Product Development-169

The Situation:

A manufacturer of tools used to build complex electronic equipment for the automotive electronics, semiconductor, and wireless telecommunications industries was experiencing a reduction in sales of 60% due to the economic downturn.  The company’s leadership was experienced in managing the cyclical industry cycles that were common to their industry, with the exception of their inventory management, which was exacerbated by this downturn.  The Highland Group was asked to assist with developing and implementing processes that would reduce finished goods inventory and significantly increase inventory turns.  During the analysis it became apparent that at the crux of the issue was their product development and product life cycle management.

The Driver Goal:

• Formalize and optimize the existing product life cycle continuum from new product introduction idea generation through obsolescence and spare parts support
• Reinforce the “stage gate” process to validate the economic assumptions driving the new product introduction at each phase of the development process
• By Business Unit, determine the appropriate manufacturing model (e.g. Build to Order, Configure to Order, Build to Forecast)
• Encourage the early involvement of all key stakeholders, especially manufacturing engineering, during the design process to build in quicker assembly/checkout and easier support
• Emphasize concurrent, collaborative, cross-functional teams using the best communication techniques to reduce rework, missed deadlines and poor quality, while maximizing revenue generation and market

• Selected cross-functional team members comprised of representatives of all stakeholder organizations
• By Business Unit/product determined the appropriate manufacturing strategy
• Identified the products within each Business Unit that needed to be re-engineered to fit the appropriate strategy utilizing best techniques (i.e. Design-for-Assembly-and-Checkout)
  • Determined the re-design effort involved
  • Assigned priorities base on sound business criteria
• Ensured that all current New Product Introduction projects conform to the build strategy
• Reviewed the New Product Introduction Process to ensure: End of life – Potential Cannibalization – Risk Buy – Service Strategy
• Reinforced through a Gate Review process, the importance of re-evaluating the economic assumptions of the project, which will avoid bringing in unnecessary inventory
• Developed/ensured a process to rank and select product initiatives based on sound business criteria
• Ensured project management interfaces and systems provided proper communication relative to project status, issues encountered, cost incurred, and time and cost remaining
• Developed a matrix of department involvement including inputs, responsibilities and accountabilities to ensure the early involvement of all stakeholders

• A manufacturing strategy for each Business Unit/product that maximizes inventory turns
• A methodology for the selection and prioritization of re-design initiatives
• A gating process to ensure that all projects deliver the expected business results
• Early involvement of all key stakeholders to minimize the potential over-commitment to inventory