Fisher & Paykel’s Lean Product Development Journey
Fisher & Paykel has been designing home appliance products since 1934 and has grown into a global company. The idea to change its product development started to develop in 2005, by exploring options that could help the company solve the challenges it was facing and render it faster to the market. Fisher & Paykel truly wanted to break from the traditional patterns of continuously improving their Stage-Gate process, because the company realized that in order to differentiate from its competitors, it needed to stop doing what everyone else was doing; it needed to stop following and trying to optimize the same Stage-Gate process everyone else was using, and find a new and better way to go about product development. This is how in 2006, the company came across Lean Product Development and later the same year, they kicked off their lean product development transformation journey.
Fisher & Paykel Appliances is a company with a long and rich history of designing and manufacturing home appliance products for kitchens and laundry. The company is headquartered in New Zealand but has grown its business to over 50 countries around the globe. Fisher & Paykel not only designs and builds award-winning appliances but also innovates heavily at multiple product levels and across its portfolio. To accommodate its talent and foster innovation, Fisher & Paykel has 2 product development sites (design centers) with almost 400 product developers.
Fisher & Paykel’s development teams used the stage-gate process for years but were repeatedly experiencing multiple issues, with the most pressing challenge being delayed product launches. Although Fisher & Paykel launched some very innovative and successful products over the years, the company, including most product development employees, felt the need to change and improve, in order to differentiate from the competition. In 2005, the desire to change grew to a point where the company started to actively explore new potential solutions for its design centers.
Fisher & Paykel initially came across Lean Product Development later in 2005, and, having benefited from lean manufacturing methods for many years, the Lean Product Development approach quickly attracted the company’s attention. In 2006, Fisher & Paykel embarked on their implementation journey, starting with the training and education of core people about Toyota’s product development system. Over the following 3 to 4 years, the company not only implemented the core enablers of Lean Product Development but also guided the entire cultural transformation, maximizing the benefits of the new product development system, tools and enablers.
Very early into the lean product development transformation, Fisher & Paykel discovered that learning before detail-designing its products is the key to success; to undisputedly reflect that, the company named their development process Learning-First Product Development. Fisher & Paykel built its development process on four mutually supporting cornerstones focused on delivering value to the customer:
- Set-Based Concurrent Engineering
- Entrepreneurial Chief Engineer
- Expert Engineering Workforce
- Responsibility Based Planning and Control
Fisher & Paykel believes that, in order to make the most of Lean Product Development, all four cornerstones must operate together. To enable this new approach, the company proceeded to a complete organizational change in its design centers, moving from project teams to the Chief Engineer and the Expert Engineering Workforce. This put in place a sound framework for the implementation of Set-Based Concurrent Engineering and other enablers supporting the new product development approach.
The implementation and application of Learning-First Product Development resulted in an approximately 100% increase of new product introductions per year. Similarly, the share of the revenue from product releases increased from 30% to 60%, and over 75% of published project schedules (not product release dates) are met today. Although these results demonstrate a significant improvement, Fisher & Paykel sees its Learning-First Product Development as a journey and not a destination. Although the company embarked on this journey in 2006, it still continuously improves.
Throughout its lean journey, Fisher & Paykel established several best practices to manage and execute Lean Product Development. These practices were identified and structured according to the four building blocks of the Lean Innovation Model.
Consolidated best practices as identified in Fisher & Paykel, structured around the Lean Innovation Model
THE IMPACT
Fisher & Paykel measures six attributes that are directly related to the implementation of learning first product development. In the column “Assessment” circle represents where the company was and the green diamond represents where they are today in the sense of achieving the target.
Fisher & Paykel’s Best Practices is available in a digital form free of charge to our Lean Innovation Community members. The case describes company’s transition from traditional to lean product development on more than 40 pages, and it includes descriptions of tools, methods, challenges and impacts.
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LAA visiting Fisher & Paykel in Auckland, New Zealand
ABOUT THE AUTHOR(S)
MATIC GOLOB
Lean Analytics Association
Matic has over 5 years of experience in working with global organizations from various industrial sectors, either leading or supporting the development and introduction of bespoke lean innovation and new product development solutions. Over the past years, Matic led the development of a framework to enable better, faster and more integrated innovation across the entire value chain, empowering companies to maximize their innovation capability and deliver truly customer-centric solutions, while minimizing the risk of market failure.
Matic is a certified Service Design Thinking Facilitator, and the creator of the Set-Based Integrated Innovation Business Game co-developed with a multinational Swiss company. He completed his Master’s degree in Global Product Development and Management at Cranfield University in 2012.
In 2017 Matic co-authored the Lean Product Development Best Practices book, and several journal and conference publications. He regularly appears as a speaker at various lean, product development and innovation conferences.
KANE ALWARD
Fisher & Paykel
Kane is the General Manager of Product Development at Fisher & Paykel Appliances. His responsibilities include; product and technology strategy, new product planning, development, and implementation, and improving product quality, reliability, safety and cost. As well as developing household appliances, his design experience includes bicycles, payment terminals and technology, and consulting. Kane holds a Bachelor of Engineering degree, and Postgraduate Diploma in Business. Starting in 2008, Fisher & Paykel have seen many benefits from their change to a Learning-First Lean Product Development philosophy and system.
MYRNA FLORES
Lean Analytics Association
Dr Flores has over 20 years of experience collaborating as an internal or external consultant in different manufacturing and services organizations, leading several initiatives related to Lean Thinking, Business Process Improvement, Six Sigma, Supply Chain, Change Management, Open Innovation, Digital Transformation and Human Centered Service Design; providing also training and coaching.
She is co-founder and president of the Lean Analytics Association (LAA) and visiting scholar at the College of Management of the Ecole Polytechnique Fédérale de Lausanne (EPFL) in Switzerland.
She carried out her Post-doc at EPFL collaborating at the Lean Product and Process (LeanPPD) FP7 European project from 2009 to 2013. She completed her PhD in 2006 at the Politecnico di Milano studying Open Innovation Models to enable Industry-University collaboration for innovation. She obtained her Master’s Degree in Manufacturing Systems in 1999 and a Bachelor’s Degree in Mechanical Engineering from Monterrey Tec (ITESM) in 1996.
VIVIANA HERMIDA
Fisher & Paykel
Viviana has a Diploma in Adult Education & Training and qualification in Industrial Engineering & Management Sciences (Argentina). She has experience as a Training Analyst through to Training & Development management roles within a variety of industries including the Societe Generale Argentina Bank, Ardito Computer Training, Brookfields Lawyers, Hesketh Henry and more recently KPMG where she held the role of IT Training Manager.
