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Principle 3: Create a Leveled Product Development Process Flow

At Toyota we try to make every process like a tightly linked chain – where the processes are connected by information and by physical flow. There’s nowhere for a problem to hide. The chain never works perfectly. But if we know where our breaks are and our people are trained to fix the breaks, we get stronger every day in the company. It keeps us on our toes, it self-identifies muda and, five whys is our method to eliminate muda.
Glenn Uminger, Toyota Manufacturing Corporation, North America

The Power of Flow

Using cellular manufacturing, Toyota extended the concept of “one-piece flow,” or leveled flow, throughout its operations – even into supplier operations.

Toyota’s success starts with viewing the Product Development (PD) as a process. Like any process, PD has a cadence and repeated cycles of activity. Toyota has done an exceptional job of standardizing the PD process to bring to the surface the repeated cadence that allows continuous improvement through repeated cycles of waste reduction. Toyota has managed to “level the flow”, not only by eliminating waste (muda) but also by eliminating “unevenness” (mura) and “overburden” (muri).

Viewing Product Development as a Process

Modern PD systems must deal with multiple project simultaneously and face similar shared resources management challenges. Moreover, even though many of the specific design challenges might be different, the basic work, the tasks, and the sequence of tasks, are the same across programs. From this perspective, companies can view the PD system as a knowledge work job shop that must deal with multiple work centers, constraints, and an integrated network of queues.

Value Stream Mapping

This methodology looks at the transformation of material as a series of process steps interrupted by waste. What governs the flow is information that tells individual process what to make, how much, and when. The starting point for representing the PD value stream is recognizing it as a process.

In any given product development project, there is a lot going on. The primary activities are value-adding activities and waste is hidden. The key to superior product development is to disentangle this complex web of activity into definable “work streams” that perform a distinctive function: converting inputs into outputs.

The task at hand is to understand the wastes and sources of waste in a product development value stream, not to measure precise and invariable activity sequences and timing. With this caveat, it is important to reemphasize that the starting point for eliminating waste is to recognize waste.

Barriers and Facilitators of Flow: Insights from Queuing Theory

It is important at this juncture to examine why the seven wastes are so prevalent because no company can truly understand how to eliminate these wastes until it understands their true root cause. Viewing the PD process as a knowledge work job shop and considering the well-known body of knowledge on queuing theory will provide some important insights about the root cause of waste in product development. Traditional PD practices that are particularly problematic include:

  • PD work centers working in large batches created by the stage-gate or milestone based product development processes.
  • PD work centers with differing levels of capacity at any point in time creating capacity mismatches and a general ignorance of work center capacity and subsequent constant system overburdening.
  • Unpredictable PD workloads expanding to take up all the time of all engineers assigned to projects.
  • Highly cyclic PD workloads characterized by lulls in workload followed by tremendous system congestion, expanding lead times beyond planned deadlines.
  • Low levels of task execution and scheduling discipline, leading to high levels of both task and interarrival variability.

To gain insight into the reasons wastes are generated by this approach consider the PD process as a system – where arrivals (requests for work) place demands upon a finite capacity resource – and apply queuing theory – the phenomena of standing, waiting, and serving. Then consider traditional product development practices in the light of following basic tenants of queuing theory which are well understood in manufacturing and well documented.

Leveled Flow Starts in the “Fuzzy” Front End: Kentou and Flow

Toyota’s lean PD process attacks waste from the very beginning. Portfolio management, cycle planning and rigorous shared resources scheduling at the front end of a process are prerequisites to leveling work in a multiproduct lean development system. Crucial to Toyota’s ability to create flow during the execution phase is the ability to use cross-functional activities to front-load failure mode resolution and core-engineering strategies, and align CE objectives during kentou. The kentou phase isolates, manages, and minimizes much of the variation in product development, which allows Toyota to focus on execution.

By aligning objectives across functions and developing designed-in countermeasures, Toyota enables synchronized, cross-functional process flow and eliminates one of the mortal enemies of flow in product development – unscheduled and late engineering changes.

The role of process logic

Process logic determines who will do what, and when, and which decisions PD teams must make at each milestone in the product development process at a macro level. It makes no attempt to provide all the details of how the work is done, but it does provide the framework that coordinates all the carious participants.

Process logic by itself cannot create flow, but when it is flawed, it drives rework loops, waste, and prevents flow from taking place. Engineers, frustrated by the broken process logic, often develop work-arounds that add and drive variation in the PD system, which further inhibits flow.

Toyota’s approach to macro process logic is the essence of elegant simplicity. It provides centralized control without the waste associated with monstrously large traditional PD central schedules (which are usually too complex to follow accurately) and places ownership and accountability where it belongs.

The Execution Phase of Product Development

Toyota’s, goal from this point forward, is to optimize capital investment, match quick cycle-supporting or embedded technology lead times, make decisions closer to the customer, and react quickly to changes in the competitive environment. Creating flow by synchronizing product development activities is one of the most powerful ways to increase speed.

Cross-Functional and Within-Functional Synchronization

Creating process flow within individual engineering activities is necessary, but insufficient for creating flow. To avoid interrupting the flow as a new product moves from one organization or resource to another, the cross-functional module-development teams must coordinate and synchronize individual functional organizational activities. Effective cross-functional synchronization in a lean PD system requires a thorough understanding of:

  • The details of how the work actually gets done.
  • Each participant’s specific roles and responsibilities.
  • Key inputs, outputs and interdependencies for each activity.
  • Sequences of activities in all functions.

The role of Simultaneous Engineers (SE) is a powerful mechanism for both cross-functional and within-function synchronization. SE is responsible for specific parts early in the program until launch; in this capacity, they serve as lead manufacturing engineers. This role of shepherding parts through the entire development process removes the momentum draining hand-off of knowledge and parts that occurs in a traditional PD process. The SEs are responsible for making timely decisions, communicating regularly with functional resources, and working to keep things progressing, particularly on the critical handoff between product development and manufacturing process development. They are adept at decision making, transferring knowledge, and coordinating the activities of people inside and outside of their home organization as they work on their respective set of parts. Utilizing the SE on the MDTs also builds accountability in the lean PD system.

Creating Flexible Capacity

By using all of the methods described, Toyota has managed to create a relatively predictable and repeatable product development process. In fact, through methods like standardization and adherence to detailed schedules, Toyota can anticipate the peaks and valleys over the life of vehicle program. A predictable and repeatable PD process allows the company to plan resource allocation. Toyota can anticipate these ebbs and flows, it can plan for extra resources at very specific times by using its flexible capacity system to add extra engineering resources when they are needed.

Toyota creates flexible capacity in two fundamental but strategic ways: 1) satellite companies and 2) flexible staffing.

Satellite companies are wholly-owned subsidiaries that are fully versed in Toyota operating methods and standards and can take up all or most critical portions of programs as required by cycle plan demands. To achieve the strategy of flexible staffing, Toyota pools and shares various skilled technical staff. Although each PD program team has a group of dedicated, highly experienced engineers, these are augmented with technicians and tracers from pools that are shared by multiple programs.

Detailed (Fundoshi) Scheduling to Head Off Unevenness

Accurate and disciplined scheduling is fundamental to managing multiproject workload leveling. A strictly functional approach would not provide the necessary cross-project functional synchronization and would drive PD teams to focus on optimizing their local objectives at the expense of the program as whole. The challenge in scheduling within a complex environment is to schedule in only the details that accomplish the objectives – avoiding the waste of excess information and false sense of control.

At Toyota, schedule discipline means recognizing that intermediate dates are crucial to managing limited resources across multiple programs and approaching these dates with rigor and precision. If a requirement is not completed on time, they will not be given an extension and will have to “move to the back of the line.”

Detailed (Fundoshi) Scheduling at the Functional-Organization Level

Daily morning “walk arounds” at the facilities and large hour-by-hour schedule boards spell out specific hourly task requirements, which provide the basis for visual “at the source” communication and identify issues early, addressing them on the spot.

Using Staggered Releases to Flow Across Functions

The release order facilitates work content so that parts requiring more time and tool-up in manufacturing engineering are released first and smaller components are released later.

Establishing an Engineering Cadence and Cutting Management Cycle Time

In lean manufacturing, takt time, based on available production time divided by customer demand, establishes the cadence and mix that drive manufacturing operations. Once you have eliminated waste and created leveled flow in the PD process, you need a mechanism to keep the entire system moving forward at a common, regulated pace.

Using Jidoka and Poka-Yoke to Support Product Development Flow

In lean manufacturing jidoka, or autonomation, is the practice of recognizing an abnormal condition and responding quickly. Visual management, such as andon (light goes on when a worker pulls a chord on the line), is often employed to aid in this effort, which is also associated with the separation of human work from machine work and is critical in supporting and maintaining flow.

Poka-Yoke (error proofing) prevents errors from occurring, which reduces inspection time and frees up time to build in quality. Poke-Yoke takes the shape of:

  • Checklists
  • Standard, detailed test plans
  • Part quality matrices
  • Standard architecture
  • Shared components across vehicles
  • Standardized manufacturing processes

A lean PD system prevents error states before they occur which helps to create predictable results.

Pulling Knowledge Through the PD System

In lean manufacturing, pull production eliminates overproduction by having downstream activities to signal their needs (demand) to upstream activities. Kanban cards usually signal (control) production in a pull system. In product development, knowledge and information are the materials that are required by the downstream activity the speed at which technology delivers information in automotive product development is overwhelming. The lean PD system uses “pull” to sort through this mass of data to get the right information to the right engineer at the right time. Knowledge is the fundamental element (material) in product development.


In summary:

Create a leveled product development process flow.

Utilizing a process perspective to improve product development performance is potentially very powerful. There are seven critical characteristics of a lean product development process:

  • Use the kentou or study period concept development to anticipate and resolve as many downstream technical issues as possible, thus reducing variation early in the value stream.
  • Develop a clear process logic with a manageable number of milestones and activities.
  • Synchronize activities across functions.
  • Level the workload through a well-designed product cycle plan which is adhered to in order to manage system capacity.
  • Use a flexible capacity strategy to fill in the gaps in high workload periods.
  • Use scheduling across functions, and even more detailed scheduling within functions. To synchronize activities and drive out variations.
  • Stagger the release of data from one function to the next, prioritizing what needs to be worked on early versus late.
  • Establish an engineering cadence and short management cycle time to orchestrate the system and create manageable deadlines.
  • Execute the process plan with precision and demand schedule adherence to drive out inter-arrival variation.
  • Use checklists and part-by-part standardized development plans to drive out task variation.
  • Build in quality at each step of the process and do not pass along problems.
  • Set up a system and culture in which engineers pull knowledge as they need it instead of inundating large numbers of engineers with information as it is produced.
  • Build learning and continuous improvement into the basic process

This is a long list, but the combination of all these methods will begin to develop a level flow and create a controllable process that companies can improve through kaizen.

Source: Liker, J.K and Morgan, J.M, The Toyota Product Development System: Integrating People, Process and Technology, Productivity Press, 2006


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