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To focus these accounts on consumers with a high marginal propensity to consume and to avoid competing with commercial banks for large accounts, these accounts could be restricted to one account per Social Security number and interest could be earned only on some base amount e. However, account holders could add additional money up to a specified annual limit until the total in their account reached the base amount.

Money above the base amount would earn no interest. Whenever excessive inflation threatened, the Federal Reserve could set high interest rates for these accounts, increase the annual contribution limit allowed for that year and increase the base amount to encourage savings and discourage consumer demand, while keeping interest rates somewhat lower in the financial markets to encourage an increase in the supply of goods and services to tightly control inflation.

Consistent with "The Public Banking Act" as recently introduced in Congress, the Federal Reserve bank would be authorized to offer small loans to individuals and small businesses to further encourage consumer demand and business activity and employment. Also opportu- 28 21 nities for improvement are important to identify, and to perform that internal and external quality audits can be conducted, with the consideration of the time and resources needed.

The seventh principle, factual approach to decision making, emphasizes the importance of performance and progress evaluations in effective decision making, and the ISO standard gives an example about analyzing the information from project closure reports of previous projects to use to support the improvement of current and future projects. The eighth principle involves also suppliers into project quality management and emphasizes the beneficial relationship between the organization and the supplier.

The cooperation with the supplier when defining strategies is important especially in the case of products with long lead times, and the requirements towards suppliers processes and product specifications should be developed jointly among the organization and the supplier. The aim in this research is not to create a quality gate model by following Lean principles, but more to choose those concepts and methods from Lean thinking that truly benefits the goals of this study and fit beneficially to project environment.

The target is to get familiar with Lean philosophy and find suitable and value adding factors to utilize in the quality gate model. The market is getting even more competitive and companies are constantly demanding more profitable solutions. Therefore, Lean approaches such as efficient application of resources, cost reduction and excellence in processes, are making it essential to consider Lean philosophy in this development project also. Lean concept is one of the most widespread management concepts in the world, and there is no unambiguous definition of Lean.

Liker demonstrates one well noted approach to Lean philosophy in his book The Toyota Way. Liker , p. At least some of those approaches provide a reasonable value basis to use in this project development study also. Next, a short introduction to general Lean philosophy is conducted, the main focus kept in concepts that can be useful from quality development and project point of view.

The roots of Lean philosophy are in Japanese car production industry, especially in Toyota s culture and way of working. The auto industries of North America and Europe were stuck with outdated mass production systems and techniques, simply lagging the development and losing market share for the pioneering Japanese companies. Unable to learn from their Japanese competitors, Western companies were concentrating on very wrong issues and an idea about undertaking a closer study of the new Japanese techniques came up.

Those techniques were started to name as Lean production and a major research project launched with MIT and motor vehicle manufacturers around the world to find out about competitiveness differences and reasons behind them. The source of competitive advantage resulted from the Lean production model developed by Toyota during the years, giving the Japanese companies copying the model a huge lead in productivity and quality compared to their competitors.

Womack et al. That kind of thinking is a huge barrier and an annoyingly often occurring phenomenon, preventing companies to improve their performance with Lean. While there is not existing any unambiguous explanation or definition of Lean and in literature the authors seem to have divergent opinions about the characteristics associated with Lean concept, for organization planning to implement the concept it is therefore essential to identify the variations and make active choices to discover the most suitable components and concepts Hines et al.

Hines et al. Hines at al. In this study it is more reasonable to concentrate on the strategic level and thoughts that can be transplanted into project business. Big part of Lean literature concentrates on Lean production and Lean tools for waste elimination and other productivity improvement techniques.

From this thesis point of view the specialties of Lean production are of minor importance, and the concepts suitable for project development are collected to this literature review. The basic principles of Lean thinking are studied via commonly known definition provided by one of the basic works of Lean, The Toyota Way Liker The 14 Lean principles, that are important for the management to embrace, are divided into four categories in the 4P model shown in the figure 2.

The first category, Philosophy is about the principle, that management decisions should be based on a Long-term philosophy, even at the expense of short term goals Liker , p. All the activities in a company should be evaluated by the value they are producing for the 30 23 customer, society and economy. Responsibility and self-confidence are especially valued, and one should always maintain and develop one s skills to make more additional value. Toyota Way s 4P model with four categories for the 14 management principles.

Liker The second category, Process, includes the statement, that following the right process, the right results can be achieved. According to Liker , p. The principles in the Process category are pursuing more the optimization, concentrating more on the technical side of Lean. According to the principle number two, it is important to create a process flow to reveal the problems and get rid of waste, the useless and unnecessary work Liker , p. The pull system should be used to avoid the overproduction principle 3 and the inventory of finished and incomplete products kept in minimum by reacting fast to daily changes and stocking up the inventory often.

Principle number four states that the workload should be balanced, so that the overload of the workforce and the equipment is minimized. The working culture should be created so, that a stop is made, when a problem is noticed principle 5. Problems should be handled quickly after occurring and the quality level of the product should be closely guided 31 24 by the customers demands. It is also important to have standardized tasks to enable the continuous improvement, commit employees and gather best practices principle 6.

To promote continuous improvement and reveal the problems a Visual Control should be applied to work principle 7. Simple visual systems and indicators can be used to inform the employee immediately if the standard circumstances are diverging, helping to maintain the process flow. Also related to remaining the effective flow, only reliable and thoroughly tested technology should be used to serve people and processes according to Toyota way principle 8.

Liker , pp According to Liker , p. The aim is to produce added value to the organization by developing people and partners, holding the people as the most valuable asset. The organization should grow talented leaders, who understand the work thoroughly and act as role models and most competent teachers of the philosophy principle 9. All the individuals in the organization should know and comply with the philosophy well to get the best results principle People should be empowered and the organizational culture stable and strong, so that the company values and visions spread and obeyed.

Also partners and suppliers should be respected by giving them challenges and helping them to grow and develop principle Liker , pp The fourth category, Problem Solving, is essential to internalize if organization is willing to change into learning organization.

Problems should be always solved, and the best way to do it is finding one s way close to the source of the problem principle The information related to the problem should be gathered on the spot, and even the high level managers and directors should get into the place to understand the situation thoroughly. Principle 13 states that the decisions should be made slowly, considering and weighing the options, while the implementation after should be made rapidly.

Consensus in decision making is important and eases the implementation process. According to the last principle, learning organization should be made by tireless evaluation and continuous improvement. After achieving stable processes, continuous improvement should be used to figure out the origin of inefficiency and waste elimination.

The improvement of performance is possible in the short run when implementing Lean tools and following few Toyota way principles. But getting a competitive edge and maintaining it requires understanding and compliance of all the key principles. Without getting into much details on how organization should put the change into practice, Liker discusses more about the cultural and philosophical part of the Lean concept.

Only the principle number two is more about the tools, the rest principles explaining more about the management approach and mindset required in order to succeed in the change. The similar approach with the same five main principles is also adopted among Valmet and chosen as the future way-to-operate.

The five Lean principles are illustrated in the figure 2. Instead, the focus should be more on a question: What need does the product meet? The fundamentals of Lean thinking: five main principles. Valmet Lean After attaining an understanding of the value, all the steps required to deliver the value to the customer must be identified. The value stream includes all the specific activities in all processes, and to create a value stream, all the steps in the delivery chain must be defined and described.

There can be specified three types of activities in the value stream: 33 26 Value-adding activities: Those activities that unambiguously add value to the flow unit. Value is added when the flow unit is being processed or moved forward. In automation delivery project for instance when the system is shipped over to customer s site.

Type one Muda waste : Those activities that create no value but are unavoidable with current production assets and technology. In a project for example conducting the quality check for the system over again on customer s site.

Type two Muda waste : Those activities that create no value and should be immediately avoided. In a delivery project that can be for example delivering a system that does not meet the customer requirements. Waste of waiting: All unnecessary waiting should be avoided, and the production should be organized in a way that no machine or worker have to wait for no reason. Waste of transportation: Transporting material and products should be avoided.

Waste of processing itself: Extra work on a part or a product, that customer does not require, should be avoided, including the unnecessary use of expensive or too precise tools for example. Waste of inventory: Inventory that is capital tied up in the process should be avoided. Waste of movement: Unnecessary movement of things, information, or workers should be avoided. Waste of making defective products: Only fault-free products should be made in every step of the process.

But for instance in project environment, when many issues are not only dependent on the project organization but also from the customer or the supplier, it is harder to minimize for example waiting time for information, when the delivery time depends upon the customer. Also, in many circumstances various types of controls are necessary, especially regarding project quality assurance. Mandatory reviewapproval chains must be conducted to assure the quality of documents for example and the approvals might be demanded even in the project contract.

Even though those chains might create unnecessary waiting time to the processes. One could assume the Lean principles a bit more suitable for stable manufacturing environment rather than project environment, where there is much more changing factors present and the process is not that foreseeable. However, after identifying the value stream, according to the third principle of Lean, a continuous flow to the process must be created.

Flow can be described as a progressive achievement 34 27 of tasks along the value stream, so that the product proceeds into the hands of customer with no stoppages, scrap or backflows. In a manufacturing environment it is more about abandoning the traditional batch-and-queue principle and trying to create the flow for single products. The fourth Lean principle of pull can be defined so that nothing should be done by the upstream supplier until the downstream customer communicates a need.

When speaking of projects, it is quite obvious that nothing starts before the project is ordered by the customer. But there is more to think about on how to maintain the customer pull throughout the project and create a system of cascading production and delivery instructions from downstream to upstream.

As there will always be activities that are considered as waste, the process must be started again and again making the effort of improvement continuous. In reality, cutting of all the extra costs of operation can be also dangerous regarding customer satisfaction. Hence, the customer requires a reliable product delivered with supportive project delivery, and recently for example the sustainability of operations has been a growing trend required by the customer.

Relative to those demands, a delivery with no waste and extra costs can be at least difficult to combine. Clearly, most of the Lean principles are aimed for the manufacturing environment, and as said before, applying Lean thinking in the traditional environment is already extensively researched, but the intention of the next chapter is to deepen the understanding of Lean in project environment as well.

The major differences are studied to build an understanding about how Lean thinking can be applied into project environment and what possible benefits that might bring from the project management and quality point of view. Hence, Lean project management is much less discussed concept compared to Lean manufacturing or Lean construction, but it has already shown significant benefits especially among difficult and complex project areas Gabriel , p. As Lean thinking is based on values, also in Lean project management the value is defined by the end customer, and can be seen as any action or process that the customer would be willing to pay.

Hence, all that expenditure of resources for any other goal then the creation of value for the customer can be considered as wasteful also in projects. As the focus in Lean thinking is on the end customer, increasing quality beside eliminating the costs is crucial, because quality is critical to satisfy the customer.

Kliem , p. Although Lean project management and general project management share the same objectives, there is still remarkable differences between the concepts, and some of those are presented next, the summary table being presented in the end of this chapter. According to Kliem Uniqueness is fine, however, when delivering a product or service standardization is critical. Also Kliem , p. The more a component is based upon a common standard, the less time and labor are required to make a change Kliem , p.

Also document and construction, especially off-site manufacturing, are seen important parts of project standardization. Also value analysis presents a basis for project standardization as functional value evaluation focuses on identifying the value of the function as well as correlates this value with the significance of the function. The different elements of project standardization.

After all, Lean underlines standardization and modularization to allow adding, deleting or rearranging components with as little disruption as possible in response to changing conditions Kliem , p. According to Ballard , p. Otherwise, processes can be improved through acting on the root causes of breakdowns and by reducing variation through experiments.

Another major difference between traditional project management and Lean project management is the timing of assuring the quality in project. According to Kliem , p. As quality is critical to satisfy the customer, among Lean the best way to deliver quality to the customer is to address it at the source, for example during design or development phases Kliem , p. Among traditional project management instead, quality is often controlled through inspections and other quality controls, which are conducted after the product has reached certain state of completion.

Traditional ways of dealing with quality as checking if the product fulfills its requirements or late quality inspections are not Lean ways of working, as inspecting the product just before delivery to customer is wasteful Kliem , p. According to Kliem inspection just before the delivery can slow down the cycle time, block the value stream and requires often overheads such as labor or spare parts, which can lead to passing the additional costs on to the customer.

Not addressing quality at its source can result also in returns or dissatisfaction of the customer Kliem , p. In addition to the principle of pursuing quality at its source, also the attempt of minimizing waste has a strong foothold in Lean philosophy, and among project management, there exists many methods and forms to realize the principle.

Identified as Set-based design, deferring decisions is done in order to allow more time for weighing and analyzing the options and so ensure that work is done only once. Whereas in traditional project management practice, selecting options and conducting the work as soon as possible is a common way to operate. Set-based strategy suggests to analyze thoroughly the options and hold up the decision contrary to rushing into one resolution, allowing interdependent specialists to proceed within the limits of the set of options under consideration.

This can result in situation where projects have organizations that resemble silos, with each function organized vertically and separated from each other. Instead, in Lean project management the early involvement of project key participants is used to generate a higher level of integration and communication of the parties in the project initial phases. In addition, when considering the best way of eliminating waste and satisfying the customer, processes will likely to be improved best by the people who know them, especially if they have an understanding of the process as a whole.

Related to involving key personnel in projects, one feature very much accentuated among Lean project management is communication. Communication is also mentioned in traditional project management literature, but discussed from a slightly different point of view. The biggest differences on the discussion between the two project management approaches are the communication related to customer and the communication manners. Traditional project management emphasizes the importance of planning and managing project communications, and recognizing different stakeholders needs for communication in certain phases of the project ISO ; Lock ; PMBOK Whereas in Lean project management, the offset is not so much in recognizing the customer s needs for communication, but more in soliciting the customer involvement in every phase of the project, and persistently engage and inform the customer Kliem , p.

In Lean approach the emphasis is on enhancing the communication constantly, even if it needs persistency towards the customer Kliem , p. For instance project meetings are not held only when needed, but instead regular meetings are organized and the customer is informed about the cost and progress of the project Gabriel , p.

Another Lean project management specialty is that all formal communication between the customer and the project team in both directions is conducted always via project manager. Using always only the mechanisms the project manager has set up, communicating via one channel aims to the reduction of unnecessary controls and decision-making processes, which can occur if multiple members of the project or client organization are permitted to communicate and state requirements with work in progress Gabriel , p.

Enhancing and controlling the communication is seen as a way to eliminate all forms of waste in addition to ensure the customer satisfaction Kliem , p. Also the usage of visual signals differentiate Lean and traditional project management approaches, as visualizing is a Lean way to communicate information and improve performance Kliem , p. In Lean project management visual signals are used to coordinate and adapt to situations, and for example dashboards can visually display reports of progress, potential risks, trends and statuses Kliem , p.

Effective decision making is done in order to ensure the continuous flow of the value stream, which is in turn based upon pull Kliem , p. As mentioned in chapter 2. Hence, the tasks and activities are defined and sequenced so that their completion releases work, and only work releasing tasks are those not producing waste. Another key factor characterizing Lean project delivery is the type of contract used and pursued.

In a real project environment, some of the Lean project management methods may sound quite surreal, while these days for instance contractual issues are impossible to base only on trust between the parties. The financial pressures of the project organization as well as the client may be high and no risks are taken willingly only based on trust.

Also the contractual form is not always even questionable when doing business, while some organizations and business fields may have very strict requirements and ready-made forms for the contract. Some of the features in Lean project management remind more like an ideal way of delivering projects, and may be considered more as a target level to show the direction of project operations development. For example, in project standardization the reason for projects temporary and unique nature is easily forgotten, and the project delivery is recommended to be fitted in one mould.

Hence, only those steps towards more standardized project model should be taken that are truly value adding regarding the project objectives. The above presented differences are summarized in the table 2. Altogether, the approach of avoiding unnecessary work and maximizing the customer satisfaction as well as the profit of the project may have very efficient applications on project environment.

According to Gabriel , p. Gabriel , p. Also a higher level of commitment and motivation from the project team can be achieved, leading to the satisfaction of the whole client organization Gabriel , p. However, the benefits of Lean project management are not much discussed among the literature and empirical studies about the profits gained are still missing.

The reasons for failing the application of Lean project management are only somewhat discussed, the main reasons according to Kliem , p. Valmet is presently one of the leading global developers and suppliers of technologies, services and automation for the pulp, paper and energy industries and the company has over years of industrial history. Valmet Valmet s history begins from the s when a small shipyard was operating in Helsinki, under ownership of the Finnish state.

The shipyard was a part of the state metal factories, later known as Valmet. Several companies were forming part of the Valmet Corporation during and century and the product portfolio was diverse. Valmet was focusing more and more on paper technology during the s and s and in July Valmet Corporation and Rauma Corporation were merged into a new company, Metso Corporation.

Valmet history Valmet Corporation has over locations in 33 different countries around the world and more than 12, employees altogether. Valmet Automation business line has around 1, employees and it operates in 30 different countries. Valmet s automation solutions are designed to improve customers production performance and cost, energy and material efficiency. In this work the main focus is on DCS products and project deliveries.

Also the biggest supply center is situated in Tampere. Valmet Automation has delivered more than 4, automation systems, 40, analyzers and measurements, and over 1, power plants worldwide utilizes Valmet s process automation. Valmet AUT 42 35 At the moment AUT has more than active projects in 50 different countries, of them being service projects.

Project size varies from , euros up to 10 million euros and typical project life time differs between 6 months up to 24 months. Operations unit is responsible for the project execution, project management and development of project related processes. Flow a This study is conducted for the Valmet Automation Operations unit. The variety in project sizes is wide with most of the projects being relatively small.

The variety in project size and scope sets certain challenges for quality assurance in projects and the quality gate model being created. The model should be well scalable and realizable in all types of projects with minor changes alternatives.

Operational functions, containing project managers, engineers, initialization engineers and other resources needed in projects, are responsible for project execution in Valmet Automation. Projects are divided into three different categories based on their different characteristics Project business : Small size project o Typical sales volume small o Simple project flow delivery-commission-invoicing , not expected addon sales o Few members in the project organization, moderate in-house scope o Includes hardware and engineering o Typically Service projects Medium size project o Typical sales volume medium o Final acceptance by performance guarantees or Pilot products deliveries o Significant project purchases or bigger engineering team Large size project o Typical sales volume large or High priority project o Complex project delivery: Multi countries project team or large project purchases 43 36 The decision about project category is made by regional Operation responsible and it is made during the Transfer from Sales phase.

Projects are guided to meet the requirements and objectives set in the beginning of the project. Large projects have often also performance guarantees which the system has to fulfill with a threat of a fine. AUT Procedures Automation project in Valmet can be divided into 9 different phases, from the project department point of view: 1. Sales 2. Definition 3. Design 4. Manufacturing 5. Factory acceptance tests 6.

Shipping 7. Installation 8. Commissioning 9. Customer service The project begins in the sales phase, where also the project manager is often involved. In this thesis the sales phase is only partly included in the scope of the quality gate model.

After the sales phase the responsibility of the project is transferred from sales organization to project organization, and the transfer from sales meeting is being held between project representatives and sales manager. After the project has started and the initial opening meetings have been held, the customer delivers basic information for the project.

Next, the definitions are made according to the data received from the customer. Definition information contains necessary standardization and model solutions needed in design phase, and is important in order to agree common technical standards with the customer and make sure that both parties have the same understanding. Definitions are reviewed with customer, and after customer acceptance the design phase can be initiated.

Design phase contains the detailed design of the software and hardware, and the design is implemented according to the definitions, basic data, instructions and implementation plan. After the hardware design is finished, the manufacturing phase begins, which is conducted by the logistics function.

In the end of manufacturing phase the system is initialized and integrated by logistics before the handover back to the projects organization. Depending on the project, the project engineers are conducting some internal testing for the system before the implementation phase ends to Factory acceptance tests FAT.

The fifth project phase, FAT, is usually the first time when the customer sees the whole system and is involved in testing the system according to beforehand planned testing procedures. After getting the customer acceptance from FAT, the system is being checked one more time in system audit and then packed and shipped to customer s site by logistics function. The on- 44 37 site phase begins with the installation of the automation system, which can be conducted also by a subcontractor, and then continues with generally longer lasting commissioning phase.

During commissioning the automation system is being tested so that processes including automation are completed and ready for the start-up. A trial run can be conducted during commissioning, the trial usually including the test period of certain time, when no major problems caused by the automation system are allowed. Before the last project phase, the system is handed over to customer and the responsibility of the project is shifted over to service function which takes care of the warranty-period and customer service.

Quality management in Valmet AUT is based on ISO management system and the quality assurance in projects consists of the processes and instructions of the Quality management system. Quality control is divided to different parts of the project and the aim is to ensure properly documented and highly reliable system and software functions before start-up. Quality assurance is an ongoing process during the project and has several different stages in different phases of the project.

QA activities are integrated into the tasks and operations of the project delivery. This means that the project organization also has the responsibility for the quality activities in the project. Department managers and quality manager are responsible for development of quality assurance and procedures related. The primary component in project quality is a workflow application for delivery projects, which builds the internal quality assurance plan of the project activities.

The application includes the project phases, reviews, approvals and templates for plans and tests. The content of the application may vary depending on the project specific requirements and usually excludes the quality assurance of procurement. Considerably large and demanding projects, which often last for more than a year, have a project specific quality manager, who is responsible for the quality assurance during the project as well as providing a project specific quality plan.

The quality plan provides the project guidelines with identified actions and key milestones during the project lifecycle. The key milestones are mandatory hold points, where often customer acceptance for defined phases is required. With defined quality assurance milestones, the quality plan includes project phases, reviews, approvals, templates and tests related to project quality assurance.

The present quality assurance milestones are presented in figure 3. Through the project, 10 quality assurance milestones are located in different phases, most of them concentrating strongly on the on-site phase. Six out of ten milestones are positioned in the phase after shipping the system to customer s site. The Quality assurance milestones presented in figure 3. Transfer from Sales to Projects, 2.

Definition acceptance, 3. System take over from manufacturing, 4. Installation acceptance, 6. Test run, 8. Take over, 9. Final customer acceptance and Transfer to service. Figure 3. Automation delivery project flow and quality assurance milestones. From the customer point of view, the most important elements of quality assurance during the project are engineering input data, approvals of definition material, typical loops, factory acceptance test FAT and engineering changes.

Most of the phases including customer acceptance prior to move on in the project. Also relative to system delivery, the main validation period is factory acceptance tests, when all the hardware and software is tested against customer accepted test procedures. Factory acceptance tests are a major milestone during the project, because that is the first time customer sees his system as a while, when coming to follow the tests to the supply center test area.

Also FAT is the last chance to test the system before the onsite phase which is important to minimize the changes and modifications done during the onsite phase. The variations or corrections in design and implementation identified during FAT will be discussed according to Valmet Change Procedures, change control being one very important quality assurance method during the project. AUT Procedures 46 39 4. As the purpose of the study is to create a new project delivery model, which will be later on implemented into practice, a constructive research method is used.

In this chapter, the research strategy and the materials are described. Also the structure of the construction process is presented, with the five different phases of the research study. Constructive research is used when a real practical problem needs to be defined and solved or to improve performance or an existing system Oyegoke , p. The problems are solved with developing a construction which is something new differing from anything which existed before Kasanen et al.

The aim in constructive research is to produce a new-found solution which will be implemented to confirm its workability and suitability Oyegoke , p. Constructive research approach is well suitable for the research done in this thesis, because the intention is to create a new model in order to improve the quality in projects.

As Kasanen et al. In this case, a real practical problem regarding project quality was already existing in the target company, and the construction of a new gate model was chosen as a solution for the problem.

Oyegoke , p. The six different phases of the constructive research support the main condition of validity of the construction, the model created must be clearly working and solving the problems in question Kasanen et al. The process is a step by step procedure with different research phases Kasanen et al. According to Kasanen et al.

If not, there is obviously no point in proceeding in the study Kasanen et al. In order 47 40 to construct a new solution, an understanding about the topic must be created. In this study the theoretical understanding was built with a literature review about phenomena concerning the topic and practical experience about the current state was gained through multiple methods presented in the next chapter.

Multiple methods in data gathering were used to ensure the findings were right and corroborate the observations made. As the objective of the constructive research is to create a model suitable for practice, according to Kasanen et al.

In order to do so, a pilot trial was conducted for the model created in this study, and according to Oyegoke , p. In addition, an essential part of constructive research is to tie the solution with accumulated theoretical knowledge Kasanen et al. In this case, as the research question and practical problem originates straight from a need of the target organization, the theoretical connections of the model do not have such a significant role in validation of the model as the connections to the practical problem.

In this study, also a phase regarding the requirements and limitations set to the construction is added to the research process because the definition of requirements is a significant factor influencing to the construction as well as suitability of the model into practice. The main phases of this study are presented in the figure 4. The actual research done in this study begins from the current state analysis and building of the theoretical background, as the practical problem was already existing and defined in the target company.

The arrows on the left and right side in the figure illustrate the validation of the model, the evaluation of the theoretical connections of the model as well as the suitability and connection to the practical problem behind the study. Theoretical background 1. Current state analysis Theoretical connections 2. Construction of the pilot version 4. Pilot trial 5.

Final version of the construction Figure 4. The constructive research process conducted in this study with five different phases. In this study there were multiple methods used to build a sufficient understanding to start the creation of the construction. A literature review was conducted to build an understanding about the theoretical background of the subject.

Theory was studied especially about the project management and project success factors, time, cost and quality trade-off, Lean thinking and Lean project management. The understanding of Lean principles applied especially at the target organization was deepened with a one-day training course, Management Lean Training, held at Valmet premises. The present state of the project operations and quality assurance at the target organization was studied also with multiple methods, the interview study being the main method.

Multiple methods were used to ensure the validity of the observations made during the present state analysis. Making same observations from multiple resources increased the reliability of the findings. Qualitative interviews were used as a main data acquisition method to gather information, generate a picture of the present situation and understand and analyze the biggest challenges in project quality at the moment.

Interviews were started right after the beginning of the thesis project, in October In the very beginning of the study project the main objectives of the interviews were to build an understanding of automation project flow, get to know the different products in Valmet AUT and understand the role of different functions in project delivery.

Interviews were conducted as semi-structured interviews, as there were a list of themes and certain questions which were covered in every interview Saunders , p. Also additional questions were included depending on the flow of the conversation and the organizational context of the interviewee.

The course of the interviews were not defined beforehand, so that the interviewee could talk freely about the topic area, but the idea of the aspects to be explored during each interview were clear. After attaining a basic understanding of the industry and the research target, the focus of the interviews was on the research problem.

To get deeper understanding and identify the targets of the development, people from different functions and levels were interviewed. The interviews were conducted one by one, the interview time being more than one hour in each interview. Two of the interviews were conducted by Skype and the rest were face-to-face interviews.

All the interviews were documented by taking notes and 10 of the interviews also recorded. Altogether more than 40 persons were interviewed and a worksheet was gathered about the similarities occurred in the answers of the interviewees. To form a picture about the general opinion about the biggest problems in projects, 15 of the most common answered reasons for project quality problems were gathered in the worksheet.

Tabulation of the answers enabled to 50 43 get numerical data and recognize those phenomena which were seen having the major impact on the project quality. Interviews also had a significant role in developing the first version of the construction, while the demo version was created in an early stage. The construction was remodeled after the feedback gathered in the interviews and then presented again to a new person, who commented the construction and the changes made to it, again from a new viewpoint.

The experiences and opinions from the interviewees were used to iterate the construction to meet the requirements of the target organization better. During and after the pilot trial of the construction, interviews were also the main method to gather feedback and evaluate the construction.

The understanding of the needs for the gate model and current state of project execution was deepen also as three projects were chosen as a deep dive projects. These deep dive projects were explored closer to get the understanding of whole end to end process and how the gate model could be implemented in that.

Possible problems related to the project delivery were also discussed during the case studies. Closer introduction to projects was made by interviewing the key personnel in projects: project manager, lead engineer and also product line, going through the project material and documents as well as following closely some of the project phases, such as customer FAT at Tampere Supply Center. Project quality costs Information about extra costs occurred during projects, and especially quality costs related to projects, was gathered from the project closing forms.

When the project is completed the project manager fills in a project closing form which is the financial closing of the project. In the form is stated the margin improvement percentage actual margin sales margin , margin change in euros and the share of add-on sales. Project manager is also asked to comment shortly to the form about major margin percentage changes and explain the increase or decrease of the margin.

The changes in gross margin are mostly results of add-on sales or unexpected costs occurred during the project. Most of those unexpected costs can be seen as project quality costs, because they were not originally budgeted and usually results of rework or product quality issues. The comments of the margin change, improvement percentage of the margin and margin growth in euros were gathered in an excel worksheet with the project information such as project manager, project number and project name.

Comments were divided in two columns, positive comments and negative comments, to ease the analyzing process of the information. The margin change worksheet contained information of around different service and capital projects from Nordics business area. The worksheet is used to analyze the most common reasons for the margin change in projects from the project manager s point of view. The scale of the project sizes in the target company is very wide, as the biggest projects are more than ten times bigger by financial scale than the smallest delivery projects.

Also the delivery time can vary from months to more than two years. Therefore, the scalability of the gate model must be high. The model must be conceivable to execute in small as well as in bigger projects, and that sets tight requirements to create alternatives to scale the model to be suitable.

Also, none of the projects are exactly similar, and the execution type and even the phases of the project depend also from the customer requirements. Thus, the gate model must be general enough, to fit into different projects, and the gate requirements must be suitable for various kinds of DCS deliveries. However, the requirements cannot be too general, so that the object of the model, quality assurance of the project and the end product, suffers.

In the scope of this study are mostly those project delivery phases which concern the project organization. In addition, the final part of the sales phase is also included, starting from the point where a valid contract has been made. Part of the sales phase is also included while the success of the phase has significant impact on the execution of the project. The scope of the model ends to the point where the project has been delivered to customer and the responsibility is shifted to the service organization.

Hence, the focus is being kept on the project implementation phase, when the project organization has the responsibility over the project. Also the main focus of the recent state analysis is kept on the DCS deliveries and quality problems occurred in those. The quality gate model created in this thesis must be aligned with the PEM model so that they are easily merged before the implementation of the models. The target company also required to involve Lean thinking and Lean principles into the development of the gate model.

Some of the suitable Lean methods were required to apply in the model, in order to bring Lean thinking into project operations of the target company as part of the ongoing Lean implementation project Constructing the pilot version of Quality gate model The construction of the quality gate model was based mostly on the problems observed concerning the recent state of the project execution.

After defining the problems causing quality issues during projects and the root causes of those, the focus was set on the time period before 52 45 the problems arise, to define needed actions to be done to avoid the difficulties. The construction of the solution proceeded very fast, because the meaning was to build the first demo version in the early phase to enable a pilot trial of the model in the given time schedule for the research.

The first step in the beginning of the construction process was to define the different project phases and to illustrate the project flow. The construction of the actual gate model started as a post-it notes exercise, where the project flow was described on a3 paper and the post-it notes presented possible gates or milestones and were attached to important phases of the project flow.

In the first phase of the construction, more than ten gates were existing on the paper model, and the amount was reduced later on as the construction developed. The paper model with the post-it notes was presented in the early stage to some of the interviewees to get opinions and improvement ideas.

In the end of November the model was converted into electronic format and the iteration of the model continued via interviews and discussions with different parties Alongside of constructing the gate model, also benchmarking was done inside and outside the Valmet Corporation to find out, how the gate model concept is conducted in other organizations.

In the benchmark meetings the present Valmet AUT Quality gate project was presented and ideas shared, how quality can be assured during the project and how processes should support that. Valmet Paper had recently implemented also a project gate model for the project execution, so experiences of the implementation phase were also shared.

Benchmarking was also done outside Valmet, towards a Finnish company that develops and manufactures products and services for environmental and industrial applications. The company was chosen as a benchmark enterprise because of their global project type business and far developed quality assurance system with quality gate model also in use in project execution.

The objectives of the benchmark were to explore the company s gate model for projects and to draw new ideas and concepts that can be applied to the Valmet AUT quality gate model as well. Also, it was important to hear about the feedback and experiences the company had about their gate model and the implementation phase of the model.

As the quality gates started to stabilize their places in certain phases of the project flow, also the definition of the gate content started. The content for the gate checklists was gathered little by little, based on the interviews and other company material. The pilot version of the quality gates was defined in the end of December, and the checklists were also finalized for the pilot trial.

In this phase also a first check was made to ensure the alignment of the quality gate model with the other gate development project ongoing. In the study, 6 pilot projects were chosen, in which the quality gates would be operated in practice. Quality gates were piloted to different phases of the projects to get information about usability and suitability of the gates in practice, and thus further develop the construction according to the feedback gathered.

Feedback and experiences from the pilot projects were seen crucial in creating practical and suitable model for improving quality in delivery projects. Big variety in Valmet AUT project sizes, scopes and customer demands set special requirements for the scalability of the gate model. The model must be suitable and fit to all projects, regardless of their size or scope, and so the required level of convertibility is high.

The objectives of the pilot trial of the construction were to gather feedback about the suitability and usability of the model, and how well the scalability confronts with different size projects. Also feedback about the possible impacts of the model to the project quality were gathered. The pilot projects were chosen during December Altogether, six projects were found, in which the time schedule of the project suited for the trial.

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