Earned value management applied to an engineered-to-order multiple project environment

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The supply of Engineered-to-Order pressure equipment in Australia has established a place in the global market. Local manufacturing requires innovation to maintain its position in this supply chain. Changes at the manufacturing level looked to project management to connect the end product’s development and delivery with the end user’s needs. Earned Value Management (EVM) offers project management a best practice in project control and its application to this niche market was considered worthy of investigation as a response to market changes. EVM has a long history of application in large and complicated projects. This provided researchers with material to study application detail across the cost and time domains, resulting in well-established theories about performance outputs and forecasting. EVM implementation has also been the subject of research offering guidance to the user. An area of EVM that remains in the background is the application, implementation and benefits of the method in the smaller manufacturing sector. This research applies EVM to a project orientated organisation that designs and manufactures customised pressure equipment. The objective of this practice-based research is to address questions of EVM application, implementation and benefits when applied to a multiple project environment set within an operations context. A series of twelve projects carried out by the host organisation were subject to EVM application. This provided data to assess the response of EVM to the short duration project and to explore various forecasting behaviours from both the cost and time domains under different reporting frequencies. The process of application was also used to establish qualitative information on implementation and organisational effects as a result of the methods presence. Results indicated EVM is adaptable to the sampled manufacturing projects and tracking capabilities were positive on the few larger projects in the sample. Net benefit to the internal project management function is not represented by EVM tracking, when restricted to the short duration project. Forecasting of both cost and time was adversely affected by high material costs, but displayed stability after this project phase. Exclusion of materials simplified application by reducing administration effort however it did exaggerate deviation of progress from the plan. High project and organisational value is realised by access to EVM’s data sources and structure. It was therefore concluded EVM methodology, coupled to organisational project management and business system theories can deliver substantial operational gains for the project orientated manufacturer.
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