Ahmed Gawdat

Anis Metry
John Georgy
Samer El-Saadany

Table of Contents
Executive Summary.................................................................................................... 2
Background................................................................................................................ 3
Teradyne.................................................................................................................. 3
The Semiconductor Industry................................................................................... 3
Teradyne Culture..................................................................................................... 4
Jaguar Project.......................................................................................................... 4
Situational Analysis.................................................................................................... 5
Project Retrospective............................................................................................... 6
Lack of Experience............................................................................................... 6
Poor quality.......................................................................................................... 6
Late action........................................................................................................... 6
Escalation of Commitment...................................................................................6
Project Management tools usage.........................................................................6
What should have been done?................................................................................6
Way to move forward................................................................................................. 7

Executive Summary

Background
Teradyne
Teradyne is a 45 year old corporation specialized in testing equipment for transistors and other
electrical components of the semiconductor industry. The company was founded in 1960 by two
MIT graduates with a vision to bring a line of reliable, fast testing equipment to the industry. As
the complexity and volume of components manufactured by their customers increased, so did
Teradynes investment in research and development. By 2004 Teradyne had five business units,
including semiconductor test, assembly test, broadband test, connection systems, and diagnostic
solutions. Semiconductor test remained the largest business operation for the company,
producing just under two thirds of annual revenue in 2004. The company had six major
engineering operations across the United States, with three of those facilities housing
manufacturing operations. Teradyne had also dispersed across the globe with smaller engineering
operations set up in Japan, China, and Germany.

The Semiconductor Industry

Semiconductors cover a very broad range of devices which can be classified
by 2 main categories: memory, and system on chip. Each type of device
performs a different task in an electronic system, with its own set of complex
manipulations that it performs on the electrical signals that come as inputs.
As semiconductors grew over the years to become smaller and more
powerful, minor flaws in the production process could prevent an entire
device from functioning correctly. This resulted in a high demand for testing
equipment that could determine if a component was functional or not. This
simple idea is quite a complex device, as devices often have a very wide
range of operations. This is where Teradyne comes in. Teradynes product
performs the testing of components to ensure that their behavior lies within
the specifications outlined by their manufactures, essentially telling them if a
component is good or bad before it leaves the factory.
By 2004 Teradyne had become one of the worlds leaders in semiconductor
testing equipment with over 6000 employees worldwide. Their biggest
competition came from Aligent, Advantest, and Credence, who held much
smaller shares of the market. Customers tended to be manufacturers like
Intel, IBM, Hitachi, and Samsung who were actively creating new products
and were willing to spend nearly 3 million dollars on a machine. Over the
years, the production process of Teradynes customers had dramatically
changed. Since production volumes were going up, and prices coming down,
it was imperative that the testing process not slow down production

operations. Reliability was of great concern as testing was often considered a

bottleneck in the production process and any downtime would be extremely
costly. Therefore, customer service was a major selling point as well.

As technology of semiconductors became more advanced, the need for more

sophisticated testing equipment increased. So each new device often
required purchasing a new specifically built piece of testing equipment.
Therefore it was very common for customers to rely on Teradynes past
experience with their products in developing new equipment. Furthermore, it
was very common that once a company was chosen to develop testing
equipment for a particular device, no other company would compete in that
area. The rapid development of new semiconductors required equally rapidly
development of testing machines, which proved to be a difficult task. It was
becoming more important that testing companies come up with equipment
that was no longer limited to testing a single device, but rather could be
configured to test multiple devices. This would in short provide equipment
that was considerably more difficult to develop, but would prove much more
cost effective for the customer.

Teradyne Culture
Teradynes background was strongly focused on engineering as many of the
senior managers came from an engineering background. Projects were
driven mainly by performance, focusing on technical competence. Engineers
were motivated to dive into tasks, and encouraged to prove themselves. The
company emphasized the individual. Many employees considered
themselves at Teradyne for the long haul. Long hours were normal.
In early 1990s, Teradyne experienced a major change in leadership with the
new CEO Alex DArbeloff. Alex grew interested in the risk of losing Teradynes
competitive edge due to quality and reliability concerns. Although DArbeloff
believed the team was exceedingly competent, he believed there were major
operating problems regarding reporting and performance measurements. To
minimize these problems, DArbeloff embraced total quality management
(TQM). After 5 years of intensive effort, TQM principles were embedded into
most aspects of work at the company and resulted in noticeable
improvement in manufacturing quality and customer service. However, the
engineering organization was resisting TQM because of the resulting late and
over budget projects.

Jaguar Project
In 2001, Teradyne senior management decided to make a fundamental
change in the strategy and aimed to create a single flexible tester platform.
The project named as Jaguar to represent how critical it is to the companys
competitive strategy. It is noted that, from the outset, it was recognized
that the project had to execute flawlessly. So it is expected that the Jaguar
project will be, unlike the Teradynes traditional projects, more focusing on
execution strategy including increased emphasis on up-front planning and
design, reorganization of project team structure, the implementation of
project management prospective, and formalizing project management tools
to streamline the product development activities.

Situational Analysis
It was decided that the engineering teams in Boston, Agoura Hills, San Jose,
Minneapolis and Portland to collaborate and work on this project. Each site was
responsible for a core subsystem. However, each of these teams had already their
own approaches and legacy tools they previously used. The teams were led by the
OBrien, a 24 years veteran of Teradynes engineering organization. A core team
was formed by the leaders of each group. This core team used to meet on weekly
basis to discuss progress, and to make critical technical and organizational
decisions.
The top management recognized the project as pivotal and strategic to Teradynes
future success. It was extremely important to have the product out in the market by
mid-2004. Thats why the project definition and scope were one of the critical
decisions. More time was spent in the early stages of the development process,
mainly concept development and product planning. The objective was mainly to
identify what to do and what not to do to hit the market window. Teradyne was
committed to the project and provided all means of support and resources to ensure
that the project gets delivered on time. Whenever there were delays, senior
management were able to provide additional resources.
To get the needed funding, detailed analysis of the product requirements,
specifications and architecture were done and presented to senior management
highlighting critical subsystems, target performance and project execution plans.
This was a challenge for the software group to provide detailed specifications and
make major architectural decisions at this early stages in the project taking into
consideration lots of uncertainties associated with the nature of software
development.
During execution of the project, the core team utilized the following project
management tools:

Work breakdown structure

3-point estimation
Critical path analysis
Earned value analysis

However due to the different teams backgrounds and level of experience using
these tools, the core team spent more time debating the tools and how the info is
presented in the tools and how much this reflected reality.
It was obvious in the core team meetings that the teams responsible for the
hardware subsystems were delivering on time keeping all major activities on track.
On the other side, the software groups were running at only 50% earned value each
month completing only half of the tasks originally planned. However the groups
were on denial saying that they would catch up, but it never happened.
In Sept 2003, the project targets were further stretched when Alphatech, one of the
biggest customers, was approached by one of Teradynes competitors. The project
has to be delivered to Alphatech by end of March 2004 rather than end of June. In
addition, Alphatech introduced changes in the requirements to match their specific
needs. Teradyne had no option but to comply with the new target because the loss
of AlphaTech account would mean a loss of more customers who might follow the
trend.
As the deadline approached, with the increased pressure on the software groups,
more features were coming out the door before they were actually ready. However,
after the delivery, the software groups spent more time fixing bugs to get an
acceptably operational software. Things were now getting worse, there was a huge
burn-down but there was no development progress.

Project Retrospective
Lack of Experience
The software group lacked the needed experience on the IG-XL operating system, as
most of the system experts were involved in other project development (FLEX),
Jaguars team lacked the enough experience that would allow them to develop the
new system upon this operating system, as most of the developers had never
worked with IG-XL before.

Poor quality
Because of the excessive load that was put on the development team, the team
members were burnout, the stress levels were enormous, which lead to developing
a buggy software for AlphaTech.
To fix the software issues, the team took more than six months in the bug fixing
stage, the team stopped developing new features and they just shifted to
firefighting mode, and the development process was ignored in this stage.

Late action
Although software team output was running at approximately 50% earned value per
month, the management didnt act to fix this issue, and it is known, the more you
postpone solving the issues, the more time it would take to be solved.
In addition, the managers were more skeptic around the metric and didnt pay
attention to the team delays

Escalation of Commitment
When senior management and the core team realized the large delay in the
software subsystems, they added more resources to the project several times
without even analyzing reasons why the groups are behind schedule. In addition,
there were no measure for the impact of the extra resources on the project schedule
and how it will bring that forward

Project Management tools usage

Although the project management tools provided the management with enough
useful data, they management didnt respond to it.
In addition, the software team kept playing with the numbers to adjust the project
plan, but the things done on the tool were not practical enough to be implemented
successfully in the real life.
Others became more keen to make the metrics look good, rather than doing whats
more important to the project.

What should have been done?

Learning curve should have been estimated properly, as sometimes the

software development teams tend to underestimate the learning curve of the
new tools (which happened at Teradyne), and expect that the team would
work efficiently from the first day, which is a managerial common error.

Teradyne could have assigned some of the system experts within the Jaguar
team, as this would help the team overcome the experience issue

Extensive training should have been delivered to Jaguars team

Teradyne should have recruited more resources from the beginning of the
project to the software development team to avoid burning out its resources
and be able to deliver the project on time; this could have been reached by
better estimation of the tasks, and making sure that the team has the needed
knowledge to achieve its goals

The management should have interfered as early as possible to minimize the

effect of the early delays, they could have got Consultancy Company that

could help them, and they should have analyzed the root cause of the delay
and try to fix it.

Although we agree that the project metrics are important, they shouldnt be
the goal, they are just indicators of the project status, people should work to
get the job done, not only trying to adjust the metrics

The metrics should not be the only way to evaluate teams performance,
other competences should be taken into consideration such as team work,
positivity and being accountable.

In addition, the project managers should thoroughly analyze the data

extracted from the tools periodically, to be able to take quick actions in case
of any deviations that could happen.

Way to move forward

Now, having the product delivered to customers, the following actions need to be
taken:

Provide training for key software developers to maintain and enhance the
product
Recruit expert software engineers to lead the software development process
Document the current project status, the implementation details and all other
activities that still need to be done in terms of bugs, new features or
enhancements.
Unify the project management tools and provide the needed training on how
to use them, and the information provided to and extracted from these tools
Prioritize the list of bugs to identify the major and critical ones that need to
be fixed immediately
Prioritize the list of features to be completed and identify the ones offering a
minimum viable solution
Since the product is now in the market, the project team needs to plan a new
release with the scope defined as the minimum viable list of features and the
major and critical bugs