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Lean PLM
The PLM Challenge to Enable the Lean Enterprise
Michael Kennedy, Targeted Convergence Corporation

Noted author Michael Kennedy outlines the way Toyota thinks, and calls for developers to fully
support the test-and-design paradigm. Simulate before design to explore the limits with set-based
possibilities. Toyota thinks about limit curves, which summarize the design tradeoffs.

Michaels recent book, Product Development for the Lean Enterprise, has raised
awareness and presented the underlying philosophy behind Toyotas outstanding product
development success. He has been a leader in the redesign of organizational processes for over
thirty-five years. With thirty of those years at Texas Instruments Inc., Michael was the lead
engineer on many development projects including missile system products and manufacturing
systems. During his last ten years at TI, he was a leader in re-engineering the core engineering
and manufacturing processes, including adopting concurrent engineering, solid modeling CAD
systems, CAD/CAM integration, and leading quality initiatives.

This report is derived from Michaels presentation at CPDAs annual conference, PLM
Road Map

2007.
EXECUTIVE SUMMARY
Last year, Toyota made more money than the next five auto makers combined.
They continue to gain share in the marketplace with no end in sight.

Toyota has an intrinsically different development behavior based upon a
fundamental philosophy learn first before making design decisions. They start
by setting targets as wide as possible, and allowing the specifications to converge
over time. Prototyping and testing never target verification, or fixing what went
wrong. To learn, they build knowledge from the start that can be applied to make
decisions. Basically, a design-then-test mentality, the norm at most other
companies, means that you design, then you test your decisions, and then you fix
the mistakes. A test-then-design mentality simulates and tests first, and then
designs. Toyota has not really believed in simulation, but in hard testing. That is
in the process of shifting.

Continuous learning at Toyota centers on their tool sets. A critically important
aspect of the approach relates to their A3 reports. Toyota arguably is the most
standardized company in the world. They standardize with their A3 checklists,
which lock in all the learning and knowledge through a set of rules and standards
that flow from one project to the next.
Lean PLM: The PLM Challenge to Enable the Lean Enterprise
PLM Integration/Product Definition

2 2007 Collaborative Product Development Associates, LLC
We believe the companies we work with are going to computerize their data.
Toyota understands that they need to use computer technology for global access
to knowledge, but worries about the loss of person-to-person communication
that today is facilitated by these paper documents.

Toyota continually looks at sets of solutions around limit curves, and thinks in
terms of design with limit curves. When you have two limit curves, you have a
tradeoff to consider. You look at what the decision affects, how the decision with
one variable impacts the others. Thats the way Toyota thinks with their designs.
Not in all cases, but often they decide straight from the limit curves. The chief
engineer makes the decision with enough understanding even without a CAD
model. They know enough to go straight from the decision to the CAD model,
and then to final test.

Another point regarding Toyota relates to the importance of conflict to making
great cars. They build cars with very real conflict between the chief engineer and
the functional managers. The chief engineer designs the car; the functional
managers own the knowledge. That occurs across all the various parts of the car.
To the chief engineer, its his car being designed. To the functional manager, its
his knowledge creating the car. They both need an approach to judge and evaluate
the data and tradeoffs for decisions. Both represent the same level in the
organization; one cannot overrule the other. Critically important, the resolution is
all based around knowledge. That extends right back to the limit curves and
LAMDA learning cycles (Look-Ask-Model-Discuss-Act). Toyota knows how to
make the decisions, and constructive conflict characterizes the process at its best.
Toyota wants that hard conflict; it is critical to their overall development
approach. It is also tremendously detailed, getting down to the tolerance level on
manufacturing parts, as an example.

Taking this approach, Toyota basically time-shifted product development. They
moved away from the approach where most time spent related to the detail
design phase with loop-backs. The limit curves and understanding apply to the
fuzzy front-end stage of the design where most of their design decisions are
made. That is where their set-based design pays off. The validated specifications
come together with the limit curves. They represent multiple points, with multiple
release parts of the car to schedule for release to manufacturing. They do not miss
these schedules because they know the tradeoffs. They will never actually start a
car project without knowing that they have at least one solution that is safe
against the limit curves.

Especially important, the approach allows Toyota to leverage knowledge across
projects. They apply set-based knowledge, LAMDA, the A3s, and the limit curves
to communicate across projects. The shared knowledge allows all to reuse the
lessons learned. This is Lean Product Development, or Learning-First Product
Development. Within in a project, they rely on the same tools everybody else
does, such as CAD/CAM.

Lean PLM: The PLM Challenge to Enable the Lean Enterprise
PLM Integration/Product Definition

2007 Collaborative Product Development Associates, LLC 3
Toyota clearly derives designs directly from set-based knowledge. Allen Ward
often told me that Toyota thinks product development is about developing the
knowledge about cars, and not about developing cars. In the figure below, the
diagonal arrow represents the growth of functional knowledge that develops over
time as set-based knowledge; the horizontal boxes represent the integration of the
knowledge into a cadence of products. The intersection is the critical point of
knowledge based decision making. That is why the ten-second rule is so
important. A limit curve must be understandable from an A3 sheet in ten seconds
or less. One year later, or even five years later, another engineer must be able to
pick up the sheet and understand what it means.


Copyright 2007TargetedConvergenceCorporati on
All Ri ht R d
Targeted Convergence Corporation
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This is Lean
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When that process is in place, then PLM starts working smoothly across
platforms and across the development cycle. The problem that remains for
Toyota today relates to the manual approach in place. They have a real challenge
globalizing. It is very difficult for them, and indeed most companies simply
cannot go back to a manual approach. As they keep growing, Toyota basically
must design other Toyota Cities. They are trying to set up design centers in the
U.S., but they face real challenges because of their approach with limit curves and
their emphasis on fundamental knowledge. That works in Toyota City, but
becomes a challenge in other cultures. Their chief engineers normally take over
twenty years to develop. Now, there may be only ten years available for training
to keep up with their growth. They have got to learn how to proceed without
sacrificing their fundamental approaches.

In general, lean product development can get you half of the way to an optimized
process. PLM can take you the rest of the way. However, unless you solve lean
first and establish an approach for systematically building and sharing a
knowledge base across platforms, PLM will never make great progress.
Implementing PLM in its broadest sense is dangerous, and especially risky in a
fire-fighting mode. Lean PLM makes tremendous progress that transforms
product development. A PLM implementation within a Toyota-inspired, lean
Courtesy Targeted Convergence Corporation
This Allows
Concurrently Growing
Set-Based Knowledge
for Future Generations
of Products
Lean PLM: The PLM Challenge to Enable the Lean Enterprise
PLM Integration/Product Definition

4 2007 Collaborative Product Development Associates, LLC
product development environment can take you to the next level. PLM provides
the glue that ties together your knowledge.

Recommendations
Get Lean by first removing the massive waste of knowledge in your product development system.
Plan / prototype your PLM system during this time.
Then grow the PLM environment to continually expand your lean product development system.

My recommendations are relatively clear. For companies implementing Lean or
PLM, get Lean first. Understand how to apply the analysis of tradeoffs early in
the design process; understand the specific approaches at Toyota that you can
build on. I think LAMDA and A3 discipline are absolutely critical. You must have
an absolutely firm approach for identifying, collecting, and capturing knowledge.

For the developers of PLM, we need more evangelists with an understanding of
the power of Lean, with an understanding of how Toyota thinks. That does not
mean copying Toyota. Copying will not work because they have their own set of
challenges, and copying would put you even further behind where they were in
the past.

Understanding the limits on decision tradeoffs will enable you to design
accordingly. If you do not understand, you are guessing. Toyota relentlessly
searches for all those limits. Limiting curve-driven design represents the key to
Toyotas approach in product development. I see tremendous potential in looking
at simulation to both understand and drive those curves, coupled also with all the
traditional approaches for getting the knowledge in from manufacturing.



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Lean PLM: The PLM Challenge to Enable the Lean Enterprise
PLM Integration/Product Definition



TABLE OF CONTENTS
EXECUTIVE SUMMARY...................................................................................................................................... 1
SCORECARD ON TOYOTAS DOMINANT POSITION...................................................................................... 7
TEST-THEN-DESIGN: LEARN FIRST....................................................................................................................... 9
CONTINUOUS LEARNING..................................................................................................................................... 12
LIMIT CURVES ................................................................................................................................................... 13
CONSTRUCTIVE CONFLICT ................................................................................................................................. 14
SET-BASED KNOWLEDGE................................................................................................................................... 15
THE ROLE OF PLM............................................................................................................................................ 16
AUDIENCE RESPONSE .................................................................................................................................... 18