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Automotive Industry

Better launches begin at estimating: Doing it right the first time eliminates costly changes and program delays - Supplier Business - Brief Article

Automotive Industries, June, 2002 by Jason C. Brewer

Are you practically taping money to every part you ship to your customer? Or do you have a profitable program, but it won't run long enough to make up what you spent to launch it? Are you saying to yourself, "If only I knew this when I started!" Or are you too busy resubmitting rejected production part approval process (PPAP) warrants, reworking tools, paying for excess overtime, and getting behind on everything else because all of your resources are working on the latest launch?

These problems frequently result from discovering manufacturing issues or customer requirements after first part submission. Fixing these problems during or after the launch is the most costly time. The time to identify issues is when the cost of change is the lowest -- during the estimating process (see Figure 1).

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The estimate is too often viewed as a necessary administrative step to get sales. Alternatively, the estimating process can be viewed as the first critical step in the program management and advanced product quality planning (APQP) processes to achieve product quality; customer satisfaction, and profitability goals. It is during the estimating process where the basic manufacturing process is determined and the price is set. This is the time to resolve customer requirements and identify manufacturing and quality issues, when cost implications can be reflected in the price and long before problems are designed into the product or process. Many costs of a bad launch can be avoided when the issues or requirements are identified and resolved upfront.

Unfortunately, many suppliers do not begin managing the program and assigning scarce problem-solving resources until after the purchase order is received, or worse, after the tools arrive. But with a few practical considerations the estimate can easily be done right the first time.

Understand needs as well as requirements

When shopping for suppliers, customers distribute requirements in the form of prints and specifications. Rarely, however, do these requirements accurately or completely describe what the customer needs for part performance or program targets. Learning at PPAP about a customer need that was poorly communicated through the part print can result in reworking parts, tools, or fixtures, for example, therefore driving up costs and delaying timing. Understanding what the customer really needs the part to do can enable the supplier to determine the appropriate processing methods, prioritize specifications, or even identify cost saving opportunities. Understanding for what the parts are needed is especially important for prototypes. Whether the parts are for visual illustration, automation try-out, or durability tests can significantly impact the choice of prototyping methods and related costs.

Tower Automotive's contribution to the 1998 Ford Ranger is a great illustration of understanding customer needs versus requirements. The specifications from Ford engineering called for a one-piece frame rail. However, Tower Automotive understood that what Ford needed was stiffness. Unlike the customer, Tower Automotive also knew a one-piece frame rail could not be stamped across the width of a steel coil, therefore driving up costs. As a result of understanding true customer needs and the manufacturing processes, Tower Automotive engineered a three-piece frame rail that provided 350 percent greater torsional rigidity, yet at a lower cost and weight.

This understanding can be partly gained through asking more questions. A sales engineer with product and manufacturing experience can ask the right questions at the first contact with the customer beyond, "when do you want the quote?" In lieu of a sales engineer, a sales representative can facilitate multiple relationships between the customer and the organizations' product, quality, and manufacturing experts to enable them to engage in dialogue whenever necessary. Questions that will likely need to be answered some time during the program include the following. Why not ask them up front?

What does this part do? What dimensions are critical for functional performance?

What dimensions are critical for handling or processing in your facility?

How is this part inspected at your facility?

When do you first need parts? How many? For what will you use them?

Incorporate manufacturing and quality knowledge

Finding a cost estimator with the perfect combination of relevant manufacturing experience, product knowledge, and business sense can be difficult. Instead, a person with less than perfect experience, working in near isolation, is left to making process decisions and resulting cost constraints with which the rest of the organization must live. How many manufacturing managers complain about being given the same troublesome process or tool design again and again, but after the investment is made? How many quality managers have instituted 100 percent product containment because the process was not robust? Incorporating manufacturing and quality input during APQP may be already too late because the price and process are already fixed.

Automotive Industry

Better launches begin at estimating: Doing it right the first time eliminates costly changes and program delays - Supplier Business - Brief Article

Automotive Industries, June, 2002 by Jason C. Brewer

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