Strategy Lean processes in development: risks and costs under control

Unstructured projects, incalculable expenses and long lead times in development are the woes of many electronics manufacturers. The frontloading strategy keeps those problems in check.

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MEV Elektronik Service GmbH

At Werma Signaltechnik, unstructured projects, incalculable expenses and excessively long lead times in development are part of the past thanks to clearly defined management, precise project prioritisation and, above all, consistent front-loading. The company consciously took the time to deliberate on the reorganisation and on sustainable learning processes. Supported by Staufen AG, Werma Signaltechnik developed the "Werma Development System". As a result, Werma was awarded the Top 100 Innovation Award in 2012.

The focus of Matthias Marquardt, Managing Partner of Werma Signaltechnik, is firmly on the number 2 spot on the global market behind the domineering Japanese leader and thus a successful future of his mid-size business. The son of the business founder who took over management of the business in 2009 knew all along that development is the foundation for achieving this goal. "I had been dealing with lean management, i.e. lean processes for quite a while and after the Best Practice Day 2009 hosted by Staufen AG it was clear to me that it would be the right approach for us as well given that we are a catalogue merchant with high vertical integration."

With the help of consultants, the pilot programme got off the ground as early as 2010. "It was mainly organisation and prioritisation of projects that were in dire need of improvement," says Marquardt. Lead times were high as a result. In addition, according to him it was nearly impossible to calculate actual expenses. "Frequently, just before the development phase was completed, some party had yet another new requirement for the product. Therefore, the entire concept had to be revised again."

Consistent project management required

After analysing the company and processes, the consultants with Staufen AG proposed to designate employees for project management only. Werma followed this recommendation by consistently making a motivated developer available. Furthermore, we posted additional project manager jobs internally. In addition, we promptly began the process of prioritisation, using the current project list. "We had many projects in the queue that were all rated the same more or less," says Marquardt. "Today, we have clearly defined criteria we use to stagger." In a room conceived especially for this purpose, now our project landscape is clearly visualised, altogether without computer and Powerpoint.

Each project receives its own DIN A4 sheet used to document the current status in hand writing. Depending on the product group, this sheet is hung on one of three clothes lines in the project room. The position of the sheet indicates the phase in which the project is at any time. The colour of the clothes pin indicates whether there are problems or everything is in keeping with the plan. "This way, we only have to look once and know what our status is," Marquardt clarifies. Now our development projects are clearly scheduled and structured, responsibilities are unambiguous and nothing is left behind any more. The method is simple and precisely for this reason it is efficient."

Weekly meetings of specialist teams also contribute to these improvements. This is where the previous week's progress as well as pending topics for the upcoming week are discussed briefly and concisely. According to Marquardt the point is not in attributing mistakes to an individual. On the contrary, he says, it is desirable to obtain diverse feedback that supports finding a solution. "Werma has always supported the idea of permitting mistakes and learning from them – as long as they are not repeated too often, of course."

Designated project managers as well as participants in all roles – product management, purchasing, sales and distribution, marketing, production, resource production, etc. – formed the core team for the pilot project with the consultants: development of a brand new family of optical-acoustic signal devices.

The goal was to reorganise the development processes so that consistent front-loading would take place. The intention was to reposition main expenditures, which so far accumulated at the end of the projects, further to the front in order to ensure more planning security and reduce financial risks.

At the same time, it was important to minimise buffer times and have processes run in parallel. "That was a big adjustment for us. For this reason, we deliberately took out time to set up the process sustainably by working with Staufen," Marquardt explains the method. In a joint effort with the team of consultants the process of front-loading was customised to Werma and the existing milestone structure and immediately tested in its practical application.

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