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?