WORK BREAKDOWN STRUCTURE:THE DESIGN OF A WORK BREAKDOWN STRUCTURE AND TYPES OF WORK BREAKDOWN STRUCTURES

THE DESIGN OF A WORK BREAKDOWN STRUCTURE AND TYPES OF WORK BREAKDOWN STRUCTURES

Introduction

The WBS serves as the taxonomy of the project. It enables all the project stakeholders—customers, suppliers, the project team itself, and others—to communicate effectively throughout the life cycle of the project. For each project, one can design the WBS in several different ways, each emphasizing a particular point of view. However, different WBS patterns call for different organizational structures or management practices during the implementation of the project. Thus, the design of the WBS at the early stage of the project life cycle may have a significant impact on the project success. Often the individuals who prepare the WBS are not aware of the crucial role they play in determining future coordination and understanding among the operational units who eventually execute the work packages. A mismatch among the WBS, the OBS, and the management style of the project manager may lead to a poor project-completion record. Such difficulties are compounded if different parties that are involved in the project have produced different WBSs. In this section, we present alternative WBS patterns and explain their possible impact on OBS and management practices. We use an example project to illustrate different patterns and indicate their strengths and weaknesses. The ex- ample project assumes that a large multinational corporation operating in the semiconductor business has just finished evaluating existing and future markets and obtained forecasts on the demand for its products in the next five years. Based on these forecasts, the firm has decided it will need five new plants (also known as FABs) in addition to the nearly dozen it currently operates. Labor availability, wage levels, and tax regulations were chief considerations affecting the decision to construct the plants in three countries.

The various WBS formats shown below can all be useful in describing the expansion project. We denote them as WBS based on technology, life cycle, geography, and so on, according to the focus of the second level in the WBS hierarchy. By choosing the focus of that crucial level, the WBS designer determines the fundamental structure of the project. Still, the designer has to make similar decisions at the third level, fourth level, and so on, but these are secondary choices compared with the second level.

A WBS Based on Technology

Projects that are characterized by a relatively high degree of specialization, especially those associated with the high-tech sector of the economy, typically require the assignment of a leading professional to lead all the project activities that are related to a particular technology. This professional is expected to maintain the same standards of quality and performance among the different facilities. Thus, this WBS format would fit especially well organizations that are structured in a functional hierarchy (see Section 1.2). This type of WBS will be a favorite for managers preferring strong central control of the project because every activity in the different locations is reported to the headquarters (where the professionals heading the various technologies are based). Figure 1 illustrates a WBS by technology in our case.

A WBS Based on Project Life Cycle

Organizing the WBS by the various stages of the project life cycle (or, more generally, by time) is not a particularly common practice. Still, it may fit certain organizations that elect to orchestrate their activities by timing. For example, the FABs construction project may be outsourced to a number of subcontractors, starting with a subcontractor in charge of preparing detailed floor plans and construc- tion programs, followed by another contractor charged with all the infrastructure activities, and so on. This will lead to the WBS presented in Figure 2. The work content is first broken by the major stages of the project (from design to delivery). Then each stage is further broken down to its relevant categories. This process is repeated, sometimes to 7–10 levels or even more, until we reach the final level of the work packages.

A WBS Based on Geography

Breaking the work by geography lends itself quite easily to the assignment of five plant managers, each responsible for the entire work required for establishing his plant. In a way, this amounts to breaking the project into five identical subprojects, each duplicating the activities undertaken by the others. Obviously, this will be the preferred mode when the circumstances (culture, language, type of government, law system, etc.) are dramatically different in the different countries. This type of WBS will fit decentralized management practices in which local plant managers are empowered with full authority (and responsibility) for the activities relating to their respective plants.

Other WBS Designs

There are many other possible orientations in which a WBS can be designed. The choice among them depends on the organization charged with the project execution. For example, the growing recognition of the importance of supply chain management has caused some organizations to adopt structures that are logistics oriented. In such cases, we may find at the second level of the WBS a breakdown by logistics functions as illustrated in Figure 4. Other organizations favor structures ori- ented towards subsystems. That is, the entire system is divided into its major subsystems. In our case, a FAB can be divided into the warehouse subsystem (receiving and checking raw materials, packing and shipping finished goods), shop-floor subsystem (scheduling and dispatching jobs), quality control subsystem (testing components and finished units), and so on. These subsystems serve as the entities in the second level of the WBS.

Discussion

We conclude this section with a summary of the pros and cons in using a WBS to plan a project.

• Advantages:

• The WBS reflects the project objectives. By listing all the activities required to accomplish these objectives, it prevents confusion and doubts as to the aim of the project.

• The WBS creates a common database and a dictionary of common notation that serves as a reference point for all involved parties.

• The WBS, in conjunction with the OBS, defines the way the project is to be managed. It relates each work activity to the corresponding organizational unit that is responsible for delivering the work.

• The WBS enables smooth communications among the project team members and between them and customers, suppliers, regulators, etc.

• The WBS serves as an archive that can later facilitate knowledge transfer to other projects or learning by new members of the workforce.

• The WBS is an effective tool for resource management.

• Disadvantages:

• The WBS requires a significant amount of effort to build and maintain.

• The WBS encourages rigid structure for the project. Thus, it reduces managerial flexibility to initiate and lead changes during the project life cycle.

Expansion Project

Facilities Equipment Raw

• There are many legitimate ways to view a project, and occasionally, depending on circum- stances, one approach may be preferred to others. Yet the WBS forces the project designer to choose one approach and remain with it throughout the project life cycle.