I am accompanying several Italian companies that develop physical products in adopting agile approaches. These are companies employing 50 to 1,200 people and working on a contract basis.
So they are very different realities, but I noticed something that I never thought they all had: new product development takes place within client orders.
This makes it necessary to design an agile transition that first goes through a development within the ad hoc modified customer orders.
The detail of how the job order schedule can be modified in a manner similar to a highly customized job order is described within the two articles, “The development of new products within customer job orders” and “The management of a customized job order.” I think this is a “structural condition of Italian companies” whether they are small or large that work to order.
It is not this technical detail that I would like to talk about, but how much about the effects this generates in the early stages of applying agility to new product development.
When one delves deeper into the analysis, one soon discovers that this mode, which was virtuous in the early stages of the company’s development, thanks to which the company itself was able to finance new product development, is proving to be a limitation as the volume of business grows.
The limitation is a very low ability to really innovate in products, because often this improvement is only incremental to existing products that the company already makes. In short, a mode that closely resembles kaizen but, in new product development, can become dangerous.
- Indeed, we are talking about Exploitation (Efficiency) with the risk of continuing to improve and evolve a product that may become or already be obsolete.
- If something truly innovative is not developed, with an Exploration approach there is a serious threat of innovative solutions that better-equipped competitors can come up with.
It is necessary once again to remember that being able to balance these dute tensions is an art and that it is a competitive advantage, and in that case we speak of a Bimodal Company.
Thus, to get an approach that approaches the “Agile factory” off the ground, 3 important interventions need to be implemented right away:
- Establish for each project a cross-functional team with full-time and part-time people, with precise rules of engagement, to make development according to this Agile approach sustainable.
- Include within each team that will work in agile mode a dedicated buyer to purchase according to preferential channels what is designed and/or selected. This Buyer will be engaged part-time and therefore can be involved in multiple cross-functional teams.
- Insert a dedicated materials planner and manager to regularize the process of generating requirements, subsequent purchase requests or production orders, and optimally manage the arrival of the materials themselves. Agile manufacturing does not mean ignoring good management that employs enterprise ERP systems. It needs to be managed in a simplified form while always maintaining the goal of tracking materials and costs.
The role of top and middle management support of teams is crucial, but I will discuss this in the next article
