EVALUATION OF PRODUCT DEVELOPMENT PROCESS USING EMVS
Iara Tonissi Moroni Cutovoi
Universidade Nove de Julho - UNINOVE, Brazil
E-mail: itmoroni@hotmail.com
Jose Antonio Arantes Salles
Universidade Nove de Julho - UNINOVE, Brazil
E-mail: salles@uninove.br
Rosangela Maria Vanalle
Universidade Nove de Julho - UNINOVE, Brazil
E-mail: rvanalle@uninove.br
Submission: 25/02/2014
Revision: 12/03/2014
Accept: 07/05/2014
ABSTRACT
This paper evaluates a PDP model application in an auto parts company,
leader in its segment. From the application of lean thinking in the supply
chain and the EMVS performance analysis methodology for PDP, a check list is
created to avoid waste in project management. In this paper, we show that EMVS
can be positively impacted through active management of knowledge within a
project. This paper suggests that the value-enabling portion of a project
manager's role requires aligning knowledge across these three key domains
regarding PDP Gates (Phases) at company manufacturers of auto parts, Lean
Thinking and Value Stream, and methodology for managing projects through
performance-term rates and costs. The results show that the methodology has
positive aspects, but its implementation takes time and has repercussions
throughout the supply chain. Further this research try to explain the types of
wastes and view of new products' development is enhanced and associates a
manufacturing strategy focus on EMVS performance analysis and lean thinking,
PDP and value stream mapping showing the
important of contribution this tools at reduction of waste.
Keywords: PDP: Product Development Process,
Lean thinking, Value stream and EMVS: Earned Value Management
1. INTRODUCTION
The
product development process (PDP) is essential for the competitiveness of
companies in several market segments. Guided among best practices for
management is the use of process approach, which has the aim of integrate
activities, techniques and methods from different areas of knowledge such as cost,
engineering, logistics, quality, marketing, project management, among others.
The aim of this study is to analyze the potential application of mapping value
stream management in the supply chain associated with PDP. It evaluates a case
for applying PDP Development model of new products that makes part of the
unified model of PDP (ROZENFELD, et al, 2006). The results are evaluated using
the methodology EVMS - Earned Value System Management - used in project
management through costs and schedules KPIs.
This
paper is organized into these sections - Lean Thinking and Value Stream, PDP
and Supply Chain Management. The following is a PDP integration proposal which
analyzes the value stream and presents a case study with an application of this
concept. Finally, conclusions regarding the proposed integration are presented.
Knowledge management has emerged as a major priority
of the organizations by the urgency and demand of differentiation through
knowledge in order to become an entry barrier to competitors, and remains
sustained competitive between aspects of technologies of information and
knowledge (ANDRADE et al,
2010).
This
works aims to contribute for the existing gap supporting workers and
researchers to create abilities related to tactile and explicit knowledge to
joining them with product development process. The impression of this work is
applied on a motor manufacturer company at the end.
Most
of the business information and knowledge available in organizations, and even
some of their business processes, is not to be found in (explicit) structured,
documented form, making it unavailable to both veteran and new employees, and
to other stakeholders. In some cases, these resources are ultimately lost
within the organization. Accordingly, the development of theoretical structures
that make provision for capturing knowledge about business processes that
contribute directly or indirectly to adding value to goods or services
generated, and for sharing it among individuals and groups, is fundamental to
business success (MELO et al, 2010).
This
challenge is particularly intense for companies that are high-technology, long
maturity cycle and high-complexity dependent of the resulting set of developed
components and applications based on existing technology. In this sense
knowledge and innovation abilities are key factors of success and are enablers
for better comprehension and assistance of clients’ needs for products and
services (SANTOS, 2008).
2. METHODOLOGY
The
method to be used will be qualitative, since the method is consistent with the
formulation of problem and project objectives. In this study, data collection
was obtained by using three sources of evidence: interviews with 12 people
(analysts, supervisors and managers) of the Manufacturing, PCP, Planning
Materials, Development Engineering, Logistics and Sales areas, documents
analysis of the company chosen to study, and participant observation of the
development process of new product company studied.
The
case study was conducted in automotive organization segment where it was
studying the launch of a new product within an existing production line. For
the case study the reference Yin (2001) was used to define case study.
According Yin (2001) case study means an empirical study that investigates a
phenomenon within its current context, inside their reality context, when the
borders between phenomenon and context are not enough defined and various
sources of evidence are used.
Reich
et al. (2012) made contributions relevant to this paper — dimensional zing
knowledge management, identifying project-based knowledge types, introducing
the concept of Knowledge Alignment. Each is briefly described below.
3. LEAN THINKING AND VALUE STREAM
The
principles are associated with creating customer value and eliminating waste in
the process. In this sense, one of the most important tools of lean thinking is
value stream mapping. The Value Stream Mapping is an essential tool because it
helps to visualize more than just individual processes. It helps identifying
sources of waste, provides a common language for dealing with the manufacturing
process, makes decisions about the apparent flow, so you can discuss them; join
lean concepts and techniques, which helps to prevent the implementation of some
techniques in isolation, form the basis for an implementation plan, and shows
the relationship between information and material flow (RHOTHER; SHOOK, 2003).
According
to Seth et al (2008), the goal of building a production chain representation
where individual processes are linked to their customers or through a continuous
flow or pull production should be seek. The idea is to approach each process of
producing only what customers’ need when they need.
In
contrast, the goal of manufacturing is playing without errors the same product
continuously and, depending on the industry, this value can vary between dozens
and hundreds of thousands.
Burlikowska
(2011) explain the final product of industrial good quality is a result of
project quality plan, quality production and also holding quality: design
quality - a degree of excellence of the project compared with the requirements.
For the PDP effective it is necessary to perform the integration of projects
due to the complexity and the size of them, and paw the contributing both
system information management as knowledge management.
4. PRODUCT DEVELOPMENT PROCESS (PDP)
The
Product Development Process (PDP) includes technical and managerial aspects of
an organization that turns market opportunities and information about the
technical possibilities to be used in a commercial product production. This
process includes the design and development of a new product Lean Thinking and
Value Stream.
The
principles are associated with creating customer value and eliminating waste in
the process. In this sense, one of the most important tools of lean thinking is
value stream mapping. The Value Stream Mapping is an essential tool because it
helps to visualize more than just individual processes. It helps identifying
sources of waste, provides a common language for dealing with the manufacturing
process, makes decisions about the apparent flow, so you can discuss them; join
lean concepts and techniques, which helps to prevent the implementation of some
techniques in isolation, form the basis for an implementation plan, and shows
the relationship between information and material flow (Rhother& Shook,
2003).
According
to Seth et al (2008), the goal of building a production chain representation
where individual processes are linked to their customers or through a
continuous flow or pull production should be seek. The idea is to approach each
process of producing only what customers’ need when they need.
In
contrast, the goal of manufacturing is playing without errors the same product
continuously and, depending on the industry, this value can vary between dozens
and hundreds of thousands.
According
Fawcett et al (2011), to share information about the PDP and invest in
connectivity technologies, it is essential, further refer to critical
information - eg, sales, inventory levels, sales forecasts, technology roadmaps
and market effectively leverage minimum income improvements in decision making
coordination, quality and performance. So, in turn highlights the importance of
using success criteria, approaches to use financial, the information technologies,
and build periodic reviews of the portfolio to create opportunities to classify
projects (COOPER, EDGETT ; 2006).
4.1.
The
model Stage-Gates
This
model classify project according the current stage and avoid to wasting time mangers in gates did not need to
be performed, delays in project execution for performing unnecessary activities
or waiting for gates postponed due to lack of agenda of members of the
evaluation commission, resistance to implementation of new practices. The
concepts are indeed sine qua non conditions for organizational knowledge
creation and innovation processes, and is still both theoretically and
empirically under-explored.
ALVARENGA
(2011), in order to maintain competitiveness, multinational companies need to
create suitable conditions for knowledge to flow among their subsidiaries
(HENRIQUES et al, 2013). The assumption of this is that headquarters have more
power to manage their international operations, using the successful methods of
their home country (MURITIBA, 2010).
According
to Zamberlan (2007) the development of new products is being considered as an
important means to create and sustain competitiveness. Continue an effort in
this area is a strategic need to continue to operate in the market. The
applications of the new products have a hope of increasing their market share
and improve profitability. The modernity product is analyzed by diversifying
the quality of the product and its life cycle, which are innovative (new
generations of products), horizontal diversity (variety), which is an
adaptation of the usefulness of the product requirements, and tastes of the
individual operating conditions, diversifying vertical (classes) is based on
the division level of the same functional tools. This approach makes it
possible to find many of the different quality settings product quality owned
businesses. (BURLIKOWSKA, 2011).
As
Miguel (2008) it is clear that the process of new product development the focus
on traditional factors such as financial return and, of course, acceptance and
customer satisfaction and also the automotive industry is one of the most
important industries in Brazil. The lack of a criterion of success at the
strategic level is consistent with the fact that a prioritization of project
portfolio officers throughout these lifecycles are relatively recent and still
in the process of internal acceptance.
It is
also evident that the factors of agility in new product launches in the market
are allowed, however they do not have a formal role in the practical development
of new products. Process development vision of manufacturing is an
organizational learning process, as who prepares the organization for new
choices strategic and favors the development of new ideas (BORHO et al, 2012).
Below at Figure 1 we show the Knowledge management in PDP automakers.
Figure1: The Knowledge management in PDP automakers
5. SUPPLY CHAIN MANAGEMENT
The
concept of Supply Chain Management presented by Handfiled and Nichols (2002) is
conceived as a tool that goes beyond the logistics by dealing with processes
that are not part of its scope. It encompasses all organizations and activities
associated with the flow and processing of goods, from raw materials stage to
the final consumer, with associated flow of information.
The
Integrated Supply Chain has represented a promising new frontier for companies
interested in obtaining a competitive advantage and can effectively be
considered an expanded, updated and, above all, the holistic vision of
traditional materials management, including the management of the entire chain
production of a strategic and integrated way. It also assumes, fundamentally,
that companies should define their competitive and functional strategies
through their positions (both as providers and as consumers) within the
production chain in which they operate.
Note
that the theme introduces an important change in the competitive paradigm, as
it believes that market competition is, in fact, at the level of production
chains and not only at the level of business units (isolated), as set out
traditional work on Porter (1993). This change results in a competitive model
based on that nowadays the competition is among "virtual business
units", i.e. between supply chains.
Thus,
there is an opportunity to integrate the PDP process through the value stream
map and lean thinking to the whole supply chain, where the goal to be achieved
by analyzing the value stream is to obtain a continuous flow, driven by the
needs of customers, from raw material to finished product.
Performance
evaluation monitors, controls and directs all the activities that contribute to
completion of the transport (BOWERSOX; CLOSS, 1999). The monitoring accompanies
and records chronological system performance, and maintains both clients and
transport managers informed. The control continuously accompanies execution of
the activities, enabling corrective action to be taken wherever values do not
match the planned goals (BALLOU, 2001).
According Borsch (2010) reports that logistical competences have key
roles to transition from one PDP to another supply chain. In this regard, a
large number of studies have shown that the development of processes with
partners in the supply chain offers distinct advantages (SAEED et al, 2011).
6. CASE STUDY
The
company studied is one of the leading American manufacturers of auto parts. The
business focus is development and manufacture of diesel engines. The production
volume in year 2010 was 143,800 engines. The company's products meet vehicular,
agricultural, industrial and marine segments.
Business
in three industrial units, two units installed in Brazil and a unit in
Argentina, has about 3,000 employees. The company has the objective of
assisting customers in the region and work as a base for exporting products
worldwide. Today the company exports to over 30 countries in South, North and
Central America, Europe and Oceania. The unit's engine company headquarters in
the United States and has approximately 4,500 employees in five plants. The
company develops products in two countries and has a unique development process
that is adopted with some modifications to fit the company's organizational
structure in each country.
We
applied a model of this company based on PDP Gates (Phases), as the unified
model proposed (ROZENFELD et al, 2006). This application was performed by a
team composed of 12 people involved in the process, coming from diverse areas
(Manufacturing, CFP, Material Planning, Development Engineering, Logistics and
Sales), included one of the authors of this article. The team was able to diagnose
weaknesses, which resulted in improvements in the management process of project
development.
The
case study was situated on additions to existing product lines: new products
that complement the established product lines of a company. There was a
division into two phases, as shown in Table 1.
Table
1: Types of waste
6.1.
Studies
Phases
In
the first phase, through the collection of information to analysts, the group
followed the trail of the production of a product from the consumer to the
supplier. After flow adjustment to the organization, it was possible to list
and analyze the related processes, diagnosing weaknesses such as lack of a
logical sequence of activities that optimize the time and to order the actions
predecessors, problems of communication between areas, lack of an array of
responsibilities, lack of time to ratify the new parts and drives unnecessary.
With
this diagnosis, strategic actions were proposed as the second phase, in order
to improve the active participation of group members in the process. The
improvements proposed in the second phase were two, as follows.
The
first refers to the structuring of the process steps that allowed him to see
the flow, helping to identify the seven types of waste: time, unnecessary
movement, transportation, inventory, lack of discipline, overproduction and
reinvention.
The
second refers to the identification of the scopes are constantly changed and
consequently so are the schedules. Thus, the promised lead time is always greater
than the desirable and the difficulty in meeting deadlines becomes a constant.
Later there was a performance analysis to validate the
new process, which began with a management meeting for consensus by applying
the tools defined by the PDP.
We used
the analysis focused on the performance criteria EMVS Earned Value Management
System, to validate and measure during the evolution of project activities, and
allow the review of planning to achieve cost and schedule goals established
previously. The second EVMS is a methodology for managing projects through
performance-term rates and costs. The project development is controlled with
the aid of three curves, which are defined from these indicators:
·
SPI Schedule Performance Index - "Schedule
Performance Index" is a variation on time performance in relation to its
planned schedule;
·
CPI (Cost Performance Index)= is a variation of the
planned cost performance against the real.
For
SPI and CPI calculations we used the formula SPI = EV / PV and CPI = EV / AC,
where:
·
PV (Planned Value) = Budged Cost of Work Scheduled
(BCWS) - Budgeted cost of the activities scheduled for completion by the date.
·
AC (Actual Cost) = Actual Cost of Work Performed
(ACWP) - Actual cost of the activity undertaken to date.
·
EV (Earned Value) = Budged Cost of Work Performed
(BCWP) - Budgeted cost for completion of activities undertaken to date.
The
SPI and CPI are the indices that measure project performance. The measurement
takes place as follows:
·
SPI> 1: Schedule in advance and CPI> 1: Under
the budget
·
SPI and CPI = 1: Schedule and on Budget day
·
SPI <1: Timeline late and CPI <1: Over budget
6.2.
Results
From
a measurement date is determined possible to verify the relationship between
the cumulative and time. This is to, budgeted cost estimates for completion of
activities to date, estimated cost for completion of activities undertaken to
date and, above all, the real cost of the activity by the same date. From the
data analyzed was possible to determine the SPI and CPI are presented below in
Table 2.
Table
2: Spending on procurement of materials and transportation
The
schedule was analyzed with 100% of completed activities; therefore, this study
did not use the concepts of change of schedule (SV - Schedule Variance). The
schedule variance indicate whether the project is early in the day or late in
relation to what had been planned and is calculated by subtracting the budgeted
amount of the scheduled value. Positive values indicate favorable conditions,
negative values indicate problems.
With
the premise that it is easier find problems than proposing solutions we
identified obstacles that were impeded environment management optimally. From
these, we created intermediate objectives to overcome obstacles and to advance
to the next stage of the methodology, which gives rise to the deployment plan.
To
perform changes a deployment plan was built and a Check List was created.
Differently from traditional management, which owns the project individually,
managing it only by chronological timeline, this Check List is a tool that also
provides the resources to manage project implementation.
For
implementation of the Check List a functional group (Task Force) was created,
with the following activities:
·
Preparation of list of prioritized projects and their
respective activities;
·
Review of supply networks, already developed for the
projects and their management characteristics in the traditional, chronological
control;
·
Review of the resource pool, as previously were
sequential activities, as if the projects were only, disregarding the conflict
of using the same resource on multiple projects.
The final idea is to obtain a clear view of the PDP
process and some of their waste and guidelines for effective analysis to
optimize flow and elimination of waste. The check list below (Table 3) has
proven to be a guide or a single instrument, a set of issues, application of
holistic analysis rather isolated and better sequencing of activities.
Especially also showed the relationship between information flow and material
flow.
Table
3: Check List – Registration and information system for the assembly line
Signs
of improvement were seen between information cost and schedule of the project,
communication, better sequencing of activities, increased visibility of the
responsibility matrix and material flow. Considering the preparation of the
Check List and tabulation of data on the stages of development of new products,
it is remarkable to see the need for training in time for the value stream,
selecting the value stream for improvement, define the elements of the value
stream; analyze and map the current state, to analyze a map or a map ideal
future, implement new processes, and continuously improve (NAZARENO et al,
2007).
7. CONCLUSION
Providing
a common language for dealing with manufacturing processes, considering that in
the case of launching a new product, the existing line, made decisions about
the flow visible. This allowed the team to discuss, together lean concepts and
techniques, helping to prevent the implementation of some techniques
individually, and thus customize the situation of each company and overcoming
the difficulties identified.
A
deficiency is found that although there are various descriptions to support the
diagnosis, lack a guide or a single instrument, a set of questions, for
example, ready to use. In the case of the research model has been studied in
detail for about 60 days to prepare the model presented Check List.
Therefore,
the recommendation of the methodology of EVMS in launching new products is
sparingly.
This
paper was focused on identifying knowledge contribution for development of new
products. Acquiring this kind of knowledge becomes one of the main company
objectives when it realizes creation, organizing, retention and learning are an
effective formula against other companies and contributes to improve abilities
and to protect achieved results.
There
are few systems available in the market leveling the displacement of
activities, requiring constant follow-up, adaptation and improvement of the
parameters. Thus, optimization may lead time, resources and costs used in both
individual and multiple projects.
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