lean product development - irdg (industry research ... · pdf filethe objective of lean...

© IRDG 2014Slide 1

Lean Product Development

Executive Overview

Prepared for IRDG and

presented by –

Ron Mascitelli, PMP

President

Technology Perspectives

© IRDG 2014Slide 2

Agenda

Introduction to Lean Product Development

A Modular, Event-Driven Approach

Supplement – A Sampling of LPD Tools and Methods

Resource Capacity Management

Market Requirements Definition

Visual Workflow Management

Risk Management

© IRDG 2014Slide 3

What is Lean Product Development?

The objective of Lean Product Development is to

significantly improve the efficiency, effectiveness,

and speed of new product development.

This is accomplished through an integrated framework

of practical tools and methods that:

Ensure true cross-functional collaboration

Enable rapid and effective decision-making

Capture valuable knowledge for future reuse

Eliminate wasted time, cost, and resource capacity

The LPD framework is designed to fit within an existing

governance process (e.g., stage / gate), or can stand

on its own, providing both governance and execution

methodology.

© IRDG 2014Slide 4

The Challenge:

Elimination of Product Development Waste

Chaotic work environment – constant interruptions

Lack of available resources – resource bottlenecks

Lack of clear prioritization of projects / tasks

Failure to proactively mitigate project risks

Failure to reuse knowledge and learn from the past

Poorly defined initial product requirements

Disruptive changes to product requirements

Lack of early consideration of manufacturability

Over-designing, analysis paralysis, gold-plating

E-mail overload / Too many @!%&* meetings

© IRDG 2014Slide 5

What are the Benefits?

Significant improvement in schedule predictability

Reduced time-to-market consistent with cost and quality goals

Enhanced flexibility and agility in meeting changing market needs

Increased productivity of design and development resources

Ability to capture and benefit from organizational knowledge

Smoother transition from development to full-rate production

© IRDG 2014Slide 6

Fundamental Principle :

EARLY is Always BETTER!

A more focused effort in the early stages of a

development project will allow more time to truly optimize

a new product design:

Early intensive focus on customer requirements definition

Early collaborative planning of the project

Early identification of risks and mitigation strategies

Early consideration of multiple design options

Early learning – closing of knowledge gaps

Early consideration of manufacturability, cost & quality

© IRDG 2014Slide 7

Fundamental Principle:

Cross-Functional Collaboration and

Personal Accountability

True cross-functional collaboration goes well beyond

names on a team roster, to achieve emotional commitment and

personal accountability to team / project goals.

Week 1 Week 2

Mon Wed Fri Mon Wed Fri

2-weekPlan

MilestoneWk 3 +

Fabricate

Prototype

Prototype

Testing

Prototype

Validated

Production

Tooling

Test Plan

Complete

Final Drwg.

Release

Week 1 Week 2


2-weekPlanTeam

Member

Tom

Dick

Harry

Jane

Sally

Mary

Wk 3 +Week 1 Week 2


2-weekPlanTeam

Member

Tom

Dick

Harry

Jane

Sally

Mary

Wk 3 +Week 1 Week 2


2-weekPlanTeam

Member

Tom

Dick

Harry

Jane

Sally

Mary

Wk 3 +

System Board – Milestone Focus

Functional / Sub-system Boards – Task Focus

© IRDG 2014Slide 8


Visual Communication

“The purpose of communication is not to be understood,

It is to make it impossible to be misunderstood.”

- Cicero

Faster comprehension

Reduced ambiguity

Focus on exceptions

Increased accountability

A common organizational language

© IRDG 2014Slide 9


Knowledge-Based Development

LPD Tools and Events are designed to be “self-documenting”

and provide a straightforward mechanism for organizational learning:

Performance trade-offs

Cost reduction solutions

Risk mitigation strategies

Knowledge of market needs

Quality enhancements

Solutions to technical problems

Improvements to process and

execution

© IRDG 2014Slide 10

A Learning Organization Harnesses

Knowledge to Improve Their Odds

Known Market / Customer Risks

Source /

Reference

Proven

Mitigation

Strategies

Specific customer needs not known

Conflicting requirements of multiple market sub-segments

Use environment for new product not well-understood

User behavior when interacting with product not clear

System-level integration requirements for product not known

Regulatory requirements not fully understood

Advantages / disadvantages of competitors’ products not well-understood

Competitor releases new product prior to launch date

Volume forecast is not accurate

Price point for product is not accurate

Specific market conditions (e.g., price of fuel, preference trends) may undermine

business case

Customer requirements will change prior to launch date

Past negative history with current products may affect market acceptance of new

product

0

5

10

15

20

25

Months from Project Start

Pro

jec

t “R

isk

Ra

tin

g”

Month 1

Month 2 Month 3 Month 4 Month 5Wk 1 Wk 2 Wk 3 Wk 4

LoadingPlanTeam

Member

Tom

Dick

Harry

Jane

Sally

Mary

Date First Submitted: Submitted By:

Product Designation: Revision Number: Prepared By:

1 What specific customer problem(s) does the new product solve? 1 Market forecast:

Minimum "Most Likely" Optimistic

2 Description of target customers / market segments. Year 1 Target Market Price =

Year 2 Target Mfg. Cost =

3 Key differentiating features / performance levels. Year 3 Target Entry Date =

1 2 Risk Analysis:

2 Risk Impact (1-5)

3

4 Critical physical characteristics (weight / dimensions / etc.).

5 Critical performance requirements / features.

6 Other critical requirements / mandates for competitive parity 3 Investment: Total Non-Recurring Investment (Capital and Labor) =

4 Profitability Calculation:

Risk-Adjusted NPV = (NPV / Max. Risk Impact)

Description of Strategic Alignment:

Step 1 -

1 Supports Retention of Existing Customers - Step 2 -

2

3

4

5 Step 3 -

6

7

8

9

10

Product Business-Case Brief

Description of Opportunity Financial / Risk Analysis

Strategic Assessment

Sales Volumes -

Market Risk -

Description of Critical Risk(s)

Schedule Risk -

Technical Risk -

Assessment of Strategic Impact (1 - 10 Scale):

Cost / Quality Risk -

Net Present Value (NPV) =

Project Productivity Metric =

Increases "Mindshare" Among Customers -

Calculate Overall Project Rating .

(Productivity Metric x Total Strategic Score)

Overall Project Rating =

(Based on 3-Year "Most Likely" Sales)

Opportunity Assessment

Non-Recurring Engineering (NRE) =

Estimate the no. of design / development hours required to commercialize the new product.

Calculate the "Productivity Metric" for the proposed new product.

(Risk-Adjusted NPV / Est. NRE)

Notes and Comments:

Total Strategic Score =

Contributes to Growth of Market Share -

Encourages Pull-Through of Other Products -

Supports Development of New Markets -

Contributes to Product Line Cost Reduction -

Contributes to Image of Firm in Marketplace -

Enables Implementation of New Technologies -

Supports Development of Core Competencies -

Supports Overall Strategic Roadmap -

Business Case Brief

Risk “Trigger Lists”

Risk “Burn-Down” Tool

Knowledge Brief

Customer Persona

Capacity Planning Tool

Knowledge-Based

Risk Reduction


An Integrated Framework…

A Flexible, Modular Approach

Lean Product Development “Best-in-Class”

Practices are Captured in a Modular Hierarchy:

Enabling LPD Methods

Examples:

• Capacity Mgmt.

• Rapid Learning Cycles

• Visual Workflow Mgmt.

• Market Req. Event

• Project Planning Event

• Design 3P Event

• Pugh Selection Matrix

• Quick-Look Value Eng.

• A3 Problem-Solving

LPD “Events”

LPD Tools


Agenda and

Review of

Event Inputs

Prior

to Event

Event “Standard Work”

After

the EventCollaborative

Application of

Standard Tools

and Methods

Attendee

Expectations

and

Preparation

Creation of

Event Outputs

Recommendations and

Assignment of Actions

Disposition of Actions

and Report-Back to

Review Team


Lean Product Development “Events”


Learning Cycle

Event(s)

Project Planning /

Risk Mitigation

Event

Design Review

& Freeze Event(s)

Design 3P

Event

Process 3P

Event

Production 3P

Event

Knowledge-Based

Development

Production Process

Preparation (3P)


Governance – Project Prioritization – Capacity / Resource Mgmt.

Knowledge-Based Development / Learning Organization

Market Rqmts.

Event


The Full-Scale Event-Driven LPD Process


A Practical, Common-Sense Approach

to Slashing Waste

“Common Sense is genius dressed in its working clothes.”

- Ralph Waldo Emerson

“Common Sense is something that you already know...

once someone points it out to you.”

- Ron Mascitelli

=


Agenda







Risk Management


Lean Product Development “Best-in-Class”

Practices are Captured in a Modular Hierarchy:

Enabling LPD Methods

Examples:

• Capacity Mgmt.

• Rapid Learning Cycles

• Visual Workflow Mgmt.

• Market Req. Event

• Project Planning Event

• Design 3P Event

• Pugh Selection Matrix

• Quick-Look Value Eng.

• A3 Problem-Solving

LPD “Events”

LPD Tools

A Flexible, Modular Approach

to Achieving an Optimized Future State


Agenda and

Review of

Event Inputs

Prior

to Event

Event “Standard Work”

After

the EventCollaborative

Application of

Standard Tools

and Methods

Attendee

Expectations

and

Preparation

Creation of

Event Outputs

Recommendations and

Assignment of Actions

Disposition of Actions

and Report-Back to

Review Team

What are Lean Product Development

“Events”?


Learning Cycle

Event(s)

Project Planning /

Risk Mitigation

Event

Design Review

& Freeze Event(s)

Design 3P

Event

Process 3P

Event

Production 3P

Event

Knowledge-Based

Development

Production Process

Preparation (3P)


Governance – Project Prioritization – Capacity / Resource Mgmt.

Knowledge-Based Development / Learning Organization

Market Rqmts.

Event

A Full-Scale Implementation of an

Event-Driven LPD Process


Agenda







Risk Management


An A3 Template for Project Selection

and Prioritization

Date First Submitted: Submitted By:

Product Designation: Revision Number: Prepared By:

1 What specific customer problem(s) does the new product solve? 1 Market forecast:

Minimum "Most Likely" Optimistic

2 Description of target customers / market segments. Year 1 Target Market Price =

Year 2 Target Mfg. Cost =

3 Key differentiating features / performance levels. Year 3 Target Entry Date =

1 2 Risk Analysis:

2 Risk Impact (1-5)

3

4 Critical physical characteristics (weight / dimensions / etc.).

5 Critical performance requirements / features.

6 Other critical requirements / mandates for competitive parity 3 Investment: Total Non-Recurring Investment (Capital and Labor) =

4 Profitability Calculation:

Risk-Adjusted NPV = (NPV / Max. Risk Impact)

Description of Strategic Alignment:

Step 1 -

1 Supports Retention of Existing Customers - Step 2 -

2

3

4

5 Step 3 -

6

7

8

9

10

Product Business-Case Brief

Description of Opportunity Financial / Risk Analysis

Strategic Assessment

Sales Volumes -

Market Risk -

Description of Critical Risk(s)

Schedule Risk -

Technical Risk -

Assessment of Strategic Impact (1 - 10 Scale):

Cost / Quality Risk -

Net Present Value (NPV) =

Project Productivity Metric =

Increases "Mindshare" Among Customers -

Calculate Overall Project Rating .

(Productivity Metric x Total Strategic Score)

Overall Project Rating =

(Based on 3-Year "Most Likely" Sales)

Opportunity Assessment

Non-Recurring Engineering (NRE) =

Estimate the no. of design / development hours required to commercialize the new product.

Calculate the "Productivity Metric" for the proposed new product.

(Risk-Adjusted NPV / Est. NRE)

Notes and Comments:

Total Strategic Score =

Contributes to Growth of Market Share -

Encourages Pull-Through of Other Products -

Supports Development of New Markets -

Contributes to Product Line Cost Reduction -

Contributes to Image of Firm in Marketplace -

Enables Implementation of New Technologies -

Supports Development of Core Competencies -

Supports Overall Strategic Roadmap -


All Development Opportunities

Should Pass Through a Prioritization “Funnel”

Initial Review and

Screening Business-Case

Validation and Project

PrioritizationP

rod

uct

Idea

Su

bm

itta

l Te

mp

late

Fo

rmal

Bu

sin

ess

-

Case D

evelo

pm

en

t

Ideas f

rom

All S

ou

rces


Project Priorities Should Be

Clearly Communicated

Clear Prioritization of All Projects

Team A Team B Team C Team D Team E

New Business

Unit Prioritization

New Opportunity /

Change in Market

Prioritization by

Executive Team

Concurrence by

Team / Functional

Leaders

Definitive Prioritization of All Projects Should Be Provided

to Teams Across the Entire Business Unit


A “Push” System for Capacity Management

Results in Turbulent “Batching”

Launch

Projects are

“pushed” into

funnel without

prioritization or

capacity mgmt.

Finite Development

Capacity

Business Case

Approved

Resulting in

“Turbulent Flow”


A “Pull” System Maximizes the Value and

Quantity of New Products

Launch

Projects are

prioritized and

submitted to

a “buffer

kanban”

Finite Development

Capacity

Business Case

Approved

Resulting in

“Laminar Flow”

1

2

3

4

Kanban is reviewed

monthly by mgmt.

team and are

“pulled” as capacity

becomes available.


Agenda







Risk Management


The Market Requirements Event

Objective –

To transform voice-of-the-customer (market) data

Into a prioritized list of product design requirements that

maximize customer value, market acceptance, and profits.

Key Outputs –

Market Positioning Statement

Prioritized Customer Benefits / Key Differentiators

Prioritized List of Features & Performance Levels

Action Assignments to Execute the Above


What Does “Market Positioning” Mean?

A product’s “position” in the market is its unique

combination of performance / features, price, and quality.

Ideally, that position is large and well-defined enough to

provide a robust business case.

Competitors’

Products

Price

Perc

eiv

ed

Qu

ality

Uncontested

Market

Position


A Concise Template for Capturing

a Customer “Persona”


Worked Example for a Speedboat Product

Key differentiators for this product (Scores > 3)

Critical “parity” factor for this product (Score > 1)

Your Current

Product

(N1)

Competitor A

Product (N2)

Competitor

B Product

(N3)

High Top Speed 3 0.3 0.4 0.4 7.50 0.3

Rapid Acceleration 3 0.4 0.5 0.5 6.00 0.3

High Towing Capacity 2 0.7 0.8 0.8 2.50 0.2Gas Mileage 1 0.7 0.7 0.8 1.25 0.1

Appearance 3 0.3 0.4 0.4 7.50 0.3

Safety 2 0.7 0.6 0.8 2.50 0.2

Next Gen. GPS Navigation 2 0.3 0.3 1 2.00 1.4

Advanced Two-Way Radio 1 0.3 0.5 0.5 2.00 0.2

Low Maintanence Cost 2 0.5 0.5 0.6 3.33 0.2

Fish-Finder Radar 1 TBD TBD TBD TBD TBD

Supports Scuba-Diving 2 0.3 0.4 0.4 5.00 0.2

Supports Water-Skiing 3 0.5 0.6 0.7 4.29 0.6

Assumptions /

Open Issues

Degree to Which Market Needs Are Totally

Satisfied (N = 30% to 100%)

Differentiation

Opportunity

(D = R / Max. N)

Need for Parity

(P = R x [Max. (N2,

N3) - N1])Possible Key Differentiators

Relevance to the

Buying Decision

(1 - 3)


Prioritized Requirements for Our

Worked Example

Derived Engineering

Requirement(s) Must-Have Should-Have Could-Have

Technical

Risk

(H,M,L)

Schedule

Risk

(H,M,L)

Cost

Risk

(H,M,L) Comments

Top End Speed 70 mph 80 mph 90 mph M M H

Engine Torque 350 ft-lbs. 400 ft-lbs. 450 ft-lbs. L M M

Engine Horsepower 300 hp 330 hp 380 hp L M M

Engine Power Band Optimization 1500-2500 rpm 1500-3000 rpm 1500-3500 rpm M M M

Trottle Response Time 3 sec. 2 sec. 1 sec. L L L

High-Performance Throttle

Linkage X N/A N/A N/A

Exterior Finish 2-color gel coat 3-color gel coat 3-color / met. L L M

Exterior Trim Chrome Chrome / Wood L M H

Next Gen. Navigation System X L L L

Single Hull / Carbon Fiber X H H H

Scuba Storage X L L LOn-board Tank Compressor X N/A N/A N/A


Agenda







Risk Management


An Integrated System for

Workflow Management

Stand-up Meeting Visual Project Board

Stand-up meetings, combined with visual

project board allow for maximum team

communication and efficiency.

Rapid Feedback

Communication

Risk Avoidance

Control


The “Visual Project Board” is a Living

Workflow Management Tool

Two-Week Action PlanProject Timeline

Parking Lot

Risk Management

0

5

10

15

20

25


Pro

jec

t “R

isk

Ra

tin

g”

Near-Term Action ItemResponsible

Team MemberDue Date

Completion

Date

M / S / C

PriorityComments

Create prototype parts kit Jane M. 4/27/09 M Parts missing

Draft test plan out for review Joe P. 5/1/09 5/8/09 S Complete

Complete circuit simulation Cedrick M. 5/1/09 M Need Resources!!

Order injection-mold tooling Joline Q. 5/5/09 M

Meet with key supplier Harry P. 5/10/09 C

Prepare for customer meeting Dave N. 5/10/09 S

Planned Work

Unplanned Work

Progress MilestoneCritical

Path?

Responsible

Team Member

Planned

Start Date

Actual

Start Date

Planned

Completion

Date

Actual

Completion

Date

Cost

Status

Schedule

Status

Tech.

StatusComments

Fabricate Prototype R David Copperfield 1/12/13 1/12/2013 2/7/13 2/7/13 G G G Complete

Prototype Testing Oliver Twist 1/25/13 1/30/13 3/5/13 G Y Y First Test Failed

Prototype Validated R Tiny Tim 2/1/13 R 2/14/13 R R Y May Require Rework

Production Tooling R Charles Darney 2/14/13 4/24/13 G R G Supplier Issues

Test Plan Complete Sydney Carton 2/20/13 3/20/13 Y Y G Resources Unavailable

Final Drawing Release Lucy Mannette 3/5/13 4/17/13 G G G

Fabricate Qual Units Charles Dickens 3/23/13 5/14/13 G G G

Week 1 Week 2


2-weekPlanTeam

Member

Tom

Dick

Harry

Jane

Sally

Mary

Wk 3 +


Example of a Single-Project Visual Board


Example of a Multi-Project Visual Board

Project Cadence Board Multi-Project Wall Gantt


A Practical “Virtual” Version of the

Visual Project Board

Courtesy Foth Companies


Agenda







Risk Management


Proactive Risk MitigationR

eso

urc

e L

oad

ing

Time-to-Profit

Launch Date

Reso

urc

e L

oad

ing

Time-to-Profit

Launch Date

Reactive Risk Mitigation Proactive Risk Mitigation

Without risk mitigation, team leader will tend to ramp up

resources too slowly at the beginning, and try to

make up schedule slips at the end.

Front-end loading of risks gives the team leader a better

chance of meeting launch date.


Lessons Learned

from Previous

Projects

Historical Data

from Similar

Products

Experience of

Core Team

Members

Risk

Identification

and

Prioritization

Risk Management –

Harnessing Lessons-Learned From

Previous Projects

Market Risks

Technical Risks

Schedule Risks

Cost/Quality Risks

Other Filters?

Prioritized List

of Project Risks

to Be

Mitigated


Starting Point –

A Trigger List for Market / Customer Risks

Known Market / Customer Risks

Source /

Reference

Proven

Mitigation

Strategies

Specific customer needs not known

Conflicting requirements of multiple market sub-segments

Use environment for new product not well-understood

User behavior when interacting with product not clear

System-level integration requirements for product not known

Regulatory requirements not fully understood

Advantages / disadvantages of competitors’ products not well-understood

Competitor releases new product prior to launch date

Volume forecast is not accurate

Price point for product is not accurate

Specific market conditions (e.g., price of fuel, preference trends) may undermine

business case

Customer requirements will change prior to launch date

Past negative history with current products may affect market acceptance of new

product


Prioritize Project Risks Using Two

Subjective Scores

PROBABILITY ( P ) X IMPACT ( I )

What would the impact

be on the project if

a possible risk actually

occurs?

How likely is it that a

possible risk will

actually occur?

P x I = Risk Priority Number

Use a subjective 1-to-5 scale to rank each factor,

where higher scores imply greater impact and greater probability.


A “Risk Register” is Created

to Track Risks and Mitigation Actions

Project Name:

Project Kick-off Date: Latest Revision Date:

Project Risk Description

Probability

of

Occurance

(1 - 5)

Project

Impact

(1 - 5)

Risk

Priority

Number

Triggering Event

(What determines

whether the RISK

has become an

ISSUE?)

Mitigation Deadline

(Latest date at

which risk

mitigation can be

effective)

Mitigation

Action

Taken

Responsible

Team

Member

Planned

Completion

Date

Actual

Completion

Date

Comments

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0


A Simple Way to Assign Risk Priorities

Pro

bab

ilit

y o

f O

ccu

rren

ce

5

4

3

2

1

Impact

1 2 3 4 5

= Must assign action item(s) for mitigation


A Visual Tool for Managing Risk –

The Risk Burn-Down Chart

Concept

Freeze

Design

Freeze

Product

Launch

Exception:

New risks

identified

Target:

Ave. < 12 & none

higher than 16

Target:

Ave. < 8 & none

higher than 12

Some risks

may carry

into production

0

5

10

15

20

25


Pro

ject

“R

isk R

ati

ng

”


Biography of Ron Mascitelli, PMP

Ron served as both Senior Scientist and Director of R&D for Hughes Electronics and the

Santa Barbara Research Center. His industry experience includes management of advanced

projects for the Department of Defense, the Defense Advanced Research Projects Agency

(DARPA), Lawrence Livermore Laboratory, NASA, and the Department of Energy.

Since founding Technology Perspectives in 1994, Ron Mascitelli has worked with over

eighty companies to improve their product development performance and product-line

profitability. In addition, he has published more than twenty papers and technical articles in

major journals and trade publications, and is a contributing author for IEEE’s Technology

Management Handbook. He is the author of five critically acclaimed books, including the

recently published Mastering Lean Product Development. Ron currently lives with his wife and

their numerous pets in Northridge, CA.

Ron Mascitelli, PMP (Project Management Professional, Masters

Degree Solid State Physics, University of California, Los Angeles)

is the Founder and President of Technology Perspectives. Ron is

a recognized leader in the development of advanced product devel-

opment methods. He presents his workshops and seminars

internationally, and has created company-specific lean product

development improvement programs for over one hundred leading

firms, including Boeing, Intel, Beckman Coulter, Boston Scientific,

Adidas, Lockheed-Martin, Parker Hannifin, Briggs & Stratton,

Goodrich Aerospace, Hughes Electronics, and Rockwell Automation.

lean product development - irdg (industry research ... · pdf filethe objective of lean...

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