Shipulski On Design

Archive for September, 2026

Process, process, process.  Everything has been about process improvement over the last decade.  And Lean has had a good run.  But let’s face it.  Its improvements have diminished, and it has largely hit a wall.  And yet, we are doubling down on this tired old horse.

S-curves are real.  Improvements are slow in the early stages, steep in mid-life, and they roll off as the system hits its asymptotic constraint.  And that’s where Lean is now.  It has hit its physical constraints defined by the product design.  Yes, I said the product is the constraint.  And without a radical change to the product, the next level of process improvement is blocked from coming to be.  But it’s not as bad as it seems.  In a sense, the bad news is the good news.

Over the last couple of decades, we forgot that the total cost is largely defined by the product design, not the manufacturing process.  The design engineering community has been let off the hook and has not been tasked with designing the product with less material cost or designing it in a way that opens up space for the next generation of process simplification (Lean).  The bad news is the product design has not changed and is blocking the next evolution of Lean.  The good news is that because the product design hasn’t changed, it’s ripe for radical cost reduction.  And the better news – changing the product itself can reduce material cost, and the material cost is at least 75% of the total cost.  And, by definition, Lean, in its current and future embodiments, cannot reduce material cost. The only way to reduce material cost is to change the product design.

Lean has saved money, but because it cannot make changes to the product itself, it can only reduce labor cost.  Here’s the math.  If material cost is 75% of total cost, overhead is 5%, and labor cost is 20%, the domain of Lean’s savings has always been limited to about 20% of total cost.  (There has never been a project that successfully reduced overhead, so that’s always off limits.) When the product itself becomes open to change, the potential for cost reduction is almost four times larger (20% to 70%).  And that’s the good news.  But the good news is also the bad news.

Yes, if the design can be changed, cost savings can be astronomical.  But the bad news – there are no engineering leaders who know how to do it.  And without engineering leaders advocating for, cajoling, prodding, and teaching product simplification, the engineering team cannot and will not pull it off.

The tools for product simplification exist, but the appreciation for their power has aged out with the previous generation of engineering leaders.  And the knowledge of how to wield the tools has also aged out.

If you want to open up the next level of company profitability, you’ve got to simplify the product.  Full stop.  And if you want to achieve those 4X savings, you’ve got to hire an old pro who has done it before.  Yes, I said old. (Maybe “experienced” is a better word?)

And before you get the bad idea to research the history of product simplification and the associated tools in the hopes of doing it on your own, don’t.  More than anything, this journey is an emotional journey.  You have to create the right conditions for the engineers to succeed, and that knowledge is not captured in the history books.

If you want to succeed, you’ll have to hire an old pro.  This is The Way.

Image credit — Crosa