Fix The Economy – Connect The Engineer To The Factory

Rumor has it, manufacturing is back. Yes, manufacturing jobs are coming back, but they’re coming back in dribbles. (They left in a geyser, so we still have much to do.) What we need is a fire hose of new manufacturing jobs.

Manufacturing jobs are trickling back from low cost countries because companies now realize the promised labor savings are not there and neither is product quality. But a trickle isn’t good enough; we need to turn the tide; we need the Mississippi river.

For flow like that we need a fundamental change. We need labor costs so low our focus becomes good quality; labor costs so low our focus becomes speed to market; labor costs so low our focus becomes speed to customer. But the secret is not labor rate. In fact, the secret isn’t even in the factory.

The secret is a secret because we’ve mistakenly mapped manufacturing solely to making (to factories). We’ve forgotten manufacturing is about designing and making. And that’s the secret: designing – adding product thinking to the mix. Design out the labor.

There are many names for designing and making done together. Most commonly it’s called concurrent engineering. Though seemingly innocuous, taken together, those words have over a thousand meanings layered with even more nuances. (Ask someone for a simple description of concurrent engineering. You’ll see.) It’s time to take a step back and demystify designing and making done together. We can do this with two simple questions:

  • What behavior do we want?
  • How do we get it?

What’s the behavior we want? We want design engineers to understand what drives cost in the factory (and suppliers’ factories) and design out cost. In short, we want to connect the engineer to the factory.

Great idea. But what if the factory and engineer are separated by geography? How do we get the behavior we want? We need to create a stand-in for the factory, a factory surrogate, and connect the engineer to the surrogate. And that surrogate is cost. (Cost is realized in the factory.) We get the desired behavior when we connect the engineer to cost.

When we make engineering responsible for cost (connect them to cost), they must figure out where the cost is so they can design it out. And when they figure out where the cost is, they’re effectively connected to the factory.

But the engineers don’t need to understand the whole factory (or supply chain), they only need to understand places that create cost (where the cost is.) To understand where cost is, they must look to the baseline product – the one you’re making today. To help them understand supply chain costs, ask for a Pareto chart of cost by part number for purchased parts. (The engineers will use cost to connect to suppliers’ factories.) The new design will focus on the big bars on the left of the Pareto – where the supply chain cost is.

To help them understand your factory’s cost, they must make two more Paretos. The first one is a Pareto of part count by major subassembly. Factory costs are high where the parts are – time to put them together. The second is a Pareto chart of process times. Factory costs are high where the time is – machine capacity, machine operators, and floor space.

To make it stick, use design reviews. At the first design review – where their design approach is defined – ask engineering for the three Paretos for the baseline product. Use the Pareto data to set a cost reduction goal of 50% (It will be easily achieved, but not easily believed.) and part count reduction goal of 50%. (Easily achieved.) Here’s a hint for the design review – their design approach should be strongly shaped by the Paretos.

Going forward, at every design review, ask engineering to present the three Paretos (for the new design) and cost and part count data (for the new design.) Engineering must present the data themselves; otherwise they’ll disconnect themselves from the factory.

To seal the deal, just before full production, engineering should present the go-to-production Paretos, cost, and part count data.

What I’ve described may not be concurrent engineering, but it’s the most profitable activity you’ll ever do. And, as a nice side benefit, you’ll help turn around the economy one company at a time.

7 Responses to “Fix The Economy – Connect The Engineer To The Factory”

  • Great post Mike. This principle goes for all of design, that often the people developing a new product or service are not familiar with the whole process or supply chain. A bit more time spent planning up front to identify the whole pathway and all the stakeholders and gather their input would save a great deal of time and cost AND result in better products/services.

  • Cathy Sun:

    Thanks Mike point out the secret of product cost, it is designed out. Designers will only consider some key component cost very limited knowledge of manufacturing process, DFx is the key connection between design and manufacturing.

  • Nick Name:

    1- Cost in the factory is a follow up of design. A designer will never be aware of what cost his design generates if the connection to the “making” is loose. according to statistics 60 to 80% of cost is generated by design. All efforts of manufacturing to reduce cost cover only part of the rest!
    2- many years ago I worked for a successful Company active world wide. I was responsible for advanced research and development. I got many times input from the marketing which was not enough since the projects were too in advance with respect to what marketing was accustomed to. So that I was obliged to keep a tight contact with sales people in order to obtain as much and as detailed informations as possible. I noticed a kind of fight between manufacturing and sales because neither part did know the problems of the other.
    When I mentioned to the Vice President to whom I had to report all those problems I got an answer which shows the mentality:
    – sales people are for sale not for giving input about the market and they have not to have any contact to manufacturing-
    this narrow minded answer shows how little managers understand the needs of engineering and communication between different departments of the process generating new products for the market.
    Being active as a Consultant in Product Development I noticed that this mentality is not an exception but quite spread over the industry.

  • AWESOME! Thank you. This is really good stuff. One question; how does design or manufacturing break through the Chinese wall between engineering and procurement?

  • Mike:

    Dylan, procurement is the bridge between engineering and your suppliers’ factories. If you measure engineering on cost, they will break down the wall with procurement in order to reduce costs of purchased parts.


  • MikeUK:

    Nice post Mike.
    The designers’ attitudes toward cost are routed in training, education and culture.
    Make realistic target cost a part of the Product Design Specification, give them tools and training in their use and engineers will go for it.
    Provide strong leadrship and the race is on!

  • Mike:

    @MikeUK – I agree – tools, time, training, and a teacher (the 4 Ts) are the answer. And, you’re right, the design community’s attitude toward cost is a result of our education and our companies’ attitudes on cost. We can and should change our thinking on cost. Though we’re on different continents, our thinking is much closer.


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