How Can You Apply Lean Product Development Approaches To Your Business?
Lean product development is a strategy that follows a group of principles, the main focus of which is to reduce waste and shorten production times while maximizing value. These days, companies understand that efficiency matters. However, while looking for ways to reduce costs in production is important, it's also important to make sure that the reduction of costs doesn't correlate with a reduction in quality. Lean product development takes all of this into account and it's a reason why you should consider taking such an approach.
What Is Lean Product Development?
Lean product development focuses on the creation of new products that meet customer needs by addressing common product development issues, including reducing long development cycle times, reducing high development costs, creating more innovative solutions, and reducing production costs. Put more simply, it's a process that systematically and sustainably improves a product development system's throughput. The lean product development process is most effectively demonstrated by the Toyota Production System.
Guiding Principles To An Effective Approach
Although the goal is to save money during the production cycle and increase profits by getting your products to market quicker, it all starts with your customers' needs and your ability to build a product that meets those needs. To meet all of these goals, numerous steps are required throughout the production process. The guiding principles for implementing lean product development include:
Specify Value For Your Customers
Above everything else, the value of your product to your customers should take priority. If you don't have a product your customers want to buy, it won't matter what you do over the course of your production process, nothing will change that. These are the areas you'll want to address to identify the value that your product needs to provide:
- The customer's voice - Do your research to truly understand what your customers' needs are and what they value. Once you've done thorough research and have a good idea of what customers want, keep this in mind throughout the development process.
- Quality function deployment - This refers to the process of taking what you've learned about what customers value and turning it into product specifications that provide that value. Your goal here is to maximize the customer value proposition.
- Reusing platform and design - Reusing platforms and design will help to reduce the non-recurring cost of development as well as enable smaller batch sizes (which will allow for less non-recurring product development effort) and increase the value of your product.
- Quickly explore and identify alternatives - To maximize customer value, it’s important to develop more optimal solutions. This can be done by implementing set-based design so you can explore alternatives in parallel, allowing you to narrow down alternatives until you can identify an optimal solution.
Identify And Focus On Your Value Stream
The value stream refers to the organization of key members of your company required to bring your product from the beginning stages of development all the way to market. Your value stream depends on individuals, such as engineers, manufacturers, sales personnel, marketers, and more. To ensure an effective value stream, these individuals need to understand what their roles are within the value stream. The value stream depends on collaboration between these roles and will help reduce potential delays and negative impacts down the line.
While this might seem like it should be common practice, it's actually not--traditional development cycles tend to involve departments taking turns instead of working together, which leads to more errors in communication as well as the inability to identify potential improvements in the process. Identify your value stream and reduce waste by taking these steps:
- Streamline your development process - Using value stream mapping will help to eliminate waste. Eliminate bureaucracy within the development process wherever possible. Both of these steps will help to avoid unnecessary process steps, gates, and procedures, and streamline your development process.
- Implement a 5S system - 5S (sort, set, shine, standardize, and sustain) is a lean management system used to organize the workplace. Implementing a 5s system will help you organize your workplace and data, reduce the time it takes to find information, and execute development activities. You can use certain tools, such as PLM (product lifecycle management) to support the objectives of a 5S system by organizing your product data, managing configurations, controlling access, and making your product data easier to find.
- Standardize processes - Standardizing your work processes, checklists, document templates, and more will help establish a common way to do things so that everyone on your team is on the same page. This also helps minimize confusion and potential miscommunication
- Integrate design tools - Use design tools, such as wireframes, mockups, CAD or CAM, to help assist with the exchange of data, improve your processes, and reduce your cycle time.
Create Flow By Eliminating Waste
The faster your value streams and processes flow, the quicker you can get your products into the hands of your customers. Improving your value stream will also improve quality and help to lower your production costs at the same time. These practices will help you improve the rate of flow through the value stream by eliminating waste:
- Managing your pipeline - By managing your pipeline, you will help prevent your pipeline from becoming overloaded as well as prevent the buildup of product development queue and work-in-progress time. Pipeline management will also help control the release of work.
- Flow process and pull scheduling - Implementing team planning and visual management will give everyone a clearer understanding of the product's development status and help determine what actions are required. Flow process and pull scheduling will also help pull products through the value-stream in a continuous flow instead of pushing it through in batches. This will allow you to begin working earlier with incomplete information using available resources.
- Reduce the size of your batches - Smaller batch sizes will allow for a smoother flow as well as more level staffing. This can be done through platform development and the implementation of standardizations.
- Synchronize team member activities - Make sure that the activities of your project team members are synchronized to ensure that everyone is on the same page and that everything flows smoothly. Tools such as a design structure matrix will let you follow interactions and implement visual management techniques to better identify the status of your team and your product, and help you better identify potential issues.
- Postpone commitment- Deferring commitment whenever it's appropriate to do so can help to keep your options open and will make it easier to respond to change, thereby avoiding the mistake of making premature decisions and helping to improve customer value.
Respond To Customer Pull
The customer pull refers to the customer demand. Understanding customer pull allows you to view and evaluate your flows for continuous improvements and will, as a result, help make product development flow faster. Removing waste to improve flow will allow you to free up time that can be focused on delivering more value. One thing to note: responding to customer pull is not the same as rushing through your processes. It's about responding quickly to the needs of your customers by creating a more focused work environment:
- Put together cross-functional teams - Cross-functional teams are teams of individuals who have different disciplines but who are working together towards a common goal. By putting together cross-functional teams, you'll help improve communication, collaboration, and coordination throughout your flow.
- Empower your workforce - Give your project teams the power to plan their projects and best determine how to provide your customers with the best possible value. It's your project team that should have the best understanding of the customer, the technology of the product, and the product process.They are in the best position to determine the most effective way to deliver value to your customer and to deliver profit to your company.
- Put together the right resources - Lean product development depends on having the right resources at your disposal: the proper number of people with the right skills and experience working together at the right time.
Pursue Perfection Through Repetition
Repetition is vital to getting your lean product development right. After defining the value, establishing value streams, removing waste, and introducing flow and pull, you'll want to repeat the process until you've created measurable value with no waste. You'll also want to do this best practice:
- Amplify what you've learned - Re-learning what made your product development process work throughout the lean product development approach is costly and time-consuming. Use what you've learned to create knowledge bases, cost tables, design guidelines, and more. This will make it easier to implement a lean product development approach for new products.
Why It Works
Looking at the general processes involved in the lean product development approach might leave you wondering why it works, especially when compared with more traditional approaches. Here are the main reasons why a lean product development approach is so effective:
- The use of methods and tools combined with culture and behaviours - The challenge in improving performance is doing so in a sustainable manner. Lean product development not only uses methods and tools that improve performance, such as set-based engineering and rapid learning cycles, but also helps establish a system of team and leader behaviors that allows you to continually improve performance, such as daily work management through the use of visual boards and by constantly checking standards.
- An efficient and effective process - Improving efficiency helps to reduce the time and effort spent on tasks that may not add value to the customer. Effectiveness helps ensure that the wrong product isn't developed as a result of poor customer understanding. A clear understanding of customer value allows you to create a valuable product proposition.
- An emphasis on knowledge work stages - Lean product development shifts focus to the knowledge work stages, which are the initial stages of the product development process.This shift of focus identifies critical knowledge gaps so you can fill them as you gain insight through consumer interaction, identify key risks in proposition and business case, and identify what technology will be used in the development of the product. Such an emphasis on knowledge work is a contrast to more traditional processes, in which requirements are defined as quickly as possible.
What Results Might You Expect From Implementing?
In the end, effective implementation of lean product development will help to increase speed to market, providing companies with the biggest opportunity to increase their profits. In fact, this also allows you to move from one product to another at a much quicker rate. It's estimated that a successful lean product development approach can result in a 400 to 500 percent increase in the introduction of new products. A lean product development approach can also result in a ten-fold increase in innovation. This is in part because of the focus on the knowledge work stages as well as the emphasis on collaboration and coordination.
If your product development system tends to be fraught with challenges due to inefficient processes, time-consuming activities, and constant miscommunication, then it might be time for a different approach. Businesses that focus on lean product development tend to greatly improve the efficiency of their processes, markedly reduce overhead costs, and improve the opportunity for substantial profit.
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