How lean can help shaping the future ? Lean engineering

Before searching about new high-tech disruptive innovation* let us reflect how lean thinking and lean tools were used so far.

*read my ‘Technologies alone will not regain competitive advantage‘ post

Every time an organization was exposed to lean concepts, those were used to improve the actual situation, resulting from decisions, practices and behaviors prior to lean introduction. Improvements were numerous and impressive enough to accumulate success stories and prove the power of lean.

Yet many improvements were limited and many impossible to Cary out, letting improvement efforts lingering in the low hanging fruits zone.

The reasons are decisions and options taken in early design phases, which engaged the organization for longer periods. Many conversion costs from actual situation to improved one would be too high and won’t pay off.

Many factories in Europe are located in centennial buildings with layouts having to cope with architectural constraints. Machines and equipment were packed in the available space, sometimes spread over several floors and over different buildings.

  • Even more recent factories I’ve helped to improve we’re located in remote places, in former backyard of founder’s home, in mountain village, in the midst of the Black Forest…
  • One of the biggest French company’s headquarter is located in a very old former convent.
  • Hospitals have similar backgrounds, layouts too often are nightmare to everyone, from visitors, patients, to staff and logistics.

All those locations may be lovely places but most of them are unfit for seamless flows and efficient work. Despite this, many of those locations will be kept for number of reasons good or bad, and will continue to hinder significant improvements.

Greenfield recent factories are generally build with lean concepts and future efficiency in mind, giving them a tremendous competitive advantage over the elder non-lean designed facilities.

Brownfield companies may pay great efforts improving their operations, it will usually not suffice to catch-up with the greenfield competitor.

Henceforth, greenfields are usually smartly located in the heart of the market they serve and hired lean aware workforce and/or trained it intensively, without facing the resistance to change nor lean learning curve.

Process and product improvement face similar problems: many decisions and options taken in early design phases constrain their design and evolution for long periods, sometimes during their entire lifetime.

Problems that drive workers crazy or require extra work, poor ergonomics and quality issues just remain because conversion costs would not pay off. Think about a mold or die modification, shape redesign, material change with all qualification process to go through again, etc.

What is left to improve is fetching the tool to correct a defect faster instead of preventing the defect.

So how can Lean help shaping the future?

Lean engineering in one way. My understanding of Lean engineering is using lean concepts, methods and tools to both improve engineering performance AND embed lean into designed products and processes to ensure future efficiency in manufacturing, delivery, servicing, etc.

While the first part – improving engineering performance – strives to reduce the time-to-market and design and engineering costs, the second part strives to put latter phases like manufacturing in best possible conditions to be efficient.

Therefore, all painfully lessons learned in manufacturing should be taken into account for the next design, frontloading issues to be solved and problems to be prevented. In the early design phases, lean thinking should help to design and build-in future sustainable performance. Design for Manufacturing and Assembly (DFMA) is one way.

While many designers may claim doing it, in reality they face great pressure to design-to-cost and speed-up to deliver products fast. Design-to-cost is usually flawed because it ignores the cost of later problem solving, error correction, scrap, rework, inefficiency and so on.

Problem solving and preventing is often ignored for the sake of design and engineering local objectives. But remember, those without memory are committed to repeat the same mistakes.

> More about How Lean can help shaping the future

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Technologies alone will not regain competitive advantage

Smart factories, high level of automation, robots, cobots and industry 4.0 concepts will not be enough to regain competitive advantage for Western European* companies. The reason is very simple, these technologies will be available to everyone and there is no real barrier to entry. These technologies won’t be very expensive and the ease of mastering them is their core claim.

Christian HOHMANNThus, everything else being equal, technologies alone won’t change contestants’ actual competitive advantages once they all acquired and mastered them.

Will the innovations therefore be useless? Surely not, they’ll enhance tools and processes and open new perspectives, but technologies alone won’t regain competitive advantage.

* This post is written from a French perspective which may be valid for Western Europe and United States as well

What can differentiate a competitor from his peers is the attractiveness of its offers, as it already did and still does before the next techno revolution. Attractive offers are based on:

  • Innovative products and services
  • High level of customization
  • High perceived value
  • Fast deliveries

These features are responses to common customers’ expectations like:

  • the fascination for novelty, originality
  • the desire to distinguish from the mass with something custom made
  • the ratio from perceived quality and value to its cost
  • the instant satisfaction of desires

In other words, it is not the means – read technologies – used to please customers that determine performance but the way of using them. The keys to competitive edge do not relate to machinery, automation nor sophisticated IT alone but to smarter use of them.

Hints for future successes, with a bit of high-tech

Analyzing voice of customers, soon greatly improved with big data.

Big data brings all kind of heterogeneous information together, analyze them and refine customers’ preferences better than traditional inquiries could achieve. For a simple reason: inquiries are based on limited questions with limited answer options and too often biased. Respondent keep much of their expectations and desires unspoken, implicit and thus hidden. Big data allows gathering small pieces of information in tweets, facebook posts, online orders, blog comments, etc. and finding correlations that allow to refine the offering to customers’ unspoken and maybe unconscious longings.

Innovation

Innovation is not only responding to customers’ whishes but surprise them with something new, different. Here TRIZ may help. TRIZ is one of these powerful methods and tools that didn’t really make it into the light so far.

TRIZ is a problem solving method based on logic and data, not intuition, which accelerates the project team’s ability to solve these problems creatively. TRIZ also provides repeatability, predictability, and reliability due to its structure and algorithmic approach. “TRIZ” is the (Russian) acronym for the “Theory of Inventive Problem Solving.” G.S. Altshuller and his colleagues in the former U.S.S.R. developed the method between 1946 and 1985. TRIZ is an international science of creativity that relies on the study of the patterns of problems and solutions, not on the spontaneous and intuitive creativity of individuals or groups. More than three million patents have been analyzed to discover the patterns that predict breakthrough solutions to problems.

source: http://www.triz-journal.com/archives/what_is_triz/

The TRIZ pioneers used a big data approach in time big data as technology and tool did not exist. Now that big data is growing mature, methods like TRIZ and QFD (Quality Function Deployment) could be boosted and jointly used for invention.

Speed

Speed, both for launching often new products/services and deliver them fast to market, is a key success factor. Additive manufacturing (3D printing) may be a technical response, but when it comes to speed Lean can help a lot.

Lean is not only about reducing lead time, but also avoiding loops (e.g. rework), unnecessary dwelling (e.g. waiting for next process step or waiting for inventory queue to flush). Lean also cares about doing things right first time, improving in-process quality and doing what is really necessary to deliver value and thus stop over processing and needless tasks. While all this reduces lead time, it reduces also costs and improves quality.

Profitability

Profitability means that all the previous should not be done at the expense of company’s profit. Profit making is essential for company’s sustainability. What’s the use of a one-shot success?

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How disruptive 3D printing can be

In the early days of 2014 there is none without announcement of new amazing possibilities offered by 3D printing. The new additive manufacturing techniques – adding material layer by layer – are accessible to a growing number of players to ever lower costs and with increasingly diverse materials.

The new possibilities are both exciting and disturbing because they will lead to changes that we should anticipate.

> Lisez-moi en français

For the best and the worst

Among the possible applications of 3D printing we find ingenious prosthetics whose cost are ridiculously low, allowing more disabled people to improve their lives, especially those who could not afford or had no access to prosthetics.

>Read more about this

3D printing will not be limited to produce cheaper affordable (expendable?) prosthetics, but will certainly boost how to design prosthetics in general, integrating the new possibilities offered by these additive manufacturing techniques, new materials and unleash creativity of clever amateur designers and other generous or disinterested persons (crowdsourcing).

Unfortunately, there are also more dubious applications such as printing perfectly functional and potentially undetectable firearms.

If the development of affordable prosthetics is part of the generous idea to offer a significant improvement of living comfort to people, making uncontrollable firearms obeys motivations of an entirely different nature. While few people will complain about the proliferation of prostheses, we can bet that the proliferation of firearms suddenly made accessible to virtually anyone will cause legitimate fears and other reactions.

The latter should concern the authorities, both to prevent explosion of gun crimes as well as accidents that gunsmiths’ apprentices may suffer or cause.

Transformation and disappearance of trades

Let’s stay positive and consider the peaceful applications of 3D printing and take the example of figurines collections.

So far the business of collectible figurine such as comic book or movie heroes was based on the ability to create the original model, than a mold to produce copies and distribute the figurines. With 3D printing the mold becomes superfluous, just as manufacturing and distribution since the collector equipped with suitable 3D printer can print it himself in a specialized store or even at home. One can theoretically print infinite number of figurines once he got the model’s digital file.

This business is likely to evolve in creating the digital files for 3D printed figurines, offer application downloading and the ability to edit the original file with dedicated tools (apps) .

Thus, just as the music consumption is largely freed from physical media and thereby has completely undermined the business model of the sector, a number of sectors should know a similar revolution.

For some of them IMHO, too little attention is paid to technological developments that still seem far from their trades or years away.

Take the case of orthopedic insoles. So far it is the responsibility of a podiatrist (3 years minimum of specialized studies in France) that manufactures insoles by cutting, forming and pasting various materials such as leather, cork, etc. Consequently, these insoles are expensive, often unique and moderately durable.

Here 3D printing allows customization of insoles not only from the perspective of correction but also from the point of view of the look like color choices and possible multiple copies for matching various shoes. A feature the ladies in particular will appreciate.

Allegedly the benefits of these new printed soles are multiple: cheaper, washable, anti -microbial, colors and shapes to choose and more.

If this trend continues, what will happen to podiatrists? Will they convert themselves as creators of digital models for insoles that patients will print themselves? Do they / will they have the skills? Will a podiatrist still be necessary or is it a 3D scanner (already existing) coupled to smart software that may determine the forms to print for adequate correction?

These questions show how a specialized profession may be affected by technological innovation.

After soles, think of dentures and braces  – already 3D printable – and all the other examples of products, which certainly become cheaper for their users but will also come at some social cost.

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Zero-based budgeting (ZBB) and lean thinking

Zero-based budgeting is a (old) budgeting method in which the building of the budget starts from a blank page or “zero base”. ZBB is not the usual variant of previous period budget with corrections but a totally new one starting from scratch.

The idea behind ZBB is to build a budget that fits the purpose or strategy of the organization, regardless of what have been in the past. Therefore, each function and related expenses must be weighted in terms of utility and contribution to the goal before making its way on the sheet.

And this is precisely where the link with lean thinking lies. ZBB was popular in the 1970’s, when “lean manufacturing” wasn’t even invented. It is only remembered by few persons exposed to it in their younger years or those who came across in literature.

In my case, I was initiated by my senior colleagues when I started consulting. We had only one assignment purely based on ZBB, but I found good use of the principles on numerous occasions since.

When building a Zero-based budget, each line has to pass the value-adding test and subsequent questions, as it is done in lean assessments:

  • Does this add value?
  • If not, can it be suppressed?
  • If not, can it be minimized?

ZBB is easy to imagine when starting a new business with limited capital. Each expense has to be carefully challenged in order to keep the whole endeavor in safe zone.

It is relatively easy when starting in greenfield, no legacy carries over its costs to the budget.

This logic is also familiar to those designing to cost. The total cost of a product or the whole project is a given limit and the design has to meet all requirements within this limit. Thus, every function, component and expenses has to undergo the necessity-to-purpose test.

ZBB is no exactly piece of cake when an organization already exists as ZBB is facing expenses that are not so easy to cancel. Some are related to regulation, others to social package, etc. Every stakeholder will have good reasons to keep a specific budget line.

ZBB was therefore often considered as a cost cutting method rather as a critical introspection and creative way to reinvent the way business is done. Put positively, ZBB could be a way to demonstrate how Lean can impact bottom line.

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Three major challenges in early design and engineering stages

Chris HOHMANN

Chris HOHMANN

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

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.

>Lisez-moi en français

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.


Win the race to market

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


Build efficient design & engineering processes

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.


Conclusion

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.


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