While manufacturing and operations have long been under close watch of improvement champions and beneficiary of transformation programs, design and engineering are relatively new to this kind of introspection.
Lean in Design and Engineering can improve a lot and support the three major challenges every company is facing:
- design and embed future performance
- win the time-to-market race
- build efficient design & engineering processes
Designing future performance means taking into account all aspect of future operations like manufacturing and assembly, installation, exploitation, maintenance and recycling from the very early stages of design, in order to make them as efficient as possible, later when products are launched and sold.
Too often, when trying to improve ops once they started, Lean practitioners notice the same phenomenon: improvements are limited by some options chosen long before that cannot be challenged anymore.
Things like machining methods, manufacturing equipment, tooling, production line layout, material or parts sourcing or even plant locations may be too expensive and/or too risky to change afterwards, even so big savings and improvements could be made, simply because everything is already decided and in place.
In such situations, conversion costs (costs are to be understood in the broadest way of expenses, efforts, risks, consequences, etc.) are so high that no reasonable return on investment can be expected.
Improvements are therefore limited by the initial choices made in early design stage, leaving most of operations sub-optimized. Even so, given the constraints, Lean initiatives usually yield nice savings and improvements, but fail to pick the most juicy fruits, hanging much higher in the tree, but out of reach.
As an example of decisions with long term consequences: most Automotive plants in France are relatively old, designed and built-in the 1970’s at a time when smooth flow, small batches and growing customisation were no topic and ops still labor intensive. To convert these plants to nowadays needed lean compact ones is not reasonable, start a greenfield is cheaper. Alas, those plants are no more needed here but in the new growing markets. So what’s left are limited improvements to keep those plant operating with limited productivity and relatively higher costs.
As products families and series are built on common bases and share common components or facilities, this sub-optimization will last long. Inefficiency will be passed over to the next generation. Taking into account the accumulated experience in ops may have to wait several product generations and new launches. A waiting time even longer if frontloading improvements and optimization are delayed.
I faced such problems in my younger years while in charge of manufacturing in a Yamaha Hi-fi plant. The final assembly of CD players, tuners or home cinema amplifiers required the ladies on the final assembly line to turn the sets several time upside-down in order to screw parts under the chassis or inside. These wasteful motions could not be suppressed because of the chassis design. Redesigning the chassis meant changing the very expensive tools to stamp the chassis. The relatively small motion time savings could not match the tool conversion costs, so the ladies kept turning and handling heavy products up to 500+ times a day over years.
Wasting all these savings and improvement potential is not only a conceptual sin, it’s a free gift to competition. Instead of giving away all this potential performance, it is wise to design for manufacture and assembly (DFMA). This means to foresee and mitigate potential difficulties, ease future operations and allow workers to be efficient thanks to a careful design.
As smart design engineers are, those who know the shopfloor reality best are workers themselves and their supervisors, who should be involved in early design stages. They bring valuable return on experience, tips and tricks, suggestions and critical assessments capabilities. Disregarding it means wasting the experience, knowledge and human abilities. This is the eighth disrespectful muda.
Being first on the market with a new offer is an opportunity to yield earnings and make profit without competition. This the Blue Ocean*, limitless, open. Soon enough it will turn red with the blood of competitors biting chunks away from each other. Red Ocean* is dangerous, crowded, limited and closed.
*”Blue Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant”, Kim W. Chan & Renee Mauborgne Harvard Business School Press
Challengers have to be fast too, they must keep pace with the leaders in order to share the market while the shares are still big and limit the Leader’s advantage.
That’s why time-to-market has become a critical factor to competitiveness and why Lean principles find their way into design and engineering. Robust and obstacle free, streamlined processes ensure efficient and fast flows of material, information, data, etc.
Being fast on market shortens time-to-cash, which is the delay between first expenses (related to studies, project, prototypes, material, manufacturing…) and first incomes from sales.
Often the company carries all costs until sales. All money spent in between must be borrowed or is taken from reserves. In the first case, the longer the time-to-cash, the higher the cost of credit. In the second case, the longer the time to cash, the longer to wait until money is freed for new investments or projects. That is, if costs are covered by incomes, a fact I believe is most likely to happen if Lean principles were part of the process.
Related: Accelerated Innovation: The New Challenge From China MITSloan Management Review April 23, 2014
Yet meeting the first two challenges (embed future performance and time-to-market) with a drastic increase of resources would be no challenge and is not trendy. As other divisions did, design and engineering are asked to slim down and adjust their resources to just needed level.
Design and engineering processes were rarely assessed on their leanness, leaving them with (lots of) all types of wastes (Muda, Muri and Mura) and improvement potentials.
Therefore the third challenge is about design and engineering processes themselves, about their efficiency and their costs.
Lean principles and tools work great in these areas too and improvements are as impressive as they are in ops or in lean office.
But long coined “manufacturing”, Lean is not always welcome in more “prestigious” labs and project offices.
“Design engineers are sacred cows, a senior executive told me. It takes long to build a good designer team and it can be destroyed very quickly. Design engineers are divas, so we avoid bothering them.” (This may be specific to French elitist culture)
Welcome or not, when competitiveness and company’s future are at stake, all means and measures must be envisioned and Lean is surely not the worst one. Lean is not, as sometimes feared, a limitation of creativity. It’s all the contrary; revisiting products and processes to improve them opens new perspectives and intellectual challenges.
As an outcome, Lean Design and Engineering, sometimes called Lean R&D, is an efficient organization using just needed resources, designing high value products which can be manufactured and assembled fast, easily, error free with a minimum of resources and costs.
Not to be forgotten, services around the tangible products often make the difference; financing, home delivery, installation, training, servicing, helpdesk, technical support, and many more opportunities to design a global offer that brings great value to customers. The profit will be even greater if these services are designed and delivered in a Lean way.
Design and Engineering hold some hidden improvement potentials rarely challenged. These potentials are twofold in application areas:
- in Design and Engineering themselves
- in future product and service (let’s say offer) performance
and in essence:
- saving costs
- improving competitiveness, hence improving incomes
These potentials savings and gains can be turned into real figures on the P&L sheet with Lean principles and tools.