At the World Economic Forum in Davos, Justin Trudeau said, “the pace of change has never been this fast — yet it will never be this slow again.”
This is a reflection of the business environment we’re operating in. All major global economies are forecasted to grow in 2018. The rising tides lift all ships, and businesses and CEOs don’t want to miss the opportunity to grow. Thus, it is not surprising that there has been a 50% increase in the number of CEOs who want to be first movers.
As most corporations become increasingly fixated on speed, the system of ensuring product quality downstream is no longer effective. Design flaws caught downstream have several time and budget-related consequences, such as significant rework and machine downtime.
In today’s business environment, quality issues need to be addressed early in the process — during design. A supply chain that senses and responds quickly, reliably and cost-effectively, but with poor-quality products, does not qualify as successful.
Developers who paid high attention to product quality in early new product development (NPD) stages earned a 20% higher return that those who did not, according to our survey of 400 product developers across more than 10 industries.
For a unique new product launch with a three-month financial goal of $10 million, that translates to an additional $2 million of earnings.
It is therefore imperative that product developers pay more attention to quality during design. However, when faced with pressures from all sides, product developers frequently trade off quality activities for other business priorities.
Findings from our Quality in Design Initiative demonstrate that there are two active ingredients to counteract such trade-offs and increase the amount of attention that product developers pay to quality in design.
Ownership: Product developers need to feel ownership over which quality activities to conduct when creating a new product design.
Guidance: Quality needs to arm product developers with the knowledge they need to create quality plans, motivate them to make quality choices, and help them make informed trade-offs during the execution of those plans.
These two ingredients combine to form the best practice of guided ownership. Because it encompasses the best of both worlds, guided ownership is effective at increasing the attention product developers pay to quality during design. On one hand it recognizes that product developers are already the de facto owners and will make necessary decisions about which quality activities to do in the moment. On the other hand, it helps ensure that the decisions developers inevitably make are the right ones by giving them the knowledge they need to make such choices.
Many supply chain executives may think that product developers experience guided ownership at their organization; however, only 19% of product developers say they do. As a supply chain executive, you must ensure that your leaders and teams understand the importance of guided ownership and have the knowledge to implement it effectively.
To establish guided ownership, your leaders will have to work with quality and product development so that quality only makes a small, critical set of activities mandatory, rather than building detailed quality plans and deciding when activities can be skipped.
Instead of telling product developers where they’ve fallen short, quality provides support so that product developers can make the right changes as needed.
Finally, rather than establishing quality standards independently, quality co-develops standards in product development terms. The result is that product developers see quality activities as value add rather than add-on work; and they understand that the co-developed standards will make their designs better.
To be implemented successfully, guided ownership requires a completely new posture from supply chain leaders and staff, as well as some process adjustments. One way to encourage your leaders to implement these changes is to show them it is possible and that they can learn from other companies, such as the ones described below.
Using Discussion Questions
Best Harbour uses a structured set of discussion questions to methodically pressure test and illuminate any shortcomings in product developers’ quality plans. The questions help product developers to realize, on their own, where their quality test plans need to account for a greater variety of customer use scenarios. This question-based approach ensures a proper balance between giving product developers ownership and guiding them toward creating robust quality test plans.
Establishing High-Frequency Design Consultations
Moen replaced design reviews with many mini design consultations that are better aligned with the speed of product developers’ workflow. These 15- to 30-minute meetings take place two or three times a week and are used as a venue where product developers bring issues as soon as they arise. During the meeting, all supporting functions (including supply chain) ask questions or provide feedback that helps guide developers without telling them what to do. The result: product developers who no longer feel discomfort during interactions and a truly collaborative environment across the entire supply chain.
As supply chain executives, you must encourage your leaders to:
- Find ways to adapt their NPD-related processes to better align with product developers’ workflows (and the speed mandate from the CEO and the business)
- Change their posture to ensure that product developers feel ownership over NPD activities while receiving the guidance they need to make quality-informed decisions.
Carolina Valencia is Research Director for the Quality Leadership Council at Gartner