Today’s hyper-competitive market demands innovative products that are brought to the market rapidly.  This is particularly true in the case of automotive industry.  This fact has been emphasized by the CEOs of General Motors and Daimler Chrysler (UM Automotive Management Conference, August 2000).  This is where Lean steps in.  Researches in the automotive industry have shown that the driving factors for North American manufacturing renaissance were the Lean tools and methods – their modified versions which have dramatically improved performance of processes in product development.

A research carried out by Paul Adler in 1998 has shown that achievement of improvement goals for traditional manufacturing product development could reduce the development time greatly by 30% to 50%.  If Lean principles are applied during the product development process itself, then this will help enable Lean manufacturing.

An example of this impressive performance is the Toyota’s powerful product development system.  Their product development system helps them in bringing high quality products faster to market, and in achieving top-notch manufacturing efficiency.  Toyota’s product development system has won it the top seven places out of sixteen categories in a Quality study in 2000, and top four places out of ten categories in Consumers Reports Top Autos study.  Toyota also boasts of excellent product designs and one of the world’s most efficient manufacturing plants.  They require only a fraction of time to bring a product to market compared to the time taken by their competitors.

The University of Michigan has carried out a 30-month research study on Toyota’s product development system, and it has outlined the following seven fundamental principles:

1. Holistic approach to product development  –  The fundamental elements of product development system – people, processes, and technology – are designed to work in mutual support and combine to form a synergistic system.  It is important that other functions in the organization are also aligned for obtaining this result.
2. Customer first approach to product development  –  This customer first philosophy integrates system elements and functional specialties.  It is required that all system participants understand the customer defined value, so the product design satisfies the customer needs and is also efficiently manufactured.
3. Front-loaded process  -  Toyota is able to minimize the variations in downstream process through effective segregation of engineering rigor phase from the execution phase of the product development process.  This aspect is crucial to gain speed and quality.
4. Built-in learning and continuous improvement  -  These are the fundamental elements of every job.  To implement this, Toyota sets performance goals of increasing rigor for each project.  It also holds real-time and post-mortem learning events (Hansai) for functional specialists to update their specialties.  Learning and continuous improvement are embedded in a problem-solving process so that multiple solutions are created and root cause countermeasures are focused to avoid future recurrences.
5. Synchronization of processes for simultaneous execution  -  The processes of each function are designed to march on simultaneously with the stable data available.  Working with early data will result in mass waste with increased duration.
6. Use rigorous standardization to create strategic flexibility  -  This may seem a paradox, but is indeed the essence of Toyota’s quality.  It enables creating predictable quality and timing outcomes than those possible.  In this principle, tools and concepts such as common architecture, standard processes, and reusability are employed.  They bring about flexible product development capacities and a host of other system benefits.  They play a vital role in downstream Lean manufacturing capabilities.
7. Go to the source engineering  -  Toyota follows a philosophy called ‘Gentchi Genbutsu’, which emphasizes that an engineer should never be more than a stone’s throw away from the physical product.  This philosophy is practiced in ways such as personally fitting parts on prototypes, spending considerable pre-program time at dealerships and manufacturing plants, working on competitor tear-downs, etc.

These principles are at the core of Toyota’s product development system.  This system has given Toyota its competitive edge over others and set it on the path to continuous improvement with focus on customer value.

The methodology of Lean is being increasingly used by organizations nowadays. Lean techniques are utilized to remove wastes of any process (e.g., servicing, manufacturing, etc.), thereby accelerating the velocity of the process and reducing its costs. Lean identifies 7 major wastes that could occur in an organization:

• Defects
• Overproduction
• Transportation
• Waiting
• Inventory
• Motion
• Processing

Of late, an 8th waste has been identified – skills. This refers to delegation of tasks without adequate training.
Lean is arrived on the basis of a mathematical result called Little’s Law, which is:

LEAD TIME OF ANY PROCESS = QUANTITY OF THINGS IN PROCESS / AVERAGE COMPLETION RATE/UNIT OF TIME

Lead time refers to the time period between entry of a work into a process and its exit from that process. ‘Things In Process’ refers to the requisition quantities in procurement process, Projects in Process count in product development process, and amount of Work in Process in manufacturing process. Actually, the quantities of Things in Process are controlled and reduced by Lean with its well-defined tool sets.
Lean Enterprise is based on the following principles:

• Zero Waiting Time
• Zero Inventory
• Scheduling for internal customer pull, instead of push
• Batch to Flow – cutting batch sizes
• Line Balancing
• Cut actual process times

Advanced statistical tools are excluded in these principles.
The Pull/Kanban system of Lean reduces the lead-time by reducing the quantities of Things in Process. This is done by the tools of 5S, total productive maintenance, setup reduction, etc. For example, setup reduction tool reduces the production time for a given product without affecting the completion rate. The methodology of Lean leverages Kaizen for rapid improvement of processes and driving results.
The Lean methodology is very tangible and could be completed within a couple of days. Its strength is that it couples the principles with practical recommendations for achieving improvement. To site an example, Lean has a simple technique for analyzing and reducing changeover time that could be employed easily without sophisticated tools. There are separate workshops for teaching Lean principles, which combine short training sessions with practical applications on the shop floor.
Many major companies such as General Electric, Toyota, Motorola, and others have accomplished impressive results using Lean techniques, which have stimulated other organizations to follow in pursuit.

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