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Stacking the Three Piuses

Each matrix of the Three-Plus diagram represents a key part of the industrial process: design, production/distribu­tion and costing. But in fact, all three of these activities must occur in each part of the process. A company can't limit the design process to simply turning out a beautiful plan but must also decide how the product will be produced and how much it will cost, even before the first component is turned out.

Feedback for a new product or strategy can be shown by "stacking" the three pluses—this is Concurrent Engineer­ing. It means that while the product or strategy is in the design phase, production/distribution and costing consid­erations are taken into account. By simulating these latter phases of the industrial process before locking in the

majority of costs, a company can increase its chances of launching successfully a new product or strategy .

For products which are already being produced and distrib­uted, the stacked pluses feed back real costs and quantities through the MRP II/JIT/TQC and ABC systems. Although the design process for an existing product is of course already completed, feedback on design can still be garnered from the production/distribution and the costing pluses for the next generation of products and strategies.

Feedback is obviously facilitated by the practice of using multifunctional teams not only for design but also for process simplification with JIT/TQC and for reducing cost drivers with ABC.

As a new product moves out of design and into the physical production and distribution processes, the star technolo­gies link up. QFD's House of Quality gives as part of its results target values of product characteristics which can be used in a succeeding QFD matrix to define major subassemblies. Follow-on linkages relate these to the production process itself.

Once the products and processes are defined, MRP II's power of simulation can take over to project the product and process structure into the future to plan what re­sources will be required and in what time frame.

These data elements then feed ABC's cost calculations so that heavy resource-consuming actitivities can be identi­fied. To reduce cost, the production/distribution process or the design itself may have to be changed. Since this is all being done prior to product release, the financial and operational risks are minimized.

A secondary benefit of stacking the three matrices and then moving through the industrial process with all three of them simultaneously is in managing the management processes themselves.

Design, for example, requires resource planning and waste-reduction analysis. Its star technology, QFD, targets the most important customer wants and needs but not all wants and needs. The normal product development process must go on in the background, and it requires resources— man-hours, space and funds. These resources must be planned and scheduled, and what better way to do it than with the concepts and tools of MRP II ?

Similarly, the production planning process itself consumes resources: manpower, office space and computers. What better way to measure the cost than with ABC ? In addition, the horizontal dimensions explained in the preceding section for identifying and reducing waste can be used to shorten the production- and distribution- planning process itself.

Stacking the three matrices in effect adds a third dimension to the two-dimensional, vertical and horizontal bars of the plus signs to create a comprehensive structure for more powerfully managing tomorrow's complex industrial processes.

To be Continued


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