LPD Capabilities

© 2007 DRM ASSOCIATES

DRM ASSOCIATES CAPABILITIES

WITH LEAN PRODUCT DEVELOPMENT (LPD)

Contact: Kenneth Crow | Tel: 310-377-5569 | Email: [email protected]


KENNETH CROW

• 30+ years consulting in product development & manufacturing

– Former Director, Mfg. Consulting, Ernst & Young

– President, DRM Associates• Recognized expert in product

development, project management, design to cost, QFD, VA, DFM and lean practices

• Certified New Product Development Professional• Frequent international speaker and author• Former President & Director of the Society of

Concurrent Product Development

For further information on Ken, see www.npd-solutions.com/kcrow.html


DRM ASSOCIATES

• Firm with recognized expertise in new product development & core focus on value

• Kenneth Crow is the firm’s Principal consultant

• Nine highly-experienced consultants

• Extensive client list - Fortune 500 and international clients

• Led consortium to identify 270 best practices of product development

• Extensive training experience and materials -conducted over 200 workshops

For further information on DRM Associates, see www.npd-solutions.com


LEAN THINKING

Lean refers to a way of thinking and specific practices the emphasize less of everything – less resources, less work-in-process, less time, and less cost – to produce

something, either a physical product, knowledge product (e.g. product design), or service product.


LEAN THINKING PRINCIPLES

The five Lean Principles are:1. Define value to the customer

2. Identify the value stream and eliminate waste

3. Make the value-creating steps flow

4. Empower the team

5. Learn and improve


COMPARING MANUFACTURING & DEVELOPMENT

Characteristic Production Process Product Development Process

“Thing” Worked On Materials, Parts & Products

Information & Documents

Activities Fabrication, Assembly & Test

Definition, Acquisition, Transformation & Integration

Deliverable Physical Product Product Definition


LEAN PD PRACTICES & TOOLS

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Practice Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 171. Define value to the customer 2. Identify the value stream & eliminate waste 3. Make the value-creating steps flow 4. Empower the team 5. Learn and improve

Lean Product Development Practices and Tools


LEAN PD PRACTICES1. Voice of the Customer provides an input to maintain focus on what is of value

to the customer.2. Quality Function Deployment transforms customer needs into product

specifications and plans oriented to maximizing the customer value proposition.3. Lean Design minimizes waste (high cost and poor quality) and maximize value

in the design of the product.4. Platforms and Design Re-Use to reduce the cost of development, increase

product value, and enable smaller batch sizes.5. Rapidly Explore Alternatives is important to develop more optimal solutions

to maximixe customer value. Set-based design explores alternatives in parallel, gradually narrowing alternatives until the solution emerges.

6. Value Stream Mapping analyzes the process, increasing process value and eliminating waste

7. 5S Workplace organizes workplace and data to minimize time needed to find information and perform development activities.

8. Standardized Work establishes a common way of doing things – standard process, document templates, checklists, etc.

9. Pipeline Management avoids overloading the pipeline, smoothes out release of work, and prevents buildup of work-in-process and queue time.


LEAN PD PRACTICES10. Flow Process and Pull Scheduling pulls work in a steady flow when

resources are available. Team planning and visual management provide a better understanding of development status and required actions.

11. Reduce Batch Sizes through standardization and platform development, working without complete information, etc., which allows a smoother flow and more level staffing.

12. Synchronize Activities frequently with project team members and use tools like design structure matrix to understand interactions and visual management techniques to determine status and issues.

13. Delay Commitment where appropriate to keep options open and respond to change, avoiding premature decisions and improving customer value.

14. Cross-Functional Team is a way to create a workcell with required disciplines to more rapidly conduct development activities.

15. Workforce Empowerment enables teams to plan their own projects and determine how to best provide value to the customer.

16. Right Resources in terms of the right number of people, at the right times, and with the right skills and experience enable lean product development.

17. Amplify Learning with knowledge capture and feedback and use iterative development to take advantage of learning.


VOICE OF THE CUSTOMER

Maximize value by understanding what customers need and what customers value

Co AProd 2

Co B

UsNew

UsProd 1

Co AProd 1 Target Price

& Cost Analysis

QFD Product Planning

Matrix

ProductSpecification

Customer Needs Data Dictionary

Voice of the Customer

InvestigationMarket

Analysis & Definition


PRODUCT REQUIREMENTS & CHANGEA major difference between traditional and lean/agile product development is in the way change is handled

Traditional Product DevelopmentGoal is to finalize requirements early in the project and minimize subsequent changes. However in most projects, especially with technology, requirements will likely change.

Lean Product DevelopmentAccepts that requirements will change & aims to reduce the cost of changes by:

• Recognizing them as early as possible with frequent customer feedback

• Providing flexible architectures

• Deferring design decisions until as late as possible


LEAN DESIGN

Objective:Minimize resources (product cost) while maximizing value to the customer (value proposition)

Maximize

customer value

Minimize

resources and cost


LEAN DESIGN vs. LPD

Lean Design is a subset of Lean Product Development

Lean ProductDevelopment

Lean Design


DESIGN IMPACT ON COSTS

ConceptDevelopment& Feasibility

Product& Process

Design

ProductionTesting &Production

Launch

CostsCommitted

CostsIncurred


LEAN DESIGN PROCESS

Establishmarket segment; assess customer

needs, competitive solutions & target price

Establish target cost

Develop alternative

concepts & cost reduction ideas

Meet goals?

Estimate cost of

alternatives

Develop design &

reduce cost

Target cost calculation

Value analysis Product cost model

DFM / A

Metric: actual cost vs. cost

target

YESNO

Brainstorming

Value analysis

Target cost tracking

QFD(Product planning matrix)

QFD(Concept selection

matrix)

Define product reqmts

Requirements AssemblyDesign

ProcessDesignPart DesignConcept

Development

DevelopBusiness

case

Conjoint Analysis


SIMPLIFY DESIGN

PartCount

UniqueParts

Complexity

Assembly SimplicityProduct Line Simplification/SKU Minimization

Architecture/ConceptDesign – Modules/Interconnections

Assembly Design & Number of Parts/Materials Part

Geometry

PartFeatures

Complexity

Part Simplicity

Piece Part Design & Number/ Complexity of Features

Process Design & Number of Operations


LEAN DESIGN SCHEDULE IMPACT

Lexmark experience with concurrent engineering & DFM/A (key elements of lean design) impact on

development schedule

Concept Development

Detailed Design

Build, Test, Fix Redesign Iterations

Manufacturing Ramp-Up

3% 27% 55% 15%

20% 13% 22% 5% 40%

Traditional Approach

Concurrent Engineering / DFMA Approach


DESIGN REUSE PHILOSOPHY

The more a company can leverage its existing products, knowledge, and expertise with new product designs, the more it can reduce the

need to invest resources and time in creating those products


PLATFORMS & DESIGN RE-USE

Find the right balance between custom and common parts and platform use based on your

business & product strategy

Common0%

100%

100%

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Design Re-use

Platform Strategy & Planning

Part Standardization


RAPIDLY EXPLORE ALTERNATIVES

• While an emphasis on value and time with lean practices would suggest not wasting time exploring alternatives when an acceptable solution exists, this is not the case

• Greatest value when multiple alternatives can be rapidly explored – this is the only way to move towards a more optimum solution

• Set-Based Design involves developing multiple sets of solutions in parallel & relatively independently.

• As the design progresses, the sets of solutions are gradually narrowed based on additional information from development, testing, the customer, etc., and the best solution 'emerges'


IDENTIFY THE VALUE STREAM & REMOVE WASTE

The Seven Wastes in Manufacturing

The Seven Wastes in Product Development

1. Inventory 1. Pipeline overload; development work in progress

2. Processing 2. Excessive reviews & paperwork; extra steps; serial process with excessive iterations; unnecessary data conversions

3. Overproduction 3. Extra/low priority features; too much detail; unnecessary information; redundant develop-ment, over-dissemination of information

4. Motion 4. Excessive mental motion; task switching; effort to find needed information

5. Transportation 5. Handoffs; translating data, formats, & infor-mation; lack of direct access to information

6. Waiting 6. Delays; time waiting for other’s inputs7. Defects 7. Design rework; incomplete/ambiguous infor-

mation; defects in requirements or design; misinterpretation of design by suppliers


VALUE STREAM MAPPING & ANALYSIS

Request1 hr

Approve1 hr

Prelim.Architect.

72 hrs8 hrs NVA

Build/TestIteration68 hrs

16 hrs NVA

Deploy2 hr

4Queue40 hrs

2Queue20 hrs

4Queue40 hrs

2Queue20 hrs

4 Iterations

Value-Added Activities• An activity that transforms material or information• And the customer wants it• And it’s done right the first time

Non-Value-Added, but Needed Activities• Activities creating no value but which cannot be eliminated based on

current state of technology or thinking• Required (regulatory, customer mandate, legal)• Necessary (due to non-robust process; current risk mitigation)Non-Value-Added Activities• Activities that consume resources but create no customer value• Pure waste• If you can’t get rid of the activity, it turns to yellow


STANDARDIZE WORK

• Standardize the development process to simplify planning and avoid relearning

• Define multiple processes as required to support different development needs

– New products

– Product enhancements & product line extensions

– Technology development or platform development that does not lead directly to a new product

• Facilitates training and process documentation (e.g., ISO 9001)


STANDARDIZE DEVELOPMENT PROCESS

• Phases

• Tasks

• Responsibilities

• Templates for documents/ deliverables

Source: www.pd-trak.com


MAKE THE VALUE CREATING STEPS FLOW

Factors affecting cycle time:

• Product/project flow variability

• Complexity of processes

• Inventory or work in process (WIP)


STRATEGY - SCHEDULE vs. UTILIZATION

• Utilization in excess of 100% is positive - it lowers costs

• Multiple project assignments assure that everyone is busy

• Overtime is an expected solution; process shortcuts are overlooked

• If a significant schedule problem exists, shift resources to catch up

100%

Capacity Utilization

Time toMarket(schedule)

Target

Traditional Cost-Based View Time-to-Market View


AVOID OVERLOADING PERSONNEL

• Project priorities are not clear – individual performers make decisions on priorities which may be counter to organizational objectives

• Part-time involvement slows down all projects

• Task switching reduces efficiency and adds to cost

Project A Project B

Plan and Manage Resources


PIPELINE MANAGEMENT

Manage the number of projects in the pipeline and their release to avoid overloading resources and

increasing work in process

DescriptionFY2003

Q1FY2003

Q2FY2003

Q3FY2003

Q4FY2004

Q1FY2004

Q2FY2004

Q3FY2004

Q4Field Strength AnalyzerNetwork TesterBroadband Optical DetectorNetwork Driver SoftwareOptical SensorATM SwitchDWDM Optical Power MeterOptical Coupling Module10GB Optical TransceiverOptical DemuxOptical MultiplexerDSP Measurement EngineNext Gen Optical Sensor1000GB Core Technology

O N D J F M A M J J A SSoftware Engineer

Base Headcount: 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0+New Hires,Contractors/-Losses 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0-Non-Project Utilization Factor (%) 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9Total Available Resources 4.3 4.3 4.3 4.3 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1Total Project Requirements 4.5 4.5 4.7 5.0 6.0 5.5 4.8 5.1 5.5 5.0 5.0 5.0+Available/-Shortage -0.3 -0.3 -0.5 -0.8 -0.9 -0.4 0.3 0.0 -0.4 0.1 0.1 0.1

System EngineerBase Headcount: 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0+New Hires,Contractors/-Losses 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0-Non-Project Utilization Factor (%) 0.8 0.8 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Total Available Resources 3.2 3.2 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0Total Project Requirements 3.5 3.5 3.5 3.9 3.9 3.9 4.1 4.1 4.1 3.7 3.7 3.7+Available/-Shortage -0.3 -0.3 0.5 0.1 0.1 0.1 -0.1 -0.1 -0.1 0.3 0.3 0.3

2002 2002 2003 2003


STRATEGY - FEWER PROJECTS

Project 1

Project 2

Project 3

Project 4

Project 6

Project 7

Project 5

FY Start FY End

Project 1

Project 2

Project 3

Project 4

Project 5

Project 6

Proj.7

Focus resources on highest priority projects to finish sooner;don’t start other projects until resources become available


ASSURING A SMOOTH FLOW

Project start dates and completion dates should not be bunched together - a steady flow (and constant “new

news” to the market) and not a log jamDescription

FY2003 Q1

FY2003 Q2

FY2003 Q3

FY2003 Q4

FY2004 Q1

FY2004 Q2

FY2004 Q3

FY2004 Q4

Field Strength AnalyzerNetwork TesterBroadband Optical DetectorNetwork Driver SoftwareOptical SensorATM SwitchDWDM Optical Power MeterOptical Coupling Module10GB Optical TransceiverOptical DemuxOptical MultiplexerDSP Measurement EngineNext Gen Optical Sensor1000GB Core Technology

DescriptionFY2003

Q1FY2003

Q2FY2003

Q3FY2003

Q4FY2004

Q1FY2004

Q2FY2004

Q3FY2004

Q4Field Strength AnalyzerNetwork TesterBroadband Optical DetectorNetwork Driver SoftwareOptical SensorATM SwitchDWDM Optical Power MeterOptical Coupling Module10GB Optical TransceiverOptical DemuxOptical MultiplexerDSP Measurement EngineNext Gen Optical Sensor1000GB Core Technology


CONTROL PROJECT RELEASE

1. Gate process to rigorously evaluate projects and kill less opportune projects

2. Portfolio management process to prioritize projects and determine what projects can be undertaken

3. Pipeline management process to determine availability of resources or plan what actions to take to execute a project

PROJECT NAME BU/Prod Line Project mgr Projectcost

Salesover life

NPV DPI

Description Process Marketing lead

Remainingcost

Profitover life

R-Factor Prob. Of Success

Virgo Technology Ken Smith Active $2,331k $29.5M $45.2M 92.6 90.8DWDM optical power meter Standard Harry Brown 7-Nov-03 L Gate $391k $23.2M 10.0 80%Leo Technology Ken Smith Active $2,331k $58.5M $60.8M 35.3 84.23GHz signal generator Standard Harry Brown 22-Sep-03 P Gate $861k $30.5M 13.1 50%Aries Industrial Frank Smith Closed $1,209k $13.3M $13.5M 1000.0 82.3High speed compressor Standard Tom Wright 26-Jan-03 Review -$1k $6.9M 5.7 75%Capricorn Industrial Ken Smith Proposed $2,331k $10.5M $6.3M 74.5 81.5High power compressor Standard Harry Brown 6-Sep-03 M Gate $51k $4.0M 1.7 60%Cancer Technology Ken Smith Closed $2,331k $5.9M $2.3M 1000.0 80.38GHz spectrum analyzer Standard Harry Brown 7-Nov-02 L Gate $1k $2.2M 0.9 80%Aquarius Industrial Mike Brown Active $903k $6.1M $3.6M 19.2 77.9High power compressor Standard Tom Wright 27-Sep-03 P Gate $143k $2.2M 2.4 75%Gemini Industrial Ken Smith Active $2,331k $42.1M $32.1M 76.2 66.1Micro compressor Standard Harry Brown 7-Nov-03 L Gate $401k $16.1M 6.9 95%Taurus Industrial Mike Brown Proposed $403k $4.6M $3.9M 4.9 40.1High efficiency compressor Standard Tom Wright 1-Nov-03 Start $403k $1.8M 4.5 50%

MPS baseline date: 10/10/03 PORTFOLIO INFORMATIONStatus

Next review

Score

Proposed/On holdActivePortfolio Bubble Chart

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

0 10 20 30 40 50 60 70 80

NPV

Prob

abili

ty o

f suc

cess

GeminiAquariusAriesCapricornTaurusVirgoLeo

Project Portfolio

O N D J F M A M J J A SSoftware Engineer

Base Headcount: 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0+New Hires,Contractors/-Losses 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0-Non-Project Utilization Factor (%) 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9Total Available Resources 4.3 4.3 4.3 4.3 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1Total Project Requirements 4.5 4.5 4.7 5.0 6.0 5.5 4.8 5.1 5.5 5.0 5.0 5.0+Available/-Shortage -0.3 -0.3 -0.5 -0.8 -0.9 -0.4 0.3 0.0 -0.4 0.1 0.1 0.1

System EngineerBase Headcount: 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0+New Hires,Contractors/-Losses 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0-Non-Project Utilization Factor (%) 0.8 0.8 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Total Available Resources 3.2 3.2 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0Total Project Requirements 3.5 3.5 3.5 3.9 3.9 3.9 4.1 4.1 4.1 3.7 3.7 3.7+Available/-Shortage -0.3 -0.3 0.5 0.1 0.1 0.1 -0.1 -0.1 -0.1 0.3 0.3 0.3

2002 2002 2003 2003

Resource Plan

Examples from PD-Trak software, www.pd-trak.com


LEAN GATE REVIEW PROCESS• Transition from “hard” to “soft” gates

– Hard gates require completion of all phase activities before the review & no subsequent work is started until gate approval

– Soft gates allow some work in subsequent phase to proceed in parallel with planning and conducting the gate review

• Avoid creating too many gates; place at key points where decisions need to be made about significant investments in a program

• Avoid getting into too much detail and covering topics that would be covered in a design review

• Tolerate some uncertainty and risk – too much risk reduction will cause more development to be done and mitigate the value of an earlier gate review

Phase 2GPhase 1

Phase 1 Phase 2G


CRITICAL CHAIN PROJECT MANAGEMENTTraditional Project Management Issues:• Task estimates are padded to better insure meeting schedule

• Tasks started late because of other pressing demands

• Work fills available time

• By coordinating via start and finish dates, effort spent finishing early often wasted

• Lateness is always passed on - can’t be made up without reducing scope or increasing resources

Critical Chain Project Management (CCPM) can significantly reduce the development schedule

CriticalTask

CriticalTask

CriticalTask

ProjectBuffer

NoncriticalTask

FeederBuffer


REDUCE BATCH SIZESAs resource utilization and batch size

increase, cycle time increases

New Module 1

New Subsystem 1

New Module 2

New Module 5

New Module 3 Design Integration

New Subsystem 2

New Subsys. 3

New Subsystem 4

New Module 4Existing

Modules & Subsystems

Project 1

New Module 3

New Module 5 Design Integration

Existing Platforms (Modules & Subsystems)

Project 1

New Module 1

New Module 2

New Subsystem 2

Platform Project 2

New Technology

Technology Proj 1New Qualified Material

Matl Qual Proj 3

New Module 4 New Subsys. 3

Platform Project 4


SYNCHRONIZE ACTIVITIES

Development activities can be better synchronized by:• Collocation of development

personnel

• Visual management tools to show status and performance

• Frequent, short coordination meetings

• Tools to share information


DEFER DECISIONS

Initiate development activities as late as possible to allow for flexibility with changing requirements

Product Definition

Module 1 Design

Module 2 Dsgn Integration

Mod 3 Dsgn

Build & Test

Baseline CaseComplete definition before development begins. Development of all modules starts immediately.

Module 1 Design

Integration Build & TestModule 2 Dsgn

Mod 3 Dsgn

M1 Def.

M2 Def.Sys. Def.

M3 Def.

Alternative 1Phased definition. Definition & develop-ment of modules deferred to allow flexibility for changes.

Alternative 2Phased definition. If one module not on the critical path requires significant leadtime to build, begin sooner.

Module 1 Design

Integration Build & TestModule 2 Dsgn

M1 Def.

M2 Def.

M3 Def. Mod 3 Dsgn

Sys. Def.

Build


USE CROSS-FUNCTIONAL TEAMS

"It is a common belief in management practice today that one of the most effective ways to shorten development cycles is through the collaborative work of cross-functional development teams. But if anything is easier said than done, it is that marketing people, development engineers, and manufacturing engineers should collaborate rather than 'throw product specifications over the wall' to one another.“

The Return Map: Tracking Product Teams, Harvard Business Review, Charles H. House and Raymond L. Price


EMPOWER THE TEAM

EMPOWER (def.) give power or authority to; to authorize; to enable; to delegate

• Functional managers empower team members to represent functional discipline without approval for decisions or actions

• Self directed teams - describe what is required; let teams determine how

• Requires more management planning & capable, trained personnel

• Results in greater commitment and ownership


PROVIDE THE RIGHT RESOURCES

• Right skills and experience

• Right level of resources

• Resources available when needed


AMPLIFY LEARNING

Learning is amplified when it is captured as knowledge, organized, and made readily available to others in the

enterprise

KnowledgeLearning Learning


LPD SERVICES

LPD Process Assessment• Assess the current development process, gather data, and

perform value stream mapping where appropriate

Training• Conduct LPD Workshop

LPD Process Implementation• Assist in leaning the process, establish supporting tools and

methodolgies, and create metrics

LPD Project Facilitation• Facilitate project teams with lean project planning, using

lean practices, and developing lean designs


LPD WORKSHOP AGENDA

1. Voice of the Customer2. Quality Function

Deployment3. Lean Design4. Platforms and Design

Re-Use 5. Rapidly Explore

Alternatives6. Value Stream Mapping7. 5S Workplace8. Standardized Work9. Pipeline Management

10. Flow Process and Pull Scheduling.

11. Reduce Batch Sizes12. Synchronize Activities13. Delay Commitment14. Cross-Functional Team15. Workforce

Empowerment16. Right Resources17. Amplify Learning

For further information on the workshop, see www.npd-solutions.com/leanws.html


LPD EXPERT SERIES WORKSHOPS

Lean Project Management (2 days)

See www.npd-solutions.com/leanpmws.html

Voice of the Customer (2 days)

See www.npd-solutions.com/vocws.html

Quality Function Deployment (3 days)

See www.npd-solutions.com/qfdws.html

Target Costing / Design to Cost (3 days)See www.npd-solutions.com/targetws.html

Design for Manufacturability/Assembly (3 days)See www.npd-solutions.com/dfmws.html

Value Analysis/Value Engineering (3 to 5 days)

See www.npd-solutions.com/vamod1ws.html


DRM CONSULTANTSJim Rains

• Expert in value analysis/function analysis, design to cost, and lean manufacturing

• Value analysis projects have averaged 20% cost savings

Gene Kania• Expert in lean project management and

pipeline and portfolio management

Jim Ayers• Expert in supply chain management,

design to cost, and quality function deployment

For further information on our consultants, see www.npd-solutions.com/consultants.html