Cost Engineering in Axiomatic Design
2.882
May 2nd, 2005
MIT
Cost: What’s the problem?
• “Cost nightmare”
• Ingalls Shipbuilding Co.
• Continuous design change, required
by the Navy
• $2.7B unsettled claim
MIT
USS Peleliu
• $2.6B (1982) to $14.6B (2004)
Boston’s Big Dig
• The Big Dig
Photo removed for copyright reasons.
Photo removed for copyright reasons.
Freiman Curve
20
Final Program Cost
The Freeman Curve
1 = Underestimates lead to
disaster
2 = Realistic estimates
minimize final costs
10
3 = Overestimates become
self-fulfilling prophecies
1
2
3
10
20
0
0
Estimated Cost
MIT
Figure by MIT OCW. Adapted from Freiman, F. R. “The Fast Cost Estimating Models.” AACE Transactions (1983).
• Fail to address:
•
•
•
•
Credible cost estimation
Cost drivers
Cost management
Schedule risk
WHY does a system
cost how much?
• We need …
• Systematic approach
• Better utilization of cost
data
MIT
TRACEABILITY
Goals & Approaches
• Goals
• Enhance the credibility of life cycle cost estimation
• Quickly predict the cost impact of engineering changes to
the system
• Identify key cost drivers to guide the cost reduction effort
• Approaches
• Develop a general method for integrating cost information
into the system architecture
• Development, Production, Operation phase
• Develop a method to predict the cost of system changes
• Requirement changes, Solutions changes
• Integrate the method into a usable tool for designers/
engineers
MIT
Value
• Cost Credibility
•
Credibility
• Cost information is tied to system design information via
•
Axiomatic Design (AD) framework
• Scope of cost estimation becomes apparent
• Unified framework for cost estimation at different stages of
•
system design by constructing a hierarchical structure
Completeness, Visibility
• Capability to Assess the Cost Impact of Changes
Changes
• Ramification of changes in a requirement and/or design
•
solution is captured by AD framework
• The estimate of cost impact is quickly generated to support
•
decision making process
• Key cost drivers can be identified
•
Traceability
MIT
System Design & Development
TECHNICAL CREDIBILITY
CREDIBLE COST ASSESSMENT
• NASA Requirements
(Level 1 & 2)
Customer
Needs
• Technical Scope Defined
is the Scope Estimated
• Identifies Lowest
Level Requirements
& Interactions
Define
FRs
• Estimate the
Systems Physical
Solutions
Detailed
system
Satisfy system
morphology
System changes
are assessed
Construct local
assemblies
Map to
DPs
Establish
interfaces
Build FR -DP
hierarchy
(Top -down)
Decompose
Define
Modules
Identify
physical
components
Mapping DPs into
physical entities
MIT
Integrate
physical entities
(Bottom -up)
Software Tool to Aid the Process
Courtesy of Axiomatic Design Solutions, Inc. Used with permission.
MIT
Software Tool Demonstration
SDCM Development Module
DP1.3.1 is Evaluated
for Change
Nature of a ‘change’
is further specified
Simulation input (change, project phase), Result
(cost impact), and Details are summarized
% completion
(hr)
Adjusted Cost
Baseline Cost
50%
Time when the change is introduced
(User selects this point)
MIT
Courtesy of Axiomatic Design Solutions, Inc. Used with permission.
Development Module Model Structure
Task
Model
FR111
FR112
FR121
FR122
DP111
DP112
DP121
DP122
CU2, $
FR1111
FR1112 FR1211 FR1212
:
DP1111
DP1112
DP1211
CU21, $
CU22, $
DP1212
:
:
Comment
MIT
Affected Design
Parameters Identified
u0, Work Vector (hours)
Installation
Test
Fabrication
Tooling
Design
Installation
Test
Fabrication
Tooling
Design
Installation
Test
Fabrication
CU4: Insulation
400
40
100
0.05 0.10
Design
Tooling
Fabrication
Test
Installation
0.05 0.10
Design
Tooling
Fabrication
Test
Installation
0.05 0.10
Design
Tooling
Fabrication
Test
Installation
0.05 0.10
0.10 0.10 0.50 0.10
0.50
0.20 0.10
0.50
0.70
150
150
75
20
10
0.10
0.40
0.80 0.80
0.10 0.10 0.50 0.10
0.50
150
150
75
20
10
0.20 0.10
0.50
0.70
0.10
0.40
0.80 0.80
0.10 0.10 0.50 0.10
0.50
150
150
75
20
10
0.20 0.10
0.50
0.70
0.10
0.40
0.80 0.80
Input
Output
CU3: Nose TPS
Conceptually Design
Assemble
Test
Design
Tooling
Fabrication
Test
Installation
CU1: Body
Winward
CU13, $
CU0:
Thermal
Protecti
on
System
DP12
CU2: Wing
Winward
DP11
CU3: Nose
TPS
FR12
CU2: Wing Winward
Tooling
CU12, $
FR11
Installation
Process
Matrix
CU1: Body Winward
Test
CU11, $
Test
CU1, $
CU4:
Insulation
Functional
Design
Change
DP1
Assemble
FR1
Conceptually Design
CU0: Thermal
Protection
System
Design
Cost
Domain
Tooling
Physical
Domain
Task/Process
model
Design
Functional
Domain
Cost
Domain
Fabrication
Axiomatic Design
Framework
Linking Functional
and Costing Domains
0.10 0.10 0.50 0.10
0.50
0.20 0.10
0.50
0.70
0.10
0.40
0.80 0.80
150
150
75
20
10
Development Module Model Structure
Identify affected
physical interfaces
between
components
CU 1 
CU 
 2 
...... 
...... 


CU k 
Affected
Components
Input
Output
Comment
MIT
 design 




 tooling 

 fabricate




 test

 design






 code 




 test 



.....


 .....



 design



 perform analysis

 tooling



fabricatio
n


 test






Tasks Required to
Implement
Changes
Iterative Model
Determines Time
to Complete the
Changes
$ - -
 
$ - -
$ - -
 
$ - -
 $-- 
 
$ - -
 
$ - -


 ..... 
 ..... 


$ - -
 
$ - -
$ - -
 
$ - -
$ - -
 


Cost Required to
Implement Changes
Iteration model
Task A Task B
Task A
Task B
0.5
0.3
Work Transformation Matrix
% completion
(hr)
un = WT ⋅ un −1
U = u0 + u1 + Lu N
= u0 + WT ⋅ u0 + WT ⋅ (WT ⋅ u0 )L
= (1 + WT + WT 2 + L + WT N ) ⋅ u0
Work completion curve
for the original design
Time (iteration step)
MIT
Cost Impact of Change
Cost penalty = Y - X
% completion
(hr)
Remaining work for
original design, X
50%
User selects this point
MIT
Summary
Complete Traceability from Design to Cost Information
Task
Model
CU13, $
FR121
FR122
DP111
DP112
DP121
DP122
CU2, $
CU21, $
CU1: Body
Winward
FR112
DP1112
:
DP1211
DP1212
MIT
:
40
100
0.05 0.10
Tooling
0.10 0.10 0.50 0.10
150
0.20 0.10
150
0.50
Fabrication
0.10
75
0.80 0.80
20
10
0.50
0.70
Test
Installation
0.40
0.05 0.10
Tooling
Fabrication
0.50
Test
0.70
Design
Tooling
0.10 0.10 0.50 0.10
150
0.20 0.10
150
75
0.50
0.10
20
0.40
0.80 0.80
10
0.05 0.10
0.10 0.10 0.50 0.10
0.50
Fabrication
Tooling
Fabrication
Test
Installation
150
150
0.20 0.10
0.50
0.70
Test
Installation
Design
u0, Work Vector (hours)
Installation
Test
Fabrication
Tooling
Design
Installation
Test
Fabrication
Tooling
Design
Installation
400
Installation
CU4:
Insulation
:
DP1111
CU2: Wing
Winward
FR1211 FR1212
CU3: Nose
TPS
FR1111 FR1112
CU4: Insulation
Assemble
Test
Design
CU22, $
CU3: Nose TPS
Conceptually Design
Design
FR111
CU2: Wing Winward
Test
DP12
Installation
DP11
CU0:
Thermal
Protecti
on
System
FR12
Test
CU12, $
FR11
Fabrication
Process
Matrix
Tooling
CU11, $
Design
CU1, $
Test
DP1
Assemble
FR1
Conceptually Design
CU0: Thermal
Protection
CU1: Body Winward
System
Fabrication
Cost
Domain
Tooling
Physical
Domain
Design
Functional
Domain
75
0.10
0.40
20
10
0.80 0.80
0.05 0.10
0.10 0.10 0.50 0.10
150
0.20 0.10
0.10
150
75
20
10
0.50
0.50
0.70
0.40
0.80 0.80
Steps
1.
2.
3.
4.
5.
MIT
Identify affected DP’s from FR change
Identify CU’ corresponding to DP’s
Identify CU’’ from CU’
Estimate % rework input
Estimate total change-workload