Automotive Sector: Elimination of Waste in Product Development

Best practice companies in the automotive sector simultaneously manage quality, cost, and time (QCT) during product development (PD) to achieve customer satisfaction and profitability goals; however, time is the driver of the overall process.  Adherence to timing requirements creates the discipline within the system that is required to make improvements in quality and cost.  Timing discipline drives the elimination of waste in the development process and improves productivity.  Timing requirements are also important because long development lead-times increase the risk that competitor actions or changes in customer wants will cause a product to be “out-of-date” when it is introduced.

Elimination of waste in the product development system is a high priority for both auto makers and suppliers because of the need to continually develop new products with short lead-times and competitive development costs.  Reducing lead-times is not enough — development costs need to be simultaneously reduced to cope with profit pressures that exist in the industry.

So what is waste in the Product development process really imply from an automotive perspective?  The table below identifies the kinds of waste that exist in product development.  Eliminating these kinds of waste is the best way to simultaneously reduce product development lead-times and cost.

 

Types of Waste in the PD Process

 

How can automotive companies improve the PD Process?

 A common process that is understood and used by all participants is a prerequisite to reducing lead-times and eliminating waste in product development. Each best practice company typically uses a single schematic diagram to communicate its common product development process throughout the company. In most cases, the schematic identifies major process steps, defines roles and responsibilities and highlights key standards or information used at various points in the process. The common process, however, is not rigidly applied in the same manner to all product development projects — it is adjusted to meet the unique needs of each project and takes into account the degree of product change. Further, common product development processes are usually not described in massive procedure manuals that attempt to define every detail. Instead, sub-process descriptions and procedures are maintained on a decentralized basis by the organizations that are responsible for the various parts of the process. Decentralized process ownership allows the common product development system to be continuously improved by making incremental changes in the various sub-processes.

 Management personnel in best practice companies use “go and see” approaches to assess how effectively the overall product development process and its sub-processes are operating and to identify problems. Based on the management reviews, improvements are planned and implemented by the responsible organizations to eliminate waste in various sub-processes, thereby improving the productivity of the overall process and reducing lead-time.

In best practice companies, the product introduction date rarely changes. If timing targets are allowed to slip, discipline in the system is lost, increasing the likelihood that quality and cost targets will be missed. When timing targets are missed, product development resource utilization decreases resulting in increased product development cost.

  • Best practice companies do not allow engineers to determine their own target completion dates for key deliverables because of the large number of cross-functional interdependencies that exist in the development process. They apply just-in-time production system concepts to product development resource planning and scheduling, shown opposite. The motivation system for meeting timing targets is simple — missing timing targets can be detrimental to careers or future supplier business.

 

  • Management in best practice companies understands the need to establish a stable and predictable product development system in order to achieve timing targets and continuously improve development productivity. Accordingly, they do not often take action that abruptly changes the direction of a product development project. Instead, top level cross-functional management meetings are conducted at key points to approve product plans, review prototypes, etc.  Stated another way, management involvement in product development at best practice companies is structured in a way that adds value to the process and contributes to creating a stable and highly productive environment.

 

Conclusion

Establishing a common development process that is understood by all cross-functional organizations is a prerequisite for maximum elimination of waste.  However, that is not enough.  Management must also establish schedule stability and timing discipline in order for the productivity of the entire system to be optimized.  Timing discipline is required in order to make waste problems visible and create organizational pressure for eliminating the waste.  The objective for management is to create and continually improve a system that eliminates waste — not to manage the details of product development.

 

 

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