All Rights Reserved – Please Do Not Copy Without Permission Brent Wahba LIPPD Ontario PDMA 3_30_10.ppt Page 1 Lean, Integrated Product & Process Development

All Rights Reserved – Please Do Not Copy Without Permission Brent Wahba LIPPD Ontario PDMA 3_30_10.ppt Page 1

Lean, IntegratedProduct & Process Development

Brent Wahba

March 30, 2010

[email protected]

(585) 315-7051


If only we coulddevelop better,easier to make

products in half the time…with

much less stress!!!

Summary

I can help you,but you will

have to LEARNto THINK & ACTDIFFERENTLY!

Oh thank youLean ProductDevelopment

Consulting Man!You’ve saved

the day AGAIN!!!


Why Focus on Product Development?

< 20% Of newproducts achievetheir commercial

objectives

Only 1 in 3,000ideas becomesa commercial

success


1 month delay = 10% gross profit loss (average) (Sopheon)

12 Month delay = 50% revenue loss in slow markets, 90% in fast markets (IBS)

Introduction Growth Maturity Decline Time

Un

its,

Rev

enu

e, o

r P

rofi

t

Los

t Uni

ts, R

even

ue, o

r P

rofit

Total Units, Revenue, or Profit

OptimalEntry

LateEntry

Why Focus on Product Development?Time to Market


Accounting Cost vs. Ability to Change Cost:

0%

10%

20%

30%

40%

50%

60%

70%

80%

Design Material Burden Labor

Accounting Cost

Ability to Change Cost

Are We Working on the Wrong End?


What % of your Product Developmenttime is typically “Value-Added?”





What Would be the Impact of*:

75% Fewerengineers todesign a car?

75% LessProduction

Scrap?

Knowing which5 – 7 criteria

customers buybased on?

50% Lessdevelopment

lead time, 30% lower total cost,

with 25% fewerresources?

> 75% Commercialsuccesses?

95 % Lessprototypelead time?

*Your results may vary


“You can’t solve today’s

problems at the same level

of thinking you were at when

you created them.”

Albert Einstein, Lean Thinker:


Definition: Value Streams

2000

I I I I

I

AAA CeramicPowder

Mug-O-Rama

P/T = 30 minL/T = 1200 min%C&A = 95%

P/T = 1 minL/T = 250 min%C&A = 99%

P/T = 1 minL/T = 250 min%C&A = 65%

P/T = 960 minL/T = 1080 min%C&A = 85%

P/T = 1 minL/T = 180 min%C&A = 65%

P/T = 15 minL/T = 600 min%C&A = 95%

P/T = 5 minL/T = 120 min%C&A = 98%

Acme Mug Company1 Order / Day

Phone2 P.O. / Week

Fax

2500 Per day27 Styles

99.7% Defect-free

1 Shipment/ Week

1 Shipment/ Day

1FIFO

1

1 500 500

Phone

ProductionAuthorization

JobPacket

2Coffee


Companies are Really Quite Simple…

Product Development Strategy & Marketing

R&D

Design

Supplier Selection

Process Development

Value Stream Design

Tooling Implementation

Test and Validation

Continuous Improvement

Make / Deliver Operations Sales & Marketing

Manufacturing

Supply Chain

Distribution

Service


“Product Development”:Creating Production

Value Streams

“Make / Deliver” Operations:Operating Production

Value StreamsCustomersCustomers


Simple, Standardized, Efficient, Robust, Development Process

Product Development

Customer Needs Problems to solve What customers value What they will pay for ”Voice of the Customer”

Competitive, profitable,capable, optimized:

Product Definition,Service Definition,Process Definition & Production Value Streams

Organizational Needs Strategy, growth, profit Standardized work Internal requirements Regulatory requirements


Lean is Ancient…and Often Misunderstood

Venetian ArsenalStandardization, Quality

1320

Honorē BlancInterchangeable Parts

1780

Frederick TaylorScientific Management

1911

Meat Packing(Dis)assembly Line

1867

Ransom Olds1st Auto Assembly Line

1901

Ford, Highland Park PlantLinked & Paced Assembly

1913

Sakichi Toyoda, Taiiichi OhnoJIT, Defect Prevention

1920 - 1990

WWIITakt Time, TWI

1940s

Eliyahu GoldrattConstraints, Systems

1984

DemingPDCA, People, Quality

1950s

Scientific MethodEgypt, Socrates, Bacon, Galileo

1600 BC – 1600 AD

1991 Today


“Delivering the most customer value

while consuming the fewest resources”

Customer focus

Respect & leverage our people

Constant reuse, learning, problem solving

→ Efficiency, effectiveness, prosperity

Lean


ProjectManagement

There really is no common definition…

What is Lean Product Development?

LeanProductDevelopment(LPD)

DesignForSix Sigma(DFSS)

SystemsEngineering(SE)

Agile

,Scr

um,

XP


FakeLean

WasteReduction

Potential Lean Product Development Paths

Which is best?

What problem(s) are you solving?

Do you want to change process and / or culture?

Lean Manufacturing

/ “Design Factory”

DesignTools

QueuingTheory /

Flow

ProjectManagement

Modified6 Sigma / Problem Solving

Al Ward

ToyotaSystems

Engineering/ SoftwareMethods

OrganicGrowthModel


Key Lean Product Development Themes

Development is not a deterministic process

The output of development is reusable knowledge:

–How to satisfy customers

–How to perform work efficiently and effectively

–Validated, lean, capable production value streams

Small batch sizes:

–Knowledge, experiments, design elements

Cadence of small, fast learning cycles


Pull systems:

–Knowledge, customer-driven milestones

Distributed project management

Visual management

Systems Engineering framework

Explore alternatives

–Increase learning

–Manage high risk / high reward alternatives



Integrating events instead of quality checks

Late concept selection with more knowledge

Managing organizational capacity versus demand

Project teams “own the business”

Team leadership, team design, supplier integration

Simple technology to fit team needs and processes



Organic Growth Model:Every Organizational Level Has Problems to Solve

Strategies Business Objectives Financial Performance

Goals Budgets Operations Schedules Projects

Assignments Rates Quality Standards

Executives

Managers

Teams &Individuals

A PC D

A PC D

A PC D

A PC D

A PC D

A PC D

A PC D

A PC D

A PC D

Source (modified): Lean Transformations Group, LLC

Graspthe

Situation

“Wha

ts”,

Res

ourc

es, S

uppo

rt“H

ows”, P

erformance

Adjust Plan Check Do

Learning /Problem Solving

Cycle


Organic Growth Model of Lean Development

ManagingWork

CustomerNeeds

LeanProduct

DevelopmentSystem

Preparingfor Lean

Production

LPD SystemDesign &

ContinuousImprovement

ProjectsReuseLearn firstExperimentsFailures

PullSmall batchPrioritizedOverburdenQuality @ sourceVisualProject management process

Team-ownedSolution emerges from experimentsValue stream mappingA3 Problem solvingSimple toolsIntegration & reflection

Product DesignProcess designValue stream designProduction validationProduction handoff

End customersProductionBusiness

FastLearningCycles

Graspthe situation,

Create pull forchange


Customer Needs:Untested Market Hypotheses?


Brent & Patty’s Car-Buying Journey:Learning and Decision Loops

Pastbrand anddealershipexperience

Patty’scar needsservice,“getting

old”

Newsstoriesof great

rebates &deals

Whatmodels?

Check ads

Onlineresearch,

narrowconsideration

set

Checkads, decide

potentialdealers

Test drive,form / verify

opinions

Biasedanalysis,

carselected

Comparedealerprices,assesshonesty

Considerimage impactwhere Patty

works

Investigatepricing anddiscounts

Negotiatedeal,

purchase

Pick upcar, qualityitems not

fixed

Badservice /

bad salesmanexperience

Badservice

experience,complaints


Customer Journey(End customers, influencers, channels…)

Linking to the Customer Journey:Integrating Constant Learning

BasicR&D

SpecificR&D

Product /Process

Development

ValueStream

ImplementStart-Up Production Service

/ Help

StrategicPlanning

MarketResearch

ProductManagement

Pricing /Placement /Promotion

Selling FeedbackService/ Help

Feedback

What Customers Need

What WeCan Do


Call out requirement used for comparison

Use Visual management to highlight gaps

Market, Customer, Program…

Capturing & Communicating Customer Needs:Value Proposition Example

What are thesignificantattributes forcustomer buydecisions?


And Some Needs are Better Left Un-Served…

News in Brief

Fork Manufacturer Introduces Fifth Tine To Accommodate Growing American MouthfulsFebruary 17, 2010 | ISSUE 46•07

EVANSVILLE, IN—In an effort to keep pace with the rapid growth of American mouthfuls, flatware manufacturer KitchenMaster announced yesterday the addition of a fifth tine to its line of dinner forks. "These days, a traditional four-tined fork is just not enough to handle the quantities of food people shove down their throats," said company spokesman Ken Krimstein, holding up a fork supporting six separate tortellini, two turkey sausages, and some mashed potatoes. "To stay relevant to our customer base and bring back some of those who have given up on using utensils entirely, this was an adjustment we just had to make." Krimstein added that the augmented forks

would soon be followed by 25 percent deeper spoons and 3-gallon gravy boats.

Source: The Onion


Lean Product Development System Design:Value Stream Mapping

UpdateConcept

ReviewData

StudyMfg.Cost

Mfg.Concept

StudyMfg.Manufacturing

ReviewData

QuoteSuppliers

SelectSuppliers

StudySupplyBase

BuyerPurchasing /Supply Chain

UpdateConcept

ReviewData

StudyInvestmentTooling

UpdateConcept

ReviewData

StudyProcess

ProcessConcept

StudyProcessProcess

ManufacturingEngineering

TestConceptTest

BuildConcept

Prototype

UpdateConcept

ReviewData

DesignConcept

StudyDesignDesign

ProductEngineering

StudyBusiness

Case

PrepareQuoteFinance

TriggerProjectProspectSales

SelectMarkets

Marketing

CreateStrategic

PlanPlanning

Commercial

Review /ApproveDesign

Review /ApproveQuote

ReviewProposalCustomer

Higher level /less detail thanmanufacturing

mapping

Current state:Customer value,Quality & rework,

Delays & interruptions,Knowledge growth,

Biases / assumptions,Prioritize problems

Future state:All customer needs,Quality at handoffs,Existing solutions,

Solution experiments


“If HP knew what HP knew,

we would be

3 times as profitable.”Lou Platt,Former CEO,Hewlett-Packard

Fast Learning Cycles


Why Learning First Works

Common causes of failure / rework:

Resources not available

Requirements change (or become known)

Validation failure or does not meet updated customer requirements

Product and process are incompatible / does not meet internal requirements

Project does not meet commercial requirements

No low risk back-up plan

Concept #1

Concept #2

Concept #3

Concept #4

Design Solution Selected

Design Development

ProductionPerceivedCustomer

Requirements

Process Development

Process Solution Selected

Typical Point-Based Product Development

Rework Rework Rework Rework Rework


Sub-System

Mapping theDesign / Process /Customer Space

DefineNarrowing

CriteriaConcept Narrowing

And Integrating

Final Definition & Validation

Concept #1

Concept #2

Concept #3

Concept #4

Concept #1

Concept #2

Concept #3

Concept #4

Sub-System A

Sub-System B

Customer

Technology

Manufacturing

Cost

Quality

Suppliers

#1

#2

#3

#4

#1

#2

#3

# 2 & # 3

# 4

# 1

# 2

Final Concept

Final Concept

Choose optimalintersection of sub-systems

Customer

Technology

Manufacturing

Cost

Quality

Suppliers

Learning First + Controlled Narrowing


Concept Narrowing While: Increasing Knowledge Increasing Detail & Functionality Increasing Optimization & Robustness Increasing Quality / Reducing Risk

Workload Leveled

Learning First + Controlled Narrowing

Lea

rnin

g C

ycle

FinalDesign,

Process, &Value Streamin Production

OutlineSystem

Structure

Mapping theDesign / Process / Customer Space

Learning, Narrowing,& Integrating

DetailedDesign,Process,

Value Stream,Validation

Fast,Standardized,No Surprises

No Rework –Only Production

ContinuousImprovement


Linked Learning CyclesLeads to More Useful Knowledge

CustomerNeeds

Strategy

Internal& Partner

Capabilities

ProductDevelopment

Process

A PC D


Swiss Federal Institute of Technology study ofthe causes of catastrophic structural failure:

1) Insufficient knowledge ........................................... 36%

2) Underestimation of influence ................................. 16%

3) Ignorance, carelessness, negligence .................... 14%

4) Forgetfulness, error ............................................... 13%

5) Relying upon others without sufficient control ........ 9%

6) Objectively unknown situation ................................ 7%

7) Imprecise definition of responsibilities .................... 1%

8) Choice of bad quality .............................................. 1%

9) Other ....................................................................... 3%

Learning Through FailuresK

now

led

geM

an

age

me

nt

Issu

es

Pro

duct

De

velo

pme

ntP

roce

ss Is

sues


Managing Work:Common Project Management Evolution

1. Under-defined, wasteful, inadequate development process

2. “Standardized” statements of work by organizational function

3. Gates / quality checks

4. Training

5. Major quality reviews

6. Automation

7. Training

8. Kaizen workshop

9. Training

10. New methodology

11. etc… Every change implies a different process. Why? What problem is each step trying to solve?

– What is the real root cause?


Projects are the deployment of a strategy

Projects are all about creating and applying useful knowledge

» What do we need to do?

» What do we need to know to do it?

» By when, by whom, and how?

Who is the customer of the project management process itself?

Lean Project Management


Product Development Value Stream Implementation


No box-checking allowed:

1. What is the product and / or service?

2. What are the delivery and service value streams?

3. Does it meet the customers’ needs?

4. Will it have acceptable quality at every customer touch point?

5. Does it fit our strategy?

6. Does it represent an acceptable investment of $s and resources?

7. What has changed and what are our countermeasures?

8. What went wrong and how do we prevent it from happening again?

9. What have we learned and how can we reuse it?

Question-Based Lean Project Management


Integrating Learning LoopsInto Project Management

Customers &Deliverables

TargetCustomers

Quote /Specs

Prototype1

Prototype2

Quote /Specs

Quote /Specs

ApprovalParts

ProductionPartsStrategy

What is the Product?

What is the Process?

What is the Value Stream?

Do we Meet Customers’ Requirements?

Do we Meet Internal Requirements?

Learning / Problem Solving

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X


Managing Work:Organizational Capacity vs. Requirements

2008 2008 1/2 2009 2009 1/2 2010 2010 1/2

Product3

Product4

Product1

2011

ValueStream

1

2011 1/2 2012

Product2

ValueStream

2

Mar

ket

AM

arke

t B

Mar

ket

C Danger!

All Good

All Good

All Good

All Good

Development teams are most efficient / effective at 70 - 80% capacity Prioritize and balance workload; manage capacity versus requirements Align organization behind the strategy & priorities

Warning


Customer

MilestonesRequirements

Defined Quote Prototype ValidationProduction

DesignStart of

ProductionContinuous

Improvement

Project 1

Plan:

Actual:

9/1/05

9/1/05

10/1/05

10/1/05

11/1/05

11/1/05

1/15/06

1/15/06

2/1/06

2/1/06

4/1/06

4/1/06

4/15/06

4/15/06

Project 2

Plan:

Actual:

9/1/05

9/1/05

10/1/05

11/1/05

11/1/05

12/1/05

1/15/06

2/15/06

3/1/06

3/15/06

4/1/06

4/15/06

4/15/06

5/1/06

Project 3

Plan:

Actual:

9/1/05

9/1/05

10/1/05

11/1/05

11/1/05

12/1/05

1/15/06

1/15/06

3/1/06

2/1/06

4/1/06

4/1/06

4/15/06

4/15/06

! ! ! !

Which project is fine? Needs watching? Is in trouble and needs intervention?

Draw attention to where help is needed and do not spend too much time on items that are on-track

Visual Project Management Example


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Design

Test

Process

Purchasing

Finance

Manufacturing

Week

“Project Kanban” Example

TeamDeliverable

CustomerDeliverable

Deliverableis Late!

Current


“It’s not a productif you can’t make

and deliver it.”

Preparing for Lean Production:Creating & Validating Production Value Streams


2008 BBB Complaints

Category Rank # of Complaints

Cell phones & carriers 1 35,631

Auto dealers – new cars 2 26,723

Auto dealers – used cars 7 12,958

Auto repair & service 12 11,157

Auto parts & supplies 39 4,303

Auto warranty companies 44 4,073

Auto rental & leasing 61 3,075

Auto manufacturers 108 1,749

Business consultants 127 1,407

Puppets & marionettes 590 2

Zinc oxide 2,408 0

Majority of autocomplaints arevalue stream / service related


KFC Value Stream Debacle

We are so sorry, but due to the overwhelming response to our FREE Kentucky Grilled Chicken™ meal coupon, we can no longer redeem the free coupon at this time. But we will honor our commitment to giving you a free Kentucky Grilled Chicken meal.

Please visit a participating KFC restaurant for a rain check form. Complete the form, attach your original coupon , and give it to the KFC restaurant manager or postmark per the form’s instructions, by May 19, 2009, and we’ll send you a rain check for your free Kentucky Grilled Chicken meal at a later date, plus a free Pepsi with our compliments. Your participating KFC restaurant will provide you with the form you need.

Please note that the redemption periods of the rain checks will vary. All other terms and conditions of the original free Kentucky Grilled Chicken coupon will apply.

Thank you for your understanding,

Roger EatonKFC® President


Creating the McCafé Value Stream

• Biggest launch since Egg McMuffin

• 11,000 Restaurants (just U.S.)

• $100 MM in launch costs

• “Cappuccinos, lattes, mochas, iced lattes and iced mochas, as well as hot and iced Premium Roast brewed coffees and hot chocolate. All McCafé Coffees start with fully-ripened Arabica coffee beans from Central and South America and Indonesia. From there, each drink is made to order with quality ingredients like flavored syrups, including caramel, hazelnut, vanilla and sugar-free vanilla, rich chocolate, frothy steamed milk and whipped cream.”


What impact does paintcolor have on cycle time?

If we localize solenoid productionin Brazil to reduce duties, can we

use the same solder?

How is labor linearity impactedby the features we offer?

Process & Value Stream DesignOften Interact with Product Design


Process & Value Stream Design Shouldbe Treated Like a System Design Problem

2000

I I I I

I

AAA CeramicPowder

Mug-O-Rama

P/T = 30 minL/T = 1200 min%C&A = 95%

P/T = 1 minL/T = 250 min%C&A = 99%

P/T = 1 minL/T = 250 min%C&A = 65%

P/T = 960 minL/T = 1080 min%C&A = 85%

P/T = 1 minL/T = 180 min%C&A = 65%

P/T = 15 minL/T = 600 min%C&A = 95%

P/T = 5 minL/T = 120 min%C&A = 98%

1 Order / DayPhone

2 P.O. / WeekFax

2500 Per day27 Styles

99.7% Defect-free

1 Shipment/ Week

1 Shipment/ Day

1FIFO

1

1 500 500

Phone

ProductionAuthorization

JobPacket

2Coffee


Sub-System

Mapping theDesign / Process /Customer Space

DefineNarrowing

CriteriaConcept Narrowing

And Integrating

Final Definition & Validation

Concept #1

Concept #2

Concept #3

Concept #4

Concept #1

Concept #2

Concept #3

Concept #4

Sub-System A

Sub-System B

Customer

Technology

Manufacturing

Cost

Quality

Suppliers

#1

#2

#3

#4

#1

#2

#3

# 2 & # 3

# 4

# 1

# 2

Final Concept

Final Concept

Choose optimalintersection of sub-systems

Customer

Technology

Manufacturing

Cost

Quality

Suppliers

Integrating Process & Value Stream Development


Lean Product Development Example #1:Toyota Product Development System

1. Establish customer-driven value

2. Front-load design process to explore alternatives

3. Create level development flow

4. Standardization to reduce project outcome variation

5. Chief Engineer / Super Program Manager

6. Balance functional expertise and cross-functional integration

7. Create “Towering Technical Competence”

8. Integrate suppliers into development process

9. Built-in learning and continuous improvement

10. Culture to support excellence and relentless improvement

11. Adapt technology to fit people and process

12. Align organization through simple, visual communication

13. Tools for standardization and organizational learning

Sources: The Toyota Way, The Toyota Product Development System, Lean Product and Process Development


Lean Product Development Example #2:Apple (?!!!)

Controlled concept narrowing

Fast cycles of learning / cadence of review

Simultaneously exploring concepts and developing detailed implementation plans

Concept is selected at the very end of the process

Strategically focused organization

Small, focused teams

Supplier partners

Market experimentation

Narrow set of must have features / functions (value focus)

– Look and feel


Pulling It All Together

Organically grow your own lean product development process:

1.Do not copy Toyota or Apple! (but you can learn from them)

2.What are your business needs? What problems do you need to solve?

3.Current state: What works well? Problems & gaps?

– What are the real root causes? (not the symptoms)

4.Future state vision: What / Who / How / When? Quality measurements?

5.Implementation plan:

– When does the business need it completed?

– Does the organization have enough capacity?

– What are reasonable “chunks” to work on?

– What simple experiments will test your future state vision (hypotheses)?

– Plan – Do – Check – Adjust

– Honest reflection and improvement


Strategy Science Inc. is a global product development, strategic planning, and sales & marketing consulting / training firm.

We are focused on improving your process efficiency and effectiveness.

Our objective is to teach you to become self-sufficient in learning, problem solving, and driving continuous improvement. We will have achieved that goal when you can maintain your own desired pace of improvement without us.

We support you with organizational problem analysis, training combined with pilot projects, and management coaching.

Our work is custom tailored to your specific needs. We work closely with you to jointly uncover gaps, create solutions, and implement rather than forcing our own set of favorite solutions.

We are a network of 10 experienced practitioners with extensive knowledge of how to best implement what we teach.

To learn more, please visit our website: www.strategyscienceinc.com or contact our president, Brent Wahba, at (585) 315-7051 / [email protected]

About Us


Thank You!!!

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All Rights Reserved – Please Do Not Copy Without Permission Brent Wahba LIPPD Ontario PDMA 3_30_10.ppt Page 1 Lean, Integrated Product & Process Development