Anderson, 1996

Agile Product Development for Mass Customization

How to Develop and Deliver Products for Mass Customization, Niche Markets, JIT,

Build-To-Order and Flexible Manufacturing

Anderson, 1996 Anderson, 1991Anderson, 2003Anderson, 2004

Design for Manufacturability (DFM) The practice of designing products with

manufacturing processes in mind so that: The transition into production will be quick and

smooth without the usual "fire-fighting," problem-solving, and Engineering Change Orders (ECOs).

Low cost will be accomplished by the design itself, not by "cost reduction" measures.

Quality and reliability will be designed-in, not accomplished by slow and costly inspections and rework.

Products will be built quickly and flexibly with low overhead cost.

Variety and customization will be handled efficiently Source: Anderson, 1991

                                                              Product Design & Product Costs

Concurrent Engineering (CE) CE: Designing products in multi-disciplinary

teams that results in the simultaneous design of the product and the processes.

Concurrent Engineering Design Teams should consist of all the necessary engineering specializations, industrial designers, and representatives from manufacturing, service, marketing, quality, purchasing, finance, regulatory compliance, plus key vendors.

Source: Anderson, 1991

CEDT - Benefits Having all the specializations on the team

ensures that all the design considerations will be "covered."

Such diversity can lead to a better design because of contributions from many perspectives. This synergy can produce better results than would be generated from a homogeneous "team" consisting only of design engineers or scientists.

Issues can be identified and resolved earlier with a complete team.

Source: Anderson, 1991

Benefits of DFM and Concurrent Engineering

Costs are reduced because simpler designs can be more easily

fabricated and assembled. DFM designs have fewer parts that can be consistently built by standard manufacturing processes.

Development time and costs are reduced because of “reusable engineering,” modular

designs, standard common parts, use of purchased parts, maximum use of existing plant equipment, and less need for engineering change orders and redesigns.

Source: Anderson, 1991

Benefits of DFM and Concurrent Engineering

Quality and reliability are increased because products are designed with

standard parts of known quality, have fewer parts from fewer vendors, and can be built by known processes.

Quicker time-to-market and delivery because the product is designed right the

first time and flows through known factory processes without problems.

Source: Anderson, 1991

Rationalizing Product Lines Cost of Variety: offering customers inflexible products

produced in inflexible factories and sold through inflexible channels >>>>>>>>OVERHEAD

The purpose of product line rationalization is to eliminate or out-source products, options, and features that: have low sales are not really appreciated by customers are problem prone have excessive overhead demands utilize unusual parts have limited future potential don’t "fit" into a flexible environment, or may really be losing money

Source: Anderson, 1996

Rationalizing Product Lines “Most companies have methodical

procedures to add products to the product line, but few have any procedures at all to remove products from the product line. So old, low-leverage products accumulate and progressively erode a company’s competitive position.”

The anti-dote to part/product proliferation.

Source: Anderson, 1996

Product Line Rationalization Issues The "Complete Catalog" issue

Can you outsource low-volume parts/products that don’t “fit”?

Product Costing and Profitability “Typical product costing systems do a poor job of

identifying money-losing products because overhead is not tracked; instead, it is "allocated" to all products (good and bad), an averaging process based on some arbitrary algorithm.”

“Thus, good products subsidize bad products. The net result is that good products cost more than they should (because of this averaged overhead) and the bad products are being sold at a loss.”

Source: Anderson, 1996

Product Line Rationalization Issues The customer satisfaction issue

“Customer satisfaction will actually be lower if you waste your resources making low-leverage products instead of capitalizing on opportunities to give customers better innovation, lower cost, better quality, and efficiently manufactured variety. However, customers will probably miss the good deals you were giving them on your money-losing products.”

Customer choice issue “Often customers keep ordering older/unusual

products because of arbitrary decisions, lack of awareness about newer/better replacements, or just plain inertia.”

Source: Anderson, 1996

Product Line Rationalization Issues Loss-Leaders

“If low-leverage products are to be retained as "loss leaders," then management should know how much money is really being lost (including opportunity losses).”

Consider competitive scenarios “A savvy competitor would not blindly compete

against your complete product line. It would offer only the most profitable products. Not burdened by your low-leverage products, it would be able to make the rationalized product line quicker, better, at lower cost. Thus, competitors could steal your cash cows leaving you with the dogs.”

Source: Anderson, 1996

Standardization The bridge between existing products and

new products designed using MC rules. Prerequisite to any of the agile paradigms:

Mass Customization, Agile Manufacturing Just-in-time, Flexible Mfg., Build-to-Order

“It is imperative that agile companies standardize on part, processes, tools, features, raw materials and procedures.”

Short setups are mandatory

GM Skateboard CarClick here – Fortune Magazine graphicPopular Science pictures