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Expanding Lean Thinking

Since the mid-1980s, many companies, with great success, have adopted the lean manufacturing system that was developed by the Toyota Motor Corp.  By making fundamental changes to the way things are done on the shop floor, production has greatly improved. In addition to implementing lean manufacturing, some companies have adapted a lean mindset in departments such as human resources, accounts receivable, and payroll with the same emphasis on eliminating the inefficient use of natural resources and manpower.

Now, manufacturers are beginning to realize the very same principles and tools that improved productivity in the plant and throughout the company can also be applied to the new-product-development process. By incorporating the same proven-effective concepts, not only does a lean approach make better use of the talent of a company’s highly paid engineers, it will also result in better designs entering the production shop, and ultimately better consumer products.

Lean product development is a natural extension of lean manufacturing. Creating a superior quality product, delivering it on time, and keeping costs low should begin with the initial stages of product design.

History of Lean Manufacturing 

More than 50 years ago, Toyota set out to transform its automotive production system with the goal of improving quality, cost, and delivery. The resulting lean manufacturing process accomplished those goals. The central principles guiding its development were to consume fewer resources and to be efficient with how the work was done. The new process garnered more employee satisfaction because workers accomplished more by performing tasks in a more streamlined way.

Changes in Lean Development

In the past, much has been written about lean manufacturing and its growing popularity, but there has been little discussion about a lean approach to industry’s classic engineering design process. There are two excellent books that are based on lean product-development methods: Product Development for the Lean Enterprise by Michael N. Kennedy and The Toyota Product Development System by James M. Morgan and Jeffrey K. Liker.

In Product Development for the Lean Enterprise, Kennedy provides some thought-provoking statistics. He states that, in contrast to the typical company, lean companies “had a four-times increase in development productivity, two- to three-times decrease in development costs, two- to ten-times increase in innovation and a two- to five-times decrease in development risk.”

It seems that most companies’ systems are structure based, often relying heavily on project-management software, whereas a lean system is knowledge based.

A lean system involves placing responsibility for personal performance with individuals. The company believes in placing one person in charge of the overall product development — usually a senior development engineer who is knowledgeable about each step in the process.

Competent engineering personnel are given personal responsibility for project goals. Concept and design experts do the work that is aligned with their skill sets, and they function like entrepreneurs who manage their own little businesses. Every person within each “little business” or team works on the highest function they are capable of handling.

Lean Development Tools

Assigning the right person to the right task and giving them the latitude to do their jobs without unnecessary distractions is the soft side of lean. Equally important is the hard side of lean. This involves specific tools such as value stream mapping,  which first identifies all steps in the product-design process — including those that add value and those that do not — and then improves or eliminates the non-value steps.

Another streamlining tool to ensure work keeps flowing is the strategy of parallel development. It can be illustrated with a company that is charged with coming up with a new way of making bicycles. Three different engineering teams are formed to develop a new steering system, a new drive system, and new bicycle accessories.

An overall development engineer oversees all three teams. One team develops three or four alternatives to the traditional bicycle handlebars, another team creates a number of alternatives to the standard pedals-and-chain system, and the final team generates ideas for new bicycle accessory items.

At some point, the senior development engineer requests the best idea from each group so the design process can move forward. If the proposed idea from the drive-train team does not work for the current project, then the team can simply present one of the other ideas it has been working on simultaneously.

With parallel development, the conceptualizing process need not start over because the original focus had been on only one product that ultimately did not pan out. This built-in fallback plan allows the work to stay on schedule.

Typical System of Development

Unlike the lean product-development system, which is knowledge based, the typical product-development system is structure based. In other words, many companies place a high value on the structural tools at their disposal — like their project-management system, which dictates step-by-step procedures to be followed to get the job done. Unfortunately, this type of a system often creates extra work for highly skilled employees that is quite unrelated to the actual type of work they were hired to do.

In Product Development for the Lean Enterprise, Kennedy related that when he asked engineers and engineering managers in lean companies how much of their time they spent “creating value or creating knowledge or doing engineering, the average answer was approximately 80 percent.” When he asked those with comparable job titles in large companies not employing lean the same question, the average answer was less than 20 percent.

Many engineers are plugged into a system that requires them to follow a project-scheduling software tool that dictates what they should do and when they should report back. The demands for documentation cause them to spend long hours creating spreadsheets and attending countless meetings.

The same product-development engineer who is accustomed to a step-by-step procedural process is also likely to be used to developing one product idea at a time. In contrast to a lean approach, which allows for the development of multiple ideas in tandem for positive workflow, a traditional linear product-development system can be inflexible and problematic.

To Get the Ball Rolling

Training and education are the biggest tools needed to identify and implement alternative ways of developing a product. Consultants who specialize in lean enterprise and who can adapt systems specifically to suit development engineers are instrumental to the conversion process.

The first step a consultant takes is to assess the current state of operations. The consultant conducts a series of interviews, does process mapping, makes observations, and attends meetings to determine how people are spending their time. The consultant generates a report of the findings, and reviews it with the company’s executive management.

During the process, skill sets are matched to tasks. If it is determined that someone’s skills are not perfectly suited to the position or department she is in, she is retrained or moved to a more appropriate position.

Rewards of Lean Development

Once a company changes over its product-development process to a lean system, design engineers will find themselves better focused on the innovative work they are best qualified to do. 

Many manufacturing executives have already adapted lean manufacturing systems to streamline their production process on the shop floor. But those who have a lifelong-learner philosophy realize problems and bottlenecks still plague the corporate offices, from administrative support on up to senior design engineers.

If a company adapts the lean system enterprise-wide — and in the product-development department, in particular — the result will be higher productivity, happier customers, and greater company success in today’s competitive marketplace.

This article was contributed to Blackman Kallick’s Manufacturing Edge by Doug Willmot, Senior Business Consultant for Business Engineering. For more information contact Doug at djwillmot@busnengg.com or 847-824-0809; Paul Oetter, Partner in Charge of Blackman Kallick’s Manufacturing and Distribution Practice at poetter@BlackmanKallick.com or 312-980-2920; or your Blackman Kallick representative.

 

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.