Lean leadership of product introduction teams
This discussion of Lean Leadership of New Product Introduction teams has resulted from a breakthrough in improving the acceptance of Project Management in a traditional engineering/manufacturing organization. The changes described herein were motivated by a clear, agreed-upon objective of the organization.
Objective: 75 % Faster Introduction of New Products
The organizational change and results that will be described will include a background of the Lean Initiative at Lord Corporation, and a description of the New Product Introduction Teams established to attack our critical strategic objective of SPEED. At least two Models of Lean Leadership have been embraced, and many of the recommendations, approaches, and tools are applicable to almost any product development or manufacturing organization. Finally, the results up to this point will show the clear benefits resulting from this significant change effort.
Yes, it takes a great deal of effort, some frustration, and persistence, but the long-term benefits and feeling of process streamlining are incredibly rewarding! Some of the most significant changes were simple, although still requiring persistence and creativity, but had profound impacts. Daily team coordination meetings, team co-location and direct reporting relationships, project planning and risk management emphasis, and project “triage” are some of the tools in place. Other improvement are planned to be incorporated later in 2002. Our recommendation: Take the first step!
Background: Lord and the Beginnings of LEAN
Lord Corporation, Mechanical Products Division, is a supplier of motion accommodation and vibration isolation devices and systems. Lord is a technology-focused manufacturing organization. Most of the products involve bonding metal to rubber, and/or electronic controls.
Major customers are in transportation industries (Aerospace, Truck/Bus, Off-Highway, Rail, RV), and include familiar names such as Boeing, Bell Helicopter, John Deere, Freightliner Trucks, Caterpillar, General Electric, Polaris, and the Taiwan Subway system. Worldwide, Lord has nine manufacturing and six engineering locations (including a technology development center in North Carolina). The bulk of new product introduction activity takes place in Northwest Pennsylvania.
The LEAN initiative started out as Lean Manufacturing, in the Manufacturing plants, about four years ago. This included focus on such efforts as 5-S (Cleaning, sorting, and organizing work areas), 20 Keys of Manufacturing, Kaizen events, Poka-Yoke (error-proofing), and Value-Stream Mapping. During the past few years, 20–40% of the improvement projects have result in significant Improvements (measured in terms of cost savings, and waste reduction). Nearly every project has resulted in positive experiences, learning, and team building.
Lord has taken broad process improvement efforts in the past, including programs and approaches per the teachings of Deming, TQM, ISO and QS registration, and others. A different approach was desired—one with fewer buzzwords and more results!
Jim Willett, Lord Manufacturing Manager and a key leader in the Lean Manufacturing implementation, describes some of the key points about Lord's Lean approach, starting with: What Does LEAN mean to Lord? It is: a Management Philosophy, a Leadership Approach, and a Set of Tactical Methods. Jim describes Lean Manufacturing as having five elements:
- High-performance teams
- 20 keys
- Waste elimination
- Kaizen weeks and events.
Starting with the domestic manufacturing plants, teams were formed in all of the work areas. Teams were assigned by geographic area within the plant. Each team selected metrics within their control. They were asked to focus on making sure all word done is Value Added—in other words, what will customers pay for? Benchmarking and overall team effectiveness were (and still are) evaluated using the 20 Keys of Lean Manufacturing. These are shown in Exhibit 1. Each key has five levels of maturity. The team evaluates itself against the five levels, and establishes targets for improvement in each area. Each team is challenged to improve its rating by 10–20 points each year (the minimum starting score is 20, and the maximum total is 100). (Note: Often, the 20 keys are split into 10 keys for the team itself, and 10 for management.)
NPI Teams at LORD
The new Strategic emphasis on SPEED resulted in several initiatives, including reorganization, improved “filtering” of input (more selectivity in pursuing new business), new tools, more supplier development, and ever increasing customer focus (in order to be more responsive to customer needs and provide maximum value).
The New Product Introduction Teams were piloted in three business segments from April to October 2001. The effort was successful enough to warrant expansion in October 2001 to include the entire Mechanical Products Division.
Eight teams were formed, each focused on one market segment in the transportation industry (four aerospace and four industrial teams). Each team is cross-functional, with direct reporting of most of the functions to a Team Leader. The functions previously performed by the new NPI Team Members were:
- Product Design Engineers
- Manufacturing Engineers
- Tool Engineers
- CAD Designers
- Test Engineers
- Quality Engineers
- Finite Element Analysis Experts
- The Team Leader, acting as Project Manager on most projects.
Other who are associated with the teams, but maintain their old reporting relationships are:
- Customer Service
- Marketing and Sales.
Each of the eight teams has 9–12 Members. Each Team has 30–60 projects (A project is one part development). The teams are responsible for the quotation, design, development, testing, customer interface, and launching to full rate production for each development. Exhibit 2 shows a sample schedule showing a typical project.
There were several fundamental requirements established before the pilot, and reinforced as the new teams were formed. These have since proven to be some of the most powerful effects of the NPI organization:
- Dedicated Teams: having the necessary resources on each team
- Co-location and fewer physical barriers
- Maximizing communication with the manufacturing plants
- Maximize the quality of project input, and identify issues ASAP
- Leaders need to lead change, eliminate habits, and cultivate champions
- Commitment will be directly proportional Involvement; maximize both
- Have leaders that will work well together.
The First Model of LEAN: To Initiate the NPI Process
During the implementation of Lean Manufacturing, various experts were consulted, and training was a key element. This has been carried over to the Front End of the process. Dr. William Lareau was a key resource in the development of the Manufacturing approach, and he helped to launch the NPI team Lean Approach as well. Dr. Lareau's book LEAN LEADERSHIP: From Chaos to Carrots to Commitment, as well as personal onsite sessions, helped to team leaders to develop an approach, and to integrate activities consistent with the Manufacturing efforts. Many members of the new NPI Teams had experience with Kaizan events and other Lean Initiatives in the plants. Some of the main elements of the initial efforts included:
- Focus on Teamwork and Organizational Dynamics
- Motivation of team members
- Visioning an ideal process/organization
- Customer focus
- Eliminating waste.
The organization's experience with Lean initiatives, and other improvement efforts in the past helped to facilitate making good decisions in areas such as:
- Team size (6–10 key members on each team)
- Organization and leaders that demonstrate its vision
- Reward appropriate behavior
- Metric maps: (Appropriate, consistent metrics flow through the organization)
- Visual systems
- Daily workplace meetings
- Improvement charters.
One area of focus used by all of the Manufacturing and NPI teams is Waste reduction, a guideline for which is shown in Exhibit 3.
A Second LEAN Model—A More Project Management Focus
A second resource became available soon after the teams started gaining momentum: Lean Project Management: Building a Project Driven Enterprise (How to slash waste and Boost Profits Through Lean Project Management), by Ronald Mascitelli, PMP, CMC. This text was consistent with many of the experiences of the team and process leaders, and added some new ideas for continuously improving the process. Mr. Mascitelli offered some additional insights and experiences. First, as shown in Exhibit 4, we reviewed the parallels between Lean manufacturing and Lean Project Management. This helped to point out two things: first that there are similarities in tools, and second that the differences do require different approaches, measures, and new tools compared to the factories.
One simple example is that both manufacturing plants and project teams need planning tools. ERP or MRP is appropriate for a factory, and perhaps could be used with major compromises and system-foolery if there were no choice for a large project plan, but project scheduling software is far better suited to a project team. Fortunately, most of us have learned that lesson.
A more current example would be the standardization of manufacturing processes compared to project method standardization. Manufacturing is not supposed to be creative, since a key part of quality is that the process be consistent, and therefore result in predictable, consistent and compliant products. This differs greatly from product design, but there may be significant benefits from standardizing input requirements (questionnaires) to assure the right customer input is always requested, automating the routine calculations to avoid errors and reduce wasted time, establishing templates for project schedules and budgets, not to mention formal plans and reports.
Tools for Now and for the Future
We have found that nearly every reference to LEAN MANAGEMENT has a clear focus on one objective: Eliminating Waste. Clearly, this is the best way to maximize resource efficiency and effectiveness, and to attain SPEED. Exhibit 5 lists Macitelli's four areas of Project Waste; very useful in evaluating where capacity can be gained, and time saved. In reviewing the tools recommended by Mr. Mascitelli, we found several that were already being used in some form, others that we determined we should implement in the short term, and others that would be deferred. Exhibit 6 lists some of these tools.
The team leaders ranked the current implementation successful tools, by relative benefit, as follows:
- Dedicated direct-reporting Teams (Providing ability to focus and allocate an entire team to meeting the customer goal. This was only possible with the support of the strategy implementation team, and was facilitated by the pilot team project last year)
- Co-Location and fewer walls (Fewer emails, and better, more direct communication)
- Daily Stand-up Meetings (This was many team-members' favorite tool; it is greatly enabled by items 1 and 2)
- Common communication tools (These tools/databases were in place well before the teams, and are still an important element)
- Leadership Dedication to Change and enable Risk (The NPI Process is co-owned by three overall managers, who are tasked with working priorities, knocking down barriers, and assuring continuous development of the process).
The Biggest Hurdles:Too Many Projects, Too Little Time
Some of the key issues in our multiproject environment centered on the need to allow people and teams to focus their efforts, and enable things to get done faster. Each team member had 4–20 different projects in various stages, often waiting for customer or supplier feedback before he or she could proceed. Interruptions to deal with old problems/changes/emergencies were, and still are frequent. Some resources are still shared, particularly some of the “specialists.”
Two tools being used to address the control of inputs into the teams are “Filters” and “Triage.” The filters are intended to improve the selectivity of new projects. Of course, it is difficult to restrict marketing bringing in new opportunities, but the quality of inputs they provide to initiate new projects has improved. The “Triage” is the process of assuring that each accepted new project goes to the right team, is being planned for the appropriate manufacturing facility, and appropriate consideration is given to the approach for each project based on timing, volume, technical, schedule and cost risks, and the right people are available to work on it.
Multitasking, which used to be prized as an engineering skill, is being recognized as a clear cause of projects taking too long. It is true, that many projects can show Progress when being worked concurrently, but then they all take too long to get completed. Whenever possible, we are starting to focus individuals, and teams, on getting jobs completed (recognizing that there are frequent instances of waiting for customers or suppliers) before with minimum of interruptions.
Juggling Between Teams
Important issues related to sharing and communicating priorities between teams were anticipated in the NPI Launch. There are some scarce resources assigned to individual teams, with the expectation that the specialized skills would be available for support and consultation. It was found that the teams expected their members to be solely dedicated to their own team, and were asked to perform activities other than their “specialties” in support of the teams. This has caused some long discussions concerning the advantages and disadvantages of allocation of such scarce resources into the teams as opposed to keeping them centralized. The consensus solution at this time is cross training within the teams in order to have all skills available when needed. Many of the team leaders value, above all else, teams having control of their own resources, and destiny. A possible downside to this solution would be the preference of some “specialists” to continue to specialize without the requirement to cross-train and perform other team tasks. I believe that some of the specialists may be moved out of the teams for this reason.
The organization did maintain some resources in central groups—most notably, the test laboratory and some of the test technicians. Conflicts between these resources still require several phone calls or visits in order to assure that customers and projects are adequately and appropriately supported. Often, the squeaky wheel still gets the grease. Cooperation and communication between team leaders keeps this situation from becoming overly problematic.
An Example of Using Multiple LEAN Tools
One waste reduction and timesaving approach taken early in the pilot phase of the NPI teams involved Approving Engineering Changes. This has been, traditionally, a serial process, involving an Initiator, three to four functional signoffs, approval, CAD Designer update, Checking, and Releasing. The Off-highway team decided to perform a group review and signoff, using prescheduled (reserved) meeting time, two times per week (Tuesday morning and Thursday afternoon). This process improved communication of the intent of the change, reduced confusion, errors, and allowed for added improvements to be incorporated in the change documentation. Shortly after this process was initiated, the company launched a new E-System for initiating, researching, and storing engineering changes. This system was designed to operate serially, like the old paper process. The Off-highway team obtained permission to electronically sign off for the entire team without accessing the change file multiple times. The next steps being pursued to improve this process include eliminating the need for separate “checking,” which will make this a three-step process, (from the original seven to eight steps). The Division VP continues to challenge the teams to get rid of engineering changes altogether, and other steps are being taken to dramatically reduce changes.
Targets and Results to Date
The key target of the teams is Reduced Cycle Time. The expectation is that on-time delivery to customer will also improve to near 100%, even using the strict comparison to often- (at least seeming) unrealistic customer requests. After six months in the new organization, we have realized measurable improvements in both measures. Aerospace Fixed-Wing NPI Manager, Pat Sheridan, reports the release of eight new part number for one program, including design, production molds, process development, testing, and shipment of parts in 5.9 weeks. This would have been a 26–30 week process without the team focus. There are other anecdotal reports of significantly reduced cycle-times in order to meet (and often exceed) customer expectations. It is expected that these will continue, and significantly improve the average cycle times over the next six months. These results will be reported at PMI 2002.
Reduced Waste is not being specifically measured, but will result in the on-time and cycle time improvements. Industrial NPI Manager Ed Auslander developed another measure of productivity, which is calculated as profit margin for new products/development expense. This measure has shown a nice upward trend for the past six months. In addition, Ed has reported the following as of 1Q 2002:
- 231 Projects in 2001 completed in 47 days (avg.) and 44% on time (to stringent customer request target)
- 56 Projects in 1Q 02, completed in 44.5 days, 64% on time (These projects include quotations, prototype orders, and 1st production orders.)
Pat Sheridan's teams have shown a dramatic improvement in on-time first production delivery from an average of 50% for the past several years, to over 80% for the first quarter of 2002. It is believed that this is a sustainable, and improvable, step increase!
Remember the 20 keys of manufacturing? A similar group of 20 keys, for NPI, was developed to help the teams track compared to benchmark organizations, and to focus improvement efforts. Exhibit 7 shows the 20 keys selected by the teams, and Exhibit 8 is an example of the starting scores, and the targets we hope to achieve in one year. These keys do not dictate the improvement projects themselves, but are intended to be a yardstick of how our improvement and change efforts are impacting specific observable behaviors. It is the intent to revise these 20 keys, as necessary, and as we gain knowledge of success-linked behaviors.
In addition, consistent secondary measures are being evaluated, that impact SPEED, such as, How many projects are being worked on, and how many awaiting assignment? (This measure changes, depending on the dynamics of the different teams.) How are people spending their time? (How often, and what are the implications of interruptions?)
Finally, how do the teams feel about the process? Not surprisingly, they report satisfaction with some of the tools and results, as reported earlier, but they also recognize that we have only taken the first few steps, although significant ones along the journey. One of the reminders we share constantly is that there is significant “pain” in making such fundamental changes, and we may not have reached the peak of it yet…but we are seeing the benefit, and we have not seen the peak of the benefit either!
Mascitelli, Ronald. 2002. Building a Project-Driven Enterprise. Northridge, CA: Technology Perspectives.
Lareau, William. 2000. Lean Leadership. Carmel, IL: Tower II Press.
Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA