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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.
I have experience in a multi-national organization that manages a supply chain that sources goods from all over the globe. The majority of our material supply filters to a main assembly location in the US where the components are configured into finished goods, then shipped out to customers worldwide. Our product line is highly configurable, which means we have a vast array of possible saleable configurations, which may include options such as functionality, colors, textures, etc. Over the past 10 years we have transformed from a batch manufacture-on-site operation to a lean model of assemble to order. We employ JIT strategies for major and minor components, and have been crafting our product designs and BOM’s to match this strategy.
While our organization is not huge in comparison to the ‘big guys’, we are a solid mid-cap operation. Quite a bit of effort is put into the coordination of the supply chain to keep the production line flowing, keeping in mind we are mainly using a single manufacturing location.
As our international product sales increase, it makes obvious sense expand final assembly locations to sites closer to our end customers. This will allow faster placement of product in international locations, as well as potentially decreased shipping costs, import fees and tax advantages. This provides a number of challenges to the operation when it has been developed around a single main warehouse and assembly location. In the past year our organization has taken steps through acquisition to open manufacturing locations on different continents to service local markets, which has presented challenges in a number of areas.
From a manufacturing philosophy, these satellite assembly locations do not, and will not maintain the same level of component stock needed to service all the potential product options. The satellite locations also do not maintain a local supply base to pull Kanban product from, which is causing batch shipments of goods to these locations. In the short term, these satellite locations are receiving goods shipments by shipping container, which means high quantities of components delivered in irregular and slow-to-react shipments. This is effectively driving batch assembly, where goods are received from shipping containers, built to semi-finished goods then stocked until being pulled for a customer order. I expect this operation to evolve over time into a more ‘lean’ model for these international facilities, but in the meantime the design cycle and release process is being asked to accommodate 2 different models.
What does this mean? Currently the company products and BOMs are designed for a lean manufacturing model. Finished goods are constructed from a large number of building blocks, each of these building blocks in managed through the procurement group based on a customer order. When a customer places an order for product XYZ, and it needs to be in colors ABC with a certain list of functionality and options, the procurement group orders or pulls those building blocks from the supply base and they arrive on site on a scheduled day. The product is assembled and tested, then shipped the same day. Lead time can be 2-6 weeks with minimal internal stock. I call this the Lego approach where engineering develops BOM’s of the building blocks that are easily configured and snap together to form the overall product.
With the addition of satellite assembly locations with limited local supply base and larger shipments by overseas container, this Lego approach falls apart. In order to be effective in these satellite locations to service customer demands, the incoming product shipments need to be pre-configured to minimize the number of components that need to ‘appear’ on the production line at the right time and place. From a design side, this means pre-configuring BOM’s for popular product configurations. This sounds simple, but in reality it means the product developers will be maintaining another level of BOM’s, one for the Lego blocks and another for the configured Lego sets. More redundant BOM’s means more opportunity for mistakes, among other issues.
We are currently looking for BOM design strategies to accommodate both flow and batch models in the short term, while allowing flexibility as the models converge over time. I know lots of firms out there have worked through these issues, would like to hear some thoughts.
Please leave a comment.
Vertical integration means consolidation of the supply chain under one roof. This would include everything from product design to manufacturing to raw material management. The most famous example of this was the Carnegie Steel Company in the early 1900’s that supplied industrial steel. Carnegie owned the steel manufacturing plant, but also owned the steel mills and the ore mines. On the processing side of the organization, steel manufacturing replied on coal for heat so the Carnegie company owned the coal mines and refiners, plus a shipping company to transport raw material in and finished goods out. Sounds like a great deal, eh?
Managing these types of organizations require a whole lot of diverse skills in different industries, all coordinating for a common goal. While this might sound hard, I’m sure it is harder in practice! Unless each leg of the firm is perfectly sized to manage the flow, bottlenecks are bound to happen. To complicate things further, the material demand must be very flat an steady or the internal supply chain will not be flexible enough to be effective. Payroll and admin on top of all that? No thanks.
The contemporary approach to organizational management employs a strategic outsourcing plan in order to maintain the activities an organization is good at, and hire out the rest. Outsourcing often gets a bad rap in business, particularly from the employee level that are worried about their individual jobs. In practice though, it just makes sense. Why should a design firm staff up and concentrate its efforts on manufacturing? Design staff have a unique skillset and a certain work lifestyle that should be catered too to attract and maintain top staff. Manufacturing teams have a different set of requirements and environment, so it has to be straining on an HR team to build policies, procedures, facilities and other internal programs to accommodate both groups? Wouldn’t it be better for the company to decide who it wants to be, then put all its effort into being the best at it? If design is the goal, it would seem that the organization should be better off teaming up with an organization that specializes in Manufacturing to take on that task is a more effective way than it could do on its own.
Continuing on with the design firm, farming out additional steps in the design process may also be considered, such as prototype development, including fabrication and rapid prototypes. Unless the firm is large enough to keep a machine shop busy or pay the overhead to maintain SLA machines, why not farm that out?
Where outsourcing cam become problematic is when the core business activity gets outsourced, either in whole or in part, or when outsourced activities begins to erode the internal culture fo the organization. From an outsider perspective (I claim ignorance to the whole situation), it seems like Boeing may have gotten itself in trouble when it decided to outsource the engineering work on the Dreamliner project to outside firms. Boeing is a design and engineering firm, so outsourcing that activity to multiple groups seemed like a good way to lose focus and control over the entire design. The end result was recoverable, but painful during the first builds when parts didn’t exactly fit together the way they should.
From the company culture front, outsourcing internal support groups such as IT or HR might sound good on paper since those activities are mainly common across multiple organizations. In practice though, employees may be annoyed when computer problems are not addressed by a local representative who is familiar with the people and systems. Likewise with HR, this is an area that requires a personal touch rather than a computerized voice and touch-tone inputs.
Upsides of outsourcing? Besides allowing an organization to focus its energy on it’s core competency, outsourcing also allows a greater level of flexibility in its capacity. Manufacturing peaks to lulls can be accommodated through a Contract Manufacturing organization because that firm should have staff on standby from other clients. In other words, the CM has a large pool of staff that can be shifted around between the firms it services to account for micro-peaks in demand. Macro-level variation are still an issue, but CM’s are better equipped to manage hiring pools for the level of employees required to do the work. That are good at that, see how it all works?
There are not many Carnegie Steel Companies out there anymore, which should be pretty telling all on it’s own.
Is your firm outsourced? I know it’s a hot button, but what are your thoughts?
So business had brought me to Sydney Australia, this is a corner of the world that I have not been to yet. Before heading out on this trip I did a fair amount of research on the area, the culture and the climate. I picked up some good tips on cultural do’s and don’ts, but for the most part the Australian social climate is pretty close to the US. The language is the same, business practices are the same, personal trade is the same, more or less. We booked 4 hotels over a 12 day stay in order to get a diverse feel for the area. One of the big differences I was expecting was the driving on the left side of the road, but really, that’s no big deal. Hertz allowed me to rent a car with a few button clicks, so how hard would it be?
Picking the car up from the airport was no big deal. The process is a bit different than Hertz in the US, but the gal was friendly and helpful. She set me up with a GPS and a mobile WiFi module, the latter of which has been super-helpful. Hopping in the car took a few minutes to get comfortable with. Everything is on the wrong side, which I expected but it is still unnatural to hop in the car from the right. Leaving the car park and the airport terminal was also no big deal, it was all one-way streets until it dumped you out into the city.
All I can say is that it takes a surprising amount of concentration to drive on the left side of the road. Every driving skill that you take for granted come back to bite you, and in a hurry! Left lane, left lane, that’s what is going through my head but panic ensues when approaching an intersection. Left turn is least worse, right turn is attention getting. Traffic is a blessing and a curse, traffic in lanes are a constant reminder of where I should be, but the drivers around me are surly impatient by this idiot that is driving slow and half out of his lane. Making left-turns onto side streets without traffic, can mean head-on confrontation with a local. Then there is one of those contraptions called a round-about. We can hardly figure out how to use one of these things in the US, try it when everything is backwards, who ever invented these things?
Done with the obvious, now the no-so obvious that I never considered would be an issue. Spatial relations are all out of whack. Sitting on the right means that I have surprisingly little feel for how much car is on the left. I also lost my perception of lane location relative to my steering wheel. I found myself concentrating on keeping the right side of my car close to the painted stripe on the right. Sounds simple until my wife starts nervously reminding me that I’m awfully close to whacking people with my left mirror. I seem to want to drift to the left of the lane, without thinking about it until my left weeks are almost touching the curb. Other things, such as backing up and looking over my left shoulder tends to make be veer to the left while backing. Turn signals are on the right, so every lane change so far has been indicated by flipping on my wipers. Duhh everyone, obviously high speed wipers means right turn, low speed means left.
So what is the relevance of my driving blunders? Well, in between all my near misses my mind turns to the experiences my kids are having learning how to drive. To me it’s so natural to maintain lane position, for them it’s a challenge to keep the right wheels on the road. I get it now! The spatial relationships are not there, or in my case are ingrained from a different perspective. Turning, signaling, stopping, all easy with practice but overwhelming during the learning process.
Now skip forward to my lean experience in business. My first Value Stream Event was exciting going in, terrifying by mid-week and left a feeling on accomplishment at the end. Our lean consultant and moderator had a certain arrogance about him, kind of like the driving instructor teaching the basics and tempering his feeling of frustration with the group that was resisting change. Lean is about eliminating waste in your organization, and it does this through Business Process Re-engineering. What is taken for granted is that this process really means that individuals need to unlearn how they have been doing a portion of their job, then relearn a new set of tactical steps to get to a similar result. Sounds simple, but my driving experience in Australia has been a glaring personal example of how difficult it can be to change process steps that are ingrained into our everyday lives.
I expect to take home a greater level of empathy to members of my business community when they are asked to participate in Lean activities. Change is needed to survive and thrive, but it’s not as easy as it sounds.
For all you ambidextrous drivers out there, what do you remember as your ah-ha moments on the road? Leave me a comment.