Two observations I made during my years working as an engineer and manager are: 1) At first glance most people under estimate an effort, 2) If you ask a person for an estimate they often freeze. Keeping these two human traits in mind will make Fermi an easier tool to use. Instead of asking how long it will take, it is better two ask “will it take 2 weeks” - you will get a faster response, yes, no, 1 week, three weeks etc. Now you have something to work with. Keep observation 1 in mind. With a hard number offered by a coworker, ask why. They will reveal what hard points they used to make the assessment. This is all happening real time. This could reveal issues you were not aware of or self-imposed requirements your coworker used in his estimate.
For a family story about observation #2 see below*
To address observation number one above, just break down the task into smaller pieces. If there are teams break it down along the team functions, mechanical engineering, electrical, purchasing etc. Within each group break it down further. How far you need to go will vary from project to project and how exact an answer you require. Breaking it down is a key step. It allows people to focus on a small aspect. Another phenomenon is that some estimates will be high and others low so many smaller pieces will have an averaging effect.
You can do a good job of estimating unfamiliar things by comparing it to things the team members know and have hard data for. Project X took Y hours of lab time and we had previous experience with X type projects. The proposed project has a few areas we have no experience with, there will likely be areas that we discover that we are not familiar with. This tells you it will likely take longer and more money that project X.
Ask simple questions - is this effort more difficult than X? Once you get an answer then ask, is it twice as much or half etc. You will find it much easier to get someone to say yes or no to a hard suggestion than to get him or her to offer the number straight away. If the design looks twice as complex as projects you know multiple the known by the complexity factor. If it took 100 hours for a similar project and the new project is twice as complex, estimate 200 hours.
Who to involve will depend on the situation. For example, If your detailed schedules indicate that in 6 months you will have a large quantity of engineering resources idle, you may want to use Fermi to decide among several design concepts which to develop into a new product. This may need to involve just engineering. If you narrow the selection to two or more you may need to do a similar exercise which includes manufacturing or all departments.
Fermi may sound like wild guessing to you. Think about it this way. If you were guided blindfolded into a room that contained a dartboard on one wall, you would have no idea which wall the target was on or what direction you were facing. Since you have hard data to apply complexity factors to it would be like putting the blindfold on after seeing the location of the target. You may miss the target but you will likely hit the correct wall. Fermi gets you into the ballpark.
Remember that the Fermi estimation is just that an estimate. If your results indicate the project would take 3 times the resources that you have and another project will take 75% you can make a decision. Even if the 3x turns out in the end to be 2.25X and the 0.75X is 1.25X you still picked the lower risk project going with 0.75X – all else being the same. If your estimates for two competing projects are 1.0X vs. 1.1X you may need to dig a little deeper. If you applied the same method to estimate profit and the riskier project (3X of resources) had a profit 10X over the safer project, there is a decision point. Do you borrow money and ramp up staffing?
This process can be used in countless ways. If you have questions don’t hesitate to contact me. JoeG@JAGEngrg.com,
If you found this information helpful, there are other articles at www.jagengrg.com/blog
*Now for the family story. When I moved from home for my first engineering job I wanted to continue with the traditional Easter cakes my late mom baked. Many of mom’s written receipts made the German enigma code appear easy to crack. Some would call out items quite clear, 6 eggs for example. For other quantities, all that was listed was “enough” - I kid you not. I asked my sister what was enough - flour in this case. She could not, would not, provide a number after repeated requests. She said use your judgment. I thought I would seek up on the correct amount by the tablespoon. After the first disaster I told my sister, that I used 5 tablespoons. (bakers stop laughing). She instantly said (think Brooklyn NY) “what! you need at least 5 cups.” The psychology here I think is a self-imposed requirement on accuracy. When I asked how much she was thinking 5.1 vs. 5.2 cups. I was the guy who walked into the room blindfolded. An estimate on her part of 4 to 6 cups would have gotten me a lot closer. Once I suggested a number a good estimate came without delay.