, thus reducing the chances of lost sales revenue
supply chain
due to missing the market window.”
Given the number of daily problems that managers have to deal with, a project can
be viewed as a problem-solving situation in itself. The learning developed carrying out 449
complex projects is essential for avoiding excessive adaptation in later phases which
can delay the project. To address the root cause of problems in a complex situation,
companies need to structure a more effective learning process (Senge, 1990). In this
sense, the lessons-learned process can be more effective using teams rather than
standards. For example, post-project appraisal can be an additional mechanism helping
companies to cope with uncertainty, interdependence and change which characterize
projects in an ETO supply chain (Twigg, 2002). Hence, the learning obtained by the
project team can increase the effectiveness of coordination and progressively reduce
the need for interaction.
6. Conclusion
The literature has shown that improving delivery in ETO supply chains is dependent on
reducing lead times and increasing the reliability of estimates (i.e. Hicks et al., 2001;
McGovern et al., 1999; Gosling and Naim, 2009). In this paper, we examined the
root cause of delays from a coordination perspective. The main research question was
“how can coordination affect the lead time in an ETO supply chain?” To answer this
research question, three aims has been posed. The first aim was to identify the main
problems causing project delay. Through a detailed analysis of data from shipbuilding
project a number of problems have been identified (conf. Table III). Such problems
highlighted the lack of coordination between two companies, a ship designer and a
shipyard responsible for performing engineering and production activities, respectively.
The second aim was proposed to describe the mechanisms that are causing delays.
Based on the influence diagram (conf. Figure 4), it was possible to make sense of
complicated linkages between problems. Although overlapping engineering and
production has been used as a practice to shorten the lead time, such practice increases
the interdependence between these activities and demand more coordination effort.
In addition to that, a number of project characteristics, such as: deep product structure,
substantial product changes, variety of engineering disciplines, incomplete product
information, high number of project activities, use of innovative systems and
disintegration of engineering and production contribute to increase the coordination
effort. In many ways, the coordination effort applied was less than the coordination
effort required (Gerwin, 2004). Due to this lack of coordination, companies were not
able to effectively coordinate the project and a number of problems generated reworks
and delays which increased the lead time (conf. Figure 5).
The third aim was to discuss the role of coordination in avoiding delays. The results
of the case study have shown that the number and nature of interactions increase
the coordination effort in a complex project where engineering and production are not
carried out at the same company. Previous studies (i.e. Novak and Eppinger, 2001;
Ulrich and Eppinger, 2000; Ettlie, 1997) suggests that the need for coordination can be
reduced adopting more standard components, modular systems and manufacturing-
friendly designs. Nevertheless, the application of such approaches is very limited in the
ETO supply chains due to high influence of the customer into the product design.
JMTM Our results suggest that the coordination mechanisms adopted to manage the
26,3 engineering and production interface need to be compatible with the coordination effort
in each project situation. Through more interactive coordination mechanisms, it should
be possible to avoid delays and cope with increasing levels of concurrency to shorten
the lead time. Even though the use of more interactive mechanisms increases the
coordination costs, such costs can be compensated by a lower lead time.
450 Evidently, these findings are limited to the ETO context that we have analyzed.
The main limitation is that we are not able to distinguish which particular project
characteristic influences the adoption of a specific coordination mechanism. In order
to enable generalization, further research is required to examine a higher number of
projects and to compare the effect of various coordination mechanisms against
different project characteristics. More research is also needed to investigate the relation
between project learning and coordination. For instance, the extent to which post-
project appraisals can help to reduce the coordination effort is not fully comprehended.
Recapping the main research question, this study contributes to increase the
understanding of coordination in an ETO supply chain by explaining project problems
in the light of coordination theory. Based on findings from an in-depth case study, the
paper has also furthered the understanding of the concept of coordination gap. Our
analysis has shown the relevance of adopting the appropriate coordination mechanisms
to achieve a short and reliable lead time. The context we have investigated provides a rich
source of evidence about problems generated by the lack of coordination. An in-depth
case study often results in a large amount of data which is difficult to analyze,
but following a systemic approach we have provided a comprehensive analysis and
explained complicated causal links. A meaningful pattern based on potential cause-effect
relationships helped to comprehend the occurrence of rework and delays which increase
the lead time. Such pattern is consistent with other references in the literature (i.e Hui
et al., 2008; Gerwin, 2004; Terwiesch et al., 2002; Loch et al., 2003; Caron and Fiore, 1995;
Handfield, 1994). Practitioners can benefit from discussions in this study to comprehend
how coordination can improve the delivery in ETO supply chains.
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About the authors

Mario Henrique Mello is a PhD Candidate in the Department of Production and Quality
Engineering at the Norwegian University of Science and Technology (NTNU) since 2010. He has
a bachelor degree in production engineering and master degree in manufacturing, and
has worked as a Production Engineer and a Lecturer in Brazil. His main areas of interest are
operations management within the scope of complex projects (i.e. offshore oil and gas and
shipbuilding). Mario Henrique Mello is the corresponding author and can be contacted at: mario.
mello@ntnu.no
Jan Ola Strandhagen is a Professor in the Department of Production and Quality Engineering
at the Norwegian University of Science and Technology in Trondheim, Norway. His research
activities focus on manufacturing strategy, the use of ICT for real-time planning and control in
plants and manufacturing networks and collaborative performance management. Strandhagen is
also a Research Director at the SINTEF NORMAN Research Centre.
Erlend Alfnes is an Associated Professor in the Department of Production and Quality
Engineering at the Norwegian University of Science and Technology in Trondheim, Norway.
He is also a Senior Researcher at SINTEF Technology and Society, Department of Operations
Management. Erlend has ten years of experience as a Project Leader and a Work Package Leader
of national and international research projects. His research focuses on manufacturing planning
and control, enterprise resource planning systems and manufacturing strategy.
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1. Mario Henrique Mello, Jan Ola Strandhagen, Erlend Alfnes. 2015. Analyzing the factors affecting
coordination in engineer-to-order supply chain. International Journal of Operations & Production
Management 35:7, 1005-1031. [Abstract] [Full Text] [PDF]

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The role of coordination in avoiding project delays in an engineer-to-order supply

Downloaded on: 11 February 2016, At: 13:48 (PT)

The role of coordination in Project delays

(3) discuss the role of coordination in avoiding delays.

The importance of coordinating engineering and production is more evident

2.3 Mechanisms for achieving coordination

• Compatibility standards. Standards used to maintain a certain degree of consistency

analyzability needs to be addressed in the later phases because it depends on generating

2.4 Summary of the literature

distinguish one from another. From this perspective, shipbuilding is a representative

3.2 Data collection

3.3 Data analysis

Problem Quotation Confirmation

440 4. Case study

4.2 Concurrent project development

4.3 Main problems during the project

Not at Very To a great

5. Analysis and discussion

analyze the project

Long time to find High customized

5.2 Understanding the role of coordination

5.3 Directions to improve coordination

No. 1, pp. 5-31.

Vandevelde, A. and Dierdonck, R.V. (2003), “Managing the design-manufacturing interface”,

About the authors

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