Check Up of the Technical Department

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]Company[/custom_headline]
Our client is an Italian company leader in the design and manufacturing of tank trucks and special trucks for dangerous goods transportation. The company that operates on the National as well as the International market is particularly appreciated because of the very high quality of its products and its capacity to design and made them to perfectly fit customers’ needs. In a market sector dominated by big multinational groups, our client has been able to identify an important niche thanks to these distinctive features.

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]The Challenge[/custom_headline]In the last few years the company has had to face a difficult situation due to the unfavourable economic trend and to organizational problems such as long time-to-market, poor customer service, decreasing job margins. The task assigned to GC&P was to carry out an in depth analysis of the Technical Design Area with the objective to identify the major problems in the product development process, to define guidelines for improvement and to teach new methods and tools to company’s people.

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]The Action[/custom_headline]The main activities performed by GC&P’s consultants have been:

1. Interviews with all the people involved (Technical Design, Production, Purchasing, Marketing, Domestic and Foreign Sales) 2. <b3. Value Stream Mapping

1st Activity: interviewing all the people involved in the process is a first step to understand their competence, their flexibility, their openness to change, their result orientation. Furthermore talking to people gives an idea of the company’s general climate and of some major organizational problems.

2nd Activity: Measuring is the first step toward improvement. Only if a set of performance indicators is in place it is possible to measure the progress from an initial situation to the planned objectives and, in more general terms, to measure the progress along the path of continuous improvement. The basic indicators we have monitored are: On time deliveries: can the company meet promised delivery dates? Job Lead Time: What’s the average time needed to develop a product? Success Rate: How many offers become orders? And what are the main causes of failure? Cost and profitability analysis: Are we sure our products are profitable?

An in depth analysis of these indicators has shown the existence of many problems: Time-to- market is too long because of an inefficient product development process based on the batch and queue logic. Success Rate is quite low and this means the Technical Design Department spends most of its time to make offers that will never be accepted Very little attention is given to the definition of Target Costs and this is one of the causes of low profitability.

3rd Activity: Value Stream Mapping is the best method to analyze a process and to identify its problems and inefficiencies. Making use of visual techniques we have mapped the whole process of product development identifying three major problematic dimensions:

Process: the process is the same for all product families in spite of their differences in terms of complexity and profitability. In addition there is no definite methodology for product development, no sharing of information among the various functions and a lot of waste of various kind (waiting, lack of information, frequent redesign etc.)

Organization: an organization by department is the least effective when products are made to order. In addition the role of some persons is far from clear while it is unclear who is responsible for some functions.

Tools: the bill of material in many cases is created at the end of the product development process, while management information system is little used and efficiency is significantly reduced because less advanced CAD systems are still in use.

After sharing our views with Top Management we have developed an action plan aimed at solving the problems identified.

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]The Results[/custom_headline]
At the end of our work we have proposed the guidelines (perfectly in line with the Lean Product Development approach) to improve the performances of the Product Development Department: – Creation of interfunctional job teams; – Transformation of product development process into a continuous flow from customer order to delivery eliminating waiting times, redesigning, lack of information etc. – Visual management of projects using tools like Oobeya – Reduction of product development costs using the “Design to cost” methodology – New office layout to improve interpersonal communication