Product And Process Improvement Strategies

Published Date: 02 Nov 2017

Chapter 1

Introduction

Global consumer demand for quality and reliable products has resulted in the development and implementation of new product development strategies that address key voice of the customers' requirements. Central to the deployment of this strategies is the development of a structured product development process that’s sustainable as well as flexible enough to absorb (or account for) the sudden changes in technology, without having any compromise on the final quality of the product.

An ideal product development process would address the key issues of product quality, product cost and time-to-market without compromise on the customers' needs. This however is not possible, as a result a compromise has to be made as to which of the three factors are key to control so as to develop and implement a strategy that would address the overall demands of the customer. To compound on to this, the rapid advances in technology have pushed the way these strategies are implemented so as to meet the customers need.

Profit making is always the bottom line for any organization. This can be related to the share of market an organization has as well as the product cost and product quality. To capture a larger market share, the speed or duration at which quality products are released to the market is crucial–Time To Market (TTM).This however is not always true, shorter TTM does not necessary equate to organizations capturing the larger market share.. The cost of poor quality will result in a drop of market share even when the time to market is reduced.

To enhance the value of shorter time to market in achieving high market shares and improved profits, issues of quality needs to be considered during product design and development phases. Application and employment of various tools during the design and development phases has been shown to reduce assembly times and cost by 60% and 45 % respectively, labour cost by 42 %, Total cost by 50% and Product development cycles by 45% .

Motivation and Research Background

With advances in modern communication technology, the need for information has never been so crucial. This information has to be reliable and readily accessible. This has led to innovation of new technologies that enable fast access of information. Data centres’ and data transmission modes play a key role when it comes to accessing information. As such, hardware and technology necessary to facilitate quick access of the information is being developed at a rapid rate.

The semiconductor industry has played a major role towards this end, especially the optoelectronics industry. The semiconductor industry growth rate is estimated to be almost 32% as of 2010 and it is projected to grow at a compound annual growth rate (CAGR) of 6 % for the period 2012 to 2015. Growth projections for the different segments of the semiconductor industry are set at 13.5% for sensors, 8.5% for discrete semiconductors, 6 % for ICs and 4% for the opto-electronics[3].

The optical communications market achieved $19 billion in 2006 and is expected to grow to near $40 billion by 2017, with a 7% CAGR for the period 2007-2017. This growth is led by strong growth in optical networking equipment that evolves the network architecture to be more efficient through the use of dynamic optoelectronic components. Optoelectronic transceivers are expected to grow quickly, from slightly over $1 billion in revenue in 2006 to over $6 billion in 2017. Key drivers will be Ethernet/Fiber Channel 10 Gbps technology. Over the next decade, the emergence of 40 Gbps modules will offer new and exciting growth opportunities[4].

With such growth rates, for any new organization that competes in this industry, the time to market of new products is crucial. Key to reducing the time to market of new products is the reduction of the development cycle time as well as the development cost while maintaining the key qualities of the product as expected by the customer or the market.

Problem Statement

To compete in the current environment, product development firms require a well-defined New Product Development (NPD) structure that will address the issues of reducing the time to market and development cost while maintaining the quality and reliability of the product.

Although the current structure being employed has enabled QEOS Sdn Bhd to come up with various designs, the issue of continuous iterations to "fine-tune" products has led to an increase in the development cycle time, and hence time to market and overall development cost (I thought the company also had an issue of reverting to conceptual design phase even after going into the detailed design phase). This presents a challenge to an organization in an industry where time to market of new products is crucial.

Objectives and Scope

This thesis is set to address two objectives. One, to define and develop a product development (PD) system for product development cycle time and cost reduction based on Define-Measure-Analyze-Design-Verify (DMADV) methodology.

The second objective is to implement the PD system in the development of a small form-factor pluggable module to verify its effectiveness.

The focus of this thesis will be the reduction of design and development cost and time during the design and development phase of the module. The definition of the time and cost at these stages will be as follows:

Design and Development Time:

Calculated as the time from the initial draft/concept design and development to the time when the rolled throughput yield has met the company’s target

Design and Development Cost:

Calculated as the cost incurred for the design and development of a single unit from the initial draft/concept design and development to the time when the rolled throughput yield has met the company’s target

PRODUCT AND PROCESS IMPROVEMENT STRATEGIES

Products, processes or services do go through a cradle-to-grave cycle. The cradle-to-grave process involves the stages a process, product or service would undergo from concept development to its final withdrawal from service. Fig. 1 below presents a graphic relationship between NPD, PLC and PLM.

Fig.1: Relationship between New Product Development, Product Life Cycle and Product Life Cycle Management [XX].

The basic phases of a complete Product Development Cycle are as illustrated in Fig. 2 below

Fig. 2: Summary of a New Product Development phase [XX].

NPD process can be split into two phases: the initial phase involving concept generation, product design and development; whereas the latter phase encompassing the market research and marketing analysis. Organisations typically see new product development as the first stage in generating and commercializing new products within the overall strategic processes of product Lifecycle management used to maintain or grow their market share.

Total Quality Management-TQM

Total Quality Management is a management philosophy whose basic premise of quality requires the involvement of everyone within an organization who is concerned with the product or process development.

Six-Sigma—6σ

Six-Sigma is a statistical based process that helps management make decisions that would affect the overall quality of a product or process—six-sigma is a product or process improvement methodology based on statistics. The idea behind using statistics is to reduce the number of defects to a point that can be considered as perfect. At six-sigma level a process or product is said to have 3.4 defects per million opportunities. Management desire for quality is fundamental towards the successful implementation of six-sigma processes in any organization

Various reviews of six sigma process have shown that second to management's desire for process improvement is the development of teams that are cross-functional in nature and possessing skills in statistics .

Application of six-sigma can be traced back to Motorola Corporation as early as the 1980’s. The success of its implementation led to other organizations adopting the methodology, with organizations such as GE, Honeywell, Sony and caterpillar is joining the band wagon [XX].

A sigma quality level offers an indicator of how often defects are likely to occur, where a higher sigma quality level indicates a process that is less likely to create defects. Consequently, as sigma level of quality increases, product reliability improves the need for testing and inspection diminishes, work in progress declines, cycle time goes down, costs go down, and customer satisfaction goes up [XX]. [http://www.pqa.net/ProdServices/sixsigma/W06002002.html, date: 18th Oct 2012 at 1600hrs]

At the heart of six-sigma application is the five stage process of DMAIC as shown in Fig. 1, which is an acronym for Define, Measure Analyze, Improve and Control. Table 1, presents a summary of the various activities for the five phases of this process.

Fig.1: Schematic of DMAIC process

Phase

Activities

Define

Define the project purpose and scope; determine the customer’s needs and benefits. Identify high level process for improvement

Measure

Baseline for current process, pinpoint problem locations and occurrences. Identify potential areas of improvement

Analyze

Identify root causes and validate root causes against captured data. Determine improvements that need to be made

Improve

Implement improvements that have been determined to

address the root causes of the major issues

Control

Perform before and after analysis, monitor systems, document results and determine next step recommendations

Table.1: Summary of DMAIC process and some of the activities within the phase

Design for Six-Sigma–DFSS

Design for Six-Sigma is considered as the strategy within six-sigma that deals with the development of new products or process during the early stages of a product or process design and development. Application of design for six-sigma involves a five (5) phase process that’s used in the development of products or process with emphases on integrating the customer’s needs –voice of the customer­–in the products or process. The five phases of DFSS are: Define Phase, Measure Phase, Analyze Phase, Design Phase and Validate Phase. Fig.2 shows a schematic of the five phases. Key to applying the five stages is the use of various tools and good project management practice.

Fig.2: Schematic of DFSS methodology of DMADV

Some of the tools used include Design for Experiment, development of team charters, Design for X principles and practices, Design Failure Mode Effect Analysis-DFMEA, Minitab-Statistics etc.

DFSS is used to design or re-design a product or service from the ground up. The expected process Sigma level for a DFSS product or service is at least 4.5 (no more than approximately 1 defect per thousand opportunities), but can be 6 Sigma or higher depending the product. Producing such a low defect level from product or service launch means that customers’ expectations and needs (CTQs) must be completely understood before a design can be completed and implemented.

Concurrent Engineering

Phase Gate System

Thesis Break Chapter Break Down

This chapter presents a background of the product development cycle, known application strategies for reducing the cost and time during this phase. The chapter defines the scope of the thesis as well as sets the objectives to be achieved.

Chapter two focuses on a review of the literature that has been published with regards to reducing development time and cost during the product development cycle

Chapter three illustrates the methodology to be applied in this work and its expected outcomes. Chapter four presents the results and discussions of the outcomes of the methodology.

Lastly, chapter five presents the conclusion and recommendations of future works for the study.