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News from PDSS Inc.
"Leading the Future in Product Development" 
May 2012- Vol 5, Issue 5
In This Issue
The New Economy of Development Projects
Greetings!   
Here is Skip's latest thinking on the practice of Critical Parameter Development & Management (CPD&M) in the product development process during these post-recession times.
-Carol
The New Economy of Development Projects


[Note: Some industries use the word "Key" instead of "Critical". We have used the latter throughout this article, but the terms are interchangeable.]

 

Technology and product development projects are under cost, schedule and performance pressure as never before. In the post-recession economy, corporations and enterprises of all types are beginning to invest in new development initiatives with more confidence - but under rigorous spending constraints. Our discussion this month is on a renewed definition of what is truly "Critical" for these projects in terms of the impact on the cost of development projects.

  

How much money we invest in a development project is based primarily on how many people are doing the development work and for how long. Thus we see a consistent bias in many projects having too few people doing too few tasks with the expectation that a new technology or product is going to be delivered as if these "lean" conditions were not actually imposed on the development team. Not a very good way to run a development process. How do we discuss balancing our people and time requirements to deliver a technology or product right the first time? We begin here...

 

  • All projects start with requirements, which are derived from two sources of discovery: The Voice of the Customer (VOC) and / or the Voice of Technology (VOT). The VOC is market pull information about customer needs while the VOT is technology push information about an innovation we have developed that customers are not aware of yet. If you have been following my newsletters you already know there are two mutually exclusive categories of requirements: New, Unique and/or Difficult (NUD) and Easy, Common or Old (ECO). NUD requirements are considered "critical" until we can prove they are ECO in our ability to fulfill them. Requirements that are New, Unique and/or Difficult possess risk - the potential to become real problems because we cannot in some way fulfill them.
  • All projects proceed with concepts, math models, and physical proto-types and ultimately end with products and the processes used to make them. It is here where we define NUD and ECO parameters. All products work according to the system of parameters that govern their performance. Most parameters are used to control the elements of the technology and product designs that fulfill the NUD and ECO requirements. A few parameters act as sources of unwanted variation to the performance of the designs and get in the way of fulfilling the NUD and ECO requirements. Our goal in development is to learn how to convert NUD parameters into ECO parameters. When a product is ECO, it is usually at its most economical state of existence based upon the concept from which it derives. Perfection is shipping a product with all ECO parameters being produced with production processes that are controlled with all ECO parameters - everything is 100% ECO! This never really happens. We always have a few NUD parameters in the system to make life difficult and consequently expensive.

 

Historically, Critical Parameter Management (CPM) began with the concepts of "Critical to Customer" and "Critical to Quality" (CTQ). You may be familiar with CTQs as part of the attempt to satisfy your customer's highest priority needs. This concept was a good start, but the economic conditions in 2012 force us to reconsider what the word "Critical" really means.

 

I have discovered over the last 20+ years since I first became aware of the concept of critical requirements and their fulfilling parameters that the broader you make the definition of CTQ - the more expensive it is to develop and manage these entities. The following things have become obvious:

  1. CTQs can be NUD or ECO; you must sort these requirements and parameters out - otherwise you tend to put equal amounts of effort into both. This causes a project to drift dangerously close to "all parameter management". NUD requirements and their fulfilling parameters require extra investment to develop the knowledge required to convert them to ECOs. ECO requirements and parameters tend to be quite amenable to low-cost quality management schema. Of course all parameters must be managed to some extent - but this is where the costs can get excessive by calling things that aren't really critical CTQs.
  2. VOT requirements tend to get under-estimated and they too fail to be sorted into NUD and ECO categories for labor and time investment for learning and maturation.
  3. Quality metrics are lagging indicators; development teams must use physics-based metrics based upon the Laws of Conservation of Mass and Energy to develop functional knowledge prior to dialing in quality to a given range of customer acceptance. You cannot satisfy a customer before you come to terms with understanding the physics and chemistry of your designs. Thus we recommend shifting away from the term CTQ and instead referring to "Critical to Function" (CTF). Your products work because of their integrated functions - not quality. Functions are leading indicators of potential quality or lack thereof.
  4. Capability (Cp/Cpk) is essential to documenting the growth of your ability to integrate requirements with functional performance (the numerator and denominator of a capability index). To develop capability requires six up-front sources of learning. We call all seven metrics The Big 7, as follows:

(1) Measure, (2) stabilize, (3) adjust functions and the parameters that control them; then we must know (4) independence, interactivity and statistical significance of the controllable engineering parameters that govern our functions, (5) hyper-sensitivities within our parameters that cause problems within our Y as a Function of X relationships. Measure the (6) robustness of our functions to unwanted sources of variation, many of which are coming from mass and energy outside of our design. And finally, we measure (7) capability to assess the ratio of what the customer wants to what physical performance can deliver in terms of the mean and standard deviation of our functions and the enabling part or material characteristics inside our sub-level designs.

 

In conclusion, the new, revised, more economical form of Critical Parameter Development and Management (CPD&M) has these elements:

  1. Discriminate between NUD and ECO Requirements, Functions and Parameters from both VOC and VOT perspectives. Customers are important but so too are our private innovations!
  2. Measure physics (CTFs) prior to and in support of quality (CTQs).
  3. Use the learning process promoted by measuring The Big 7 for all NUD Functions and Parameters (part and material characteristics that enable functions). If you can learn about your functions and their enabling parameters at a reasonable pace - you have a great leading indicator about your progress against planned timing and milestones. It's all about the Rate of Learning!
  4. Reserve the designation of "critical" for functions and parameters that are true problems because they are failing to meet learning objectives across one or more of The Big 7 metrics. Something is critical only when there is data from a math model or a physical proto type that proves that it is not meeting the Big 7 objectives in light of our NUD technical requirements either from the VOC or VOT. We must use the term "candidate" in front of critical until we have proof that this is really the case and that takes time and accrued learning.

This is the new form of CPD&M that will cost the least in development time and personnel investment when used to design a project resource and time budget. If these things are not considered, the project will be too "lean" and almost certainly will generate very expensive technology and design scrap and re-work, which are currently at epidemic levels in technology and product development. The time has come to seek a new balance between calling too many things "critical" and staffing to learn at the right rate so that the few things that truly are critical get the appropriate attention.

Is there a topic you'd like us to write about? Have a question? We appreciate your feedback and suggestions! Simply "reply-to" this email. Thank you!
 
Sincerely,
Carol Biesemeyer
Business Manager and Newsletter Editor
Product Development Systems & Solutions Inc.
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About PDSS Inc.
Product Development Systems & Solutions (PDSS) Inc.  is a professional services firm dedicated to assisting companies that design and manufacture complex products.  We help our clients accelerate their organic growth and achieve sustainable competitive advantage through functional excellence in product development and product line management.

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