Impact Analysis

Impact Analysis

It is my belief that one of the most critical steps of the change process is the impact analysis. A good impact analysis can make the difference between profit and loss. Most companies use the item hierarchy, product structure, or bill of material to help determine the impact of a change. However it is not as simple as that, especially with the trend of ever increasing complexity of products. Think about hardware – software dependencies that do not show up in a product structure or hardware – hardware dependencies that are not directly visible as parent – child relationships.

Increasing complexity

With ever increasing complexity of products the dependencies grow rapidly. We have requirements that define functions that in turn are translated to logical components. Those logical components are translated to items which are related to process plans. These process plans can relate to tooling, process materials and facilities. If I pull on one requirement how many dependencies in the product will I find that might be impacted by a change to that requirement? If one changes the requirement highlighted in red in the below picture, it can impact 3 functions, 2 logical components, 2 to 7 items, a process plan, up to 3 operations and possibly a tool and a process material. This is a simple example that does not take into account all the possible documentation that is impacted by the change. Imagine the complexity of a real product like a car, aircraft or even your smartphone. Don’t forget you also need to look at other baselines such as your installed base in the field when doing an impact analysis. Facilitating the impact analysis is crucial for the success of the change process. The information of all the dependencies is typically not maintained in one tool, which means it is difficult to perform the impact analysis successfully. There is too much information to process efficiently for the human mind without the assistance of an enabling software solution.

Facilitate Impact Analysis

Companies need to be able to facilitate their impact analysis better. That means software vendors need to provide the capabilities to do this without having to create custom code to enable a business to perform the impact analysis in a fast and user friendly way. It is not just a report; it is an interface that allows for interaction. The solution must be able to generate a dynamic impact matrix per impacted baseline for a change request whilst taking into account all dependencies, re-identification rules and information such as stock information, items on order, and whether or not the orders can be cancelled or changed. The solution must allow the user to improve this systematic proposal and save it to initiate the automated cost calculation. These calculations are based on all the historic data to come up with a business case proposal, which can be fine-tuned before getting approval for the change request.

Change Implementation Plan

The impact matrix is just the start. Based on the impact analysis of an approved change, an implementation plan can be created. This is traditionally a lot of manual work, even though the impact matrix of the change can provide a clear implementation path. To create a solid plan more information is needed, like availability of resources, order lead times, etc. What if it were possible to generate the implementation plan of a change and let the system help you set the best possible effectivity of each of the items on the change and let the system help in setting the correct dispositions? What if the system could propose updates to the planned effectivity, impact to cost, or item disposition when changes happen to resource allocations, inventory, items on order or otherwise? With the current state of technology, it is possible to build a solution that can deliver these capabilities. I have seen IoT (Internet of Things) platforms that can pull data from various systems and display it in an interactive dashboard. I have seen big data analytics platforms that can learn and model from historic data to improve decision making. These are building blocks that unfortunately still require a lot of custom coding to be made useful. Which software solution provider will deliver the first useable change impact analysis platform? This is my question and challenge to them.

This article was originally published in the IPX Newsletter of 1 Feb 2017

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