Techniques and Analyses of Sequential and Concurrent

Product Development Process

Marko Starbek, Ph. D., Janez Grum, Ph. D., Aleš Brezovar, MSc. and Janez Kušar, Ph. D.

University of Ljubljana, Faculty of Mechanical Engineering

1
Content

1 INTRODUCTION........................................................................................................................3

2 SEQUENTIAL ENGINEERING..............................................................................................4

2.1 Sequential product development process.........................................................................4

2.2 Characteristics of sequential engineering........................................................................5

3 CONCURRENT ENGINEERING...........................................................................................6

3.1 Concurrent product development process.......................................................................6

3.1.1 Data transfer between activities in concurrent product development process.................7
3.1.2 Loops of concurrent product development process..........................................................8
3.1.3 Team work......................................................................................................................11
3.1.3.1 Team structure in concurrent product development process......................................11
3.1.3.2 Teams in big company...............................................................................................12
3.1.3.3 Team structure in SMEs.............................................................................................14

3.2 Organisational structures................................................................................................16

3.2.1 Functional organisational structure................................................................................16
3.2.2 Project organisational structure......................................................................................17
3.2.3 Matrix organisational structure......................................................................................19
3.2.4 Organisational structure of team work in SME..............................................................20

3.3 Goals and tools for support of concurrent product development process..................21
3.3.1 Quality Functions Deployment (QFD)...........................................................................23
3.3.1.1 House of quality structure..........................................................................................24
3.3.1.2 Steps in constructing the House of quality.................................................................26
3.3.1.3 Extending the House of quality..................................................................................28
3.3.1.4 Advantages of using the House of quality..................................................................29
3.3.2 Value Analysis...............................................................................................................29
3.3.3 Failure Mode and Effects Analysis (FMEA).................................................................34

4 SAMPLE CASE OF INTRODUCTION OF CONCURRENT ENGINEERING IN AN

SME...................................................................................................................................................39

4.1 Building a House of quality.............................................................................................39

4.2 Project of concurrent product development process....................................................42

4.2.1 Goals of the project and project team.............................................................................42
4.2.2 WBS of the project and responsibility matrix................................................................42
4.2.3 Structure of a project team for execution of concurrent engineering loops...................45
4.2.4 Time and structural plan of the project..........................................................................46

5 CONCLUSION.........................................................................................................................49

6 References..................................................................................................................................50

2
1 Introduction
A company can enter the global market only if it can fulfil the customer needs regarding features
and quality of products. Customers are becoming more and more demanding and their
requirements are changing all the time. "Customer is the king!” is becoming the motto of today.

In these circumstances only that company can survive on the global market, which can offer its
customers the right products in terms of features and quality, products which are produced at the
right time and place, at the right quality and at the right price. A product, which is not
manufactured in accordance with needs and requirements of the customers, which hits the market
too late or is too expensive, will not survive.

When developing a new product the company has to pay special attention to fulfilment of the basic
market requirement, i.e. as short new product development time as possible (as short delivery time
as possible).

Fierce market competition increases pressure on the companies so that they would hit the market
with new products sooner than their competitors. This goal can only be achieved by reduction of
product development time, while quality and cost of the product should be taken into account at
the same time, which is possible if the concurrent engineering concept is used. The basic idea of
the concurrent engineering is concurrent execution of formally sequential activities during new
product development process. By executing activities concurrently it is possible to harmonise
decisions during the draft phase, which prevents time and engineering changes during
manufacturing of the product. The motto for successful implementation of the concurrent
engineering concept says: “Concurrent engineering starts in the heads of team members.”

Several authors [1], [2], [3] have analysed activities in individual stages of new product
development process, and concluded that the volume and contents of product development
activities depend on quantity and purpose of the product. There is a substantial difference between
new product development activities in individual and mass production [4].

The chapter presents techniques and analyses of sequential and concurrent product development
processes, the emphasis being on team work, organisational structures and tools needed for
transition from sequential to concurrent product development process. The chapter also presents
the results of implementation of concurrent engineering in an SME which produces civil
engineering equipment.

3
2 Sequential engineering
2.1 Sequential product development process
The main feature of sequential engineering is sequential execution of stages in product development
process. Figure 1 presents the sequential product development process as a part of the product life
cycle.

Removal, recycling Marketing, product planning, tenders

Out of operation Concept of a product

DE
VE
UCT PL LO
PRO D AN P
Maintenance N IN
G Development of a product

M
PR

EN
OD

T A
U

ND
C
T
DE

DES
Use Making design

F IN
T documentation
ELO PM EN

IG N
IT IO N
Material
V

Start of operation
DE

NE
W P CT management
RO DU

Planning of manufacturing and

N

TI
O

Outfit
D UC assembly, development of
PRO production

Sales Manufacturing of parts

QC Assembly

Figure 1: Product development process as a part of the product life cycle

The next process stage can begin after its preceding stage has been completed. Data on current
process stage are collected gradually and they are completed when the stage is finished – then the
data are forwarded to the next stage as shown in Figure 2 [1].

Sequential product development time can be calculated as a sum of times needed for individual
stages of product development.

4
 Gradual building
Activities
collected of data

Single transfer
of data

Time needed for sequential new product development

Time

Activities

Goals

Product
planning

Design

Production
planning
Production
prepare
Manufacturing
and assembly

Delivery

Time needed for sequential new product development

Time

Figure 2: Sequential product development

2.2 Characteristics of sequential engineering

Three typical types of problems exist in sequential product development:
 organisational problems (problems in collaboration, unmotivated employees, requirements and
goals are not clearly defined, weak connection between suppliers and customers),
 problems in product development process (problems related to explanation of requirements,
problems during searching for solutions, problems related to meeting the deadlines),
 technical and economic problems with products (problems related to operation of the products,
manufacturing problems, environmental protection problems, cost-related problems).

5
3 Concurrent engineering
3.1 Concurrent product development process
The main feature of concurrent engineering is concurrent implementation of stages in product
development process. In this case the next stage can begin before its preceding stage has been
completed.

Winner defined concurrent engineering as a "systematic approach to the integrated concurrent

product planning and similar processes, including manufacturing and sales" [4].

Ashley defined concurrent engineering [5] as a "systematic approach to integrated product

development that emphasizes the response to customer expectations. It embodies team values of
cooperation, trust, and sharing in such manner that decision making proceeds with large intervals of
parallel working by all life-cycle perspectives early in the process, synchronized by comparatively
brief exchanges to produce consensus".

Concurrent engineering is based on eight principles:

First principle: EARLY DETECTION OF PROBLEMS

Problems that are detected early in the product development process can be solved more easily than
problems that are detected later.

Second principle: EARLY DECISION MAKING

In early design stages it is much easier to influence the product design than in later stages.

Third principle: SHARING WORK

One man cannot perform several tasks at once, while parallel-connected computers can.

Fourth principle: CONNECTION OF TEAMS

Connection and collaboration within a team is not enough – it is important that there is a connection
and collaboration among all teams that strive after a common goal: a customer who is satisfied with
the product.

Fifth principle: USING KNOWLEDGE

A knowledgeable and experienced person is still an indispensable decision-making factor.

Sixth principle: GENERAL UNDERSTANDING

Teams work better if they know and understand what other teams do. If one team changes particular
parameter then it has to think about how this change will affect other teams.

Seventh principle: OWNERSHIP

Teams will work more enthusiastically if they have some authorisation for making decisions, and if
they get some kind of "ownership" of what they have made.

Eighth principle: CONTINUOUS FOCUS ON THE COMMON GOAL

Everybody has to (as much as one can) participate in the fulfilment of the given goal of the
company; everybody has to enthusiastically (and yet not competitively) collaborate with other
individuals and teams.

6
3.1.1 Data transfer between activities in concurrent product development
process
In concurrent product development the next process stage can begin before its preceding stage has
been completed.

Data on the current process stage are collected gradually and forwarded continuously to the next
stage. The series of data exchange between the current process stage and the next process stage ends
when the data on the current stage has been completed.

Figure 3 presents the principle of concurrent product development process [1].

Activities Partially built

data

Multiple
transfer of data

Time needed for concurrent new product development

Time

Activities

Goals

Product
planning

Design

Production
planning
Production
prepare
Manufacturing
and assembly

Delivery

Time needed for concurrent new product development

Time

Figure 3: Concurrent product development

7
3.1.2 Loops of concurrent product development process

In concurrent product development there are interactions between individual stages of product
development process. Track-and-loop technology was developed for implementation of these
interactions [1]. Type of loop defines the type of co-operation between overlapping process stages.

Figure 4 presents types of loops in concurrent engineering with respect to number of interactions
between various process stages. 1-T loop means interaction of the process stage with itself, 2-T loop
means interaction between two process stages, and 3-T loop means interaction between three
process stages. As a general rule, the number of interactions between L process stages is equal to
L×(L-1)/2.
Type of
Number of acivities Number of interactions
loop

1- T 1 actvity 0

2- T 2 actvities 1

3- T 3 actvities 3

4- T 4 actvities 6

5- T 5 actvities 10

L - T L actvities L ( L -1)
2

Figure 4: Number of interaction between product development process stages.

Winner [4] proposed the use of 3-T loops, where interactions exist between three stages of product
development process.

8
When 3-T loops are used (Figure 5) the product development process consists of five 3-T loops.

Goals

Feasibility loop
Product planning
Product development stage

Design loop

Production planning
Design

loop
Production planning

Production loop

Manufacturing loop
Production

Manufacturing and assembly

Delivery

Product development loop

Figure 5: Track and loop process in product development

In 3-T loops each loop is defined as an intersection of three mutually covered stages; this can be
written as:

Feasibility loop = Goals  Product planning  Design

Design loop = Product planning  Design  Production planning
Production planning loop = Design  Production planning  Production
Production loop = Production planning  Production  Manufacturing and assembly
Manufacturing loop = Production  Manufacturing and assembly  Delivery and service

On the basis of the following requirements and restrictions:

 customer requirements,
 geometrical characteristics,
 weight,
 reliability,
 safety,
 quantity,
 lifetime,
 recycle,
 ecology
input is transformed into output [2] in each loop.

Each transformation loop is carried out in steps, as shown in Figure 6.

9
 4. step
Optimization and
improvements

2. step

1. step Have requirements 3a. step

No
Initial system state of and restrictions Analyses and
the " i " loop been met? evaluation

Yes

3b. step
Improved system state
of the " i " loop
=
Initial system state of
the " i +1" loop

Figure 6: Transformation process in the concurrent engineering loop

The information flow diagram in the track-and-loop process of product development is shown in
Figure 7.

10
 Goals of th e company
Requir ements and restr ictio ns of
feasib ility lo op

FEASIBILITY lo op

no Have requir ements and restr ictio ns

of th e lo op been met?
Requir ements and restr ictio ns of
yes
desig n lo op

feedback
in formatio n
DESIGN lo op

no Have requir ements and restr ictio ns

of th e lo op been met?
Requir ements and restr ictio ns of
yes
productio n plannin g lo op

feedback
in formatio n PRODUCTION PLANNING
lo op

no Have requir ements and restr ictio ns

of th e lo op been met?
Requir ements and restr ictio ns of
yes
productio n lo op

feedback
in formatio n
PRODUCTION lo op

no Have requir ements and restr ictio ns

of th e lo op been met?
Requir ements and restr ictio ns of
yes
manufactu rin g lo op

feedback
in formatio n
MANUFACTURING lo op

no Have requirements and restr ictio ns

of th e lo op been met?

yes
yes

no no Solu tio n in productio n no Solu tio n in productio n no Solu tio n in manufactu rin g Have th e company goals
Solu tio n in desig n lo op?
plannin g lo op? lo op? lo op? been met?

yes

Satisfied custo mers and

company

Figure 7: Information flow diagram in the track-and-loop process of product development

Analysis of the track-and-loop process of product development, as shown in Figures 5 and 7,

reveals that the concurrent engineering is not possible without a well-organised team work.

3.1.3 Team work

3.1.3.1 Team structure in concurrent product development process

We are dealing with team work when a team is oriented towards the solution of a common goal [6].
Team work is an integral part of concurrent engineering as it represents the means for
organisational integration.

Requirements for team work are [1]:

 flexible, unplanned and continuous collaboration,
 commitment regarding achievement of goals,

11
 communication by exchange of information,
 ability to make compromises,
 consensus in spite of disagreement,
 coordination when carrying out interdependent activities,
 continuous improvements in order to increase productivity and reduce process times.

3.1.3.2 Teams in big company

Concurrent engineering is based on multidisciplinary product development team (PDT) [7], [8].
PDT members are experts from various departments of a company and representatives of strategic
suppliers and customers (Figure 8).

PHYSICAL PRESENCE BASIC PRINCIPLES AND VIRTUAL PRESENCE

METHODS OF CE
CUSTOMERS
PDT MANAGER
AND SUPPLIERS

FIELD EXPERTS FIELD EXPERTS

Marketing,
market Design
research

Cooperation,
CIS Product IIS
communication Production
planning and continuous WEB SERVER
improvements

Manufacturing,
Delivery and
Engineering assembly and
PRODUCTS support PROCESSES
and analyses QC
(QFD, CFD,
FMEA)

TECHNOLOGY TOOLS

INFRASTRUCTURE

Figure 8: Structure of a multidisciplinary product development team

Product development team members communicate via central information system (CIS) which
provides them with data about processes, tools, infrastructure, technology, and the existing products
of the company. Representatives of strategic suppliers and customers – due to their distance from
the company – participate in the team just virtually, using the Internet information system (IIS)
which allows them to use the same tools and technologies as the team members in the company [8].

In big companies the PDT structure changes in different phases of product development. The team
consists of various workgroups in various phases of product development, and each workgroup
consists of four basic teams [1]:
 Logical team ensures that the whole product development process is divided into logical units
(operations, tasks) and defines interfaces and links between individual process units.
 Personnel team has to find the required personnel for PDT, it trains and motivates the personnel,
and provides for proper payment.
 Technology team is responsible for creating strategy and concept. It has to concentrate on
quality of products at minimum costs.

12
 Virtual team operates in a form of computer software and provides other PDT members with
data required.

Figure 9 presents the composition of a workgroup in a big company.

PERSONNEL TEAM

VIRTUAL TEAM
WORK GROUP

AM
TE
L
A
IC
G
LO
TECHNOLOGY TEAM

Figure 9: Workgroup in a big company

The goal of the concurrent engineering is to achieve the best possible collaboration among the four
basic teams in a particular workgroup.

The multidisciplinary teams should generally have such a structure that the following goals are
achieved:
 clear definition of competence and responsibility,
 short decision paths,
 identification of team members with the product being developed.

A survey of the published works in the field of team structure planning in big companies [1], [9] has
revealed that a three-level PDT structure is recommended in big companies, as shown in Figure 10.

Level:
1. CORE TEAM

MANUFAC-
FEASIBILITY DESIGN PROD. PLAN. PRODUCTION
TURING
2. lo op loop loop loop
lo op
LT LT LT LT
LT

Feasib ility of Feasib ility of Desig n of Desig n of Prod. plan. of Prod. plan. of Productio n Productio n Manufact. Manufact.
3. funct. 1 funct. n funct. 1 funct. n funct. 1 funct. n funct. 1 funct. n funct. 1 funct. n
FT FT FT FT FT FT FT FT FT FT

LT - level team
FT - functio nal team

Figure 10: Three-level team structure in a big company

Core team consists of the company management and the manager of the level team; its task is to
support and control the product development project.

13
Level team consists of the level team manager and the managers of the participating functional
teams in this level (loop); its task is to co-ordinate the goals and tasks of functional teams and to
ensure a smooth transition to the next level of product development.

Functional team consists of the functional team manager, experts from various fields in the
company and representatives of suppliers and customers; its task is to carry out the tasks given,
taking into consideration terms, finance and personnel.

3.1.3.3 Team structure in SMEs

Analysis of results regarding setup of workgroups and team structure in big companies has shown
that the proposed concept for planning workgroups and structure of teams cannot be used in SMEs
as there are too many teams in a workgroup and too many team levels.

When developing a workgroup concept, structure and organisation in SMEs it will therefore be
necessary to propose:
 as few workgroup teams as possible,
 as few team levels as possible, and
 appropriate organisation of the company.

Experts of the Production Systems Institute made several versions of workgroup composition and
team structure, and decided – after evaluation of the proposed versions – that the following seems
advisable for SMEs:
 transition from four workgroup teams (personnel, logical, technology, and virtual team) to two
teams (logical and technology team);
 transition from the three-level to two-level team structure.

In an SME a workgroup therefore consists of just two basic teams (Figure 11):
 logical team ensures that the whole product development process is divided into logical units
and that interfaces and links between process units are defined;
 technology team is responsible for providing strategy and concept.

PERSONNEL TEAM

VIRTUAL TEAM

WORK GROUP M
A
TE
L
A
IC
G
LO

TECHNOLOGY TEAM

Figure 11: Workgroup in an SME

With proper software tools the CIS performs the role of a virtual team (workgroup members should
be well trained to use these tools), and project team manager carries out the tasks of the personnel
team.

For SME, the transition from a three-level to two-level team structure is planned, as shown in
Figure 12.

14
 Level PERMANENT STRUCTURE OF CORE TEAM IN PRODUCT DEVELOPMENT PROCESS

CORE TEAM
1.

PROJECT
MANAGER

2. Project team of Project team of

Project team of Project team of production Project team of manufacturing
feasibility loop design loop planning loop production loop loop

VARIABLE STRUCTURE OF PROJECT TEAM IN PRODUCT DEVELOPMENT PROCESS

Figure 12: Two-level team structure in SME

Core team [10] which supports and controls the product development project consists of:
 core team manager (permanent member),
 department managers (permanent members), and
 project team manager (permanent member).

Project team [10] which carries out the tasks given, taking into consideration terms, finance and
personnel consists of:
 project team manager (permanent member),
 experts from various fields in the company and representatives of strategic suppliers and
customers (variable members).

The project team in SME is therefore designed similarly as a functional team in a big company, the
difference being in that there is just one team and its composition changes in different phases
(loops) of product development process.

In the feasibility loop the project team should define customer requirements and goals, and make
several versions of the product design; the project team should consist of the employees from the
marketing, product planning, and design departments, and representatives of strategic customers
and suppliers.

In the design loop the project team should provide general solutions regarding the product, product
planning and design, its parts and components, development of prototypes, and choice of the most
suitable versions from the manufacturing point of view; the project team should consist of the
employees from the product planning, design and production planning departments.

15
In the production planning loop the project team should select the best technology routings for
manufacturing of parts and assembling the components (definition of sequence, operations,
selection of machines, tools and standard times); the project team should consist of the employees
from the design, production planning, and production departments, and strategic suppliers'
representatives.

In the production loop the project team should define production type (workshop, cell or product-
oriented type of production) and select the optimal layout of production means; the project team
should consist of the employees from the production planning department, production,
manufacturing and assembly, as well as logistics and delivery.

In the manufacturing loop the project team should take care of prototype tests, supply of required
equipment, layout of production means, manufacturing and test of the null series; the project team
should consist of the employees from the production department, manufacturing and assembly,
quality assurance, warehouse and delivery departments.

3.2 Organisational structures

3.2.1 Functional organisational structure

Functional organisational structure is a centralised organisational structure. It is based on the

requirement that the interdependent partial tasks related to a work piece and operations are done in
one place (workshop functional type). Therefore, in this organisational structure the areas, sectors,
services, departments and workshops are formed, which perform the required special tasks.

So the subordinate employee can have several functional managers besides his line manager.
Employee is responsible to his functional managers just for the corresponding functions, while he is
responsible to his line manager in the organisational sense. All functional managers on the same
hierarchical level have therefore the same subordinate employees.

Operation of a functional structure is complicated so it is necessary to precisely define the

responsibilities of the functional managers. An example of organisational scheme in a functional
organisational structure is shown in Figure 13.

16
 COMPANY
MANAGEMENT

HEAD OF HEAD OF HEAD OF

CONSTRUCTION PRODUCTION ADMINISTRATION

Functional manager for

Functional manager for Functional manager for
SEQUENCE OF
MATERIAL QUALITY CONTROL
OPERATIONS

Worker 1 Worker 2 Worker 3 Worker 4 Worker 5 Worker 6 Worker 7

line subordination
functional subordination

Figure 13: Organisational scheme of a functional organisational structure

Advantages of a functional organisational structure:

 division of hierarchical management level on the basis of (business) functions
 specialisation and concentration of knowledge in one place,
 centralised decision making by means of linear type of management,
 priority is given to expertise,
 it is useful for SMEs with stable production programmes,
 it allows for quick adaptation to changes,
 intensive development of individual functions (concentration of knowledge) and personnel,
 individual function performs specialist operations for the whole company,
 there is less bureaucracy.

Disadvantages of a functional organisational structure:

 coordination between areas is unconnected and unclear,
 there are difficulties in precise definition of working duties and responsibilities of the functional
managers,
 communication structure is complicated,
 a lot of coordination is needed when a task should be done which covers several fields,
 working discipline is worse than in linear type of organisation,
 when employees move to a higher hierarchical level, difficulties arise because tasks are not
divided on a functional basis any more.

In spite of disadvantages the functional organisational structure is still a prevailing form of

organisation in companies.

3.2.2 Project organisational structure

Projects are activities that are done just once, and they consist of a series of logically interconnected
activities. In order to be accomplished they require time and resources which cause costs.

Project organisational structure is used if the company runs many large projects which are not
interconnected. It is formed so that the projects can be finished in the expected time frame, with
costs defined in advance, and in accordance with the requirements of the client.

17
For every project the company forms a fixed organisation, but just for a limited period – the project
team (a company within a company), which is completely responsible for execution of the project.
Project team starts its mission at the beginning of the project and finishes it when the project is
finished. After the completion of the project the team members are employed at other projects or in
other departments of the company. An example of organisational scheme in a project organisational
structure is shown in Figure 14.

COMPANY
MANAGEMENT

PROJECT PROJECT PROJECT PROJECT PROJECT

A B C D E

DEVELOPMENT SUPPLY PRODUCTION SALES FINANCE

Figure 14: Organisational scheme of a project organisational structure

Project organisation is used if one of the following criteria is met:

 the project is large and high funds are involved,
 some of the project parameters are critical, e.g. time for completion of the project, availability of
resources, or costs,
 it is the customer's requirement.

Advantages of a project organisational structure:

 planned, harmonised and controlled organisation throughout of the project duration,
 project team is entirely responsible for completion of the project goals and fulfilment of project
activities,
 all project-related data are collected and evaluated in a central location,
 ensured are central responsibilities of partners, contractors and employees,
 high level of development flexibility, using internal or external human resources,
 growth, training and education of future project managers,
 high motivation of employees as they participate in exactly defined and interesting tasks.

Disadvantages of a project organisational structure:

 contradictions between project-oriented view and functional dealing with organisational
problems,
 disappointment of project managers due to unrealistic goals of the project,
 unsteadiness of team members due to automatic cease of their roles in a project team after a
successful completion of the project,
 project managers tend to establish too large project teams, which increases overhead expenses
of the project,
 integral project information system should be established, as a part of the information system of
the entire company.

18
3.2.3 Matrix organisational structure
Matrix organisational structure is a combination of functional and project (or product)
organisational structures.

In matrix organisational structure a permanent project organisation is not established, only the
project team manager is defined who is responsible for the project or for the realisation of the
programme (product).

Project team members, selected for accomplishment of the project-related tasks remain in their
functional departments (in the organisational sense). Authorisation for work is given to them by
their department head, and project-related tasks are given to them by the project manager. The
project (product) manager is therefore just a coordinator for the execution of tasks which are (based
on his orders) carried out in functional departments. Project team member has two managers:
department head (in view of organisational and technical level) and project manager (in view of
project tasks).

Matrix organisational structure got its name because of its characteristic shape. An example of
simplified organisational scheme in a project matrix organisational structure is shown in Figure 15,
and product matrix organisational structure is shown in Figure 16.

COMPANY
MANAGEMENT

COORDINATOR
DEVELOPMENT SUPPLY PRODUCTION SALES FINANCE
OF PROJECTS

PROJECT
A
Manager

PROJECT
B
Manager

PROJECT
C
Manager

PROJECT
D
Manager

PROJECT
E
Manager

department participates in a project

Figure 15: Organisational scheme of a project matrix organisational structure

19
 COMPANY
MANAGEMENT

COORDINATOR
DEVELOPMENT SUPPLY PRODUCTION SALES FINANCE
OF PROJECTS

PRODUCT
A
Manager

PRODUCT
B
Manager

PRODUCT
C
Manager

PRODUCT
D
Manager

PRODUCT
E
Manager

department participates in product realisation

Figure 16: Organisational scheme of a product matrix organisational structure

Matrix organisational structure is used when there are several concurrent recurring projects being
executed, which require common sources of functional departments of the company (multi
projects).

Advantages of a matrix organisational structure:

 it is based on a team problem solving,
 clear coordination of tasks,
 project teams temporarily join people from various functional grounds,
 project team structure may change during development of the project (concurrent engineering),
 interdisciplinary links are established in the company so it is very flexible,
 conflicts are solved in teams,
 knowledge is concentrated in functional departments,
 priority is given to expertise.

Disadvantages of a matrix organisational structure:

 it is efficient only if team work is used,
 dual system of management and responsibility (project manager and functional manager),
 large communication needs,
 frequent conflicts and compromises.

3.2.4 Organisational structure of team work in SME

The tasks which are performed by level teams in big companies should be done by the project team
manager in SME and he should co-ordinate and tune the goals and activities between the project
team and core team, and provide for a smooth transition from one phase (loop) of product
development process to another.

20
In big companies the members of the core, level and functional teams usually use project type of
organisation. This type of organisation cannot be used in SMEs as they have too few employees.

Analysis of various organisational structures of companies and teams [11], [12] has shown that in
SMEs matrix organisation would be the most suitable for core and project team members (Figure
17).

PRODUCT
DEVELOPMENT GENERAL MANAGER
PROJECT

Marketing Projects Design Prod. planning Production Manufacturing Delivery

PERMANENT CORE

Core team
TEAM STRUCTURE

manager
department department department department department and assembly department
manager manager manager manager manager manager manager

Manufacturing
Marketing Projects Design Prod. planning Production Delivery
Project and assembly
employees employees employees employees employees employees
team employees
manager

Feasibility loop
project team
VARIABLE STRUCTURE OF

Design loop project

PROJECT TEAM

team

Product planning
loop project team

Production loop
project team

Manufacturing loop
project team
departm ent particip ates in project team departm ent coordin ates th e work in project team

Figure 17: Ideal matrix organisation in SME

A member of the core team (with exception of the project team manager) would carry out tasks in
his/her department part of his working time (for this work (s)he would be responsible to the general
manager of the company), and the rest of his/her working time (s)he would work in the product
development project (for this work (s)he would be responsible to the core team manager). A
member of the project team (except the project team manager) would carry out the tasks in his/her
department part of his/her working time (for this work (s)he would be responsible to department
head), and the rest of his/her working time (s)he would work in the product development project
(for this work (s)he would be responsible to the project team manager).

The project team manager would be excluded from his/her department throughout the duration of
the product development project and (s)he would work full time in the project.

3.3 Goals and tools for support of concurrent product development

process
Using concurrent engineering, the following goals should be achieved:
 considerably shorter new product development time
 reduced new product development costs
 better quality of new products regarding customer requirements.

a.) Considerably shorter new product development time

Product development time is supposed to be reduced by 50 % or more due to the following reasons:
 activities run in parallel

21
 team members have regular meetings, which allow for fast and efficient exchange of
information
 responsibility for all product characteristics is transferred to teams (no time is wasted for
searching the one "who is to be blamed for failures").

b.) Reduced new product development costs

Figure 18 presents the diagram of ideal cost curve in sequential and concurrent product
development and use.
Costs

Reduction of

Product and process development - SE

costs
Product and process
development - CE
production time
Reduction of
of cost
ease
Incr

Time
Development - CE Production - CE

Product and process development - CE

Development - SE Production - SE

Product and process development - SE

Figure 18: Ideal cost curve in sequential and concurrent product development and use

In sequential development and use of a product we can see that:

 due to sequential activities, product development costs increase evenly
 costs of production and use of a product increase rapidly because of long iteration loops for
execution of required modifications and elimination of defects.

In concurrent development and use of a product we can see that:

 product development costs are much higher than in sequential development due to intensive
activities during the early development stage (team work)
 costs of production and use of a product are considerably lower than in sequential product
development because of short iteration loops for execution of required modifications and
elimination of defects.

c.) Better quality of new products regarding customer requirements

Today only those companies are successful which can offer their customers:
 right products,
 of the right quality,
 at the right price and
 at the right time

22
therefore the companies which are able to adapt to the requirements of the customers.

Figure 19 presents an overview of the "concurrent engineering tools"; knowledge and use of these
tools ensures better quality of products.

CONCURRENT ENGINEERING

Computer-Aided Quality Functions Deployment

Design (CAD) (QFD)

Design methodology

Value Analysis (VA)

Evaluation of Quality

Design for Manufacturing (DFM) and Assembly (DFA)

Failure Mode and Effects Analysis (FMEA)

Figure 19: Concurrent engineering tools

3.3.1 Quality Functions Deployment (QFD)

Quality functions deployment method (also known as House of Quality) is an important tool of
concurrent engineering, which should ensure that all customer requirements will be taken into
account and realised during development of the product.

The method [13] was developed in Mitsubishi shipyard in Japanese town of Kobe in 1972. It allows
for design of the product development cycle. The method was quickly accepted in other Japanese
companies. Toyota made the main contribution to its development and popularity.

In Europe the method is not yet widely used. In USA it appeared in the eighties, mostly related to
the Xerox Company.

House of quality is a method that, by using matrices, shows connections between customer
requirements and technical capabilities of the company. It is a tool that – in the product
development process (as well as during its later improvements) – transforms customer requirements
into specific technical solutions – product requirements.

23
Building a house of quality is a team work and it can be used as a communication tool for team
members. The purpose of the method is that the customer participates in development of the product
and in its later continuous improvements.

Goetsch and Davis made the following definition [14]: House of quality is a practical tool for
designing a product in such a way that it fulfils the customer requirements. House of quality
transforms what the customer wants into what the company produces. It allows to define the
customer priorities, it seeks innovative approaches for their fulfilment, and improves the process up
to its maximum efficiency.

When implementing the QFD method, it is necessary to consider the following rules:
 management has to completely support the implementation of the QFD method,
 QFD implementation project manager should be the team member who is the most experienced
in the QFD method usage,
 each meeting of the team should have a precisely defined goal,
 it is necessary to take minutes during every meeting,
 after the meeting the minutes are sent to all team members.

3.3.1.1 House of quality structure

QFD – quality functions deployment is called a house of quality because of its characteristic shape
[13], [15], [16], [17]. It consists of six matrices, called "rooms". House of quality structure is shown
in Figure 20.

24
 6. ROOF

Correlation between technical

descriptors of a product

2. HOW ROOM

Technical requirements for the company and its suppliers

4. RELATIONSHIPS ROOM 3. COMPETITIVENESS

1. WHAT ROOM
ANALYSIS ROOM
What does the customer requirement mean for the company
Customer requirements,
regulations, acts
Relationships between customer requirements and technical Comparison of selected
descriptors of the product solution with the competition

5. HOW MUCH ROOM

Definition of values and importance of technical descriptors of the

product

Figure 20: House of quality structure

There are six rooms in the House of quality:

1. WHAT room
This is a list of what the customer wants. Primary, secondary and tertiary requirements are listed.
Standards, regulations and acts may also be included.

2. HOW room
This is a list of what the company and its suppliers should do in order to satisfy the customer
requirements. It answers the questions of how the customer requirements will be presented in
technical descriptors of the product.

3. COMPETITIVENESS ANALYSIS room

It lists current situation of the product in comparison with its competitors, and locations of possible
improvements.

4. RELATIONSHIPS room

25
This is the core of the house of quality. It consists of a relationship matrix between WHAT and
HOW rooms (relationships between customer requirements and technical descriptors of the
product)

5. HOW MUCH room

This list is used to specify which technical product/process requirements are the most important to
satisfy the customer requirements.

6. ROOF of the house of quality

It is presented by a correlation matrix between various technical descriptors of the product.

3.3.1.2 Steps in constructing the House of quality

Building a house of quality is simple, yet it requires a lot of effort and efficient team work. Size of
the house of quality depends on the number of customer requirements. Authors of the house of
quality recommend that this method be used for problems consisting of up to 30 customer
requirements and just as many engineering requirements, otherwise the method becomes too
complex and unclear.

The house of quality is constructed in 14 steps.

step 12:

CORRELATION

step 5:

GOAL

step 3:

TEHNICAL SPECIFICATIONS
OF THE PRODUCT

step 1: step 2: step 7: step 9: step 13:

CUSTOMER ASSIGNING RELATIONSHIP MATRIX BENCHMARK THE FOCUS

REQVIREMENTS WEIGHTS COMPETITION SALE
TO CUSTOMER
REQVIREMENTS

step 6: step 10:

FEASIBILITY OF TECHNICAL ANALYSIS OF THE

DESCRIPTORS BENCHMARK
step 4:
MEASURABLE TARGET VALUES

step 11:
TEHNICAL COMPARISION OF
COMPETITIVE PRODUCT

step 8:
TEHNICAL IMPORTANCE

step 14:
CRITICAL TECHNICAL
SPECIFICATIONS OF PRODUCT

Figure 21: Steps in constructing the house of quality

26
Step 1: Customer requirements
Construction starts by gathering customer requirements. Questionnaires and market research
methods are used. The data obtained are classified into primary, secondary and tertiary. The
primary ones are general, the secondary ones define the primary ones, and the tertiary ones enable
the primary ones.

Step 2: Assigning weights to customer requirements

As customer requirements can be mutually complementary or exclusive, each customer requirement
is assigned its relative importance (weight).

Step 3: Technical descriptors of the product

Engineering requirements of the product (HOWs) are defined, which enable meeting the customer
requirements (WHATs).

When defining engineering requirements the following questions may be useful:

- What is the function and purpose of the product?
- How does the product look like?
- How much does the product cost?
- How will the product be sold?

Step 4: Measurable target values

Measurable target values of technical descriptors of the product are defined (usually these are
numerical values; however, they can be defined as a text).

Step 5: Goals
Using an arrow, for each technical descriptor of a product we indicate whether a lower or higher
value is desired. Correct value is denoted by 0.

Step 6: Feasibility of technical descriptors

An estimation regarding feasibility of technical descriptors of the product is given on the scale from
1 to 10, 1 being the most easily feasible technical descriptor and 10 being the most difficult one.

Step 7: Relationship matrix

Central part of the house of quality is filled with data. Relationship matrix defines how the technical
descriptors of the product (HOWs) are related to the customer requirements (WHATs). There are
four possible relationships:
9 – strong relationship (weight of 9)
3 – moderate relationship (weight of 3)
1 – weak relationship (weight of 1)
– empty cell – no relationship (weight of 0)

Practical use has shown that for successful solution of the problems it is suitable that less than half
of the matrix cells be filled in.

After the data have been filled into the matrix, checks have to be made whether each customer
requirement has interaction with at least one technical descriptor. If there is no interaction a new
technical descriptor has to be defined, which fulfils the customer requirement. If all cells in a matrix
column (technical descriptors of the product) are empty then this particular descriptor is not
important.

Step 8: Technical importance

For each technical descriptor of the product its absolute and relative technical importance is
calculated. Absolute technical importance is calculated using the equation:

27
 n
ATI   (VRi  I i )
i 1
ATI – absolute technical importance
VRi – value of the relationship of the i-th customer requirement
Ii – importance of the i-th customer requirement
n – number of all customer requirements

Technical importance with highest absolute (relative) importance obtains the highest rank, which
means that it has the highest influence on satisfying the customer requirements.

Step 9: Benchmark the competition

In this step the competitiveness room is filled in. Current design of the product is compared with
competitive products (our and competitive products are rated on a 1 to 5 scale). Benchmark is
carried out on the basis of questionnaire the customers and by other market research methods.

Step 10: Analysis of the benchmark

The points obtained in step 9 are summed up for our and competitive products.

Step 11: Technical comparison of competitive products

Fulfilment of technical descriptors of our and competitive products is rated on the scale from 1 to 5.

Step 12: Correlation

Correlation matrix shows interactions of technical descriptors of the product. Interactions can be:
= - strong negative
– - negative
+ - positive
++ - strong positive
Correlation matrix makes the roof of the house of quality.

Step 13: Sales focus

Those customer requirements are defined which are best fulfilled by our product (in comparison
with the competitors). When fulfilling these requirements we take care that we keep ahead of the
competition.

Step 14: Critical technical descriptors of the product

Those technical descriptors of the product are defined that achieve the highest absolute (relative)
values (using e.g. ordinal ranking from 1 to 8). Those technical descriptors mostly influence the
fulfilment of customer requirements.

3.3.1.3 Extending the House of quality

House of quality is a method for finding interactions between product functions and customer
requirements. House of quality is extended in such a way that technical descriptors of the product in
existing house of quality (HOWs) become requirements in new house of quality (WHATs). First a
relationship between technical descriptors of the product and properties of parts is found (second
house of quality), then between properties of parts and key process operations (third house of
quality) and finally between the key process operations and production requirements (fourth house
of quality).

An example of such an extension of a house of quality is shown in Figure 22.

28
 Technical descriptors
Customer requirements

I
Properties of parts

Technical descriptors
II
Key process operations
Product
planning Production

III

Properties of parts
requirements
Component

Key process operations

planning
Process
planning
IV
Production
planning

Figure 22: Extension of the house of quality

3.3.1.4 Advantages of using the House of quality

There are several benefits if a company uses the house of quality method, especially in the fields of
improving the competitiveness and quality. They are expressed in:

 Focus on the customer

Every company that introduced TQM has to be focused on the customer. House of quality allows
for collecting input and feedback data from customers, these data are transformed into a
collection of customer requirements and they become target values that the company has to
achieve.

 Better use of time

House of quality reduces product development time because it shows the most important and
clearly defined customer requirements. Therefore time is not wasted to develop features which
are of no interest to the customer.

 Team work
As a method, the house of quality is oriented towards a team work. All decisions are results of a
consensus of team members.

 Consistent documentation
One of the results of the house of quality is an exhaustive document, which combines all data
about processes and shows how they complement when satisfying the customer requirements.
Document is being continuously updated as new data are obtained. In order to successfully plan
new products and improve existing ones it is necessary to note daily information on customer
requirements.

3.3.2 Value Analysis

L. D. Miles wrote that value analysis [18] is an organised creative method whose task is to show
exactly and efficiently the unnecessary costs – i.e. the costs, which neither contribute to the quality,
usefulness or life-time of a product nor to its aesthetic function or other characteristics desirable by
the customer.

29
Value analysis is a system which allows solutions of complex problems which cannot be completely
or partially transformed into an algorithmic form. It consists of combined actions of the following
system elements:
 management,
 method and
 mode of operation
 with their simultaneous mutual impact; the goal being to optimise the end result.

Value analysis is a professionally applied, function-oriented, systematic team approach used to

analyse and improve value in a product, facility design, system or service – a powerful
methodology for solving problems and/or reducing costs while improving performance/quality
requirements.

Value analysis is a systematic method which can be used in order to reduce the costs of a product or
service. It is a creative process, a systematic searching for facts and alternatives, whose purpose is
to reduce costs to a minimum in each phase of product life-cycle [19].

The concept and techniques of value analysis are called basic when dealing with "economy
decisions". Proper use of value analysis ensures better results when searching for and reducing
unnecessary costs. However, as any other tool, value analysis can be improperly used which means
that we do not obtain desired results. Considering the fact that the method has been successfully
used in the industry for more than 40 years we can conclude that improper use is usually the one
that obtains unsatisfactory results.

Value analysis is not a substitution for design-engineering and production-engineering knowledge –

it is an excellent systematic approach to use this knowledge. Value analysis is an aid, which allows
the company to preserve or increase its competitiveness on the market.

At the beginning value analysis was used only in mass production (and in great extent it still is used
today). However, the attempts to use value analysis in small-series production (or even in individual
production) were extremely successful. It is obvious that it is more sensible to use value analysis if
quantity or price of the analysed object increases [20], [21].

Today value analysis is limited neither to a product manufactured in mass- or individual production
nor to the size of the company or the industry. Objects of value analysis can be:
 products,
 production systems,
 administration,
 organisation.

Selection of the object of value analysis depends on business decisions, supported by proper
analyses.

According to VDI 2222 [22], value analysis of a product can be used in all three key phases of
product development:
 development,
 design,
 production.

Naturally, the most benefits are obtained from the value analysis if it is used in the design phase.
The sooner in product development value analysis is used in order to find economic solutions, the
higher the benefits will be.

30
In the design phase the value analysis deals with products which exist only as drawings, models or
prototypes – things which are not yet in production. In the production phase a value analysis of
products on the market is made.

Graphical presentation of value analysis presents clearly why it is so important to use it early in the
product development phase – see Figure 23.
Costs

Possibilities for reduction of Costs for changing a

product costs product

Setup of production means

Operation setup
Pre-calculation

Manufacturing
Development

Prototype
Design

Sales
Idea

Use

Time

Figure 23: Reduction of product costs with value analysis in different phases of product life cycle
[22]

Goals of research made by value analysis arise from the goals of the company [21]. Depending on
strategic orientation, the goals of the market research are:
 increase of profit,
 increase of usefulness for the customer,
 achieving competitive advantages.
The results of value analysis are usually presented as reduced costs. Additional benefit is that
customer requirements are fulfilled well, and thus competitive advantage is achieved.

Using value analysis an optimum between producer costs and customer benefits is expected:
 increase of usefulness for the customer was shown in 80 % of all researches,
 reduction of throughput time up to 50 %,
 reduction of costs up to 20 %.

Depending on the goals the costs may be reduced, or the number of functions may be increased, or
the quality may be improved or the processes may be sped up.

31
Value analysis research should increase productivity and increase value for the end user. 90 % of all
researches revealed an increase of quality in spite of reduced production costs; the remaining 10 %
revealed that the same quality was retained.

In addition to quantitative results, value analysis brings several additional benefits to the company:
 Employees' thinking is oriented towards goals, costs and functions.
 All participants are motivated to give their contribution to achieve success.
 Collaboration inside the company is improved.
 Capabilities of team work are improved.
 Creativity of all employees is used.

Value analysis method is standardised in DIN 69910 [23] and consists of 6 steps (Figure 24). Steps
are divided into sub-steps, which can be repeated in several iterations (Figure 25).

32
 1. PROJECT SETUP

1.1. appointing a moderator

1.2. undertaking the order, finding general goals
1.3. definition of individual goals
1.4. limiting the scope of research
1.5. finding the project organisation
1.6. planning the project

2. ANALYSIS OF THE CURRENT SITUATION

2.1. data obout the subject

2.2. data obout costs
2.3. finding functions
2.4. assigning costs to functions

3. DESCRIPTION OF THE "TO BE" SITUATION

3.1. evaluation of data

3.2. definition of "TO BE" functions
3.3. assigning target costs to the "TO BE" functions

4. DEVELOPMENT OF DRAFTS

4.1. gathering existing solutions

4.2. development of new ideas

5. SELECTING THE BEST SOLUTION

5.1. definition of evaluation criteria

5.2. evaluation of drafts
5.3. review of possible drafts
5.4. evaluation of possible drafts
5.5. making detailed solutions
5.6. evaluation of solutions
5.7. defining decision tables
5.8. making a decision

6. REALIZING A SOLUTION

6.1. detailed plan of realization

6.2. implementation of realization
6.3. controlling the realization
6.4. finishing the project

Figure 24: Value analysis method (DIN 69910)

Sub-steps can be mixed or can be repeated in several iterations.

33
 Start of the project Project setup

Yes

Approaching
No
the goal Analysis of the current
situation

Yes

Approaching Desscription of the

No
the goal "TO BE" situation

Yes

Approaching Development of outline

No
the goal schemes

Yes

Selection of the best

End of the project
solution

Figure 25: Iteration model of value analysis

3.3.3 Failure Mode and Effects Analysis (FMEA)

Failure Mode and Effects Analysis (FMEA) is a method of preventive quality assurance. The goal
of the FMEA method is to find and prevent possible failures during product development and
manufacturing.

Failures that arise during production or use of the product cause high costs. Because of them the
company often loses its reputation in view of the customers.
FMEA is a target-oriented method which allows us to find possible failures on time. Risks as results
of failures are evaluated, and corrective measures are developed to prevent failures. FMEA goals
are:
 evaluation of effects and consequences of events, which will be caused by each failure found in
the system,
 definition of value or criticalness of each failure with respect to the proper function of the
system and influence on the reliability and/or safety of the process,
 finding the failures in accordance with the possibility of their detection, diagnosing and testing,
 estimation of required corrective measures.

In various product development phases there are four types of FMEA; all together they form a
complete system:
 system FMEA defines functionality of individual system components with respect to the
complete system and interconnections between individual components (e.g. operation of the
engine, gearbox and drive shaft at the gearbox);

34
 design FMEA is used for finding possible failures of individual component in design,
manufacturing and assembly;
 process FMEA researches possible sources of failures in production process,
 service FMEA is used for joint-ventures and suppliers.

Types of FMEA and their basic features are shown in Table 1. Their common feature is the same
approach. Differences between FMEA types are visible especially in the design phase and in
definition of a goal, which corresponds to their execution.

Object of Elements of When? Responsibility

analysis FMEA
System Superior Project of a Project of a Development
FMEA product/system product product after
(e.g. car) manufacturing
Design Important Design Design Design
FMEA component documentation documentation
after
manufacturing
Process Manufacturing Manufacturing Plan after Manufacturing
FMEA process steps plans manufacturing planning
(e.g. casting)
FMEA of joint- Service steps Plans of services Plan after Planning a
ventures, suppliers service service
Table 1: Types of FMEA

Although it makes sense to use all types of FMEA, in practice most often design and process
FMEA are used; they are divided as shown in Figure 26.

FMEA

DESIGN PROCESS

Components Machines

Sub-system Tools

Main system Workstations

Production lines

Processes

Control devices

Figure 26: Division of design and process FMEA

Using FMEA has the following advantages [24]:

 It helps at selection of alternative design solutions with high reliability and safety already in
early development phase.

35
 It identifies possible failures and their effects, which influence efficiency of product functions.
 Program of tests is made in development phase, before final confirmation of design.
 Criteria for definition of production process, supply and service are developed.
 Failures are documented as future references in order to help us in failure analysis during use,
and when dealing with design changes.
 It is a basis for finding priorities of corrective actions.

FMEA is a preventive technique which allows for a systematic study of causes and effects of
failures before design is finished. The product is analysed (on a system or lower level) from all
possible points of view which may lead to failures. For each possible failure, effects on entire
system are estimated; their severity and their frequency of occurrence are defined.

Drawbacks of FMEA:
 It is difficult to perform FMEA for complex systems which perform several functions and
consist of many components.
 FMEA results do not take into account human errors. Human errors usually appear in a certain
sequence during the system operation. Yet, the FMEA can find the components which are the
most sensitive to human factors.

Execution of the FMEA is in the competence of the company management whose task is to:
 define the requirement for FMEA execution
 define the goal
 define the limits of problem solving
 define the deadline for execution of the task
 form the workgroup.

Setup and execution of FMEA is a result of a team work. Figure 27 presents the composition of a
workgroup, responsible for execution of the FMEA analysis.

Person(s)
responsible for As needed
production

Person(s) Person(s)
responsible for responsible
technology for design

Person(s)
Person(s)
responsible for
responsible for
measurments
service
and tests
Person(s) Person(s)
responsible for responsible for
material reliability

Figure 27: Composition of a workgroup

This method is divided into several working steps [25]. Figure 28 presents a form for execution of
the method, where individual steps, which follow each other in a sequence, are shown.

36
 FAILURE MODE AND EFFECTS ANALYSIS
Design FMEA Process FMEA
System Name/ BASIC DATA
Approval of corresponding Name/Department
characte- Department
departments/suppliers or Supplier
ristics or Supplier

CURRENT SITUATION IMPROVED SITUATION

System Possible Possible Recomended

Possible Responsi-
characte- effects of causes of measures for
failures Expected test Preventive bility Proper Preventive
ristics failures failures Finding Meaning Appearance elimination Finding Meaning Apperance
measures risk number measure risk number

Analysis of possible failures Risk evaluation Measures Evaluation of remaining risk

Solutions

Location of Effect of Cause of Control Probability of Meaning of Probability of Preventive Preventive

Failure mode
failure failure failure measure arising failure finding risk number risk number

Figure 28: Form of the FMEA method

The header of the form is first filled out with the basic data required for clear definition of the
product. The form is then filled out in four steps:

Step 1: Failure analysis

According to the FMEA type used (system, design or process) it is necessary to define system or
design functions and individual production process steps. Possible failures, their effects and sources
of failures are analysed in detail.

Step 2: Risk assessment

For each possible reason of failure the probability of its arising (risk factor N) is estimated and
assigned a value from 1 (not probable) to 10 (highly probable).

For each cause of failure the influence or meaning of the failure for customers is estimated (risk
factor V). It is important for the customer that the product works well so the estimation from 1 (no
consequences) to 10 (great consequences) is used.

For each source of failure the probability of finding the failure is estimated (risk factor O). The
range of estimation is from 1 (high probability) to 10 (not probable).
In order to define the total risk of possible cause of failure the preventive risk number (PRN) is
calculated as a product of estimated values for the N phenomenon, influence V and finding the
failure O:
PRN = N×V×O

The value of PRN is between 1 (no risk) and 1000 (very high risk). However, the PRN value is not
enough. If reasons for failures are sorted by PRN it is possible to define priority for their
elimination. High-PRN reasons can be eliminated by introducing corrective measures into the
product and production process.

Step 3: Measures for optimisation of product design

With respect to individual risk assessments (the value of PRN) it is possible to introduce
appropriate corrective measures and improvements into the product design. This can be done on the
company level or just in a particular department.

37
Step 4: Assessment of results
Using the above-mentioned procedures and measures it is possible to correct individual
deficiencies. These improvements have to be re-evaluated regarding possible failures (step 2 has to
be repeated (PRN calculation)).

38
4 Sample case of introduction of concurrent engineering in an
SME
An SME which produces civil engineering equipment decided to develop a mini-loader (Figure 29).

Figure 29: The VEPER mini-loader

Mini-loader development process ran in two phases:

1. Analysis of customer requirements (i.e. market analyses) and construction of the house of
quality.
2. Plan and execution of mini-loader development project using the concurrent engineering
principle.

4.1 Building a House of quality

In order to build a house of quality the company management formed a team whose members were
from the following departments:
 marketing and sales,
 development and product planning
 design,
 production process
 production
 QC/QA,
 supply and
 external member (designer).

Head of marketing department was selected as a project team manager.

39
Before starting the construction of the house of quality for the mini-loader, the team members were
informed on details about the product, possible customers, domestic and global competitors, and
manufacturing costs.

After preliminary activities had been finished the team members performed all 14 steps in
construction of the house of quality, which is shown in Figure 30.

12.CORRELATION: = highly negative

- negative
+ positive
highly positive

-too low
5. GOAL: O -just right
-too high

3. TEHNICALDESCRIPTORS OFTHE PRODUCT

j=1,2,3,.......24
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
9. BENCHMARK
Quality of pumps (manufacturer)
Quality of engine (manufacturer)

THE COMPETITION

13.SALES FOCUS
Power and volume of engine

-product of the company

Simplicity of construction

Cost of purchased parts

-competitive product 1

Servicing organize tim

Maintenance frequency

Cost of materials used

Cabin with glass sides
Universal attach table
-competitive product 2
2.WEIGHTS Ui

Selection of colour

Fuel consumption
Noise damping
Ladle volume
Load capacity

Tearing force
Drive speed
Drive type

Series size
Points Customer rekuireme.
Stability
Weight
Brakes

obtained fulfilment profile

Tyres

Size

1234 5
1 Sufficiently low and narrow 15 9 9 9 3 1 1
2 Lifting at least 800 kg load 14 3 3 3 9 3 1 2 1
3 Recognised design 10 3 9 5 4 4
4 Protection of parts against damage 8 9 4 4 4
5 Light enough to be transported by a trailer 11 9 3 1 4 2 2
1.CUSTOMER REQUIREMENTS

6 Anality components built in (engine, pump) 14 9 9 3 3 3 1 3 3 3 4 4

7 Ability to attach a pit-digger 9 3 3 3 3 3 9 9 3 4 4 4
i =1, 2, 3, 4, ....,20

8 Ability to attach a caterpillar 8 3 1 1 4 2 4

9 Ability to change fast attachables 13 3 9 9 4 4 4
10 Removal of snow 7 3 9 4 4 4
11 Useful for agriculture 9 9 3 9 4 5 4
12 Can be used with concrete mixer 4 1 9 4 3 4
13 Low fuel consumption 6 9 1 1 1 3 3 9 4 4 4
14 Minimum use of tyres 11 9 3 3 3 3 3 3
15 Minimim noise 8 1 3 9 4 4 4
16 Acceptable price 15 9 3 3 3 3 3 3 3 9 9 4 2 3
17 Short delivery time 14 9 1 4 3
18 Organised service department 14 1 1 9 3 14 4 2
19 Simple maintenance 8 9 1 9 2 4 3
20 Accessible spare parts 12 1 1 3 1 9 4 4 4
=679points
=740points
=702points

6.Difficulties in tehnical implementation (estimates from 1 to 10) 10 4 8 10 9 2 9 10 10 10 9 8 9 5 6 2 3 7 6 8 10 4 6 6 10. ANALYSIS OFTHE

BENCHMARK:
automatically negative

service rensponse time

23*8,5-12 ali 5,70-12

2562*1200*1955mm

overturn load 800kg

product of the
20,5KW;1331cm 3

4.MEASURABLE TARGET VALUES company

12 attachments

Ui x Ti
1.600.000 SIT

T = Ui x Ti
back and sides

Ui x Ti
twice per year

competitive product 1
400.000 SIT
hydrostatic

any colour
1000 daN
9,8 km/h

10 pieces
400 daN

competitive product 2
1350kg

<82 db
simple

2,5 l/h
0,2m3
good
good

T =
T =

11.TEHNICALCOMPARISION OF
1
fulfilment profil

COMPETITIVE PRODUCTS:
Technical featres

2
product of the company
'
Points:

competitive product 1 3
competitive product 2 4
5
Absolute value 197 180 224 147 39 48 42 381 477 180 153 116 15 410 72 102 378 90 170 126 103 279 177 191
8.TEHNICAL 4,6 4,2 5,2 3,4 8,9 4,2 2,4 8,8 2,9 2,4
Relative value(%) 0,9 1,1 1 11 3,6 2,7 0,3 9,5 1,7 2,1 4 6,5 4,1 4,4
IMPORTANCE 7. 6. 14. 1. 9. 13. 16. 24. 18. 4. 19. 12. 15. 11.
Sequence 9. 18. 23. 22. 3. 2. 20. 17. 5. 8.

14.CRITICAL TEHNICAL DESCRIPTORS

OFTHE PRODUCT

Figure 30: House of quality for the mini-loader

Analysis of the house of quality for the mini-loader led the team members to some important
conclusions:
1. The mini-loader, produced by the company, fulfils the following customer requirements better
than its competitors:
 it is lower and narrower than competitive products,
 it has a recognisable design (influence of external designer),
 it can be transported on a trailer,
40
  it consumes less fuel,
 it is cheaper than competitive products.

In comparison with the competition, the product is worse regarding the following three
requirements:
 its components are of worse quality,
 delivery time is much longer,
 maintenance is more demanding.

2. The mini-loader, produced by the company, fulfils the following technical descriptors better
than its competitors:
 engine power,
 size and weight of the mini-loader,
 volume of the ladle,
 selection of colour,
 cost of materials used.

The product is worse regarding the following technical descriptors:

 smaller load capacity,
 smaller tearing force,
 maintenance frequency,
 too small lot size.

3. A highly positive correlation exists between the following pairs of technical descriptors of the
product:
 engine power and load capacity,
 weight and size,
 stability and tearing force,
 organisation level of the service department and maintenance frequency.

Highly negative correlation exists between:

 quality of engine and cost of purchased parts,
 engine power and maintenance frequency,
 quality of pump and cost of purchased parts,
 load capacity and design simplicity,
 stability and design simplicity.

4. In further development of the mini-loader it will be necessary to pay special attention to the
following technical descriptors:
 size of mini-loader,
 construction simplicity,
 weight of mini-loader,
 universality of connection plate,
 lot size,
 quality of pump,
 quality of engine,
 evaluation of purchased parts.

The results of team work with an emphasis on the construction of the house of quality for the mini-
loader were presented to the company management; it was stressed that this was the first one of four
houses of quality which should reveal how the product fulfils the customer requirements.

41
The company management and the team members discussed the results obtained and decided that
the team should proceed with the construction of the other three houses of quality:
 house of quality for planning parts and components,
 house of quality for production process planning, and
 house of quality for manufacturing and assembly planning.

Four Houses of quality for the mini-loader will be used in order to gradually transfer customer
requirements from the product to its components and parts, from components and parts to
production processes, and from production processes to manufacturing and assembly.

4.2 Project of concurrent product development process

4.2.1 Goals of the project and project team

The company decided to develop a new mini-loader in a project style. The goal of the project was
development of mini-loader and implementation of the concurrent engineering in the company.

In order that the company could switch to the concurrent development of mini-loader it was
necessary first to decide about the structure and composition of concurrent product development
teams.

The company management decided to form a two-level team structure (core and project teams).

In order to get the best structure of both teams two creativity workshops were organised with the
general manager, his assistant and nine department managers participating.

Results of the first creativity workshop have shown that the core team should consist of eleven
company employees:
 general manager who would manage the core team,
 nine department managers,
 assistant general manager who would manage the project team.

All core team members will be permanent members; core team composition will therefore not
change within the mini-loader development time.

4.2.2 WBS of the project and responsibility matrix

The second creativity workshop was organised in order to define stages of mini-loader development
process and their corresponding activities, as well as responsibilities of departments to carry out
those activities. For the new mini-loader development project a WBS structure of the project was
made, as shown in Figure 31.

42
Figure 31: WBS of the mini-loader development project

For execution of project activities, responsibilities were assigned to department heads and company
employees, as presented in responsibility matrix (Table 2).

43
 Developmen

Marketing
Design dept.

Supply dept.
Technology

and sales
Production
planning
Department:

dept.

dept.
dept.t

Financial dept.

Informat. unit
Quality dept.

Delivery
Description of

Shaping
Development and
Stage product

Prod. planning

Manufacturing
Cooperation
plan proc.

Marketing
No: development

Logistics
Employees:

Prepare
Design

Supply

Sales
stage:

Prod.
Planned activities
within the stage:
1 Definition of goals Goals
Term plan

Financial plan
Feasibility
2
study Pre-calculation

Goals of market

First draft of the product

Product First draft of components
3
planning
Planning of the product

Design of components

4 Design Drawings of parts

Bills of material

Material requirements

Technology routings

Control procedures

Preparations
Process Documentation of orders
5
planning
Overview of stock

Creation of orders

Order of material

Acceptance and storing

Launch of production

Preparation of material
Manufacturing of
appliances
Manufacturing Manufact. of components
6
and assembly
Assembly

Check

Test and control

Offer and contract

Preparation of the product

Marketing and
7
sales Final control

Supply

Table 2: Responsibility matrix of the mini-loader

44
4.2.3 Structure of a project team for execution of concurrent engineering loops

Results of the second creativity workshop and selection of the project team manager allowed for the
definition of the project team structure in individual loops of the mini-loader development, as
shown in Table 2. Changeable structure of the project team in loops of the mini-loader development
is shown in Table 3.

OF PROJECT
PROJECT TEAM MEMBERS

MEMBERS
Loop number

PROD. PROC. PLAN

MANUFACTURING
OPERATIVE PREP.

INFORMAT. UNIT
PRODUCT PLAN.
DEVELOPMENT
DESCRIPTION STAGES,

COOPERATION
PROJ.T EAM

MARKETING
LOGISTICS

DELIVERY
QUALITY

SHAPING
FINANCE
OF THE INCLUDED IN THE

MANAGER

SUPPLY
DESIGN

SALES

TEAM No
LOOP: LOOP:

TOTAL
- definition of goals
FEASIBILITY
1. LOOP - feasibility study 12
- planning
- feasibility study
2. PROJECT LOOP - planning 12
- design
- planning
3. DESIGN LOOP - design 12
- process planning
PROCESS - design
4. PLANNING - process planning 13
LOOP - manufact. and assembly
MANUFACTU- - process planning
RING AND
5. - manufact. and assembly 14
ASSEMBLY
LOOP - marketing and sales

Table 3: Project team structure in individual loops of the mini-loader development

Project team manager will be a permanent team member, while experts from nine departments of
the company and representatives of designers, suppliers and customers will be variable team
members.

After the structure of the core and project teams had been defined, it was possible to form a two-
level team structure for mini-loader development (Figure 32).

45
 PERMANENT STRUCTURE OF CORE TEAM IN PRODUCT DEVELOPMENT PROCESS

a- Manager of IT department
e f b- Manager of QUALITY department
d g c- Manager of FINANCIAL department
d- Manager of MARKETIN G
and SALES department
c h
e- Manager of PRODUCTIO N department
f- CORE TEAM manager
b i g- Manager of DEVELOPMENT
and PLANNING department
h- Manager of DESIGN department
a j i- Manager of TECHNOLOGY department
j- Manager of SUPPLY department

PROJECT
MANAGER
1- Develo pment
PROJECT
MANAGER 2- Product pla nnin g
3- Desig n
4- Prod. proc. pla n
5- Supply

1 1 16 16 6- Marketing
1 14 15 15
2 11 2 11 1 1 7- Sale s
2 13 14 14
8- Fin ance
3 10 3 10 2 13 3 13
3 12 9- In fo rmatio n unit
4 9 4 9 3 12 4 12 10 - Deliv ery
4 10 11 - Shaping
10
5 8 5 8 4 10 5
6 7 6 7 5 9 5 9 7 9 12 - Logistic s
6 8
13 - Operative prepare
14 - Quality

VARIABLE STRUCTURE OF PROJECT TEAM IN PRODUCT DEVELOPMENT PROCESS 15 - Cooperatio n

16 - Manufa cturing

Figure 32: Two-level team structure during mini-loader development

4.2.4 Time and structural plan of the project

Up to now the producer of mini-loaders has developed new products sequentially. Analysis of the
past results of sequential development of mini loaders has shown that the average development time
for a particular product was four years. In these days the market demands short delivery terms of
products and short development times. In order to reduce the mini-loader development time (and
thus get a competitive advantage) the company decided to concurrently develop a new type of mini-
loader.

A creativity workshop was organised with all members of the core team participating. They were
asked to estimate or define the following:
 duration of individual stages (activities) in the concurrent product development process;
 possible connections between stages (activities);
 types and planned times of overlapping stages (activities).

Results of the core team work during mini-loader development are shown in Table 4.

46
 DESCRIPTION OF Activity Preceding Type of overlap Time of
Stage PRODUCT Activity duration
Planned activities within the stage estimation activity overlap
id. DEVELOPMENT id.
STAGE [months] id [months]
FS SS FF
1 Definition of goals Goals 2 3 -
3 Term plan 4 13 2 x 1
Financial plan 5 12 2 x 2
Feasibility study Pre-calculation 6 19 5 x 1
Goals of market 7 10 4 x 0
5 x 0
8 First draft of the product 9 4 2 x 2
Product planning First draft of components 10 4 9 x 1
Planning of the product 11 9 9 x 3
12 Design of components 13 5 9 x 3
11 x 0
Design
Drawings of parts 14 8 10 x 3
Bills of material 15 9 9 x 3
16 Material requirements 17 8 9 x 0
10 x 3
14 x 0
15 x 0
Technology routings 18 11 13 x 3
Control procedures 19 13 18 x 1
Process Preparations 20 5 19 x 1
planning Documentation of orders 21 14 18 x 0
Overview of stock 22 3 19 x 0
21 x 1
Creation of orders 23 4 20 x 0
Order of material 24 5 17 x 5
22 x 2
Acceptance and storing 25 7 24 x 1
26 Launch of production 27 11 19 x 0
21 x 0
24 x 0
Preparation of material 28 6 25 x 1
27 x 2
Manufacturing of appliances 29 8 7 x 0
Manufacturing
14 x 0
and assembly
20 x 4
Manufact. of components 30 4 24 x 3
Assembly 31 5 30 x 2
Check 32 4 29 x 0
31 x 1
Test and control 33 4 32 x 0
34 Offer and contract 35 11 28 x 0
Preparation of the product 36 4 32 x 0
33 x 0
Marketing Final control 37 2 6 x 0
33 x 0
Supply 38 3 35 x 1
37 x 2

Table 4: Duration of activities, types, and times of overlapping activities during mini-loader
development

The data on times, connections and overlapping of stages (activities) in concurrent mini-loader
development (shown in Table 4) are the input data for the CA – SPJ software which was used to
design the Gantt chart of the development process of the new type of mini-loader (Figure 33).

47
Figure 33: Gantt chart of the concurrent development of a new type of mini-loader

Analysis of the Gantt charts of the existing sequential and the planned concurrent development of
the new mini-loader has shown that if the company shifts from sequential to concurrent
engineering, it will be able to launch a new mini-loader in 25 months instead of four years as before
– which would considerably improve the competitiveness of the company.

The success of the concurrent mini-loader development process mostly depends on the effectiveness
of work of the project team in the product development loops, and therefore activities in future will
be directed towards a detailed organisation and co-ordination of the project team members during
individual loops of product development.

48
5 Conclusion
Global market requires short product development times, and therefore small companies are forced
into transition from sequential to concurrent product development.

As the basic element of the concurrent product development is team-work, the chapter pays special
attention to the formation and structure of teams in a small company. Research has led us to the
conclusion that a workgroup in a small company should consist of just two teams (logical and
technology team) instead of four ones, and that a two-level team structure (permanent core team and
variable project team) is more suitable for small companies.

In order to reach these goals the companies will have to shift from individual to team work,
implement the known methods for quality management of products and processes, and finally
organise the process of concurrent engineering for new product implementation with emphasis on:
 Computer-aided design (CAD)
 Quality functions deployment (QFD)
 Design methodology
 Value analysis (VA)
 Evaluation of quality
 Design for manufacturing (DFM) and assembly (DFA)
 Failure mode and effects analysis (FMEA)

The proposed concept of team formation in a small company has been tested in a sample case of
team composition in a mini-loaders producing company.

First the permanent core team structure and then the variable project team structure have been
defined. The team of company department’s managers accomplished activities of construction
house of quality for product.

With the construction of the first house of quality, which refers to product planning, the voice of the
customer has not yet reached the lowest level of product planning (manufacturing and assembly);
the team will have to build another three houses of quality for the mini-loader:
 house of quality for planning parts and components,
 house of quality for production process planning, and
 house of quality for manufacturing and assembly planning.

Construction of the four houses of quality for the mini-loader will enable the team to gradually
transfer the requirements and wishes of the customer from product to its components, from
components to production processes, and from production processes to manufacturing and
assembly.

Team work and construction of houses of quality are important elements of concurrent product
implementation: the first one is a means for organisation integration and the second one provides
for the fulfilment of customer's requirements.

The team of company department’s managers finally constructed a project of concurrent product
development into company. Results of project has shown that if the company shifts from sequential
to concurrent engineering, it would be able to launch a new mini-loader in 25 months instead in 48
months as before.

49
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50