Pdma Product Development Metrics May 2000

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Cycle time reduction Six-sigma program

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Pdma Product Development Metrics May 2000

  1. 1. Metrics for New Product Development: Leveraging the Works of Others
  2. 2. Background <ul><li>A billion $ company </li></ul><ul><li>The World Leader in Electronic Security </li></ul><ul><li>Over 5700 employees worldwide </li></ul>
  3. 3. Growth <ul><li>Founded in 1966 </li></ul><ul><li>1976 - 10 million in revenue </li></ul><ul><li>1986 - 100 million </li></ul><ul><li>1996 - 1 billion </li></ul>
  4. 4. Outgrew Systems & Processes <ul><li>Product Development slowed down </li></ul><ul><li>Quality issues rose </li></ul>
  5. 5. <ul><li>Teams were established </li></ul><ul><li>Investments were made in systems </li></ul><ul><li>Positive impact </li></ul>System & Program Initiatives
  6. 6. But It Wasn’t Enough!
  7. 7. Sensormatic’s Journey To New Product Development Success!
  8. 8. Roadmap <ul><li>Borrowing approaches </li></ul><ul><li>Assessment, project selection, implementation </li></ul><ul><li>Key Metrics </li></ul><ul><li>A metrics toolkit </li></ul>
  9. 9. Inspirations & New Goals
  10. 10. TTM Process (structured team-based problem solving) Motorola’s Six-Sigma Program Design for Manufacturability Program Xerox-based Baldridge Award criteria
  11. 11. Assessment [Where are we?]
  12. 12. Self-Assessment of Development Processes Mechanical CAD Industrial Design Rapid Prototyping Electrical Analysis Technical Communications
  13. 13. Needed Improvement <ul><li>Integrating advanced manufacturing & procurement </li></ul><ul><li>into design </li></ul><ul><li>Use metrics to drive everyday activities </li></ul><ul><li>Create a problem management system </li></ul><ul><li>Include more quality metrics </li></ul>
  14. 14. Product Quality Baseline <ul><li>4% Out-of-box failures </li></ul><ul><li>1 in 4 failed final factory tests </li></ul><ul><li>8% monthly warranty call rate </li></ul>
  15. 15. Development Cycle Data Gathering <ul><li>Development programs overran schedules because they were under - resourced, poorly defined and not schedule-managed . </li></ul><ul><li>A team was formed </li></ul><ul><li>We were not learning from our mistakes </li></ul>
  16. 16. Selection Criteria [What Do We Tackle First?]
  17. 17. Champions Product Delivery Council (PDC ) Continuous Improvement Advisory Council (CIAC)
  18. 18. Few Programs Selected
  19. 19. <ul><li>Self-Assessment score </li></ul>Criteria Included: <ul><li>Cycle time reduction </li></ul><ul><li>Product quality </li></ul><ul><li>Cost of implementation </li></ul><ul><li>Resources/skills available </li></ul><ul><li>Ease of implementation </li></ul><ul><li>Timeframe </li></ul>
  20. 20. Implementation
  21. 21. Organizational Changes <ul><li>Product Delivery Teams were created </li></ul><ul><li>Combined core team members </li></ul>
  22. 22. Temporary Teams Formed <ul><li>Rapid Action Teams (RAT’s ) </li></ul><ul><li>Continuous Improvement Teams (CIT) </li></ul>
  23. 23. Requirements for both RAT’s & CIT’s <ul><li>Charters (including ROI) </li></ul><ul><li>Executive Sponsor </li></ul><ul><li>Trained, independent facilitator </li></ul>
  24. 24. Recognition & Reward of team efforts <ul><li>Badge pins and promotional items </li></ul><ul><li>Quest competition </li></ul><ul><li>Trips and more! </li></ul>
  25. 25. Our New Toolkit <ul><li>Product Quality Data & Benchmarking </li></ul><ul><li>New Product DFM </li></ul><ul><li>Development Process Self-Assessment </li></ul><ul><li>TTM 7-step Continuous Improvement Process </li></ul>
  26. 26. Product Quality Data & Benchmarking We needed measurable and justifiable targets for new product quality
  27. 27. TDPU .027 95% 90% 97.3%** Industry Average Target Range -Old Products 100% PLANT FPY* Source: Industry Week 1998 World Class Performance Metrics Best in Class Target Range - New Products Below Industry Average 0 .05 .1 Plant Benchmark *First pass yield **True BIC=99.7% Median BIC= 97.3%
  28. 28. 2.6K 14.9K 1K I ndustry Average PPM Out of Box Benchmarks Source: Industry Week 1997 Benchmark Electronic Equipment companies over 1000 employees Best in Class Target Old Products Target New Products
  29. 29. 15K 4.2K Industry Average Target - New Products MTBF = 5 Years (18% Annual failure rate) MTBF = 20 Years (5% Annual failure rate) Warranty Benchmarks Monthly PPM Best in Class
  30. 30. 95% 90% 97.3% 100% PLANT FPY* Best in Class Target Range - New Products TDPU 0 . 027 .05 .1 1 YEAR Plant Benchmark — New Product Introductions *First pass yield
  31. 31. 2600 1K Best In Class PPM Out of Box Targets — New Product Introductions * Target New Products 3939 34% Reduction 6 Months *NPI curve developed by Dell
  32. 32. 4.2K 1K PPM Target New Products 5.6K 25% Reduction Warranty Targets — New Product Introductions 6 Months Best In Class
  33. 33. New Product DFM …(Preferred fastener set) Number of total fasteners in the system 4000 Number of fasteners active in the system 1200 Number of fasteners in original Preferred Set 74 Date Preferred Set was implemented July 1, 1998 Number of additions to the Set 2 Number of one-time exemptions to the Set 14
  34. 34. Development Process Self-Assessment
  35. 36. TTM 7-Step Continuous Improvement Process
  36. 39. Our Metrics Roadmap <ul><li>Existing Product Quality </li></ul><ul><li>New Product DFM </li></ul><ul><li>Development Process Self-Assessment </li></ul><ul><li>Development Cycle Time </li></ul><ul><li>New Products Released </li></ul><ul><li>Financial (% of revenue from new products) </li></ul>
  37. 40. Existing Product Quality
  38. 41. New Product DFM Design for Manufacturability
  39. 42. Development Process Self-Assessment <ul><li>November 1998: 53 development tools </li></ul><ul><li>and processes resulted in a score of .42 </li></ul><ul><li>[The average US company score is .40] </li></ul><ul><li>July 1999: our assessment improved 10% </li></ul><ul><li>to .46 [US BIC is .60] </li></ul>
  40. 43. Development Cycle Time Average cycle time (calendar days)
  41. 44. New Products Released Number of new products released
  42. 45. Financial Results Percent of Revenue from New Products
  43. 46. Financial Results Percent of Revenue from New Platforms
  44. 47. Stock Price Financial Results
  45. 48. Financial Results Earnings Per Share
  46. 49. What did we learn… What do we still have to do?
  47. 50. Lessons Learned <ul><li>The easy targets are easy to fix , yet minimal impact </li></ul><ul><li>Make teams accountable , reward them </li></ul><ul><li>Impossible to get accurate date </li></ul><ul><li>Take advantage of a crisis and/or senior management </li></ul><ul><li>advocates in other areas </li></ul><ul><li>Establish & stick to justifiable selection criteria </li></ul><ul><li>Select your quality , proactive people , reward them </li></ul>
  48. 51. To go to the next level
  49. 52. Product Launch Process Must Improve <ul><li>Requires confidence in our ability to meet development schedule </li></ul><ul><li>Requires confidence in our ability to deliver first-out product quality </li></ul><ul><li>Need a next-gen metric - first year audit performance to plan </li></ul>
  50. 53. Eliminate NVA Time (sign-offs, logistics) <ul><li>Shipping & logistics constitute 10-25% of </li></ul><ul><li>total development cycle time </li></ul><ul><li>Total supplier cost management </li></ul><ul><li>Web-enabled processes </li></ul><ul><li>Alignment of non-core team members </li></ul>
  51. 54. Better , Smarter , Faster Testing <ul><li>Field testing constitutes 45% of the total development </li></ul><ul><li>cycle time </li></ul><ul><li>Fund, involve, develop customers </li></ul><ul><li>Accelerate testing in-house </li></ul>
  52. 55. Expanded DFM <ul><li>Eliminate of non-preferred fasteners in </li></ul><ul><li>older designs </li></ul><ul><li>Design for Build-to-Install </li></ul><ul><li>Expansion of Preferred Set to electrical </li></ul><ul><li>components </li></ul>
  53. 56. Our Goal Double Our Revenue In The Next 3 Years!

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