1
ETM 5111
Introduction
to
Strategy, Technology and Integration
Instructor: Gregory H. Watson
Session 4 – Part 1
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
2
Session 4:
Managing Projects for Rapid Time-to-Market
Instructor: Gregory H. Watson
Introduction to Strategy, Technology and Integration
ETM 5111 – Summer 2003
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
3
Today’s topics:
• Part 1:
– Managing Projects for Rapid Time-to-Market
– Design for Excellence (DFX) Principles
– Global Manufacturing & Supply Chain Integration
• Part 2:
– Best Practice Engineering Management Methods
– Core Competence, Process Capability & Staffing
• Part 3:
– Course Summary
– Extra Credit Project
– Final Examination Instructions
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
4
Managing Projects for Rapid Time-to-Market
Does it really make a difference?
Instructor: Gregory H. Watson
Introduction to Strategy, Technology and Integration
ETM 5111 – Summer 2003
Session 4 – Part 1
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
5
Product success factors - It takes all three!
As Perceived by the Customer:
1) Unique and superior product
– Superior quality with respect to competitors
– Good value for the money with respect to customer price tolerance
– Superior price/performance with respect to alternate choices
– Fills customer needs, wants and preferences
– Provides a useful benefit – highly visible to economic buyer
– Unique features and attributes not available from competitors
2) Superior marketing and customer service – aligned to requirements
3) Correctly introduced to the market
– Time-to-Market: How long it takes to develop the product.
– Timing-to-Market: When the product is introduced.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
6
Leading the market or lagging the market?
Being first in a new market has definite [obvious] advantages, but
there may be legitimate reasons not to lead into a new market:
–
–
–
–
–
Technology uncertainty drives significant business risk
Market requirements or potential acceptance is uncertain
Initial market size not sufficient to support a new product
Pricing of new technology is not yet commercially viable
Company established in older technology and wants to milk the
cash cow – waiting to launch the new product when competition
determines the market timing
1993 Printer War: Compaq verses Hewlett-Packard
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
7
“Time-to-Enter” vs. “Time-to-Market”
• When to enter markets is a strategic planning decision. (There are
good reasons to support either a Leading or a Lagging new product
introduction strategy)
• “Time-to-Market” is an implementation result, with reference to the
planned schedule for launch date and it has penalties for being late.
• Commercial success requires both time and timing = RHYTHM
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
8
What does a “market window” look like?
Market diffusion
O
P
P
O
R
T
U
N
I
T
Y
Not This!
Opportunity is
not uniformly
distributed!
TIME
O
P
P
O
R
T
U
N
I
T
Y
Product rollover
More
Like
This!
TIME
The majority of sales are in the mature product life cycle phase.
Opportunity is not uniformly distributed throughout product life.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
9
What drives business success?
% Loss in After Tax Profit
Study assumes:
• 20% market growth
• 12% annual price erosion
• 5 year product life
• Dynamic high-tech market
33%
Loss
Although this study uses very aggressive
business assumptions, the relative impact
of time-to-market is clear.
22%
Loss
3.5%
Loss
Six months
late to the
market
Production
cost is 9%
too high
In a McKinsey study that was reported in
Fortune Magazine (February 1989), the
loss to total lifetime profitability from three
different R&D problems: time to market
slippage of 6 months, overrun of cost of
production by 9% and 50% overrun of the
product development budget.
R&D cost
over budget
by 50%
Product development teams must focus on
the time-to-market as a critical dimension
of new product development success!
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
10
Speed means Faster response – fewer surprises!
Accuracy for
reduced TTM
Accuracy for
normal TTM
Accuracy Curve
Time-to-market
Project Cost
% Accuracy of market analysis
Two important relationships to remember:
Time-to-market
Shorter development time leads to:
• Increased product life-cycle revenue and market penetration
• Success in time-sensitive markets due to improved predictability of release
• More successful products at lower engineering costs
• Less development waste and better resource use
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
11
Missing time-to-market – project slip rate:
• Slip rate is a measure of the project team’s ability to maintain it’s
forecast project schedule.
• Slip rate can be calculated for the project as a whole or for the
components of its design (thus indicating where the slippage is
occurring) all the way down to the individual task measure.
• The improvement of project-level slip rate is a measure that can
be used to track improvement in project development from one
new product development to the next.
• The calculation of slip rate is easy:
Planned Duration (months)
Slip Rate
=
X 100%
Actual Duration (months)
• Slip rate must be re-estimated at regularly in order to determine
if a project is in serious difficulty or risk to slip introduction date.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
12
Managing project deliverables using slip rate:
Predicted Completion Date
T12
T11

T10
T9
T8

T7
T6
T5

T4
T3
T2
T1
T0
T0 T1
One way to manage a project using
slip rate is to graphically plot the slip
rate for each item in the development,
so that their intersection with market
Scheduled launch can be observed. As the new
product development progresses, the
Product
convergence with a ‘reality line’ can be
Launch
observed for those elements that are
Date
on schedule. Development items that
Reality Line
are not on schedule will not be
converging with the reality line prior to
the schedule product launch date.
T2 T3 T4 T5 T6 T7 T8 T9 T10 T11 T12
Date of Prediction
Managing using slip rate allows project managers to reallocate their
resources to the project deliverables that are on the critical path for
making the scheduled market release date.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
13
Slip impact on revenue loss (no competition):
Product Revenue ($)
Lost
Revenue
Market
Peak
Time
Late
TIME
This is a “best case” scenario!
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
14
The business impact of product launch timing:
Illustration:
Quarter Volume Unit Price Company1 Company 2 Company3
MS GP
1
2
3
4
5
6
7
8
9
10
11
12
5,000
30,000
65,000
73,000
74,000
73,500
73,000
68,000
60,000
50,000
35,000
10,000
$375
$350
$325
$300
$285
$271
$257
$244
$232
$221
$220
$185
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
MS
GP
MS GP
100% 30% 0%
70 38 30
50 35 35
45 35 40
42 33 42
42 32 42
41 31 41
41 31 41
40 30 40
40 28 40
40 19 40
39 18 39
0%
30
32
33
33
32
31
31
30
28
19
18
0%
0
15
15
16
16
18
18
20
20
20
22
0%
0
22
28
27
26
26
26
26
25
17
16
15
Price erosion as product approaches maturity:
Price
$400
$300
$200
0
5
10
Quarter
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
16
Market volume profile of product sales:
80000
100
70000
50000
Cum%
Volume
60000
40000
30000
20000
50
Enter Company #3
Enter Company #2
10000
0
0
0
5
10
Quarter
Total Market Sales (# units)
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
0
5
10
Quarter
Product S-Curve (% total unit volume)
17
Market revenue across the product life cycle:
Market Revenue
$20,000,000
$10,000,000
0
0
5
10
Quarter
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
18
Gross profit from product life cycle revenue:
Market Profit
$7,500,000
$5,000,000
$2,500,000
0
0
5
10
Quarter
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
19
Total units sold – broken down by competitor:
First place = 13% more units sold
300,000
273,010
242,610
250,000
200,000
150,000
100,880
100,000
50,000
0
Competitor 1
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
Competitor 2
Competitor 3
20
Total revenue broken down by competitor:
$80,000,000
$74,872,527
First place = 16% more revenue
$70,000,000
$64,533,777
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$26,180,696
$20,000,000
$10,000,000
$0
Company 1
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
Company 2
Company 3
21
Total gross profit broken down by competitor:
$30,000,000
First place = 23% more gross profit
$25,000,000
$24,165,846
$19,690,821
$20,000,000
$15,000,000
$10,000,000
$6,714,453
$5,000,000
$0
Competitor 1
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
Competitor 2
Competitor 3
22
Summary – competitive impact of late-to-market:
• There will be a smaller total market opportunity.
• There will also be a smaller market share available to capture.
• It will be extremely difficult to displace the incumbent:
– Increased displacement cost
• Price to buy-in (reduces revenue and profit)
• Increased marketing effort
• Business concessions
• Impact of being second-to-market:
– Must overcome incumbent’s customer loyalty and ease customer’s
pain to change or switch buying to your product.
• Being first in a NEW market may or may not be a good strategy – it all
depends on the customer’s time-to-acceptance of the technology.
• Time-to-market can be a major factor in the economic success or
failure of a product – especially in short life-cycle products.
• Time-to-market is more important to product success than R&D cost.
• Being “late-to-plan” almost always leads to difficult market problems
that are seldom overcome.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
23
Personal reflection:
Think about your company’s latest experience in introducing a new
product. How would you describe that product – a variant of prior
products or a departure into totally new design? How fast was that
product brought into the market? Was it first or second into the field
or was it a late arriver into the market? What was your company’s
strategy for launching and introducing the product? Did it compete
on price or did it compete on the feature performance? If you were
to describe your company’s time-to-market performance would you
classify it as competitive? If not, what should be changed to make
it more competitive?
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
24
Design for Excellence (DFX) Principles
Instructor: Gregory H. Watson
Introduction to Strategy, Technology and Integration
ETM 5111 – Summer 2003
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
25
What is Design for Excellence (DFX)?
• DFX is a planned approach to more rapid new product development.
• A knowledge-based approach to design to maximize all the desirable
characteristics of the ‘extended product’ while concurrently minimizing
total lifetime cost of the product. The DFX emphasis is on both the
elements of product design and ‘downstream’ activities such as costeffective distribution, installation, operation and service. Other DFX
objectives include: reliability, safety, conformance to environmental
regulations and product liability prevention.
• Without DFX many of the ‘ilities’ would be developed in a haphazard
manner and would not be implemented in a consistent style across
the product lines.
• NOTE: Some classifications would replace DFX by Design for
Manufacturability (DFM) – as the definition for all of the ‘ilities’ related
to designing a product appropriately for its intended market. This
definition does disservice to both the content of DFM and the
importance of all other ‘ilities’ which have their own engineering
support communities.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
26
What are the attributes of good design?
•
•
•
•
•
•
Functions – what the product does
Performance – how well it does it
Features – how the product is presented
Appearance – how well a product appears aesthetically
Safety – how the product prevents harm to people
+ “the X-ilities” of DFX – in addition to profitability:
– Quality, reliability, availability and durability
– Serviceability, maintainability and repair-ability
– Manufacturability, testability and ship-ability
– Install-ability, upgrade-ability, and customize-ability
– Sustainability, portability and recycle-ability
– Usability and access-ability
• Cost – lowest total or ‘lifetime’ cost – acquisition, operation as well
as the cost of obsolescence.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
27
What should be the DFX design objectives?
Fastest time-to-market plus:
• Lowest total cost – viewed as a cost to “society” after the style of
Genichi Taguchi’s quality loss function:
– Quality loss function – poor quality cost includes the cost borne
external to the organization (beyond scrap or defect repair) and
must comprehend the cost to the customer as well as the loss
in productivity by the society as it performs corrective action,
expediting to adjust for the impact of the failure as well as the
cost of rework on the entire ‘chain’ of productivity that will reach
the ultimate customer.
• Align to external product requirements – the best way to reduce
the cost to society is to understand its requirements and mistakeproof those potential failures that drive the elements of total cost.
• Right the first time – preventive action prior to release of the
design to full scale production is the most cost-effective design
approach. This means that the Test-Analyze-Fix sequence used in
design must effectively and efficiently find product defects.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
28
Quality, reliability, availability, & durability:
• Quality: the performance of the product as delivered
which includes delivery, installation, initial use, as well
as appropriateness of the application.
• Reliability: the useful product life once installed and
operating correctly.
• Availability: the ability to use the product as desired
by the customer (eliminates downtime due to either
scheduled or unscheduled maintenance).
• Durability: ruggedness of design – ability to withstand
punishment during use.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
29
Serviceability, maintainability & repair-ability
• Serviceability: the ease of conducting service on the
product – one way to mitigate reliability issues is to
anticipate failure and provide proactive service prior to
the expected service problem.
• Maintainability: the ability to maintain a product which
includes its documentation, preventive maintenance
schedule as well as spare parts usage prediction and
stocking process.
• Repair-ability: the ease of diagnosis and repair once
a failure has been observed.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
30
Manufacturability, testability, & ship-ability:
• Manufacturability: the ease of final assembly and the
manufacture of parts by their basic production method
(e.g., machining, casting, stamping, forming, etc.).
• Testability: the ability to test the critical performance
parameters of the product which includes built-in-test
capability, data capture and recording, and closed-loop
engineering process control.
• Ship-ability: the ability to securely ship and distribute
products to the ultimate customer from the production
point – includes packaging design, material handling,
container reuse, labeling, and recycling elements.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
31
Install-ability, upgrade-ability, & customize-ability:
• Install-ability: the ease of installation of the product
at its point of ultimate use – including instructions for
installation, initial training of operators, tutorials in the
use of key functions, and accompanying equipment.
• Upgrade-ability: the ability to enhance the feature
set of a product through a system of accessories or
additional features that increase performance.
• Customize-ability: the ability to make the product
perform as desired by each individual customer – this
capability may be delivered using customer-modified
menu selections or factory-installed options.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
32
Sustainability, portability & recycle-ability:
• Sustainability: the friendliness to the environment of
the product and its production processes (this need is
typically met by an ISO14000 management system).
• Portability: the ability to move the product from one
site to another or from one workstation to another – it
includes the ability to change system components
independently of the performance of sub-systems
(e.g., changing a CPU without changing printers, etc.).
• Recycle-ability: the ability to recycle the product or its
parts at the time of its obsolescence.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
33
Usability & access-ability:
• Usability: the attention to safety, ergonomics and the
support functions (i.e., help functions, user tutorials,
and problem diagnostics) required in a product to
make it as friendly as possible for operator use.
• Access-ability: the ability of disabled people to use
the equipment (e.g., support for hearing disabled or
blind people).
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
34
DFX and the pressure of time-to-market:
People make it work!
• Without a structured approach to DFX, many product
compromises are likely to be made in the rush to get the product
into the market – and the product may not fulfill a ‘competitive’
design intent.
• Without a coordinated effort like DFX, many of the design
support services that have ‘special interests’ in one or more of the
DFX elements may not be as ‘supportive’ of the sense of urgency
to get the product to the market due to concern that their
perspective will not be adequately addressed in the design
process – this creates a resistance to rapid development.
• Without a comprehensive communication as occurs in DFX,
effort to achieve many of the DFX sub-objectives of the product
design could prove counter-productive as each element suboptimizes the total time-to-market initiative in order to achieve its
component of a rapid development process.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
35
Personal reflection:
Think about the last new product that your company brought into
the market. What was the management approach used relative to
the DFX disciplines? How does your organization manage the DFX
disciplines to assure that your product maximizes its limited window
of revenue opportunity?
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
36
Global Manufacturing & Supply Chain Integration
Instructor: Gregory H. Watson
Introduction to Strategy, Technology and Integration
ETM 5111 – Summer 2003
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
37
What has influenced the plant location decision?
• Past influences included:
– Union and labor support
– Transportation and proximity to markets
– Location of key suppliers or technologies
– Community (education, quality of life, etc.)
– Taxes (state and local) and incentives
– Communities of technology excellence (e.g., steel
in Pittsburgh, automobiles in Detroit, tires in Akron
and semiconductors in Santa Clara).
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
38
Plant expansion under the traditional model:
Expansion
Plant 1
Expansion
Plant 2
Original
Location
Expansion
Plant 3
All functions are duplicated at each facility – each operates independently.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
39
Why the interest in global manufacturing?
• Why move production overseas?
– A big reason is the potential for increased profit:
• Operating costs are lower
• Taxation is more beneficial
– A second big reason is the ease of doing business:
• Product legal issues are less complex
• Less regulation and government interference
• BUT, what is the impact on product development?
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
40
Today’s influencing factors on plant location:

LABOR COST & AVAILABILITY
LOWEST AVAILABLE

TAXES & DUTIES
GLOBAL

INTERNATIONAL AGREEMENTS
GATT, NAFTA, E.C.

GOVERNMENT ASSISTANCE
GRANTS, LOANS

GOVERNMENT
TYPE & STABILITY

GOVERNMENT REGULATIONS/LAWS
ENVIRONMENTAL
SAFETY
BENEFITS
TORT SYSTEM

COMMUNICATION FACILITIES
GLOBAL CONNECTIVITY

LOCATION
TRANSPORTATION
PROXIMITY TO MARKETS
& SUPPLIERS

TECHNICAL SUPPORT RESOURCES
LOCAL EDUCATION SYSTEM

FINANCIAL & MONETARY SYSTEMS
LOCAL CAPITAL FUNDS
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
41
How does location impact product development?
 Materials – potential decrease in parts cost
 Product Development – potential coordination difficulty
 Sales – potential decrease in product availability
 Administration – potential increase in admin costs
 Transportation – potential increase in transportation
 Labor & Overhead – potential decrease in labor cost
 Taxes – potential decrease in tax expense exposure
 Tariffs – potential decrease in cost of trade tariffs
Most of the benefits relate to cost while most of the
disadvantages relate to coordination.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
42
Profitability comparison – USA vs. Far East:
$25.00
U.S.
FAR EAST
$20.90
$20.00
$15.00
$13.75
$11.51
$10.00
$5.21
$5.00
$2.75
$3.26
$1.55
$0.23
$0.00
LABOR & OH
TARIFFS
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
TAXES
PROFIT AFTR TAX & TARIFFS
43
Labor neutral comparison of tax and tariff impact:
$25.00
US
US LABOR & OH=FE
FAR EAST
$20.90
$20.00
$15.00
$13.75
$11.51
$11.51
$10.00
$6.79
$6.27
$5.21
$4.55
$5.00
$2.75
$3.26
$1.55
$0.23
$0.00
LABOR & OH
TARIFFS
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
TAXES
PROFIT AFTR TAX & TARIFFS
44
Disadvantages of USA industrial policy:
• Taxes:
– Flat tax system won’t help.
– Sales tax as revenue source would level the playing field if:
• Domestic and imported products both taxed same in U.S.
• U.S. exports should not be taxed by U.S.
• Regulation:
– OSHA (safety & health)
– EPA (environment)
– ERISA (retirement)
– American Disabilities Act
– Striker replacement
– Family medical leave
• Legal system:
– Product liability costs over $80 Billion/year – more than all
manufacturing capital investment! This is a tort lawyer’s idea
of heaven!
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
45
Off-shore manufacturing first steps:
MANUFACTURING
Focus areas
MARKETING
PM
ENGINEERING
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
QUALITY
46
Typical first step in a global expansion strategy:
Develop remote production capability:
Global
Plant 1
Global
Plant 2
Original
Location
Off-Shore
Global
Plant 3
Only manufacturing and quality functions are duplicated at each facility.
Initial production is typically final assembly using pre-shipped “kitted” parts.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
47
Match global production output to local demand:
Develop remote production maturity:
Global
Plant 1
Global
Plant 2
Sales, Admin, R&D
and Corporate Office
Off-Shore
Global
Plant 3
Local investment driven by ‘local content’ requirements and individual
market demand for the region served. Flexibility is created to serve all
regions from any production facility.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
48
The complexity of today’s global production:
Thailand
Component B
Component A
Production of parts is done in
different locations than where
sub-assemblies are completed
which is also different from the
point where final assembly is
conducted. All tasks are divided
into distinct ‘focused factories’
that accomplish part of the work
at the lowest total cost.
Final assembly shipped
Malaysia
Cost is the decision driver!
Sub-assembly
Singapore
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
49
The dominant strategic concept:
DISTANCE
The emerging global manufacturing strategy –
“VIRTUAL CO-LOCATION”
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
50
Communication is THE critical success factor!
Good communication turns ‘virtual’ location into a ‘reality’ show!
• All information must be available in your information
system – in real time – as if the sites were all local!
• All sites must appear to an outsider as if they were one!
• Rules for communication system design:
– Information must be available instantly – 24 X 7!
– All information systems must be networked.
– All locations should have the same capability.
– All locations should use the same software.
– All communication systems must be seamless and
available in an interactive mode to facilitate dialog:
• Voice, video and data
• Wired, wireless and satellite
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
51
Remote design centers with remote production:
Designs are developed through virtual coordination and transferred
using information technology to distributed, remote production sites.
Design
Center 1
Design
Center 2
Design
Center 3
Global
Plant 1
Global
Plant 2
Global
Plant 3
Assembly Drawings
Test Instructions
Process Instructions
Production Schedule
Tool Drawings
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
52
Remote manufacturing requires standardization:
How can you compare if you don’t know what you are measuring?
The following systems must be the same between all design
centers and remote factories:
• CAD/CAM drawing systems
• Parts numbering
• Release and change control procedures
• Process & test instruction formats
• Supplier approval procedures
• Product testing systems
• Problem solving processes & failure reporting
• Factory data collection and report outputs
• etc., etc., ....etc.
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
53
The engineering challenges of a remote factory:
• Synchronizing design transition to multiple locations
• Transition from design to factory across an ocean
• Supporting product launch at the remote factory
• Global supply planning and inventory management
• Correlation of measurement systems and testing
• Trans-lingual / multi-cultural interpretation
• Product configuration control
• Process standardization
• Remote problem solving
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
54
Global manufacturing summary:
• Global manufacturing represents a significant challenge to
manage all corporate functions of a Corporation – especially
the technical management capability and coordination of the
product configuration at multiple global locations.
• Global manufacturing requires corporate-level planning and
the standardization of production processes, documentation
and assembly procedures.
• Global manufacturing is not an easy task, but it is essential to
do it correctly in order to survive in world markets.
Warning: Both pay-backs and penalties are BIG!
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
55
Personal reflection:
Think about how your organization is organized in its manufacturing
operations. What is your organization’s global strategy? What will
it need to become in the future? What natural expansions can you
foresee that could build on strategic alliances or strategic supplier
relationships to expand overseas?
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.
56
ETM – 5111:
BREAK
Instructor: Gregory H. Watson
Summer 2003
Session 4 – End of Part 1
Oklahoma State University
© Copyright 2003 by Gregory H. Watson. All rights reserved.