Original Date: 02/19/2007
Revision Date: / /
Best Practice : Material Earned Value Management System Reporting Tool
The Raytheon Network Centric Systems Manufacturing Center in Largo, Florida, developed a Material Earned Value Management System Reporting Tool that enables the material program managers to analyze program parts and material utilization. Operating in conjunction with the Estimate at Complete reporting tool, the Material Earned Value Management System utilizes the Project Evaluation Review Technique methodology to capture more complete analysis data.
Determining with accuracy the value or cost to a program for parts and material received for work in process and reporting that information in a manner that allows for effective analysis is an ongoing challenge. The assumption is frequently made that the budgeted cost of work scheduled (BCWS) equals the budgeted cost of work planned (BCWP). This optimistic assumption makes it difficult to detect variances from plan or budget and devalues the Schedule Performance Index (SPI) calculations. Raytheon Largo developed its Material Earned Value Management System (EVMS) Reporting Tool to overcome these shortcomings by providing tools for material program managers (MPMs) to better manage material inventories using data captured by the Estimate at Complete (EAC) reporting tool to perform this specialized analysis. The unique enhancement of the EVMS is its use of the Project Evaluation Review Technique (PERT) calculation methodology to overcome the faulty assumption that BCWS automatically equals BCWP, making it feasible to calculate a more realistic SPI. Features of the Material EVMS reporting tool include: An intuitive Web access screen that allows anyone with data access rights to prepare and view the available reports
Dynamic linkage to data from the Manufacturing Resource Planning (MRP) program
Better inventory management through linkage to MRP data
Prohibits credit for early deliveries to mask problems with late deliveries
Allows for analysis visibility down to the individual part number
Automated data compilation
Automatically calculates SPI
Use of existing EAC data reduces the unique resource requirements
The Material EVMS reporting tool gives the MPMs the needed automated analysis utilities to more thoroughly manage material inventories. Being based on the proven PERT methodology provided through a centralized tool means comparative analyses for variance will yield consistent results that will encourage more precise delivery scheduling of material.
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