The Competitive Edge

Dec. 21, 2004
Manufacturers look to improve the processes behind product development.

It's no secret that environmental impact is of paramount importance to Philips Electronics NV in its development of new products. A recent company-wide initiative has further strengthened that commitment. Xerox Corp., in its latest new-product introductions, has strayed from its long-held vision of vertical integration. Strong supplier partnerships are being forged as the company looks to reduce both costs and the time it takes to bring new products to market. Another major manufacturer, Lockheed Martin Corp., has firmly embraced the latest in simulation software and other manufacturing technologies to lower its product costs and reduce the potential for manufacturability problems. The company also is working to ensure that its engineers make the most of Lockheed Martin's own expertise. A study conducted last year throughout all Lockheed Martin companies collected its engineering best practices. They are now being shared throughout the organization. These companies, like many others, are looking to new-product development to push growth into the next century. Indeed, a recent Deloitte & Touche manufacturing study reports that product innovation is a major driver for growth and customer retention by global manufacturing executives heading into the year 2000. What may separate the market leaders from the market followers, however, is their commitment to the processes behind the new products. Attention to speed, cost, and technological advances as well as commitment to the environment are among the practices cited as drivers for growth. Initiatives paying off Affordability is a major corporate push at Bethesda, Md.-based Lockheed Martin. The purpose of the company's Advanced Affordability Initiative (AAI) is to integrate appropriate emerging technologies to help achieve goals of minimized part counts, reduced assembly times, minimized labor, minimized need for tooling, elimination of non-value-added processes, and reduced material costs. Lockheed Martin is now performing "verification studies and capturing results" to gauge the progress of the initiative, says Ken Taylor, director of AAI at Lockheed Martin Tactical Aircraft Systems (LMTAS) in Ft. Worth. However, Taylor can cite a number of accomplishments he attributes to this initiative, including the application of high-speed machining to airframe work. He reports that use of this technology has reduced manufacturing cycle times by 70% to 80% and produced an unexpected side benefit -- hand-finish time was reduced by some 40%. More directly tied to new-product development is Lockheed Martin's Virtual Product Development Initiative (VPDI), an integration of numerous software tools to create a virtual development environment. Linda Poole, LMTAS program manager of virtual product development, says VPDI is transforming the development process at the Ft. Worth company by reducing design cycle times, improving manufacturability, and lessening the need to create solid models. Its implementation on Lockheed Martin projects includes the Joint Strike Fighter (JSF) program, which aims to develop and produce affordable next-generation strike aircraft weapons systems for the Navy, Air Force, Marine Corps, and allies. Poole says the VPDI effort is producing cycle-time reductions of up to 50% in design development, reductions of 50% in manufacturing cycle times, and 30% reductions in maintenance. The objectives of the five-year VPDI program, which began two-and-a-half years ago, are to design for affordability and producibility. "We want the capability deployed, but in a cost-effective manner," Poole says. "We are focusing our efforts to get a high payoff." Poole cites numerous payoffs for Lockheed Martin from the virtual development environment, and many of them involve finding and eliminating potential problems before they occur. One example: a recently conducted simulation of a weapons-loading sequence tied to the JSF program. A number of simulations were run for military personnel at all levels, and two pages of data were collected. Among the comments, Poole says, someone pointed out that the simulation illustrated the need for more clearance to be incorporated into the design. Poole notes additional advantages of VPDI:

  • The potential for rework can be addressed far earlier in the design stage. "We don't wait until the design process is complete before we consider manufacturability," she says.
  • Ergonomic issues also can be considered much sooner, holding a potential to reduce workers' compensation costs. For example, Poole says virtual simulations can address the stress and strain issues that result from performing specific functions. Color changes to the arms of the "virtual workers" performing a task identify the level of strain placed upon the limbs.
  • Supplier capabilities can be analyzed in advance. "Say [a supplier] tells Lockheed Martin they have the greatest robots, etc. We say give us the software so we can run a simulation to see if [you] are workable for us," Poole says.
Ambitious goals Much like Lockheed Martin, Southfield, Mich.-based Siebe Automotive has a strong corporate incentive to incorporate cost-saving measures. The global manufacturer of fluid-power systems, controls, and sensors for the automotive industry is one of 12 divisions of Windsor, UK-based Siebe PLC, the UK's largest diversified engineering company. Siebe PLC sets ambitious goals for the organization and demands that each division meet four metrics: reduce costs by 5% each year, increase organic growth by 10% each year, increase profitability to shareholders by 15% annually, and reduce inventory by 20% per year. "You will not get a business plan approved that does not meet this requirement," says James McElya, president of Siebe Automotive. The automotive division is also a unit in a pilot program to add yet another metric to the equation: reduce the cost of quality by 25% annually. Siebe Automotive expects strong contributions from engineering to inadvertently meet these requirements. And it receives them in a variety of ways. For example, McElya says Siebe Automotive's design engineers must participate on kaizen teams. This helps engineers understand problems they inadvertently create -- such as bolt designs that vary only slightly from one another because two engineers produced two designs -- and what the manufacturing floor must do to deal with the multiple configurations. "[Engineers] get to help resolve problems that they may have helped create," McElya says. "It's helped us tremendously." Siebe's commitment to Six Sigma quality initiatives also impacts new-product development in the automotive division. "What a lot of companies have done is put Six Sigma guys on the manufacturing floor. We put them upfront," McElya says. Siebe PLC has committed $2 million to training efforts in pursuit of Six Sigma quality. Half of the automotive division's Six Sigma participants are from design engineering. Following training, each participant must successfully contribute to a management-selected project that saves the company at least $300,000. McElya points to one such project involving tooling (Siebe Automotive makes its own). In the past, McElya says, "it's been left to the designer to determine how he wants to do the tooling." A focus on reducing tooling costs led to the standardization of some fabrication tooling. McElya says in some cases tooling was found to be overengineered and, as a result, more costly. And when a supplier quotes prices to car companies by piece price and tooling cost, "it allows us to be more aggressive in the area of tooling," McElya notes. Siebe Automotive also aggressively pursues a function-up/cost-down philosophy to product development. The company first ascertains that any proposed new product does improve function. If it does, Siebe then develops a team to answer the question: Can this be a cost-reduction benefit to both supplier and customer? "If the answer is no, we typically will shelve it," except for some government regulatory requirements, says McElya. This upfront attention to cost allows Siebe, as well as the customer, to avoid absorbing wasted engineering time as company overhead. A more recently introduced concept by which Siebe Automotive expects to grow is modular integration. This concept calls for Siebe designers to move from a focus on individual-component design to a focus on the bigger picture in developing engineering solutions for its customers. Extending the enterprise Rochester-based Xerox makes a sharp turn away from design-as-usual with a new development process it calls Extended Enterprise. Although it is not a new idea -- the automotive industry has used it for some time -- for Xerox it is an entirely new concept. Michael D. Green, vice president of low-cost delivery at Xerox, describes the company as one "of the last of the great vertically integrated companies." Its engineers designed virtually everything, down to each screw, Green says. Suppliers provided input, of course, but Xerox engineers produced nearly every drawing. The Extended Enterprise approach, however, moves many critical design and development activities into the hands of supplier-partners, allowing Xerox engineers to focus on the company's strength in systems engineering. This new thrust allows everyone "to leverage their own expertise," Green explains. What benefits has Xerox reaped from this approach? For one, Green says, it short-circuits the process in which Xerox engineers have to rework designs after receiving supplier input "because everybody is designing much more to their capability." Another obvious benefit is reduced design-cycle time. Additionally, Green believes that with this approach, suppliers question more and offer up more of their own expertise -- such as cost-saving material alternatives. "What we used to do is give everyone the world as we knew it," he says. Xerox recently introduced two digital convenience copier/printers that showcase its first use of Extended Enterprise. The company realized significant cost savings in developing these units using the new approach. One of the digital models costs about 30% less than the comparable analog (although 10% above the cost target initially established). "And people thought digital was going to come at a premium," Green says. Additionally, a prior Xerox model took more than four years to bring to market. With Extended Enterprise, the company brought its new digital units to market in just over two years, with 24 Xerox engineers on the development team. As many as 150 engineers may have participated under traditional development methods. Among the concerns Xerox had to address with Extended Enterprise was the fear that a far fewer number of engineers are needed on Extended Enterprise development teams. However, Green says, the result is that "people are actually able to do more. . . . They can work on multiple projects." Also, this approach requires a great deal of trust and relationship building with the supplier-partners. Green says development of the new units took longer than he wanted, in part because Xerox did not encourage enough interaction between partners, some supplier-partners suggested. "That's something that has matured," Green says. "Trust has a long learning curve." Expanding environmentalism Cost and quality issues certainly drive engineers at Philips Electronics, but environmentally conscious design is an overwhelming, undeniable influence. And the company has just stepped up the challenge to its product developers. Although the Amsterdam-based company has long been identified with environmentally sound business practices, this year it launched a company-wide initiative, EcoVision, which is a new phase in its Environmental Opportunity Program. EcoVision has tough manufacturing targets and focuses on five areas of product design: weight, hazardous substances, energy use, recycling, and packaging. The initiative calls for an increasing percentage of products to be "eco-designed" through 2001, with all business lines required to produce flagship green products this year. The company also has identified manufacturing targets of 35% reduction in waste, 25% less water use, and significantly reduced emissions. These new targets are on top of goals the company already had set in its initial environmental program. But Henk de Bruin, director of Philips' corporate environmental and energy office, says tremendous opportunities for environmentally conscious design still exist in electronic products. That means engineers must be persuaded to think beyond the given concerns of cost and quality and look to ecological innovations. "Nine times out of 10 they come up with a method to produce the same product with a better eye toward environmental concerns," de Bruin says. "And if they do . . . it's a value-add for the consumers." Among Philips' ecologically conscious products is a green television, a prototype unit that the company says boasts a 30% reduction in operational energy consumption, a weight reduction of 11%, and a 22% increase in the use of recycled materials. The company also has a number of technologies it uses to measure the ecological impact of a product. These include the EcoIndicator, which calculates the environmental impact of a product throughout its life cycle, and the Energy Potential Scan, which measures the impact energy usage has on the environment. Camp in the plant Among other efforts to improve product development:
  • Chrysler Corp., Auburn Hills, Mich., recently announced a jointly developed digital manufacturing tool it says will slash engineering times.
  • EG&G Astrophysics, Long Beach, Calif., sends its mechanical design engineers to a two-week "boot camp" on the manufacturing floor to drive productivity and quality. From a high-tech approach to a human approach, manufacturers with a goal to grow are addressing the processes behind product innovation.
About the Author

Jill Jusko

Bio: Jill Jusko is executive editor for IndustryWeek. She has been writing about manufacturing operations leadership for more than 20 years. Her coverage spotlights companies that are in pursuit of world-class results in quality, productivity, cost and other benchmarks by implementing the latest continuous improvement and lean/Six-Sigma strategies. Jill also coordinates IndustryWeek’s Best Plants Awards Program, which annually salutes the leading manufacturing facilities in North America.

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