Shipulski On Design

Archive for the ‘DFA’ Category

I can’t believe everyone isn’t doing Design for Assembly (DFA), especially in these tough economic times. It’s almost like CEOs really don’t want to grow stock price. DFA, where the product design is changed to reduce the cost of putting things together, routinely achieves savings of 20-50% in material cost, and the same for labor cost. And the beauty of the material savings is that it falls right to the bottom line. For a product that costs $1000 with 60% material cost ($600) and 10% profit margin ($100), a 10% reduction in material cost increases bottom line contribution by 60% (from $100 to $160). That sounds pretty good to me. But, remember, DFA can reduce material cost by 50%. Do that math and, when you get up off the floor, read on.

Unfortunately for DFA, the savings are a problem – they’re too big to be believed. That’s right, I said too big. Here’s how it goes. An engineer (usually an older one who doesn’t mind getting fired, or a young one who doesn’t know any better) brings up DFA in a meeting and says something like, “There’s this crazy guy on the web writing about DFA who says we can design out 20-50% of our material cost. That’s just what we need.” A pained silence floods the room. One of the leaders says something like, “Listen, kid, the only part you got right is calling that guy crazy. We’re the world leaders in our field. Don’t you think we would have done that already if it was possible? We struggle to take out 2-3% material cost per year. Don’t talk about 20-50% because is not possible.” DFA is down for the count.

Also unfortunate is the name – DFA. You’ve got to admit DFA doesn’t roll off the tongue like six sigma which also happens to sound like sex sigma, where DFA does not. I think we should follow the lean sigma trend and glom some letters onto DFA so it can ride the coat tails of the better known methodologies. Here are some letters that could help:

Lean DFA; DFA Lean; Six Sigma DFA; Six DFA Sigma (this one doesn’t work for me); Lean DFA Sigma

Its pedigree is also a problem – it’s not from Toyota, so it can’t be worth a damn. Maybe we should make up a story that Deming brought it to Japan because no one in the west would listen to him, and it’s the real secret behind Toyota’s success. Or, we can call it Toyota DFA. That may work.

Though there is some truth to the previous paragraphs, the main reason no one is doing DFA is simple:

No one is asking the design community to do DFA.

Here is the rationalization: The design community is busy and behind schedule (late product launches). If we bother them with DFA, they may rebel and the product will never launch. If we leave them alone and cross our fingers, maybe things will be all right. That is a decision made in fear, which, by definition, is a mistake.

The design community needs greatness thrust upon them. It’s the only way.

Just as the manufacturing community was given no choice about doing six sigma and lean, so should the design community be given no choice about doing DFA.

No way around it, the first DFA effort is a leap of faith. The only way to get it off the ground is for a leader in the organization to stand up and say “I want to do DFA.” and then rally the troops to make it happen.

I urge you to think about DFA in the same light as six sigma or lean: If your company had a lean or six sigma project that would save you 20-50% on your product cost, would you do it? I think so.

Who in your organization is going to stand up and make it happen?

Lean has been beneficial for many companies, helping improve competitiveness and profitability. But, lean has not been nearly as effective as it can be because there is a missing ingredient – product design. Where lean can reduce the waste of making and moving parts, product design can eliminate the parts altogether; where lean can reduce setup times for big machines, product design can change the parts so they no longer need the big machines; where lean can reduce inventory, product design can eliminate it by designing out parts; where lean can make the supply chain more efficient, product design can radically shorten it by designing out the long lead time elements.

The power of product design is even more evident when considering the breakdown of product cost. Here is some data from Nick Dewhurst taken from multiple-hundred DFMA analyses showing the typical cost breakdown of products.

Of the three buckets of cost, material cost is by far the largest 74%, and this is where product development shines. Product design can eliminate 40 to 50% of material cost resulting in radical cost savings. Lean cannot. I will go a bit further and say that material cost reductions are largely off limits to the lean folks since it requires fundamental product changes.

Side note – Probably most surprising about cost breakdown data is labor cost is only 4%. Why we move our manufacturing to “low cost countires” to chase 50% labor reductions to net a whopping 2% cost reduction is beyond me, but that’s for a different post.

Let’s face it – material cost reduction is where it’s at, and lean does not have the toolbox to reduce material cost. There’s no mystery here. What is mysterious, however, is that companies looking to survive at all costs are not pulling the biggest lever at their disposal – product design. Here is a bit of old data from Ford showing that Product Design has the biggest lever on cost. We’ve know this for a long time, but we still don’t do it.

Clearly, the best approach of is to combine the power of product design with lean. It goes like this: the engineers design a low cost, low waste product that is introduced to the production line, and the lean folks improve efficiency and reduce cost from there. We’ve got the lean part down, but not the product design part.

There are two things in the way of designing low cost, low waste products in a way that helps take lean to the next level. First, product development teams don’t know how to do the work. To overcome this, train them in DFMA. Second, and most important, company leaders don’t give the product development teams the tools, time, and training to do the work. Company leaders won’t take the time to do the work because they think it will delay product launches. Also, they don’t want to invest in the tools and training because the cost is too high, even though a little math shows the investment is more than paid back with the first product launch. To fix that, educate them on the methods, the resource needs, and the savings.

Good luck.

John Teresco of Industry Week wrote a good article that shows how up upfront design enables the next level of improvments in Lean and Six Sigma.

Here are several excerpts:

At Hypertherm Inc., a manufacturer of plasma cutting systems, the DFMA software enabled a first pass part count reduction as high as 50%, says Mike Shipulski, Hypertherm’s director of engineering. About 500 parts were eliminated from the product, a main power supply sub-assembly that originally contained about 1,000 parts. Shipulski says the resulting reduction in assembly floor space requirements made it possible to satisfy a growing market demand within the existing building. “We didn’t have to add floor space.” Read the rest of this entry »

“Hyper” for Lean — Lean Directions, SME

Hypertherm’s lean journey began in 1997 as a natural and enthusiastic extension of its long history of continuous improvement. Founded in 1968, the company’s “lean vision” includes training, application of 5S components, visual factory audits, single and mixed-model flow lines and the engagement of its product design functions.

A recent Hypertherm success is found in the company’s HyPerformance series of plasma arc, metalcutting systems. The company’s product design community designed a product line with Read the rest of this entry »

John Teresco of Industry Week wrote a thought-provoking article on assigning responsibility of product cost to the design engineering community (and not to the manufacturing community).

An expert from his article:

“We in the United States have mistakenly allocated the responsibility for [production] cost to the manufacturing folks. We forget that the cost has already been designed into the product.”

That’s Mike Shipulski, director of engineering with plasma cutting technology provider Hypertherm Inc., reflecting on one of the lessons learned from implementing Design for Manufacturing and Assembly (DFMA) software. The accomplishments include a 600% increase in profit per square foot of factory floor space within a five-year redesign program.  Correspondingly, warranty cost per unit declined more than 75% during the same period, from January 2003 to January 2008.

Wes Iverson, Managing Editor of Automation World, wrote a good artcle on DFMA’s ability to cut product cost, reduce part count, and save assembly floor space.

Measuring DFMA Savings — Automation World

An expert from his article:

When a Hypertherm team led by Shipulski designed a major new plasma cutting machine several years ago, the team was able to reduce the number of parts required to about 700, down from around 1,400 in the previous generation design. The result was a machine that took about four hours to build, compared to 10 hours for the previous unit, enabling Hypertherm to hit its 35 percent cost reduction target for the system.

Design2Part Magazine published a good article on DFMA’s ability to cut costs, labor, floor space and improve global competitiveness.

Design for Manufacture and Assembly Helps OEM Reduce Warranty Costs, Boost Profits — Design2Part Magazine

An expert from the article:

Five-year implementation of DFMA software creates strong business model for improving global competitiveness

“We started with a vision to make radical improvements in both product performance and product economies,” stated Mike Shipulski, Hypertherm’s director of engineering. “Hypertherm met both of these goals by aggressively applying Boothroyd Dewhurst’s software within our existing programs for robust design and lean manufacturing. We found their product simplification software made it easy for us to improve a product’s performance-to-cost ratio. Moreover, we learned that DFMA ideas and financial estimates also lead to profound savings beyond labor and part cost, creating a domino effect ‘downstream’ in operational areas of our organization.”

Successful Design For Assembly

Each company works with design for assembly (DFA) methods for different reasons. Some companies want to take cost out of their products, some want to make more products in their factories, and some want to simplify the product to increase quality and reliability.

In a growing market, a company wants to reduce labor content to get more products through the factory and to meet demand without adding assembly workers. In a growing market, a company also wants to reduce the floor space required to meet demand without building another factory. Read the rest of this entry »

Free Up Floor Space with Design for Assembly and Part Count Reduction

By Mike Shipulski, Director of Engineering, Hypertherm, Inc

Design for Assembly (DFA) methods have been around for over 25 years, but the number of companies using the methods is surprisingly low given that they are straight-forward, fast, and produce significant savings in traditional Value Added (VA) metrics: labor content and material cost. Now that LEAN has raised the world’s awareness of the importance of reducing Non-Value Added (NVA) activities, the true value of DFA methods can be appreciated.

As a first principle, Design for Assembly (DFA) methods focus on part count reduction. Part count reduction results in labor content reduction (fewer parts to assemble) and material cost reduction Read the rest of this entry »

Part Cutters — Design News

The engineers at Hypertherm Inc., a maker of plasma cutting systems,know a thing or two about cutting metals. They also know how to cut cost. A lot of cost. While redesigning one of the company’s best-selling plasma cutting systems, they managed to reduce parts’ count from more than 1,000 components to fewer than 500. System assembly time fell from 20 hours to less than five. And the output from the company’s existing assembly operation quadrupled — without any additional floor space or an expensive second shift. Bottom line: the redesign saved the company about $5 million in assembly costs over the past 24 months alone, according to Engineering Manager Mike Shipulski. Read the rest of this entry »

Six Lessons Learned DFA paper for May 2006 DFMA Forum.pdf  (8 pages)

Each company works with Design for Assembly (DFA) methods for different reasons.  Some companies want to take cost out of their products, some want to make more products in their factories, and some want to simplify the product to increase quality and reliability.  In a growing market a company wants to reduce labor content to get more products through the factory to meet demand without adding assembly workers.  And, in a growing market a company wants to reduce the required floor space required to meet demand without building another factory.  Remarkably, the goals are similar for Read the rest of this entry »