What is a Product Breakdown Structure? Need and Examples

What is a Product Breakdown Structure?

When I came to know about Product Breakdown Structure (PBS) for the first time, I realized that it is a very effective tool for project managers. In other words, PBS is a description that involves organizing a project or a product into subordinated categories. It is important to note that this structured approach not only defines the working scope but also increases the efficiency of communication and the rational use of resources during all project stages.

From a practical or tangible standpoint, a PBS breaks down a deliverable into workable components that make it easy to visualize. It acts as a guide that depicts the interactions between different elements of a scheme and assists the client in focusing on the various aspects of a project most efficiently. This comprehensive guide will help you know ‘what is product breakdown structure’ in detail. 

What is the Need for a Product Breakdown Structure?

I observed that a Product Breakdown Structure is needed for various reasons. It serves as a cornerstone for project management by providing several key benefits: 

• Clarity and Scope Definition: PBS also assists in breaking down the project into work components and thereby makes the specification of work easier in terms of amount and kind. It helps to assure all stakeholders that they understand what has to be delivered.
• Resource Allocation: This process of a proper distribution of project resources is one of the most crucial tasks of project managers. A PBS aids in the identification of activities and parts, which makes their resource plans more efficient.
• Risk Management: Risk evaluation and assessment is a vital process because it helps in the early identification of possible risks to ensure successful implementation of the project. In other words, by bringing out the various nuts and bolts of a project by way of a well-developed PBS, project managers can detect risks that are tied to each of these parts and come up with a suitable risk-aversion plan.
• Communication: Communication is one of the most important aspects that should be well-managed in any project. A PBS affords the project’s various components and their relations with one another, hence promoting improved understanding with the parties concerned.

Product Breakdown Structure vs Work Breakdown Structure

Yes, while I was pursuing training on PMP, I was introduced to the difference between what is Product Breakdown Structure (PBS) and what is WBS or Work Breakdown Structure. While both are hierarchical breakdowns used in project management, they serve different purposes: 

• PBS: While discussing what is product breakdown structure, we can say that it is a technique that revolves around the identification of the tangible products that will be produced at the end of the project. It outlines the subparts that contribute to the final output. In other words, it defines the structure of the result. For instance, in a software development project, the PBS would decompose the software into major components and subcomponents.
• WBS: On the other hand, a WBS or work breakdown structure splits the project work into more achievable components which makes it easier to work on the project. While this deals with who will complete the project, it concerns how the tasks will be performed to produce the final project products. This means that every activity described in the WBS is the work contained in a project that leads to a deliverable.

Project managers must be able to distinguish between PBS and WBS to understand what is product breakdown structure and what is work breakdown structure. It will help them to plan and execute projects efficiently. PBS specifies what is to be delivered and WBS identifies how work will be done to deliver the defined PBS. Pursuing PMP Certification training can further enhance their understanding and skills in these areas.

Tools to Create a Product Breakdown Structure

Throughout my career in project management, these are the best tools that I can recommend to create effective Product Breakdown Structures. The tools are as follows: 

• Mind Mapping Software: Mind maps are one of the tools that must be indispensable for anyone. MindMeister or XMind are good tools for creating hierarchies and recording brainstorming sessions. They enable the project team to work cooperatively online and to sort the documents of the project effortlessly.
• Project Management Software: Applications like Microsoft Project or Asana have specific sections and tools to organize and develop PBS. These tools help project managers delegate duties, monitor the progress, and define the relationships between tasks within the PBS environment.
• Spreadsheets: Excel or Google Sheets are extremely useful strategies for developing straightforward PBS. They enable the project managers to arrange aspects of a project in a nested way, put more information in the structure, and provide a status in a streamlined technique to the stakeholders.
• Specialized PBS Software: When it comes to working with PBS directly, programs such as WBS Schedule Pro or Lucidchart have more setup to accommodate the creation and depiction of PBS. These provide ready structures, customization, and integration features that help in creating the PBS.

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How to Create a Product Breakdown Structure?

After knowing ‘what is product breakdown structure let’s understand how to create it. The Product Breakdown Structure is created based on well-defined procedures. As per my experience, the steps given below are crucial:

• Identify Deliverables: Start with defining the project outcomes in terms of the primary products and services that you shall be delivering. It is important in this step to illustrate the objectives and desired results of the project.
• Decompose Deliverables: For each deliverable, there should be sub-products or breaking down of the deliverable into small manageable tasks. This decomposition process is useful in relating the various tasks and subtasks that are needed in the achievement of every deliverable.
• Organize Hierarchically: Organize the deliverables and their components in a top-down format beginning with the top-level product and ending with components. This helps in understanding the relationship between the different components of the project and the role of each sub-topic in enhancing the overall project.
• Assign Codes or Labels: Provide identification numbers or codes for every element of the PBS. These identifiers enable the identification of the various project parts as well as the handling of such components from a certain stage in the project to another.
• Review and Validate: Make it a habit to reassess PBS, and corroborate the components, to make sure they are all indispensable and capture the project’s scope and goals faithfully. This step entails engaging the key stakeholders and ensuring the incorporation of their input to the work that had been done before.

Product Breakdown Structure Example

To better explain ‘what is product breakdown structure’, let’s consider a simple example from the sphere of computer software production.

Suppose that the goal of a certain project is established as designing an integrated solution for the management of customer relations through a software application. The PBS for this project would begin with the overarching deliverable: the target customer is the CRM software itself. If this main deliverable were to be further divided, some of them would be User Interface (UI) Design, Database Structure, Functionality sub-modules like Sales Management, Customer Support, Third Party Integration like APIs, etc. 

Each module would further decompose into specific components: While the UI Design would contain such tasks as ad creation, Grid Layout, and prototyping, with Database Architecture referring to Schema mapping and modeling as well as Integration Planning; Functionality Modules would include tasks such as feature implementation, testing, and documentation and Integration with External Systems would include tasks like API integration, data synchronization as well as security implementation. 

This structural division helps to guarantee that all activities of the CRM software project are thoroughly planned, described, and controlled on all levels, which creates the basis for proper development and meeting the requirements for successful project completion.

In creating such a comprehensive structure, project teams often rely on a product breakdown structure template.  These templates provide a standardized framework that guides the decomposition process, ensuring consistency and completeness across different projects. By using these templates, organizations can streamline project planning, improve communication among team members, and enhance overall project efficiency.

Real-World Example: Construction Project

Suppose you’re to undertake the responsibility for the general supervision of a mega construction project. The PBS would commence with the major output such as a residential building. It would then be divided into major systems such as structural, electrical, and plumbing and then into the different elements or sub-sections like the foundations, walls, electrical wiring, water pipe or fixtures, and surface finishing. In the case of the critical realism approach, each component would be given codes for tracking and managing work in the construction phases.

Conclusion

So, through this guide about ‘what is product breakdown structure’ we have highlighted how the PBS is an essential component of project management by offering visibility, definition of the scope, and communication amongst stakeholders. In my experience in PMP certification or PMP Training as well as the practical use of PBS in planning and managing projects, I have seen how PBS simplifies project planning and management by breaking down large projects into equally manageable segments. 

Thus, PBS can be incorporated into project management practices that increase resource utilization, risk management, and project outcome satisfaction. Thus, as project management develops, the utilization of tools such as Product Breakdown Structure becomes more critical in projects and organizational development. To have an in-depth insight about ‘what is product breakdown structure' I will recommend you to pursue a PMP certification training. 

FAQs

1. What are the disadvantages of product breakdown structure?

While the Product Breakdown Structure offers significant advantages, it is essential to consider potential drawbacks: 

• Complexity Management: This causes large projects to have very complex PBS structures that are difficult to govern and sustain.
• Scope Creep: Lack of adequate decomposition at the beginning can cause the emergence of new project scopes during the execution process which can affect the project time and cost.
• Maintenance: To maintain the usefulness of PBS for a project, the PBS should be updated and reviewed from time to time.

2. What is the main way in which the breakdown structure can be used when planning?

The PBS is principally used during the planning stage of the process and is used to identify the components of the project, to approve resources, and to recognize relations that are imperative to the achievement of the project. As PBS entails the separation of the project into portfolios, programs, and projects, it assists in defining clear goals and milestones and providing a framework for project delivery.