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  • 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

    norbert.majerus@goodyear.com

    5/18/12

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 2 5/23/2012 2

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 3 5/23/2012 3

    Passion?

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 4 5/23/2012 4

    Agenda

    Goodyear Overview

    Why do LEAN in Product Development

    Lean Tire Development Process what

    works

    Results

    Case Studies

    Lessons Learned

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

    The Marketplace

    Tires are an integral element of all Vehicle Systems

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 6 5/23/2012 6

    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

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 7 5/23/2012 7

    Goodyear IC

    Luxembourg

    Goodyear IC

    Akron, Ohio

    Dunlop DC

    Germany

    SRI TC

    Japan

    Goodyear Innovation

    Network

    1400 professionals

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 8 5/23/2012 8

    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

    Typical Passenger Tire

    15 - 18 Components

    12 Compounds

    2 Fabrics

    2 Steels

    60 Raw Materials

    Tread

    Belt

    Sidewall

    Ply

    Liner

    Apex

    Bead

    Chafer

    Toeguard

    Typical Passenger Tire

    15 - 18 Components

    12 Compounds

    2 Fabrics

    2 Steels

    60 Raw Materials

    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)

    SKUs every year

    around the world

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 9 5/23/2012 9

    Lean Product Development

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

    Million - by eliminating R&D

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 10 5/23/2012 10

    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

    .

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 11 5/23/2012 11

    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

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 12 5/23/2012 12

    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

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 13 5/23/2012 13

    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

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 14 5/23/2012 14

    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

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 15 5/23/2012 15

    -9.00

    -8.00

    -7.00

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    -5.00

    -4.00

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    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

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    Months of Missed Opportunity

    $M

    M

    Cumulative Savings R&D

    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

    Months of Missed Opportunity

    $M

    M

    Cumulative Savings R&D

    Cumulative loss for having no

    product

    Cumulative loss for missing a cost

    opportunity

    Optimum time to launch

    -9.00

    -8.00

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    0.00

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    1 2 3 4 5 6 7

    Months of Missed Opportunity

    $M

    M

    Cumulative Savings R&D

    Cumulative loss for having no

    product

    Cumulative loss for missing a cost

    opportunity

    Missed performance target

    10% R&D savings

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 16 5/23/2012 16

    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

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 17 5/23/2012 17

    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)

  • May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire & Rubber Company. 18 5/

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