Improving Product Quality in New Product Development

John Holmes General Electric The 2011 Quality Conference

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About the presenter….

John Holmes

Learning Objectives
• Learn what is important to change to improve the quality of new products emerging from the new product development (NPD) process in your firm. • R Recognize th t organizational change i a i that i ti l h is process and how to approach change from a l d hi perspective. leadership ti

Agenda
• Overview – Quality in NPD • Background – The Research
– Dissertation – WCQI R Research h – Research by others

• Case Study • Implementing Change
– What to change – How to implement the changes p g

• Closing Remarks – Discussion

low cost.1 2 sigma • Y t – NPD h t create a positive return Yet has to t iti t on investment (implying – speed-to-market.2 l t t ) • What factors can we (our organizations) manipulate to improve the initial q p p quality? y .Overview – Quality in NPD • Products emerging from NPD processes typically have less than 2-sigma quality.). etc.

The Overall Process Measure Existing NPD Quality Q lit Identify Gaps from Best in Class Cl Manage Changes Using Gap Analysis A l i Celebrate Success Industry is < 2 sigma Academic Research can Guide You Reduce Conflict W/ Team Input Measure Improvement Over Time .

• Phase I of the research investigated Productivity in NPD 3 NPD. • Phase II of the research was completed for the WCQI and investigated quality in NPD. CQ .Background – The Research • A survey was conducted. – 569 total survey accesses – 266 valid responses – 85 ASQ members participated with valid resp resp.

Company Size Senior Management Involvement Selling P i S lli Price NPD Productivity Project M P j Mngr.Phase I – Productivity in NPD Phase I was carried out with Northcentral University. Skill Skills Tollgate Process Voice of the Customer Team Experience T E i Team Size .3 Phase I investigated the following theoretical framework.

383) – Voice of the Customer (rho=0.573) – Team Member Experience (rho=0 383) (rho=0.497) – Selling Price (rho=0 300) (rho=0.493) – NPD Toll Gates (rho=0.300) – Project Manager Experience (rho=0.Phase I – Productivity in NPD • The following items were found to correlate with NPD productivity (95% confidence) – Senior Management Involvement (rho=-0.702) (rho 0 702) • An interaction was also found between senior management and t i t d team size. i .

• Ran factor analysis for data reduction and used principal component scores for analysis. • R Results were published i th proceedings lt bli h d in the di of the ASQ 2011 World Conference on Quality I Q lit Improvement.Phase II – Quality of NPD Products • Used data from phase I plus additional survey questions on quality.4 t .

To what extent is product quality correlated to the NPD team setting up the supply chain. Is there a difference in NPD Quality between ASQ members and ASQ non-members? non members? 3. 1. To h t t t i 4 T what extent is product reliability correlated d t li bilit l t d to the NPD team setting up the supply chain. The th 1 Th theoretical framework (next slide) ti l f k( t lid ) 2. and setting up reliability audit methods? g p y . g p pp y setting up quality audits and setting up quality test methods? 4.Phase II – Quality of NPD Products • Phase II investigated four approaches to Ph i ti t d f h t the research questions.

Skills NPD Process Voice of the Customer Team Experience Product Strategy .Phase II – Quality of NPD Products Theoretical Framework. NPD Productivity Senior Management Involvement Product Performance NPD Product Quality Project Mngr.

354) – Voice of the Customer (rho=0.338) .513) – Project Manager Skills (rho=0 419) (rho=0.Phase II – Quality of NPD Products • The following items were found to correlate with NPD quality (95% confidence) – NPD Productivity (rho=0.419) – Product Performance (rho=0.365) – Team Member Experience (rho= 0 354) (rho=-0.442) – Senior Management Involvement (rho 0 338) (rho=-0.

.Phase II – Quality of NPD Products • Additional results – Product quality was correlated with the NPI team being responsible for setting up the supply chain. defining the p pp y g production q quality y audits. – Product reliability was correlated with the NPI team being responsible for setting up the supply chain and d fi i th production l h i d defining the d ti reliability audits. and setting production quality test methods.

Other Research • Empirical studies by Cole & Matsumiya8 – Benner & Tushman found an inverse relationship between number of ISO certifications & number of original p g patents – Silicon Valley CTO stated all p j y projects sacrifice quality for time to market .

Result: five months of quality work. Result: five year later their failure rate was still near 5%. new chip release. new software downloads. – p Created market opening for startup.Cole & Matsumiya8 • Examples – Affymetrix – launched a new generation chip too soon. . – Apple – Launched initial ipod with only 6 months development.

Cole & Matsumiya8 • Take-aways – Time to market is critical for disruptive products – Quality is important but may not be top priority in NPD – A zero defect culture can create risk aversion and limit innovation .

Case 5 • Building management system – Monitor energy usage in commercial buildings – Track peak time energy rates – Adjust energy usage in the building to minimize cost – Well defined system cost target .

Case 5 • Voice of the Customer – Initial concept created – Feature definitions added and subtracted based on customer interviews and focus groups .

Case 5 • Team Experience – Tiger team ( g (100% dedicated) – Design engineers average six years experience – Design team changed g g three times over the course of the program • Program Manager – Two different PMs – Each had 20 years experience • Senior Management – Approves programs at each of four milestones – Limited day to day involvement .

Case 5 • Product strategy – The specification was reissued four times – With the market changing R&D was “aiming for a moving target” target – Tiger team forced a frozen spec – The product strategy and features were not well understood going into the program • Product performance – Product was well accepted and met customer needs .

Case Summary NPD Productivity PM Experience Team Experience* Product Performance Product Strategy Senior Management * Yellow due to personnel changes ROI = 28% 20 Years 6 Years Good Questionable Limited Voice of the Customer Good Successful Program Started a New Product Line .

Change So…. How do you improve your process? .

Implementing Change • Acceptance Process 6 Stability Immobilization Denial Bargaining Anger Depression Testing Acceptance Note: Red processes may require conflict resolution skills. Process developed by Dr. Kubler-Ross .

Implementing Change • Acceptance Process 6 Stability Immobilization Resistance to Change Anger Denial Bargaining Depression Testing Acceptance Note: Red processes may require conflict resolution skills. Process developed by Dr. Kubler-Ross .

Implementing Change • Causes of resistance to change 7 – Substantive disagreement – Misunderstanding facts – Different perspectives – Intertia – Loss of control – Indictment of the past .

Implementing Change Resistance to Change can be Overcome 7 – Don’t surprise employees – Over communicate Don t – Provide a channel for the employees’ voice – Communicate early and often during the change process – Ensure relationships with supervisors – Provide a method for conflict resolution – Deal with conflict effectively .

What to change • Two categories of improvement opportunity – NPI team responsibilities p – Organizational changes • Focus o responsibilities first ocus on espo s b es s – Train each team and require voice-of-the customer techniques on every NPD project – Charter each team with the responsibility for setting up • • • • Supply chain S l h i Production quality audits q y Production quality test methods Production reliability audits .

What to change • Organizational changes – Update p g p program manager requirements to g q include senior level experience – Setup regular pulsing rhythm with senior management to allow senior management to t t ll i tt have visibility yet minimize impact to the team – Create metrics and reporting requirements around • NPD productivity • NPD quality Keeping the visibility is critical to understanding what i working d t di h t is ki .

How to implement the changes Stability Immobilization Denial Bargaining Anger The goal: Minimize these steps! Acceptance Depression Testing .

How to implement the changes • Avoid forcing new processes and organizational changes: rather manage the quality of the changes – Even if you know the process. Stay in the stability phase while communicating the changes that are coming! . – Tell the teams you are considering changes and ask for their input. participate in process existing meetings. reviews. and activities with the NPD teams. Be sure to take their input seriously.

How to implement the changes Once what to change is identified. and observing and documenting the existing process is complete: perform a gap analysis with the team We W must close the gap from t l th f “as is” to “will be” .

How to implement the changes Stability Immobilization Denial Bargaining Anger Allow these steps to p Acceptance happen during the gap analysis! Depression Testing .

How to implement the changes • The goal of the gap process: Implement the change in the testing phase! .

• Use research to help identify the critical few attributes to improve NPD quality. tt ib t t i lit • Implement a good change management process to improve NPD. 1 • Strategically decide whether quality or time timeto-market & market disruption is the top priority (both is ideal) ideal). .Closing Remarks – Discussion • Industry NPD quality is less than 2 sigma.

Closing Remarks – Discussion Measure Existing NPD Quality Identify Gaps from Best in Class Manage Changes Using Gap Analysis Celebrate Success Industry is < 2 sigma Academic Research can Guide You Reduce Conflict W/ Team Input Measure Improvement Over Time .

• Recognize that organizational change is a process and h d how t approach change f to h h from a leadership perspective. .Learning Objectives • Learn what is important to change to improve the quality of new products in your firm.

Phi Kappa Phi ( ( ). MBA (2007) Sullivan. Project Management. Software architecture. John Holmes. Professional Engineer (1999) • Reliability and Safety . quality and reliability. Analog digital Electronics quality and reliability. • Honors: Delta Mu Delta (2010). and power electronics.. ASQ CRE Work History • • • • 06/1998 – Present 08/1987 – 06/1998 06/1983 – 08/1987 08/1986 – 05-1998 General Electric (Engineering & Management) Boehringer Mannheim now Roche Diagnostics Standard Change Makers (Technician & Engineer) Purdue University (Adjunct Professor) Education • Education: DBA (2011) Northcentral. 3 International Patents others in process • 10 P Papers P bli h d & 8 I it d P Published Invited Presentations t ti • GE Certified Six Sigma Black Belt (2003) • GE Corporate Reliability Council.GE Expert – ASQ Certified CRE • Expertise includes: NPI. Leadership. MS Electronics (1995) Indiana State. Analog. BS Electronics (1986) Purdue. digital.com . P. Other Accomplishments • 22 US Patents.Dr. pp (1995) ) Email: mailjholmes@yahoo. GE Software PITS Development Team.E. Chair Elect ASQ Electronics D Industrial Advisory Board – Western Kentucky University.

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