lean product development at goodyear - fisher … to end lean product...investment in “lean...

May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 1 5/23/2012 1

End-to-End Lean

Product Development

at Goodyear

Norbert Majerus

[email protected]

5/18/12


Passion?


Agenda

Goodyear Overview

Why do LEAN in Product Development

Lean Tire Development Process – what

works

Results

Case Studies

Lessons Learned


The Marketplace

Tires are an integral element of all Vehicle Systems


Business Overview

Goodyear Specialty = Tires and Tire Materials

Global company – 42 tire manufacturing facilities in 22 countries

Third largest tire company - $22.8 Bi annual sales

Focus on high (technical) end of the business – high value products and innovation


Goodyear IC

Luxembourg

Goodyear IC

Akron, Ohio

Dunlop DC

Germany

SRI TC

Japan

Goodyear Innovation

Network

1400 professionals


Tire Development

Typical Passenger Tire

• 15 - 18 Components

• 12 Compounds

• 2 Fabrics

• 2 Steels

• 60 Raw Materials

Tread

Belt

Sidewall

Ply

Liner

Apex

Bead

Chafer

Toeguard



• 12 Compounds

• 2 Fabrics

• 2 Steels


Tread

Belt

Sidewall

Ply

Liner

Apex

Bead

Chafer

Toeguard



• 12 Compounds

• 2 Fabrics

• 2 Steels


Tread

Belt

Sidewall

Ply

Liner

Apex

Bead

Chafer

Toeguard

High competition and diverse customers lead to short product cycles

and very high complexity in a highly regulated industry

High variability in application, testing, materials, manufacturing

processes …

Combination of high complexity and high variability created a worthy

challenge for a lean product development process

At Goodyear we

release about

1,500 new

(innovative, high

value added)

SKU’s every year

around the world


Lean Product Development

Last Year R&D saved us $25 Million – Next year we will save $30

Million - by eliminating R&D


Traditional vs Lean Process

Optimized functional process at the cost of project flow

Large queues and WIP (work in progress)

Poor delivery and long cycle times

Need of heroes and emergencies

Stop iterating when time runs out

Much shorter cycle time

Have product development completed when needed

Significantly less resources

Time to do things “right” – improved quality at launch

Higher efficiency

….


“Operation” vs Development

R & D – (High) WIP (Work in Progress)

– Long cycle times (buffer)

– Low cost

– Very low visibility of work

– Has to decide what to work on

–High leverage

“Operation” has – High inventory (buffer)

– Short cycle times

– High cost

– Work is visible

– Given ticket

– Low leverage

Investment in “lean product development” can be

leveraged/multiplied through the enterprise


Enterprise Financial Model

Cost to Business

Materials

44%

Conversion

37%

SAG

13%

Other

0%

R&D

2%

Transport

4%

The R,D and E cost can be reduced through application of lean


What is the Purpose of R & D?

Profit = Volume * (Price – Cost)

R&D is an INVESTMENT, not a cost

USE LEAN to give the

business the product

when THEY NEED IT

USE LEAN to assure lowest cost of goods sold

USE LEAN to give

the business the

RIGHT product


Maximizing Revenue

New Product Pricing Benefit

40

50

60

70

80

90

100

110

120

0 10 20 30 40

Month

Pri

ce

Difference in

collectable margin

Use lean to provide the

speed and agility to hit

the optimal market window

(offensively and defensively)

Current product

New product

Hitting or missing this MOVABLE window is worth $$$$/day

20 30 40 50


-9.00

-8.00

-7.00

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

1 2 3 4 5 6 7

Months of Missed Opportunity

$M

M

Cumulative Savings R&D

Order of Magnitude R & D

Leverage

-9.00

-8.00

-7.00

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

1 2 3 4 5 6 7


$M

M


Cumulative loss for having no

product

-9.00

-8.00

-7.00

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

1 2 3 4 5 6 7


$M

M



product

Cumulative loss for missing a cost

opportunity

Optimum time to launch

-9.00

-8.00

-7.00

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

1 2 3 4 5 6 7


$M

M



product

Cumulative loss for missing a cost

opportunity

Missed performance target

10% R&D savings


R & D Additional Leverage

Materials

44%

Conversion

37%

SAG

13%

Other

0%

R&D

2%

Transport

4%

Manufacturability Complexity

Inventory

Product design

affects material

cost

Production Equipment


Roadmap for Lean Product

Development Implementation

No consultant/book has all the

answers

The key is to understand the

principles … and then figure out

where to apply them

Path from Womack/Jones – Lean

Thinking (1996)


Roadmap that Worked for Us

Safety

Quality

Delivery

Cost /

Efficiency =

Speed


Path that Works

1

Specify Value for the customer

while providing opportunity for

growth

2

Focus on value stream

Go see – grasp the situation

…end-to-end

3

Create Flow and Stability

Build Confidence

4

Develop lean process

Engage Associates

Implement Pull

Standardize

5

Work to Perfection

Kaizen / CIS

Lean Thinking – Womack / Jones

Safety

Quality

Delivery

Cost /

Efficiency >>

Speed

Start Over


Training

Lean is a major change of the culture in a company

Significant change is required – change must be managed

Some of the concepts are counter intuitive and look like they are not the right thing to do

Some lean concepts are in conflict with other concepts (HR, legal, finance, purchasing ..)

If I had the choice I would start the training from the top – hard to get attendance

Training is also necessary to stop the mindset of “we can’t change the way we have always done this “

The culture change starts with training - It

continues with DOING and keep going


Goodyear Lean Product

Development Training

Lean 101 - Basic Principles – not necessarily linked to product development – focus on examples

Lean 201 – Standard work - LEAN Development Process

Lean 301 – Advanced Principles, tools ….

Lean 401 – Lean Product Development Certification

Leaders, managers must be taught first –

They must help train associates and

reinforce the training in their gemba walks


Some “LEAN” Stuff That Works

for Product Development!

Factory Physics (Spearman/Hobbs) – Understand Principles

Toyota PD School (Morgan/Liker) – Toyota PD Process

Knowledge Management School – (Ward/Kennedy) - Leverage Knowledge

Development Flow School (Reinertsen) – Manage Flow

Matrix Organization - Project focus AND Functional Focus – Chief Engineer

Eliminating Development Waste

Pull, Kanbans

Design Process around

PROJECT Speed and Flow

Cost of delay thinking

Management of Buffers

Little’s law CT=WIP/TH

Knowledge Management

A3 Process

Gemba Walks

5S

Value Stream Mapping

………

Does not work so well: Copy lean manufacturing or copy

other organizations …


“Less Intuitive” Concepts – That

Worked Well For Us

TOC – D-B-R (Theory of Constraints - Drum, Buffer, Rope)

Late Start

Law of Utilization

Selected subjects are counter intuitive and buy-in was

hard to achieve

Visual Planning – Visual

Workplace

Concurrent Engineering


Traditional Iterative Process

1 to 80 Iterations per project

Iteration used as largest

scheduling block in

Goodyear process

Iteration Time

1

2

3

n

n+1

n+2

Engineer

Tire

Make a

Mold

Build

Prototypes Test

Release

Engineer

Tire

Make a

Mold

Build

Prototypes Test

Release

Project

How do we release

1,500 SKU’s per year

on target


Leveling Business Needs

Development Seasons

0

20

40

60

80

100

120

140

1 2 3 4 5 6 7 8 9 10 11 12

Month

Rati

ng

Dealer Conference

OE

Summer

Winter

Leveled Business Needs

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12

Month

Rati

ng

Dealer Conference

OE

Summer

Winter

Sub Process Work Load

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10 11 12

Month

Rati

ng

Lack of leveling leads to

default buffer = time =

late


Pull System

Airplane analogy – planes do not take off until they have a landing slot at destination and they minimize the time in the air (CT)

Process 1

Process 2

Process 3

Scheduler

FIFO


TOC (Theory of Constraints)

TOC: A process can only produce as much as it’s bottleneck – Identify, exploit, subordinate, elevate

– Bottleneck quickly moves to the market.

Once the bottleneck is well understood it should be kept as a schedule point although it may not be the constraint any longer

Understanding the pacemaker and it’s influence on upstream and downstream process provides the “dial” to budget/level – plan – execute.

TOC is a very simple concept but powerful where it fits


Resource Planning – R vs Cc

PULL

Upstream from pacemaker Downstream from pacemaker

Pacemaker/

schedule point

Sets TAKT

Sized to business needs

ONLY leveling point

Sized to keep pacemaker full

Toyota pull or

TOC (Theory of constraint) pull

Sized to service the output

from the pacemaker

without queues

FIFO


Law of Utilization

Schedule at less than 100%

Use capacity buffers

Flexible capacity – matrix organization / outsourcing

Effect of Utilization on Total Cycle Time

0

20

40

60

80

100

120

140

160

10 20 30 40 50 60 70 80 90 95 97 99

Utilization (%)

Measu

re f

or

the T

ota

l C

ycle

Tim

e

Low Variability

High Variability

If you do not learn how to manage capacity, you will always buffer with time

CT= f 1

1-utilization ( )


Late Start

Dealing with perishable information

Manage changes

Lock in designs as late as possible

Dealing with engineers (Parkinson Principle)

Investment

WIP or inventory

Latest technology and opportunities

Late start is not an intuitive concept

Every iteration is started as late as possible but with

enough time to finish, including a small buffer to account

for variability


Tire Build

Tire Build

Design

Mold Eng.

Mold Mfg.

Construction Modeling

Tire Testing


Materials Development

Single Piece Flow Focus Resources and Eliminate Wait Times

Design

Mold Eng.

Mold Mfg.

Construction Modeling

Tire Testing

Materials Development

Prepare

Prepare

Prepare

Prepare

Prepare

Prepare

Prepare

I T E R A T I O N

K I C K O F F

M E E T I N G

Kickoff Meeting Shared Information / Up-Front Preparation

Teamwork / Parallel Engineering

Downstream Activities are Planned / Scheduled

Cycle Time

0

5

10

15

20

25

Phase 0 Phase 1 Phase 2

Weeks

Cycle Time


Visual Planning TO CAPACITY

Plant capacity:

4 prototype sets per week

Scheduled at

3 prototype sets per week

75-80% line

Incoming work is leveled and scheduled according to available capacity

Buffer

This process enables Goodyear to release 1500 SKU’s/year – on time


Daily Meeting/Escalation


Lean Tools Used

Little Law, Single Piece Flow …

Resource Leveling

Schedule to Capacity – Law of Utilization

Waste Elimination

Cost of Delay Thinking

Pull, Kanbans,

Visual Management


Late Start

TOC

Buffer Management


Goodyear (Business) Results

NAT OP Income

-400

-300

-200

-100

0

100

200

300

400

2005 2006 2007 2008 2009 2010 2011

$M

M

Financial

Strike Economy

Quality at Launch


Results

CT

0

20

40

60

80

100

120

2005 2006 2007 2008 2009 2010 2011 Initiative

%OTD end to end

0

10

20

30

40

50

60

70

80

90

100

2005 2006 2007 2008 2009 2010 2011 Goal

% o

n t

ime

Throughput (iterations NAT business – consumer)

Cycle Time

(rating)

On Time – ON TARGET

95%

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2005 2006 2007 2008 2009 2010 2011

Fund

Appl

Process and technical issues


Case Studies

Plant Prototype Process

– Problem: Cycle time is too long

“Direct Ship”

– Problem: Cycle time is too long (and a lot of

money can be saved)

Focus on Principles and Tools Used


Plant Prototype Building Process

NEAR Future State


Tools Used

Gemba Walks


Kaizen Events

Learning through Experiments

Share the Learning

Standard Work

A3


Direct Ship

Current Value Chain – ALL Tires

Transport

TransportTransport

Plant TTW Akron

1228

TCM

1228

Test RequestPriority

Test Site

Lawton

U/C

Danville

…. ATC

S/A Texas

Customer

test site

(US, Eu,

Japan ..)

Transport

1228

Scrap

Former

Spec

Build wire

SCC

….

2006

(Pre Direct Ship)

Test Tire Value Chain

1

Engineers

1

Build tire at the plant

Build

Wire

SpecTest

data

Uniformity

data

Section

data

Lawton

In process

Lawton

3 Month

1

Scrap

Commercial

Warehouse

1

Test Site

1

Analysis

Withdrawal

Withdrawal

Withdrawal

1

Scrap

I

I

I I

I

Test

Request

Test

Results

TTW

Withdrawal

Transport

Transport

Transport

Transport

Transport

Transport

Customer

Withdrawal

I

FIFO

Transport

Transport

Transport

Transport

Transport

Transport

Current:

Ship to TTW

Screen

Wait for Priority

Ship to location

Return through TTW

Proposed:

Screen and keep at plant

Ship direct to location

Direct return

Time savings 3 weeks per iteration

$ Savings Warehouse $1.8 Mi/year

Transportation $1 Mi/year

Tire savings 30%


Direct Ship

Spaghetti Diagrams


Waste Elimination

Best Use of Talent

Outsourcing


What Is Next?

Leadership’s Responsibility in Lean

– Education

– Roles

– Sustainability

Use freed–up resources for formal CI

Set Based / Fast Learning Cycles / Front Loading for “fuzzy front end”

Lean Approach to Problems

– A3 process


Lessons Learned

EASY: Understand lean principles

HARDER: Find out how it applies

VERY HARD: Implementation / sustaining – Change management

– “Kaikaku”

– Know what works and how to sell it, implement it

– Know the process and the tools (work on the process and in the process)

The “C” in the PDCA seems to be the hardest

It is important to focus on the customer BUT internal objectives must also be pursued (growth)

Act yourself to a lean culture – John Shook


Random Observations

Complete enterprise initiatives (end to end) yield the biggest benefits

The “little lean” initiatives are hard to sustain

Processes must be analyzed/leaned out from the highest level down

Lean education is critical

Change must be managed

Tolerance for process experiments desirable

“Go see” and Gemba walks work well


Conclusion

Lean can be adapted to a Product Development Process

Most impressive results can be achieved by leveraging product development in the end to end process to generate revenue

With lean you can have it all, the service, the speed, the efficiency and the quality

No single person/institution has all the answers for you – “learn and go find”

Keep Going


Thanks

Contact Information

[email protected]

[email protected]

Bus.: 330 796 2318

Cell.: 330 801 3184

mailto:[email protected]

mailto:[email protected]

lean product development at goodyear - fisher … to end lean product...investment in “lean...

Documents