PLC Implementation: A Case Study (Part 2)

Ok, we have performed a number of interviews and town hall meetings at all levels of the company, evaluated the company culture, and elected to develop a PLC.   Now we need to define our implementation and get the job done.

Implementation:  Based on the feedback and understood pain points we established a cross-functional core team with representatives from each organization involved in new product development.   We then choose a lifecycle model and implemented a series of Decision Point Reviews where the E-staff was responsible for reviewing and approving or rejecting the request to move to the next Phase.  The culture of the company was technically oriented rather than process oriented and we therefore wanted a process that was lightweight but delivered significant bang for the buck.  Therefore, we elected to place our emphasis on the definition, development, manufacturing and service aspects of product definition and development including:

• Product specifications
• Detailed program planning
• Test definition
• Priority setting
• Key deliverables per phase

We then assigned a corporate sponsor for the PLC and empowered them to set the overall program priorities.  We also defined the a template of functional members for all core teams, empowered core teams to execute against their plan and provided the escalation paths to help them clear any issues that were preventing them from meeting the program objectives.  Sounds simple but in reality this was nearly a 6-month process with many iterations to ensure the maximum buy in was achieved. 

Results seen to date:  The results between the two companies were different but both were good.  I remained with the first company for only one year after we released the PLC.  In that time we were able to reduce the development time on new products by 30%.  I can’t speak for customer satisfaction and re-use of product since I am no longer there but they have steadily increased revenue, delivered new products and are now profitable (definitely not the case before the PLC went into effect).

The second company has experienced improvements in a number of areas.  It has now been 4 years since the initial introduction of the PLC and in that time we have:

• Increased the  number of new products delivered each year by over 50%
• Reduced RMA costs by 25%
• Increased gross margins by almost 20%
• Held staffing to approximately the same levels

Strengths and Weaknesses of our Implementation:  On the good news side we set clear priorities and significantly raised Management accountability and involvement in resolving conflicts.  The cross-functional nature of the core team has raised awareness for manufacturing and service needs as well as tracking of quality measurements.  This has resulted in a more rounded product that can be built and supported more effectively than we did before.  The result is greater focus for the individual contributor and a higher quality product.

The major weakness to date is that we did not implement resource management.  The result is that we still run into resource contention and overloads between programs.  We are now looking to implement portfolio management to address this issue and expect to see even better results once it is up and running.

Ed Gaeta

egaeta@pacbell.net

 Summary:  Defining a clear methodology that enables you to define the total product has had a significant positive impact to the bottom line of these two companies.  Granted two companies is not a statistically significant number but even without addressing some key areas of program management (ex. resource management) we have seen significant improvements in performance.   .

Of course, like playing the stock market, your results may vary.  However, if you have either no, or an immature, development process you may want to consider developing your own PLC.