Wednesday, September 01, 2010

Delivering Lean and Mean New Product Development

Most are familiar with Lean Manufacturing today, a concept brought into the limelight through the Toyota Production System (TPS). Henry Ford was actually one of the earliest "Lean thinkers" with the notion of an assembly line. In it's early form this waste elimination concept was considered only applicable to manufacturing. Today it has expanded into areas that include healthcare, government, construction and services to name a few. The application in New Product Development (NPD) is a relatively new area that has significant opportunity for improving development time, quality and predictability while reducing developments costs. It is easy to say Lean cannot apply to the non-repetitive engineering and invention aspects of NPD; that's not right, it's just easy to say.

Let's start off with defining what lean is; put simply, it is about improving efficiency by eliminating waste. The inefficiencies can be in the form of the use of people's time, inadequate tools, rework, overdone requirements, non-value steps/activities/meetings and so on. Waste can be found in many areas, mostly buried and out of sight. Consider Lean as nothing more than creating a culture to drive higher levels of efficiency on a continuing basis.

There is plenty of opportunity for leaning up in new product efforts. The scope of any Lean effort must cover the entire development process from initial customer contact to a volume revenue stream with that customer. A localized view of any subset of the total NPD process is actually anti-lean due to an obvious disconnection from the value stream, an error for many improvement initiatives. Lean must be a big picture view that includes all functional areas, both deliverers and receivers of a common value stream.

The diagram to the right represents the typical components of a lean approach. The cycle is one of continuous learning and an ever-evolving process based on that learning. It never ends; an organization is never done. As soon as there is a belief of doneness, the lean train is derailed. Begin a Lean journey by looking for areas where the principals can be applied to NPD.

The focus of any new product must always be on the customer value. For any new product you must be able to clearly identify where the customer value is. That is what matters, in fact that's all that matters. Be in the customers shoes, feel the problem to be solved. Think beyond requirements to include interactions, information exchanges, trust, communication and the needs for development of their product. You must be absolutely certain of what the customer values in a relationship with you on new product. Delivering all aspects of customer value is a distinct competitive advantage.

Identify Value Stream
Anything that does not add to the customer value is a waste; it is outside the value stream. This is a tough one for those that believe everything they do is important, essentially the majority of organizations today. Meetings, documentation, decision processes, procedures, reviews, sign-offs; they are all suspect of being off the value stream in their current form! The value stream is only the activities, information and deliverables that clearly promote the customer value. Can you identify the value stream for new products in your organization?

Create Value Flow
Now, knowing what the value stream is, build a NPD flow that supports that value stream. Get rid if the wasted activities, meetings and deliverables that do not directly enhance the customer value for new products. What are you doing because you have always done it? This is a great place to engage some good solid discovery, beginning at the bottom and working up. Creation of the value flow will not be for the faint of heart; every activity today is already assumed to be valuable and there are people and bruised ego's to deal with. The output of this phase should be a development flow that is highly efficient in bringing value to the customer at the quickest pace and the lowest cost.

Establish Pull
This one is a little tricky for NPD. Establishing pull means that deliverables are completed at the latest time possible, where the greatest amount of information is available. Today most are focused on getting everything done ASAP and queued up before it's needed, essentially creating inventory and a push forward. A pull is more like JIT (Just in Time), where tasks and deliverables are completed as needed, at the maximum point of knowledge for the task. Think of pull as tasks that are demand driven. For NPD a pull mindset will have a significant impact on quality and rework. How much is being redone because of not knowing what was needed the first time? Pushing tasks creates rework!

Seek perfection
To seek perfection is a course of continuous improvement. The lean process is never done and ever evolving, always improving upon knowledge from previous projects. Perfection does not just happen; it is asymptotically being approached with every new project. Lean NPD is a journey, not a destination.