Lean by design

Haydn Insley of the Manufacturing Institute said: “Only eight per cent of the manufacturers we surveyed stated innovation as the highest priority for lean activity, compared to 27 per cent for production and 11 per cent for supply chain. But effective innovation may be more critical to business survival than production costs. Being the cheapest candle maker didn’t help when Edison invented his light bulb.
“Manufacturers recognise the potential, but traditionally R&D has been seen as a black art and many hesitate to carry lean ideas into this function. Implementation of lean in R&D is often a yardstick for the lean maturity of the organisation.”
Professor John Bessant, chair in innovation management at Imperial College, commented: “The metrics and desired outcomes are often different to implementing lean on the shopfloor, with cost reduction often secondary. Key drivers will typically be reducing time to market for new products and offering greater variety across a product range without increasing cost.”
A key question for manufacturers is at which point in the new product development (NPD) process should the disciplines of lean be applied?
With up to 20 new products launched each year, in addition to customer-specific development, Congleton-based Siemens Standard Drives wanted a more consistent and simplified approach to innovation which smoothed the progress of new products between design and manufacture.
R&D manager Ian Donald said: “The lean innovation project coincided with a similar initiative in manufacturing, but is a separate activity.
The lean approaches are applied from the point when the requirement for the new product is identified.
They then shape the NPD process through the creation of the specification, the development and testing phases, through manufacturing and to final launch.”
Another manufacturer, James Walker & Co,uses lean approaches even earlier in the process, from the conceptual stage. Managing director Paul Myerscough said: “We wanted to find a better way of picking winners and getting them to market as soon as possible.”
Both companies have been assisted by the Manufacturing Institute, which stresses that implementing lean in NPD is definitely not a ‘one size fits all’.
Graham Cooke, specialist practitioner for the Manufacturing Institute said: “Lean for NPD is quite different to lean for production. It’s not always desirable, for example, for innovation processes to be repeatable. Variation is good.
A restrictive lean framework risks driving out interesting ideas, so the best way of harnessing potential is to apply the broader principles without rigid application of the tools.” Cooke gave as an example the lean principle of reducing batch sizes. In NPD, the same principle can be applied to information flow. “Consider the batch size of the information you’re transferring,” he said. “If you’re transferring huge chunks of data infrequently, look at breaking it down to minimise risk and reduce waste. Large amounts of information take longer to collate and, once transferred, take longer to process, elongating response times.”
This approach has brought benefits for Siemens Standard Drives. “In the past, design would take a new product through the various stages of development and deliver it to production ready for manufacture, but this ‘throwing it over the wall’ approach had shortcomings,” Donald explained.
Manufacturing manager Nei l Eardley continued: “Sourcing of components was problematic, but the greatest challenge was accommodating new products within a wider production schedule. We weren’t always sure in advance when the product would be coming into production (because of slippage), and there were snags that only became apparent once we began manufacture.”
The lean initiative, begun 18 months ago, has created a web-based shared information resource for personnel involved in NPD. Shared documents and checklists provide frameworks for projects and clarify responsibilities. The communication mechanisms have been extended to encompass cross-functional meetings to discuss manufacturing concurrently with each phase of design. Prototypes are now built in-house so feedback is available faster and earlier, and a new system records lessons learned to assist in future projects.
Far from having a restrictive influence on NPD, Cooke believes that applying lean principles can build in greater flexibility. “The typical way to work is to, at the outset of a project, draw up a master plan with set stage gates,” he said. “This system can work well but it’s another example where breaking down into smaller chunks has advantages. Markets change constantly. Three months on, the whole landscape can be different.
A structure which breaks the master plan down into smaller chunks with periodic reviews can make you more agile.”
Mike Innes, chief executive of Oldham-based Money Controls, identifies this as a key difference between the lean-influenced NPD process they have now, and their previous approach. “We’re now able to say no,” he explained. “Only recently we stopped a development project completely because we identified that potential profit was much lower following changes in the market. In the past a project like that would have just trundled on to conclusion.”
Innes insists that, while lean techniques are used widely in production, the company has not yet applied lean within NPD. There are clear signs, however, of lean ‘cross-fertilisation’. Products are developed collaboratively by the manufacturing and design departments and the stage gate framework clarifies responsibilities and timescales to reduce wastage of resources to a minimum. A three-day value analysis workshop run by the Manufacturing Institute has also tackled the issue of removing unnecessary locked-in costs within product designs without reducing desirability of products to customers.
Money Controls exemplifies the way a strong lean culture can permeate naturally from production into other business operations.
Insley believes that company culture can also delay lean innovation. “There can be a fear that imposing lean thinking, particularly at the conceptual end of the NPD process, might hamper creativity,” he said.
Myerscough has found, however, that establishing NPD on a lean framework has enabled James Walker & Co to harness creativity more successfully. “You need to brainstorm ideas but it’s also important to have a mechanism that takes early stage ideas forward,” he commented.
“Otherwise they’re only ever wishful thinking.” The company has developed a strategic business opportunity matrix which assists in identifying and prioritising new product ideas.
In some industries however, the secret to leaner processes may lay with the equipment itself rather than with internal processes.
Conor McKechnie of GE Healthcare explained: “NPD in bio processing is highly regulated, involving extensive non-value-added activity (industrial admin relating to cleaning and the validation of equipment). With much of the development cycle lying outside the control of the manufacturer (approvals, clinical trials etc), shortening time to market relies on eradicating these internal non-value-added steps.”
In response GE Healthcare has launched a range of processing equipment which is supplied pre-validated and documented. It is process-ready and, up to a point, disposable, so the manufacturer avoids many of the non-value-added steps, thereby reducing time to market and cutting cost. For example, to design and commission a new cell culture and fermentation process using traditional equipment could take between eight and 24 months and cost between $750,000 and $1 million. Using pre-validated disposable equipment for the same project would take just two months to establish at a cost of $250,000.
While ROI is quantified here in cost and time to market, it is common for the desired outcomes of lean to be quite different when applied in NPD.
Donald of Siemens said: “Our lean innovation project ticked all the boxes: better communication, clarity of responsibilities, more consistent meeting of target dates, fewer technical hitches at production stage and a more stable process.
Eardley added: “Another major benefit is our ability to slot in the production of new products within the wider schedule without disruption.”
Myerscough of James Walker & Co said: “The first lean innovation project was so successful that we’ve extended the scope and are working with the Manufacturing Institute on resource utilisation. This is a particular challenge because, as well as having a number of NPD projects underway at any one time, we also have demands from day-to-day applications engineering.”
This is an issue that Money Controls has also addressed. “Our design function needs to customise designs for specific applications as well as developing new generations of equipment,” Innes explained. “Our stage gate process doesn’t generally suit the applications engineering projects. Currently we’ve set up a small applications engineering team which is attached to the sales function rather than R&D. That seems to be working, but it’s an issue we’re still tackling.”
In the NPD process the methods by which lean techniques can be applied are not as immediately obvious compared to the production environment.
Professor John Bessant concluded: “The lean tool bag has been around a long time, but the people involved in implementing lean in NPD are often not as conversant with them. It’s a new language and there are fewer best practice examples to refer to. But the technique is less important than the forum it creates. It is the discussion around the value stream map that creates improvements, for example, rather than the map itself.”