Management consulting

– to make small improvements. To achieve incremental improvements, a consultant may be given the task of installing continuous improvement processes: a total quality approach, for example.4

Revitalization should be followed by an incremental improvement approach to sustain overall high performance levels, as there is a well-known tendency for performance levels of production systems to erode with time. Furthermore, even if the latest production and information technologies have been applied, there is always scope for smaller improvements suggested by the customers, the company’s own staff, the suppliers of the technology or the consultants.

Notwithstanding the approach taken, the consultant in most cases will have to deal with three major components of production systems:

–the products;

–the processes, including methods and organization of work;

–the people involved.

The consultant can concentrate on any of these areas in line with the agreement reached with the client. In many cases, however, this classification is somewhat artificial – problems to do with product quality, for example, may be due to poor methods of work, or poor training of workers, and so on. Nevertheless, for the purpose of structuring his or her thoughts the consultant may find this approach helpful.

Within each area, the consultant has at his or her disposal a variety of operations and management techniques ranging from the simple to the highly complex. In the planning area, for example, techniques can range from simple bar charts to network planning to advanced operations research tools and supply chain simulations. The choice depends on the situation faced and the degree of sophistication of the industry concerned. No attempt will be made in this chapter to describe these techniques, and readers are referred to the various publications dealing with operations management and operations research. Instead, we will concentrate on the systematic approach to identifying and prescribing methods for improving productivity, reducing production costs, and improving quality, speed and customer focus, so that the consultant develops an approach that is processand problem-oriented rather than single-technique- oriented (see also Chapters 20 and 21).

17.2 The product perspective

The product range

A product may start as a single substance or as a multitude of raw materials, processed to give quality characteristics that match a predetermined standard. It is rare to find enterprises that produce only one product. Usually there is a

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“product line”, or a number of products, produced to order, or for stock, or both. In the majority of cases, a few products will either form the bulk of items produced or represent the most expensive (and presumably yield the highest rate of return). The consultant would then be well advised to start the assignment by analysing these product lines to identify the one or more products representing the bulk of production, or the highest value, and to focus attention on certain major areas in respect of this particular product or products. At the same time, this analysis may help to bring another question to the fore: is there a need for all these product variations, or can some products be eliminated or standardized? Pruning the product range would be the first task in systematically restructuring production systems before looking more closely into the remaining products and their production.

Increasingly, environmental considerations play a role in decisions about the continuation, modification or discontinuation of products. The selection of reusable or biodegradable materials, product modifications to allow cleaner production processes, and a “cradle-to-grave” approach in defining product specifications open a whole range of new consulting tasks in production.5

In recent years, outsourcing has become a major strategy, allowing companies not only to concentrate on their core competencies but also to offer a wide range of complex products.

Why do some companies move quickly and efficiently to bring to market outstanding new products, while others expend tremendous resources to develop products that are late and poorly designed? How do designers, engineers, marketers, manufacturers, and senior executives in these companies combine their skills to build competitive advantage around product and process development?… What can managers do to bring about significant improvement in the performance of their development process?6

These are questions that clients increasingly ask their consultants with a view to restructuring product development processes.

To render product development more efficient, consultants will have to look into four areas: strategy; translation of customer demands into products; design for manufacturing; and organization of the product development process.

Product development strategy

In assisting a client to define a product development strategy, the consultant may encounter a number of common problems (see also box 17.3):7

●The moving target: The basic product or process concept misses a shifting technology or market.

●Mismatches between functions: What one part of the organization expects or wants from another part may prove to be unrealistic or impossible, e.g. the engineering department may design a product that the production department cannot produce, or only with difficulty.

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Box 17.3 Central themes in ineffective and effective development projects

Source: S. G. Wheelwright, I. Clark and R. A. Hayes: Dynamic manufacturing (New York, The Free Press, 1988), p. 14.

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●Lack of product distinctiveness: New product development terminates in disappointment because the new product is not unique or as justifiable as the organization anticipated.

●Unexpected technical problems: Delays and cost overruns can be traced to overestimates of the company’s technical capabilities or to its lack of resources.

●Unresolved policy issues: If major policies have not been articulated clearly and shared, short-term decisions will have to be made during the “heat of the battle”, often with negative implications for the whole organization.

Translation of customer demands into products

Here the consultant has to focus on cross-functional information flows, particularly between marketing, research and product development, and on the structural processes of translating this information into product specifications via techniques such as quality function deployment. The tendency of engineers to “over-engineer” products should be limited by introducing target costing techniques. A cost target is set for the whole product and subsequently broken down into cost targets for each component, to avoid cost and price overruns which are quite common for new products. Target costing also allows better negotiation with suppliers based on a fixed cost target.

Design for manufacturing

In many cases, a traditional or successful product will continue to be produced for years with little thought being given to its design features. In other cases, product design is considered to fall solely within the domain of the marketing staff, and it is left to them to make all decisions in this area. Development work leading to a design involves more than just producing an appealing product. It should be based on the full cooperation of several enterprise functions, particularly marketing, production and costing.

On the production side, the consultant is concerned with the fact that a design will normally predetermine the process and method of work, the type of raw materials, jigs or fixtures, or materials-handling equipment that will be used. This is true of the product as well as of its constituent parts. The most frequent questions that the consultant needs to ask are:

●How many parts is the product composed of? Can some parts be eliminated through better design? Have any unnecessary features been removed?

●Can certain component parts be standardized to match parts of other products and so enable the use of the same machines, tools, jigs and fixtures?

●Can some components be replaced by cheaper ones that would perform the same function?

●Does the design lend itself to easy handling?

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