Month: April 2014
Ok, so I talk a lot of about design for manufacturing, it’s probably about time that I describe exactly what I mean. In a nutshell, Design for Manufacturing is a design philosophy and product release strategy that tailors the assembly of a product to the operational structure of the firm. This ties in with the earlier discussion on Competing Commitments where engineers must balance the design process to serve the end user, as well as the company’s need to turn a profit. A good and successful product is one that both exceeds customer expectations for the price, and is manufacturable a cost low enough to generate profit.
Easy right? Not so much.
The key to Design for Manufacture strategy is for engineering and operations to build a good 2 way relationship and communicate the needs and structure of both units. Engineering must have a good understanding of the specific manufacturing process of the firm, and Operations must have a good understanding of the capabilities and product intents of Engineering.
For example, Engineering might intend for a product line to be offered to customers with a number of configurable options. Think of the automotive industry in the 70’s, cars could be ordered with an extensive menu of options from colors to engines to curb feelers. In reality this would mean that thousands of permutations may be possible for a single line of cars. In order to accommodate this, the manufacturing line would need to be set up in a manner that allows for a bunch of non-standard work steps based on selected options. Engineering on the other hand would need to structure its BOM’s in a ‘kit’ type format, which would group all of the components together that would go into a particular option. This might include a radio kit, an air-conditioning kit, or an engine kit, and a configuration tool that would bunch all the kits together to equal a complete product.
From a product design perspective, there are 2 main areas of emphasis for a design for manufacturing strategy.
- Match the operational model: Operational models may vary from a vertically integrated structure where raw materials are processed into components then into finished goods, or could be a contract manufacturing structure where raw goods and sub-assemblies are outsourced to contract manufacturers (CM), the brought in-house for final flavoring and assembly. The big difference for product designers in these scenarios is in BOM structure. Vertically integrated firms will benefit from a flat BOM structure that will list out every raw material and bottom level component so Operations can purchase, store, pick and assemble. In a CM model, designers are challenged with ‘kitting’ or sub-assembling groups of parts in the BOM structure in order to create ‘buyable’ assemblies. This ‘buy level’ kit or assembly is driven by how Operations would like to receive the components in the door for final flavoring of the overall product. This model requires a higher level of communication through documentation to the CM’s, specifically for revisions of parts within assemblies.
- Optimize for the operational process: This is a higher level of Design for Manufacturing. Optimization of sub-assembly BOM’s is intended to balance sub-kits to accommodate configurable options with assembly line load balancing to reduce down-time between steps on the manufacturing line. That is a mouthful. Simply put, an engineer will structure BOM kits so they take equal time to assemble. An air-conditioning kit should take twice as long as a radio kit and headrest kit, which is intentional in order to balance out assembly stations on the line.
Design for Manufacturing can be complicated upstream and require a good amount of coordination between Engineering and Operations, but the whole organization benefits with components come together efficiently into a finished good. Poorly run manufacturing organizations are often structured into silos, where Engineering will release product without regards for manufacturability, rather ‘throwing their work over the wall’ for Operations to figure out. Conversely Operations does not provide feedback to Engineering due to the siloed barriers.
Hopefully I didn’t confuse the topic, it’s a simple concept that can be tricky to implement. What are your thoughts?
So I was doing some reading on Switzerland, specifically Swiss products and business processes. My stereotype going into the reading was that the Swiss are known for banking (obviously), but also known for engineering and precision products. It’s a country with a high GDP per capita, high education levels, and a highly skilled labor force. All these would indicate an engineering powerhouse, but my reading suggested the opposite. The subtle suggestion is that Swiss are lacking in innovation, which didn’t make sense right away.
So it is true that the Swiss are known for precision manufacturing and product development, largely in the medical and machinery field. I believe the lion’s share of worldwide timekeeping mechanisms and watch movements, as in high-end watches are all supplied from Switzerland. So what’s with the lack of innovation?
Turns out it is caused in part by the institutionalized practice of Continuous Process Improvement (CPI) in the Swiss engineering practice and product design. I know this is contrary to my general view that CPI is a good thing, but for the Swiss it may have gone too far. The Swiss openly practice CPI as a means to standardize work and increase quality, which characterizes products that come from the region. Watches from Rolex, Omega, Hamilton, etc, etc are super high quality products that demand high dollars in the marketplace. Cracking one of these watches open will show an amazing level of detail in springs, gears, levers, metalwork and finishes, all working in unison to tell time. Now take a look inside a Japanese watch, you will see a battery and some plastic that houses a tiny quartz crystal that vibrates crazy fast to produce accurate time.
Am I saying a Timex from Japan is better than a Rolex from Switzerland? No.
What I am saying is that the Swiss have invested an enormous amount of time and effort into CPI in order to produce an intricate mechanism that can tell time from a wound-up spring. The Swiss are very good at what they do, but their scope of expertise is relatively small. The quartz and digital watches from other regions are technologically far more advanced than the mechanical units from Switzerland, far cheaper, far longer lasting and far more accurate, but definitely far less precise from a component level and far less cool. Careful telling a Rolex guy that a $10 Casio is more accurate and longer lasting than a $12k Rolex, but he still has to wind his daily whereas the Casio will last years on a $2 battery. (I know, I know, the Rolex is a self-winder, but you should see the point) I would not say the Swiss missed the innovation boat with Quartz watch movements, rather they chose to stick with the old-school high quality mechanical movements.
What do I mean by Institutionalized? Well, the Swiss are conservative by culture, they have a high Uncertainly Avoidance and are pretty risk-adverse. All of these attributes combined would suggest that culturally the Swiss prefer to do the same thing that worked previously, but do it better than everyone else to maintain their competitive advantage. I’m a little biased here, but look at the US in comparison. In the US we are not afraid to take risks, culturally and infrastructural we actually promote it. The vast majority of businesses that start in the US fail for a variety of reasons, but the point is that in the US we have a try-it mentality with little downside. If an idea fails, try another. Heck, we even have tax structures that reward and subsidize risk in development.
Don’t get twisted, I’m not suggesting the US system is superior. The ‘try it’ mentality can produce innovation in abundance, but it can also lead to sloppy implementation and poor quality. Look at the US Auto industry from the 70-80’s, arguably into the early 2000’s. Lots of good ideas that were poorly implemented, and the Japanese put more effort into perfecting these ideas and selling them back to the US in high quality product offerings.
So if I haven’t offended everyone yet, what is the take-away from all of this? My takeaway is that of balance. Too much CPI in your design and manufacturing can tie your hands from trying new things, or it can slow the experimentation process and allow your competitors to jump by. Evolutionary changes are good, but one revolutionary idea can change the landscape. Think iPhone and killing the competition. On the flip side, too little process improvement will lead to poor implementation and poor quality. This will put you out of business before getting to the next idea.
What are your thoughts? Please leave a comment.
Mark Graban posted a great video showing the dramatic differences between the same process being performed 60 years apart. Formula 1 Pit Stops 1950 & Today… a Huge Difference. I love seeing videos like this, because it can show huge advancements in a short clip, while cutting out all the incremental changes needed to get there. Often in our business roles we (should at least) change things incrementally for the better, day by day so it is hard to see the overall impact of our actions.
I am also a car guy, so this video is just plain awesome anyways.
What I really like about this clip is that it shows a couple major components of lean and CPI being practiced ‘out in nature,’ not in the business environment. In the motorsports community it is well known, races are won or lost in the pits, not on the racetrack. Of course no one goes to the races to watch the pits, and that’s a shame. Assuming the average speed around a racetrack is 100MPH, that means every additional second a racer spends in the pits compared to his competition means 147 feet lost on the track. That means 2 extra seconds means the racer is now a football field behind, which is difficult and risky to make up on the racing track.
Value Stream events teach us to map out a workflow or process and identify individual steps than can be ranked in terms of their impact, and in terms of their effort level to change. Take racing for example, the goal is to decrease overall lap time to be quicker than all your opponents. To do this you must be faster on the track then your competition. This takes a lot of effort, and the risk increases significantly the more you push. Overall, high impact and high risk.
Pit stops are another part of the process that apply to everyone in the race. The effort required to decrease time in the pits is relatively low effort through coordination and technology, and can be highly impactful on the race course if it can mean a football field of advantage every 2 seconds. Seems like the easy areas to streamline would be the pitstop!
Now, zoom in on the pitstop.
In the case of the 1950 Formula 1 stop, it is pretty clear that there are too few people doing linear tasks with too much time in between steps. If you competition is also taking 60 seconds in the pits, no big deal. Once your competition figures out how to drop 5 seconds, you are in a world of hurt. Hindsight is 20-20, but the 50’s pitstop was full of opportunities! Look at mapping out the subtasks, and determining which steps have dependencies. You have to jack up the car before changing the tire, check. Once the car is lifted, why not change 2 tires concurrently by adding another resource? Big time savings. To go a little further, why not jack both sides of the car up at once? Then all 4 tires can be changed at one time, brilliant!
Tools and technology obviously take a big role here, but evolution can still play a part. In 1950 the crew member used a hammer to beat the lug-spinner off the hub to change the tire. Of course air impacts were not available in 1950, but I’m sure a BFH was (Big F****gin Hammer to non-gear heads). Instead of beating on the spinner for 10 seconds with a small hammer, do it in 2! Now give each resource at each wheel (workstation) the right tool, and you have another big opportunity that multiplies itself by 4. Jump forward to 2013 and you will see the result of 60 years of evolution, multiple coordinated resources on the same task, each with his own tools, each with his own work step instructions. The result is impressive. What took 70 seconds in 1950 took less than 3 in 2013. Don’t split hairs about the exact work not being one-for-one between these stops, just marvel in their beauty.
Some big-hitters of time and effort waste can be cut from the early pitstop with ease. Once those have been corrected there are still a number of CPI steps that can, and have happened over the years. Staging of workstations, staging of tools, balancing of work steps to minimize idle time of resources, combination of steps such as pre-loading of lug nuts into the tools, of in the 2013 case have 2 sets of tools at each wheel, one pre-set for ‘off’, one pre-set for ‘on’. All fractions of a second, but all add up.
In the end, the race is won through coordinated efforts in a low-risk environment when the car is stopped. This is less risky than relying on the driver to make up football fields on the track while barreling towards a corner at 100MPH +.
Call me a car nut, but I love it.
Can you apply any of this in your business?
Balance, life is all about balance.
When it comes to consumer products, there seems to be 3 stakeholders that might feel differently about a product or service. In the end they must all be satisfied or the product, and maybe even the organization may fail.
Engineers want to do a good job, they want to develop cool stuff, and in the end they really want to engineer things. This is good in order to bring innovation into your products for a competitive edge, however engineers typically need to be kept in check for a number of reasons. First, engineers like to engineer, which may or may not be inline with what customers are willing to buy. Engineers are a geeky type, and can enjoy complexity and focus in a product, whereas customers may be interested in a product that only does XYZ, and does it with ease. How many of you know programmers that talk at-length about some Linux code routine that they have been working on at home in their mad-scientist lair? While it may be super-cool, most of us just want to boot up our computer and have it work, not really caring what is under the hood.
Engineers may also tend to over engineer and re-engineer projects as they find new solutions or ways of doing things. Reevaluation of designs and adjustments are a good thing and an expected part of the design cycle, however it can lead to a variety of issues including feature creep or loss of the original target. Sometimes in the product development cycle it must be determined that the product is ‘good enough’, not perfect, but ‘good enough’ to meet or exceed the customers’ expectations.
Face it, a Corporation exists to pool resources and provide a product or service solution to fit a consumer need. At the heart of all this is the need to earn a profit in order to be sustainable, reinvest in the products and provide returns to investors. Without turning a profit, the corporation will fail. The corporation’s view of product design is that it has to be ‘good enough’ to meet or exceed customer expectations, be inexpensive enough to maintain an appropriate level of margin, and focused and strategic to meet current and future customer demands.
The corporation must provide the appropriate guidance to the product development teams to develop the right goods and services. In return, the business expect the development to be completed and ready for market as quickly as possible, since every day of delay is a large hit to revenue. This is at odds with the engineers view that always wants more time to perfect the design.
Unfortunately this has been a consistent source of internal friction in every organization I have been in contact with. The business says push-push-push, the engineers say ‘stop pushing, you will get a poor product’. It is all about Balance.
Simply put, the customer wants what he wants, when he wants it for what he wants to pay for it. The customer is king, and both the engineers and the business unit are trying to satisfy the customer wants. The customer expects his purchased product to meet or exceed his expectations, if it does he will buy again and tell his friends. The customer typically wants his product to work well, be simple to operate, be durable and long lasting, and recently he also wants his product to be recyclable or hold some sort of residual value.
Customers also expect a good level of value from their purchase, this does not necessarily mean they want a ‘cheap’ product, but rather a product that is priced appropriate to the level of function and expected quality. Lately, customers also expect a level of ‘feel good’ from their purchases as well, meaning the producing organization should practice some level or Corporate Social Responsibility through environmental practices or giving back to the community.
I will say it again, life is all about balance, and product design is no different. It seems easy for the stakeholders in the process to become misaligned, which will ultimately lead to a market failure.
What was the last product you bought that you were not happy with? Was it over engineered and too complicated to use, or under engineered and not worth the asking price?
Please leave a comment.
In today’s world, having a great product at a good price is not enough. The consumer world has evolved to expect more from a product than the item itself. Consumers expect a level of responsibility and engagement from the firm itself. Customers expect to feel good about the product they just bought by knowing where it came from, knowing that it will not cause harm during use and knowing that disposal at the end of its life will have more options than just the landfill. This demands a number of competing commitments to product designers when developing new goods.
Product designers must first and foremost understand their target market and a list of customer requirements and expectations for a particular product concept. In a nutshell, if product developers ‘miss the mark’ of what the customers want, or miss the cost target that the market will bear the product will fail. This responsibility to the customers is the classical area of focus and where most companies invested their resources in years past. This is also prevalent in the international theater with emerging markets, where low economic overhead requires product developers to invest their resources into the area that provides the greatest bang for the buck. In this case, a whiz-bang gadget at a dirt cheap cost.
In the context of this discussion, corporate responsibility is referring to a product development team’s duty to release product that is profitable to the organization. This is different than corporate social responsibility, that is a topic for another day.
A product development team must balance customer expectation and target product cost with a level of margin required by the company to remain sustainable. A common desire from product developers is to create products that far exceed customer expectations; think a gold-plated toaster. While a gold plated toaster may be super cool, it’s probably not any more functional than a chrome toaster. The balance here is to exceed customer expectations, while driving the lowest COGS, or Cost of Goods Sold for the producer. This is the responsibility to the corporation, the throttling back on the product features to maintain margin.
Social Responsibility is a big topic in today’s consumer and business world. Social Responsibility is what helps customers ‘feel good’ about their purchases. This can come from the product being manufactured from recycled material, sourced from responsible supply chains, etc. I consider this to be part of the contemporary move towards Corporate Social Responsibility, which is really a macro-level initiative that successful organizations drive from the top down. Chiquita is a good example of this with their organizational turnaround in the late 90’s, then they changed their operating strategy to be employee and socially focused with the assumption that business would follow. It did.
Digging down to the micro level, how does Social Responsibility effect product design and development? Turns out, product development teams can have a large impact on social responsibility with low effort investment. Product design is a very early step in the overall release process to get products into consumer hands. This means small steps in component or material specification upstream can drive responsible product sourcing downstream in operations. The sourcing and supply chain activities can have a large impact regions and societies, and can potentially drive out unfortunate activities such as child labor, pollution or human rights violations. Simply put, Product Developers are at the handle of the Operational bullwhip, small changes can make a big impact.
Examples? Conflict Minerals is a recent and ongoing issue of mining activities in the Congo area that is responsible for child labor, human rights violations, pollution, the whole gamut of social sins. Materials from this region include gold, tin, tungsten and tantalum, which unfortunately are basic industrial staples for modern electronics, including your iPhone and iPad you might be using right now. Local laws in this region are ineffective or too corrupt to stop the activity, and consumers keep the demand strong for the products. This is where Product Development can step in. Engineers designing the releasing product can take additional steps during the design cycle to specify components and materials that are certified ‘conflict free’ upstream and stop an issue before it starts.
There are a number of other environmental and social issues and restrictions that can be addressed relatively easy upstream in the design cycle, including RoHS, REACH, WEEE and Recycling Initiatives. Addressing these items downstream, or not addressing them at all can be difficult or costly.
From a corporate perspective, these activities should be encouraged, supported and institutionalized to build them into the culture of the company. Subtle marketing campaigns can be built around these activities as well, to educate the buying public on how your product can make a difference, and make the customers feel good about buying it!
Do you intentionally purchase products from responsible companies? Drop me a line and leave a comment.
Continuous Process Improvement (CPI) is based on the idea of observing, standardizing, measuring, adjusting and reevaluating processes. This strategy is used to determine inefficiencies in any system or process, make quantifiable changes to that system to either eliminate wasted steps or increase quality and first pass yield. This works very well in the Manufacturing and Operational world where there is little variation in process, or at least there should be little variation. BOM’s should be used at parts lists, standard work instructions followed to produce final goods. There should be little uncertainty in the process, little variation so small changes can be made and evaluated.
You should also know by now that I am a proponent of using CPI methods and strategies upstream in the product design cycle in order to release product that fits within the manufacturing model. This is called Design for Manufacturing. There are many areas within the design cycle that can be standardized, such as the items I had discussed in the Process blog post. The design topic that I have skirted around is the creative process itself while developing product. This is also the topic that most engineers throw out like a red herring every time the word ‘process’ comes up in conversation. In reality, I tend to agree to a certain extent, but life is all about grey area.
Plain and simple, you can’t schedule creativity.
As a lead of a design team, I can not impose a schedule on the team that says ‘You must be creative on Tuesdays and Thursdays between 10-2’. I also can’t put benchmarks on concepts and ideas, such as to say that 4 new ideas must be presented by Friday at 4. It simply does not work that way. Being an engineer by nature, I fully understand that ideas come at strange times, 24 hours a day 7 days a week during the oddest of times. A fair amount of my better ideas have come in the shower, some late at night when I awake from a dream. Some come from things I see out in the world that tie back to a particular problem, or sometimes they come from something cool I see but don’t have an application for… yet. I recall seeing a handrail on a subway car in Taiwan that split from one rail into 3, it was so elegant and simple that I have it locked away for that special application. The point is, it happens, and not to a tempo.
Why does this matter? Well it matters because engineers (me included) tend to use this argument when tasked with a deadline or schedule. I have been on both sides of the fence so I understand that schedules and processes are not intended to schedule the creative side of the equation, they are intended to estimate the admin and documentation side of the cycle. I can certainly attest that product design is all about ‘not knowing what we don’t know yet’, but that is not an excuse for rejecting processes or project estimates. Estimate what you know, estimate what you don’t know, add it all up for a stab in the dark.
I recently encountered an engineering team that was very steadfast in their resistance to estimate a project schedule. The arguments kept coming back to the creative cycle and being unable to estimate how long it would take to complete a task without knowing how to solve it first. The juxtaposition from a management perspective is that a commitment of resources can’t be made without knowing the magnitude of the commitment, and the engineering team did not want to throw out an estimate because of fear of making a commitment. In the end I believe this was a trust issue between the engineers and management.
So how do we get around this? From a management perspective, I try to communicate early on that schedules and estimates are just that. Estimates. It is also important to communicate the difference between routine tasks that are easily estimated and uncertainly areas so that a good picture can be developed of the overall timeline. Is there a lot of uncertainty, or just a little? The part of the task that is ‘just work’ can be quantified. Lastly, it is important to reiterate that no one will be burned at the stake if dates slip for legitimate reasons. Budgetary estimates are needed to gauge the feasibility of projects up front, a 100% accurate estimate given after the task is completed does not add value.
Do you have a strong feeling one way or another? Let me know and leave a comment.
This is a little off my beaten path, but I believe a little insight might be helpful to those out there that may be traveling to Australia for business or pleasure. I have been in the Sydney area of Australia for 2 weeks now on business. Sydney is very western in its business practices and everyday life, which makes navigation easy and exploration comfortable. Other than driving on the opposite side of the road, the biggest difference, which has turned into the largest challenge is online connectivity through data and WiFi networks.
In the US, or at least on the west coast, free WiFi is commonplace, to the point that it is expected from coffee shops and restaurants. Hotels follow suit, as do businesses, and data plans on handheld devices are inexpensive though that almost everyone has it. I have also been to a number of other countries, including China, Taiwan, India and Europe, all offer slightly less connectivity than the US, however it is still commonplace and somewhat expected form the public.
Australia, in my experience is very different. Free Wifi is very hard to come by, if Wifi is available at all. Coffee shops have no connections, and restaurants have Wifi but it is only for internal use. Hotels offer internet connection for a fee of $25-$30 for 150Megs of data, and businesses such as mine lock down their Wifi connections with strict passwords and policies. When I was renting a car from Hertz, they offered a mobile Wifi hotspot which was bundled with the car GPS for $6 a day, I opted to take the service by pure luck, as I had never seen this service offered. The mobile hotspot was good for 150Meg of data a day, after that it was billed out at $10 for every additional 100Meg. In the US I never monitored data usage, so I was surprised how little time it takes to burn 100Meg of data while surfing.
On the data side of things, about 1 hour after I arrived in Sydney I received an automated text from my cell provider (with international plan) that I had exceeded $50 in data already, and I was not even using my phone. Turns out my inbox was synching after a 15 hour flight, hardly $50 worth on information, I promptly turned data off on my phone.
I spoke with the IT Director of our branch in Sydney about the lack of connectivity, and he seemed a bit surprised that it was an issue. He continued to explain that worldwide fiber optic line installations during the dot-com era extended between the US and EU, and the US to India, however Australia was not highly invested in during this ‘global connection’. He had indicated that connectivity between Australia and the US was ok, but connections to the EU were bad from Sydney. In fact, it is faster to route internet traffic from Australia to the US then to the EU than it is to set up a direct line between Australia and the EU. The director also indicated that commercial data service was very expensive to businesses in Australia, which I assume is the reason that public-facing operations do not offer free service to customers.
After getting strange looks from every restaurant I went to and asked for the Wifi password, I started noticing that the locals here are not on their mobile devices quite as much as we see in the US. No-one was on Facebook, no one was on email, it just does not happen. I even pulled out my Yelp app to look for good pizza places in Sydney only to find that 80% or more of the restaurants were listed on Yelp but not claimed and had no reviews. The total population here is about 25 million, mostly located along the coastlines, I would think that customer base would drive an influx of data into the country. For now though, connectivity is reminiscent of the states in 2005.
Anyone out there have a similar experience? Leave a comment.