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CAPABILITIES
WITH LEAN PRODUCT
DEVELOPMENT (LPD)
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
2007 DRM ASSOCIATES
DRM ASSOCIATES
Firm with recognized expertise in new product
development & core focus on value
Kenneth Crow is the firms 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
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.
Characteristic
Production Process
Fabrication, Assembly
& Test
Deliverable
Physical Product
Product Development
Process
Information &
Documents
Definition, Acquisition,
Transformation &
Integration
Product Definition
Practice Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1. 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 PD PRACTICES
1. 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.
2007 DRM ASSOCIATES
LEAN PD PRACTICES
10. 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.
2007 DRM ASSOCIATES
Market
Analysis &
Definition
Voice of the
Customer
Investigation
Customer
Needs Data
Dictionary
Us
New
Co A
Prod 2
Co B
Co A
Prod 1
Us
Prod 1
Target Price
& Cost
Analysis
QFD Product
Planning
Matrix
Product
Specification
LEAN DESIGN
Objective:
Minimize resources (product cost) while maximizing
value to the customer (value proposition)
ize
m
i
x
a
M
lue
a
v
r
e
custom
ze
i
m
i
n
i
M
st
o
c
d
n
sa
e
c
r
u
o
res
Lean Product
Development
Lean Design
Costs
Committed
Costs
Incurred
Concept
Development
& Feasibility
2007 DRM ASSOCIATES
Product
& Process
Design
Testing &
Production
Launch
Production
QFD
(Product
planning
matrix)
Value analysis
Product
cost model
Brainstorming
DFM / A
Establish
target cost
Develop
Business
case
Define
product
reqmts
Develop
alternative
concepts & cost
reduction ideas
Conjoint
Analysis
Estimate cost
of
alternatives
NO
Meet
goals?
Value
analysis
Target cost
tracking
YES
Develop
design &
reduce cost
Metric: actual
cost vs. cost
target
QFD
(Concept selection
matrix)
Requirements
Concept
Development
Assembly
Design
Part Design
Process
Design
SIMPLIFY DESIGN
Product Line Simplification/
SKU Minimization
Assembly Simplicity
Part
Count
Complexity
Architecture/Concept
Design Modules/Interconnections
Unique
Parts
Part Simplicity
Part
Geometry
Complexity
Part
Features
Detailed
Design
3%
27%
Manufacturing
Ramp-Up
55%
15%
Traditional Approach
20%
13%
22%
Concurrent Engineering /
DFMA Approach
5%
40%
Platform Strategy
& Planning
Part
Standardization
2007 DRM ASSOCIATES
Custom
Design Re-use
100%
0%
Common
100%
in
2
Queue
20 hrs
Approve
1 hr
4
Queue
40 hrs
Prelim.
Architect.
72 hrs
8 hrs NVA
4
Queue
40 hrs
Build/Test
Iteration
68 hrs
16 hrs NVA
2
Queue
20 hrs
Deploy
2 hr
4 Iterations
Value-Added Activities
An activity that transforms material or information
And the customer wants it
And its 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 cant get rid of the activity, it turns to yellow
2007 DRM ASSOCIATES
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)
Source: www.pd-trak.com
Complexity of processes
Time-to-Market View
Time to
Market
(schedule)
Target
Overtime is an expected
solution; process shortcuts
are overlooked
If a significant schedule
problem exists, shift
resources to catch up
2007 DRM ASSOCIATES
100%
Capacity Utilization
Project A
Project B
PIPELINE MANAGEMENT
Manage the number of projects in the pipeline and
their release to avoid overloading resources and
increasing work in process
O
Software Engineer
Base Headcount:
+New Hires,Contractors/-Losses
-Non-Project Utilization Factor (%)
Total Available Resources
Total Project Requirements
+Available/-Shortage
System Engineer
Base Headcount:
+New Hires,Contractors/-Losses
-Non-Project Utilization Factor (%)
Total Available Resources
Total Project Requirements
+Available/-Shortage
2002
N
D
2002
F
M
4.0
1.0
1.0
4.0
3.9
0.1
4.0
1.0
1.0
4.0
3.9
0.1
2003
M
J
2003
A
S
5.0
1.0
0.9
5.1
5.5
-0.4
5.0
1.0
0.9
5.1
4.8
0.3
5.0
1.0
0.9
5.1
5.1
0.0
5.0
1.0
0.9
5.1
5.5
-0.4
5.0
1.0
0.9
5.1
5.0
0.1
5.0
1.0
0.9
5.1
5.0
0.1
5.0
1.0
0.9
5.1
5.0
0.1
4.0
1.0
1.0
4.0
3.9
0.1
4.0
1.0
1.0
4.0
4.1
-0.1
4.0
1.0
1.0
4.0
4.1
-0.1
4.0
1.0
1.0
4.0
4.1
-0.1
4.0
1.0
1.0
4.0
3.7
0.3
4.0
1.0
1.0
4.0
3.7
0.3
4.0
1.0
1.0
4.0
3.7
0.3
Description
Field Strength Analyzer
Network Tester
Broadband Optical Detector
Network Driver Software
Optical Sensor
ATM Switch
DWDM Optical Power Meter
Optical Coupling Module
10GB Optical Transceiver
Optical Demux
Optical Multiplexer
DSP Measurement Engine
Next Gen Optical Sensor
1000GB Core Technology
FY2003
Q1
FY2003
Q2
FY2003
Q3
FY2003
Q4
FY2004
Q1
FY2004
Q2
FY2004
Q3
FY2004
Q4
FY End
Project 1
Project 2
Project 6
Project 3
Project 4
Project 7
Project 5
Project 2
Proj.
7
Project 4
Project 1
Project 3
Project 5
Project 6
FY2003
Q1
FY2003
Q2
FY2003
Q3
FY2003
Q4
FY2004
Q1
FY2004
Q2
FY2004
Q3
FY2004
Q4
Description
Field Strength Analyzer
Network Tester
Broadband Optical Detector
Network Driver Software
Optical Sensor
ATM Switch
DWDM Optical Power Meter
Optical Coupling Module
10GB Optical Transceiver
Optical Demux
Optical Multiplexer
DSP Measurement Engine
Next Gen Optical Sensor
1000GB Core Technology
FY2003
Q1
FY2003
Q2
FY2003
Q3
FY2003
Q4
FY2004
Q1
FY2004
Q2
FY2004
Q3
FY2004
Q4
Active
1.2
Proposed/On hold
BU/Prod Line
Project mgr
Process
Marketing
lead
Ken Smith
Harry Brown
Ken Smith
Harry Brown
Frank Smith
Tom Wright
Ken Smith
Harry Brown
Ken Smith
Harry Brown
Mike Brown
Tom Wright
Ken Smith
Harry Brown
Mike Brown
Tom Wright
Description
Probability of success
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0
10
20
30
40
50
60
70
PORTFOLIO INFORMATION
PROJECT NAME
1.1
Technology
Standard
Technology
Standard
Industrial
Standard
Industrial
Standard
Technology
Standard
Industrial
Standard
Industrial
Standard
Industrial
Standard
Virgo
DWDM optical power meter
Gemini
Leo
Aquarius
3GHz signal
generator
Aries Aries
Capricorn
High speed
compressor
Taurus
Capricorn
Virgocompressor
High power
Cancer Leo
8GHz spectrum analyzer
Aquarius
High power compressor
Gemini
Micro compressor
Taurus
High80
efficiency compressor
Status
Next review
Active
7-Nov-03
Active
22-Sep-03
Closed
26-Jan-03
Proposed
6-Sep-03
Closed
7-Nov-02
Active
27-Sep-03
Active
7-Nov-03
Proposed
1-Nov-03
L Gate
P Gate
Review
M Gate
L Gate
P Gate
L Gate
Start
Project
cost
Remaining
cost
$2,331k
$391k
$2,331k
$861k
$1,209k
-$1k
$2,331k
$51k
$2,331k
$1k
$903k
$143k
$2,331k
$401k
$403k
$403k
Sales
over life
Profit
over life
$29.5M
$23.2M
$58.5M
$30.5M
$13.3M
$6.9M
$10.5M
$4.0M
$5.9M
$2.2M
$6.1M
$2.2M
$42.1M
$16.1M
$4.6M
$1.8M
NPV
DPI
R-Factor
Prob. Of
Success
92.6
80%
35.3
50%
1000.0
75%
74.5
60%
1000.0
80%
19.2
75%
76.2
95%
4.9
50%
$45.2M
10.0
$60.8M
13.1
$13.5M
5.7
$6.3M
1.7
$2.3M
0.9
$3.6M
2.4
$32.1M
6.9
$3.9M
4.5
Score
90.8
84.2
82.3
81.5
80.3
77.9
Project
Portfolio
66.1
40.1
NPV
2002
N
D
2002
F
M
4.0
1.0
1.0
4.0
3.9
0.1
4.0
1.0
1.0
4.0
3.9
0.1
2003
M
J
2003
A
S
5.0
1.0
0.9
5.1
5.5
-0.4
5.0
1.0
0.9
5.1
4.8
0.3
5.0
1.0
0.9
5.1
5.1
0.0
5.0
1.0
0.9
5.1
5.5
-0.4
5.0
1.0
0.9
5.1
5.0
0.1
5.0
1.0
0.9
5.1
5.0
0.1
5.0
1.0
0.9
5.1
5.0
0.1
4.0
1.0
1.0
4.0
3.9
0.1
4.0
1.0
1.0
4.0
4.1
-0.1
4.0
1.0
1.0
4.0
4.1
-0.1
4.0
1.0
1.0
4.0
4.1
-0.1
4.0
1.0
1.0
4.0
3.7
0.3
4.0
1.0
1.0
4.0
3.7
0.3
4.0
1.0
1.0
4.0
3.7
0.3
Resource
Plan
Examples from PD-Trak software, www.pd-trak.com
Phase 1
Phase 1
Phase 2
Phase 2
Feeder
Buffer
Critical
Task
Critical
Task
Project
Buffer
New Module 3
Project 1
New Subsystem 2
New Module 1
New Module 5
Project 1
New Module 2
Existing Platforms
(Modules & Subsystems)
New Subsystem 1
Design Integration
New Module 3
New Module 4
New Subsys. 3
New Module 5
New Subsystem 4
Existing
Modules &
Subsystems
Technology Proj 1
New Technology
Platform Project 2
New Module 1
New Subsystem 2
Platform Project 4
New Module 4
New Module 2
2007 DRM ASSOCIATES
Design Integration
New Subsys. 3
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
Baseline Case
Complete definition
before development
begins. Development
of all modules starts
immediately.
Alternative 1
Phased definition.
Definition & development of modules
deferred to allow
flexibility for changes.
Alternative 2
Phased definition. If
one module not on
the critical path
requires significant
leadtime to build,
begin sooner.
2007 DRM ASSOCIATES
Module 1 Design
Product Definition
Module 2 Dsgn
Integration
Integration
Mod 3 Dsgn
M1 Def.
Module 1 Design
M2 Def.
Sys. Def.
Module 2 Dsgn
Module 1 Design
M2 Def.
Module 2 Dsgn
Integration
Build
AMPLIFY LEARNING
Learning is amplified when it is captured as knowledge,
organized, and made readily available to others in the
enterprise
Learning
Knowledge 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
2.
Quality Function
Deployment
3.
Lean Design
4.
5.
Rapidly Explore
Alternatives
6.
7.
5S Workplace
8.
Standardized Work
9.
Pipeline Management
DRM CONSULTANTS
Jim 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
2007 DRM ASSOCIATES