The Evolution of Product Development -- Has Lean Adjusted?

In October, Cécile Roche and Luc Delamotte published a book entitled The Lean Engineering Travel Guide: The Best Itineraries for Developing New Products and Satisfying Customers. This book explains many Lean Engineering practices in some detail and the best itineraries to develop better products, discussing the underlying intentions and offering advice for implementation. It includes numerous concrete cases that illustrate this part with case material drawn from the authors’ own experiences. In addition, there is a brief guide to where and how to get started.  

When I spoke with Cécile this month, I asked her: "How has Lean adjusted as product development evolves?" Here is her complete answer:

The power of the Lean approach is that it is based on two strong convictions. 

The first is that a company will succeed if it really takes care of the customers, and therefore offers products that will solve their real problems - Do the right thing!

The second is that the company will make money thanks to the ingenuity of its employees, which must be encouraged by the existence of organized thinking spaces. 

By doing this, you avoid the biggest wastes imaginable: products that don't sell, products that you don't know how to produce, maintain, or recycle at the right cost, and all the rework caused by poor choices - Do the right thing, then do it right!

The practices and tools of Lean are all geared towards answering this question: what are we doing to give our staff the means to understand customers properly, and the means to identify the waste caused by our misconceptions? This constant questioning, which always begins with "Do we know what we don't know?” is the best way of ensuring that we are constantly adapting to change.

To encourage this questioning, we must set up a system that can very quickly identify the gaps, knowledge gaps, and trade-offs that need to give rise to creative discussions and train people to solve problems using appropriate methods. It is the Lean system.

Lean is a dynamic approach. It's not about freezing practices in procedures that are excellent one day but already unsuitable the next, but about regularly questioning all changes (in the context, of technology, resources, skills, etc.) to assess their impact. This is what we call the Kaizen spirit. As Allen Ward said, "Instead of learning to surf, conventional organizations try to control the waves! This almost never works."

What do you think of Cécile Roche's thoughts on Lean methodology? Do you feel that Lean continues to benefit the changing face of product development? 

Lean Drives Innovation at Goodyear

I often hear the fear from right-brained functions, staff, and executives that Lean kills creativity. In the watershed book titled Lean-Driven Innovation: Powering Product Development at The Goodyear Tire & Rubber Company, author Norbert Majerus proves it doesn’t need to be that way. Norbert’s book describes how Lean expanded innovation capabilities and capacity at Goodyear, and, more important, led to competitive advantages and powerful business results. I asked Norbert, an engineer by trade and Goodyear’s Lean champion, “What are the keys to Goodyear’s success with Lean research and development (R&D), and are they replicable by others in innovation?” Here is his response:

An important first step within Goodyear R&D was that we didn’t view Lean as a way to reduce product development costs. That may sound counter-intuitive to those in manufacturing, where major savings can be gained from Lean and the removal of production wastes, but it doesn’t work that way in R&D. Unlike manufacturing, R&D is a small direct cost to the business and there is only so much to gain from cost-cutting — but R&D casts an enormous shadow over the products and activities of a company. Design decisions can affect the product’s performance (price), cost, manufacturability, complexity, and even distribution. Design processes also assure that the right product is available at the right time. We chose to focus Lean on how R&D designs product, the powerful ways it can increase value for customers, and its impact on the profitability of the value streams. Leveraging that shadow with lean thinking has a return that is an order of magnitude greater than direct cost savings in R&D.

We also recognized that Lean could enhance many of Goodyear’s already existing R&D strengths — knowledge management, advanced computer modeling, people engagement, matrix organizational structure etc. We weren’t looking to apply a whole cloth version of Toyota’s Lean or a Lean template promoted by another company or consultant, but a Lean that could work within Goodyear. That sounds simple, but it required a fundamental commitment that every Lean innovation transformation requires: that is, we took the time and effort to learn, understand, and validate Lean principles that would work in our organization.

When I was selected to get Goodyear’s Lean R&D effort underway, I had little knowledge of Lean. I read everything I could get my hands on and attended Lean conferences and seminars. It was all fairly confusing. Eventually I started to see the science that underpins Lean, which, as an engineer, convinced me of Lean’s potential in product development. (Too often I see individuals trying to apply Lean tools without understanding the principles of how and why it really works.) I began to teach these Lean principles to our R&D experts. I coached and encouraged them to leverage the principles, and they made the changes we needed to be more competitive. We changed our innovation culture from the inside out, and even developed some new Lean principles along the way — Lean R&D principles are the backbone of  Lean-Driven Innovation.

We repeatedly applied these principles and tools to continuously improve safety and quality (already industry-leading at Goodyear), service (e.g., on-time delivery), and efficiency (e.g., innovation cycle time). As R&D improved its ability to serve the business, it also freed resources for more knowledge development (innovation capability) and more product development projects (innovation capacity). And all of this was done without additional investment in R&D.

Many other things contributed to our Lean R&D initiative and business success, particularly the unwavering support of our Lean initiative by Goodyear leadership, which grew as we showed how the results affected the bottom line. It wasn’t an easy journey, with many challenges — and challengers — met along the way. I write about both the good and the bad moments in Lean-Driven Innovation. In doing so, I hope I can help others avoid some of the problems we encountered and overcome their own Lean R&D challenges as they arise.

Norbert has written a powerful and engaging story about Lean innovation within Goodyear, and their journey and outcomes will surprise you. Clearly, Lean innovation thrives at Goodyear. Let me know what you think of Norbert’s Lean R&D principles, especially if you are in product development and striving to create, sustain, or enhance innovation capability in your organization.

Why Don't All Manufacturing Companies Design Products that are Easy to Manufacture?

David M. Anderson recently published a book titled Design for Manufacturability: How to Use Concurrent Engineering to Rapidly Develop Low-Cost, High-Quality Products for Lean Production, and I just had to ask him a few questions, such as: Don’t all manufacturing companies design products for manufacturability? How could they not? Why will all manufacturing companies benefit from a book that shows them how to design products for manufacturability?

Here is David’s complete answer:

Engineering schools usually teach students to just design for function. This book completes that education by showing company engineers, and their managers, how to also design for low cost, design in high quality, enable Lean production with standardization, and design for fast ramps to stable production. 

Of all of these goals, cost is the most misunderstood to the point that counterproductive policies can actually raise total cost. For example, pressuring engineers to lower "cost" but primarily quantifying only parts’ cost will encourage them to specify cheap parts, which will raise quality cost even more. Another cost myth is that cost can be easily reduced after design, but the book shows that 80% of cost is determined by design and that trying to reduce cost later drains resources from new product development and introduces many new variables that will delay product development and raise many other costs. 

The book shows management how to structure new product development efforts so that design teams: (1) have enough multifunctional resources available early to work together in complete concurrent engineer teams and (2) have a higher proportion time up-front time to do a thorough design that avoids delays to fix things later and, paradoxically, gets products faster to paying customers. 

A key element of this thorough up-front work is to optimize product architecture and develop families of products so that Lean production factories can quickly and easily build many standard product variations (build-to-order) and specials (mass customization). 

How does your company determine product costs? What are your biggest barriers to fast product development?

The Production Preparation Process (3P) -- A True "Game Changer"?

At a recent conference, I had the chance to speak with Drew Locher about the Production Preparation Process (3P), and how it is used. Drew recently co-authored a book titled Unleashing the Power of 3P: The Key to Breakthrough Improvement with Dan McDonnell. I asked Drew: "How does 3P provide a real breakthrough? And, how does it function within a Lean initiative?" Here is Drew's full response:

3P can provide breakthrough results since it is foremost a methodology for innovation.  First, one needs a clear problem statement of a problem that should be resolved.  This can be the function that a new or existing product is expected to perform. Then, two key principles are used to expand people's creative thought process. "Biomimicry" is where examples of that function are identified in nature.  Why nature?  Nature has already solved countless problems over millions of years. This principle also helps people "get out of their box" and expand their thought process. The next principle is "Seven Ways" -- Do not simply identify one possible solution, identify seven. This stretches the creative process. The creative process ceases when people converge too quickly on a possible solution, and perhaps overlook a better one. At some point, those examples from nature are translated to possible human-made solutions, and the best elements of the seven ways are combined to form a better solution.  A third principle is rapid simulation -- to make the "fuzzy" as tangible as possible, as early as possible.  This provides the means for rapid learning cycles, which improves the solution that results.

As for "fitting in" with Lean, think of 3P as kaizen on steroids.  Instead of making incremental improvements on existing products or processes, 3P is intended for major redesigns of either or both simultaneously.  Therefore it must be fully supported by leaders in terms of the commitment of appropriate resources to insure success.  It is not for the weak of heart!  The underlying principles, however, can still be applied in many business contexts.  Consider an example of a cellular/flow kaizen event on an existing process and where major change is not possible. A team should be encouraged to consider multiple alternative cell or flow line designs for the purpose of identify a better one.  And the team should rapidly simulate proposed designs using simple materials.  In this way, the "spirit" of 3P is maintained though the exact methodology is not necessarily followed.

What do you think of Drew's explanations? Have any of you used 3P at the front end of the design process? Do you believe 3P is key to designing market-changing products?

Here is a video of Drew speaking directly about his new book:

Product Improvement -- Which Approach?

Jay Mandelbaum, along with three co-authors, published a book titled Value Engineering Synergies with Lean Six Sigma: Combining Methodologies for Enhanced Results, and I recently had the chance to ask him a few questions during a phone conversation. I wanted some more clarification on value engineering, but more specifically, I asked him: "Why is it important to use more than one approach to product improvement?" Here is Jay's response:

Different process and product improvement methods were developed under different circumstances -- each has its own unique strengths and weaknesses. Value Engineering (VE) is a practice that is distinguished from other techniques by three elements -- analysis of functions; a multidisciplinary team approach; and the step-by-step VE Job methodology.

VE works synergistically with all other continuous improvement initiatives. It makes any project better by using a unique approach to problem solving that includes the analysis of the functions of an item or a process to determine best value. More specifically, VE systematically determines all of the necessary functions of the item or process, identifies those functions that cost more than they are worth, and brainstorms alternative ways to perform those functions for further evaluation. This distinctive approach drives innovation because it encourages people to think about solutions in atypical ways.

An example recently came to my attention. The New York City FAIRTAX software integrates 40 major systems, 3,000 programs, and 1,400 job streams into seven subsystems, incorporating state-of-the-art technologies and an advanced development environment. The subsystems are: Taxpayer ID, Returns Processing, Property Management, Charge Processing, Accounts Receivable, Collections, and Case Tracking. The amount of information that needed to be input exceeded the capacity of all existing technologies. A Value Team analyzed the functions of the system architecture, software development, hardware, implementation plan, and staffing requirements. The study produced a change in the program to reduce the computer capacity requirements and a revised implementation and staffing plan which yielded monthly savings of $325,000.

What do you think of Jay's response? Do you have any experience using value engineering?

What is 3P and Why Should I Use It?

I recently spoke with Allan Coletta, who is the author of a new book titled The Lean 3P Advantage: A Practitioner's Guide to the Production Preparation Process, and asked him directly: "What is 3P and why should it be used when developing new products?" Here is Allan's full response:

Lean 3P (Production Preparation Process) is an event-driven process for developing a new product concurrently with the operation that will produce it. 3P is a game-changer that results in better products that require less initial capital investment and lower ongoing costs.

Previously, Lean had been largely relegated to fixing existing problems in our manufacturing plants. 3P takes Lean principles upstream into the new product development arena, and applies them liberally at the point in the process where they can have the most influence on both product and operation. Enormous advantages are created by deeply understanding customer needs and developing alternative designs that will create breakthrough benefits. Time is no longer spent trying to fix “baked-in” problems.

New products and new operations require many functional groups working together, but traditional development is typically a series of successive sub-optimizations and hand-offs. Time pressure and a passion to quickly reach a design decision squashes innovation.

Lean 3P brings stakeholders together and sequentially takes them through a process where products are developed alongside of the manufacturing operations. Design engineers interact with process engineers, marketing, and research & development team members; each declaring their preferences and capabilities and developing alternative options against agreed criteria. Manufacturing and maintenance teams weigh in with preferences for operability and maintainability, standardization, ergonomics and flow.

The Lean 3P advantage is about rapid learning, collaboration, and innovation, and it works with new or established products and on any sized project. Companies in virtually every industry are applying Lean 3P to drive competitive advantage.  

Why do you think of Allan's thoughts on 3P? Have any of you applied 3P when developing new products? What were the results?

Redeveloping Product Development at Volvo

I came across this interesting article that provides a little insight into how Volvo developed one of its new trucks -- the Volvo FMX. According to Gunnar Eliasson (a market manager for Volvo Trucks), customer input and specific requirements are now influencing the design of Volvo's trucks in a much more direct fashion. As product lifecylces are much shorter due to increased competition, response to customer demands must be more immediate.

With the Volvo FMX, the development process included customers, drivers, sales staff, and marketing specialists and then prototypes were built and tested after input and "wish lists" were distilled. A very crucial point of the article is a quote from Jeffrey Liker (author of The Toyota Way) who noted that this new process is what separates Lean product development from traditional product development: "In Lean production, specialists work together freely across several departments and areas, all so as to be able to better meet customer demands. At the same time, this approach promotes constant learning about the production processes and understanding of how product development is conducted."

Do you know of any companies that include this type of input very early in the process? How has it affected lead times?

Most companies' major concern with this type of process is the dissemination of important "secrets" to competitors. The more various "outsiders" involved in the development process so thoroughly increases the potential for leaks. Eliasson, however, reveals that the priorities and outcomes have greatly changed: "The benefits of inviting customers into the product development process far outweigh the risk that information might spread to our competitors."