Using product and process flexibility to cope with project delivery uncertainty

Three factors – technical complexity of the product design, need to compress project delivery, and external-driven changes in design criteria – make the project delivery of semiconductor fabrication facilities (fabs) a challenging problem. Empirical findings on strategies to cope with this problem support a comparative study of two project management principles: the principle of investing upfront on a flexible product design and the principle of structuring a more flexible project development process. The project delivery problem is first articulated by outlining the extent of the overlap between the critical steps in the fab development process and by interpreting data to exemplify real-world profiles of external-driven uncertainty. Various strategies that implement the two principles are then analyzed. Specifically, the pros and cons are compared of committing early on by overdesigning with those of postponing critical project decisions by employing modular design definitions and by pre-fabricating building components. The study shows that the two principles are complementary. Managers may find it useful to adopt strategies that implement both principles whenever they have to deliver challenging projects.