Got 99 Projects But Profit Ain't One? - CAPINC Presentation on Automation
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The document discusses the concept of Cost of Delay (CoD) in product development, illustrating various cases and financial impacts of delays in product launches. It emphasizes the use of SolidWorks and DriveWorks to mitigate delays, improve profit margins, and enhance decision-making related to design processes. Additionally, it underscores the importance of measuring design-in-process queues to optimize efficiency and underscores that only a small percentage of developers currently track their CoD, leading to potential profit loss.
Got 99 Projects But Profit Ain't One? - CAPINC Presentation on Automation
- 1. CAPINC Presents Jason Pancoast Engineering Manager www.capinc.com
- 3. © CAPINC Time Sales Original Timeline Minimal Impact of Delay “Ideal Monopoly Case” Delayed Timeline Delay Product Launch
- 4. © CAPINC Time Sales Original Timeline Delayed Timeline Delay Lost sales Lost sales Delay = Cost Of Delay (COD) Product Launch Financial Impact of Delay “Competitive Market Case”
- 5. Explore Cost of Delay applications and implications. Learn how SolidWorks + DriveWorks can reduce delays and increase profits. Measure the impact of the Design-In-Process queue. © CAPINC
- 6. © CAPINC Case 1: COD: $10,000/week • Product has issues that will delay launch 4 weeks. • Issues will cost $50,000 in sales, Marketing predicts. What do you do? Case 2: COD: $30,000/week
- 7. © CAPINC Case 1: COD: ??? • Product has problems. • Development can find problems in 5 weeks. • Manufacturing can find problems in 1 week. • Manufacturing estimates that re-tooling to address problems will cost $50,000. Should Development push this immature product to Manufacturing? Case 2: COD: $20,000/week
- 8. © CAPINC Case 1: COD: ??? Case 2: COD: $20,000/week
- 9. Only 15% of product developers know their Cost of Delay. Employees on the same project estimates’ vary by 50x. Proper economic framework can improve estimates to vary only 2x. © CAPINC
- 10. © CAPINC Production Delay: Sales Quote Delay: Ask your sales person: • Would the customer pay an extra 10% to get a quote <24 hours? • What % of sales would you lose if quotes took 3 days instead of 1? Why? Quantify COD for Sales Quote delay.
- 11. Explore Cost of Delay applications and implications. Learn how SolidWorks + DriveWorks can reduce delays and increase profits. Measure the impact of the Design-In-Process queue. © CAPINC
- 12. Knowing your Cost of Delay turns debates into profitable decisions. Learn how SolidWorks + DriveWorks can reduce delays and increase profits. Measure the impact of the Design-In-Process queue. © CAPINC
- 13. Lots of back-and-forth between sales and engineering. Engineering time is consumed by repetitive work. Need to open up R&D opportunities for new accounts and innovation. Requoting missed requirements is embarrassing and time-consuming. © CAPINC
- 14. Automation is a benign circle. You just need to get the engine started. For best ROI, start with low-hanging fruit! Create a positive- feedback-loop. Then automate the exceptions... © CAPINC Automation Effort Automated Tasks Queue reduction Excess capacity!
- 15. © CAPINC Input customer requirements... •Form-based user interface •Web Browser or Desktop ...Let knowledge- based engineering take over... •Fast and powerful rules engine •Excel-style logic and formulas ...Automatically produce CAD and other documents •Behind-the-scenes operation •SolidWorks and MS Office
- 16. Capture customer requirements and create sales documents © CAPINC
- 17. Knowing your Cost of Delay turns debates into profitable decisions. Learn how SolidWorks + DriveWorks can reduce delays and increase profits. Measure the impact of the Design-In-Process queue. © CAPINC
- 18. Knowing your Cost of Delay turns debates into profitable decisions. Implementing SolidWorks with DriveWorks reduces delays and increases profits. Measure the impact of the Design-In-Process queue. © CAPINC
- 19. © CAPINC Work-In-Progress (WIP) Designs-In-Progress (DIP) • Refers to physical parts • Easy to see • Tracked by Finance Departments • Refers to ideas • HARD to see • UNTRACKED by 98% of design houses!
- 21. Cycle Time is a trailing indicator of a problem. Queue size is a leading indicator. “Little’s Law” says you can measure one to get the other, if you must... © CAPINC
- 22. Example1: If you complete 10 jobs per week, and you have 50 jobs in process, your time in queue is 5 weeks. Example 2: If your cycle time is 30 days and you complete 2 jobs per day, your DIP is 60 jobs. © CAPINC Wait Time = Queue Size Processing Rate * John D.C. Little, MIT, 1961
- 23. © CAPINC 5 weeks in queue $30K per week COD 60 products per year Cost of Queue = 5 x $30K x 60 = $9,000,000 per year
- 24. Big DIP queue has damaging effects: Longer cycle time (Cost of Delay) Increased risk from changes over time Variability due to high capacity More overhead to maintain queue Lower quality from delayed feedback Less motivation to work with urgency Only 2% of product developers measure their DIP queues! © CAPINC
- 25. Modest improvements in capacity can dramatically reduce your queue! © CAPINC 3 items at 75% 19 items at 95%
- 26. • Sales and Marketing • CAD • Analysis, Prototyping, and Testing • Management Approval • Purchasing • Tooling © CAPINC
- 28. Generate engineering drawings and production documents © CAPINC
- 29. Knowing your Cost of Delay turns debates into profitable decisions. Implementing SolidWorks with DriveWorks reduces delays and increases profits. Measure the impact of the Design-In-Process queue. © CAPINC
- 30. Knowing your Cost of Delay turns debates into profitable decisions. Implementing SolidWorks with DriveWorks reduces delays and increases profits. Reducing your Design- In-Process queue saves costs dramatically. © CAPINC
- 31. For more theory... read Reinertsen’s book For more application... email [email protected] © CAPINC
- 32. Thank you for attending I’ve Got 99 Projects but Profit Ain’t One Jason Pancoast Engineering Manager [email protected] www.capinc.com