Lean Product Development and Manufacturing - A Critical Linkage
Posted on Fri, Sep 17, 2010
For years conventional wisdom has been that while North American manufacturing may migrate overseas at least R&D will never leave. Unfortunately, this is a short-sighted view that is already proving to be wishful thinking. One significant reason for this can be summarized in a recent quote from Paul Otellini, CEO of Intel:
"I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States."
While this is sobering to those involved in manufacturing it should be equally as alarming for people in other areas of business.
It is becoming increasingly clear that the physical location of production facilities is a leading indicator for the rest of the organization. As production moves overseas the pressure to relocate planning, materials, and sustaining engineering quickly becomes apparent. But more and more companies are also recognizing the integral relationship between manufacturing and product development.
World class development organizations leverage production experience for competitive advantage. These companies are continuously asking themselves:
- What improvement ideas are being generated from the manufacturing organization?
- How can R&D and manufacturing work more collaboratively to reduce the new product introduction cycle?
- What new manufacturing technologies can result in cost effective new products?
- Where are quality problems occurring most often and how can they be eliminated?
- What products can we produce at the lowest cost?
On one hand, video conferencing and other high-tech capabilities have made it easier to communicate between separate production and development facilities. But nothing can substitute for actually observing production in action and face-to-face discussion as the way to link development and manufacturing. So as more production moves offshore the pressure grows to move development as well.
Read the rest of the article at "Lean Product Development and Manufacturing".