Prerequisite for Designing for Manufacturability and Low Cost:
Remove Counter-productive Policies

Cost Reduction Strategy (home page)     Seminars     Consulting     Articles     Books     Site Map 

Half of change is undoing counter-productive blocks

Half the challenge to implement new methodologies may be getting rid of existing counterproductive policies. For product development, here are some of the worst:

Don’t bite off more than Engineering can chew when planning product portfolios, which drastically decreases the success rate of all products. The book, Fast Innovation, (by Michael L. George, et al., 2005, McGraw-Hill; p. 167) presents a case study which clearly shows how too many projects diminish the chances of project success. 

  In the first, year a prominent company tried to develop 120 products, but resources were spread so thin that no products were introduced at all!     The next year the workload was reduced to 22 projects and they were able to introduce eight products in 24 to 28 months.  In the next year, as they got more focused on only 20 projects, they were able to launch 14 products in 12 months.  Thus they were able to successfully launch almost twice as many products in half the time!

 The results of focusing product development and rationalizing away most existing products during a three year period was that manufacturing productivity tripled, early life failures decreased by 38 times, customer satisfaction rose from 27% to 90%, revenue increased by 2.4 times, and operational earnings  increased from -6%  to +7%.

• Don’t allow Sales to “take all orders” and “acceptall customizations” (or, worse, encourage them) and pollute operations with low-volume, hard-to-build products that drain resources away from product development and other improvement programs. Rationalize Product Lines to eliminate or outsource high-overhead products.
   

• Don’t  “manage” product development with deadline management (track progress meeting deadlines and then putting on the pressure if any deadline is late) for the illusion of “early progress.”  This can counterproductive if poorly set deadlines don’t encourage thorough up-front work.
   

• Be very sure that your your product development process actually has a product design phase: Some, even prominent and expensive "processes" don't, and skip skip from the "concept testing" phase to the "prototype testing." phase.  Check your to see if it has a strong product design phase, or has one at all!
   

•  Don’t quantify only labor and part cost and then allocate (average) all other costs (overhead) over all products, good or bad.  Instead quantify total cost.
   

• Don’t try remove cost after the product is designed, which is so hard to do that is a waste of resources.  See article: Seven Reasons Why “Cost Reduction” after Design Doesn’t Work.  
   

• Don’t go for the low bidder on custom parts, which precludes vendor/partnerships and, thus, prevents those vendors from helping the company design the parts and their tooling.

 Companies that practice the above three will have to devote a very high percentage of product development resources of their time to: make change orders to try to implement DFM (because it couldn’t be done with Concurrent Engineering);  try to take cost out after the product is designed with change orders;

• Don’t offshore manufacturing to "save cost," which makes it hard to do Concurrent Engineering when there are no manufacturing people around to be “concurrent” with. In many offshoring situations, people in engineering and manufacturing are not even working at the same time.  So launching a product stares with throwing a drawing package "over the ocean," which is followed by the Contract Manufacturer "building to print," whether the drawings are perfect, 100% complete, and completely unambiguous -- or not, which is the case in almost all offshoring.  Outsourcing, in general, also involves converting documentation for outsourcing; changing all parts to "local sources of supply; getting outsourcers up to speed; dealing with quality and delivery problems, and so forth and so on.
  
  
  In his travels, the author of this site, Dr. David M. Anderson, has encountered several companies that spend two-thirds of product development resources on the last three bullets, which really puts their future in doubt if that future depends on new product development. Ironically, these attempts thwart six of the eight Half-Cost strategies, for reasons presented at the beginning of the offshoring article.

After DFM training, one large company that has pioneered many of these, needed to launch an initiative called "DFM vs policy" to correct current counterproductive policies for their first product development team to utilize these new methodologies.

 For a secure enguiry form, go to the secure site: form (design4manufacturability.com)

Dr. David M. Anderson, P.E., fASME, CMC
www.HalfCostProducts.com
phone: 1-805-924-0100
fax: 1-805-924-0200
e-mail: anderson@build-to-order-consulting.com

Copyright 2021 by David M. Anderson

Cost Reduction Strategy (home page)  Seminars   Consulting   Credentials  Client List   Articles   Books  Site Map