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Managing the Design Factory - Hardcover

Reinertsen, Donald

 
9780684839912: Managing the Design Factory
Hardcover
ISBN 10: 0684839911 ISBN 13: 9780684839912
Verlag: Free Press, 1997

Inhaltsangabe

The man who launched a revolution in product development with his bestselling Developing Products in Half the Time is back with a new book that's also certain to be a classic. In Managing the Design Factory Donald G. Reinertsen presents concepts and practical tools that will be invaluable for anyone trying to get products out of the pipeline and into the market.

The first book to put the principles of World Class Manufacturing to work in the development process, Managing the Design Factory combines the powerful analytical tools of queuing, information, and system theories with the proven ideas of organization design and risk management. The result: a methodical approach to consistently hit the "sweet spot" of quality, cost, and time in developing any product. Reinertsen illustrates these concepts with concrete examples drawn from his work with many leading companies across different industries.

Fresh and thought-provoking, the book challenges many of the conventional approaches to product development. "There are no best practices," Reinertsen writes, "the idea of best practices is a seductive but dangerous trap." Unlike other books that promote rules and rituals based on benchmarking "best practices," this book focuses on practical tools that account for varied situations. He breaks new ground with a disciplined, quantitative approach for making decisions on critical issues: When should we use a sequential or concurrent process? Centralized or decentralized control? Functional or team organizations?

Full of practical techniques, concrete examples, and solid general principles, this is a real toolkit for product developers. Moreover, it is written with the clarity, precision, and humor that are Reinertsen's trademarks. He promises to challenge the thinking of anyone involved in product development.

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Über die Autorin bzw. den Autor

Donald G. Reinertsen is head of Reinertsen & Associates, a firm that specializes in new product development. He also teaches at the California Institute of Technology and has attracted a worldwide following among managers, designers, and engineers. He holds an engineering degree from Cornell and an MBA from Harvard. He and his family live in Redondo Beach, California.

Von der hinteren Coverseite

The first book to put the principles of World Class Manufacturing to work in the development process, Managing the Design Factory combines the powerful analytical tools of queuing, information, and system theories with the proven ideas of organization design and risk management. The result: a methodical approach to consistently hit the "sweet spot" of quality, cost, and time in developing any product. Reinertsen illustrates these concepts with concrete examples drawn from his work with many leading companies across different industries. Unlike other books that promote rules and rituals based on benchmarking "best practices", this book focuses on practical tools that account for varied situations. He breaks new ground with a disciplined, quantitative approach for making decisions on critical issues: When should we use a sequential or concurrent process? Centralized or decentralized control? Functional or team organizations? Full of practical techniques, concrete examples, and solid general principles, this is a real toolkit for product developers.

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Chapter 1

Into the Design Factory

Imagine that own a business with a large bank account that pays no interest. You would be unhappy. Now imagine that this bank account loses half its capital value every year. You would be outraged. Yet this is exactly the situation that most companies find themselves in as they try to manage their product development process. They have high levels of investment in partially completed designs, but these investments earn them nothing until the products are introduced. These investments are at risk, because a competitor's product introduction can make a partially completed project worthless overnight. In effect, they have a large non-interest-bearing asset that loses its capital value very rapidly. There is however one key difference. Most companies have no clue how big this asset is, or what sort of return they make on it.

This chapter introduces the concept of the Design Factory, the foundation upon which we will build when we introduce more powerful analytical tools later in the book. We will look at the goals of the Design Factory, its output, its inventory, and will examine its similarities and differences from the manufacturing factory. I have chosen the term Design Factory for our product development process because it gives us a useful context within which to view this process. By approaching the problem as a manufacturing problem, we can exploit certain tools and concepts that have proved useful for repetitive processes like manufacturing.

There is a good reason for viewing design through the eyes of a manufacturing manager. In general, more careful management thought and more insightful review of experience have occurred in the area of manufacturing than in the area of product development. This is true in part because we have better accounting systems in manufacturing, which makes it easier to assess performance. It is also true because we spend more money in this area, causing it to receive a higher level of management attention and scrutiny. It may also be true because manufacturing is an inherently repetitive process and therefore more likely to produce learning than a nonrepetitive process, like product development. Whatever the causes, the net effect is that we have scrutinized manufacturing more carefully than product development. This careful study has sharpened our thinking and produced some useful tools that can usefully be applied to the development process.

OUR GOALS ARE ECONOMIC

We must begin by asking, "What is the objective of the Design Factory?" We cannot optimize the Design Factory unless we are clear about what we are trying to optimize.

The answer is quite simple. The Design Factory exists for one purpose -- the same purpose as the manufacturing factory -- to make a profit. I would argue that it has no important objective that cannot be quantified in economic terms. Furthermore, I would assert that it is only by attempting such quantification that we can objectively weigh the consequences of particular actions. We are only philosophers until we begin to use numbers.

This view is not as starkly mercenary as it appears. All profit derives from a single source: the ability to sell things or services for more than they cost to make or acquire. Our sales price is a measure of the value that people attach to our output. If we fail to create sufficient value for customers, then they will spend their money on something else. In this sense sales price is the customer's message that we have done something useful. Our cost, on the other hand, is a measure of how well we use time and physical resources. A manufacturer who is efficient at converting material, labor, and energy into products is rewarded with profits. When resources are squandered, profits drop. In this sense, profit is simply a measure of how efficient we are at converting time and resources into things people value. When we do important things for people, without wasting time and resources, we are rewarded with profit.

We will develop this measure of profit more completely in Chapter 2, where we will show how measures like time, expense, cost, and performance can be converted to a common denominator of profitability. For now, just remember that our objective is profits, not products.

PRODUCTS VS. DESIGNS

How does the Design Factory plan to produce these profits? Here is where we find a fundamental difference from manufacturing. Producing a design is a different problem from producing a product. As Marv Patterson has pointed out in his book, Accelerating Innovation, the purpose of a design process is to generate information. It is the difference between making food and making recipes. The manufacturing factory creates food for people to eat. The Design Factory creates recipes. Behind this simple statement are some interesting implications that we shall examine in more detail in Chapter 4 when we cover information theory. For now, let us make a few basic observations.

The recipes we produce in the Design Factory only achieve our objective when they are converted to our valued goal, which is profit. Thus, the only measure of the value of design is its economic value. Our designs are not important because they are new, or because they are beautiful, or because they are innovative; they are only important if they make money. Our designs will only make money if we create recipes to turn material, labor, and overhead into valuable functionality better than our competitors do.

The goodness of our recipe is important, but it is perishable. The ability of a design to make money is greatly affected by time. Our recipe is constantly measured against the recipes offered by other companies. The profit of the recipe is determined by its value, which takes the form of sell price, and its cost. Both of these factors vary with time. For example, the original Sony Walkman sold for around $150. Since it cost less than $150 to make, it was profitable. The same design today would make no money because the market price for this functionality is less than $30. Market prices have fallen because today's designs have different recipes. They have substituted plastic parts for metal ones and can be sold profitably at today's low prices. Thus, we need good recipes, and we need them before our competition gets them.

DESIGN-IN-PROCESS INVENTORY

When we begin a design we make investments in creating recipes. However, a recipe does not generate profit until it is completed. During the time that the recipe is incomplete we are holding an investment that is earning no money. We call this investment design-in-process inventory (DIP).

This is the Design Factory's equivalent of the work-in-process inventory (WlP) that we have in the manufacturing factory. Like the level of WIP, the level of DIP is a sign of the health of our process. When we bring our designs to market quickly, we can begin earning money quickly, which is good. When we are slow, we will have large levels of DIP which earn no money for us. Thus, the design process has inventory just as the factory does.

This DIP inventory is actually more important than inventory in the factory, because it is much larger and more expensive to hold. Manufacturing plants turn their inventory with incredibly fast cycle times. Modern plants can turn their inventory more than fifty times a year. In contrast, it is the rare development process that achieves more than one turn per year. Thus, DIP can be a much larger number than WlP in most companies. As the data in the Figure 1.1 show, DIP can easily be ten times bigger than WlP in many situations.

Furthermore, holding costs are much higher for DIP than for WlP. A traditional rule of thumb for the cost of holding WlP is about 25 percent of the inventory value per year. This takes into account the cost of...

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Verlag
Free Press
Erscheinungsdatum
1997
Sprache
Englisch
ISBN 10 
0684839911
ISBN 13 
9780684839912
Einband
Gebundene Ausgabe
Anzahl der Seiten
288
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
Simon and Schuster Netherlands BV
info@simonandschuster.nl

Herculesplein 96
Utrecht
3584 AA
Niederlande