Purchasing and supplier involvement in design has come a long way at Bay Networks. Just two years ago, purchasers and suppliers were shut out of the design process and only got involved after designs were set and a bill of materials (BOM) was drawn up by engineers.
And even after a BOM was set, suppliers were kept in the dark. "We weren't even allowed to give suppliers code names for our new-product projects," says Suzanne Berube, manager of product purchasing management at Bay, which designs and manufactures networking equipment such as hubs, routers, and switches. "The only thing we would tell them was the estimated usage of the part and the price we wanted. And we would hold them to that price.
Now purchasing is involved at the concept stage--when an engineer has proposed a new product but has yet to develop specs for it. Suppliers also are brought in before specs are established for the proposed new product. The early involvement has helped Bay cut in half its new-product development time for many products.
"We'll talk to customers and come up with the requirements for the product," says Bruce Miller, director of hardware development. "At this stage, there isn't too much vendor involvement. Then we'll identify critical technology that we need to be successful. That's when we start initiating dialogue with suppliers. As we move forward, we start aggregating more of the team," he says.
All this occurs before there is a BOM, says Berube. "We invite suppliers in and ask them to suggest technologies to us," she says. Suppliers are asked for input on issues that affect design, including manufacturability, cost, and obsolescence. Purchasers steer engineers toward Bay's preferred suppliers, companies that not only have the technology that Bay requires, but can manufacture parts in volume and support Bay long term.
The involvement of Bay's designers, purchasers, and suppliers is part of its six-phase design process, which ranges from product concept to end of product life.
The process starts at "phase zero," or the concept stage, when the idea for a product is in the designer's head. There is a business plan for the proposed new product, but little else. Each month Bay holds new-product "phase reviews" where a list of proposed new products is announced.
Berube is a member of a team that sits in on the phase-zero reviews. "As soon as we catch wind of a new product, I let my people know," she says. Those people are new-product purchasing managers who are specialists in ATM (asynchronous transfer mode), ethernet, and token ring technologies. The new-product purchasing manager and component engineers form a core team and are assigned to the project.
This team talks to the design engineer about the critical components he or she plans to use in the new product. Critical components are microprocessors, interconnect and application specific integrated circuits (asics). The core team guides the engineers to Bay's preferred suppliers, which are determined by commodity teams.
"We spend at least three hours a week in the engineering building sitting with the design engineer to influence the design decision," says Berube.
Suppliers also are involved in design before the BOM is established. "We allow suppliers to come in and recommend alternate technologies before we end up with something in writing," says Berube. Suppliers have face-to-face meetings with Bay's engineers to discuss new projects.
For instance, if a new product requires a new asic, the supplier would work with Bay's engineer to design the chip, making sure it delivers the proper functionality. If a new connector was required, the supplier and Bay's design engineers would discuss issues such as the physical size of the connector, signal integrity, ground and shielding, insertion force, and reliability, says Miller.
Generally, the newer the technology, the closer Bay's engineers work with suppliers. "If the technology is stable and well known, the tendency is to deal with the supplier through purchasing and manufacturing channels," says Miller. "It's a function of the newness and the unique characteristics that we need in that particular component."
Suppliers also are called into monthly meetings. "They sit at the table with someone from purchasing, component engineering, manufacturing, quality, and test," says Berube. "They are part of the team. They sit and participate in the design, milestones in delivery dates, everything. In the end, they celebrate just like we do. We have gone from not sharing any information with them to having them as part of the team," she says.
Purchasing has several roles in new-product development. One is keeping an eye on cost. "They keep engineering informed as to where the project stands in meeting cost targets," says Miller. Purchasing also plays a role when a change in component and supplier is needed. "One problem with emerging technologies is that it can be difficult to get what you need. In the beginning, the supply of the technology is minimal, so having purchasing establish supplier relationships helps us get the material we need to execute the development," says Miller.
The relationship between designer and purchaser is usually amiable, but sometimes there are disputes. "There can be contention if an engineer wants to use a single-source supplier," says Miller. "Engineering may say 'we need this component to meet our goals,' and purchasing says 'well you know you have some risk here.' Purchasing will point out issues of using a single source, such as if the supplier is fiscally sound," says Miller.
The final part of new-product design before a BOM is set is a value-analysis/value-engineering workshop. Bay's VE/VA engineer brings in key suppliers and a design consultant to help review the design. The purpose of the workshops is to review cost and manufacturability of the design. "It's purely a technical meeting," says Miller. "They have the opportunity to change the design, to take a certain technology off the board, and to make sure parts being used won't soon be obsolete."
Design changes are made at the workshops. For instance, in one case an LED (light emitting diode) and connector supplier changed a design to eliminate a connector and create more board space. The move reduced cost and improved efficiency in board layout.
"If there are no changes, we do a bill of materials within 24 hours," says Berube. "If there are changes, the BOM may be delayed a week."
After the BOM has been established, Bay builds prototype and pilot boards, making changes as they are needed until the first products are shipped to customers.
The process has helped reduce design time because problems are discovered early or avoided altogether.
Design time varies depending on the complexity of the product. "If you have a new platform with multiple boards for a brand new router, it can take six months to a year," says Berube. "If you're designing from scratch it could take two years on a complex ATM system. If it's just an add-on board for an existing platform, it could take three to six months."
But several years ago, a major new product at Bay would take 2.5 years to develop. The last major product Bay shipped was an ethernet platform product, which took 11 months from start to finish.