Axiom 2 – You can’t design out what you can’t see.

In product development, these two axioms can keep you out of trouble. They’re two sides of the same coin, but I’ll describe them one at a time and hope it comes together in the end.

With Axiom 1, how do you make sure you’re working on the most important stuff? We all know it’s function first – no learning there. But, sorry design engineers, it doesn’t end with function. You must also design for lean, for cost, and factory floor space. Great. More things to design for. Didn’t you say time was short? How the hell am I going to design for all that?

Now onto the seeing business of Axiom 2. If we agree that lean, cost, and factory floor space are the right stuff, we must “see it” if we are to design it out. See lean? See cost? See factory floor space? You’re nuts.  How do you expect us to do that?

Pareto to the rescue – use Pareto charts to identify the most important stuff, to prioritize the work. With Pareto, it’s simple: work on the biggest bars at the expense of the smaller ones. But, Paretos of what?

There is no such thing as a clean sheet design – all new product designs have a lineage. A new design is based on an existing design, a baseline design, with improvements made in several areas to realize more features or better function defined by the product specification. The Pareto charts are created from the baseline design to allow you to see the things  to design out (Axiom 2). But what lenses to use to see lean, cost, and factory floor space?

Here are Pareto’s three lenses so see what must be seen:

To lean out lean out your factory, design out the parts. Parts create waste and part count is the surrogate for lean.

To design out cost, measure cost. Cost is the surrogate for cost.

To design out factory floor space, measure assembly time. Since factory floor space scales with assembly time, assembly time is the surrogate for factory floor space.

Now that your design engineers have created the right Pareto charts and can see with the right glasses, they’re ready to focus their efforts on the most important stuff. No boiling the ocean here. For lean, focus on part count of subassembly 1; for cost, focus on the cost of subassemblies 2 and 4; for floor space, focus on assembly time of subassembly 5. Leave the others alone.

Focus is important and difficult, but Pareto can help you see the light.

Still not convinced parts are the key? Take a look at the seven wastes and add “of parts” to the end of each one. Here is what it looks like: 

1. Waste of overproduction (of parts)
2. Waste of time on hand – waiting (for parts)
3. Waste in transportation (of parts)
4. Waste of processing itself (of parts)
5. Waste of stock on hand – inventory (of parts)
6. Waste of movement (from parts)
7. Waste of making defective products (made of parts)

And look at Suzaki’s cartoons. (Click them to enlarge.) What do you see? Parts.

Take out the parts and the waste is not reduced, it’s eliminated. Let’s do a thought experiment, and pretend your product had 50% fewer parts. (I know it’s a stretch.) What would your factory look like? How about your supply chain? There would be: fewer parts to ship, fewer to receive, fewer to move, fewer to store, fewer to handle, fewer opportunities to wait for late parts, and fewer opportunities for incorrect assembly. Loosen your thinking a bit more, and the benefits broaden: fewer suppliers, fewer supplier qualifications, fewer late payments; fewer supplier quality issues, and fewer expensive black belt projects. Most importantly, however, may be the reduction in the transactions, e.g., work in process tracking, labor reporting, material cost tracking, inventory control and valuation, BOMs, routings, backflushing, work orders, and engineering changes.

However, there is a big problem with the thought experiment — there is no one to design out the parts. Since company leadership does not thrust greatness on the design community, design engineers do not have to participate in lean. No one makes them do DFA-driven part count reduction to compliment lean. Don’t think you need the design community? Ask your best manufacturing engineer to write an engineering change to eliminates parts, and see where it goes — nowhere. No design engineer, no design change. No design change, no part elimination.

It’s staggering to think of the savings that would be achieved with the powerful pairing of DFA and lean. It would go like this: The design community would create a low waste design on which the lean community would squeeze out the remaining waste. It’s like the thought experiment; a new product with 50% fewer parts is given to the lean folks, and they lean out the low waste value stream from there. DFA and lean make such a powerful one-two punch because they hit both sides of the waste equation.

DFA eliminates parts, and lean reduces waste from the ones that remain.

There are no technical reasons that prevent DFA and lean from being done together, but there are real failure modes that get in the way. The failure modes are emotional, organizational, and cultural in nature, and are all about people. For example, shared responsibility for design and manufacturing typically resides in the organizational stratosphere – above the VP or Senior VP levels. And because of the failure modes’ nature (organizational, cultural), the countermeasures are largely company-specific.

What’s in the way of your company making the DFA/lean thought experiment a reality?

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 significantly lower material and labor costs. The cost reduction target for the product was challenging—35 percent cost reduction and 50 percent labor reduction. The product also had to have 30 percent more cutting capacity. The team introduced a “low waste” design, which was further “leaned out” by manufacturing. The design effort was not formally linked to our lean initiatives; nor was it given a programmatic feel. The cost reduction target itself was sufficient to focus the group. The lack of programmatic feel eliminated any possible resistance, which can be especially prevalent in the product design community.

The design team met all the cost and performance goals on the first product and developed the recipe for additional HyPerformance series product introductions, which resulted in the following achievements:

• Almost 75 percent increase in net sales per associate over four years.
• Stock value increased by 280 percent over that same time period.
• Inventory turns are around 10.

World leader in plasma cutting (more than 50 percent of sales are outside North America) while making all of its products in New England.

Continuous improvement has allowed the company to avoid a general price increase over 10 years, even with rapidly rising material costs.

The company continues to set new profitability records annually. Consistently identified as on of the top 20 mid-size companies to work for in America.

Hypertherm also has realized staggering cost savings in the traditional, measurable areas of labor and materials:

• 38 percent cost savings
• 70 percent reduction of labor costs

Though the savings in labor and materials are staggering, the downstream savings from design for lean are even more significant. As a surrogate for these downstream savings, the design team set a stringent part count reduction goal of a 50 percent reduction in part count. The team achieved a 47 percent reduction in part count. As we know, lean is about minimizing transactions, and parts drive transactions. To illustrate the point, think about the seven wastes and add “of/for parts” to the end of each waste. The seven wastes “of parts” follows:

1. Waste of overproduction (of parts)
2. Waste of time on hand—waiting (for parts)
3. Waste in transportation (of parts)
4. Waste of processing itself (parts)
5. Waste of stock on hand—inventory (of parts)
6. Waste of movement (from parts)
7. Waste of making defective products (using parts)

Looking back, looking ahead

While Hypertherm’s lean culture is as strong as ever, just three years ago that wasn’t the case. In 2004, lean progress slowed and even began to stagnate. A dedicated corporate improvement team (CIT) was established to increase the pace and broaden application of lean practices. The CIT worked throughout manufacturing and used both quick-hit kaizen events and larger projects at the value stream level. Within a year, independent kaizen projects were led by associates recently trained in lean. During 2006, the organization demanded support in its service and supply chain. And today, the majority of CIT work is with service teams and its supply base.

If there is a point of diminishing returns when it comes to lean, we don’t see it.

Instead, we view lean as an effective way to create value for customers through improved quality, improved delivery and improved cost structure of our products. And we believe the lean culture communicates respect for our associates in the form of long-term profitability, employment security and solid compensation.

Looking ahead, lean design efforts resulting in reduced parts count will continue to eliminate transactions in the business processes, resulting in stronger bottom lines throughout the manufacturing world.

The future is indeed bright.

About the authors

Mike Shipulski, PhD, is director of engineering for Hypertherm , a Hanover, N.H., based, privately held company that designs and manufactures plasma-arc metalcutting systems.

Mark Buck is vice president of manufacturing for Hypertherm , a Hanover, N.H., based, privately held company that designs and manufactures plasma-arc metalcutting systems.