Increasing the effectiveness of design and development teams is crucial for greater innovation. But how can manufacturers balance the conflicting requirements of cost, time and innovation to improve their results?
Pressures in the contemporary manufacturing sector are increasing – while product availability at the right price is expected, companies look to maintain a competitive edge by differentiating their products or services. New products have to be brought to market faster and lifecycles reduced. This often represents a challenge for engineering teams that are already stretched; teams that are expected to reduce product costs, develop new product and process technologies, reduce defects and increase performance, all at the same time.
The ideas of agility are well established, but the market, product and supply chain instability, created by the need for more innovative products with shorter lifecycles, can give rise to a dramatic reduction in the effectiveness of design and development teams. Wasted spend can easily equate to a quarter of the engineering resource budget, so what must a business do to get a better return on product development effort? The true capacity for an engineering team to develop new products can often be doubled or even trebled by understanding the current effect of the business dynamics on the team and then stabilising the situation through a carefully designed programme of changes.
The first step is to evaluate the true level of effectiveness in product design and development by way of a rapid assessment of the real business dynamics and their impact on performance needs. Once the assessment is complete, an improvement programme needs to be implemented that will reverse the undesirable consequences of these dynamics. This typically involves addressing several strategically important company products in parallel, often including one that is established and causing difficulties in production, as well as one that is part-way through the design and development process.
A rapid assessment of the dynamics will identify big opportunities for increased effectiveness. The basic product development cycle is a virtuous circle, generally moving from a request for quote, through concept and detailed design work, to testing, product launch and volume ramp-up. A satisfied customer will then help drive repeat business and the lower cost of customer retention over acquisition leads to greater levels of profitability.
The danger is that this cycle of activity is inherently unstable and there are a number of influences that drive some very undesirable outcomes. Primary amongst these, ironically, is change itself. Both OEM change requests and problems identified by the design teams generate rework loops. This rework can be identified at any stage within the product development lifecycle, but the later it is found, the more disruption it causes. Naturally then, this unexpected work places extra pressure on a new product development team that is almost certainly planned to be fully loaded with work and it acts as the catalyst in what turns out to be a catastrophic chain of events as shown in Figure 1 in this PDF.
As the requests for changes arrive or rework is identified, managers typically try to juggle the team resources. This often results in a more complex portfolio of activity and the team dynamics increase as they become more fragmented, with people often jumping from project to project in an attempt to solve the latest problem. At a time when unexpected work is being added to an already full schedule, team productivity now starts to fall, having a negative impact on all projects in the development portfolio.
Additionally, due to the unexpected nature of these extra activities and the understandably reactive nature of the response, there is huge pressure on the business to start working on activities in the wrong sequence. Timeline pressures mount, deadlines loom near and as the pressure continues, morale starts to fall, yet further reducing team productivity.
By this stage, the perceived and real quality of the product is beginning to be affected, since the customer may well observe increasing delays due to problems in finalising or validating the design. Increasing timeline pressures also encourage unhealthy risk taking and, in industries for which the timeline is sacrosanct, the new product gets delivered, but with ever reducing levels of readiness.
This lower delivered quality may well provoke a further barrage of change requests, reinforcing what has now become a negative and highly destructive cycle of activity. At the very least customer satisfaction falls – breaking the once virtuous cycle of product development, the effort to launch the product increases and the return on sales rapidly disappears.
A thorough assessment of engineering effectiveness in new product development takes all these major dynamics into account and produces both a quantitative and qualitative statement of the areas to be addressed and the benefits available. These benefits are determined through the use of a broad range of tools and techniques.
Quantitative analysis is achieved through the use of time card studies and Cost of Quality (CoQ) research, as well as interrogation of engineering change registers and other operational documents. Frequently, a specially designed timecard is used for the duration of the study, which provides insight into where and how the engineering team's time and effort is really placed.
Similarly, a study of operational performance records will allow the creation of a rigorous CoQ analysis – if the business does not already have this in place. Insight from the detailed breakdown of this analysis is important because the decisions taken and choices made during the design phase of a product lifecycle have enormous impact on the overall performance of the business once the product is in manufacture – and this analysis can help identify where extra effort may be required in the design of future product and manufacturing processes. Indeed, once the Cost of Quality starts to approach or even exceed the engineering budget (as we have seen in some studies), then it becomes clear that the business needs to critically rethink its approach to the funding and management of its engineering resources.
Finally, by considering previously introduced products, an analysis of the time breakdown by phase in the development programme – concept design, planning, detailed design – can yield some valuable insights when compared to other industry benchmarks. Change records can also be a valuable source of data, although frequently this needs to be supplemented with a qualitative assessment of the levels and impact of rework on the organisation.
Qualitative analysis is achieved through a co-ordinated and rigorous programme of activities. Structured interviews with key members of the research, design, development, manufacturing/manufacturing engineering and sales teams provides initial insight into many of the issues being experienced by the business and helps clarify further lines of investigation. Additional brainstorming workshops – held by cross-functional teams that classify the importance of various engineering activities and indicate how well they're perceived to be carried out - enhance the interview observations, while Strengths, Weaknesses, Opportunities & Threats (SWOT) analysis then starts to move the business into identifying the way forward.
A detailed World Class Engineering questionnaire can also be used to assess the businesses perception of its alignment with best practice. This is typically sent to all team members for completion after which comparisons can be drawn with other benchmark data or even the businesses perception of competitor's performance. This analysis focuses on four key dimensions: design processes and planning, teams and organisation, information and systems, and control.
When brought together, the quantitative and qualitative analysis described creates a well-rounded and often surprising picture of a business' effectiveness in developing and introducing new products. From this starting point, an improvement strategy can then be determined.
Breaking out of the destructive cycle is simple in principle, but not quite so easy in practice. However, the rewards of success can be significant. Typically, improvements to engineering effectiveness in the order of 25% can be found and delivered. This is often achieved by tackling both quality and portfolio complexity.
Running a focused campaign on the quality of a significant and high-profile product on the one hand will release engineering time for 'good' new product design that would otherwise have continued to be consumed by supporting product launch problems.
If, concurrently with this, the business also tackles portfolio complexity through the use of strong portfolio management, risk and resource management and the appropriate application of a concept PA refers to as 'design studios', then one or more significant new products will go through to launch with significantly fewer teething problems than the business might usually expect.
These two elements of a business improvement programme, properly timed, will have the net effect of kick-starting a virtuous cycle of activity once more. Critical to the success is getting the right mix of activities, whether in organisational, process or system improvements.
In conclusion, the product development process should be a virtuous cycle of activity, but due to its inherent instability, engineering teams frequently fail to meet their potential. A detailed quantitative and qualitative analysis of the current situation will provide a great deal of insight into the problem areas and the size of the potential improvements that can be achieved. The overall improvement programme may be fairly complex, but is often found to require two strategically important elements to help kick-start a virtuous cycle of activity once again, these being the implementation of a focussed campaign to improve the quality of a new and high profile product, combined with the establishment of a design studio to ensure the smooth and trouble free implementation of a product that has yet to be launched.
Ultimately the business prize is the realisation of 25% of engineering capacity to work on more value added activities as shown in Figure 2 in this PDF. This can often allow the business to at least double the amount of effort it currently puts into new product design, without any increase in cost.
