Lean Design

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Lean Design How to slash manufacturing costs during the product design cycle

In the 1970’s, we “discovered” the Toyota Production System (TPS). Since then, many companies have adopted TPS or “Lean Manufacturing” methods, realizing enormous cost savings while improving competitive position. Now we are finding that Lean Manufacturing is not enough to stay competitive. We need faster time to market with competitively priced products that delight our customers. To approach Toyota-like levels of performance and survive the current global challenges we must take Lean and other strategic concepts upstream into new product development; effectively developing products for Lean speed and Six Sigma quality at target cost.

The “Cost Lever”

Product Design100 : 1

Process Design10 : 1

Manufacturing1 : 1

High-ValueProduct

Benefit of cost reduction efforts at each stage of product development...

Copyright © 2005 – Technology Perspectives

The basic problem with traditional product development processes is that most of the cost is locked in long before production launch. For example, overly complex designs cannot be “Leaned out” in production, and being too slow to market can severely impact product profitability. Products that do not reach out to customers in terms of price, performance, and benefits do not sell well. In short, designs that arrive at the factory late, with poor production yields, major manufacturing problems, and unresolved engineering problems, undermine the benefits of Lean manufacturing. As most of us have experienced, this has been the rule rather than the exception. Applying standard Lean tools to the new product development process will certainly reduce development lead-time. By taking a broader view of new product development, we can simultaneously minimize manufacturing lead-time, maximize product performance from the customer’s viewpoint, and maintain target cost. These objectives can be achieved by combining Lean concepts and Six Sigma methods with an integrated set of tools for cost reduction. This potent combination can bring your business to a higher level of profitability.


Consider every product that your company produces (or at least all products within a business unit). If managed properly over time, this mix of products can constitute a system for profit maximization. How can all of the products within a business unit interact to achieve maximum profitability? Each new product design must be considered in the context of both existing and future products. Standardization of parts and processes is the obvious beginning, but there is much more that can be done:

• Platform Designs – Platforms leverage design efforts from one product to many other related products. Think automobiles. Automobiles have engine platforms, suspension platforms, and more. This allows them to have highly flexible product lines that require less overall engineering and manufacturing effort. How can you design your products around one or more platforms?

• Modularity and Scalability – The easiest way to understanding modularity is the “Plug and Play” concept. If you want to add more hard drive capacity to your computer, simply plug in a new hard drive module. How can you design your products to provide flexibility of features? Can capabilities be improved by simply plugging in a new module?

• Drive Down Indirect Costs – Each new design project is an opportunity to reduce overhead by reusing existing equipment, floor space, personnel, and systems. Can you design your new product without the need for new production equipment? Can you build the new product in an existing production line?

• Drive Out Waste – The expected production yield of a new design should be known before the product launches. Process capability must be studied to ensure that the product can be produced economically. Unexpected rework and scrap reduce profits and disrupt manufacturing flows. Can you design your products to ensure Lean production with Six Sigma capability before you even launch the product?

There are many existing tools and methods that can help your company achieve a high-level of synergy and performance in product design. There are also some relatively new tools that allow easy analysis of tradeoffs between alternative design concepts from the standpoint of cost, performance, and quality. To be effective, tools and methods must be applied at the appropriate points in an integrated product development process. From the first glimmer of a new product concept, through development, and continuing on to a successful production launch, application of the tools depends critically on how the new product is positioned relative to your company’s existing products, processes, and core competencies. To illustrate how new and existing tools are combined in an integrated product development process, we utilize a seven-step Lean Design Process (please see diagram at top of page 3).


Seven Steps to Lean Design

1. Define Product Define as clearly as possible what the market desires, without either overshooting or undershooting on performance, features, and quality. Voice-of-the-Customer tools are applicable during this first step. Tools and methods to consider are:

• A lean and more efficient version of quality function deployment (QFD) • Probe-and-learn feedback techniques • Market or customer surveys • Focus groups • Kano methods are used to identify spoken and unspoken customer needs

Delight

Disgust

Indifference

Must-haves(unspoken needs, taken for granted)

Could-haves(unspoken needs, “wow” factors)

Should-haves (spoken needs, more is better)

Cus

tom

er re

spon

se

Degree to which a customer need is met

The Kano Curves

Reverse

Define ProductEstablish Product Line Optimization

Team (PLOT)

Determine Target Cost

Translate Requirements into

Specifications

Design at System Level

Design at Detailed Level

Production Preparation

Process (3P)

1 2 3 4

5 6 7


2. Establish Product Line Optimization Team (PLOT) With a reasonably clear product definition in hand, your company can convene an appropriately chartered Product Line Optimization Team (PLOT). This team considers how the new product will fit within existing material inventory, processes, factory layout, core competencies, etc. Process capability is evaluated against proposed specifications. The PLOT provides specific recommendations for enhancing the synergy and manufacturability of the product to the development team at the kickoff of the project. The PLOT also develops a product roadmap to guide product development through the expected life cycle of the product line.

P roduct R oadm aps D efine C om m on Product P latform s

B reakthrou gh N ew P roduct P la tform

C urrent P roduct P latform

P roduct L ine #1

P roduct L ine #2 (D erivative)

L ine E xtension #1Line E xtension #2

Line E xtension #3

Line Ex tens ion #1Line Ex tension #2

The goal is to have h igh com m onality am ong p latfo rm extensions...

T im e


3. Determine Target Cost Once the project is underway, design requirements are prioritized based on customer benefit and need. A target cost is established. The team develops a preliminary cost model to put some teeth into the target cost. This is a tool that designers can use early in the conceptual design. This model will evolve over time to become an accurate representation of the actual cost-at-volume for the new product.



4. Translate Requirements into Specifications The design team uses Value Engineering techniques to generate a broad and innovative list of design alternatives for the new product. Toyota and others have successfully used this “set-based” approach to generate and consider a broad spectrum of possibilities before selecting the final concept. The design team uses a simple cost/performance tradeoff tool to determine which concept has the best combination of manufacturing cost and customer value. To ensure the final design choice represents the best balance between customer needs, quality and cost, the team evaluates alternative designs against twenty cost factors in five categories:

• Direct Labor • Direct Materials • Assignable Capital • Design Costs • Factory Overhead

5. Design at System Level Upon arriving at an optimal concept, the design team consults the product line roadmap. From this forward-looking document, the team identifies opportunities to extend and customize the product. Platform design considerations are incorporated into the rapidly solidifying design. The team also considers scalability, modularity, and mass customization strategies as ways to capture economies during future product line expansion. 6. Design at Detailed Level As detailed design begins, the team determines the compatibility of the new design to existing and planned manufacturing processes. Six Sigma methods are used to evaluate tradeoffs involving design tolerances, process capabilities and costs of poor quality.

LSL USL

Increase design tolerances or reduce process variation?

Scrap & rework


To optimize design variables or controllable process parameters, the team uses a powerful Six Sigma methodology called Design of Experiments (DOE). DOE is the only method capable of dealing successfully with the usual situation of multiple design and process variables having interactive effects on product performance. (See diagram on the next page.) The traditional practice of testing one variable at a time is ineffective in this situation, even counter-productive. DOE has the additional capability of “robust design”—designing a product to perform consistently in the face of uncontrollable manufacturing or use-environment factors. 7. Production Preparation Process (3P) To ensure smooth and rapid transition of the new design to the factory, the team considers the manufacturability of the product from the standpoint of touch labor, standard materials, cell-layout, takt time, capacity, etc. A model for this “Production Preparation Process” (3P) has recently emerged from studies of the “Toyota Way.” Although this is the final step in the Lean Design process, these considerations are addressed, in increasing levels of detail, throughout the first six steps as well.

Toyota’s Production Preparation Process (3P)

Launch to Production

Info

rmat

ion

Phas

e

Cre

ativ

e Ph

ase

Red

efin

e Ph

ase

• Part Numbers• Drawings• Samples• Volumes• Ramp Schedule• TAKT Time• Process Steps• Target Costs

• Flow Chart• TAKT Time• Cycle Time• Process Capacity• Standard Work• Standard Layout

• 7 AlternativeProcesses

• Model Cells• Simulations

Goals of 3P – Design products forlean production

Incorporate error-proofingand JIT

Guarantee process capabilityand cycle time

Build quality into the system


The seven-step Lean Design process is an integrated approach to new product development. It will reduce your time to market and improve the market acceptance of your new products. It will capture manufacturing cost reductions that are inaccessible to after-the-fact applications of Lean and Six Sigma. Lean Design represents a powerful competency that is guaranteed to improve your organization’s competitive position.

Lean Design

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