Friday, October 21, 2016

Design To Value - Design For Value (DTV) - Procedure and Case Studies


Design-to-value (DTV) is an integrated approach to product development that considers multiple perspectives:

What customers want?
What competitors are offering?
What it costs to manufacture and distribute an end product?

As a part of DTV, companies interact with customers and  identify the product features that consumers value most, as well as those that generate little market interest. Based on this information, they can redesign their products, adding new features that promote sales while eliminating unnecessary attributes.  DTV also evaluates cost elements of products and helps companies optimize efficiency in product design and manufacture by highlighting areas for improvement.

DTV is in application in many companies. The applications are available across multiple industries, including automotive and assembly, high tech, telecom, consumer goods, and electronics.

DTV is a systematic, fact-based approach

During the DTV process, all product development decisions are based on facts— hard data from consumer research, clean-sheet-based cost models, and competitive intelligence from teardowns of products of competitors.

Developing a robust and deep understanding of features that drive value up and quantifying their  how much consumers are willing to pay for those product features highlights important product features that need to be added. Conducting “teardowns” of competitors' products to document technical and functional differences provide ideas for reducing costs of providing various features,

Clean sheet modeling, which involves determining the detailed “should cost” for each product and developing strategies to reduce expenses based on that "should cost", by redesigning products or processes or by negotiating differently with suppliers

After doing the three information gathering steps and developing various ideas by involving many experts from various functions, the list of ideas is compiled for further evaluation. In the evaluation process, a list of specific and pragmatic ideas that companies can implement to increase customer value while reducing product costs is arrived at.

By using the DTV methodology, many companies have redesigned and optimized their products  and uncovered significant savings—often in unexpected areas.

Across sectors, DTV stimulates growth, improves customer satisfaction, and optimizes brand positioning by keeping the focus on product features that customers value. This results in impressive financial benefits.   McKinsey claims that on average, our clients achieved a 10 to 40 percent increase in gross margin and a 10 to 40 percent reduction in product and supply chain cost. DTV also helps increse product preference in the market and helps companies gain additional market share as well.

DTV Resources and Capabilities of McKinsey 

McKinsey has invested significant time and resources into DTV over the last decade, and now has  many proprietary, cutting-edge assets to assist clients. These include:

A database of  400 should cost sheets that show labor rates, material costs, and machine costs are created by them.

 A library of linear performance pricing models to help clients identify when the cost of commodities and standard parts, such as batteries, motors, or raw materials, appears to be excessive

Proprietary software that allows clients to track and manage their innovative product improvement ideas from creation to implementation and financial validation.

It has a pool of over 300 experts and consultants who are trained in DTV techniques, many of whom have deep technical knowledge and several years of industry experience in relevant fields. They lead and facilitate workshops for cross-functional client teams composed of a general manager and staff from marketing, engineering, operations, and other groups.

McKinsey holds workshops at client sites or in one of their global design labs. They can create design labs in client organizations also.

McKinsey Case Studies

Redesign of Medical Device

DTV Application to Forklift Truck

DTV Application to Household Fan

DTV Applied to Shampoo Packaging

Designing Products for Value - McKinsey Quarterly

By Ananth Narayanan, Asutosh Padhi, and Jim Williams
McKinsey Quarterly October 2012

I came to know of this method through a presentation a J & J team on 21 October 2016

Director of DTV (Design-to-Value) / Value Engineering
Johnson & Johnson, Bridgewater, NJ
Advertisement in October 2016

Job Description

Johnson & Johnson Family of Companies is currently recruiting for a Director of DtV (Design-to-Value) / Value Engineering. This position can be located in Bridgewater, NJ, USA or Zug, Switzerland.

Caring for the world, one person at a time, inspires and unites the people of Johnson & Johnson. We embrace research and science bringing innovative ideas, products and services to advance the health and well-being of people. Employees of the Johnson & Johnson Family of Companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

The Director DtV / Value Engineering will:
• Lead or Co-Lead DtV product conventions and other DtV project types
• Role-model DtV behavior and cross-functional ways of working
• Create positive financial impact with DtV savings and value creation opportunities
• Follow-up at high level on convention results and selectively further guide or assist segment staff responsible for implementation
• Assist businesses and partner with R&D and commercial in identifying and assessing opportunities and planning a DtV roadmap, with the objective of creating and maintaining a continuous stream of DtV work
• Create showcases on DtV application and further develop our process descriptions and training materials
• Assist in developing the Design-to-Value (DtV) Process and Framework, as an integrated approach to Product Development considering multiple dimensions: Customer, Quality, Cost, Technology, Value Add
• Ensure that the DtV processes are properly documented, provide work instructions which have to be used by the operational/segment teams, indicating in particular the intersection points between the functions with clear R&R; important in the cross functional supply chain environment.
• Be aware of product related trade-offs and make best use of the customer / consumer insights, to ensure DtV improves overall product competitiveness, with proper balance of cost and attractiveness while ensuring quality and regulatory compliance
• Identify and drive leverage DtV opportunities wherever reasonable. Across business, or across segment. Use / integrate centrally managed resources as well, wherever appropriate

• University degree in engineering or scientific field is required, an advanced scientific degree (MS) or MBA is preferred
• Minimum of 10 years of experience in engineering / R&D, manufacturing, product management or supply chain (ideally across multiple functions) is required, as well as broad technical and scientific expertise
• Expertise in understanding Product Development and Design is required
• Understanding the linkages from product development through manufacturing and delivery to the customer is required, deep practical understanding of the linkage between product and process development is required
• Leadership experience in a large scale multi-location operational change program, preferrably DtV / Value Engineering, but possibly also Six Sigma or Lean programs is preferred
• Familiarity with state-of-the art DtV tools, including consumer / marketing related tools is preferred
• Multifunctional background, or proven track record of working easily and achieving results across functional boundaries is required
• Understanding of typical regulatory and quality requirements is preferred
• Ability to create strong relationships across multiple functions and businesses is preferred
• Change management and project management experience is required
• Strong executive presentation skills is required
• Strong analytical and strategic skills with a Bifocal approach - ability to zoom-in/zoom-out for strategic and tactical, high-level and detailed, etc. is required
• Experience in driving broadly based culture change in a train-the-trainer setting is required

Tuesday, October 18, 2016

Industrial Engineering Conclave NITIE, 2016

Ganapathy - IE System Efficiency Engineering and Human Effort Engineering
R Suresh  -RGF   - Cost, Productivity, Quality, Specialisation
Mahesh Kripalani  Marico  - Marvel - Value Management  - Productivity in Sales and Marketing
S. Padhy  Tyres   -   Material cost reduction,   VA/VE  - Rastogi
Pankaj Agrwal -  Lupin   -     Lean Methodology, TPM.

Friday, September 30, 2016

The Age of Productivity - Productivity of National Economies

Development Patterns of Material Productivity

Development Patterns of Material Productivity: Convergence or Divergence?

Larissa Talmon-Gros
Springer Science & Business Media, Feb 10, 2014 - 210 pages

Increasing concerns regarding the world’s natural resources and sustainability continue to be a major issue for global development. As a result several political initiatives and strategies for green or resource-efficient growth both on national and international levels have been proposed. A core element of these initiatives is the promotion of an increase of resource or material productivity. This dissertation examines material productivity developments in the OECD and BRICS countries between 1980 and 2008. By applying the concept of convergence stemming from economic growth theory to material productivity the analysis provides insights into both aspects: material productivity developments in general as well potentials for accelerated improvements in material productivity which consequently may allow a reduction of material use globally. The results of the convergence analysis underline the importance of policy-making with regard to technology and innovation policy enabling the production of resource-efficient products and services as well as technology transfer and diffusion.

Productivity Management - Improving Productivity - Stevenson

Stevenson in his book "Operations Management" discussed the importance of productivity, factor affecting productivity and steps to improve productivity.

Factors That Affect Productivity

Important factors that affect productivity. Methods (Operator methods and motions), Equipment, Quality (performance specifications and defects) , Technology, and Management (production plans and schedules, organization and layout,motivation, job evaluation, wage and salary incentives, use of industrial engineering).

 A commonly held misconception is that workers are the main determinant of productivity. But the fact is that many productivity gains in the past have come from technological improvements. Familiar examples include:

 Fax machines,  Automation, GPS devices,  Copiers, Calculators, Smart phones,  The Internet, search engines, Computers, Apps,  Voice mail, cellular phones,E-mail, 3-D printing,  Software, Medical imaging

Adoption of the above technologies increased productivity in production - distribution systems.

However, buying technology or technology assets alone won’t guarantee productivity gains; it must be used wisely and thoughtfully. Careful planning is required to determine the productivity provided by the new technology to the systems of the organization after ascertaining the it is a feasible technology for the organization.

 There  is a dip in productivity that results while employees learn to use new equipment or procedures that will eventually lead to productivity gains after the learning phase ends.

 Other factors that affect productivity include the following:

Standardizing processes and procedures wherever possible to reduce variability can
have a significant benefit for both productivity and quality.

Quality differences may distort productivity measurements. One way this can happen
is when comparisons are made over time, such as comparing the productivity of a factory
now with one 30 years ago. Quality is now much higher than it was then, but there
is no simple way to incorporate quality improvements into productivity measurements.

Use of the Internet can lower costs of a wide range of transactions, thereby increasing
productivity. It is likely that this effect will continue to increase productivity in the foreseeable

Computer viruses can have an immense negative impact on productivity.

Searching for lost or misplaced items wastes time, hence negatively affecting productivity.

Scrap rates have an adverse effect on productivity, signaling inefficient use of

New workers tend to have lower productivity than seasoned workers. Thus, growing
companies may experience a productivity lag.

Accidents can take a toll on productivity. Safety has to be improved.

A shortage of technology-savvy workers hampers the ability of companies to update computing
resources, generate and sustain growth, and take advantage of new opportunities.

Layoffs often affect productivity. The effect can be positive and negative. Initially, productivity
may increase after a layoff, because the workload remains the same but fewer
workers do the work—although they have to work harder and longer to do it. However,
as time goes by, the remaining workers may experience an increased risk of burnout,
and they may fear additional job cuts. The most capable workers may decide to leave.

Labor turnover has a negative effect on productivity; replacements need time to get up
to speed.

Design of the work space can impact productivity. For example, having tools and other
work items within easy reach can positively impact productivity.

Incentive plans that reward productivity increases can boost productivity.

Equipment breakdowns and shortages of parts or materials.

The education level and training of workers and their health can greatly affect productivity.

The opportunity to obtain lower costs due to higher productivity elsewhere is a key reason many organizations turn to outsourcing. Hence, an alternative to outsourcing can be improved productivity.

Moreover, as a part of their strategy for quality, the best organizations strive for continuous improvement.

Productivity improvements can be an important aspect of that approach.

 Improving Productivity
 A company or a department can take a number of key steps toward improving productivity:

 1. Develop productivity measures for all operations. Measurement is the first step in managing
and controlling an operation.
 2. Look at the system as a whole in deciding which operations are most critical.

3. It is overall productivity that is important. Managers need to reflect on the value of potential productivity improvements before okaying improvement efforts. The issue is effectiveness of productivity improvement efforts.
There are several aspects of this. One is to make sure the result will be something customers
want. For example, if a company is able to increase its output through productivity
improvements, but then is unable to sell the increased output, the increase in productivity
isn’t effective. Second, it is important to adopt a systems viewpoint: A productivity
increase in one part of an operation that doesn’t increase the productivity of the system
would not be effective. For example, suppose a system consists of a sequence of two
operations, where the output of the first operation is the input to the second operation, and
each operation can complete its part of the process at a rate of 20 units per hour. If the
productivity of the first operation is increased, but the productivity of the second operation
is not, the output of the system will still be 20 units per hour.

4. Develop systems for achieving productivity improvements, such as soliciting ideas
from workers (perhaps organizing teams of workers, engineers, and managers), studying
how other firms have increased productivity, and reexamining the way work is done.

 5. Planning productivity - Establish reasonable goals for improvement.

 5. Make it clear that management supports and encourages productivity improvement. Provide
incentives for doing productivity improvements in all departments at all levels in the organization.

 6. Measure productivity improvements and publicize them so that others in the organization recognize  the opportunity for improvement.

To rewrite once again.

Thursday, September 29, 2016

Productivity Management - Books and Articles

Productivity Management in an Organization: Measurement and Analysis

kongkiti phusavat
Download fullbook from

Evidence-based Productivity Improvement: A Practical Guide to the Productivity Measurement and Enhancement System (ProMES)

Robert D. Pritchard, Sallie J. Weaver, Elissa L. Ashwood
Routledge, 2012 - 316 pages

This new book explains the Productivity Measurement and Enhancement system (ProMES) and how it meets the criteria for an optimal measurement and feedback system. It summarizes all the research that has been done on productivity, mentioning other measurement systems, and gives detailed information on how to implement this one in organizations. This book will be of interest to behavioral science researchers and professionals who wish to learn more about the practical methods of measuring and improving organizational productivity.

Edmonton City Productivity Audit

Service Productivity Management: Improving Service Performance using Data Envelopment Analysis (DEA)
H. David Sherman
Springer, 10-Sep-2006 - Business & Economics - 350 pages
The service economy is now the largest portion of the industrialized world's economic activity. This development has dramatically raised the importance of maximizing productivity excellence in service organizations. The correlation between the service economy and productivity excellence has lead service organization managers to recognize the value of using benchmarking techniques to identify and adopt best practices in their organizations. As the use of benchmarking metrics in service organizations has increased, correspondingly these organizations have improved continuously by allowing service units to learn from methods that prove the most effective. Service Productivity Management provides the insights and methods to answers questions on a whole range of productivity issues, of which some examples are: How do you manage profitability of a network of hundreds or thousands of branch offices disbursed over several states and countries? How can managed-care organizations manage the quality and cost of hundreds of physicians providing health services to millions of plan members? What methods would enable a government to ensure that the multiple offices serving citizens across a country are operating at low cost while meeting the required service quality? Each of these service settings are examples of the many service providers that deliver a complex set of services to a widely diversified set of customers. The book systematically explores complex service issues and analyzes each case for a variety of ways to improve service productivity, quality, and profitability. Service Productivity Management is an in-depth guide to using the most powerful available benchmarking technique to improveservice organization performance -- Data Envelopment Analysis (DEA). (1) It outlines the use of DEA as a benchmarking technique. (2) It identifies high costs service units. (3) It isolates specific changes to each service unit to elevate their performance to the best practice services level providing high quality service at low cost. (4) And most important, it guides the improvement process. The discussion and methods are all supported by case-study applications to organizations that have sought and have successfully improved its performance. The techniques discussed in the book are accessible to any and all managers with access to Microsoft. Excel spreadsheet software (Excel). Throughout the book, step-by-step guidance is provided to enable any reader to apply DEA and the Excel software to their organization. Packaged with the book comes a ready-to-use DEA software CD for Microsoft. Excel Add-in to run DEA analyses on any set of organizations of interest to the reader.

Productivity Management: A Practical Handbook

Author: Joseph Prokopenko
Publisher: ILO

Google Book Link

Preview available

ILO always emphasized the productivity of all resources instead of a single point focus on labor productivity.

You can order the book from ILO

A Guide to Integrated Management of Productivity Activities
Spring, Singapore
Full Book - Published in 2011 - Interesting Contents

SPRING's Productivity Management Program - APO report

Appoint a Productivity Manager for Your Organization - Singapore Govt. Message

Energy Productivity Management - Details of a training program

Measuring and Improving Organizational Productivity: A Practical Guide

Robert D. Pritchard
Greenwood Publishing Group, 1990 - 248 pages

Productivity has become a national priority. Its effects are being felt on all levels--national, industrial, and individual. An organization must be able to measure productivity before effectively improving it. This volume is the first practical guide for developing productivity measurement systems. It describes the use of the Productivity Measurement and Enhancement System (ProMES) designed by its author and his colleagues. An important tool for organizations, this step by step guide discusses how to measure productivity and then how to use this measurement.

Robert Pritchard's guide first presents a detailed description of the development and uses of ProMES. The background and description of ProMES is followed by details on how to develop ProMES in any organization. Questions and answers about using the system are discussed together with further issues on how to implement the system. The use of the system with other productivity improvement techniques is also covered. The volume concludes with a discussion on evaluating the effects of a productivity improvement system. It is a valuable practical source for industrial and organizational psychologists, management consultants, classes, and workshops.

No-Nonsense Guide to Measuring Productivity
W. Bruce Chew

Productivity management: A neglected approach for reducing federal government costs

Peter J. Lemonias,
Brian L. Usilaner
Global Business and Organizational Excellence, Volume 3, Issue 2, Spring 1984
Pages 145–154
First published: March 1984, National Productivity Review, Volume 3, Issue 2,

Organizing for productivity management
Marta Mooney
National Productivity Review
Volume 1, Issue 2, pages 141–150, Spring 1982

Updated  2 October 2016, 13 Sep 2015
First published: 29 October 2013

Productivity Education - A Proposal for a Framework

International Conference On Applied Economics – ICOAE 2010 523

The paper investigates the views of employers in Cyprus regarding the effect of education on productivity in their organisation.
Information was collected through in-depth interviews with 26 individuals who represented different types of employers (public sector institutions, semi-government institutions, small and large private organisations, and key stakeholders). The majority of respondents did not perceive a strong link between education and productivity, nor did they consider the type of education received to have an impact on productivity, expressing views that are consistent with the screening model. Participants identified the problems which limit the positive effect of education on productivity at their organisations, and offered suggestions on overcoming these problems.

Does education raise productivity, or just reflect it?
Arnaud Chevalier (University College Dublin & CEE), Colm Harmon (University College Dublin & CEPR) and Ian Walker (University of Warwick, IFS & CEE)
Version 1.01 14 November 2002

This paper attempts to implement, using a variety of UK datasets, a number of suggestions from the existing literature for empirically discriminating between the human capital and signalling/screening explanations of the observed correlation between education and wages. Most of these tests are based on the idea that screening is more important in some sectors than others. Although we have
reservations about the power of the tests used we find little support for signalling/screening ideas in these tests. Finally, we exploit a little used distinction between the two theories, based on the response of individuals to a change in the education incentives for some people of the education distribution, to provide a more definitive test and find that the data in the UK appears to strongly support the human capital explanation.

My idea is to present a model having three components

Productivity knowledge

Productivity attitude (Favorable attitude towards productivity improvement process and productivity improvement)

Productivity behavior (actions that implement productivity improving practices, that develop productivity improvement processes, actions that analyse productivity of resources using current methods of analysis, actions that develop new methods of analysis, actions that conduct training in productivity management, actions that celebrate productivity improvements, etc)

Productivity education has to be productivity learning. The learning has to result in change of behavior. It has to result in new behavior that enhances productivity. But negative attitudes toward productivity will become barriers. Hence productivity education needs to focus on attitude development. So productivity knowledge must have a component that provides inputs that help in formation of favorable attitudes about  productivity improvement. I need to develop my thoughts further and publish it as a paper in an industrial engineering journal. I am posting it here to get some opinions and comments.

Updated 2 October 2016, 26 Feb 2015