Read Articles about Lean Cost Reduction
Driving Lean Upstream Can Multiply Its Benefits
by Ron Mascitelli, PMP
don’t mean to frighten you, but lean manufacturing initiatives may prove
to be too little, too late. After all, even if your firm manages to strip
every dollop of waste from the factory floor, it can still fail in the marketplace
by being slow to market with inherently “fat” products. Without
eliminating waste from the new product development process, the substantial
benefits of lean manufacturing cannot be fully realized.
The problem is that most of the cost of a product is etched in stone long before its launch. An overly complex design, for example, cannot easily be “leaned out” in production. Moreover, unnecessary delays in product launch may cost your company unrecoverable profits. As precious weeks of profitable sales pass you by, your firm stumbles through slow decisions, changing requirements, and endless glitches prior to launch. In short, the benefits of lean manufacturing can easily be undermined by sub-optimized designs that arrive late to the factory with major engineering problems still unresolved.
It may be hard for a battle-weary change warrior such as yourself to accept this, but the holistic ideal of the lean enterprise is much more than a slightly expanded version of lean manufacturing. As challenging as a lean factory implementation can be, it is the easy part. Dramatic bottom-line results depend on eliminating waste from both the factory floor and the design process that feeds it. Whereas many firms are taking the former seriously, the vital (and often, tragically wasteful) activities that lead up to product launch have been, to date, almost completely ignored.
If you don’t believe that there is a mountain of waste in your up-front design process, consider Dilbert. We all laugh at the endless frustrations and mindless quirks of the “front office” that Scott Adams has so incisively captured. Yet shouldn’t we be crying? Consider the impact of such inefficiencies on your balance sheet. Recent studies of project team members have shown that in many cases, less than one hour of a typical workday is spent doing work that an outside customer would willingly pay for. How is this possible? The answer: endless meetings, disruptive change, delayed information, lack of prioritization, poor definition of roles and responsibilities, design overshoot…the list is long and challenging.
Fortunately, the same five lean principles that have enabled monumental improvements to recurring manufacturing can guide us out of this wasteful product development miasma. Before we charge into the engineering department with our kanban cards in hand, however, we should stop to think about the unique nature of new product development. The first and most important distinction is that product development involves two kinds of waste: that associated with the process of creating a new design (e.g., wasted time, resources, development money), and waste that is embodied in the design itself (e.g., excessive complexity, poor manufacturing process compatibility, many unique and custom parts). A second unique attribute of new product development is that the design process involves creative thinking, rather than just turning the crank. Hence, it may be difficult to just “lean it out” without risking throwing the baby out with the bath water. Which parts of the creative process are waste and which are pure value?
The good news is that many familiar lean tools translate into new product development very nicely. Value-stream mapping and kaizen events, for example, work well in this new and challenging domain. What is fundamentally different is the toolbox. Although analogies exist between the methods of lean manufacturing and the methods of lean product development, there are fundamental differences as well. Kanban cards are replaced by linked deliverables, capacity is managed through design-specific “time slicing” techniques, and so on. New tools…but a proven and well understood improvement process.
A final encouraging note is in order. The greatest single advantage of lean manufacturing methods is their almost childlike simplicity. They are typically easy to understand, straightforward to deploy, and yield unambiguous benefits. The tools of lean product development share this user-friendly nature. They are straightforward to apply at minimal cost, and begin yielding savings the very next day. All that is required for success is a bit of organizational discipline, and an intolerance of waste in all aspects of your enterprise.
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