Lean Design - Read an article on Lean Design

Published in a forthcoming issue of The Journal of Advanced Manufacturing Systems:

Lean Design as a Competitive Mandate

by Ron Mascitelli, PMP

         Over the past decade, the waste-slashing methods of lean manufacturing have become synonymous with high production efficiencies, short manufacturing cycle times, and cost-effective quality. From its roots in the Toyota Production System, this loosely connected suite of methods has enabled Western firms to regain competitiveness in the face of rapid industrial development in lower-wage countries. In fact, the concepts of just-in-time (JIT) inventory management, pull systems, visual controls, and the like have become table stakes in virtually every manufacturing sector. That being said, in the longer term it is essentially impossible for Western firms to match costs with overseas competitors. The primary factors of production (i.e., labor, raw materials, and investment capital) are all readily available and in most cases fundamentally cheaper in developing countries. Moreover, lean manufacturing is spreading like wildfire in emerging powerhouses such as China, South Korea, and Taiwan. This commoditization of efficient production leaves firms in fully industrialized countries to ponder a crucial question; “How can we keep our edge?”
        The pat answer to this burning question is to “increase the rate of innovation.” All well and good, but while those fortunate few firms in leading-edge industries can readily brainstorm their way to continued growth and profitability, the vast majority of manufacturers see their opportunities to innovate as something less than stellar. Opportunities for innovating a successful new semiconductor device or software product are far greater than achieving a breakthrough in hoses, fittings, or castings. Even in fast-moving, high-growth industries, innovation is a risky business. It is all too easy to bet the company on new markets and seemingly bright ideas. Is this truly the only way to sustain competitiveness?
        Fortunately, there is a more straightforward way to recapture those “glory days” of dramatic cost reduction and profit growth, without the need for either creative genius or gut-churning risk. By adapting the waste-slashing philosophy of lean manufacturing to the front-end process of product design, an entirely new world of economies can be captured. Yes, some innovative thinking is required, but the only true prerequisite is a willingness to take a far more holistic view of the product development process. I’m not referring here to reducing time-to-market; essential to be sure, but a lot has already been done in this arena. Nor am I simply rewarming old chestnuts like Design for Manufacture and Assembly (DFMA), or even the powerful but narrowly focused tools of Design for Six Sigma (DFSS). Rather I suggest an integrated toolbox of methods that enable manufacturing cost reduction to become a foundational part of product development, not just for individual products, but for the entire product “system” of a firm.
        Picture in your mind every product that your firm produces (or at least all products within a business unit). If managed properly over time, this suite of products can constitute a system for profit maximization. For a product line to behave like a system, it must meet three criteria. First, there must be more than one product in the line. Ok, that one is probably fairly easy. Next, the various products within the product line must work together synergistically to accomplish the “function” of the system. Since the function that we desire for our system is to achieve maximum profits, the products within your firm must be working together synergistically to increase profitability. This one is a bit harder, n’est pas? Luckily, the final criterion is also relatively easy. Your product-line system must respond to external feedback. The feedback for a product-line system comes from the sales and profit dollars generated in the marketplace. Fortunately, a negative or positive response from the market is detectable almost immediately, and provided that your system reacts to this feedback (such as by changing the type of products offered), you’ve got a system on your hands.
        So how does a firm achieve the second criterion mentioned above: How can all of the products within a business unit work together synergistically to achieve maximum profitability? First and foremost, each new product design must be considered in the context of the whole. Standardization of parts and processes is certainly a beginning, but there is much more that can be done. Can highly efficient platform designs be developed to replace isolated “point design” products? Can modularity and scalability be incorporated into both products and processes? Can operational overhead be driven down through consistent consideration of indirect costs with each new design initiative? No one tool or technique can ensure such high-level synergy. A flexible toolbox of methods is needed that addresses both cross-product-line cost reduction as well as profit optimization for each individual design. This toolbox must be integrated with an effective development process in such a way that the right tools are applied at the right times, beginning with the first glimmer of a new product concept, and continuing through to successful production launch and commercialization.
        The term “lean design” has come into use as the catch-all for this integrated toolbox. As in lean manufacturing, no one technique is sufficient to eliminate all of the waste in new product design. Six-sigma methods have their place, along with DFMA, target costing, value engineering, production process preparation (referred to as the “3P” process), and so on. Each tool does its job at the appropriate points in the process, but no one method dominates; application is entirely based on the nature of the new product and consideration of the milieu of products and processes already in place in a firm. Along the way, some new tools are included that allow easy tradeoff of alternative design concepts from the standpoint of cost, performance, and quality.
        An example is in order to illustrate how lean design can impact manufacturing costs at all levels within a firm. Consider the whatchamacallit. Your firm has determined that the marketplace is in desperate need of a replacement for the venerable widget, and a whatchamacallit appears to be just the ticket. How can lean design be applied to this new strategic product to ensure maximum profits for the entire business unit? The first step would be to define as clearly as possible what the market desires, without either overshooting or undershooting on performance, features, and quality. Voice-of-the-customer tools are apropos during this first step, perhaps including “lean” quality function deployment (QFD, but in a more efficient incarnation), and other direct feedback techniques such as probe-and-learn, surveys, and focus groups. With a reasonably clear product definition in hand, our mythical firm convenes its product-line optimization team (PLOT) to consider how the new product will fit within existing material inventory, processes, factory layout, core competencies, and so on. Specific recommendations for enhancing the synergy of the product are provided to the development team at the kickoff of the project. Once the project is underway, design requirements are prioritized based on customer benefit and need, and a target cost is established. To put some teeth into the target cost, a preliminary cost model is also configured to provide a tool that designers can use early in conceptual design. This model will evolve over time to become an accurate representation of the actual cost-at-volume for the new product.
        Now comes the fun part. Rather than jumping at the first decent idea that is proposed for the whatchamacallit, the design team will consider multiple design alternatives. This set-based design approach has been used successfully by Toyota and others to generate a broad spectrum of initial possibilities which can be traded off before a final concept is selected. A simple cost / performance tradeoff tool is used here to allow the design team to qualitatively determine which concept has the best combination of manufacturing cost and customer value. Value engineering techniques such as verb / noun functional analysis are used to generate a broad and innovative list of design possibilities.
        Upon arriving at an optimal concept, the design team consults the product-line roadmap that has been created by the firm’s PLOT team. From this forward-looking document, opportunities to extend and customize the product are identified, and platform design considerations are incorporated into the rapidly solidifying design. Scalability, modularity, and mass customization strategies are also considered as ways to capture economies of scope during future product-line expansion. As detailed design begins, the compatibility of the design to existing and planned manufacturing processes is determined using six-sigma methods. Yield is thereby optimized, and exceptional quality is assured.
        Finally, the manufacturability of the product from the standpoint of touch labor, standard materials, cell-layout, takt time, capacity, etc. is considered. Although this is mentioned at the end of my example, in reality these consideration have been addressed, in increasing levels of detail, throughout the process. A model for this so-called production preparation process (3P) has recently emerged from studies of the “Toyota Way.” An adaptation of this comprehensive process is used by the whatchamacallit team to ensure smooth and rapid transition of the new design to the factory.
        Well, that’s the lean design methodology in a (somewhat simplified) nutshell. It’s really all about leverage, with a bit of systems thinking thrown in for good measure. Strategic, product-line considerations at the very beginning, multiple design alternatives for both products and processes generated throughout, and simple, user-friendly tradeoff tools at the ready disposal of the design team. Whether you are designing a jet fighter, a new hose fitting, or a new thingamajig, this holistic and integrated approach to manufacturing cost reduction represents a powerful design competency for your organization. One which may indeed yield a sustainable competitive advantage…at least for a while.