Concurrent Product Development: Towards DQE?

1. Concurrent Product Development:Towards DQE? Prof. Spyros Lioukas, Dr Irini Voudouris Athens University of Economics and Business

2. Overview of the lecture • New product development • Why, stages, objectives, success factors, approaches • Traditional product development • Concurrent product development • Definition • Benefits • Influencing agents • Context • How to achieve • Barriers

3. Objectives: Learners will: • Discuss the reasons for New Product Development (NPD) • Understand the approaches of NPD • Identify the benefits of concurrent product development (CPD) versus traditional product development • Identify the CPD as a means of “How to achieve DQE”

4. New Product Development(NPD) • Why? • The long-term success and viability of a company depends on its ability to: • Produce better products than its competitors • Satisfy the changing market demand • The development of new products is an important strategic option • The Cycle-Time of new products is reduced continuously • The new products are gaining an increasing market share

5. NPD Stages Stages in New Product Development(NPD) 1. Opportunity identification 2. Concept development 3. Product design 4. Process design 5. Commercial production

6. Reduce the time of product introduction NPD Objectives Maximize the product quality Respond to customer needs Maximize productivity NPD objectives DQE

7. NPD Success Factors • Product fit with market needs • Product fit with internal functional strength • Technological superiority of the product • Marketing synergy • Use of a formal new product process • Favorable competitive environment • Design – Quality - Environment

8. Two approaches of NPD Opportunity identification Traditional Product Development Concept development Product design Opportunity identification Process design Concept development Commercial production Product design Concurrent Product Development Process design Commercial production Savings

9. Traditional product Development (TPD) • …or sequential design • “Each department does its work and passes off the product to the next Department for the next step in the process” • Common problems • unsuitable product to be produced • the necessary equipment is not available • unsatisfactory design • assembly problems • the available equipment, tools and devices are not reused

10. TPD: Arguments against • Too costly • Too long • The design of the product is finalised when it is known how it will be made • Design alternatives are eliminated in the interest of time • one narrow idea is pursued • Rigid sequence of decisions in the design process • Information is lost as the design progresses • Each group sees the other as enemy • Each group becomes highly specialized in its own analytical method • Resulting poor design, quality, environment

11. Concurrent Product Development (CPD) • …or concurrent engineering, integrated product development,… “Stylists, designers, marketers, economists and engineers work together and information flows between them, yet their respective roles remain distinct” Economics Marketing Production Design

12. Concurrent Product development (CPD) Definition: "a systematic approach to integrated product development that emphasizes the response to customer expectations. It embodies team values of cooperation, trust, and sharing in such a manner that decision making proceeds with large intervals of parallel working by all life-cycle perspectives early in the process, synchronized by comparatively brief exchanges to produce consensus.“ Cleetus (CERC), 1992

13. CPD “formulation map” Objective: A way of improving Product Introduction Strategy: Simultaneous consideration of all aspect of NPD Other equally valid strategies e.g. improved quality greater creativity/ better design better specification/ environmental posture Tactics: A Collection of Tools and Techniques Company Generic Company Specific e.g. Teams Parallels Tasks e.g. QFD, SPC N.J. BROOKES, C.J. BACKHOUSE,“Understanding concurrent engineering implementation: a case study approach”

14. Benefits of CPD based on … • Early Problem-discovery • Early decision making • Work structuring • Teamwork Affinity • Knowledge Leveraging • Common-understanding • Sense of ownership • Constancy-of-purpose

15. CPD Benefits (1) • Product development cycle time reduction (40-60%) • Quality improvement (200-600%) • Manufacturing costs reduction (30-40%) • Engineering changes reduction (more than 50%) • Scrap and rework reduction (up to 75%) • Error prevention • Customer satisfaction

16. CPD Benefits (2) • Increased Productivity (20-110%) • Increased Investments return (20-120%) • Reduced risk • Design compatibility with production facilities • Enhanced team work, cooperation and collaboration • Emergence of strong and confident managerial and scientific teams

17. Influencing agents of CPD: 7Ts Prasad, CE Fundamentals Book [1997]

18. Influencing agents of CPD: 7Ts • Tasks - Parallel tasks • Teams- Inter-disciplinary work groups, decomposition of tasks • Techniques - Design-for-manufacture techniques • Technology - PDM, EDI etc. • Time – reduction of the product design and manufacturing cycle time • Tools - software, hardware, and networks • Talents – Learning the new work model

19. The Context of CPD The big picture view of the CE model Supply Chain Context Supply Chain Context Company Context Environmental Context MITCHELL FLEISHER and JEFEREY K. LIKER, “CONCURRENT ENGINEERING EFFECTIVENESS”

20. The context of CPD (1) • The internal company context • People • skills, job design, reward systems, motivation • Organization • relationships, project management structure, job description, coordination mechanisms, performance measurement systems • Technology • communication technology, design technology, program management technology, environmental tecchnology

21. The context of CPD (2) • The environmental context • Industry • Macro-environment • PESTEL framework • Global environment • The supply chain context • Customers and suppliers have critical role in development of newproducts

22. How to Achieve CPD?Change Methodology The CE Change Methodology: “a process for changing the context in your companyto make it easier to do Concurrent Development” Assess the AS - IS situation Design the new system Implementing the New CPD system Scope the Project MITCHELL FLEISHER and JEFEREY K. LIKER, “CONCURRENT ENGINEERING EFFECTIVENESS”

23. CPD change methodology(1)Scope the project Clarify Project Concept Secure Sponsorship from Top Management Develop Vision & Boundaries Develop Project Action Plan MITCHELL FLEISHER and JEFEREY K. LIKER, “CONCURRENT ENGINEERING EFFECTIVENESS”

24. CPD change methodology(2) Assessment of the AS - IS situation Measure Performance Measure Process & Structure Consolidation Benchmark others MITCHELL FLEISHER and JEFEREY K. LIKER, “CONCURRENT ENGINEERING EFFECTIVENESS”

25. CPD change methodology(3) Design the new CE system Characterize Environment Consolidate & Feedback CE Work Process Internal Organization Supplier Relations People Systems Technology Develop Design Principles Design Process & Structure MITCHELL FLEISHER and JEFEREY K. LIKER, “CONCURRENT ENGINEERING EFFECTIVENESS”

26. Sell the CE System Review Guidance Team Membership Modify CE System Design. Develop Chunking Strategy. Pilot and Capture Learning Broaden Rollout CPD change methodology(4) Implementation MITCHELL FLEISHER and JEFEREY K. LIKER, “CONCURRENT ENGINEERING EFFECTIVENESS”

27. Implementing CPD to SMEs • Create a cross-disciplinary team (5-20 members) • Teams feature high-bandwidth technical communication • Trade-offs should be resolved by mutual understanding • “Design and production” issues should be considered simultaneously • Teams should have common goals

28. Management initiatives for a successful implementation • Improving cross-functional integration • Setting and analysing goals • Directing and controlling integration • Encouraging communication and awareness • Fostering design for excellence • Applying best design practices • Facilitating design generation analysis • Encouraging DQE

29. Barriers to Implementation Barriers to implementation come from two fronts: • The natural resistance of organizations to change • The lack of information available to assist in implementing that change Common errors • Information waves • Time loss risk • Repetition cost augmentation • Concurrent chaos • Accumulation of errors

30. References • Mitchell Fleisher and J. K. Liker, “Concurrent engineering effectiveness”, Hanser Gerner Publications. • A. Gunasekaran, (1998), ”Concurrent engineering: a competitive strategy for process industries ”, Journal of the Operational Research Society, 49. • Suk-Ki Hong and Marc J, Schniederjans, “Balancing concurrent engineering environmental factors for improved performance”, Int. J. Prod.Res., 38(8) • Bob Filipczak, (1996), “Concurrent engineering: A team by any other name?”, Training (Minneapolis, Minn.) 33 • N. J. Brookes & C. J. Backhouse, “Understanding concurrent engineering implementation: A case study approach, Int. J. Prod. Res., 36 (11). • D.N. Ford and D. Sterman, “Overcoming the 90% Syndrome: Iteration Management in Concurrent Development Projects”, Concurrent Engineering: Research and Applications.