Counter-productive actions, decisions, and policies will have a compounding  effect whenever they discourage e or thwart promising ideas, suggestions, approaches, or proposals.

And, if these do get started and then counter-productive actions cause a failure, it will have a triple compounding  effect by discouraging future attempts!

Case study # 1: Counter-Productive Early Demonstrations

One product development "road map" advises that for technologies that are not ready for market should be "demonstrated very quickly at scale in multiple configurations and in various regional contexts." And acceleration also "requires a large increase in investment in demonstration projects.

If the latter makes more sense, than  the former - or if your work   is very important, challenging, or  timely - then read the 52 articles on this site  or the all editions or the DFM book or  call Dr. Anderson in for consulting  or  seminars.

True innovation must start with Manufacturable Research  steps  
with  the entire team practicing Concurrent Engineering,
 Scalability  , and DFM methodologies from  the beginning. . .

while doing whatever it takes to  avoid   everything  counter-productive:

What is Too Often Counter-Productive in Product Development:

Here are 18 common practices that prevent companies from innovating
with links to solutions (in red) presented on this site.

This is web version of DFM book Section 11.5, "Stop Counter-Productive Policies."  Be sure to send the DFM book to any source of these policies, with post-it notes on the appropriate section, noted by the section number below:

 The section numbers coincide with section numbers in the 2020 DFM book .

11.5.1)   Don’t allow Sales to “take all orders,” sell any option ever built, and “acceptall customizations” and pollute operations with low-volume, hard-to-build products that drain resources away from product development and other improvement programs. 

Solutions:   Rationalize Product Lines to eliminate or outsource high-overhead products that are incompatible with your operations and supply chains.   If hard-to-build products really have potential, design them into a family in a product platform.  If they do not fit into any product family, outsource them to a specialist CM or rationalize them away and send all those problems to your competitors!  See DFMbook Section 2.2.1.
 

11.5.2 Don’t Sell Every Option Ever Sold and Accept All Customizations/*.   This is slow and expensive to do in a mass production environment, building inventory based on forecasts after ordered parts arrive. If it is valuable to sell many options, then learn to do Build-to-Order. If it is valuable to customize products, learn to do Mass Customization. Solutions:  Build options and modules on-demand with Build-to-Order (Section 4.2) which is based on Lean Production (Section 4.1) and Standardization (Chapter 5) Customize orders with Mass Customization, summarized in Section 4.3 and taught in Chapter 9 in the 520-page book Build-to-Order & Mass Customization summarized in Section D.

11.5. 3)  Don’t bite off more than Engineering can chew when planning product portfolios, which drastically decreases the success rate of all products.

Solutions:   Rationalize Product Lines to focus on your most profitable products. This can triple your profits immediately! Just stop selling your highest-overhead "loser" products.  See DFM book Section 2.3.

Product Portfolio Case Study.  The book, Fast Innovation, (by Michael L. George, et al., 2005, McGraw-Hill; p. 167) presents a case study which clearly shows how too many projects diminish the chances of project success. 

 In the first, year a prominent company tried to develop 120 products, but resources were spread so thin that no products were introduced at all!     The next year the workload was reduced to 22 projects and they were able to introduce eight products in 24 to 28 months.  In the next year, as they got more focused on only 20 projects, they were able to launch 14 products in 12 months.  Thus they were able to successfully launch almost twice as many products in half the time!

 The results of focusing product development and rationalizing away most existing products during a three year period was that manufacturing productivity tripled, early life failures decreased by 38 times, customer satisfaction  rose from 27% to 90%, revenue increased by 2.4 times, and operational earnings increased from -6% to +7% !

11.5.4)   Don’t  “manage” product development with deadline management (track "progress" at meeting arbitrary deadlines and then putting on the pressure if any deadline is late) for the illusion of “early progress.”  This will be counterproductive if poorly set deadlines don’t encourage thorough up-front work.  SeeDFM  book Section 3.2,

Solution for innovation:  Product development phase scheduling should allow enough up-front effort, which is (a) when manufacturable innovation is done and (b) the thorough up-front work that will  cut in half the time to stable production.
 

11.5.5)    Be very sure that your product development process actually does have a product design phase: Some, even prominent and expensive "processes" don't, and skip from the "concept testing" phase to the "prototype testing." phase.  Check your to see if it has a strong product design phase, or has one at all!

Solution:  Implement DFM and Concurrent Engineering principles, as described in the white paper on Concurrent Engineering.  See DFM book Chapters 2 and 3.

 

11.5.9)    Don’t quantify only labor and part cost and then allocate (average) all other costs (overhead) over all products, even your best "cash cow"  products.  To make an impact, tell senior management that their favorite products are paying a "loser tax" to pay for all the overhead costs on the "loser" products.

Solution: Implement  total cost measurements to get pricing credit for all the overhead cost reductions, which can range from 1/2 to 1/0 of the usual costs, as shown in for each overhead category the page: http://www.design4manufacturability.com/designing_half_cost_products.htm   See DFM book Chapter 7.

11.5.10)    Don’t try to remove cost after the product is designed, which is so hard to do that it is a waste of resources that will prevent innovation  If this is even attempted, product development teams will have to devote a very high percentage of product development resource to make change orders to try to implement DFM retroactively

Solutions: See Solutions embedded in the article  Seven Reasons Why “Cost Reduction” after Design Doesn’t Work.  See DFM book Chapter 6.

 

11.5.11)   Don’t go for the low bidder on custom parts, which means your engineers will have to design the whole part in isolation, send it out for bids, manage a "bidding war," and then deal with the consequences of missing out on concurrent engineering with the best vendor.

Solution.  Pre-select he best vendor as a vendor/partner,  who will join your team and help you concurrently engineer the part, thus expanding the team without hiring or transferring any personnel.   This article will show many ways this will actually cost less and get parts ramped up quicker.  See point # 15 on cautions about not to drive away the best vendors with onerous terms & conditions and outsourced purchasing and accounts payable.  See DFM book Section 2.6.

11.5.12)    Don’t offshore manufacturing to "save cost," which makes it hard to do Concurrent Engineering when there are no manufacturing people around to be “concurrent” with. In many offshoring situations, people in engineering and manufacturing are not even working at the same time.  So research can only  be done in one time zone, and launching a product stares with throwing a drawing package "over the ocean," which is followed by the Contract Manufacturer "building to print," whether or not the drawings are perfect, 100% complete, and completely unambiguous -- or not, which is the case in almost all offshoring.  Outsourcing, in general, also involves converting documentation for outsourcing; changing all parts to "local sources of supply" (which may involve changing hundreds of parts and inducing hundreds of new variables), getting outsourcers up to speed; dealing with quality and delivery problems, and so forth and so on.  See DFM book Section 4.10.

Solutions.  First, implement   total cost measurements , (DFM book Chapter 7) which will quantify all the "hidden costs" of offshoring.  Second, understand all the costs that can be reduced by the principles of this site, e.g. at the page on how to design half cost  products, and the value of doing all phases of innovation in concurrent engineering teams.  

After DFM training, one large company that has pioneered many of these points, needed to launch an initiative called "DFM vs policy" to correct current counterproductive policies for their first product development team to utilize these new methodologies.

In his travels, the author of this site, Dr. David M. Anderson, has encountered several companies that wasted two-thirds of product development resources on the last three bullets (# 6, 7, and 8), which really puts their future in doubt if that future depends on new product development. Ironically, these attempts thwart six of the eight Half-Cost strategies, for reasons presented at the beginning of the offshoring article.
 

PROBLEMS DEFINING "COST" MOSTLY AS PARTS

11.5,7    Don't Beat up  Suppliers, specifically: 

  Vendor/Partnerships can reduce many costs, reduce NPD resources demands, and reduce the time to stable production. However, they will not be an option if purchase cost pressures force teams into the sub-optimal practice of designing in isolation and then going out for the low bidder.  See DFM book Section 2.6.

a)  Do not drive your best vendors away with onerous terms and conditions that stretch out payments, which doesn't really save money because

•  the vendors you drove away would have saved many more costs with better work and do it faster

• any saved interest will have to be paid back when you realize all this and reverse your beat-up-the-vendor policies,

• In emergencies, the slow-paying "net 60 day" customer will get the least attention

Vendor relations is no place "beat up vendors" just because you can or have the false believe it saves money.

b)  Don't outsource Accounts Payable. which will inevitably stretches out payments even longer and frustrate vendors with hard to reach offshore people and cumbersome procedure.  Some companies dress these up by calling them "Portals" or :supplier Network" like they are some kind of benefit.   One of these actually makes vendors buy an access code just to get in.

c)  Don't outsource Purchasing which can  thwart standardization, selecting parts for availability (two major bullets above) , and concurrent engineering with both company engineers and vendors.

d)  Do not add onerous terms and conditions to a Non-Disclosure Agreement (and call it a "Services Agreement") and try to slip in net 60 day or longer  payment terms (or worse) thwart class customization by trying to  claim world-wide IP rights to any "work product" done for training.  Such policies will limit your training to generic, maybe less effective, methodologies  taught by staff trainers from "canned" handouts, or, even worse, software systems that have a high cost-per-seat and has a long learning-curve.

ALERT TO VENDORS AND CONSULTS:  Insist on an NDA without terms and conditions. I f you get a  "services agreement" agreement, you and your client will have to spend a lot of hours and calendar time to negotiate away onerour teams and conditions.  First suggest that the client find an Exutive Sponsor first  that will appreciate e  will appreciate  the following issues:

Assigning IP rights precludes customization, which results in teaching generic material from a published book. 

Stretching out payments will discourage preparation and rush into "completion" to get into the "payment queue."   This willl discourage spreading out webinar sessions, which can accomodate more people.

Ironically, shifting efforts to contract negotiating and content to generic, presludes the need for an NDA in the first place

The ultimate irony is that a class that stresses not "beating up suppliers" 
should not beat up the messinger.

11.5.8)  Quality compromised.. Pressures to lower part cost results in cheap parts, which will raise quality costs more their anticipated savings, and that will have the following effect on NPD:  See DFM book Figure 1.2.

  Product Development delayed and costing more. Dealing with problems caused by cheap parts will:

• increase resource demands to deal with quality problems,  See DFM book Section 2.1

• introduce many variables, which compromise functionality, with change orders to make everything work again and fix new problems caused by all the changes

• put pressure on teams to compensate for all the above cost increases  See DFM book Figure 1.2.

•  delay the time to stable production.  See DFM book Figure 2.1

  Standardization will be thwarted by pressures to keep part cost down because most standard parts are “better” than a proliferation of the minimum spec parts, but the overall gain from standardization would be so great the material overhead for standard parts could be discounted to 1/10 of hard-to-get parts (see the first page of Chapter  4 on Standardization in the   DFM book).

 Part availability improvements will be also thwarted because more available parts may raise a BOM (Bill Of Material) entry, but the overall cost savings will be enormous by avoiding the cost of obsolescence and supply chain spontaneity which is a key prerequisite to Lean Production.  See Chapter 7 of book on BTO and Mass Customization.

 Off-the-shelf parts discouraged, which can focus resources on what customers buy products for and lower overall cost, but this will be discouraged by BOM cost pressures because purchased part cost is the total cost , whereas BOM cost is only material cost. For instance, wires are very inexpensive (as they may be “expensed” and not even be listed on the BOM) but wiring generates enormous labor and quality costs to wire products "like a house." However, DFM solution to wiring problems and cost is standard off-the-shelf cables, which will all look like “new expenses”“ on the BOM.  See DFM book Section 5.18.

Chapters 9 & 9 )  DFM guidelines thwarted, like “Eliminate Right/Left Parts,” symmetrical parts, and part consolidation will be discouraged if “extra” processing (to make right and left parts the same) raises a BOM entry. In one company the VA team resisted the DFM team’s attempts combine eight different brackets into one by drilling all the holes for all brackets into one versatile version because it would add extra hole drilling to most of the versions! However, if the right and left parts were molded or cast parts, eliminating the extra mold would save tens of thousands of dollars in tooling costs.   See DFM book Chapters 8 and 9.

Worst possible scenario:

The worst possible “cost reduction” scenario is to *(a) base “cost” primarily on parts and (b) pressure the design team for ambitious goals, like half the (parts) cost. That much pressure on parts cost will lead to desperate searches for the absolute cheapest cost which will:

- Compromise quality, raise quality costs, worsen reliability, and all the costs to deal with that, which will lengthen product development time.

- Thwart all real supply chain and lean production cost improvements such as standardization, designing for part availability, and off-the-shelf parts, which will be perceived as “raising” a BOM entry

- Discourage vendor/partnerships if cost pressures on their parts drive the counterproductive practice of designing in isolation and send out for the low-bidder

- Discourage DFM improvements that can combine parts and simplify any designs that may raise a Bill-of-Material entry.

 The very last paragraph of the 2020  DFM  book (Section 11.9; Students and Job Seekers Guidance) cautions engineers, who just learned DFM and are  ooking for work, to avoid  companies that  do the above counter-productive practices because it will  be an "unrewarding job experience."

If this is not enough to allow meaningful change, then forward this to those responsible for attracting and recruiting engineers , those responsible for retention (and the reputation hit from those that leave), and even those who try to impress journalists and judges of "best place to work" awards.    

Another group that needs to know all this would be Investor Relations and those that write Annual Reports, who should compare their bragging to the above.  Rather, they should be able to based that on the 53 articles on the home page.

 

All of these principles on DFM can be included in
your customized class and workshop on DFM or the
Advanced Product Development class 

Dr. David M. Anderson, P.E., fASME, CMC
www.HalfCostProducts.com
phone: 1-805-924-0100
fax: 1-805-924-0200
e-mail: anderson@build-to-order-consulting.com

Copyright 2022 by David M. Anderson

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