Managing Uncertainties in the Project 4.0 Lifecycle

Managing Uncertainties in the Project 4.0 Lifecycle

Timo Klünder (Ruhr-University Bochum, Germany), Jan Niklas Dörseln (Ruhr-University Bochum, Germany) and Marion Steven (Ruhr-University Bochum, Germany)
DOI: 10.4018/978-1-5225-7865-9.ch007

Abstract

Three out of four projects are not getting off the ground. It is questionable whether industry 4.0 represents an additional obstacle to the execution of projects or contributes to overcoming these barriers. The fourth industrial revolution extends to all phases of the value-creation process. The project, ubiquitous in Industry 4.0, suffers a fundamental change covered by the definition of a Project 4.0. Uncertainties arising from the far-reaching changes in the environment and companies over the entire lifecycle of a project are not taken into account yet. Considering the uncertainties, there is an uncertainty descent from early to late stages of the Project 4.0 lifecycle. Here, by describing anomalies of subjective uncertainty assessment, the massive uncertainties perceived by decision makers were put into perspective. This serves as prerequisite for the design of a sound tool for an unambiguous decision on the execution of a Project 4.0. This tool contributes to insuring that more than one out of four projects succeeds.
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Introduction

Three out of four projects are not getting off the ground. Can Industry 4.0 be a game changer or are the uncertainties associated with projects even increasing by the fourth industrial revolution?

The fourth industrial revolution is more than just limited to production or company boundaries as it extends to all phases of the value-creation process. Hereby, digitization acts not only as basis for new business models, projects, smart products, innovative services and batch size one, but also as source of uncertainty. Uncertainty about the economic benefits of Industry 4.0 represents the central implementation barrier for 46% of industrial companies (PricewaterhouseCoopers, 2017; Hertel, 2015). The core idea of merging the physical world with the digital world makes Industry 4.0 a threat to the industrial centrepiece of the german economy for many companies (Sommerfeldt, 2015). By malware, such as Stuxnet, computer viruses, for instance Goldeneye, or hacker attacks on Deutsche Telekom in 2016, digitally induced uncertainties become open to the public. In addition to the publically known problem of information security, numerous other uncertainties are neither discussed publicly nor evaluated within the company (Alberstadt & Dörsam, 2014; Bundesamt für Sicherheit in der Informationstechnik, 2016). While the management of individual uncertainties used to be the focus, today - driven by discontinuities in the corporate environment, technologies and digitization - it is primarily a holistic management of uncertainties of entire businesses and projects that is in the spotlight.

The desire for custom-developed products and shortened product lifecycles requires mass production with batch size one that represents the ideal image of the fourth industrial revolution. The fourth industrial revolution’s focus on batch size one requires a customer-focused ad-hoc configuration of networks. This ad-hoc network configuration corresponds to the definition of a project. Projects are essentially characterized by their uniqueness but also by the consistency of the conditions in their entirety, such as objectives, time, financial, personnel and other limitations, delimitation from other projects or their project-specific organization. In Industry 4.0, it is no longer companies that compete, but networks that cooperate in projects. Projects are ubiquitous in Industry 4.0 as value is created throughout project partnerships. As a result, the nature of a project suffers a fundamental redesign. This requires a redefinition of the project named Project 4.0.

Due to the growing complexity of uncertainty, only a quarter of all companies control project-specific uncertainties. With the rise of the fourth industrial revolution, this share surprisingly has been reduced by more than half since 2010. Long-term uncertainty assessments were increasingly replaced during this period by short-termed uncertainty assessments. Overall, three quarters of all projects do not meet with success.

These uncertainties resulting from the massive and far-reaching changes in the environment over the entire lifecycle of projects need to be taken into account. This is the only way to process uncertainties transparently on the one hand and to decide on the implementation of a project on the other. This leads to three research questions that span the scope of this paper:

  • What are the properties of a Project 4.0?

  • Which uncertainties arise in a Project 4.0 and when do they occur during project execution? How can the uncertainty assessment of decision-makers be put into perspective by anomalies of subjective uncertainty assessment?

  • How to carry out a target-oriented uncertainty assessment of the project and unambiguously decide on its implementation?

These three research questions map the paper’s procedure:

First, the key elements of Industry 4.0 are applied to projects. Objectives are the definition of a Project 4.0 and the presentation of the dynamic ad-hoc network configuration.

Subsequently, the decision-making situation marked by uncertainty is outlined followed by the derivation of thirteen different sources of uncertainty. These thirteen project uncertainties are then classified into a proprietary Industry 4.0-Project Lifecycle.

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