Abstract: To solve the shortcoming of traditional Design Structure Matrix (DSM) optimization for R&D project, this paper presents the approach of DSM value stream optimization based on value factor. The activity’s ratio of Cost to Time (CTR) and Rework Factor DSM are proposed to reflect synthetically the infulence of value factors including the activity cost, time and rework risk for sequencing optimization of the complex R&D project. Furthermore, the optimization objective function is built based on CTR rework factor as optimization parameters. Finally, for a typical case optimization minimizing the value stream optimization objective function, the result indicates that the feedbacks and the total project cost can be reduced significantly compared to traditional DSM optimization objective.

Key words: project management, Design Structure Matrix (DSM), value stream optimization, value factor