Managing Product Development: Using Information Technology and Compensation Systems to Enhance Collaboration Across Organizational Boundaries
Schneider Electric North America (Square D) is utilizing new tools, methods, and concepts to drive its product development strategy. Charles Rochester discussed "what it really takes to DESIGN anywhere, TOOL anywhere, and BUILD anywhere." Product development at Schneider Electric North America is moving closer to becoming virtual. It has consolidated its design teams into three design centers and requires its engineers to work across product lines and plant locations. It also has implemented a Web-based parts-management system to eliminate redundancies, and give engineers in every location access to consistent design data.
Schneider Electric Summary (319 KB pdf)
American Axle & Manufacturing is expanding upon the benefits it initially derived from implementation of a product data management (PDM) system. It is doing so by taking advantage of improvements in software and the Internet to include suppliers and distributors and make collaborative engineering among its far-flung facilities a reality. To facilitate PDM implementation, AAM assembled a cross-functional team that devised world-class processes and clear goals before evaluating software vendors. This allowed for selection of a PDM system that could be easily configured to handle the company's processes. Implementation remains ongoing, with engineers generating proposals for doing new things that they did not know were possible until the PDM system was in place.
American Axle Summary (366 KB pdf)
IBM Corporation began an initiative in 1994 called Common Building Blocks, an effort to drive the design community to increase its reuse of parts and components and to select them from preferred vendors whose business, technical, and supply perspectives meet IBM cost and business objectives. Preferred Parts Councils were established to map the direction of new and existing technologies and identify needed parts and preferred suppliers. Targets for parts reuse, parts reduction, etc. are set every year. Parts reuse has increased dramatically and total parts numbers have been reduced by half. Significant savings also have been realized in delivery cycle times, on time shipments, and material acquisition costs.
IBM Summary (389 KB pdf)
For the past two years, Pitney Bowes Mailing Systems Engineering Group has measured the performance of new product development managers by the projected profitability of those products. The incentive portion of the core team leaders' compensation is linked to how well they optimize the profitability of products while they are being developed. Denis J. Stemmle, vice president of Engineering, discussed the formula for measuring profitability, including four key metrics for engineering performance, and how this formula provides an excellent tool for making rapid trade-offs as issues arise during the product development process.
Pitney Bowes Summary (342 KB pdf)