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Collaborative Product Development Associates, LLC www.cpd-associates.comA summary of this report is available to all of our subscribers. Sponsors of ou r collaborative program in PLM

Integration/Product Definition receive the full report as part o f our comp rehensive services. Those interested in

the program should con tact cust_service@cpd-assoc iates.com.

Lean PLMThe PLM Challenge to Enable the Lean Enterprise

Michael Kennedy, Targeted Convergence Corporation

Noted author Michael Kennedy outlines the way Toyota thinks, and calls for developers to fullysupport the test-and-design paradigm. Simulate before design to explore the limits with set-basedpossibilities. Toyota thinks about limit curves, which summarize the design tradeoffs.

Michaels recent book, Product Development for the Lean Enterprise, has raisedawareness and presented the underlying philosophy behind Toyotas outstanding productdevelopment success. He has been a leader in the redesign of organizational processes for overthirty-five years. With thirty of those years at Texas Instruments Inc., Michael was the leadengineer on many development projects including missile system products and manufacturing

systems. During his last ten years at TI, he was a leader in re-engineering the core engineeringand manufacturing processes, including adopting concurrent engineering, solid modeling CADsystems, CAD/CAM integration, and leading quality initiatives.

This report is derived from Michaels presentation at CPDAs annual conference, PLMRoad Map 2007.

EXECUTIVE SUMMARY

Last year, Toyota made more money than the next five auto makers combined.They continue to gain share in the marketplace with no end in sight.

Toyota has an intrinsically different development behavior based upon afundamental philosophy learn first before making design decisions. They startby setting targets as wide as possible, and allowing the specifications to convergeover time. Prototyping and testing never target verification, or fixing what wentwrong. To learn, they build knowledge from the start that can be applied to makedecisions. Basically, a design-then-test mentality, the norm at most othercompanies, means that you design, then you test your decisions, and then you fixthe mistakes. A test-then-design mentality simulates and tests first, and thendesigns. Toyota has not really believed in simulation, but in hard testing. That isin the process of shifting.

Continuous learning at Toyota centers on their tool sets. A critically importantaspect of the approach relates to their A3 reports. Toyota arguably is the moststandardized company in the world. They standardize with their A3 checklists,which lock in all the learning and knowledge through a set of rules and standardsthat flow from one project to the next.

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Lean PLM: The PLM Challenge to Enable the Lean EnterprisePLM Integration/Product Definition

2 2007 Collaborative Product Development Associates, LLC

We believe the companies we work with are going to computerize their data.Toyota understands that they need to use computer technology for global accessto knowledge, but worries about the loss of person-to-person communicationthat today is facilitated by these paper documents.

Toyota continually looks at sets of solutions around limit curves, and thinks interms of design with limit curves. When you have two limit curves, you have atradeoff to consider. You look at what the decision affects, how the decision withone variable impacts the others. Thats the way Toyota thinks with their designs.Not in all cases, but often they decide straight from the limit curves. The chiefengineer makes the decision with enough understanding even without a CADmodel. They know enough to go straight from the decision to the CAD model,and then to final test.

Another point regarding Toyota relates to the importance of conflict to makinggreat cars. They build cars with very real conflict between the chief engineer andthe functional managers. The chief engineer designs the car; the functionalmanagers own the knowledge. That occurs across all the various parts of the car.To the chief engineer, its his car being designed. To the functional manager, itshis knowledge creating the car. They both need an approach to judge and evaluatethe data and tradeoffs for decisions. Both represent the same level in theorganization; one cannot overrule the other. Critically important, the resolution isall based around knowledge. That extends right back to the limit curves andLAMDA learning cycles (Look-Ask-Model-Discuss-Act). Toyota knows how tomake the decisions, and constructive conflict characterizes the process at its best.Toyota wants that hard conflict; it is critical to their overall developmentapproach. It is also tremendously detailed, getting down to the tolerance level onmanufacturing parts, as an example.

Taking this approach, Toyota basically time-shifted product development. Theymoved away from the approach where most time spent related to the detaildesign phase with loop-backs. The limit curves and understanding apply to thefuzzy front-end stage of the design where most of their design decisions aremade. That is where their set-based design pays off. The validated specificationscome together with the limit curves. They represent multiple points, with multiplerelease parts of the car to schedule for release to manufacturing. They do not missthese schedules because they know the tradeoffs. They will never actually start acar project without knowing that they have at least one solution that is safeagainst the limit curves.

Especially important, the approach allows Toyota to leverage knowledge acrossprojects. They apply set-based knowledge, LAMDA, the A3s, and the limit curvesto communicate across projects. The shared knowledge allows all to reuse thelessons learned. This is Lean Product Development, or Learning-First ProductDevelopment. Within in a project, they rely on the same tools everybody elsedoes, such as CAD/CAM.

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4 2007 Collaborative Product Development Associates, LLC

product development environment can take you to the next level. PLM providesthe glue that ties together your knowledge.

Recommendations

Get Lean by first removing the massive waste of knowledge in your product development system.

Plan / prototype your PLM system during this time.

Then grow the PLM environment to continually expand yourlean product development system.

My recommendations are relatively clear. For companies implementing Lean orPLM, get Lean first. Understand how to apply the analysis of tradeoffs early inthe design process; understand the specific approaches at Toyota that you canbuild on. I think LAMDA and A3 discipline are absolutely critical. You must havean absolutely firm approach for identifying, collecting, and capturing knowledge.

For the developers of PLM, we need more evangelists with an understanding ofthe power of Lean, with an understanding of how Toyota thinks. That does notmean copying Toyota. Copying will not work because they have their own set ofchallenges, and copying would put you even further behind where they were inthe past.

Understanding the limits on decision tradeoffs will enable you to designaccordingly. If you do not understand, you are guessing. Toyota relentlesslysearches for all those limits. Limiting curve-driven design represents the key toToyotas approach in product development. I see tremendous potential in lookingat simulation to both understand and drive those curves, coupled also with all the

traditional approaches for getting the knowledge in from manufacturing.

This document is copyrighted by Collaborative Product Development Associates, LLC (CPDA) and is protected by U.S. and internationalcopyright laws and conventions. This document may not be copied, reproduced, stored in a retrieval system, transmitted in any form, posted on apublic or private website or bulletin board, or sublicensed to a third party without the written consent of CPDA. No copyright may be obscured orremoved from the paper. Collaborative Product Development Associates, LLC and CPDA are trademarks of Collaborative Product Development

Associates, LLC. All trademarks and registered marks of products and companies referred to in this paper are protected.

This document was developed on the basis of information and sources believed to be reliable. This document is to be used as is. CPDAmakes no guarantees or representations regarding, and shall have no liability for the accuracy of, data, subject matter, quality, or timeliness ofthe content.

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ...................................................................................................................................... 1SCORECARD ON TOYOTAS DOMINANT POSITION ......................................................................................7

TEST-THEN-DESIGN:LEARN FIRST .......................................................................................................................9

CONTINUOUS LEARNING.....................................................................................................................................12

LIMIT CURVES ...................................................................................................................................................13

CONSTRUCTIVE CONFLICT .................................................................................................................................14

SET-BASED KNOWLEDGE ...................................................................................................................................15

THE ROLE OF PLM ............................................................................................................................................16

AUDIENCE RESPONSE .................................................................................................................................... 18

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