• Predictive Analytics for Improved Cost Management  



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Original Post Date: Tuesday, March 29, 2011 “I think we have an obligation to work with industry to ensure that our suppliers do not just remain world class in defence, but aspire to be world-class manufactures that can withstand comparison to other industries.” Chief of Defence Procurement, Sir Robert Walmsley Is this a practical proposition or is it a pipe dream?  The following excerpt from Dale Shermon’s Systems Cost Engineering attempts to make the case that this type of comparison is possible. Many of the statements in proposals and marketing literature stating the superiority of a company are anecdotal or at best qualitative ...
Original Post Date: Monday, March 28, 2011  So how did your basketball picks go this season?  My bracket is officially closed since absolutely no one picked any of the final four teams!   I am happy to report that I came in second with a whopping 36 correct picks - picks that most would judge to be pretty bad.  So where did we go wrong? Since I don’t really follow college basketball closely during the year I make my picks somewhat randomly – loosely based on the teams' standing but occasionally predicting an upset.  Naturally, the upsets I predicted were not ...
Original Post Date: Wednesday, March 16, 2011 True Planning results have many options, including viewing Costs by Activity. While simple, this view can be quite powerful, especially when exported for re-organization manipulation.  In a recent exercise, the WBS mapping of common objects, estimated by separate multiple scenarios, presented a non-trivial chore in Excel. “Transposition” features work fine for matrices, as do pivot tables. But how does one map object by activity grids into activity lists, similar to MIL-STD 881a, with singular “roll up” instances of all nonzero object costs?  The secret is in how True Planning appends each activity output with the [object] tag. Once exported ...
Original Post Date: Wednesday, March 16, 2011 ...wear the worst shoes. The cobbler was a master at his craft; he was just too tired to practice it when he got home from the shop.  Sound familiar? A disciplined approach to understanding (functional) requirements as well as analogous projects (with actuals) is our not-so-secret sauce. Why run the risk of creeping back up our career learning curve? There’s already enough scope creep to keep us busy. Plus, for you management types charged with prospecting, a consistent approach towards estimation is a great way to connect with people who've felt the pain of being the cobbler's kids. I recently reconnected ...
Original Post Date: Wednesday, March 16, 2011 In Parametrics is Free, I acknowledged receiving (too late) “you should’ve known to ask that” over the years. Quality control after-the-fact is fine; but it’s better and cheaper to take a systematic approach to quality assurance as part of your estimating process. The sheer volume of what we model can often keep us so close to the details that we are unable to step back and put on our QA hat on for a sanity check. Enter Quality! On a very large project, our team has introduced a few regular cross-checks, notwithstanding typical math check-sums.   A round table peer ...
Original Post Date: Tuesday, March 15, 2011 In my blog last week on Work Breakdown Structures, we reviewed the subtleties of using the [object] tag to your advantage in creating different sorts and roll up subtotals. As a followup, I’d like to drill down a bit on the initial step of using the “copy grid” exports. Each row number is unique, thus creating an identifying key for the vlookup function in Excel. Since all object X activity instances are allocated 100% to one of the three phases (with very rare exception), these row keys allow you to sort and re-group outputs while maintaining ...
Original Post Date: Thursday, March 10, 2011 My previous blog discussed a “Should Cost” methodology used by PRICE Systems to complete an analysis. In the article I included a chart depicting calibration results for manufacturing complexities for each weapon system (X-Axis). Manufacturing complexities are a major cost driver within the model. This parameter can be derived from model knowledge tables, generators or from calibration. Many times the calibrated results are simply averaged and used for predicting cost for the new system. This assumes that the new system is very similar in technology and performance as the systems used for calibration. In general this is not the ...
Original Post Date: Tuesday, March 1, 2011 The concept of the fuel cell was first published in 1938 by Christian Friedrich Schonbein.  Based on this publication Sir William Grove invented the precursor of the fuel cell in 1839. The Grove Cell created current by applying two acids to zinc and platinum electrodes separated by a porous ceramic pot.  In 1842 Grove developed the first actual fuel cell which produced electricity with hydrogen and oxygen, much like many fuel cells in use today. Fuel cells remained an intellectual curiosity until the 1960’s when the US space program identified a requirement for ...
Original Post Date: Monday, February 28, 2011 Don't reinvent the wheel.  It's a waste of time and effort.  All too often I see organizations establishing measurement programs or new software estimation intiatives and they want to build everything from the ground up.  Mistake, mistake, mistake... People have gone before you.  Learn from them.  Take their ideas and go forward from there.  In the past year, I have architected the implemention of our software cost estimation tools at two large federal agencies and two DoD programs.  Teaching people how to estimate is easy.  Teaching them how to find the data to develop estimates is ...
Original Post Date: Monday, February 28, 2011 I recently attended the Wharton Aerospace Conference and Federal Networks 2011.  Amid the obligatory discussions about the economic climate and federal budget deficit, an interesting topic bubbled up.  There  was a certain preoccupation with an idea called ‘consumerism.’  According to Webster, consumerism means "...the promotion of the consumer's interests; the theory that an increasing consumption of goods is economically desirable; a preoccupation with and an inclination towards the buying of consumer goods." As is often the case, there is a difference between definition and connotation. The intended meaning of consumerism at these events was the ...