Design for Growth
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How to Design for Growth: Principles

There are two elements to Design for Growth: I. How to Design for Competitiveness and II. How to Design to Scale up Production Quickly.
 

I HOW TO DESIGN FOR COMPETITIVENESS

Lowest Prices can be achieved by lowering all costs which is possible after all costs are quantified  and then systematically reduced through all the strategies at http://www.halfcostproducts.com  that include:

  •  low-cost product development methodologies that can lower cost by 20% to 50% and beyond

    • Minimizing the cost of quality  which can be from be between 20 and 35% of the revenue stream or the product’s selling price.

    • Eliminate inventory carrying costs  which cost the company a quarter of inventory every year! This can be done with build-to-order  and spontaneous supply chains.  In some companies, WIP inventory cost equal profits, so eliminating them can double profits. This is especially true with capitol equipment products that build products around expensive parts, like engines and generators, instead of building the products first and then adding the expansive parts the day before shipping to eliminate WIP inventory costs.

    Eliminate the “loser tax” to pay the overhead costs of money-losing products by rationalizing them away.

    Avoid counterproductive practices to design for growth that drain resources away from the above such as attempting cost reduction after design, low bidding, and offshoring. See article at http://www.halfcostproducts.com/how_not_to_lower_cost.htm
     

Fastest Introductions of Innovative Technologies are key to growth can be achieved by first commercializing  all research, experiments, breadboards, prototypes, patents, and acquired technologies. Then use Concurrent Engineering to thoroughly develop the product for the fastest ramp to stable-production.

Best Selection and Customization can enable growth with families of products that are built-to-order   including mass-customized products that are also build quickly and cost-effectively.

Best Deliveries will lead to growth if you can be faster than any of your competitors with products built on-demand  from standard parts from spontaneous supply chains.
 

II. HOW TO SCALE PRODUCTION QUICKLY

The featured article in the November 2013 in Mechanical Engineering, titled “Why Manufacturing Matters,” concludes that:
 

The companies that scale the latest technologies the fastest
will become the market leaders and reap most of the profit.”

Products can be designed to scale quickly by the following methodologies:

Manufacturability.  Design for growth depends on designing for all aspects of manufacturability that are:

• designed around proven off-the-shelf parts that are selected to be readily available throughout the anticipated lifespan of the product to avoid dependence on parts that are hard to get, have long lead-times, incur high inventory carrying costs, or may become unavailable within the lifespan of the product.

  • avoid basing designs on scarce materials, especially those containing rare-Earth elements, and avoid basing production on expensive “fabs” that have limited capacity that would be slow and expensive to expand.

• concurrently designed with vendor/partners so that all design guidelines are followed and parts can be easily build on widely available machine tools from widely available materials on without setup delays. See article by Dr. Anderson at http://www.fabricatingandmetalworking.com/2008/02/tearing-down-the-walls/ .

• designed for quick and easy assembly without the need for firedrills, tribal lore, scarce resources, and skill and judgement, all of which make production hard to scale.  In Dr. Anderson's seminar, he asks the classes "how long would it take to double production?"  The answers range from 6 months to never!

• fully commercialize  research to ensure the above manufacturability is designed in the first time for rapid deployment.

“Firms that scale and deploy innovations rapidly will remain market leaders.”

• concurrently engineered production equipment and tooling suitable for initial demand and easily scalable to the highest anticipated demand. See article on DFM and Concurrent Engineering at: http://www.design4manufacturability.com/DFM_article.htm

 

Flexibility to Adapt to Evolving Market Needs, which will also enable growth:

• Design product families and design products for lean and build-to-order  that can quickly adapt to evolving market needs.

  • Flexibility is even more important if forecasts are vague for all potential markets.
     

III. HOW NOT TO GROW

  • Growth doesn’t come from just directives. Don’t assume that meaningful growth can be achieved only by directive, which, without a meaningful program, will be about as effective as the classic “show me the money” chant from the movie, Jerry Maguire, shown at: http://www.youtube.com/watch?v=mBS0OWGUidc .

    • An important aspect to a Design for Growth strategy is to avoid counterproductive policies, such as trying to developing all products for all markets, taking all orders, accepting all customizations, managing projects to death with deadline management, only quantifying labor and part costs, offshoring to “save cost,” low bidding, and trying to remove cost after design, which may actually delay growth and drain resources away from achieving real growth by implementing the above principles.  Each of these is discussed at http://www.halfcostproducts.com/counterproductive_policies.htm

    • Don’t use Mergers & Acquisitions for Growth. In Jim Collins’ book on how good companies become great companies, appropriately titled, Good to Great, he states flatly that “you absolutely cannot buy your way to greatness.”

• A Thomson Financial/First Call study commissioned by the Wall Street Journal study found that “stocks of the top 20 acquirers in the late 1990s have fallen nearly twice as much as the Dow Jones Industrial Average and the Standard & Poor= s 500 Index.”

• An A.T. Kearney study of 115 global mergers showed that the total return to shareholders (relative to peer companies) was minus 58%.”

See full article at http://www.halfcostproducts.com/mergers%20&%20acquisitions.htm

For more information, call Dr. Anderson at 1-805-924-0100
or e-mail him at anderson@build-to-order-consulting.com.
 

Design for Growth Class by Dr. David Anderson


The Design for Growth seminar will show how to develop products for growth.


The opening slide in Dr. Anderson’s seminar concludes that
inadequate design for manufacturability limits growth.
So companies must ensure that products are designed for manufacturability
 

To show how to design for growth, the two-day Design for Growth seminar will include sections on:

I. Design for Competitiveness, which will show companies to develop products for the:


Lowest Prices can be achieved by lowering all costs (as described above) with:

low-cost product development methodologies that can lower cost by 20% to 50% and beyond

• Minimizing the cost of quality

• Eliminate  inventory carrying costs 

Eliminate the “loser tax” to pay the overhead costs of money-losing products

Fastest Introductions of Innovative Technologies can enable growth by first commercializing  all research, experiments, breadboards, prototypes, patents, and acquired technologies. The Design for Growth seminar will show how to use Concurrent Engineering to thoroughly develop the product for the fastest ramp to stable-production.

Best Product Line Selection and Customization will enable growth with families of products that are built-to-order , including mass-customized products that are also build quickly and cost-effectively.  Dr. Anderson has written two books on BTO and Mass Customization

Best Deliveries will also enable growth when deliveries are faster than any of your competitors.  The Design for Growth seminars shows how to do this by building products on-demand from standard parts that are made available from spontaneous supply chains.


II. Design for the Ability to Scale Production Quickly

Manufacturability. The Design for Growth seminar will show how to ensure scalability by designing for all aspects of manufacturability by designing products that are:

• designed around proven off-the-shelf parts that are chosen to be readily available throughout the anticipated lifespan of the product to avoid dependence on parts that are hard to get, have long lead-times, incur high inventory carrying costs, or may become unavailable within the lifespan of the product.

• concurrently designed with vendor/partners so that all design guidelines are followed and that parts can be easily build on widely available machine tools from widely available materials on without setup delays.

• designed for quick and easy assembly without the need for firedrills, tribal lore, scarce resources, and skill and judgement, all of which make production hard to scale.

• Fully commercialize research to enable growth of new technologies by ensuring that the above manufacturability is designed in the first time.

            Dr. Anderson has written three books on Design for Manufacturability
 

Flexibility to Adapt to Evolving Market Needs. The Design for Growth seminar will show how to design product families and design products for lean production and build-to-order that can quickly adapt to evolving market needs to ensure growth in changing markets.
 

These are the general principles. Pass around this article or URL to educate and stimulate interest

In customized seminars and webinars, these principles are presented in the context of your company amongst designers implementers, and managers, who can all discuss feasibility and, at least, explore possible implementation steps

In customized workshops, brainstorming sessions apply these methodologies to your most relevant products, operations, and supply chains.

 

Call or email about how these principles can apply to your company:

Contact Dr. David M. Anderson, P.E., CMC
fellow, American Society of Mechanical Engineers
www.design4manufacturability.com
phone: 1-805-924-0100
fax: 1-805-924-0200
e-mail: anderson@build-to-order-consulting.com

copyright © 2017 by David M. Anderson

Book-length web-site on Half Cost Products: www.HalfCostProducts.com

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[DFM article]     [Half Cost Products site]   [Standardization article]   [Mass Customization article]   [BTO article]   [Rationalization article]

 

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