About the Author
Karl Schultz is the president of Schultz Associates, specializing in manufacturing and technical management consulting. He holds a Bachelor of Science in Mechanical Engineering in Machine Design from Western Michigan University and is an adjunct instructor at the Oregon Institute of Technology, where he teaches operations management. If you would like to contact Schultz, please e-mail firstname.lastname@example.org.
By the time the Saturn came onto the market, the Acura was on its third iteration. How did Honda do this? It's called concurrent or simultaneous engineering. In today's appliance marketplace, we need faster time to market to delight our customers with competitively priced products. Manufacturers are truly at war with their competitors to gain a competitive edge. It is said that if a product is late to market by 6 months compared to its competitors, the average gross profit potential can be reduced as much as 33 percent. Concurrent engineering cannot only prevent this from happening, it can give you the edge.
Most manufacturing companies have functional organizations for marketing, product engineering, manufacturing, finance, etc. These functional organizations are called "silos." Processes typically flow through these organizations in series and are “thrown over the wall,” resulting in poor product quality, late time-to-market and non-competitive cost (or low gross margins).
Not to point fingers, but design engineers traditionally tend to be a breed apart. That is the nature of the beast. They perform their work in isolation; they love to be creative, designing new parts versus substituting current designs. They are generally not interested in input from other functions such as marketing and manufacturing. Thus, meeting product quality, availability and cost goals is a challenge.
However, design should be thought of as a competitive weapon. This writer, while director of Manufacturing Engineering for a major electric motor company, participated in a new product concurrent engineering project that reduced the normal time to market by 50 percent, while surpassing both quality and cost goals. How did we do this?
First, we eliminated the silos by organizing a team consisting of a marketing person, a couple of manufacturing engineers, a financial person, and several product engineers. They were co-located in a separate office area from their normal functional organizations. The leader of this team, or process owner, was chosen from product engineering, and team members reported to him during the duration of the project. They were empowered to make decisions, communicating quarterly to top management. Benchmarking of competitive electric motors was an initial exercise. Marketing surveyed key customers. Suppliers were brought in during the design stage to make recommendations for manufacturability and quality. Equipment and tooling were purchased before the designs were solidified. Design-for-manufacturing/assembly (DFM/A) was a key tool in this project. The project showed that concurrent engineering and DFM/A are tools to be incorporated for competitiveness.
In a complete elimination of the functional silos, concurrent design at Rubbermaid has created entrepreneurial teams of five to seven members in each of its four-dozen product categories. Each team includes a product manager, research and manufacturing engineers, and financial, sales and marketing executives. The teams conceive their own products, shepherding them from design stage to the market place.
Typical benefits of concurrent engineering are:
• 30 to 70 percent less development time
• 60 to 90 percent fewer engineering changes
• 20 to 90 percent less time to market
• 200 to 600 percent improvement in quality
• 20 to 110 percent in white collar productivity
• 20 to 120 percent higher return on assets
James Lardner, former vice president at outdoor appliance manufacturer Deere and Company, says: "We can cut capital investment by 50 percent to 60 percent just by getting the design and manufacturing people together from the beginning."
Thus, we have the key points of concurrent engineering:
• multifunctional team empowered with leader
• co-located team
• defined quality, availability and cost goals
• communication with key customers
• benchmark competition
• suppliers are part of the team
• use of DFM/A concepts
While it may seem easy to incorporate concurrent design as outlined above, one must wonder why more manufacturing companies don't embrace this technique. Call it resistance to change. Unfortunately, companies that don't see a challenge in meeting customer requirements- quality, availability and cost- are doomed to a slow death spiral. Concurrent engineering requires a strong leader that realizes a massive organizational change will have to occur and is willing to "bet the company." Leaders of world-class companies are taking this step and, in the end, are winning the war.