It is Time to Learn
New Ways to Develop Products (below)
and Stop
doing what gets in the Way!
How to Design for Growth: Principles
There are two elements to Design for Growth: I. How to Design for
Competitiveness and II. How to Design to Scale up Production Quickly.
New
article:
Stopping counter-productive policies before change can start
I HOW TO DESIGN FOR COMPETITIVENESS
Lowest Prices can be achieved by lowering all costs which is possible
after all costs
are quantified and then systematically reduced through all the
strategies at
http://www.halfcostproducts.com that include:
- low-cost
product development methodologies that can lower cost by 20%
to 50% and beyond
• Minimizing the
cost
of quality which can be from be between 20 and 35% of
the revenue stream or the product’s selling price.
• Eliminate
inventory carrying costs which cost the company a
quarter of inventory every year! This can be done with
build-to-order and
spontaneous supply chains. In some companies, WIP
inventory cost equal profits, so eliminating them can double
profits. This is especially true with capitol equipment products
that build products around expensive parts, like engines and
generators, instead of building the products first and then
adding the expansive parts the day before shipping to eliminate WIP
inventory costs.
• Eliminate the “loser tax” to pay the overhead costs of
money-losing products by rationalizing them away.
• Avoid counterproductive practices to design for growth
that drain resources away
from the above such as attempting cost reduction after design, low
bidding, and offshoring. See article at
http://www.halfcostproducts.com/how_not_to_lower_cost.htm
Fastest Introductions of Innovative Technologies are key to growth
can be achieved by first
commercializing all research, experiments, breadboards,
prototypes, patents, and acquired technologies. Then use Concurrent
Engineering to thoroughly develop the product for the
fastest ramp to
stable-production.
Best Selection and Customization can enable growth with
families of products that are
built-to-order
including
mass-customized
products that are also build quickly and cost-effectively.
Best Deliveries will lead to growth if you can be faster than any of
your competitors with products
built on-demand
from standard parts from
spontaneous supply chains.
II. HOW TO SCALE PRODUCTION QUICKLY
The featured article in the November 2013 in Mechanical Engineering,
titled “Why Manufacturing Matters,” concludes that:
“The companies that scale the latest technologies the
fastest
will become the market leaders and reap most of the profit.”
Products can be designed to scale quickly by the following methodologies:
Manufacturability. Design for growth depends on designing for all aspects of manufacturability that
are:
• designed around proven off-the-shelf parts that are selected
to be readily available throughout the anticipated lifespan of the
product to avoid dependence on parts that are hard to get, have long
lead-times, incur high inventory carrying costs, or may become
unavailable within the lifespan of the product.
-
avoid basing designs on scarce materials, especially those containing
rare-Earth elements, and avoid basing production on expensive “fabs”
that have limited capacity that would be slow and expensive to expand.
• concurrently designed with
vendor/partners so that all design guidelines are followed and parts can be easily build on widely available machine tools from
widely available materials on without setup delays. See article
by Dr. Anderson at
http://www.fabricatingandmetalworking.com/2008/02/tearing-down-the-walls/
.
• designed for quick and easy assembly without the need for firedrills,
tribal lore, scarce resources, and skill and judgement, all of which
make production hard to scale. In Dr. Anderson's seminar, he asks
the classes "how long would it take to double production?" The
answers range from 6 months to never!
• fully
commercialize
research to ensure the above manufacturability is designed in the first
time for rapid deployment.
“Firms that scale and deploy innovations rapidly
will remain market leaders.”
• concurrently engineered production equipment and
tooling suitable for initial demand and easily scalable to the
highest anticipated demand. See article on DFM and Concurrent
Engineering at:
http://www.design4manufacturability.com/DFM_article.htm
Flexibility to Adapt to Evolving Market Needs, which will also
enable growth:
• Design product families
and
design products for lean and build-to-order
that can quickly adapt to evolving market needs.
- Flexibility is even more important if forecasts are vague for all
potential markets.
III. HOW NOT TO GROW
- Growth doesn’t come from just directives. Don’t assume that
meaningful growth can be achieved only by directive, which, without a
meaningful program, will be about as effective as the classic “show me
the money” chant from the movie, Jerry Maguire, shown at:
http://www.youtube.com/watch?v=mBS0OWGUidc .
• An important aspect to a Design for Growth strategy is to avoid counterproductive policies, such as
trying to developing all products for all markets,
taking all orders, accepting all customizations, managing projects to death
with deadline management, only quantifying labor and part costs, offshoring
to “save cost,” low bidding, and trying to remove cost after design, which
may actually delay growth and drain resources away from achieving
real growth by implementing the above principles. Each of
these is discussed at
http://www.halfcostproducts.com/counterproductive_policies.htm
• Don’t use Mergers & Acquisitions for Growth. In Jim Collins’ book
on how good companies become great companies, appropriately titled, Good to
Great, he states flatly that “you absolutely cannot buy your way to
greatness.”
• A Thomson Financial/First Call study commissioned by the Wall
Street Journal study found that “stocks of the top 20 acquirers in the
late 1990s have fallen nearly twice as much as the Dow Jones Industrial
Average and the Standard & Poor= s 500 Index.”
• An A.T. Kearney study of 115 global mergers showed that the total
return to shareholders (relative to peer companies) was minus 58%.”
See full article at
http://www.halfcostproducts.com/mergers%20&%20acquisitions.htm
For more information, call Dr. Anderson at 1-805-924-0100
or e-mail him at
anderson@build-to-order-consulting.com.
Design for Growth Class
by Dr. David Anderson
The Design for Growth seminar will show how to develop products for
growth.
The opening slide in Dr. Anderson’s seminar concludes that
inadequate design for manufacturability limits growth.
So companies must ensure that products are designed for
manufacturability
To show how to design for growth, the two-day Design for Growth seminar will include
sections on:
I. Design for Competitiveness, which will show companies to
develop products for the:
• Lowest Prices can be achieved by lowering all costs (as
described above) with:
• low-cost
product development methodologies that can lower cost by
20% to 50% and beyond
• Minimizing the
cost of quality
• Eliminate inventory
carrying costs
• Eliminate the “loser tax” to pay the overhead costs of
money-losing products
• Fastest Introductions of Innovative Technologies can
enable growth by first
commercializing all research, experiments,
breadboards, prototypes, patents, and acquired technologies. The
Design for Growth
seminar will show how to use Concurrent
Engineering to thoroughly develop the product for the
fastest ramp to stable-production.
• Best Product Line Selection and Customization will enable
growth with
families of products
that are
built-to-order , including
mass-customized
products that are also build quickly and cost-effectively.
Dr. Anderson has written two books on BTO and
Mass Customization
• Best Deliveries will also enable growth when deliveries are faster than any of your
competitors. The Design for Growth seminars shows how to do
this by building products on-demand from
standard parts that are made
available from
spontaneous supply chains.
II. Design for the Ability to Scale Production Quickly
• Manufacturability. The Design for Growth seminar will show how to ensure
scalability by designing for all aspects of manufacturability by
designing products that are:
• designed around proven off-the-shelf parts that are
chosen to be readily available throughout the anticipated
lifespan of the product to avoid dependence on parts that are
hard to get, have long lead-times, incur high inventory carrying
costs, or may become unavailable within the lifespan of the
product.
• concurrently designed with
vendor/partners so
that all design guidelines are followed and that parts can be
easily build on widely available machine tools from widely
available materials on without setup delays.
• designed for quick and easy assembly without the need for
firedrills, tribal lore, scarce resources, and skill and
judgement, all of which make production hard to scale.
• Fully
commercialize research to enable growth of new
technologies by ensuring that the above
manufacturability is designed in the first time.
Dr. Anderson has written three books on
Design for Manufacturability
• Flexibility to Adapt to Evolving Market Needs. The
Design for Growth
seminar will show how to
design product families and
design products for lean production and build-to-order that
can quickly adapt to evolving market needs to ensure growth in
changing markets.
These are the general principles. Pass
around this article or URL to educate and stimulate interest
In customized seminars and
webinars, these principles are presented in the context of your
company amongst designers implementers, and managers, who can all discuss
feasibility and, at least, explore possible implementation steps
In customized workshops, brainstorming sessions
apply these methodologies to your most relevant products, operations, and supply
chains.
If you want to discuss Design for Growth by
phone ot e-mail, fill out this form:
Call or email
about how these principles can apply to your company:
Contact
Dr. David M. Anderson, P.E., CMC
fellow, American Society of Mechanical Engineers
www.design4manufacturability.com
phone: 1-805-924-0100
fax: 1-805-924-0200
e-mail: anderson@build-to-order-consulting.com
copyright © 2021 by
David M. Anderson
Book-length web-site on Half Cost Products:
www.HalfCostProducts.com
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