The Importance of Improved Design
How product design affects significant factors in manufacturing
by Mary Gander
When Carl Derkes, grandson of Bauer Winches Inc. founder Joseph Bauer, took over, he realized a number of significant changes were needed. Carl and his father, Ed, attended a seminar on W. Edwards Deming's principles and decided to develop a new vision for the company: continuous improvement and better integration of all the parts of the production system.
Deming referred to continuous improvement as the effort to optimize a system.1, 2 A systems perspective says a manufacturing company must be viewed as a whole made up of parts with interdependent relationships. Complexity in the system is reduced as processes are systematically improved and better integrated so a company can do more with less. This helps throughput and plant capacity increase--often with little or no capital investment. Complexity and flexibility are inversely related; the more complexity in the design of the product and the processes that produce it, the less flexibility.3
Ed Derkes asked, "Where are we making money and where are we losing money?" Everyone agreed the company was likely losing money on a customized winch made for a customer who ordered a few each year. Therefore, Ed and Carl assigned a cross functional kaizen team to find out exactly how much Bauer was losing. Though the winch was one of its highest priced products, Bauer was losing money on it.
The team constructed a flowchart and layout diagram illustrating the entire process of redesigning the winch, ordering and handling parts and materials, and manufacturing. The flowchart showed the process, and the layout diagram showed the physical layout of the plant and tracked the travel of people, paperwork and materials.
The average lead time for manufacturing the winch was 5.5 weeks, and the average manufacturing process time was 155 hours, but actual value-added time (steps in the process that actually add value to the product) was only eight hours.
Help from outside
The team decided to contact me, a local professor of production and operations management, to get information on product design. I explained the basic concepts of design for manufacturing and helped integrate the information into the team's continuous improvement strategy. The team learned most of the quality goes into a product at the design phase, and because design is so far upstream in the process, it affects everything downstream. So improvement in the design helps improve everything else downstream in the process.4
The team realized the design engineers never paid attention to parts reduction. The design had become increasingly more complex and required more parts. This made the ordering, stocking and handling of parts more complex and added more processes.
The team also discovered the design engineers did not relate the design of this winch to three other similar winches. Each was designed and redesigned as an individual product, not as a family of similar products with which a modular concept could be used to reduce complexity and cost in production.
Derkes then challenged the team to redesign the winch using a more detailed concept of the customer's needs and manufacturing's needs. A design engineer and a production engineer visited the customer to learn how the winches were used and to ask questions of the actual users.
This launched the next phase of the team's work: to make real improvements. Redesigning the three similar winches was done concurrently with redesigning the production process, with the goal of having more shared and common parts and production steps. This would increase flexibility in responding to customer demands and give customers more choices at less cost.
Short-term and long-term impact
The redesigned production process took only five hours, and lead time was reduced to three days. Inventory for the new family of winches was reduced by 71% because the winches shared 67% of their parts. Not only was Bauer able to make a profit on the customized winch, but it was also able to reduce the price.
The customer had been concerned Bauer might stop supplying the winch, so when its managers were informed Bauer would continue to make the winch and the price would be reduced, they were delighted.
The team developed a keen sense of how the design of a product relates to lead time, costs and difficulties in manufacturing, purchasing, production planning and control, materials management, inventory size and quality. Consequently, Bauer successfully applied these lessons to improvements to many of its other product designs and processes, and it took on more customized work as it gained the flexibility to do so profitably.
1. W. Edwards Deming, Out of the Crisis, MIT Press, 1986.
2. W. Edwards Deming, The New Economics for Business, Government and Education, MIT Press, 1993.
3. Brian H. Maskell, Performance Measurement for World Class Manufacturing, Productivity Press, 1991.
MARY GANDER is a professor of production and operations management at Winona State University, Winona, MN. She earned a doctorate in operations management from the University of Wisconsin-Madison and is an ASQ member.