Design engineers at major companies from Procter & Gamble to Lucent Technologies are heading teams aimed at improving total value through product re-use, life-cycle costing, and outsourcing of design and project management to trusted supplier partners.
At P&G, the Chief Technology Officer launched a program called “Connect & Develop” in which much of the corporate technology is driven through innovation provided by suppliers. New injection molders in P&G’s Global Beauty Care business unit must provide design capabilities.
Such strategies also fit increasing drives to speed product introduction and reduce costs through improved manufacturability. Nabil Sakkab, senior vice president of research and development in the Fabric and Home Care division, explains: “P&G’s R&D department used to be like the Kremlin. Now we’re more like the Acropolis – all ideas are welcome and get a fair hearing…The cost of R&D grows faster than sales and this is unsustainable. Big ideas are no longer the exclusive domain of big R&D departments.”
Other major companies are increasingly outsourcing manufacturing or large sections of project management as a way to leverage their internal resources. Others are putting renewed focus on consistency of design. “We have really rationalized and brought together all of the sourcing strategies that really define how technology decisions are made,” comments David J. Ayers, vice president, platforms and quality engineering, at Lucent Technologies. “That helps establish a set of guidelines which our design engineers would then leverage.”
One major impact is less customization of components. At times, the design-led strategies are in conflict with other price-driven supply chain strategies. One significant example is price-focused electronic auctions, which became the rage for some companies in the last four years.