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Building products that are cheap,fast and good by Anand Murthy Raj

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Lean Product Development developed by Toyota had some wonderful hidden secrets that have not been understood by the masses. In this talk, I would like to share you the wonderful principles that govern the concept of product development which results in building products that are cheap, fast and good (cost effective, Quick and good quality).

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Building products that are cheap,fast and good by Anand Murthy Raj

  1. 1. March 11, 2020 - Dubai, UAE Building Products Fast, Cheap and Good Anand Murthy Raj Partner, Gladwell Academy B.V. Director, Agile Spirit private Limited
  2. 2. SUPPORTERS PLATINUM PARTNERS GOLD PARTNER BRONZE PARTNERS
  3. 3. This presentation has been greatly influenced by the work of Dr. Allen C Ward Inspiration
  4. 4. Which option would you pick ? Toyota is able to do Good (Quality), Cheap (Cost) and Fast (time to Market) sustainably for decades now..
  5. 5. Toyota Facts • Recorded the highest vehicle profits YOY • Depressed Japanese economy • Innate ability to make every project commercially successful • Great innovations like • Lexus – The first time they entered the SUV segment • Prius in 2003 - FOK -Hybrid Electric vehicle • Extremely reliable Development system to make every car successful • Toyota Production system is responsible for more success than the Toyota Manufacturing system
  6. 6. Recall numbers in the year 2000 1. Toyota launched 14 new cars in 2000 and in 2001 > 14 with every car being commercially successful. 2. Toyota Development process produces a high-quality vehicle consistently every time and cheaper 3. Relatively Design defects were very less in Toyota compares to Ford. 4. Economics 1. Toyota assigns typically 300 engineers to a car project working on 2 projects and lasts 2 years 2. Chrysler assigns 600 engineers full time for 4 years Results are not because engineers work harder in Toyota.. Facts Toyota Ford Recall 5 30 Manufacturing Defects 4 16 Design Defects 1 14
  7. 7. Toyota Development vs US Auto giants 1. Toyota - Reduce time to market 1. Starting from 36 months for a Car launch program 2. Sustainably reduced it to 30 months 3. Now 12 to 15 to 18 months 2. Jacques Nasser, CEO, Ford tried copy by reducing the people by 25% and reduced the time for development process by 25% 1. Substantial increase in recalls 2. Issue debugging took 6 months after the launch Improve the Development process by eliminating waste and not by reducing people and reducing the development time.
  8. 8. Facts about Development Process • Purpose of Development process is to make the operational value stream profitable • Many companies treat “Development process” as Black Box • Development process – must be the primary focus of the Top management • Development process creates the future to the company • Development process includes enabling systems thinking • Design, Testing the product • Design, Testing the manufacturing process • Training the manufacturing personnel • Selling and establishing Sales system • Developing the Supplier network • Enabling an environment of systems thinking
  9. 9. What is Value and How do we add value?
  10. 10. Why do projects Fail? Product had Known features Teams’ Lack of customer understanding Teams are not quick ; market competition took over Product got to market too late Overran the schedule as they had made mistakes Other project has more priority than this Need for better design was discovered too late Planned process was too slow because of ignorance Failure to understand and innovate, the manufacturing system Cost was too high to build Had quality issues Cost too high to operate and maintain Because of the ignorance Cost too high Have quality or Delivery problems Project Failures are Knowledge failures
  11. 11. What does Development process create? 1. Development process creates “Usable Knowledge” AND 2. “Usable Knowledge” produces a better “Operational value stream”
  12. 12. How to create “Usable Knowledge”?
  13. 13. Roots : Henry Ford and Kichiro Toyoda 1. Visionary, Technical Genius 2. Skills readily available 1. Personally experienced in cars 2. Located in Detroit 3. Ford could hire experienced Engg 4. Detroit - Heart of Automotive Industry 5. American Universities – produced great engineers 6. Auto Engg was an exciting place to work 3. Could give Orders 4. Optimized system for command 1. Visionary, Technical Genius 2. Skills not readily available 1. Tiny village 2. Located in a remote location 3. No adequate engineers 4. University of Toyo- Nissan 5. No suppliers to make steel body, cast a piece of cast Iron 6. First Auto body casting in mud 7. People had no knowledge 3. Could not give orders 4. Optimized system for learning by experimentation 5. Learning was key to survival A system that is designed to enable people to learn as quickly as possible – True Agile Organization
  14. 14. Lean Development systems - value of science 1. Respect for and determination to understand the physical world • Physical world is not regarded as very important and interesting • Science begins with an idea that all the worlds are equal • Physical world is very important and worth paying attention to • It was first addressed by Roger Bacon in 12th century • Mangers spend a lot of time to teach how to solve problems • We have separated management and engineering • Toyota’s management system is a part of the engineering system 2. Focus on creating clear multiple, explicit, concise hypothesis (models) • No models are right • Some models are useful • The shorter the better • Test them against the real world and decide • Toyota uses trade offs curves and one-page problem solving methods
  15. 15. Lean Development systems - value of science 1. Respect for and determination to understand the physical world • Physical world is not regarded as very important and interesting • Science begins with an idea that all the worlds are equal • Physical world is very important and worth paying attention to • It was first addressed by Roger Bacon in 12th century • Mangers spend a lot of time to teach how to solve problems • We have separated management and engineering • Toyota’s management system is a part of the engineering system 2. Focus on creating clear multiple, explicit, concise hypothesis (models) • No models are right • Some models are useful • The shorter the better • Test them against the real world and decide • Toyota uses trade offs curves and one-page problem solving methods
  16. 16. Connecting the dots now…… Usable Knowledge Understand customers Understand customers Makes meaningful and impactful Innovations Creates Profitable Value streams
  17. 17. Lean Development - Measuring value 50% 35% 15% Waste Value add Non value add but necessary
  18. 18. What is “Waste in Development”?
  19. 19. Lean Development – What is Waste? If development is meant to create usable knowledge, then anything that does not create usable knowledge is regarded as “waste” Three broad categories of waste 1) Hand off 2) Wishful thinking 3) Scatter
  20. 20. Lean Development – Waste – Hand off 1. Scientific Management Forces hand off 2. There is only “One” best way to do everything 3. Expert will figure it 4. No need to change it Hand offHand off Hand off Hand off
  21. 21. Time Waste – Hand off Advanced Engineering Product Development Manufacturing Advanced Engineering Product Development Manufacturing F T E Time F T E
  22. 22. 1. We have made the decision with no data. Data and results come at the end !!! 2. How do you know this is the best idea? 3. How long we must invest before we test and proceed? 4. Unpredictable process – How many times must I loop ? 5. What if my initial idea works, but I find much better ideas later? 6. What happens to the knowledge at the end (waste of discarded knowledge)? Lean Development – Waste – Wishful thinking Ideas Select one Synthesize Analyze and Test YesNo Feedback and Improve
  23. 23. Lean Development – Waste – Scatter 1. Scatter makes usable knowledge impossible to use !! 2. Do more Reorganization – Most reorganizations create waste 3. Workload fluctuations create more mistakes, more checklist, more errors 4. Mangers must control the workload!! 5. Large communication barriers silos - “I had may conversations with universities where I learnt nothing, but I have never had a conversation with a machinist who did not teach me something” 6. Toyota believes that Knowledge is there where it has to be.. We need just to get it.
  24. 24. Team of Responsible Experts vs Bureaucracy Building Learning Organization -Toyota VALUE Focus Entrepreneur and System designers Fractal, Set Based, Concurrent Innovation Pull, Flow and Rhythm
  25. 25. Skill Management Level Description 0 Fresher, No knowledge about the job 1 Knows the fundamentals of the job. They understand the basic principles 2 They can work fast enough to make a full fledge contribution to the team 3 Take responsibility of making decision 4 Ability to “Teach others” Level 1 Level 4Level 3 Level 2
  26. 26. Trade off curves at Toyota and Suppliers Back pressure NoiseLevel Impossible Safe region Sango exhaust system Tradeoff curves are a visual representation of basic product and process physics and economics • Central concept in development • Toyota uses these for everything • Enables to process the basic physics and economics through your eyes and not the mathematical part of your brain • Toyota’s primary tool to • Understand and Communicate and Negotiate between various specialties and functions and mgt. and suppliers and mgrs. and engineers • Training new engineers • Primary tool in Design reviews • Design-in-quality ; Updated by working owner with every new Datum • Design to Test à Test to Design • Roots of this engineering approach - Wright-Bros • Artful process • Looks simple • Very difficult to teach • More difficult to implement • Kill your own design; till you are sure that your design works Safe region
  27. 27. One Page problem solving 1. Background or Data 2. Problem Definition 3. Alternative root causes 4. Test to determine which root cause is correct 5. Alternate solutions with recommendation 6. Implementation Plan • Responsibility • Time line • Way to check progress (PDCA) 7. All are trained on this 8. It is OK to be wrong, it is not Ok not to follow the steps
  28. 28. Suppliers as expert team members 1. Product design, Tooling design and manufacturing in same supplier org 2. Select suppliers at the beginning of the project 3. Select for Attitude, past performance, new technology 4. Journey in the X- Axis vs focus on Y-axis 5. Target pricing – No Bidding 6. Suppliers provide the trade off curves Increasing knowledge and Frequent Integration : Lean Focus – Maximize this $ Profit Conventional Focus Fight over this Value Cost
  29. 29. High time - Change in the Management approach From Scientific Management à To Management by coaching
  30. 30. Change in the Management approach Management by Coaching 1. Everyone works !! 2. Design is in the factory and Factory is in the design 3. Go See on the spot !! Go GEMBA!! 4. Ask Why 5 times, learn analytical techniques 5. Create knowledge to build better systems 6. Teach by asking questions 7. Assist when projects are in trouble 8. NEVER DECIDE FOR YOUR SUBORDINATES • Assign responsibility areas not tasks • Ask for problem solving sheets • Ask them till you are satisfied • The subordinate need not be right à coach 2. Ask why 3. Create4. Share 1. Go See
  31. 31. THANK YOU

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