Knowledge Based Product & Process Development: An Executive Overview Presented to- CTMA Symposium April 18, 2005 Michael Gnam Lean Product Development.

Knowledge Based Product & Process Development:

An Executive Overview

Presented to-CTMA Symposium

April 18, 2005Michael Gnam

Lean Product Development Initiative (LPDI)

04/19/23 Page 2

Industry Need

New Product Development lead times have been significantly reduced in recent years through CE and IPPD methodologies and the use of product design software.

Lately, though, the pace of improvement has slowed. Best-in-class (auto) Domestic Lead Time-38 Months Toyota Lead Time-18 Months and Decreasing Needed: Great Leap Forward

04/19/23 Page 3

Background

Project Participants:

GM/Delphi - Champion Cincinnati Milacron Sandia National Laboratories Ortech Raytheon (TI DSEG) UT/Automotive (now Lear) Dr. Allen Ward (U of M)

04/19/23 Page 4

Background

After initial research by the team, it became obvious that emulating other best practice pdp processes was not the answer.

Reason: Many of our team members had already done that-benchmarked it to death

Further research indicated that we needed to go to the paradigm level to find the answer

Result: Study paradigms, not processes

04/19/23 Page 5

Why Study Toyota?

FASTER: half the time of US competitors– Ipsum minivan: 15 months, styling approval to full

production.– Standard is now 18 months; may be aiming at one year.– One hour response to suggestion by tool builder.

BETTER: Consistently highest quality ratings.– A car in top 3 of every category (four of them #1) in

2003 Consumer Reports reliability ratings.– Lexus again #1 in JD Powers quality survey.

– “Toyota’s not just good. It’s always the best.” —1995 Harbour

04/19/23 Page 6

Why Study Toyota? (cont.)

CHEAPER: at least 4X the engineering productivity of US competitors

– ~ 150 product engineers per car program at peak not dedicated; ideal is two projects per engineer vs. 600 total at Chrysler for almost twice as long

– Sales per employee 2 to 4 times those of Chrysler (with similar vertical integration).

04/19/23 Page 7

Why Study Toyota? (cont.)

“Toyota makes lots of money and is overtaking GM to lead the world’s car industry.”

Target: 15% of global car market Market capitalization: worth 3x the American

big 3 combined Productivity grown 7x in last 25 years, Detroit

3.5x

» The Economist, January 29, 2005

04/19/23 Page 8

Why Study Toyota? (cont.)

Net profit (latest year, in $B)– Profit Margin(%)

– Toyota 11.0 6.7– Nissan 6.8 6.8– Honda 4.2 5.7– GM 3.9 1.9– Ford 3.8 2.4– D/Chrysler 0.5 0.3

Source: The Economist, January 29, 2005

04/19/23 Page 9

The Toyota Paradox

• No requirement to co-locate teams or dedicate engineers

• Does not establish early design specifications• Delay, as long as possible, freezing the design• No “design factory” process — no hand-offs• Simple process, few “tools” — no reliance on QFD,

FMEA, PERT, DFM• No Six Sigma corporate strategy• No standard development process – or an initiative

to create one• Lots of prototypes – lots of parallel designs

04/19/23 Page 10

Product development excellence is based on compliance to company standards

– Quality indices– Functional performance indices– Detailed processes

A STRUCTURAL PERSPECTIVE

Conversely, typical U.S. Companies

04/19/23 Page 11

The “Structural” Assumption

Compliance to rigorous design process / quality standards will yield great products on time

Wrong!

04/19/23 Page 12

Issues: Current Product Development System

Value-added productivity is 20 – 40% Project management has become too

administrative Design reviews are focused on tasks, not results Minimal learning between projects Design engineers have little design experience Planning and control systems are not

maintainable Design process loop-backs are systemic

04/19/23 Page 13

The Nature of Product Development

Product development is an iterative, uncertain process: plans are results dependent

Learned knowledge during any operation is the only value added intellectual inventory

Activities based strictly on compliance will invariably create reams of non-value added information

–wasted effort–informational clutter–costly maintenance

04/19/23 Page 14

What if

All the knowledge gained throughout the design process, what works and what doesn’t work, could be captured and consistently applied for all future projects

That is the power of the Toyota development system

04/19/23 Page 15

Lean Product Development

Is not a re-application of the principles of Lean Manufacturing!!

It is complementary to Lean Mfg principles and to DFSS principles

Product Development requires innovation and the open minded application of profound knowledge.

04/19/23 Page 16

The Essence of Lean Development is the effective management of knowledge– Encouraging– Creating– Acquiring– Controlling– Sharing– Applying– Leveraging

Toyota is only an example of excellence

Lean Product Development

04/19/23 Page 17

The Toyota Development System

Creating and leveraging knowledge to create an ongoing stream of great profitable products

04/19/23 Page 18

The Toyota Paradigms

Leadership– Expertise based

Solution Exploration– Point based– Set based

Planning & Control– Task based (stage gate)– Responsibility based

Personnel Foundation

04/19/23 Page 19

CE integrates everything, is totally responsible

StylingVehicle Evaluation

Body

Chassis

Power Train

R & D Customer

Manufacturing Chief Engineer

•product plan•concept•design architecture•targets and specifications

•schedule•budget•drawing approval

Top management

judged on corporate objectives: profit, share, learning

04/19/23 Page 20

Leadership by expertise

Technical expertise: Minimum 20 years experience as engineer– Deep grasp of engineering fundamentals

(communication with any engineer)– Assignment(s) outside original area of

expertise (ability to adapt and learn quickly) System design skills and attitudes; strong personalities

– Assignment(s) as assistant chief engineer (integration experience)

– “Push very hard — but know when to stop”– Pinball — reward is to do it again

Communication skills and knowing the company

04/19/23 Page 21

The Exploration Paradigms: point-

based vs set-based

04/19/23 Page 22

Point-based design: design as iterative improvement of point

solutions

generate concepts

synthesize analyze

improve

pick one

+ ++ +

+

More costly region

04/19/23 Page 23

Set-based design

picture by Toyota GM of body engineering

3. Innovate and optimize without risk by controlled narrowing of redundant solutions.

4. Dominate markets and reduce costs through market and conceptual robustness.

1. Explore cheaply by mapping design sub-spaces.

2. Integrate by intersecting minimum constraints.

04/19/23 Page 24

Planning and control paradigms

Task based Responsibility based

04/19/23 Page 25

Task-based Plans Decompose

Centralized planning.– written by staff– standard– high detail

Built around tasks: begin and end at information hand-off points

A Push System

04/19/23 Page 26

Responsibility-based Plans Integrate

Responsibility streams and integrating gates– clear, “whatever it takes” responsibility for subsystems– gates bring everyone together– everyone starts when they must to meet the gates,

seeks information as needed– known acceptable variation for each gate

Finance

Mktg.

Styling Body Eng.

Production Eng.

Concept Clays P1

A Pull System

reso

urce

s

time

Process designed with the product.

– written by team leader– simple– subordinates fill in the

details

04/19/23 Page 27

Knowledge paradigms

– Model oriented

– Learning oriented

04/19/23 Page 28

No change without measurable benefits. Computer modeling is the key.

– finite element models by engineers who don’t know beam equations.

– process improvements through analytical prototypes “to be created.”

– expert systems will allow continued rapid rotations of inexperienced engineers and managers.

Decisions based on accounting and marketing data, even though we know it’s wrong.

US: complex models as oracles

04/19/23 Page 29

Toyota: Tools or models as simple servants

Data informs, not substitutes for human judgment.

“ The chief engineer [not marketing or accounting models] decided not to paint the Corolla bumper.” — A CE

“Good intuitive sense is crucial... [and] is something we need to foster. Marketing data leads to designs that are too conservative.”

—Exec VP of R&D

Everyone is constantly sketching relationships, problems, and solutions. TOC’s, A-3’s

04/19/23 Page 30

Engineering “Checksheets”

Toyota’s manufacturing engineers maintain design standards.

– Part by part, tool by tool.– Describe current manufacturing

capability.– Contain solutions to past problems.– Working-level engineers update

regularly.– Everyone can access them.

Every project begins with the design standard.

04/19/23 Page 31

Trade Off Curves: The Power of Visible Knowledge

Tradeoff curves are the visual representation of basic product and process physics and economics

They are the Toyota’s engineer’s primary tool to

Understand Communicate and negotiate

between specialties and functions Train new engineers Record knowledge Negotiate and communicate

between customer and supplier Conduct design reviews Communicate between developers

and managers Design quality into the product

Back pressure

Nois

e level

Exhaust system family

Safe region

Infeasible

04/19/23 Page 32

Personnel Management Paradigms

– Boss based– Market based– Qualification based– System based

04/19/23 Page 33

Results-oriented personnel management

In the job long enough to acquire real expertise, acquire a reputation for results

Managers competent to judge engineering work Evaluated based on reputation by a council of senior

managers Deliberate effort to ignore appearances, where schooled

in what Non-value added is anything that doesn’t directly please

customers (such as reporting)

04/19/23 Page 34

Developing engineer/managers at Toyota

min. 5 years in one specialty. min. 5 years in related specialty. assist. manager (5 years) in similar

specialty (player/coach for five engineers)

manager (5 years) in similar specialty (player/coach 5 assistant managers)

5-10 yrs5 yrs

depth

breadth

04/19/23 Page 35

Foundation Paradigms

Advocacy

“Other people control my life”

persuasion is the most important skill

Goals, programs, “taking care of people”

Hands-on Entrepreneurship

“I control my life”

Hands-on creation is the most important skill

“Yankee know-how”

“Rugged Individualism”

04/19/23 Page 36

Can Culture Change?

Advocacy Hands-On

Causal Attributes Characteristics Who leads industry Financiers, Marketeers “Engineers”

What solves problems

Government Technology

How to pick solutions Argue Try them out

What to trust Procedures, education Judgment, experience

What to reward Advocacy, plans, potential, ____ correctness, contacts

Results

What’s an engineer White collar specialist nerd Hands-on system-designer hero

Industrial performance

Low High

Before WWII

After WWII

US SoftwareUS Japan

04/19/23 Page 37

PDP Project Findings

Difference is in their set of Paradigms Counterintuitive to our thinking

– Delay, as long as possible, making decisions

– More and more prototypes, both real and virtual

– Pursue sets of solutions, not answers Analogous to JIT in late 70’s 58 Paradigms catalogued & discussed

04/19/23 Page 38

PDP Excerpts

Top Toyota Engineer (equiv to CTO) spends 90 % of his time solving technical problems.

Ford engineers suggested 3-4 layers down before any technical problem solving done

Toyota Chief Engineer feels he is a people person--Mentoring

04/19/23 Page 39

PDP Excerpts

Beware of:– GM- Aim, Aim, Aim!!– Plans to produce plans– High level people very busy but doing

nothing of value to customer– Compliance for the sake of compliance– Deviation from simplicity– Ambiguous phraseology

04/19/23 Page 40

PDP Excerpts

Structure Based– People selected &

promoted based on perceived potential (fasttracking)

– People selected & promoted based on presentation skills

– People selected & promoted based on promises and plans

Knowledge Based– People selected &

promoted based on knowledge, wisdom, and experience

– People selected & promoted based on results

– People selected & promoted based on teaching and mentoring skills

04/19/23 Page 41

PDP Excerpts-Knowledge Hierarchy

Perceptions-Our first impressions Data-Stored in a base Facts-What is really happening Information-Collection of focused data &

facts Knowledge-Proper application of useful

information Wisdom-Providing the best solutions

04/19/23 Page 42

PDP Excerpts—Action Verbs

Structure Based– Organize– Check– Monitor– Approve– Support– Plan – Plan to Plan– Ensure Compliance– Oversee

Knowledge Based– Perform– Do– Design– Create– Solve– Teach– Mentor

04/19/23 Page 43

2-4X increase in development productivity 2-3X decrease in development cycle time 2-4X decrease in development cost 2-5X increase in innovation 2-5X decrease in development risk

The Gain Potential

04/19/23 Page 44

Knowledge-based Product

Development

TheImplementationPerspective

04/19/23 Page 45

The Change Process

Focus initially on one product family – or a subset Assign clear knowledge / change ownership Complete progression to set based within year Expand to other product families as comfortable Modify corporate infrastructure elements as you go

Principles of Learning Based Development

Capture Knowledge

Design by Knowledge

Set basedDevelopment

Leadership Alignment

Expand to other product areas

Focus on one product family

1 2

3

4

5

04/19/23 Page 46

How We Can Help – A Series of Kickoff Workshops

1. a. Executive Overview b. Leadership Alignment

One Day Workshop Follow up as required

Leadership understands principles and commits to becoming a knowledge based organizationAssessment and planning next stages

2. Learning based Development Workshop

Two day workshop Details of entire process Aligns customer processes

The workgroup understands the whole, is aligned to the leadership vision, and owns the change process

3. Knowledge Stream Mapping Two day workshop Build database model Follow up as required

The development personnel understands the alignment and importance of physics based knowledge mapped to customer needs and design decisions

4. Knowledge based Design Kickoff workshop to establish process concept Teams engaged to work the details

Robust knowledge becomes an integral part of the traditional point based design process

5. Set Based Design Kickoff workshop to establish process concept Teams engaged to work the details

Process is expanded to include set based design

Activity Plan Outcome

04/19/23 Page 47

Assessing the Risk of Change

The potential is huge– 4X productivity gain– Extensive cross project learning– Company wide knowledge and experience – Increased innovation– Time-to-market decrease– Consistency in development performance

The risk is minimal - any progress toward a learning environment is positive

04/19/23 Page 48

Knowledge Based Product Development Paradigms:

Questions ? Comments ?

For additional information contact Mike Gnam at NCMS– [email protected]– 734-995-4971– http://[email protected]