Shipulski On Design

Posts Tagged ‘Engage Design; Product Design; Cost Savings’

I hear it’s a good idea to move manufacturing work back to the US.

Before getting into what it would take to move manufacturing work back to the US, I think it’s important to understand why manufacturing companies moved their work out of the US.  Simply put, companies moved their work out of the US because their accounting systems told them they would make more money if they made their products in countries with lower labor costs. And now that labor costs have increased in these no longer “low-cost countries”, those same accounting systems think there’s more money to be made by bringing manufacturing back to the US.

At a low level of abstraction, manufacturing, as a word, is about making discrete parts like gears, fenders, and tires using machines like gear shapers, stamping machines, and injection molding machines.  The cost of manufacturing the parts is defined by the cost of the raw material, the cost of the machines, the cost of energy to power the machines, the cost of the factory, and the cost of the people to run the machines. And then there’s assembly, which, as a word, is about putting those discrete parts together to make a higher-level product.  Where manufacturing makes the gears, fenders, and tires, assembly puts them together to make a car.  And the cost of assembly is defined by the cost of the factory, the cost of fixtures, and the cost of the people to assemble the parts into the product.  And the cost of the finished product is the sum of the cost of making the parts (manufacturing) and the cost of putting them together (assembly).

It seems pretty straightforward to make more money by moving the manufacturing of discrete parts back to the US.  All that has to happen is to find some empty factory space, buy new machines, land them in the factory, hire the people to run the machines, train them, source the raw material, hire the manufacturing experts to reinvent/automate the manufacturing process to reduce cycle time and reduce labor time and then give them six months to a year to do that deep manufacturing work.  That’s quite a list because there’s little factory space available that’s ready to receive machines, the machines cost money, there are few people available to do manufacturing work, the cost to train them is high (and it takes time and there are no trained trainers).  But the real hurdles are the deep work required to reinvent/automate the process and the lack of manufacturing experts to do that work.  The question you should ask is – Why does the manufacturing process have to be reinvented/automated?

There’s a dirty little secret baked into the accounting systems’ calculations.  The cost accounting says there can be no increased profit without reducing the time to make the parts and reducing the labor needed to make them.  If the work is moved from country A to country B and the costs (cycle time, labor hours, labor rate) remain constant, the profit remains constant.  Simply moving from country A to country B does nothing.  Without the deep manufacturing work, profits don’t increase.  And if your country doesn’t have the people with the right expertise, that deep manufacturing work cannot happen.

And the picture is similar for moving assembly work back to the US.  All that has to happen is to find empty factory space, hire and train people to do the assembly work, reroute the supply chains to the new factory, redesign the product so it can be assembled with an automated assembly line, hire/train the people to redesign the product so it can be assembled in an automated way, design the new automated assembly process, build it, test it, hire/train the automated assembly experts to do that work, hire the people to support and run the automated assembly line, and pay for the multi-million-dollar automated assembly line.  And the problems are similar.  There’s not a lot of world-class factory space, there are few people available to run the automated assembly line, and the cost of the automated assembly line is significant.  But the real problems are the lack of experts to redesign the product for automated assembly and the lack of expertise to design, build, and validate the assembly line.  And here are the questions you should ask – Why do we need to automate the assembly process and why does the product have to be redesigned to do that?

It’s that dirty little secret rearing its ugly head again.  The cost accounting says there can be no increased profit without reducing the labor to assemble the parts.  make them.  If the work is moved from country A to country B and the assembly costs (labor hours, labor rate) remain constant, the profit remains constant.  Simply moving from country A to country B does nothing.  Without deep design work (design for automated assembly) and ultra-deep automated assembly work, profits don’t increase.  And if your country doesn’t have the people with the right expertise, that deep design and automated assembly work cannot happen.

If your company doesn’t have the time, money, and capability to reinvent/automate manufacturing processes, it’s a bad idea to move manufacturing work back to the US.  It simply won’t work.  Instead, find experts who can help you develop/secure the capability to reinvent/automate manufacturing processes to reduce the cost of manufacturing.

If your company doesn’t have the time, money, and capability to design products for automated assembly and to design, build, and validated automated assembly systems, it’s a bad idea to move assembly work back to the US. It, too, simply won’t work.  Instead, partner with experts who know how to do that work so you can reduce the cost of assembly.

With inflation on the rise and sales on the decline, the time to reduce costs is now.

But before you can design out the cost you’ve got to know where it is.  And the best way to do that is to create a Pareto chart that defines product cost for each subassembly, with the highest cost subassemblies on the left and the lowest cost on the right.  Here’s a pro tip – Ignore the subassemblies on the right.

Use your costed Bill of Materials (BOMs) to create the Paretos.  You’ll be told that the BOMs are wrong (and they are), but they are right enough to learn where the cost is.

For each of the highest-cost subassemblies, create a lower-level Pareto chat that sorts the cost of each piece-part from highest to lowest.  The pro tip applies here, too – Ignore the parts on the right.

Because the design community designed in the cost, they are the ones who must design it out.  And to help them prioritize the work, they should be the ones who create the Pareto charts from the BOMs.  They won’t like this idea, but tell them they are the only ones who can secure the company’s future profits and buy them lots of pizza.

And when someone demands you reduce labor costs, don’t fall for it.  Labor cost is about 5% of the product cost, so reducing it by half doesn’t get you much.  Instead, make a Pareto chart of part count by subassembly.  Focus the design effort on reducing the part count of subassemblies on the left.  Pro tip – Ignore the subassemblies on the right.  The labor time to assemble parts that you design out is zero, so when demand returns, you’ll be able to pump out more products without growing the footprint of the factory.  But, more importantly, the cost of the parts you design out is also zero.  Designing out the parts is the best way to reduce product costs.

Pro tip – Set a cost reduction goal of 35%.  And when they complain, increase it to 40%.

In parallel to the design work to reduce part count and costs, design the test fixtures and test protocols you’ll use to make sure the new, lower-cost design outperforms the existing design.  Certainly, with fewer parts, the new one will be more reliable.  Pro tip – As soon as you can, test the existing design using the new protocols because the only way to know if the new one is better is to measure it against the test results of the old one.

And here’s the last pro tip – Start now.

Image credit — aisletwentytwo

One of the best ways to improve your brand is to improve your products.  The most common way is to provide more goodness for less cost – think miles per gallon.  Usually it’s a straightforward battle between market leaders, where one claims quantifiable benefit over the other – Ours gets 40 mpg and theirs doesn’t.   And the numbers are tied to fully defined test protocols and testing agencies to bolster credibility.  Here’s the data.  Buy ours

But there’s a more powerful way to improve your brand, and that’s to map your products to reliability.  It’s far a more difficult game than the quantified head-to-head comparison of fuel economy and it’s a longer play, but done right, it’s a lasting play that is difficult to beat.  Run the thought experiment:  think about the brands you associate with reliability.  The brands that come to mind are strong, lasting brands, brands with staying power, brands whose products you want to buy, brands you don’t want to compete against.  When you buy their products you know what you’re going to get.  Your friends tell you stories about their products.

There’s a complete a complete tool set to create products that map to reliability, and they work.  But to work them, the commercialization team has to have the right mindset.  The team must have the patience to formally define how all the systems work and how they interact. (Sounds easy, but it can be painfully time consuming and the level of detail is excruciatingly extreme.)  And they have to be willing to work through the discomfort or developing a common understanding how things actually work. (Sounds like this shouldn’t be an issue, but it is – at the start, everyone has a different idea on how the system works.)  But more importantly, they’ve got to get over the natural tendency to blame the customer for using the product incorrectly and learn to design for unintended use.

The team has got to embrace the idea that the product must be designed for use in unpredictable ways in uncontrolled conditions. Where most teams want to narrow the inputs, this team designs for a wider range of inputs.  Where it’s natural to tighten the inputs, this team designs the product to handle a broader set of inputs.  Instead of assuming everything will work as intended, the team must assume things won’t work as intended (if at all) and redesign the product so it’s insensitive to things not going as planned.  It’s strange, but the team has to design for hypothetical situations and potential problems.  And more strangely, it’s not enough to design for potential problems the team knows about, they’ve got to design for potential problems they don’t know about. (That’s not a typo.  The team must design for failure modes it doesn’t know about.)

How does a team design for failure modes it doesn’t know about? They build a computer-based behavioral model of the system, right down to the nuts, bolts and washers, and they create inputs that represent the environment around the system.  They define what each element does and how it connects to the others in the system, capturing the governing physics and propagation paths of connections. Then they purposefully break the functions using various classes of failure types, run the analysis and review the potential causes.  Or, in the reverse direction, the team perturbs the system’s elements with inputs and, as the inputs ripple through the design, they find previously unknown undesirable (harmful) functions.

Purposefully breaking the functions in known ways creates previously unknown potential failure causes.  The physics-based characterization and the interconnection (interaction) of the system elements generate unpredicted potential failure causes that can be eliminated through design.  In that way, the software model helps find potential failures the team did not know about.  And, purposefully changing inputs to the system, again through the physics and interconnection of the elements, generates previously unknown harmful functions that can be designed out of the product.

If you care about the long-term staying power of your brand, you may want to take a look at TechScan, the software tool that makes all this possible.

Image credit — Chris Ford.

With websites, e-books, old fashioned books, Twitter, LinkedIn, Facebook, and blogs, there’s a seemingly limitless flood of information on every facet of business. There are heaps on innovation, new product development, lean, sales and marketing, manufacturing, and strategy; and within each there are elements and sub elements that fan out with multiple approaches.

With today’s search engines and bots to automatically scan the horizon, it’s pretty easy to find what you’re looking for especially as you go narrow and deep. If you want to find best practices for reducing time-to-market for products designed in the US and manufactured in China, ask Google and she’ll tell you instantly. If you’re looking to improve marketing of healthcare products for the 20 to 40 year old demographic of the developing world, just ask Siri.

It’s now easy to separate the good stuff from the chaff and focus narrowly on your agenda. It’s like you have the capability dig into a box of a thousand puzzle pieces and pull out the very one you’re looking for. Finding the right puzzle piece is no longer the problem, the problem now is figuring out how they all fit together.

What holds the pieces together? What’s the common thread that winds through innovation, sales, marketing, and manufacturing? What is the backplane behind all this business stuff?

The backplane, and first fundamental, is product.

Every group has their unique work, and it’s all important – and product cuts across all of it. You innovate on product; sell product; manufacture product; service product. The shared context is the product. And I think there’s opportunity to use the shared context, this product lens, to open up design space of all our disciplines. For example how can the product change to make possible new and better marketing? How can the product change to radically simplify manufacturing? How can the product change so sales can tell the story they always wanted to tell? What innovation work must be done to create the product we all want?

In-discipline improvements have been good, but it’s time to take a step back and figure out how to create disruptive in-discipline innovations; to eliminate big discontinuities that cut across disciplines; and to establish multidisciplinary linkages and alignment to power the next evolution of our businesses. New design space is needed, and the product backplane can help.

Use the product lens to look along the backplane and see how changes in the product can bridge discontinuities across sales, marketing, and engineering. Use the common context of product to link revolutionary factory simplification to changes in the product. Use new sensors in the product to enable a new business model based on predictive maintenance. Let your imagination guide you.

It’s time to see the product for more than what it does and what it looks like. It’s time to see it as Superman’s kryptonite that constrains and limits all we do that can become Popeye’s spinach that can strengthen us to overpower all obstacles.

There’s an unnatural attraction to lean – a methodology to change the value stream to reduce waste.  And it’s the same with Design for Manufacturing (DFM) – a methodology to design out cost of your piece-parts. The real rain maker is Design for Assembly (DFA) which eliminates parts altogether (50% reductions are commonplace.) DFA is far more powerful.

The cost for a designed out part is zero.  Floor space for a designed out part is zero. Transportation cost for a designed out part is zero. (Can you say Green?) From a lean perspective, for a designed out part there is zero waste.  For a designed out part the seven wastes do not apply.

Here’s a recipe for unreasonable profits:

Design out half the parts with DFA.  For the ones that remain, choose the three highest cost parts and design out the cost.  Then, and only then, do lean on the manufacturing processes.

For a video version of the post, see this link: (Video embedded below.)

A Recipe for Unreasonable Profits.

I wrote an article on the level of savings when product designers are engaged in DFMA. 

Here is an excerpt:

 This month, Shipulski details the company’s lean product-design efforts as he issues a “call to action” for lean manufacturers everywhere to involve their product-design teams. 

Why should the manufacturing engineering community care about engaging the product design community in pursuits such as design for manufacturing (DFM) and design for assembly (DFM)? The answer is simple—to make (and save) money