In today’s competitive world, companies are introducing new products at regular intervals to retain their market share. New product development is a very complicated and expensive process. . It is quite a challenge for most companies to develop new products. This has prompted many companies to use lean techniques in product development.
The concepts of lean have been successfully used in production, quality and inventory management. In product development the primary use of lean techniques has been in reducing product development cycle time. However there are very few companies who have successfully implemented lean product development.
Lean product development primarily involves the elimination of waste in new product planning, communication and management of resources. It also involves lean design. Lean design focuses on reducing waste in the form of poor quality and high cost of product. Toyota Motor Company has implemented lean product development very successfully.
The principles of lean product development are based on identifying and eliminating waste in product development. This involves reducing unnecessary costs and delays and elimination of errors. A very close analysis of information flow and decision processes in product development is required. The reduction in time due to adoption of lean product development could be 30% to 50%.
Product development activities that do not lead to increase in value to the customer have to be eliminated. Designs have to be correct as early as possible in the development process. There is also a need to develop techniques to measure and improve the product development process.
The main wastes in lean product development are creating, storing, locating and reusing product data. Some of the waste generated in the product development process includes waste of resources due to wrong designs and repetition of steps in the product development process. Other waste generated in product development includes that generated due to poor quality of information. The main benefits of lean product development are development of products faster using lesser people and at lower costs.
Toyota was probably the first company to implement lean product development. In order to streamline its product development activities, Toyota spread all its product development activities over three centres. One centre developed luxury and high end cars, other low cost vehicles and the third concentrated on developing cars for new markets. There was competition amongst these centers, though experiences in innovation were shared between the centers.
The product development system of Toyota is called Toyota Product Development System also called TPDS. In TPDS the raw material is knowledge and information. It recognizes wastes as waiting, rework, lack of system discipline and too many transactions. TPDS has created a community of scientists which is constantly experimenting with innovative ideas in a system which is pull driven. The decision making in TPDS is mainly driven by technical knowledge and technical expertise.
Lean product development has also been adopted by US car makers General Motors and Ford. Many Swedish companies like Sandvik, Ericsson and ABB Robotics and Indian companies Mahindra & Mahindra , Lucas TVS Ltd and Sundaram Clayton Ltd have adopted lean product development.
Lean product development is a five stage process. The first step is to find out what could value to your end customers and intermediate customers. In the next step there is a need to choose between the needs of intermediate and end customers. After this the product development process has to be analyzed and find out at which steps value is being added. Also wherever there are any wastes they have to be eliminated. Finally which of the product development processes are directly adding to value to the customer.
Lean product development is also being used by some companies during software development. The first is to eliminate any kind of process which is adding to waste and to focus only on adding value. After this to have a very strong focus on people who are adding value. The main wastes in software development are additional features, extra steps, waiting, searching for information and defects which are not revealed during the testing process.
The most successful company in lean product development has been Toyota. Many companies have adopted lean product development without fully adopting its philosophy. Instead many of the companies have adopted some tools of lean product development on a piecemeal basis. Among the popular tools used are the visual tool and weekly meetings.
The main challenges to successfully implement lean product development are engineering leadership, knowledge management, concurrent engineering, development process and visual management systems. In Toyota the leadership in the product development department is with the managers who are most competent in engineering. Hence companies who want to emulate Toyota in lean product development will have to have a similar system. The second challenge is the way engineering data on design is stored. All the engineers working in the department have access to the data. They also are expected to know what other engineers have done in development. Concurrent engineering is strength of Toyota. Many designs are developed for a component and then the best is chosen for a given product. Hence trade off between designs has to be calculated and a very sophisticated knowledge management system is necessary to choose the best design. There is also a need to develop a pull system for ensuring that all the designs are available on time. All the design teams have to have their own schedules based on the final date given for the product by the chief engineer. One of the key reasons for the success of Toyota in lean product development is the visual management system. All the engineers work in one large room. All details about the project and all the data are available on the walls of the room.
In the future it is expected that many companies will adopt lean product development to bring products to the market faster. However except for a handful of Japanese companies and some US companies the philosophy of lean product development has not been implemented. It will take some more time before lean product development is successfully implemented worldwide.
