I saw a recent LinkedIn study that says most millennials who graduate from college this year will work for four different companies in the first decade of their career. I’m guessing my MBA students are amused when I tell them that early in my career, many engineers not only worked for a single employer for ten years, we sometimes worked on a single product for ten years.
How times have changed. Today, manufacturers like Keysight go from product idea to first shipment in a matter of months. It’s the “and/and” world we all live in: today’s products have to meet strict time-to-market windows and be produced at the lowest possible cost and be extremely high quality. The students who ace my class know that the answers are found in the supply chain: Tear down the wall between design and manufacturing, and you can create a single integrated supply chain that allows you to move at warp speed. Here are three keys to making that happen.
1. Make it easy for R&D to do the right thing.
When I started my engineering career, it was common practice for R&D teams to complete a new product design, then “throw it over the wall” to manufacturing so the product could be built. Many companies continue to use that same siloed business model because they think that introducing manufacturing requirements into the design process slows things down. I’ve found the opposite to be true. When manufacturing issues are addressed early, delivery schedules are accelerated. Deep down, R&D teams know that designing for manufacturing is the right way to go, and they’re happy to do it—as long as there are tools in place that make it easy to create manufacturing-friendly designs. At Keysight, we found that the ideal toolset includes:
- Design guidelines to reduce rework in manufacturing
- A preferred parts database that allows known-good parts to be procured in volume
- Common components that are shared across platforms, reducing integration time and maintenance costs
- Rapid prototyping models that allow design ideas to be validated or abandoned quickly
2. Co-locate design and manufacturing.
I know what you’re thinking. Too expensive, right? What I’ve learned in my career and what we’ve proven at Keysight is that keeping design and manufacturing separate is actually more expensive than co-location. With separate teams in different time zones, small delays in communication can have a big impact downstream. The takeaway is that if you’re planning to design and introduce a major new product in Spain, it pays to have a New Product Introduction (NPI) manufacturing team co-located with the design team. Direct contact improves communication, so minor tweaks and course corrections can be discussed and implemented in real time. It keeps launch schedules on track, reduces overall product costs, and accelerates time to revenue.
3. Get senior management on board.
When I talk with customers about supply-chain optimization and the far-reaching cultural and operational shifts that come with it, I always get the same question. How do you get senior management buy in to something like this? It’s a fair question because of the misperceptions that exist around design for manufacturing (“slows us down”) and colocation (“too expensive”). The reality is that senior decision makers in every area of the company—whether R&D, manufacturing, test, or procurement—are focused on time, cost, and quality. Supply chain optimization touches all three. To prove it will work for your organization, identify a small project, find sponsors in R&D and manufacturing who are willing to do a test case, and track your results. When senior management sees the business case, they’ll get on board.
The business case at Keysight is compelling. Over the past five years, our integrated teams have cut annualized product failure rates by 50 percent, raised on-time arrival of new products to over 93 percent, achieved greater than 90 percent scheduling accuracy, and increased annual profit margins by reducing scrap, rework, and inventory. It’s a case study for how modern manufacturing can keep up with the disruptive pace of today’s technologies. It also makes a pretty good curriculum for the next crop of management executives who will soon occupy the C-suite.
Pat Harper is vice president and general manager at Keysight Technologies and an adjunct professor teaching global supply chain management in the Executive MBA program at Sonoma State University and Project Management in the Executive MBA program at the University of San Francisco. Read his bio.