Lean product development: the next frontier

By now, the terms "lean manufacturing" and "lean enterprise" are quite popular and well accepted. The "lean" approach is acknowledged as a way of doing business in the present challenging environment. The "lean" principles are easy to understand and accept. The challenge is in implementing them.

Such an approach revolves around concepts, which have been talked about for time immemorial. However, it is only recently that the Lean manufacturing and enterprise concepts have been given a serious look as businesses combat the pressures of customer satisfaction, cost reduction, globalization, compliance, time to market, growth, profitability etc.

Lean manufacturing aims to "do it right the first time" while minimizing waste (this refers to not just physical waste but importantly to non-value add processes as well) and being open to change. Toyota led this effort by what is now the well-known Toyota Production System (TPS). The global manufacturing industry went about researching, learning or adopting similar practices only to find out that they did not achieve significant business success, such as gaining competitive advantage.

The reason most probably lies in the fact that emulating only manufacturing practices is not enough. This can put a company's manufacturing practices at par with other leaders. But what about the products themselves? If quantum improvements are needed in areas such as competitive advantage, market share, which can lead to higher revenue growth and profitability- companies need to build winning products! Thus Toyota's leadership today is not only because of TPS.

Leading companies around the world recognize this fact and are applying the "Lean" principles to other activities of the value chain. Examples of activities even before a product is manufactured are product development, planning, parts sourcing, purchasing and so on. It is in this context, most companies are realizing that Lean Product Development is the next frontier, since it provides a greater level of opportunity for improvement. Lean manufacturing still delivers significant value but is no longer a competitive differentiator.

In Focus - Product Development

As enterprises become more customers driven, the focus has shifted to product development. They are now beginning to realize that an even greater level of opportunity for improvement is available by better managing the digital product definition at every stage in a product's life. There are ever increasing demands to improve innovation, quality and time to market while reducing costs. These circumstances have forced businesses to re-engineer their product development processes. Global Product Development (GPD) has become a reality through off shoring and outsourcing, to leverage the benefits of costs and talent availability around the world. However, newer challenges have emerged. There is a need to collaborate effectively across geographies, various participants including customers and suppliers, time zones, cultures and languages.

Developing the organizational ability to manage projects, product information, protect intellectual property (IP), deploy consistent processes, communicating the right thing to the right person at the right time, managing change or have version control in a distributed environment is a complex task.

PLM - An enabler                                                                                                                                                Many enterprise solutions - such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and SCM (Supply Chain Management) - focus on optimizing the flow of physical products and transactional information. These applications work best for processes that involve doing the same thing, the same way, over and over again. The fact is, they are not suited for the kind of rapid iteration and innovation necessary for successful product development. This led to the birth of Product lifecycle management (PLM).

To consistently produce great products, companies need a product development process that becomes, in itself, a competitive differentiator. While some see product development as synonymous with engineering, a truly effective product development process engages a variety of cross-functional participants from marketing, engineering, procurement, manufacturing, sales, and service departments. Ever-increasing levels of outsourcing have driven suppliers and manufacturing partners into direct roles in the product development process. At the same time, a strong customer focus has necessitated the customer's direct involvement.

As a result, attempts to optimize product development naturally evolve from a departmental focus within engineering, to an enterprise focus, and ultimately to a distributed value chain focus.

Developing digital products in a value chain environment-and under intense time and cost pressure - is certainly not easy. While many manufacturers have made great strides improving operational effectiveness across their enterprise and supply chain as it relates to manufacturing and logistics, most companies will admit that their product development processes are rife with problems. The digital content that describes products during the development process typically gets fragmented across organizational boundaries, with each group having different forms of product definition stored in different systems, and many with incompatible formats. No easy-to-use capability exists to share information among these enterprise systems in a controlled manner.

Product Lifecycle Management (PLM) describes a comprehensive framework of technology and services that permit manufacturing companies and their partners and customers to collaboratively conceptualize, design, build, and manage products throughout their entire lifecycle. PLM solutions must enable companies to create detailed, intuitive, and realistic digital product information; collaborate by incorporating early input from the various participants in order to identify and resolve critical issues; and control and automate critical processes such as release to manufacturing, change, and configuration management throughout the product's lifecycle.

PLM has emerged as the primary means by which manufacturing companies can achieve step-change improvements in their product development process.

Architecture Matters                                                                                                                                               A superior product development system must be based on leading technology that tightly links footprint and architecture. A comprehensive set of capabilities on an inadequate architecture, or a great architecture that lacks critical capabilities, does not deliver an effective product development system. A comprehensive footprint must offer the capabilities necessary to improve product development processes. These processes involve the entire enterprise and are further extended to include supplier, partner, and customer participants.

The footprint of PTC's Product Development System provides five essential capabilities:

• Create detailed digital product information (MCAD, ECAD, Software, Documentation)
•  Collaborate with distributed project teams, customers, suppliers, and partners
•  Control content and automate processes
•  Configure content to match products and services
•  Communicate via dynamic publications

But this footprint of capabilities must align on a sensible system architecture. Without an integral, Internet-based architecture that knits together these five interdependent capabilities - create, collaborate, control, configure and communicate - manufacturers cannot effectively optimize their product development processes. Therefore, leading technology must ensure that the footprint of capabilities are built from the ground up on an optimized architecture that addresses the needs of the digital product value chain, what PTC calls the "3 Is". The architecture must be

• Integral in the sense that it shares a common database schema, common business objects, and a common Web-based user interface,
•  Pure Internet in the sense that it deploys seamlessly across existing Intranet and Internet infrastructures to accommodate a distributed value chain as well as provide a seamless user experience across applications, and
•  Interoperable in the sense that it integrates easily with other systems (ERP, SCM, CRM, as well as a variety of MCAD/ECAD and software applications) using standard protocols and integration approaches.

The emerging need of a PLM system today is to have a very strong capability to define and automate processes, and not just tie those tools together which help engineers create a product with a set of capabilities. A competitive value can emerge when organizations focus on not just "what" they develop, but "how" they develop. Examples of processes involved would be Concept development, change management, Quality management, manufacturing process management, component sourcing - to name a few. PTC's PDS has the ability to help manage the various processes involved in the course of product development.

In general, the goal of lean techniques is to define processes, which allow people - individuals, functions or organizations- to operate as one entity to create breakthroughs in a continuous value stream to raise the whole chain to a higher level. PLM system is the technology that ties the people and processes across the supply chain to help create winning products.

The author is Vice President and Managing Director, PTC Software (India) Pvt. Ltd.,