Wednesday, 1 May 2013

Time, cost, quality - and knowledge

When I was young and learning about projects, I was told that cost, time and quality create an "incompressible space" defined by scope, and this if you squeezed on any one of these three axes, the other two would increase in response.

"Quick, Cheap, Good" I was told; "Pick any two".

I still see this theory reflected back at me when I talk about companies using knowledge to reduce construction time, such as Nuclear Plants in Korea, or Oil Platforms in Trinidad. In the latter case I was asked "can one assume from the comment above that lessons learned only contribute to savings in terms of execution time (the value of saved time)and not in terms of operational excellence? My thinking is that often projects are implemented in a shorter time span but not necessarily more efficient". Now I know that in this case, the projects were executed in a shorter time, and with reduced cost, and to the same or better quality, with no compromise on safety.

Knowledge Management has managed to compress the incompressible space.

This is counter intuitive. However the reality is that the incompressible space is not incompressible. It contains the project scope, but it also contains the current inefficiencies, and it contains the waste work due to lack of knowledge. It contains what Shell call "non-productive time", and what the product companies call the "cost of non-quality" - both of which are elements which learning and knowledge management can help eradicate. There is a "technical limit" to that space, defined by the fastest possible time and lowest possible cost to safely deliver the required quality. What KM does is help you approach that technical limit as effectively as possible.

The learning curves shown in the two blog posts above come not through compromise on safety, scope or cost, but on a reduction of non-productive cost and time, through learning and re-use of knowledge.

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