Blog Archives

Tips To Reduce Your Time-To-Market

October 2 2012  |   Cliff  |  All Posts, Business Tips, Manufacturing Tips, Product Development  |  Comment

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product Development

Reduce your time-to-market.

When developing products, an entrepreneur, startup, inventor or small business can rarely assume that the market will wait or that a competitor will not introduce something smaller, better, faster, and at a lower price point. Therefore, reducing time-to-market (TTM) is a key requirement for business success and can be a competitive advantage for those that do it right.

Here are a few areas to consider that will help your organization improve time-to-market:

• Product specification

• Fast prototyping

• Incremental design

• Lean development teams

Product specification can take on a variety of forms and many times is not just one document but a collection of documents. Whatever the form, when the design of the first prototypes begins it must have cross-organizational support that delivering to this specification will produce a viable product (price, features, product cost, investment, schedule)  in the market place without additions, modifications, or deletions. This may not be absolutely achievable in the real world of product development, but the point to be made here is that a moving spec can produce major design resets, adds complexity and produces secondary defects which will lengthen TTM, increase investment cost and potential product costs.

Fast prototyping can reduce your time to market. The team that can design, build, test, and fix (DBTF)) often has a huge market advantage! Concurrent engineering efforts, shorter DBTF cycles for subsystems with periodic fully integrated product builds, fast tooling suppliers, and using a plethora of fast fabrication methods for parts all contribute to taking weeks off schedules.

Incremental design and innovation must be considered in shortening time-to-market.  If design of complex systems was easy then there wouldn’t be a need for iterative design cycles, it would just be design, build, and ship. But it is very difficult and the “does everything” or “innovate in all subsystems” in order to kill the competition mentality will guarantee cost overruns, schedule slips, late spec changes, etc. The essence of incremental innovation is to complete the product development cycle many times over a period of time which results in significantly greater organizational learning, revenue generation, and market understanding.

Development team should be cross-organizational, at the very least members from marketing and manufacturing. While team size will be driven by the project, many times there are just too many people involved in the development. They add very little and many times just suck bandwidth away from the value add engineering. Full-time vs. part-time is the key to a small team and maintaining team integrity for the entire length of development is important.

Have questions on how you can improve your time to market? Contact us here.

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What Your Prototype Says About You

March 20 2012  |   leardonsolutions  |  All Posts, Insider's Perspective TIps, Product Development, Prototyping  |  Comment

Product Development, Leardon Solutions, Manufacturing, San Diego, Southern CaliforniaDesigning and fabricating prototypes during the product development life cycle is a critical part of the product learning process. Successful prototypes will prove that the product idea is feasible, will help qualify the engineering design, and are needed to receive customer feedback prior to producing higher production volumes. The interesting thing about a prototype is that it is an extension of you, your company, and the values of your company. In other words, these prototypes give others a first impression of you and your efforts. Below are four questions investors, distributors, customers, and suppliers will immediately answer upon seeing your prototype:

(1) At what stage is the product in the product development life cycle? A prototype will portray the stage of your product in the product development life cycle. It is immediately apparent to an expert if your product is 5% complete or 95% complete after seeing the prototype. It is important to accurately describe how far along the product is in the product development process when speaking with experts, otherwise it will be very clear that you don’t know much about developing products.

(2) How well have you thought through your product idea? The prototype is a physical embodiment of your product idea. When people see your prototype, they will immediately know if you have thought through only the simple aspects of your product idea or if you have dug deep into the critical aspects of the product such as the user and human interface, the detailed design, the interactions with other products, and the manufacturing or assembly issues. Also, the prototype will show if you have a true innovation, an improvement on an existing product, or a trivial reinvention. If you show up to a meeting with a product prototype that only displays the external features of the product but doesn’t demonstrate the functionality, you will get many questions about how you intend to design the product so it functions properly. If you say “I’ll let the engineers handle that….”, then it will be apparent that you haven’t thought through the idea well.

(3) Do you understand the costs associated with developing a product? When an entrepreneur is in a meeting with a potential investor, the investor is typically looking very closely at the financial forecast and plan to determine if it is realistic. If an entrepreneur brings a mature production prototype to this meeting, the investor will expect that the financial plan has very detailed and accurate numbers. This production prototype allows the entrepreneur to get accurate quotes on the costs associated with taking the product to the next level. If the prototype is only at the proof-of-concept level, the financial plan will include rough estimates and the accuracy of the financial model will be scrutinized in detail.

(4) How prepared are you for the challenges ahead? Nobody ever said that product development is an easy endeavor. There are many roadblocks and potholes on the product development path that must be overcome. Producing prototypes is one of the first. Based on the quality, functionality, and overall look of the prototype, people can easily gauge how prepared you are to take on the challenges ahead. Show them that you are prepared for the future challenges of product qualification, production, and manufacturing scale-up by demonstrating your prototype is the best possible embodiment of your product idea.

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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Tips to Cut Product Development Costs – Part 2

March 13 2012  |   leardonsolutions  |  All Posts, Business Tips, Manufacturing Tips, Product Development, Prototyping  |  Comment

Leardon Product Development Tips, Manufacturing ServicesIn Part 1 of Tips to Cut Product Development Costs, three ways that innovators, entrepreneurs, start-up companies, and small/medium enterprises can be smart and spend the least amount of money throughout the product development life cycle were discussed. Here are the next three ways that entrepreneurs, innovators, or small companies can save money without cutting corners or skipping product development phases.

Avoid Multiple Hand-Offs During the Product Development Life Cycle
Most entrepreneurial, start-up, or small/medium companies do not have large internal staffs to handle all stages of the product development life cycle. These companies typically nearsource or outsource much of the work in an attempt to minimize product development costs and maximize development speed. While nearsourcing and outsourcing can improve your costs and speed, it unfortunately can create a costly and slow system if not managed properly.

Many service providers and suppliers do not provide an end-to-end product development solution from product idea to manufacturing, forcing companies to hire multiple service providers throughout the product development life cycle. When entrepreneurs piece together a product development team by hiring these outside firms, an inefficient team that doesn’t have visibility to the tradeoffs between cost, schedule, and scope is sometimes created. To create an efficient system, the innovator or entrepreneur should try to minimize the number of hand-offs throughout the cycle by hiring an end-to-end engineering, prototype, and manufacturing firm that internally handles all the hands-offs without dropping or losing any of the knowledge gained in the last phase.

Here are some tips for an efficient product development team:

  • Have one experienced internal program manager for the complete project that is responsible for product/project cost, schedule, and scope.
  • Minimize the number of hand-offs by hiring one company that can take the project from design concept to manufacturing.
  • Eliminate any supplier agents, go-betweens, or representatives that don’t allow you to work directly with the suppliers doing the work.

Don’t Buy Production Tooling Until Final Production Qualification.
When a product enters mass production phase, fabrication methods different from those used to produce prototypes are required to meet the quantity, cost, and schedule goals of mass production. Some examples of these production tooling methods include injection molding for plastic parts, progressive stamping for metal parts, production lines for efficient assembly, and wave soldering for printed circuit board assembly. Prior to starting mass production qualification, there is no need to purchase these production tools early in the product development life cycle. Delay the cost of these production tools by using early proof-of-concept and design prototypes for as much testing as possible.

There is usually no need to spend money on any production tooling in the proof-of-concept or design prototyping phases. Even if a production-like method must be used to produce a part in a prototype, the cost can be minimized by fabricating only what is absolutely necessary to make the parts. For example, if you are producing a rubber seal in a prototype, a prototype tool can be fabricated inexpensively to yield the high quality part required. Do plenty of research if a prototype company says that they need to produce a high-volume production tool for a part being used in your prototype because more than likely this is not required.

Minimize the Amount of Product Inventory Purchased.
Once you enter into the production qualification phase, try not to lock up cash in expensive inventory by purchasing large quantities of your product. Work with a supplier who is happy to provide you with a smaller volume, say 1000 production products, that will allow you to test out the market prior to ordering more. This will also prevent expensive inventory reworks.

A misconception in the world of entrepreneurial product development is that all suppliers require entrepreneurs to buy tens of thousands or even hundreds of thousands of products on their first order. For a custom product, it is recommended that the entrepreneur only buy as many products as necessary to fulfill the immediate customer demand of the product. There is a high chance that changes will be required as sales begin so keeping inventory low will minimize the financial pain of any design changes, reworks or repairs.

There are many entrepreneurs who are “up-sold” to higher quantity orders for a lower product price. There are other entrepreneurs who are shocked to learn that a supplier is unwilling to take a low quantity order and will not to work with the customer unless a large order is placed. It is important to know the prices at all order quantities early in the relationship with the supplier. If the supplier is unwilling to fulfill low quantities in the range of 1,000 products, it might be best to switch to another supplier. Chances are high that there are hundreds of other suppliers that are capable of supplying the product and willing to work with entrepreneurs.

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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Avoid Design Changes When Possible: Tip #1

January 30 2012  |   leardonsolutions  |  All Posts, Insider's Perspective TIps, Manufacturing Tips, Product Design, Product Development  |  Comment

Product Development, Leardon Solutions, Manufacturing, San Diego, Southern California

At Leardon Solutions, we are starting a new blog series to help provide more information on the product development process. Our new series is called “The Insider’s Perspective” and will focus on tips and teaching that we have learned along the way that we want to share with you. It is our hope that these tid bits of valuable product development knowledge will help you succeed as you begin your journey into the product development lifecycle. If you have a suggestion for one of these blog posts, please contact us, We would love to hear from you.

Tip #1: Avoid Design Changes When Possible

Product development is a creative team process. Engineers and designers take on the difficult task of creating a product that meets all the customer’s needs and wants. The team typically strives for product perfection but unfortunately perfection can never be achieved due to time and money constraints. Therefore, in order to get the product shipped and into the hands of customers, it is important to prevent unnecessary product design changes so the team can go out and manufacture the product for sale.

Product design change is sometimes seen as the enemy of an efficient and cost effective product development process. Of course, change is inevitable and necessary but minimizing unnecessary product change is important to keep the project on schedule and within budget while continuing to meet all the product specifications. Here is the insider’s perspective on why a product development team should avoid design changes when possible.

  1. The objective of the product development team is to deliver a product to a target customer. If change isn’t managed properly, the team members will each make “required” changes based on their own opinions and needs. This will result in change chaos.

    2.  

  2. In order to validate that the product design meets the customer’s quality requirements, the product must be tested. If changes are continually being made in the background, there will never be a stable design that can be formally qualified.

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  3. If engineers and designers were allowed to continuously change the product design, it would be almost impossible to know what design was qualified and which to manufacture.

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  4. Changes should only be made if product defects and issue arise. A defect or issue can be raised by anybody on the product development team and the program manager can determine if it is worthy of making a change based on change management rules. Why change if there isn’t a defect?

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  5. If the product development team has a rigorous defect review process and change system, then only necessary changes will result from the product change management system.

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  6. Changes cost money and take time. When a change is made, the product development team must make the modifications to the product and qualify the change. This sometimes requires that fabrication tools are scrapped or test data is retaken. This can take significant time and delay the product sale.

Avoid making unnecessary changes to be part of a successful product development team.

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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The Entrepreneur And Product Development : Lessons Learned

January 3 2012  |   Cliff  |  All Posts, Inventing Profit, Manufacturing, Product Design, Product Development, Prototyping, San Diego  |  2 Comments

Inventor, Product Development, Prototype, Lawn MowerYou might remember that we helped Entrepreneur Steve Hartman with the product development on his Cyclemower, a product that eventually ended up being featured in the Inventors Spotlight at the Las Vegas National Hardware Show. It’s time to check back in with the Entrepreneur Mr. Hartman and the Cyclemower to ask a few questions pertaining to product development and lessons learned along the way.

Q: Steve, what have you learned about product development?

A: The learning curve on prototype development is a long one, which I am still going through. At first, I had a design in mind, which I though I could just kick out and be done with it. I soon learned that there were a number of design details, at least with a relatively complex product like Cyclemower, that caused one problem to exacerbate another. With my first prototype, I was looking to prove that I could achieve my expected blade speed, which I succeeded in doing. I was unable to cut grass with it, and the design was really ugly. When we finally got to our current design, it was still not what I initially envisioned, but it had all the functional elements. It not only spun the blade at speed, but we eventually were able to cut grass. It has a cool look as well, but we also have found a number of weaknesses that makes it unsuitable for a final product. Notably, its too heavy, and the bottoms of the sideplates drag on uneven terrain. This causes the blade to stop spinning. We also can’t seem to get the back roller to function, so we can’t establish an even cutting height. For demonstration purposes, we are basically limited to perfectly flat and well tended lawns, which are hard to come by. To summarize, I think the biggest thing I learned is that the details never stop, and you can never assume that you have figured them all out.

Q: What did you learn from attending the Las Vegas Hardware show?

A: I learned from the hardware show that it is not necessarily a good place to find manufacturers who want to invest design and engineering resources into a new product. The hardware show is a good place for existing manufacturers to show their products to distributors and retailers.

Q: When building a product again, what will he do different next time?

A: If we need to develop another prototype, it will become all about the details. We will want to take all the shortcomings we have learned from our current design, and eliminate them, one by one. We will also want to directly compare ourselves to our competitors, in order to point out the superior aspects of our design. This is a long and tedious process, but one where nothing can go unaccounted for, no matter how seemingly insignificant. We will want our design to be perfect, from form and function all the way to packaging and shipping.

Q: Suggestions for others building hardware for the first time?

A: My suggestion for others would be to take a long, hard look at what you are trying to accomplish, and identify potential shortcomings in a brutally honest and thorough way. I can’t overstress the issue of details, as it only takes a small malfunction to make your whole design look bad. Have faith in your convictions, but take all the advice you can and apply good ideas that make sense to you. One thing I learned along the way is that there will always be people who will tell you how stupid your idea is. Most of the time, these people should be ignored. On occasion however, someone will come up with a legitimate criticism which should be considered and applied to improve your design. Inventing is hard work, and most people can’t do it. Quitting is easy, and most people do that all the time. There are so many obstacles to overcome in creating a new product, but you have to keep at it while maintaining faith in yourself. No one is going to succeed for you.

We would like to thank Steve for taking the time out for our Q&A. If you are an Entrepreneur entering the product development cycle, it’s great to hear from people that have been there and done that. They can help shed some light on the process of product development, prototyping and product marketing.

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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Product Development Efficiency – Tips and Tricks

October 18 2011  |   leardonsolutions  |  All Posts, Engineering, Product Design, Prototyping  |  Comment

Save Some Coin With The Right Product Development Team

Product Development is a process that when followed properly results in a tangible product that can be sold to customers, thus generating revenue and hopefully profit. In order to get quickly into the revenue stage, it is important to develop a  process that results in fast product time to market, high quality, and minimal development costs. In short, achieving Product Development Efficiency.  So how does a team go about achieving this? Below are three suggestions that if implemented will result in an efficient product development system.

Learn while minimizing cash spend

The product development lifecycle is essentially a learning process where the team progresses and continuously improves their level of knowledge about the product. During the progression, the team should be using the proof-of-concept, design, and production prototypes as the learning devices to determine the optimal function and failure modes under all operational conditions. Acceleration of this learning through a speedy design-build-test-fix cycle is absolutely necessary to get the team closer to the manufacturing stage and hence to revenue. Unfortunately, many small/medium and start-up companies do not have a never ending amount of cash to keep the learning progressing at a breakneck pace. Therefore, the teams need to be very smart about how they spend their money to properly continue learning and saving cash for later in the product development game.

Here are some great tips on how to spend the least amount of money and continue fast learning throughout the lifecycle:

• Pick The Right Team - Work with an engineering services company that has flexible billing arrangements such as amortization of engineering cost into product manufacturing or fixed total engineering costs. Avoid the hourly engineering rate which requires you hand over a blank check to an engineering services team.
• Do More With Less - Use the early proof-of-concept and design prototypes for as much qualification testing as possible. Many times, there is no need to use production parts off of expensive production tools for early qualification tests. Map out a test and qualification strategy that allows you to test as much as possible on early prototypes.
• Don’t Bite Off Too Much At Once – Once you enter into the production qualification phase, try not to lock up cash in expensive inventory by purchasing large quantities of your product. Work with a supplier who is happy to provide you with a smaller volume, say 1000 production products, that will allow you to test out the market prior to ordering more. This will also prevent expensive inventory reworks.

Continuity

Most entrepreneurial, start-up, or small/medium companies do not have large internal staffs to handle all stages of the product development life cycle. These companies typically nearsource or outsource much of the work in an attempt to minimize product development costs and maximize development speed. While nearsourcing and outsourcing can improve your costs and speed, it unfortunately can create a costly and slow system if not managed properly.

The One Stop Shop Could Be Your Answer: Many service providers and suppliers do not provide an end-to-end product development solution from product conceptualization to manufacturing, forcing companies to hire multiple service providers throughout the product development lifecycle. When companies piece together a product development team by hiring these outside firms, they sometimes create an inefficient system and lose sight of the tradeoffs between cost, schedule, and scope and the impact on the total quality solution. To create an efficient system, the company must minimize the number of hand-offs throughout the cycle by hiring an end-to-end engineering, prototype, and manufacturing firm that internally handles all the hands-offs without dropping or losing any of the knowledge gained in the last phase.

Here are some tips to improve continuity and product knowledge levels:

• Have one internal program manager for the complete project that responsible for product/project cost, schedule, and scope.
• Minimize the number of hand-offs required between program phases. Try to hire one company that can take the project from design concept to manufacturing.
• Eliminate any supplier agents, go-betweens, or representatives that don’t allow you to work directly with the supplier members doing the work.

Competent and Committed team

A successful product development team consists of internal members, service providers, and external supplier that are not only competent but also extremely committed to delivering the product to the market. Achieving the proper level of commitment and competency takes many years but if you focus on improving these two dimensions of a successful relationship, you can ensure an extremely productive relationship which will result in successful programs and projects.

In order to quickly assemble a committed and capable team, focus on the following:

• Make Friends: Develop a network of world-class service providers and suppliers that have experience working with the best product development companies. Assemble a team selected from this network based on your product development needs and requirements.
• Maintain an extremely close relationship with the internal and external team and create an environment with respect for people and their opinions. Provide open and honest communications regarding performance, both good and bad.
• Help your supplier improve their capabilities by helping them grow and develop with training and an active development plan.
• Expect co-accountability for the success of your product and don’t “point fingers.” A successful product will require teamwork and collaboration of all the members.

Here are a few other helpful links with tid bits of great information regarding lean manufacturing which greatly helps with product development efficiency:

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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What is a Production Prototype?

September 27 2011  |   leardonsolutions  |  All Posts, Prototyping  |  Comment

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product DevelopmentIf you are reading this post, you probably understand the basics of prototyping early in the product development lifecycle. In past posts on prototyping, we have discussed the Proof-of-Concept Prototype and the Design Prototype (also referred to as the Form/Fit/Function Prototype) as the first two phases of prototypes in world-class product development. Let’s define these two prototypes again as a refresher:

Proof-of-Concept Prototype: First phase of a product prototype that bears little resemblance to the final product but is used to validate of the idea and prove feasibility. A Proof-of-Concept Prototype is also used for obtaining intellectual property and to show to investors for raising money.

Design Prototype: Second phase of a product prototype that has the functional and aesthetic properties of the final product and is produced using quick fabrication methods. A design prototype is used to work out the final design and manufacturing details and to receive feedback from distributors, buyers, and retailers.

Note that these first two prototype stages are meant to prepare the product for production but that no production tooling or final products using the final manufacturing processes have been built or qualified. The picture below shows the proof-of-concept (POC) and design prototype for the Emada Cigar Clip, a product that is used by golfers and boat enthusiasts to hold their cigars. The POC prototype was constructed using an off-the-shelf plastic wire clip attached to a flat metal plate and an off-the-shelf magnet. The Design (Form/Fit/Function) Prototype was designed to the specifications required of the Emada and machined out of nylon to meet the functional and aesthetic requirements. These two prototypes were used to prove the concept, qualify the design, and verify it was acceptable for the existing market. This was required to prepare for the next phase of prototyping. The inventing blog Ideas Uploaded provides some other great examples of Proof-of-Concept Prototypes in the post How Inventors make Prototypes.

Emada Cigar Clip Proof of Concept and Design Prototypes

There is a third and final prototype stage that fills the gap between prototyping and full scale manufacturing. This is referred to as the Production Prototype.

Production Prototype: The third phase of prototype that is fabricated using the final production design and manufacturing methods. A Production Prototype is used to qualify manufacturing processes and to receive feedback from distributors, buyers, customers, and retailers.

The Production Prototype for the Emada Cigar Clip in different materials is shown below. Due to the expectations of large production volumes of this product, it was necessary to produce a two-cavity hardened steel tool for plastic injection molding. Once the tool was complete, the engineering team at Leardon Solutions approved the tool by performing first article inspection (FAI) and determining the process capability (Cpk) of the molding process. To determine the proper material to be used in the final product, three materials were molded including nylon, POM (polyoxymethylene), and PP (polypropylene). All three materials were tested but only the nylon was qualified as acceptable for use in the expected environment.

Emada Cigar Clip Production Prototypes

You might be wondering why you must build production prototypes if the production tools and assembly line are functioning. There is sufficient work required to qualify the product functionality and the manufacturing processes to prevent defective products from getting into the hands of customers. Performing the proper verification and validation with production protoypes will result in high quality products.

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Creating and Maintaining Successful Supplier Relationships: Part 3

August 23 2011  |   leardonsolutions  |  All Posts, Supplier Management  |  2 Comments

In the last article on supplier management entitled Creating and Maintaining Successful Supplier Relationships: Part 2, it was shown that each of the Five Vital Characteristics of a Successful Supplier Relationship has a direct impact on the supplier commitment and capability. This article also described how the supplier manager should focus her efforts on implementing the improvement techniques for each characteristic, hence improving the commitment and capability of the supplier. In the end, this leads to an improved relationship.

The table below reiterates the Five Vital Characteristics of a Successful Supplier Relationship and the impact they have on commitment and capability. These characteristics were identified by the Leardon Solutions program managers after studying dozens of supplier relationships, both good and bad.

Leardon Solutions Five Vital Characteristics of a Suppiler Relationship

Five Vital Characteristics of a Committed and Capable Supplier Relationship

This concept of supplier relationship improvement can be communicated using a matrix of capability and commitment. The matrix graphic below shows the simple connection between commitment, capability, and supplier relationship success. There are four quadrants of the matrix and three states of the supplier relationship: Poor, Fair, and Good.

Leardon Solutions Supplier Relationship Management Model

  • POOR RELATIONSHIP: A Poor Relationship exists when the supplier does not commit to the relationship and is not a capable of performing the job at hand. In this case, the supplier must demonstrate some desire to increase their capabilities or their commitment, otherwise another supplier should be chosen. If the desire exists, the supplier manager should focus on using the improvement techniques for the vital characteristics.
  • FAIR RELATIONSHIP: A Fair Relationship exists when the supplier is either fully committed to the relationship or demonstrates good capabilities, but not both. It is possible for this type of relationship to be successful in the short term but typically the relationship will fall apart unless improvement is made. Again, this improvement will come through utilizing the improvement techniques for the vital characteristics.
  • GOOD RELATIONSHIP: A Good Relationship exists when the supplier exhibits full commitment to the relationship as well as demonstrates excellent capabilities. This is the pinnacle of supplier management and relationships in this quadrant are typically prepared for long-term success.

In the end, the objective is to improve the supplier capability and commitment by striving for improvement of the Five Vital Characteristics of a Successful Supplier Relationship: respect for individuals, partnership, growth and development, properly managed risk, and complementary capabilities. Implementation of these characteristics into the relationship by using the management improvement techniques will ensure an extremely productive relationship which will result in successful programs and projects.

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Creating and Maintaining Successful Supplier Relationships: Part 2

August 19 2011  |   leardonsolutions  |  All Posts, Supplier Management  |  4 Comments

The first posting on the topic of successful supplier management entitled Creating and Maintaining Successful Supplier Relationships: Part 1 pointed out that a successful supplier relationship consists of five vital characteristics which result from a relationship that encourages commitment and capability. These five characteristics are shown in the table below.

Leardon Solutions Successful Supplier Management Characteristics

These Five Vital Characteristics of a Successful Supplier Relationship were identified by the Leardon Solutions program managers after studying dozens of supplier relationships, both good and bad. To reiterate, the premise for these vital characteristics is that the supplier manager must influence the supplier to believe that the relationship is worth the time and that their team can do what the manager requires.[1] In other words, the supplier must be committed and capable and if a supplier manager can improve the commitment and capability of the supplier, the relationship will improve.

Each of these vital characteristics impacts the supplier commitment, capability, or both. In order to improve the supplier commitment, the supplier manager should work on improving the Respect for Individuals and the Partnership. If the supplier manager focuses on creating a relationship that has Properly Managed Risk and Complementary Capabilities, then the supplier capability will increase. Finally, improvement of the characteristic of Growth and Development will improve both the supplier commitment and capability. This is better described in the simple table below.

Leardon Solutions Capable and Committed Supplier Characteristics

Five Vital Characteristics of a Committed and Capable Supplier

So how does a supplier manager influence these five vital characteristics for improvement of supplier commitment and capability? Below is a list of the improvement techniques for each characteristic that, when implemented in the day-to-day supplier management, have been shown to establish a good supplier relationship.

Respect for Individuals

  1. Create an environment where everybody has the upmost respect for people and their opinions.
  2. Provide open and honest communications regarding performance of individuals (both good and bad).
  3. Create an environment where team members have genuine trust in each other.[2]

Partnership

  1. Allow an environment of open and honest communications about the state of the business relationship.
  2. Provide consistent, stable work that enables the supplier to invest and grow.
  3. Provide an environment where the teams engage in respectful debates about critical issues.[2]

Growth and Development

  1. Provide continual development of the supplier through an active development plan.
  2. Minimize the employee attrition rate by showing commitment to supplier’s growth and development.
  3. Develop a capable resource pool at the supplier through training.

Properly Managed Risk

  1. Both the supplier and supplier manager decide what risks to take and the implications of such risks.[2]
  2. Provide a team member training program to minimize mistakes and eliminate repeat mistakes.
  3. Provide a rewards and recognitions program that motivates innovation.

Complementary Capabilities

  1. Understand supplier employee capabilities and balance capabilities of integrated teams.
  2. Continually evaluate supplier employees and ask the supplier to improve underperforming employees.
  3. Focus the team individuals on using their capabilities to achieve team results.[2]

Influencing these five vital characteristics using the recommended management improvement techniques above improves the supplier commitment and capability which results in an improvement of the overall relationship. Remember that if the supplier thinks the relationship is valuable, they will remain committed. And if the supplier thinks they can do what is required, then they have the capability to excel and improve.

[1] Influencer: The Power to Change Anything, page 132, Kerry Patterson, David Maxfield, Joseph Grenny, Al Switzler, and Ron McMillan, October 2007.

[2] The Five Dysfunctions of a Team, A Leadership Fable, Patrick Lencioni, Wiley, 2002.

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Product Cost, Scope, Schedule: Prioritize or Fail

August 4 2011  |   leardonsolutions  |  All Posts, Program Management  |  Comment

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product DevelopmentProduct development and commercialization can be summarized as a balancing act between the competing constraints of product cost, scope, and schedule. Thousands of decisions are made while a product is under development and the end result is typically a sub-optimal result of these decisions. A consistent theme exists as a team moves through the process of bringing a product to the customer: it is virtually impossible to optimize all the requirements of the program/product.

Since optimization is impossible, it is necessary to prioritize the objectives of the project in order to ensure success. Without prioritization, the individuals working on programs will be pulled in opposing directions and will be continually redirected during the project, resulting in failure. Proper prioritization of product cost, scope, and schedule will result in success.

The three objectives of a program are product cost, product scope, and program schedule.

Product Cost refers to the many financial metrics, including total budget, cost of goods sold, gross margins, or any other financial metrics used on the project.

Product Scope refers to the product features that will be designed into in the final product.

Program Schedule refers to the amount of time available to complete the project.

Unfortunately, it is impossible to change one of these objectives without affecting the others. The cost, scope, and schedule each act as constraints and therefore movement of one affects the others. This is typically referred to as the project management triangle by program managers.

How do you manage a project knowing that everything cannot be optimized? The management team at Leardon Solutions has managed hundreds of programs using a simple method of prioritization which requires that the team takes away the constraints that will cause failure. This method requires thinking of the cost, scope, and schedule in terms of three levels of priority.

a) Determine which of the three program objectives is the most important. This chosen objective will be the first program priority that must be constrained and cannot change under any circumstance. For example, if the product being developed is for the snowboard market and must be available two months prior to the skiing season, the program schedule should be chosen as the highest priority. The team must make changes to the product scope or product cost in order to meet the program schedule.

b) Choose one of the two remaining program objectives that can change but must be held within a range. After the top program priority that cannot change under any circumstance is chosen, there are only two objectives left. The second priority should be thought of as an objective that can be modified but should always be kept as close to the goal as possible. In the snowboard example, program schedule is the top priority and everything else must adapt to meet the program schedule. If all similar products in this snowboard product category have a retail price around US$50, this product might also need to be close to this retail price. It might not be possible to hit this price exactly because of the rigid schedule constraint, but the product cost should be optimized by minimizing the product manufacturing cost or modifying the gross margins.

c) The outcome of the last program objectives will be accepted as is. Unfortunately, since the first program priority was constrained and the second program priority was optimized, there is no ability to control the third program priority. The program manager must accept whatever results from the actions of constraining and optimizing. For the snowboard product example, the product scope is considered the third program priority. The product designer might have wanted to include a small injection molded plastic toe bumper on the front of the product to improve the looks of the product and prevent wear of the toe. But due to the schedule constraint (injection molding tool has a six week lead time) and the product cost optimization (this additional part adds cost), the design engineer should not include the toe bumper in the design.

Some hard tradeoffs need to be made when prioritizing the program cost, scope, and schedule. By performing this exercise and communicating the priorities, the product development team will be given very clear objectives that allow the members to make their own tradeoffs knowing the overall program priorities. This will result in successful programs for both large and small projects at companies of all sizes.

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