Dozuki workshop goodyears guide to lean product development

Goodyear's Guide to Lean Product Development

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Goodyear’s Guide to Lean Product Development


Cait Emma Smith

Director of Outreach Dozuki

[email protected] | @CaitEmmaSmith


Norbert Majerus

Lean Champion Goodyear

[email protected] | [email protected]

•  Global company – 42 manufacturing facilities in 22 countries

•  Third largest tire company - $20 Billion in annual sales

•  3 Innovation Centers – Akron, Ohio and Luxemburg and Hanau/Germany

– 2,500 professionals

At Goodyear, we release about 1,500 new (innovative, high value added) SKU’s every year around the world – 4,000 learning cycles - $450 Mi/yr

Business Overview


Successful lean research and development transformations in probably less than 5% of companies

•  Hard to see the work

•  Hard to see benefits

•  Focus on waste can be counterproductive

•  Good variability in research and development

•  Lack of good benchmarks

What makes Research and Development such a difficult target?

Lean in R&D



The R&D Current State Throughput

0 200 400 600 800

1000

2005 2007 2009 2011 2013

Cycle Time Rating

0 25 50 75

100 125

2005 2007 2009 2011 2013 0

30

60

90

120

1988 1994 2000 2006 2012

Product Life Cycles

0.0

3.5

7.0

10.5

14.0

90 92 94 96 98 '00 '02 '04 '06 '08

Safety Incidents

2000 2003 2006 2009 2012

Product Warranty Costs

0

125

250

375

500

2007 2009 2011 2013

R&D Spending ($Mi)

(Iterations NAT business – consumer)

Cannot be business as usual


Typical R&D Value Stream

Money Collection

Marketing / Sale

Distribution

Production

Product Development

Technical Feasibility

Commercial Feasibility

Ideas / Innovation

Product Industrialization

0%!

10%!

20%!

30%!

40%!

50%!

R&D Raw Materials Manufacturing SAG Transport


Direct Cost to Business


Application of Lean

0%

10%

20%

30%

40%

50%

R&D Raw Materials Manufacturing SAG Transport


Influence on Profitability of Value Stream

Applying lean to the “R&D shadow” is a lot more attractive than applying it to the R&D cost

Indirect influence on profitability

Profit = Volume * (Price - Cost)

How can we leverage lean principles for the indirect influence?

Understanding the Shadows


(The traditional place for lean)

R&D decides ~70% of product cost


Maximizing Revenue

Current Product

New Product

Difference in Collectable Margin

Use lean to provide the speed and agility to hit the optimal market window (offensively and defensively)

Hitting or missing this movable window is worth $$$$ / Day

R&D Leverage


Optimum time to launch

10% R&D Savings

Cost of Time

Managing R&D

•  Purpose of Research and Development – Develop profitable VS’s and reusable knowledge

•  Research and Development must be considered an investment

- not a cost

•  Any savings from waste elimination should be re-invested

in capability development


Step 1: More Work with a Flat Budget


0

200

400

600

800

1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Appl Fund

Also created the resources to work on improving the process

Throughput (Iterations NAT business – consumers)

Step 2: Organization


•  R&D is about creating knowledge – Organized in functions based on skills

•  Projects must be managed horizontally – across the functions

R &

D

Man

ufa

ctu

rin

g

Sale

s

Dis

trib

uti

on

Project 1

Project 2

Goodyear Matrix


Advanced Concepts

Technology Programs

NAT Consumer

NAT Commercial

Latin America

Off Highway

EMEA Consumer

EMEA Commercial

Asia Pacific T

ire

& M

old

En

gin

eeri

ng

Mat

eria

ls S

cien

ce

Tir

e P

erfo

rman

ce P

red

icti

on

Pro

ject

Man

agem

ent

Offi

ce (P

MO

)

Info

rmat

ion

Tec

hn

olo

gy

Pro

du

ct Q

ual

ity

& P

lan

t T

ech

no

log

y

Glo

bal

En

gin

eeri

ng

& M

anu

fact

uri

ng

Tec

hn

olo

gy

GIC

*L

GIC

*A

Cro

ss-F

un

ctio

nal

T

eam

s

Functional Expertise

(resources)

•  Empowered teams of experts – sometimes self directed

•  Significant change in management and leadership required

•  Supporting, coaching role

•  Respect for people

•  Focus on process and alignment

Start Over

Specify Value

Focus on Value Stream

Create Flow and Stability

Implement Pull

Step 3: Five Steps to Get Lean


For the customer while providing opportunity for growth

(Think end-to-end)

Value Creation, Not Cost

Reductions

Work to Perfection Kaizen / CIS

•  Work on the right product

•  “Market Back” Innovation

•  Try a lot, evaluate fast

•  Discard the “losers” fast

•  Invest in the winners


Value For The External Customer

•  Every new product developed when needed

•  A process so fast and agile that competition cannot follow

•  No compromise on safety and quality


At Goodyear, the Internal Customer Wanted:

2000 2002 2004 2006 2008 2010 2012

Pro

du

ct W

arra

nty

Co

sts

0.0

3.5

7.0

10.5

14.0

90 92 94 96 98 '00 '02 '04 '06 '08

Safe

ty In

cid

ents

Delivery before efficiency

•  Make Work Visible – Visual Planning

•  Use Project Managers – Manage horizontally

•  Level Resources

•  Schedule at 70% of Capacity


Principles / Results – Delivery to the Business

28% 29% 31% 59%

82% 87% 92% 95% 98%

2005 2006 2007 2008 2009 2010 2011 2012 2013 % O

TD

En

d T

o E

nd

Start Over

Specify Value



Implement Pull


Five Steps to Get Lean


(Think end-to-end)



Focus on End-to-End Value Stream

•  Before Lean – focus on the performance of a function

•  Now – focus on the profitability of the value stream

•  How –

•  Collaboration of all functions in the value stream towards creating

customer value and profit

•  All stakeholders engaged on day one – no hand-offs, no surprises - skin in

the game

•  Empowered teams of experts

GATE 1

GATE 2

GATE 3

GATE 4

GATE 5

GATE 6

STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5 STAGE 6

Product Concept

Screening

Business Evaluation

Product / Process

Dev.

Industrial-ization

SOP / Launch

Product Monitoring

PCP: Product

Creation Process


Concurrent Development

•  Manufacturing involved in earliest stages

•  “Skin in the game”

•  Help develop

•  Concurrent development

•  R&D remains involved through the first year of production

•  Ready before the launch

Manufacturing

R&D Late Start

Concurrent

Launch

Work

Start Over

Specify Value



Implement Pull




(Think end-to-end)



Creating FLOW

•  Alignment – Relay Race

•  Leveling of Resources

•  Eliminate waste

•  Waiting

•  Watch the WIP (inventory)


Creating SPEED

•  Lean Principles for Speed

•  Focus on the critical path

•  Manage knowledge – Model ipo. experiment

•  Watch the WIP (CT = WIP/Throughput)

•  Overlap tasks

A fast innovation process is efficient and creates a competitive advantage


Modeling and Knowledge Reuse

•  Use knowledge to build good computer modeling or “predictive” tools

•  Test to validate and improve the models

•  Allows quick set based and DOE’s

Tires for Chevy “VOLT” were developed virtually with a vehicle model supplied by GM –

no tire/car built before “approval”

Tires and vehicle were developed concurrently


Overlapping Tasks

Tire Build

Tire Build

Design

Mold Eng.

Mold Mfg.

Construc6on Modeling

Tire Tes6ng

Materials Development

Design

Mold Eng.

Mold Mfg.

Construc6on Modeling

Tire Tes6ng

Materials Development

Prepare

Prepare

Prepare

Prepare

Prepare

Prepare

Prepare

I T E R A T I O N K I C K O F F M E E T I N G


Results

Cycle Time Rating

0

30

60

90

120

2005 2006 2007 2008 2009 2010 2011 2012 2013


Start Over

Specify Value



Implement Pull



(Think end-to-end)



Creating Pull

•  Airplane analogy

•  Circle

•  Slow down in flight

•  Wait for landing slot

Process 3 Process 2

Scheduler Scheduler

Process 1 Process 3 Process 2 Process 1

Push System Pull System

FIFO

Start Over

Specify Value



Implement Pull




(Think end-to-end)



Kaizen / Kaikaku / CIS

Incremental Improvement

“Kaizen” Radical

Improvement

“Kaikaku”

Imp

rove

men

t

•  Standard work

•  Standard problem solving process

Start Over

Specify Value



Implement Pull




(Think end-to-end)



Goodyear Financial Results

•  Reduced Business Volume

•  Flat R&D budget

-400

-100

200

500

800

2005 2006 2007 2008 2009 2010 2011 2012 2013

Investment in LEAN PD

Get the process right and the results will follow


Product Awards


Lean Principles

Project Management

Knowledge Management

Goodyear Lean R&D T

alen

t M

anag

emen

t

Innovation Leadership

Pro

cess

es /

O

per

atio

n

Cu

sto

mer

Cen

tere

d

Exp

lora

tio

n

Tec

hn

olo

gy

Dev

elo

pm

ent

Pro

du

ct

Dev

elo

pm

ent


1.  Learn the principles – apply them correctly

•  Develop champion and get sponsor

2.  Change from the inside out

3.  Educate leaders

4.  Eliminate waste in R&D – reinvest resources in capability development and innovation

5.  Leverage R&D influence through the value stream for highest return

6.  Collaboration among all stakeholders for value stream profitability

7.  Trace results to the bottom line

How-To


Conclusion

•  With lean you can have it all, the delivery, the speed, the efficiency and the quality in product development

•  Results help – Most impressive results can be achieved by leveraging product development in the whole value steam


Any Questions?

Norbert will field live questions from the audience for a few minutes.

Type your questions into the Q&A portion of the workshop window.


Ask Questions Online

Continue the conversation with Norbert on Dozuki Answers

Dozuki.com/Answers/Ask/Product_Development

[email protected]

[email protected]

B: 330 796 2318

C: 330 801 3184


Thanks

Contact Information

Leadership & Management

Dozuki workshop goodyears guide to lean product development