1. Defining ‘Early Management’
Product planning has to be preceded by market research. In this manual, the blanket term ‘management of product and equipment development’, or ‘development management’, will be used to refer to all the activities taking place from the market research stage onwards. In the early stages of TPM (Level 1), development management focuses principally on the work done from the product-planning stage onward, with the aim of achieving vertical volume-production startup and stable production thereafter, and this is what we call ‘Early Management’. This chapter explores the meaning of Early Management in more detail.
A Definition of Early Management
Early Management is part of the process of creating a system for managing product and equipment development, one of the principal TPM activities. It can be split into ‘Early Product Management’ and ‘Early Equipment Management’. The period covered by Early Management is from the start of conceptual product planning until the go-ahead is given for full-scale production.
Figure 7.1 shows how Early Product Management and Early Equipment Management fit into the overall development management process.
1.1 What does ‘Early Product Management’ mean?
To succeed in the face of tough market competition, it is absolutely essential to manufacture what the customer wants, and to do it quickly and cheaply. In today’s world, customers’ needs are becoming ever more individualised and diverse, while product life- cycles are becoming ever shorter – all at a dizzying rate. This means that a company needs to be as efficient as possible in planning, developing and evaluating prototypes – while developing the necessary production equipment – and get the new product into volume production as quickly as possible.
‘Early Product Management’ refers to management activities carried out to ensure that everything runs smoothly from the conceptual product planning stage right up until volume production. Its objectives can be summed up as follows:
- To ensure that the product not only fulfils its basic functions, but is also QA- friendly, factory-friendly and automation-friendly when it reaches the volume- production stage;
- To shorten the product development period and achieve vertical startup (in other words, to produce defect-free products from the word ‘go’).
If these two objectives are to be attained efficiently, the product design department must make it clear to the equipment design department and other departments involved, early on in the design process, exactly how everyone will co-operate, and who is to be responsible for what.
1.2 What does ‘Early Equipment Management’ mean?
Nowadays, product specifications are rapidly proliferating, while life cycles dwindle. Consequently, production equipment has to be able to turn out a wide range of products extremely efficiently in small quantities, while becoming larger, faster and increasingly automated. However, despite the best efforts of equipment design departments, problems arising in the early stages of equipment development are as common as ever.
Early Equipment Management can be defined as follows:
Management where the equipment design department works with the operating and maintenance departments throughout the period from conceptual equipment planning to volume-production startup to forestall losses due to initial equipment problems, while striving for optimal equipment design that correctly balances initial cost and running cost.
Often, no distinction is made between Early Product Management and Early Equipment Management: the two are simply lumped together as ‘Early Management’. In this manual, however, the distinction will be maintained: Early Management covers the three scenarios listed below, and it makes things clearer if we can talk about Early Product Management and Early Equipment Management as two distinct entities.
- The scenario where new equipment is to be developed and designed in order to produce a new product.
- The scenario where the product is to remain unchanged, but new equipment is to be developed and designed in order to speed up production, increase the degree of automation, or attain some other improvement.
- The scenario where a new product is to be developed, but existing equipment is to be used.
When different departments work together on a project and concurrent engineering is practised, it is essential to be absolutely clear about the objectives and which department is responsible for doing what.
2. The Four Steps to Early Management Implementation
Figure 7.2 shows a recommended procedure for thorough and effective implementation of Early Product and Equipment Management.
2.1 Step 1: Examine and analyse the present situation
Examine and analyse the current situation (i.e. how Early Management has been carried out for the past year or two), and clarify the problems.
(1) Clarify the current Early Management workflow.
(2) Identify the problems with the current workflow.
(3) Find out what is currently being done to ‘design out’ foreseeable problems at each stage of the Early Management process.
(4) Find out what problems are currently arising at the prototyping, test-run and commissioning stages, and what is being done about them.
(5) Find out how the process is being held up at the prototyping, test-run and commissioning stages.
(6) Find out what is currently being done in the way of collecting, storing and using information with a view to designing products and equipment to be user-friendly, factory-friendly, non-defective-generating, maintenance-friendly and highly-reliable, as well as safe and commercially-competitive.
See Table 7.1 and Figure 7.3
2.2 Step 2: Establish an Early Management system
In the light of all the knowledge gained from the previous stage, build a new system aimed at making Early Management work the way it should.
- Think through a basic Early Management system, set it up, and define the scope of its application.
- Think through and set up a system for collecting, collating and utilising the data needed for Early Management.
- Formulate and refine the various standards and forms needed to run these systems.
2.3 Step 3: Debug the new system, and train your workforce to use it
To train your staff and fine-tune the system, try it out on sufficient pilot projects for everyone to take part, at the right level of difficulty for the design engineers.
(1) Implement the system progressively, taking one project at a time, and one Early Management stage at a time.
(2) Meanwhile, train everyone in the standard techniques needed to implement the system.
(3) Throughout each step, keep evaluating everyone’s understanding of the new system, and keep reassessing the techniques being used, the effectiveness of what is being done to build quality into the design, and so on. Treat the debugging process as a diagnostic technique.
(4) In the light of your new knowledge, refine the system, the standards and the forms used.
(5) Take stock of the benefits you have gained by using the new system.
2.4 Step 4: Bring the new system into full-scale operation
- Bring the new system into full-scale operation by extending it to all areas.
- Arrange for more of the information generated to be channelled into LCC (life-cycle cost) optimisation and MP (maintenance prevention) design as a matter of course.
- Identify the problems in each area and at each stage of Early Management. Find out how many improvements were incorporated into the design, how many problems are arising, what types of problem they are, how long the delays are, and so forth. Collate all the data and take stock of results every six months or every year. Analyse the problems arising from the commissioning stage onwards, consider how things could be put right at an earlier stage, and press ahead with standardisation, aiming for a vertical startup right on schedule.
3 Early Management in Practice
3.1 The objectives of Early Management Why is Early Management necessary?
- 1) Because 80% of the LCC (life-cycle cost) of products and equipment is determined at the design stage.
- 2) Because Early Management programmes the whole service life of the product or equipment, at the design stage. Early Management boils down to the endeavour to create factory-friendly equipment and use it to manufacture products that are user- friendly and do not incur unnecessary costs at any stage of their life.
Early Management is aimed at minimising LCC by the following means:
- Shortening lead times
- Reducing total cost
- Reducing the number of labour-hours needed from development through introduction
- Reducing disruption in the form of process, equipment or product trouble from development through introduction
- Making it possible to achieve vertical startup right on schedule
- Minimising environmental impact
- Producing people-friendly products and equipment
3.2 The desired scenario for Early Management
Attributes that products should have
Attributes that equipment should have
The ideal scenario for products and equipment
3.3 Rolling out Early Management
An Early Management programme should be rolled out in the sequence shown in Figure 7.4. It is a good idea to record all the problems with the existing Early Management system in detail, to retain a clear picture of how bad things were ‘before’. Track a pilot product or piece of equipment throughout its commissioning, listing all the checks required at each stage, and developing all the tools that need to be deployed. As you proceed, work out how MP (maintenance prevention) and TS (troubleshooting) information should be used, develop a model for calculating LCC, and collect the necessary data.
Figure 7.4 Flow Diagram of Early Management Activities
3.4 Reviewing the overall Early Management process
(1) Effect on LCC at each step
It is said that 80% of the LCC of products and equipment is determined at the design stage (see Figure 7.5)
(2) Using concurrent engineering to reduce the time required for preparing to produce new products or use new equipment
One of the most important business challenges companies face today is the need to get new products onto the market rapidly, ahead of the competition. To achieve this, it is essential to slash the time needed to get ready for full-scale production – which means moving from the old-style sequential approach (first development, then production, then marketing) to a parallel approach using concurrent engineering.
Concurrent engineering means implementing two or more phases of a project in tandem – for example, beginning to design the production equipment at the same time as designing the product, instead of waiting until the product has been designed. It aims to shorten the overall project lead time by progressing the various activities simultaneously, based on a clear understanding of how the relevant departments will work together and who is responsible for what (see Figures 7.6 and 7.7)
Figure 7.6 How Concurrent Engineering Works
Figure 7.7 The Advantages of Integrating Product Engineering and Process Engineering
3.5 Setting up an MP information utilisation system
(1) Identify sources of MP information
• Take stock of every potential source of MP information – old or new – and decide how useful it could be.
• For each information source, set up a system (e.g. MP data sheets) for gathering useful information in a usable format. Establish new information channels (primary MP data sources) as necessary.
• Design a system to sort out historical information and make it usable immediately, with the minimum of further effort.
• Organise the information into categories, making it easily searchable and retrievable. The object is to make everything readily accessible to anyone (including non-expert users) at any time. Add it to frequently-used reference diagrams and key it into CAD systems.
• Design the system so that each entry offers useful extras, such as the provenance of the information, the benefits of using it, examples of ways it has been used in the past, and so forth.
Figure 7.8 shows the anatomy of an MP information utilisation system.
Figure 7.8 The Anatomy of an MP Information Utilisation System
3.6 The anatomy of an LCC system
To assist readers to gain a basic understanding of LCC, Table 7.2 presents a comparison of the LCC calculation method and conventional investment calculation methods. Figure 7.9 shows a typical LCC calculation.
Table 7.2 LCC Calculation Method Compared with Conventional Investment Calculation Methods
IC: Initial Cost (investment cost or acquisition cost)
OC: Operating Cost (cost of upkeep, ownership, operation, materials, labour, repairs, utilities, etc.)
CC: Cost of capital (depreciation, interest)
C: Total cost price
V: Added value (profit, interest, depreciation, human resources, tax and public charges, leasing fees)
P: Profit = S-C
LCC: Life Cycle Cost
S: Net sales revenue
ROI: return on investment
Chapter 7. Early Equipment Management. Part 2
Figure 7.9 A Typical LCC Calculation