Lean Product Development at Goodyear - Fisher to end Lean Product...Investment in “lean product development” can be ... 13% Other 0% RD 2% ... Lean 101 - Basic Principles

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<ul><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 1 5/23/2012 1 </p><p>End-to-End Lean </p><p>Product Development </p><p>at Goodyear </p><p>Norbert Majerus </p><p>norbert.majerus@goodyear.com </p><p>5/18/12 </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 2 5/23/2012 2 </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 3 5/23/2012 3 </p><p>Passion? </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 4 5/23/2012 4 </p><p>Agenda </p><p> Goodyear Overview </p><p> Why do LEAN in Product Development </p><p> Lean Tire Development Process what </p><p>works </p><p> Results </p><p> Case Studies </p><p> Lessons Learned </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 5 5/23/2012 5 </p><p>The Marketplace </p><p>Tires are an integral element of all Vehicle Systems </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 6 5/23/2012 6 </p><p>Business Overview </p><p> Goodyear Specialty = Tires and Tire Materials </p><p> Global company 42 tire manufacturing facilities in 22 countries </p><p> Third largest tire company - $22.8 Bi annual sales </p><p> Focus on high (technical) end of the business high value products and innovation </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 7 5/23/2012 7 </p><p>Goodyear IC </p><p>Luxembourg </p><p>Goodyear IC </p><p>Akron, Ohio </p><p>Dunlop DC </p><p>Germany </p><p>SRI TC </p><p>Japan </p><p>Goodyear Innovation </p><p>Network </p><p>1400 professionals </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 8 5/23/2012 8 </p><p>Tire Development </p><p>Typical Passenger Tire</p><p> 15 - 18 Components</p><p> 12 Compounds</p><p> 2 Fabrics</p><p> 2 Steels</p><p> 60 Raw Materials</p><p>Tread</p><p>Belt</p><p>Sidewall</p><p>Ply</p><p>Liner</p><p>Apex</p><p>Bead</p><p>Chafer</p><p>Toeguard</p><p>Typical Passenger Tire</p><p> 15 - 18 Components</p><p> 12 Compounds</p><p> 2 Fabrics</p><p> 2 Steels</p><p> 60 Raw Materials</p><p>Tread</p><p>Belt</p><p>Sidewall</p><p>Ply</p><p>Liner</p><p>Apex</p><p>Bead</p><p>Chafer</p><p>Toeguard</p><p>Typical Passenger Tire</p><p> 15 - 18 Components</p><p> 12 Compounds</p><p> 2 Fabrics</p><p> 2 Steels</p><p> 60 Raw Materials</p><p>Tread</p><p>Belt</p><p>Sidewall</p><p>Ply</p><p>Liner</p><p>Apex</p><p>Bead</p><p>Chafer</p><p>Toeguard</p><p> High competition and diverse customers lead to short product cycles </p><p>and very high complexity in a highly regulated industry </p><p> High variability in application, testing, materials, manufacturing </p><p>processes </p><p> Combination of high complexity and high variability created a worthy </p><p>challenge for a lean product development process </p><p>At Goodyear we </p><p>release about </p><p>1,500 new </p><p>(innovative, high </p><p>value added) </p><p>SKUs every year </p><p>around the world </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 9 5/23/2012 9 </p><p>Lean Product Development </p><p>Last Year R&amp;D saved us $25 Million Next year we will save $30 </p><p>Million - by eliminating R&amp;D </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 10 5/23/2012 10 </p><p>Traditional vs Lean Process </p><p> Optimized functional process at the cost of project flow </p><p> Large queues and WIP (work in progress) </p><p> Poor delivery and long cycle times </p><p> Need of heroes and emergencies </p><p> Stop iterating when time runs out </p><p> Much shorter cycle time </p><p> Have product development completed when needed </p><p> Significantly less resources </p><p> Time to do things right improved quality at launch </p><p> Higher efficiency </p><p> . </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 11 5/23/2012 11 </p><p>Operation vs Development </p><p> R &amp; D (High) WIP (Work in Progress) </p><p> Long cycle times (buffer) </p><p> Low cost </p><p> Very low visibility of work </p><p> Has to decide what to work on </p><p>High leverage </p><p> Operation has High inventory (buffer) </p><p> Short cycle times </p><p> High cost </p><p> Work is visible </p><p> Given ticket </p><p> Low leverage </p><p>Investment in lean product development can be </p><p>leveraged/multiplied through the enterprise </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 12 5/23/2012 12 </p><p>Enterprise Financial Model </p><p>Cost to Business</p><p>Materials</p><p>44%</p><p>Conversion</p><p>37%</p><p>SAG</p><p>13%</p><p>Other</p><p>0%</p><p>R&amp;D</p><p>2%</p><p>Transport</p><p>4%</p><p>The R,D and E cost can be reduced through application of lean </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 13 5/23/2012 13 </p><p>What is the Purpose of R &amp; D? </p><p>Profit = Volume * (Price Cost) </p><p>R&amp;D is an INVESTMENT, not a cost </p><p>USE LEAN to give the </p><p>business the product </p><p>when THEY NEED IT </p><p>USE LEAN to assure lowest cost of goods sold </p><p>USE LEAN to give </p><p>the business the </p><p>RIGHT product </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 14 5/23/2012 14 </p><p>Maximizing Revenue </p><p>New Product Pricing Benefit</p><p>40</p><p>50</p><p>60</p><p>70</p><p>80</p><p>90</p><p>100</p><p>110</p><p>120</p><p>0 10 20 30 40</p><p>Month</p><p>Pri</p><p>ce</p><p>Difference in </p><p>collectable margin </p><p>Use lean to provide the </p><p>speed and agility to hit </p><p>the optimal market window </p><p>(offensively and defensively) </p><p>Current product </p><p>New product </p><p>Hitting or missing this MOVABLE window is worth $$$$/day </p><p>20 30 40 50 </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 15 5/23/2012 15 </p><p>-9.00</p><p>-8.00</p><p>-7.00</p><p>-6.00</p><p>-5.00</p><p>-4.00</p><p>-3.00</p><p>-2.00</p><p>-1.00</p><p>0.00</p><p>1.00</p><p>1 2 3 4 5 6 7</p><p>Months of Missed Opportunity</p><p>$M</p><p>M</p><p>Cumulative Savings R&amp;D</p><p>Order of Magnitude R &amp; D </p><p>Leverage </p><p>-9.00</p><p>-8.00</p><p>-7.00</p><p>-6.00</p><p>-5.00</p><p>-4.00</p><p>-3.00</p><p>-2.00</p><p>-1.00</p><p>0.00</p><p>1.00</p><p>1 2 3 4 5 6 7</p><p>Months of Missed Opportunity</p><p>$M</p><p>M</p><p>Cumulative Savings R&amp;D</p><p>Cumulative loss for having no</p><p>product</p><p>-9.00</p><p>-8.00</p><p>-7.00</p><p>-6.00</p><p>-5.00</p><p>-4.00</p><p>-3.00</p><p>-2.00</p><p>-1.00</p><p>0.00</p><p>1.00</p><p>1 2 3 4 5 6 7</p><p>Months of Missed Opportunity</p><p>$M</p><p>M</p><p>Cumulative Savings R&amp;D</p><p>Cumulative loss for having no</p><p>product</p><p>Cumulative loss for missing a cost</p><p>opportunity</p><p>Optimum time to launch </p><p>-9.00</p><p>-8.00</p><p>-7.00</p><p>-6.00</p><p>-5.00</p><p>-4.00</p><p>-3.00</p><p>-2.00</p><p>-1.00</p><p>0.00</p><p>1.00</p><p>1 2 3 4 5 6 7</p><p>Months of Missed Opportunity</p><p>$M</p><p>M</p><p>Cumulative Savings R&amp;D</p><p>Cumulative loss for having no</p><p>product</p><p>Cumulative loss for missing a cost</p><p>opportunity</p><p>Missed performance target</p><p>10% R&amp;D savings </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 16 5/23/2012 16 </p><p>R &amp; D Additional Leverage </p><p>Materials</p><p>44%</p><p>Conversion</p><p>37%</p><p>SAG</p><p>13%</p><p>Other</p><p>0%</p><p>R&amp;D</p><p>2%</p><p>Transport</p><p>4%</p><p>Manufacturability Complexity </p><p>Inventory </p><p>Product design </p><p>affects material </p><p>cost </p><p>Production Equipment </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 17 5/23/2012 17 </p><p>Roadmap for Lean Product </p><p>Development Implementation </p><p> No consultant/book has all the </p><p>answers </p><p> The key is to understand the </p><p>principles and then figure out </p><p>where to apply them </p><p> Path from Womack/Jones Lean </p><p>Thinking (1996) </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 18 5/23/2012 18 </p><p>Roadmap that Worked for Us </p><p>Safety </p><p>Quality </p><p>Delivery </p><p>Cost / </p><p>Efficiency = </p><p>Speed </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 19 5/23/2012 19 </p><p>Path that Works </p><p>1 </p><p>Specify Value for the customer </p><p>while providing opportunity for </p><p>growth </p><p>2 </p><p>Focus on value stream </p><p>Go see grasp the situation </p><p>end-to-end </p><p>3 </p><p>Create Flow and Stability </p><p>Build Confidence </p><p>4 </p><p>Develop lean process </p><p>Engage Associates </p><p>Implement Pull </p><p>Standardize </p><p>5 </p><p>Work to Perfection </p><p>Kaizen / CIS </p><p>Lean Thinking Womack / Jones </p><p>Safety </p><p>Quality </p><p>Delivery </p><p>Cost / </p><p>Efficiency &gt;&gt; </p><p>Speed </p><p>Start Over </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 20 5/23/2012 20 </p><p>Training </p><p> Lean is a major change of the culture in a company </p><p> Significant change is required change must be managed </p><p> Some of the concepts are counter intuitive and look like they are not the right thing to do </p><p> Some lean concepts are in conflict with other concepts (HR, legal, finance, purchasing ..) </p><p> If I had the choice I would start the training from the top hard to get attendance </p><p> Training is also necessary to stop the mindset of we cant change the way we have always done this </p><p>The culture change starts with training - It </p><p>continues with DOING and keep going </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 21 5/23/2012 21 </p><p>Goodyear Lean Product </p><p>Development Training </p><p> Lean 101 - Basic Principles not necessarily linked to product development focus on examples </p><p> Lean 201 Standard work - LEAN Development Process </p><p> Lean 301 Advanced Principles, tools . </p><p> Lean 401 Lean Product Development Certification </p><p>Leaders, managers must be taught first </p><p>They must help train associates and </p><p>reinforce the training in their gemba walks </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 22 5/23/2012 22 </p><p>Some LEAN Stuff That Works </p><p>for Product Development! </p><p> Factory Physics (Spearman/Hobbs) Understand Principles </p><p> Toyota PD School (Morgan/Liker) Toyota PD Process </p><p> Knowledge Management School (Ward/Kennedy) - Leverage Knowledge </p><p> Development Flow School (Reinertsen) Manage Flow </p><p> Matrix Organization - Project focus AND Functional Focus Chief Engineer </p><p> Eliminating Development Waste </p><p> Pull, Kanbans </p><p> Design Process around </p><p>PROJECT Speed and Flow </p><p> Cost of delay thinking </p><p> Management of Buffers </p><p> Littles law CT=WIP/TH </p><p> Knowledge Management </p><p> A3 Process </p><p> Gemba Walks </p><p> 5S </p><p> Value Stream Mapping </p><p>Does not work so well: Copy lean manufacturing or copy </p><p>other organizations </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 23 5/23/2012 23 </p><p>Less Intuitive Concepts That </p><p>Worked Well For Us </p><p> TOC D-B-R (Theory of Constraints - Drum, Buffer, Rope) </p><p> Late Start </p><p> Law of Utilization </p><p>Selected subjects are counter intuitive and buy-in was </p><p>hard to achieve </p><p> Visual Planning Visual </p><p>Workplace </p><p> Concurrent Engineering </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 24 5/23/2012 24 </p><p>Traditional Iterative Process </p><p>1 to 80 Iterations per project </p><p>Iteration used as largest </p><p>scheduling block in </p><p>Goodyear process </p><p>Iteration Time</p><p>1</p><p>2</p><p>3</p><p>n</p><p>n+1</p><p>n+2</p><p>Engineer </p><p>Tire </p><p>Make a </p><p>Mold </p><p>Build </p><p>Prototypes Test </p><p>Release </p><p>Engineer </p><p>Tire </p><p>Make a </p><p>Mold </p><p>Build </p><p>Prototypes Test </p><p>Release </p><p>Project </p><p>How do we release </p><p>1,500 SKUs per year </p><p>on target </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 25 5/23/2012 25 </p><p>Leveling Business Needs </p><p>Development Seasons</p><p>0</p><p>20</p><p>40</p><p>60</p><p>80</p><p>100</p><p>120</p><p>140</p><p>1 2 3 4 5 6 7 8 9 10 11 12</p><p>Month</p><p>Rati</p><p>ng</p><p>Dealer Conference</p><p>OE</p><p>Summer</p><p>Winter</p><p>Leveled Business Needs</p><p>0</p><p>20</p><p>40</p><p>60</p><p>80</p><p>100</p><p>120</p><p>1 2 3 4 5 6 7 8 9 10 11 12</p><p>Month</p><p>Rati</p><p>ng</p><p>Dealer Conference</p><p>OE</p><p>Summer</p><p>Winter</p><p>Sub Process Work Load</p><p>0</p><p>10</p><p>20</p><p>30</p><p>40</p><p>50</p><p>60</p><p>70</p><p>80</p><p>90</p><p>100</p><p>1 2 3 4 5 6 7 8 9 10 11 12</p><p>Month</p><p>Rati</p><p>ng</p><p> Lack of leveling leads to </p><p>default buffer = time = </p><p>late </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 26 5/23/2012 26 </p><p>Pull System </p><p>Airplane analogy planes do not take off until they have a landing slot at destination and they minimize the time in the air (CT) </p><p>Process 1 </p><p>Process 2 </p><p>Process 3 </p><p>Scheduler </p><p>FIFO </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 27 5/23/2012 27 </p><p>TOC (Theory of Constraints) </p><p> TOC: A process can only produce as much as its bottleneck Identify, exploit, subordinate, elevate </p><p> Bottleneck quickly moves to the market. </p><p> Once the bottleneck is well understood it should be kept as a schedule point although it may not be the constraint any longer </p><p> Understanding the pacemaker and its influence on upstream and downstream process provides the dial to budget/level plan execute. </p><p>TOC is a very simple concept but powerful where it fits </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 28 5/23/2012 28 </p><p>Resource Planning R vs Cc </p><p>PULL </p><p>Upstream from pacemaker Downstream from pacemaker </p><p>Pacemaker/ </p><p>schedule point </p><p>Sets TAKT </p><p>Sized to business needs </p><p>ONLY leveling point </p><p>Sized to keep pacemaker full </p><p>Toyota pull or </p><p>TOC (Theory of constraint) pull </p><p>Sized to service the output </p><p>from the pacemaker </p><p>without queues </p><p>FIFO </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 29 5/23/2012 29 </p><p>Law of Utilization </p><p> Schedule at less than 100% </p><p> Use capacity buffers </p><p> Flexible capacity matrix organization / outsourcing </p><p>Effect of Utilization on Total Cycle Time</p><p>0</p><p>20</p><p>40</p><p>60</p><p>80</p><p>100</p><p>120</p><p>140</p><p>160</p><p>10 20 30 40 50 60 70 80 90 95 97 99</p><p>Utilization (%)</p><p>Measu</p><p>re f</p><p>or </p><p>the T</p><p>ota</p><p>l C</p><p>ycle</p><p> Tim</p><p>e</p><p>Low Variability</p><p>High Variability</p><p>If you do not learn how to manage capacity, you will always buffer with time </p><p>CT= f 1 </p><p>1-utilization ( ) </p></li><li><p>May Contain Confidential and/or Proprietary Information. May not be copied or disseminated without the express written consent of The Goodyear Tire &amp; Rubber Company. 30 5/23/2012 30 </p><p>Late Start </p><p> Dealing with perishable information </p><p> Manage changes </p><p> Lock in designs as late as possible </p><p> Dealing with engineers (Parkinson Principle) </p><p> Investment </p><p> WIP or invento...</p></li></ul>

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