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Design Phase

After ranking the CT characteristics, current sub-systems that positively or negatively influence the CT characteristics are rated. A new product or service may be a moderate improvement over the current design or a completely new design. If it is like a current design, existing sub-systems are reviewed for their ability to meet the customer’s CT requirements. Performance gaps that require improvements to current capabilities require incremental changes. Completely new designs will rely on the application of available technologies to create new features and functions.

The team gathers relevant requirements, including specifications related to fit, form, function, and production feasibility. Its important that new products and services consistently meet customer requirements. Capability analyses are made using testing and historical performance. Engineering drawings, models, performance testing, and field performance information are evaluated for additional design improvements. This latter information focuses on ease of installation and maintenance, serviceability, and disposability (including recycling).

Design and performance depend on technological maturity within an industry and organization (i.e., state-of-the-art capabilities). Some organizations create more efficient designs than others (i.e., they are more competitive). In Chapter 2, in the section entitled, “Deploy Design Excellence,” an example was discussed in which three manufacturers of direct current motors had different motor designs and differing quality and cost positions. Recall that the Japanese company had the simplest and most competitive design. Global competitive advantages depend on setting correct design goals and performance objectives and on following good design principles. Simplicity is very important. Design complexity can be seen in a product’s BOM. The number of components and assembly operations grows with complexity. This increases design lead time and costs, and mistakes are easier to make without compensating mistake-proofing strategies and controls.

Organizations need to get new products and service design right the first time. How can an organization do this? It is important to ask the right questions at the start of the design process. The best place to start is with the external customer by gathering the VOC. Second, assembling a crossfunctional team and creating an aligned project plan coinciding with release to production is critical for success. Facilitation also helps ensure design teams do not become side-tracked or focus on the wrong requirements and solutions. Through facilitation and brainstorming, alternative design solutions will be more likely to close the performance gaps.

Brainstorming can be used to better manage the project or to identify ways to close performance gaps. It is useful in almost any situation where new ideas are needed to move forward. There are different types of brainstorming, from simple idea generation to the use of highly structured checklists such as those used in the theory of inventive problem solving (TRIZ). The TRIZ acronym is translated from the Russian phrase for the theory of inventive problem solving. TRIZ was invented by Dr. Genrich Altshuller while a political prisoner in a Soviet Union prison camp as a structured approach to identify solutions to solve design problems. During his imprisonment, Dr. Altshuller analyzed the Soviet Union’s patent literature for common themes in inventions across diverse industries and applications. His hypothesis was that analogous problems in different industries had similar solutions that could be applied to new and different problems in other industries. He found only a small fraction of inventions required completely new technology. Most problems had been solved more than once, but in different industries.

In recent years, the TRIZ methodology has been reformulated as four steps: identify the problem, formulate the problem, search for a previously solved problem, and look for analogous solutions to the current problem. Dr. Altshuller and his consultants found thirty-nine engineering parameters that can be used to search for a previously solved problem. They also found forty inventive principles to aid in the identification of an analogous solution. These are always under active investigation by TRIZ consultants. There are numerous examples where TRIZ has been successfully applied in practice to the design of products and services.

Table 4.9 shows how the TRIZ methodology that was applied to identify ways to reduce the lead time of a product across a global supply chain.

ПОOperational Excellence


TRIZ Applied to Reduce Lead Time

TRIZ Principle


Segmentation (1)

Divide into different product centers, make some things 100% in different countries.

Take out (2)

Lean manufacturing: eliminate steps and operations in the process.

Local quality (3) Merging (5)

Position casting manufacturing close to customers. Bring things together; manufacture the product closer to final assembly.

Universality (6)

Design product to perform multiple functions; develop a generic design.

Preliminary action (10) Beforehand cushioning (11)

Complete as many operations in advance as possible. Ensure supplier quality and systems are very good to avoid waste.

The other way around (13)

Bring final assembly to China; analyze worst-case supply chain events.

Spheroidality/curvature (14)

Have someone else make the castings and get out of the way.

Partial actions (16)

Complete the product partially, move along faster; forget component cost savings to reduce inventory levels and increase cash flow and customer service (i.e., profitability).

Another dimension (17)

View your organization from the outside in using consultants; don’t make the product.

Periodic action (19)

Transfer batches rather than process batches; decrease lot size.


Change magnitude of feedback (metric); move from inventory metric to profitability or customer satisfaction.

Intermediary (24)

Merge one object temporarily with another (i.e., hire a consultant to help).

Discarding (34)

Migrate advantages of Chinese manufacturing to another location.

Multiple matching (37)

Ensure supplier teams are diverse to eliminate groupthink.

Boosted interactions (38)

Implement risk- and revenue-sharing partnerships.

The product under analysis was a heavy industrial component manufactured in China and used in the United States. This product had a long lead time between customer order and customer delivery. This caused high inventory investment across the organization’s global supply chain. The example shows how TRIZ offers different ways to view this long lead time/inventory problem. Some of the alternative solutions were not manufacturing the product in China, manufacturing it at other locations, and manufacturing some components in one place and other components at other locations. Although not every solution listed in Table 4.9 is feasible, many alternative solutions were created for consideration using TRIZ. Brainstorming methods such as TRIZ can be very useful for designing products and services.

Once the solution begins to take shape, a preliminary BOM is created for products or a schematic with roles, and responsibilities, work actives, and systems for services is drawn up. The BOM shows the parts list and the hierarchal position of each component, including materials, suppliers, testing requirements, assembly instructions, and workflows. In parallel, process engineering creates the new process workflow for the products as well as the production systems and technology required to produce the new design. At this step in the design process, the design team needs to work closely (i.e., concurrently) with process engineering and production operations to ensure a smooth transition for commercialization. Specifications for performance, dimensional tolerances, and other requirements need to be complete before a final transition to production. Ideally, the new product will be production-friendly, i.e., able to be produced with high quality and to the target cost and lead time. As an example, small tolerances require highly precise equipment be used by production. This may require the purchase of new equipment at higher cost to avoid rework, scrap, and customer returns. Relative to services, the people must be highly trained, and their tools and equipment should be available to provide the required customer service (i.e., actual capacity must meet demand on the system).

Target standard cost is calculated as sales price minus required profit margin. There are competitive pressures to keep standard cost as low as technically feasible to meet profit margin targets. It makes no sense to design a product or service with a high and noncompetitive standard cost and then add the required profit margin only to see it fail to sell. Best- in-class organizations work through a series of analyses to ensure their products or services are well positioned relative to competitive offerings and have the features and functions that customers need and value at a competitive price. Target costing is shown in Figure 4.5.

Based on competitive pressures and technological maturity, finance, marketing, design, production, and other stakeholders set a target standard cost. Standard cost targets are allocated to every component in the BOM for products or to the list of work tasks in a service system. Each design is


Target costing.

carefully evaluated for cost-reduction opportunities and competitiveness based on benchmark data. There is an interplay between the stakeholder teams where price elasticity is measured in test markets, design alternatives are evaluated for price reductions, and gross margin targets are modified. This is often done across the design’s life cycle because an organization may be noncompetitive in one phase, but in total very competitive. This strategy enables designers to evaluate features and functions across the entire life cycle for cost savings. The CE team coordinates the purchase and manufacturing of materials and components across the supply chain using the BOM, technical specifications, and related information. Figure 4.6 shows a common method for doing this coordination using the HOQ matrix as extrapolated though a supply chain. Each part of a supply chain creates solutions to “what” is required versus “how” it will be done.

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