'There is nothing so useless as doing efficiently
that which should not be done at all'.
your projects align with your strategic needs?
Front-end process of new products is a critical part of the business that often causes rippling
effects to operations’ key metrics like quality, delivery, cost and profitability.
process is the part of your business that determines organizations’ new products, new markets, improvement projects,
supplier development and people development. It makes it clear what is important, and what the organization values.
Unfortunately, most often, organizations permit initiation of hundreds of projects that are not aligned
with the goals and they never get completed, which dramatically adds cost, extends lead times, and demoralizes employees.
We have noticed that most organizations have 70% to 80% of the projects that are either not aligned or weakly aligned with
Companies that have robust front-end processes have increased the bottom line results from new
products by up to 600% in 3 years. Financial impact is dramatic, employee morale is greatly improved, and the company has
resources to execute other strategic programs. New product lead time also is dramatically reduced by half or two thirds as
the organization reduces low-priority projects.
We have been fortunate to have several opportunities to analyze
and improve the front-end processes. Some of our findings of success factors and pitfalls are listed below.
Aligned front-end process framework of successful organizations include:
needed to promote this type of focus is clearly defined in numbers not adjectives
defined value-added customer features and benefits
Resources are estimated
in hours and dollars required for the project
Justification for the project
with pricing and volumes are solidified up front
Sales volumes, prices, or
project costs are committed to up front, before they start major projects
leadership governance body is in place to assign/exit projects and check the progress
Non-aligned front-end processes include:
Reduced 8,394 suppliers to 242 suppliers reducing total purchase part cost by developing a front-end process
and strategy to guide sourcing of parts
Stopping two unaligned mega-projects
enabled 300% revenue growth in one year
Implemented a structured framework
for new product development which increased the return per engineer by six times
focusing on the most significant quality issues, we reduced quality cost by 20% per year
Identified 20% of revenue locked up in excess inventory and process inefficiencies caused by poor new product and
material management processes
As obvious as this seems, very few companies
have a structured and focused framework for their front-end new product development. As with most planning, start with the
strategy, plan the execution, measure the results and take timely corrective action to assure your organization is getting
the maximum results to the bottom line. Once you know your strategy, discipline is needed to stay the course, until you have
hard facts that convince you to change. The more predictable your decisions are the faster your organization will move forward
and the more the bottom-line will grow. The more predictable your front-end process, the more agile your organization will
become in its response to market changes. The more predictable your front-end process becomes the more cash will flow to your
of Constraints — Managing Bottlenecks
have a bottleneck that's slowing down operations. Let's fix it with more people and equipment!"
This is the norm in manufacturing and the service industry today.
There are a few problems associated with that type of thinking:
The budget is the most obvious and immediately painful. When the bottom line
takes a hit, the effect is noticed in an instant — especially when the expense was not built into the current budget.
Regardless of whether the "solution"
is more equipment or people, space will be needed, and in well-managed organizations, excessive space or assets are not the
The most important factor
is whether or not the problem has been solved, or, has it just been pushed further down the line, like squeezing a tube of
Any organization that
has a process — be it administration, manufacturing, healthcare, or other service, will always run into a constriction
in the flow. Managing bottlenecks effectively requires a relentless pursuit to unleash hidden capacity at the bottleneck site.
This will result in increased throughput without added capital expenditures — Theory of Constraints!
PhD, will conduct the July 20 session of the Theory of Constraints seminar in Austin, Texas. Please see the Training Seminars
section on the right panel for more information or to register.
OpEx Solutions is an organization that helps identify strategic
areas for improvement and provides effective high-value, low-cost solutions, training, and project management to drive significant
productivity improvement through the use of operational excellence tools and systems in most manufacturing and service industries.
With a variety of offerings to choose from, we're
confident of working with your organization to find and define your own way through:
If you have any questions or comments,
please feel free to contact us.
Find out more About Us, then look at our Stategy to make your possibilities a reality.
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