Lean's Next Step
By Beth Stackpole
More than a decade ago, Honeywell International Inc.'s aerospace division was on top of its game. Considered to be an industry leader, the division was riding high on its successes, leveraging lean principles to drive efficiencies throughout its manufacturing operations.
What a difference a few years can make. By the mid-90s, that same Honeywell division found itself desperately searching for a rebound. Competition was up, market share was down, and customers were complaining that, while product quality was good, Honeywell's pricing was at a premium and it took far too long for the company's new designs to make their way to market.
"That was when the light bulb went on and we realized we had to do something to change our development paradigm," explains Cliff Fiore, a certified black belt Six Sigma and lean expert in Honeywell's Aerospace division (Phoenix). "The question was, could we apply the benefits and gains we had enjoyed from our Six Sigma-based manufacturing world to how we produce products? That set the stage for us to go down the path."
The path that Honeywell traveled is one a handful of manufacturers are only now ready to explore: Applying lean principles to the practice of product development. Lean, popularized over 20 years ago as a series of techniques aimed at wringing waste out of manufacturing processes and operations, is now gaining a toehold among experts and early adopters like Honeywell, who view the methodology as a way to develop better products faster, with less waste, and at a reduced cost. Well-documented successes of lean concepts such as value-stream mapping, flow, kaizen, poka yoke, and reuse at manufacturing leaders such as Toyota Motor Co. have prompted many to consider spreading the gospel of lean to product development functions as the next logical step.
Product lifecycle management (PLM) software vendors, perhaps with an acute sense of timing and a nose for opportunity, have recently stepped up their message around the role PLM can play in lean product development. While their pitches vary, most play up how PLM's core data management, workflow, collaboration, business process, and project management capabilities can serve as conduits for an injection of waste-saving lean principles. They also say the tool sets are critical to delivering the visibility required to promote reuse in both product design and sourcing strategies while discouraging waste -- administrative or otherwise.
"The movement now to include product development is really a function of the fact that companies have been successful in implementing lean initiatives in production and the supply chain," notes Marc Lind, vice president of marketing at Aras Corp. (Lawrence, MA), one of the PLM vendors actively talking up lean product development as part of its PLM pitch. "But you need to have lean thinking applied throughout the company in order to maximize the impact of lean initiatives. It started by getting your own production house in order [and] was extended to suppliers who fed the production area; now the next logical step is product development, which feeds production with new products."
New product development may be the next logical step for lean, but it's not necessarily a straight shot. In the tangible world of manufacturing, it's easy to see and measure scrap and rework and identify areas of waste that can be eliminated by applying lean practices such as kaizen. Not so in the case of product development. Here, the flow is about information, not physical materials, and waste in the process is much more difficult to pin down.
For example, many experts contend that the iterative process so closely associated with design is essential to creativity and, if identified as waste and stripped away, could ignite problems within product development. There are also huge cultural barriers to getting engineers to embrace many of the repetitive and standardized development models associated with lean because they believe these undermine innovation and creativity.
Nevertheless, making the connection between lean practices and product development, with PLM as the enabling technology, is important, analysts contend, and not just some vendor sales blather. Lean puts product lifecycle management in the context of process improvement, thus providing a great starting point for manufacturers to consider PLM as part of any continuous program for improving how they build and design new products. Along with PLM, technologies such as portals, workflow, and ERP -- which didn't exist on any grand scale 10 years ago -- can also make the difference between succeeding or failing with a lean initiative, experts say.
The Two Sides of Lean
There are varying interpretations of what constitutes lean product development. At one end of the spectrum is the idea that Web-based collaboration tools and enterprise PLM platforms can facilitate information sharing and promote reuse within the design process, reducing wasted steps and giving manufacturers a start on the road toward lean. Taking that a step further is the notion of designing products that are conducive to lean manufacturing -- leveraging sourcing and program-management components within PLM, for example, to promote common parts and reuse of designs in other platforms.
On the other end of the scale is lean design, a methodology exemplified by Toyota, which espouses a radically different approach to product development. Leveraging mentoring, knowledge management, and concurrent engineering, this approach is centered on learning what works and what doesn't and creating a culture that doesn't just seek out the best solution, but rather applies knowledge where it makes sense to spark future product designs. (For more on the Toyota approach, see the sidebar on the facing page.)
Michael Kennedy, CEO of Targeted Convergence (Coppell, TX), a teaching company built on the premise of lean design, is the author of the book, Product Development for the Lean Enterprise, which chronicles the Toyota experience with this nascent methodology. Kennedy is a firm believer in the need for American manufacturers to fully embrace the radically different new-product development paradigm, which he says is delivering new-product development productivity surges in the area of 400% for Toyota through techniques like knowledge sharing across projects, concurrent engineering, re-use, and keeping projects on schedule.
"It's a whole different paradigm and it really isn't lean," Kennedy says. "It's a learning-focused product development process, not a waste removal process."
Even so, Kennedy admits, there are merits to applying traditional lean practices to product development. "There's a lot of waste in the product development process -- things like waiting for a drawing to flow from a designer to a production planner -- and those can certainly be removed," Kennedy explains. "From that perception of lean, all the basics of lean production will flow... and companies can achieve 30% to 40% improvements in productivity."
Aras' Lind contends that the kinds of productivity boosts associated with lean product development -- not the wholesale paradigm shift typified by Toyota -- are substantial, and what most manufacturers are equipped to swallow. The alternative -- getting engineers to unlearn classical methodologies and embrace something totally foreign -- is an uphill battle most companies aren't willing or able to fight. "It's very hard to get engineers who've been working for 10 or 15-plus years and are schooled in a certain way of operating to change their behavior, especially when all the rules of nature as they know it are turned upside down," Lind says.
Therefore, the path of least resistance is what Aras refers to as lean product development or designing for lean manufacturing. "You're taking into account core considerations for lean manufacturing during product development, upstream," he explains, "as opposed to waiting for the product to be released to manufacturing to let them figure it out."
According to Lind, under this premise, dashboard functions and program management functions, all part of the PLM platform, help the design team address early on in the process such questions as: Does the new product fit into an existing lean family? Are there existing preferred suppliers that are qualified for lean? Are there ways to poka yoke (mistake-proof) this product as part of the design?
Promoting such lean approaches is essential to improving design processes, but manufacturers need to be careful not to go too far in applying lean concepts to the overall development process, according to Marc Halpern, research director at Gartner Group (Stamford, CT). Not all iterations and errors in the design process are waste, Halpern says. Errors that can increase the knowledge pool around the design and promote better innovation and reuse are an important and healthy part of the creative process, he explains. Thus, manufacturers need to apply lean concepts in consideration of the unique aspects of product development.
"You want to apply the philosophy of lean, but you don't necessarily want to copy actual lean approaches from manufacturing to design," Halpern says. "Manufacturing processes are very serial, whereas design processes are highly iterative -- but iterations often add value to the design. It's almost like good and bad cholesterol: by simply focusing on cutting out the fat, you could prolong problems for the company."
PLM's data management and collaboration capabilities can help add structure to the creative chaos that is design, according to Todd Black, marketing communications manager at CoCreate Software Inc. (Fort Collins, CO). For example, CoCreate's OneSpace.net offering is positioned around a team design principle, pushing the idea of concurrent engineering to the next level to encourage a free exchange of ideas and less reinvention of the wheel, Black says. OneSpace.net's dynamic modeling capabilities let anyone change designs at a much later date in the process than more traditional history-based design tools, he says.
"Concurrent engineering helps with trying to make sure the entire team is working on a design, but we're taking it one step further to make sure it's not a serial process where one person has ownership," Black says.
Calling All Poka Yokes
At Freudenberg-NOK (Plymouth, MI), it was PLM's program management functions that sparked a lean product development push. The company, a $1 billion producer of elastomeric seals and custom molded products, was using Aras PLM to manage its advanced product quality planning (APQP) processes. As an extension of that effort, the company began leveraging lean concepts as part of its development processes, according to Thomas Gill, director of CAE technology and support. For instance, the group created a checklist of 80 standard tasks related to product development as part of its mission to reuse components and to make design practices more defined and repeatable, Gill says. They also began designing with poka yoke in mind -- for instance, putting a notch in a particular area of a component to ensure no mistakes were made on the shop floor, he explains.
"We've been doing lean [in manufacturing] for so long, it's just ingrained in everyone," Gill says. "When we looked at what we were actually doing with PLM and product development, there was lean all over the place."
At Honeywell, the decision to experiment with lean within product development was a deliberate move to orchestrate a comeback. The first step, according to Fiore, was to do a baseline assessment to fully understand the degree of design inefficiencies. The assessment showed that the Honeywell group was great at winning new business, but that its development ranks were drowning in requests for new designs and projects and didn't have any guidance around prioritization. Also, the workforce was changing at the time, Fiore says. Many of Honeywell's long-standing engineers were moving on, leaving a gap in product knowledge and preventing teams from leveraging existing product portfolios in new designs, he explains.
By applying lean principles around process and workflow, Honeywell was able to achieve a 15% productivity improvement just by fostering communication between management and engineers about resource constraints and what projects to prioritize, Fiore says. Through knowledge management and reuse strategies, the firm has been able to reduce cycle times by 40%, Fiore says, using a homegrown product repository and PDM applications as the enabling technologies.
Getting its engineers to buy into these new practices was not nearly as difficult as Fiore had initially expected. "Things were so fundamentally bad, they'd have to look at parts on carts to try to find a product match," Fiore says. "Once they saw how these tools and practices made their jobs easier, they started to embrace them."
Fiore's division at Honeywell has been working on lean product development for a couple of years, and Fiore has been called in to help more than a dozen Honeywell sites follow suit. While word is getting out, he says it's still early in the process. "Six Sigma and lean [have] been around in the manufacturing world for over 20 years," Fiore says. "We're now only two or three years into trying to break through the walls in non-manufacturing applications. The jury is still out."
