product development process:
A case study at Philips
ANDRIES VAN MARKUS
A thesis submitted to the University of Groningen,
in fulfillment of the requirements for the
Degree of Master of Science in
Technology Management
Using lean principles to improve the
product development process:
A case study at Philips
Student: H.A. van Markus
S1582984
andriesvanmarkus@hotmail.com
University: University of Groningen
Faculty of Economics and Business
Supervisors: Dr. L. Zhang
Prof.Dr.Ir. J. Slomp
Company: Philips CL Hoogeveen
Industrieweg 56
7900 AB Hoogeveen
Supervisor: B. Bircan
Place: Hoogeveen
Abstract
During the past several decades, lean philosophy has been successfully implemented in manufacturing, leading to a number of improvement programs, e.g. TQM, Kaizen, Six sigma. Recognizing the contribution of lean activities in manufacturing and inspired by Toyota’s lean product development, Philips, a leading company in producing healthcare, lifestyle and technology based products, takes the initiative to explore the lean principles in its product development process. This project is carried out to investigate the possibility of adopting lean principles in the product development activities in the Technology and Development department, Philips, Hoogeveen, The Netherlands.
Acknowledgements
I would like to thank Berkay Bircan, my coach from Philips for giving support during the project. Furthermore, I would like to thank Arno de Vet, group leader function development and system architecture, for supporting me, especially in the beginning of the project.
From the university I would like to thank Dr. Zhang for supervising me and giving comments on the thesis. As assessor I would like to thank Prof.dr.ir. Slomp for co-assessing the report. Besides co-co-assessing the report, he facilitated with interesting articles and presentations about lean from the Lean Operations Research Center.
At last I would like to thank my parents and friends for supporting me during the seven years of my studies.
Table of content
Abstract ...i
Acknowledgements...ii
Table of content ...iii
List of figures ...v
List of tables ...vi
List of tables ...vi
1. Introduction ...1
1.1. Background ...1
1.2. Project objective ...3
1.3. Project scope...3
1.4. Report organization ...3
2. Lean product development ...5
2.1. The lean philosophy...5
2.2. Origins of lean product development...6
3. Philips ...18
3.1. Company background...18
3.2. Documented processes within T&D ...19
3.3. The business case...24
4. Research design ...25
4.1. Overview of the project ...25
4.2. Research methodology ...26
5. Existing process ...30
5.1. Project assignment ...30
5.2. FCP and PCP ...30
5.3. Applied processes in practice ...33
5.4. Stakeholder analysis...36
5.6. Benchmark with other projects...39
6. Existing process analysis ...39
6.1. Value ... Fout! Bladwijzer niet gedefinieerd. 6.2. Entrepreneur system designer ... Fout! Bladwijzer niet gedefinieerd. 6.3. Set based concurrent engineering ... Fout! Bladwijzer niet gedefinieerd. 6.4. Team of responsible experts... Fout! Bladwijzer niet gedefinieerd. 6.5. Cadence, flow and pull... Fout! Bladwijzer niet gedefinieerd. 7. Existing process improvement ...40
7.1. Customer focus...40
7.2. Value focus...44
7.3. Set based concurrent engineering ...45
7.4. Entrepreneur system designer ...46
7.5. Flow, pull and cadence ...46
7.6. Teams of responsible experts ...46
7.7. Lean culture...47
8. Summary and recommendations ...49
8.1. Summary of the project...49
8.2. Summary of the recommendations ...50
8.3. Further investigation ...52
List of figures
Figure 1: Functional groups applying lean ...2
Figure 2: Lean product development system...9
Figure 3: Framework of usable knowledge ...11
Figure 4: Set based concurrent engineering...11
Figure 5: Lean as sociotechnical system...16
Figure 6: Philips business process ...19
Figure 7: Functional creation process...20
Figure 8: Product creation process...21
Figure 9: Relationship between FCP and PCP ...23
Figure 10: Conventional product development process ...24
Figure 11: Overview of project...25
Figure 12: Research approach ...27
Figure 13: Representation of components of IDEF3 ...28
Figure 14: Representation of an Ishikawa diagram...29
Figure 15: Assignment process of a project... Fout! Bladwijzer niet gedefinieerd. Figure 16: Speed & Simplicity business process ...30
Figure 17: Goal of FCP and PCP ...31
Figure 18: Documented FCP and PCP process ...32
Figure 19: Existing process in practice ...34
Figure 20: Ishiskawa diagram problem analysis ... Fout! Bladwijzer niet gedefinieerd. Figure 21: Design process ... Fout! Bladwijzer niet gedefinieerd. Figure 22: Oceanos business process ... Fout! Bladwijzer niet gedefinieerd. Figure 23: Drachten business process ... Fout! Bladwijzer niet gedefinieerd. Figure 24: Improved process of FCP and PCP...42
List of tables
1.
Introduction
In this chapter, the background of the lean philosophy is explained. Subsequently, a short description of Philips at Hoogeveen is given. Finally, the project objective and scope are provided.
1.1. Background
Over the last few years, customers become more and more demanding towards products that they want. Along with the diverse individualized requirements, they also require the products to be delivered with shorter and shorter lead times, but at lower prices. To meet these demands, a strong customer focus has to be apparent throughout the whole organization. As a result, over the past several decades, attention has been given to multiple optimization concepts, including Total Quality Management, Kaizen and Six sigma. Nowadays, the lean philosophy receives great emphasizes by many industrial companies.
Lean is a business strategy based on satisfying the customers by delivering quality products and services that are just what the customer needs (Sayer and Williams, 2007). The Toyota Production System (TPS) was the incubator where the methods, techniques, and tools of lean were pioneered and refined. The lean philosophy proved itself in manufacturing already for a long time, resulting in a widely application of the philosophy to optimize manufacturing processes.
Figure 1: Functional groups applying lean
Many companies begin with applying lean principles in their manufacturing department. After successfully applying the lean principles in manufacturing, they start applying lean principles to upstream processes. Also shown is that, 23% of the best in class product developers are applying lean principles nowadays.
Philips, founded in 1819, is one of the largest diversified industrial companies in the world, with sales of EUR 26.8 billion in 2007. The company’s headquarter is located in Amsterdam, and it has manufacturing operations in 28 countries including the Netherlands, Poland, USA, Singapore, and China.
manufacturing. As a result of this success, a growing interest has been shown in the application of the lean principles to upstream processes like product development.
1.2. Project objective
Although certain activities of lean thinking have been already applied to the product development, no structural lean project have been introduced. It should be clear whether or not lean principles can be applied to the product development in Hoogeveen. In addition, it should be well understood what impact the application of lean principles has on the organization of the product development.
The objective of the project is: to investigate the possibilities of introducing lean
principles to the product development process at the Lead Innovation Site (LIS) for small household appliances of Philips in Hoogeveen.
Recommendations concerning the introduction and application of lean principles to the product development process should be given. For achieving this objective sub-objectives are determined.
The project sub-objectives are:
- To obtain an “AS IS” model of the current processes
- To obtain an “TO BE” model of the improved processes using the Lean philosophy
- To simulate the “TO BE” model to obtain the possible consequences of applying the
lean philosophy to the process.
1.3. Project scope
The project is carried out from February 11th until July 7th 2008 and the scope of the project is
as follows:
1. The project is performed with the T&D department of Philips at Hoogeveen.
2. The focus is on the development of a family of silent vacuum cleaners.
1.4. Report organization
2.
Lean product development
Many studies about applying lean in manufacturing have been performed. In contrast, the application of lean to product development is not researched as widely as in manufacturing. It is necessary to have an understanding of lean product development before lean concepts are implemented. In this chapter, first the general lean philosophy is explained. Subsequently, the lean product development concept is explored. Different views on lean product development are explained and compared.
2.1. The lean philosophy
The origins of “lean” are found in the Toyota Production System (TPS) initiated by the Toyota
chief engineerTaiichi Ohno and Shigeo Shingo. In the years following the Second World
War, Japanese industry in general, and Toyota in particular struggled with how to rebuild a shattered manufacturing base without such resources that are typically available to Western
companies (Badr et al., 2004). With the constraints given, Ohno and Shingo started
developing the ideas in the late 1940’s and early 1950’s, and by the end of the 1960’s they
had fully developed their basic principles of lean production (Womack et al., 1990).Ohno’s
view on production was summarized in three principles: build only what is needed, eliminate anything that does not add value, and stop if anything goes wrong. The Toyota Production System was also claimed to be rooted in a set of values: the respect of those engaged in the work, the strive for full utilization of workers’ capabilities and the placing of authority and responsibility for the work with those doing it. After the oil crisis in 1973, Toyota and other large Japanese companies had expanded into Europe and America and, they started dominating several industries, putting local industrial giants such as Ford and GM behind (Kristofersson and Linedeberg, 2006).
development. Unlike manufacturing, an R&D process adds no value when it does exactly the same thing twice. Therefore lean philosophy from manufacturing can not be applied one-to-one to product development.
2.2. Origins of lean product development
Lean product development is not a new concept. In the book “the machine that changed the world”, Womack (1990) already put emphasizes on other departments than production, including the development department. He identified four basic differences in design methods employed by lean producers in comparison with the conventional western way of developing products. These are differences in leadership, teamwork, communication and simultaneous development.
Leadership
In Toyota the leader of a development project is called a susha. This leader can be seen as the large-project leader who is carrying great power. The project leader in Toyota is a well experienced employee with many year of experience in his work. Toyota project leaders are empowered to make their own decisions and those are respected by senior management. In western companies the main role of the project leader is to coordinate the project with little authority. This is evidenced by the fact that senior management can overrule the project leader during the development project. When market conditions change, senior management can adjust the requirements of the new product, or cancel the project.
Teamwork
In a lean development process the susha assembles a small cross functional team which is then assigned to a development project for its life. These team members come from functional departments like market assessment, product planning, styling, advanced engineering, detail engineering and production engineering. During the project they are led and evaluated by the susha. In western companies the project team consists of individuals (including the project leader) who are on short term loan from the functional departments. The project itself is moved from department to department along a sort of production line, e.g., from marketing to engineering to production.
Western companies fail to resolve critical design trade-offs until very late in the project. They also make vague commitments to a set of design decisions. In addition, in western companies the process is implemented sequentially, going from one department to another. This makes it difficult to solve problems through communication. As development proceeds, the number of people involved decreases in lean development because specialties like market assessment are no longer needed. In conventional, western companies the number of people involved in the beginning of the project is very small, but when the project proceeds many people are brought into the project to solve problems, which should have been cleared up in the beginning. In Japan, team members assign a formal pledge to do exactly what everyone has agreed upon as a group. So, conflicts about resources and priorities occur at the beginning rather the end of the process.
Simultaneous development
Mass production designers have a different approach to performing process steps than lean designers. For instance, in stead of first developing the product and then tools to manufacture it, the development of product and tools takes place simultaneously. This is possible because the designers and engineers are in direct face-to-face contact. Of course, this involves a considerable degree of anticipation and scheduling.
2.2.1. Different views on lean product development
LPD Approach Description Tools Major Benefits
Toyota Product Development System (TPDS)
Based on research about TPDS A3 reports, Set-based Concurrent Engineering, Chief engineers Time-to-Market, productivity, quality, rapid learning, fewer changes at the end of development
Lean Principles Application of lean
principles to product development Value, waste, flow, pull, perfection Time-to-Market, quality, productivity
Design for Lean Production
Improvement of product designs so that they cost less, have more reliability and are easier to
manufacture
TRIZ, DFMA, Poka-Yoke
Product costs, quality
Lean Toolbox Application of lean
manufacturing tools in product development Value stream mapping, 5S, work cells Research & Development Capacity
Re-labeled Lean Best/ Good practices
given the lean label to make them more marketable, no real connection to lean New Product Development practices given a new label
Non in the terms of lean, some are useful for incremental improvement
Table 1:Comparison of lean product development approaches (Radeka and Sutton, 2007)
Liker (2006), translates the lean philosophy in a sociotechnical system. This TDPS is explained in more detail in chapter 2.2.3.
2.2.2. The lean product development system
One of the most popular books on lean product development is written by Allen C. Ward (2007). Like concepts of lean production, the focus of his work was to create value and reduce waste in the product development process. He states that two kinds of value are created by the product development: manufacturing systems and usable knowledge. Product development should create profitable operational value streams. Operational value streams includes activities converting raw material to products. The development value stream includes activities running from recognizing an opportunity through manufacturing launch. All included activities should be value creating. Activities are value creating when a customer wants to pay for it. The author also identifies the waste of knowledge as the most critical one for product development.
The lean development system as practiced by Toyota can be summarized in five principles: value focus, entrepreneur system-designer, set-based concurrent engineering, team of responsible experts and cadence, flow and pull. Figure 2 gives an overview of the development system. The five principles are explained as follows.
Value focus:
Knowledge for profitable operational value streams
Cadence, fow and pull Team of responsible experts Set-based concurrent engineering Entrepreneur system-designer leadership
Value focus
To achieve a constantly profitable operational value stream, Ward (2007) stresses that the company should know: what their customers want and how to integrate that in their products, their own manufacturing and development capabilities, the physics and aesthetics of their products and the capabilities and limitations of their suppliers. In order to achieve that, the value streams should be lined-up. Ward (2007) emphasizes that the whole system should be involved. So every department should be involved in making the processes lean. It can not sustain when the lean philosophy is only applied in one or two departments because it affects the whole company.
As mentioned before, the value adding activities of product developing consists of two parts. The creation of usable knowledge depends on three basic kinds of learning, as shown in Figure 3:
- integration learning: this includes the learning about customers, suppliers, partners
and the physical environment in which the product will be used. It helps to understand how to integrate the design, according to the needs of others, most importantly, the customers;
- innovation learning: for the creation of new possible solutions;
- feasibility learning: this enables better decisions among the possible new solutions,
Figure 3: Framework of usable knowledge
Lean companies emphasize to create usable knowledge (Ward, 2007; Kennedy, 2003; Morgan, 2006). They convert data into usable knowledge by using trade-off curves. In addition to the value focus, Ward (2007) identifies four cornerstones for achieving lean product development.
1. Set-based concurrent engineering (SBCE):
In lean organizations systems are broken down in sub-systems. Multiple concepts for every sub-systems are explored simultaneously. The purpose of SBCE is to aggressively explore trade space up front and to eliminate weak options quickly, as shown in Figure 4.
Using tradeoff curves, updated continuously, to capture knowledge about key design decisions, SBCE demands aggressive evaluation. In conventional development a concept for the system is selected and then supporting concepts are selected for the subsystems. Sequentially, tests are performed to prove that the system and subsystems work. SBCE generates many concepts in parallel, and tries to make them fail quickly and efficiently. It converges on a concept only after proof that it is the best of the set, that it works well with the rest of the system, and that its failure points lie safely beyond operating conditions.
Sobek (1999) summarizes the definition of SBCE as “reasoning, developing, and communicating about sets of solutions in parallel and relatively independently”. Because this description is quite hard to understand, the best way to explore the definition is to split it into parts. The first part of SBCE is to develop sets of design alternatives for a given problem. Rather than trying to identify one solution, engineers should instead develop a variety of design options, and then gradually eliminate alternatives, until only one option remains (Sobek et al., 1999). The objective is to explore multiple alternatives early in the process to avoid failure later in the process. Exploring many different concepts is relatively cheap in the beginning of the process. Later in the project, molds and other equipment are bought, changes at this state are more expensive than changes in the beginning of the project This way of working also delays key decisions, which paradoxically, results in faster product development (Ward et al., 1995).
2. Entrepreneurial system-designer
and education of the developers. The representation of the organizational role of the entrepreneurial system-designer is shown in appendix 1.
3. Team of responsible experts
In lean organizations, developers are empowered, this gives them a great feeling of responsibility. In addition, they work in teams and are developing real expertise. The responsibility concerns the success of the whole project. So, even when a developer is working on a very specific area, he is still responsible for the fact that his internal customer can work with it. For example, the function developer should take into account that the product developer has to fit it in a product. Teamwork is very important to make the project successful in the end, everyone has to work together to achieve the best result. To achieve this teamwork, team members have to be loyal to the team, even when decisions are taken which they do not agree with.
4. Cadence, flow and pull
The Toyota project management exists consists of three concepts: cadence, flow and pull. To level the load on the resources, everything should move in a repetitive rhythm. Projects are given short and rigidly enforced milestones, these milestones are called “target events” by Ward (2007). The developers have the freedom to do whatever is necessary, this means a great level of empowerment. As long as the developers meet the target events with a satisfied customer. This is significantly different than the conventional milestone development process where all milestones are fixed in the beginning of the project.
Flow means that all the knowledge and materials are available when needed. This knowledge and materials should be available in small chunks that can be handled easily. In this manner the knowledge and materials are ready when a successive developer needs it.
Reducing waste
The lean concepts stresses the importance to reduce waste in the applied processes. Taiichi Ohno, the creator of the Toyota production system identified seven kinds of waste. These wastes are concerning the production system, but these kinds of wastes can also be translated to wastes in product development. These wastes are given in Table 2 (Morgan and Liker, 2006).
Wastes in Production Translated wastes in Product Development
Overproduction Extra Features
Waiting for information or decisions
Unnecessary transport Hand-offs
Over-processing Reinvention, paperwork
Excess inventory Partially done work
Unnecessary motion Meetings, searching info, task switching
Defects Correction and rework
Table 2: Wastes in product development
However, Reinertsen (1997) emphasizes that some wastes are necessary and may serve a very different purpose in the product development environment. For example, carrying out many tests early in the design process generates information early when it is most important and helps early detection of errors. This is coherent with the front-loading process, described in the SBCE (Reinertsen, 1997).
Ward (2007) states that the waste of knowledge is the most critical waste in product development. He points out three types of waste of knowledge: scatter, hand-off and wishful thinking.
The waste of scatter occurs when the flow of knowledge is disrupted. The reason can be that a product developer has too many administrative actions to do, causing that the thing he is hired for is “forgotten”. The interaction between developers plays a great role here. A fundamental cause of scatter is the assumption of conventional managers that order and regulation can be achieved by procedures and manuals. But order and regulation should be achieved by the interaction of people, which takes time.
2. Waste of hand-off
Hand-off waste occurs when information is handed over. It is known that only 20% of the knowledge someone has can be transferred to another by a hand-over. Hand-off also occurs when knowledge, responsibility, action and feedback are separated. In essence, this is the base of scientific management. The manager defines a goal, the expert develops a process and the operation executes that task. Every actor has to report to his supervisor, resulting in useless reports.
3. Waste of wishful thinking
Waste of wishful thinking occurs when making decisions without data, or testing to specifications. This makes the product vulnerable to problems later in the process, or even failure of the project. In addition, discarded knowledge is part of wishful thinking. This is the failure to put everything learned during the project into useful information for a next project.
2.2.3. Revised lean product development
Morgan (2006) treats lean product development as a sociotechnical system. Sociotechnical systems theory (STS) found its roots in the early 1960’s. The term system refers to a framework by which one can analyze and/ or describe any group of objects that work in
concert to produce some result. To be successful, any organization must find the
The product development of Toyota evolved as a living system for many years. When applying the STS to the product development, three primary subsystems can be identified: the process, people and tools and technology, The power of this system is that the combination of the three subsystems is emphasized. The implementation of a sociotechnical system requires a holistic systems approach that engages the entire organization.
The sub-system can be defined as all the tasks and the sequence of tasks which are required to bring a product from concept to start of production. These processes include how information flows, how designs evolve, how tests are completed, how prototypes are made and how the voice of the customer is understood. The people are the key in the lean product development system. The people subsystem includes shared language, symbols, beliefs, its leadership style and learning style and how it trains and develops employees. The last subsystem concerns about tools and technology. Many new technologies support the product development to decrease development time, like rapid prototyping, digital simulation, virtual engineering and product life cycle management. But these tools only are valuable when they are customized to the needs of the organization. Morgan (2006) identifies 13 lean principles corresponding to the three subsystems, as shown in Figure 5.
To o ls & Te chn o log y Ski lled pe ople
Another slightly different view on lean is given by Ballé and Ballé (2005). In their article “Lean development”, they identify four main features for lean product development: customer focus, limiting late changes, mastering the flow and efficient development process as a result of a focus on quality. Reinertsen (2005) presents five key methods for achieving lean product development:
Queue management: The “product” of engineering work is information, which,
although not visible, creates queues waiting for overloaded resources.
Batch size reduction: Early deliveries of small batches provide opportunities
for transferring requirements needed for quicker next-stage decisions.
Cadence: By conducting project reviews at fixed-time intervals,
e.g. every week, all review dates become completely
predictable, rescheduling is eliminated and the amplification of variance goes away.
Rapid adjustments: The speed of local adjustments is particularly important in
queuing systems. When capacity is lost, it should be resolved quickly to avoid queues.
Waste elimination: Adopting the same broad view of waste as in
manufacturing is equally useful in development.
Morgan (2006) adds another method to achieve lean product development to the five methods of Reinertsen: the learning and continuous improvement.
3.
Philips
This chapter gives information about Philips and the processes they apply. First background information is given, followed by the documented processes. The documented processes concern a description of how the processes look like in theory. In following chapters, the processes are analyzed in practice to see what the differences are. The chapter ends with a description of the case which is used to perform this investigation.
3.1. Company background
With the slogan “Sense and Simplicity”, Philips is a global leader in Healthcare, Lifestyle and Technology based product and service solutions. With this brand, Philips emphasizes their goal to deliver products that make sense for their customer that are easy to experience.
Philips maintains the passion to “Improve the quality of people’s lives through timely
introduction of meaningful innovations”. Philips emphasize on selling not only a product but
the experiences that comes with the product. Using branding and innovation to differentiate themselves from competitors, Philips invests heavily in R&D with R&D expenditures of EUR 1.6 billion in 2007. Philips has three product divisions: Healthcare, Lighting and Consumer Lifestyle; these make up its three pillars. The products are sold through sales outlets in 150 countries around the world.
The sector Consumer Lifestyle (CL) is formed by former Domestic Appliances & Personal care (DAP) and Consumer Electronics (CE). All consumer lifestyle products are included in this sector.
“We enable Lines of Businesses (LoB’s) to become and remain leader in their key categories by option generation, development and deliveries of the required product propositions with
superior service levels”
With this mission statement, the following vision is defined:
“Innovation and delivery of value added solutions to the business, in order to fulfill the need of consumers that seek propositions that enhance their quality of life, in close co-operation
with mature suppliers and a wide network of partners”
The T&D department is facilitated by the Advanced Technology Center (ATC), located in Drachten. In this facility, applied research is performed, but no products are developed here, only new technologies are tested and explored.
3.2. Documented processes within T&D
The documented processes are the formal written processes by Philips. Interviews and field study show that these processes are not always applied as they are written down. This will be analysed in later chapters. Here, the formal written processes of Philips are explained.
3.2.1. Business process
When the assignment for a new product is placed, the T&D department starts a project. T&D basically makes use of three processes in their product development: the innovation planning process (IPP), the function creation process (FCP) and the product creation process (PCP), as shown in Figure 6.
There are different product development processes within T&D. When an existing product has to be improved or needs incremental changes (other design), the main function remains the same. In this case the FCP phase is skipped and the product development begins in the orientation phase of the PCP directly. Only if new functions with new technologies are added to a product, a FCP phase is performed first. The IPP is a process in which the product road map is defined, in this road map the products are planned for the next five years. This road map is built by the program manager, which has input from the consumer marketing department and product development department.
The IPP, FCP and PCP phase are sequentially organized. First, the (technical) functions must be developed before the design of the product can be developed. Note, the product introduction phase (PIP) and the market introduction phase (MIP) are outside the scope of this project.
3.2.2. Function creation process
Philips applies an official predevelopment process, this process aims at the development and testing of new product functions. This predevelopment phase is called the “Function Creation Process” (FCP). The goal of the FCP is “to increase innovation by controlling creativity”. The process of this predevelopment process is a guideline for every project, This means that this process is adjusted for every project, this increases the speed with relatively easy projects. The FCP consists of three parts with four milestones, as shown in Figure 7.
Figure 7: Functional creation process
leader makes a planning for the predefined milestones and deliverables. The main activities in the start phase are: determining market and industrial needs, identifying interesting principles and making a global plan. Then the physical principle phase researches potential principles and evaluates the fundamental phenomena for each principle. At the business decision a principle is chosen. This milestone is optional, when the project does not require this extra decision moment, this can be skipped. In the FCP the principle is translated into a realistic embodiment and the interfaces are fixed. The FCP is used as an input for the product creation process.
3.2.3. Product creation process
The product creation process is designed to develop new products successfully. The process is divided in seven phases, each resulting in a milestone. For each milestone the project team has to deliver certain deliverables, as prescribed in the process description. The results are presented in a consolidation meeting, with all relevant stakeholders, including the management. The outcome of these consolidation meetings is either:
- the authority to proceed to the next phase;
- a conditional authority to proceed to the next phase;
- the decision to cancel the project.
Figure 8 shows the seven phases of the product creation phase, underneath a short description of each phase is given.
Figure 8: Product creation process
- Orientation phase
developed. Since individual new functions have already been proven in the function creation phase, the focus in the orientation phase of the PCP is on the product as a whole. Innovation is still taking place in this phase, resulting in a winning industrial design.
- Definition phase
After the project-order, innovation will turn into “straightforward” realisation. In the
definition phase, the concept and industrial design are developed into a more
detailed technical design and a manufacturing/ logistic concept.
- Development phase
In the development phase, the design is transformed into a fully dimensioned and functioning prototype that is used to verify the product design.
- Preparation phase
In the preparation phase, all tools are built or ordered. These tools are used to make the first product samples.
- Product release phase
This product release-phase concerns the release of the product for volume production. The definitive tools and equipment are used to perform a pilot run of the right batch size. The products of these pilot runs are tested and then the release for production is drawn up.
- Production ramp-up phase
In this phase the production will be ramped up to full capacity and both the product design and the manufacturing system are verified. At the end of the phase, the product is released for delivery.
- Mass-production release phase
3.2.4. Relationship FCP and PCP
As described before, the PCP phase is subsequent to the FCP phase. However, not every PCP requires an FCP. If a product only has incremental changes, no FCP is needed to develop a new function, so it can be the case that only a PCP is performed to develop a new product. It is also possible that multiple FCP’s precede a PCP. In this case, several new functions and technologies have to be developed before the new product can be developed, as shown in Figure 9.
Figure 9: Relationship between FCP and PCP
Multiple FCP’s can be performed concurrently, resulting in a more efficient process.
3.2.5. Comparison of the Philips business process and a conventional PD process
the IPP. The FCP can be compared to the concept development and system-level design and the rest of the process can be compared with the PCP.
Figure 10: Conventional product development process
3.3. The business case
25
4.
Research design
In this chapter, the research design of the project is described. An overview of the project is given to understand the project. Furthermore, the research methodology is provided where the approach of the research is explained.
4.1. Overview of the project
In the model, as shown in Figure 11, the concepts relevant to the project are illustrated with their relation to each other.
Figure 11: Overview of project
26 For this research, the lean philosophy is used to improve the organisation and process of the product development.
The output of the product development process is measured by the performance of the department. Time to market is related to the throughput time for developing a new product. Many variables have influence on the lead time of the development process.
Quality of the product development process can be measured by the field call rate, this is the number of products that return from the market after the product is launched. Return on investment can be calculated by the expected turnover, related to the costs of the investment. Knowledge is hard to measure, one method is to count the number of patents. However, measuring knowledge remains difficult and is out of the scope of this project.
4.2. Research methodology
27
Figure 12: Research approach 4.2.1. Desk study
The starting point of the research was to explore the lean product development concept. Literature is researched in order to determine what lean product development consists of exactly. Most of the literature was related to the Toyota product development system.
In addition to the literature study, the business processes of the T&D department of Philips Hoogeveen are analysed. Local intranet sites and relevant documents are used to get a clear picture of the currently applied development processes.
4.2.2. Qualitative research
28
4.2.3. Analysis method
To analyze the current process, the Integrated Definition modeling (IDEF3) is used. This is a technique to model functions required by a system or enterprise, and the functional relationships and data that support the integration of those functions (Dorador and Young, 2000). IDEF is the common name referring to classes of enterprise modeling languages. These classes include: function modeling (IDEF0), information modeling (IDEF1), data modeling (IDEF1x), process modeling (IDEF3), object-oriented design (IDEF4) and ontology description capture (IDEF5). For analyzing the existing product development process, IDEF3 is used to model the activities of the system. The purpose of IDEF3 models is to enable process analysis and identification of business process improvement opportunities.
The IDEF3 collect the following data related to an activity:
- Input: Data or material used to produce an output of an activity.
- Control: Data that constrain or regulate the activity and hence the transformation
of inputs into outputs.
- Output: Data or materials produced by or resulting from the activity. It must
include the input data in some form.
The two primary modeling components are processes (represented by the boxes) and the data and objects that interrelate those processes (represented by arrows), as shown in Figure 13.
29 The strength of the IDEF3 technique is the flexibility and clarity for modeling activities and the information flows between them. It is used for evaluating enterprise activity structures, as it provides an easy to understand model which non-experts can understand and assess. (Dorador and Young, 2000).
After the analysis of the current process, the relevant stakeholders are determined. The interests of every stakeholder are captured by interviews. The interviews resulted in a variety of interests and potential causes of the problem situation expressed. This is summarized in an Ishikawa diagram, also called a “cause and effect” diagram. This diagram expresses the cause of a particular effect, as shown in Figure 14.
The main causes in this investigation are the organization, documentation, process and people. These subjects are explained in detail in Chapter 5.3.
5.
Existing process
This chapter depicts the existing process with regard to the function development phase and the orientation phase of the product development process. First the project assignment process is described, followed by an explanation of the formal processes in detail. Subsequently, the FCP and PCP processes are explained which are applied in practice.
5.1. Project assignment
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5.2. FCP and PCP
The overall business process is called the “Speed and simplicity (S&S)” tool. This tool includes a description of processes within product development, as shown in Figure 16.
A0 Road mapping A1 Function creation process A2 Product creation process A3 Mass production Business strategy Marketing information Technology forcast Product plan Product plan Function information Developed product Marketing information Advanced technology Supplier information Process information Quality information Design information Area of concern
This business process reflects the overview of product development at a high aggregation level. For the long term (up to 5 years) a roadmap is conducted. This roadmap gives information about the launching of new products. In this roadmap, a launch date is determined and from that point the development of the new product is calculated. If the product can be built from existing technologies, the product development starts from the PCP. But when new functions with new technologies are required in the product, these functions have to be developed first, then the development process starts at the FCP.
The development process is divided in two processes: predevelopment (FCP) and product development (PCP). The reason for separation is to manage risk in the projects. During the actual development of the product (making prototypes, order molds) much money is invested to realize the project. From that moment, the risk of failure should be reduced to zero, or at least to a minimum. To achieve that, new functions are developed in a predevelopment phase, i.e., FCP.
The goal of the FCP is: “To increase innovation by controlling creativity”. The focus is on new technical principles. The goal of the PCP is: “To develop a product that is ready for
release for mass production”. The focus is on industrialization; based on proven technologies
and validated components/ new functions.
The difference of these two functions is obvious. The FCP is creativity driven, while the PCP is time driven, as shown in Figure 17. This means that efficiency is important within the PCP. These separated processes are performed by different departments with a different functional supervisor, reporting to the T&D manager.
Figure 16: Goal of FCP and PCP
- break through function;
- budget & time for developing the function; and
- fit all requirements (low call rate, factory sales price).
These factors are conflicting in nature. If a break through innovation has to be developed, more time and resources are needed. There is a trade off between these factors, all factors are important and the best combinations has to be found.
To achieve a better overview of the documented existing process, a more aggregated level of the documented process is shown in Figure 18. In this figure it can be seen that the FCP and PCP process are sequential. The PCP process is not visualized completely, only the orientation phase of the PCP is included to see the relation with the FCP.
A1 Assignment (develop silent vacuum cleaner) A2 Identify the sound sources A3 Identify possible physical principles A4 Determine functional critical parameters A31 Test physical principle A5 Investigate and select embodiment A6 Determine working window A8 Define product/ market opportunities A9 Define commercial specification A100 Create artistic design A101 Generate tech. / functional feasibility A102 Guarantee industrial feasibility A11 Test & select design model A12 Prepare for consolidation Business information ATC Design information Process information Construction requirements A7 Consolidate FCP Marketing/ ARC requirements Marketing req. Process req. Safety req. Quality req. Technology roadmap Quality information FCP PCP FCP PCP Marketing information Winning design Checked design Technical feasible Production allocation defined Prliminary assembly plan Supply chain defined Commitment of all parties Supplier information Feedback from FCP Patent information Patent information (5) Assignment information Competitor information (5) Design rules (3) FMEA information (3) Factory sales price information (6) Industrial requirements information Legal & safety information (2) Deliverables information (6) Consolidation reports User requirements information System requirements information VPH
Planning Test results (52) Do’s and dont’s ARC
A10 Concurrent engineering
Estatics FSP
Figure 17: Documented FCP and PCP process
- patent information;
- assignment information;
- competitor information;
- design rules;
- FMEA information;
- factory sales price information;
- industrial requirements information;
- legal and safety information;
- consolidation reports;
- user requirements information;
- value proposition house information;
- planning information;
- test information; and
- do’s and don’t’s
The most important deliverables of the orientations phase of the PCP are the following:
- winning design;
- technical feasibility information;
- production allocation information;
- preliminary assembly plan;
- defined supply chain; and
- commitment of all parties to continue
5.3. Applied processes in practice
A1 Assignment (develop silent vacuum cleaner) A2 Identify the sound sources A3 Identify possible physical principles A4 Determine functional critical parameters A31 Test physical principle A5 Investigate and select embodiment A6 Determine working window Business information ATC Design information Process information A7 Consolidate FCP Marketing/ ARC requirements Marketing req. Process req. Safety req. Quality req. Technology roadmap Quality information Feedback from FCP Patent information Patent information (5) Assignment information Competitor information (5) Design rules (3) FMEA information (3) Factory sales price information (6) Industrial requirements information Legal & safety information (2) Deliverables information (6) Consolidation reports User requirements information System requirements information VPH
Planning Test results (52) Do’s and dont’s ARC A8 Define product/ market opportunities A9 Define commercial specification A100 Create artistic design A101 Generate tech. / functional feasibility A102 Guarantee industrial feasibility A11 Test & select design model A12 Prepare for consolidation Construction requirements Winning design Checked design Technical feasible Production allocation defined Prliminary assembly plan Supply chain defined Commitment of all parties
A10 Integrate different functions Estatics FSP Design information Design information
FCP
PCP
A62 Determine all critical functional parameters A60 Determine working window A63 Prove the window in which the embodiments works for eachparameter A61 Investigate embodiments Functional management approves
List with all requirements Parameter window of requirements State validation of solutions Prepare design rules
Selected embodiment Select embodiment Windows researched and proved? A120 Review pre-development/ research results A121 Generate product concepts A122 Analyse possibility to standardize A123 Conduct competitor analysis A124 Draw up environmental report A125 Determine construction principles and key components A126 Predict performance, reliability and call
rate A127
Evaluate final design
Before the FCP starts, an assignment is written by the program manager in cooperation with the system architect. In the early state of an FCP project, the assignment is discussed with the project team, ARC, design and marketing. The roadmap delivers information about the time schedule of the project. In the XXX case, the ATC identified the sound sources of the vacuum cleaner. During the identification of physical principles, the FCP team starts to think about possible solutions to reduce the noise in the sound sources. Several options are researched and the best option is explored in more detail. When one physical principle is selected, the critical parameters of this principle are identified. Theoretical hypothesis are determined about the behavior of the function. Then the function is tested to see if the hypothesis is correct. This is done in test laboratories where samples are made and tested. Testing the theoretical hypothesis is a very time consuming activity because every variable has to be tested and related to other variables. The goal is to create a working window in which the behavior of the function is given. With this working window, PCP engineers can develop a product where this function is included. The working window is of great importance to the PCP engineers because then they know what they can adjust in the function and what the results will be of the adjustment. In the XXX case, three FCP’s were conducted. The PCP engineers started the development of the vacuum cleaner, concurrent to the FCP. The PCP starts with defining the market opportunities in order to have a good business case. When the technical feasibility is generated in the PCP process, all parts of the product are tested and researched on the integration of them in the end product. Then the design of the products starts and the technical feasibility is researched. In the mean time, the developed functions are reviewed. With information about the architecture of the product and the aesthetic design the final product is drawn and prototypes are built to perform lifetime tests and other quality tests. In this phase, there is a strong iteration with the design department to develop a suitable design for the product. The orientation phase of the PCP usually lasts three to six months. The FCP of the XXX project lasted over two years.
- Product development (PCP)
- Function development & Architecture group (FCP)
- Application Research Centre (ARC)
- Advanced Technology Centre (ATC)
- Process engineering
- Purchasing
- Marketing (CMM)
- Development Quality Department (DQD)
- Testing and Verification (T&V)
- Design
For the XXX project, three FCP’s were running. When the exhaustion function was consolidated, the PCP began to develop the product. At the time of writing this report, the other FCP’s are not consolidated yet and are still under development.
5.4. Stakeholder analysis
Many functions are involved in the development process. These functional employees have their own unique tasks. The stakeholders are identified and their interests are listed as elaborated below:
- FCP project leader (PL FCP)
The interest of the PL FCP is to manage the FCP in such a manner that a function is proven in the end. This process is creativity driven. The PL FCP generates a planning and calculates the needed resources. The PL FCP is responsible for delivering a function which is mature enough to implement in a product.
- FCP engineer
The interest of the FCP engineer is to develop and prove a function. In the beginning of the project a function is described according to the VPH, then the FCP engineer start to develop a working function. The process of developing a new function requires a lot creativity. New technologies are tested to develop the new function. The FCP engineers have to take into account the manufacturability of the function.
The interest of the PL PCP is to manage the PCP in such a manner that the product can be launched in time. All the parts are drawn for production and a prototype is built. This process is time driven, the launch date is fixed after Project Order (PO: the first milestone in PCP). In the orientation phase there is time for discussing how the product will exactly look like, but there is no time for extensive testing in the orientation phase. After PO, risks in the project should be minimized.
- PCP engineer
The interest of the PCP engineer is to develop an end product. When PCP starts, all components are already developed. Some of the components are developed in the predevelopment phase, other parts are already existing components. The task of the PCP engineer is to assemble and integrate all components into a product. In addition to the integration of all the components, the device has to fit in the design of the outer body. Lifetime tests have to be performed and the product should be ready for production in the end of the PCP. This means that also the way of manufacturing is known. From the beginning of the PCP, the launch date is fixed, so the process is time driven.
- PCP Lead Engineer
The interest of the lead engineer is to manage the technical part of the project. This includes the practical drawing of parts, prototyping, technical feasibility tests, etc. The lead engineer is responsible for the technical realization of the project, and can be seen as the technical project leader.
- Application Research Centre
The ARC is responsible to translate the VPH into user requirements (Critical To Quality: CTQ’s). They research the customer insight. Tests are performed with customers where the needs and wants are explored. In this case the assignment of producing a low noise vacuum cleaner is translated in an assignment of developing a vacuum cleaner with a total noise level of < 70 dB.
- Advanced Technology Centre
certain functions. In this case of XXX, they researched the acoustic behavior of a vacuum cleaner.
- Purchasing FCP
The FCP purchasers search for suitable suppliers for the (development) of parts. This is part of strategic purchasing because suppliers are asked to think with the developers for solutions. Also the production of molds is part of the job.
- Purchasing PCP
The PCP purchasers search for proper suppliers to produce parts of the product. This concerns commodity parts. It is important to have detailed drawings of the part so that the supplier can manufacture it without problems.
- Testing & verification
The responsibility of testing & verification is to test the functions if they comply to the specification. For example: if a vacuum cleaner should make the floor clean, the T&V verifies how clean “clean” is.
- Consumer Marketing Manager (Marketing)
The interest of the CMM, together with the ARC is to translate customer needs into requirements. From the business (marketing) customer needs are identified and forwarded to the developers. The marketing department is responsible for the profit of the end product.
- Process engineer
The interest of the process engineer is to have a product that is easy to manufacture. The parts designed by the FCP and PCP should be suitable for mass production.
- Design engineer
The interest of the design engineer is to make a design which will suit to the current trends in the market. Designers join the development in the predevelopment phase, but have a marginal role in this phase (in the XXX case). In the orientation phase of the PCP, they work on the aesthetic design of the end product.
The responsibility of the DQD is to ensure that the quality of the developed function is sufficient. This quality concerns the safety of the product and life cycle test for example. The goal of the DQD is to achieve a field call rate that is as low as possible. This analysis shows that different stakeholders have a different interest in the project. They all have their own goals as a team. The goal of the project is always to develop a successful product, but predevelopment and product development have different goals in itself. The rest of the departments play a facilitating role in order to achieve a smooth development process.
5.5. Inefficiencies in the process
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5.6. Benchmark with other projects
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6.
Existing process analysis
7.
Existing process improvement
The ideal situation would be that the whole development process would be performed by a fixed group. In this case no transfer of knowledge is needed between different groups of engineers. A handover always results in waste, for example a waste of knowledge, waste of time and a waste of money. But this one-stage process is an utopia. Some processes have to be divided in specific sub-processes.
The preferred situation would be that no time and capacity of resources are wasted when the process is handed over from FCP to PCP. The process should act like a flow of activities without interruption. No rework exist, work done in previous phases of the development process are first time right and do not have to be adjusted in subsequent processes. In addition, in the preferred situation the documents are easy to retrieve and only the information strictly necessary is written down. The knowledge created in the development process is captured and accessible to the whole organization. Then, cross project learnings can be achieved.
In order to achieve a flow of activities, continuous learning and an effective and efficient product development process, the following improved process can be applied. The subjects are compiled under the following lean headings of Ward (2007): customer focus, value, set based concurrent engineering, entrepreneur system designer, flow and pull and cadence, and team of responsible experts.
7.1. Customer focus
customer of the FCP project. But the assignment to develop a function is given by the business (marketing). In that manner, the business is also a customer.
For the XXX project it was already known in the beginning of the FCP project that the results are used to develop a silent vacuum cleaner. To find out what the needs and wants are of the customer, they should be involved in an early stage of the project.
Work had to be redone due to changing requirement during the development process. During the orientation phase of the PCP, the design department changed the design. Due to that, the components did not fit in the product anymore and had to be redeveloped. Besides, the PCP engineers had different expectations about the FCP than the delivered results from the FCP.
Performing the process concurrently is possible when the tasks are synchronized well. In the improved model, the process is still concurrent, as can be seen in Figure 24. The cooperation between the FCP engineers, PCP engineers and design department can be improved. When the design department starts to think about the design of the end product earlier, and the PCP engineers are also closely involved, the chance for successfully implementing the newly developed functions into the end product can be increased. The thick lines in Figure 24, represent the differences from the existing process. In the improved process, more emphasizes is given to the input of the design department earlier in the process. The process flow will then look like represented in Figure 25.
This process forces the PCP lead engineer to think about what input he needs for the PCP process. Also the design department has to know what kind of design the end product will have. The design of the product does not have to be known exactly, but general dimensions should be known. The design department should be involved more in the FCP, this will avoid that the develop function fails to fit into the design. In this manner the output of the FCP: a developed function, will have a better fit in the end product. This approach forces also an extensive cooperation between the FCP, PCP engineers and designers. Engineers from all departments should work in both processes in order to get the required knowledge about the product. When decisions are made about requirements, these should not be adjusted anymore later in the project. Multiple PCP engineers should work within in the FCP team, including the lead engineer. The Oceanos project can be used as best practice. This project shows that performing the FCP and PCP concurrently is possible. This close cooperation requires flexibility from both the FCP and PCP engineers and project leaders. A challenging culture has to be achieved in order to achieve a successful cooperation with engineers from both processes. The culture issue will also be explained in more detail in Chapter 7.7. The functional leader should make sure that the stakeholders agree upon the requirements.
7.2. Value focus
As mentioned before, the value stream of a new product development process consists of two parts. Several authors stress the importance of knowledge creation in product development (Kennedy, 2003; Morgan, 2006; Ward, 2007). In the current situation the focus lies on the value stream of developing new products. Knowledge is created during the projects, but the question is whether this knowledge is really usable knowledge. To create a value focussed development department lean emphasizes the need of the following tools: A3 reporting, trade-off curves and knowledge teams.
7.2.1. A3 reporting
communication format, called A3. The idea is to force engineers to filter and refine their thoughts and findings to fit one sheet of paper in such a way that management and engineers of sub-sequent processes has all of their questions answered by reading this single piece of paper. The process of making A3 reports is given in Appendix 2.
7.2.2. Trade-off concept
A lot of data is created during each phase of the development process. This data is not always easy to understand or does not give exact insight in the behaviour of the function. Trade-off curves can be used to visualize the information. If the critical parameters of the function are determined, their behaviour should be examined. A graph is often easier to understand than hard data. The trade-off theory is quite easy to understand, but the implementation of it is very time consuming. The concept of trade-off curves is further explained in Appendix 3.
Due to the time pressure on the predevelopment teams, it is not possible to extensively apply the trade-off concept in the current situation. When projects end, the project team is immediately assigned to an other project. In this manner, there is not time to capture the created knowledge of the project. The organization should make time for the project teams to create usable knowledge. When time is available, project teams can capture the created knowledge in such a manner that it is useful for next projects.
7.3. Set based concurrent engineering
engineering, more resources and time are needed in the FCP phase to explore the different concepts.
7.4. Entrepreneur system designer
Within the product development process, the responsibilities are separated over the FCP and PCP process. This creates hand-off waste. The Toyota production system recommends to have one person responsible for both the technical part of the development as well as the commercial success of the new product. Within Philips, a clear separation of these responsibilities exists. It is not feasible to adjust this structure in once, and that is also not what is recommended. Within the T&D department the FCP and PCP are lead by different project leaders. If one technical project leader leads the whole development process, knowledge transfer becomes easier.
The lean philosophy also stresses the empowerment of employees. For Philips this means that project teams and their project leader are empowered to make decisions because they are the experts. Now, the business in Amsterdam has a big influence in making decisions. This should be empowered to the pre developers and product developers because they exactly know what the project is about.
7.5. Flow, pull and cadence
To create flow in the process, interruptions should be reduced to a minimum. The S&S tool gives an extensive description of what should be done during each phase. The S&S tool is used as a referring tool. But standardized documents are not easy to find. Using checklists as Balle & Balle (2005) suggest will be more valuable than the current S&S tool. The standard documents are available in the S&S tool but they should be easier to access.
7.6. Teams of responsible experts
