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Attend this event as part of MRT's:
NPD Best Practices VIP Series

Product Development and the Supply Chain
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Reducing Design Complexity

Optimizing Common Components
for Increased Speed and Profitability

Denis Stemmle, Principal Fellow, Advanced Concepts and Technology Group, Pitney Bowes Corporation

Over the past four years, the Pitney Bowes New Product Development team has initiated process changes that resulted in dramatic improvements in product performance and time-to-market. Two initiatives that led to these improvements include carefully planned reuse of technologies and modules across families of products, and linking leadership team incentive systems to product profitability.

This presentation will address key strategies for designing products with appropriate levels of common components and modules to increase time-to-market, optimize the investment and reduce manufacturing costs.

Key takeaways:

  • An overview of the various types of re-use: technology, documentation, modules, components, software and design teams
  • How to break down the barriers to re-use
  • Methods for linking re-use with incentive systems
  • The pros and cons of common modules
  • Benefits of partnering with suppliers in design and sourcing

The IBM Common Building Block Initiative

James E. Dickerson, Director of Hardware Common Tools & IPD Process Management, IBM

Improvement in production/procurement operational efficiency starts with reducing product complexity. The objective of product complexity reduction is to lower the cost of development, manufacturing, sales, order fulfillment, service and warranty of hardware products. These objectives can be accomplished at a high level by reducing the number of models and features. They can also be accomplished by reducing the number of total part numbers, increasing the number of preferred part numbers and increasing the number of common part numbers, or reuse, between the models and features. Product complexity reduction has a direct benefit in manufacturing and distribution costs.

Common parts are key to product complexity reduction, but far greater efficiencies in manufacturing, inventory and order fulfillment are realized by designing common assemblies, common FRUs, and common fabricator units that can be shipped to fulfillment centers and distributors to be customized quickly as orders come in. This presentation will focus on IBM's efforts in the area of part number management - demonstrating IBM's processes, management system, tools and metrics.

Maintaining Quality Suppliers

Measuring Supplier Performance

Jerry Swan, Strategic Supplier Process Manager, Texas Instruments

TI selects and retains suppliers based on their ability to provide TI with a sustained competitive advantage in CETRAQ: Cost, Environmental Responsibility, Technology, Responsiveness, Assurance of Supply and Quality. The CETRAQ methodology gives TI’s Worldwide Procurement & Logistics organization a consistent framework to communicate with, and manage, its suppliers. CETRAQ provides a complete list of performance requirements, measures supplier performance to those requirements, and guides continuous improvement programs between suppliers and internal TI teams. CETRAQ attributes are recognized within TI as critical supplier performance characteristics that must be managed effectively for TI to be successful. This case study will examine how the Capital Equipment Procurement group at TI applied the CETRAQ concepts to develop and implement a comprehensive supplier performance measurement process.

Key Takeaways:

  • How to design and implement an effective supplier performance management process
  • Planning for continuous improvement in results and process flexibility
  • TI Capital Equipment Procurement process examples

Managing the Impact on Quality when Third Parties Represent/Support Your Product

Bill Neill, NA Technical Computing Channels Manager, Hewlett-Packard

Today, many product development teams focus on component and supplier selection. There are design considerations for the supply chain downstream of product development; especially for configure to order and software products. Additionally, design considerations include how to present, deliver, and support the product when third parties represent and support the product. This paper presents those considerations, explores some of the impact, discusses approaches to product development and methods for managing those supply chain considerations.

Extending Lean, Six Sigma and other Quality Improvement Programs to Your Suppliers

Power Lean — Seamless Integration
of Lean Enterprise and Six Sigma

James Illing, Director of Lean Enterprise & Billy Singleton, Principal Engineer, Rockwell Automation Power Systems

In 1999, Rockwell Automation Power Systems implemented "Power Lean", an integrated Lean Enterprise and Six Sigma Model, to reduce costs, eliminate waste, reduce lead times, improve quality and customer service. In this session you will learn:

  • About the integrated tools and methods of Lean and Six Sigma used to eliminate barriers to flow
  • How Rockwell uses cross functional business process kaizen events to attack waste in support organizations
  • Steps taken to introduce Power Lean to key Rockwell suppliers/customers to optimize flow throughout the entire value stream

DELL Computer Case Study

Jeff Pierson, Sr. Manager, Global Supplier Management, and Tom Mast, Principal, Product Development Process Group, Dell Computer Corporation

Details coming soon...

Value Stream Analysis Tools for
Product Development and the Supply Chain

Adi Choudri, Program Manager, Value Stream Analysis in Product Development, Aerojet

This presentation will examine two newly developed tools aimed at identifying waste and weaknesses in product development and the supply chain. The first tool, "Visual Information Pull System" (VIPS), was developed under an Airforce Mantech contract and is a web based software tool used currently as an "Andon" system for managing critical tasks. It also serves as a Value Stream Mapping tool to identify bottlenecks or "rocks" in the information flow context of product development. The second tool, the "Lean Enterprise Self Assessment", was developed by the University of Tennessee and Mr. Choudri will give an overview of the pilot conducted using this assessment tool. The tool examines a ‘vertical slice’ of a supply chain for a particular product line and identifies opportunities for improving the value stream: product development collaboration, technology planning, areas of lean manufacturing improvement for each part of the supply chain, as well as communication across the supply chain.

Applying Design-to-Cost
With Your Suppliers

Fred Ade, VP North America Manufacturing for Construction Equipment, CNH

The merger of two Agriculture and Construction Equipment OEM powerhouses; Case and New Holland has provided a good opportunity to leverage volume in reducing purchased product costs. However, CNH has realized that the best cost reduction lever is through working with its suppliers to design cost out of its products using the "Design to Cost" process. This process is a structured approach to generate cost reduction ideas by applying cost driver analysis and benchmarking tools which results are measured against ambitious savings objectives. In this presentation, you will learn about process details for target setting, unconstrained idea generation and the selection of ideas to implement.

Key takeaways

  • A strategy for dramatic cost reduction and selectively reinvesting some of the savings in product features of key customer importance
  • Process elements, including, how to involve suppliers
  • Cost reduction examples by applying tools such as; Linear Performance Pricing, Clean Sheet Build-up and Internal Benchmarking
  • Roles and responsibilities of top management

Critical Supplier
Partnership Program

Jeff Pierson, Sr. Manager, Global Supplier Quality, DELL Computer and Tom Mast, Principal, Product Development Process Group

Dell designs its printed circuit board assemblies and has them manufactured by suppliers. Quality problems had reached the point of threatening the continuity of supply of these boards, so Dell decided to replace the somewhat adversarial relationships with partnerships to facilitate communications on a broad range of issues. Working closely with everyone involved at both Dell and the pilot supplier, Dell formulated the plan and then put it into action. This supplier was skeptical at first, but became the most enthusiastic advocate of the program, and the quality metrics showed dramatic improvement. It was a win-win program.

This presentation will focus on the techniques used to create an open and non-confrontational relationship that proceeded to identify root causes of problems and fix them.

Key take-aways:

  • Pilot with one key supplier
  • Accelerate communications improvement by using the following techniques long enough to effect the desired changes
    • Use a Partnership Review Report to identify all the problems (opportunities) between you and your supplier
    • Have Partnership Review Meetings, quarterly at first, with the supplier at his plant to discuss the problems, their solutions, and to assign remedial actions
    • Bring people to these meetings from both companies and from all functional areas related to the problems. These people must be senior enough in their organizations to make things happen, but junior enough to have first-hand knowledge of processes and problems.
  • Train your supplier to make effective use of FMEA’s (failure modes and effects analyses)
  • Separate strategic issues from tactical ones to ensure that they get handled well

Supporting Organizations:
Publication Sponsor:
Sloan Management Review

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