Skip to main content

XM Principle 1: Optimize for change

What happens if an engineer comes up with a way to build a safer car door? Can that new door be deployed right away? No. A stamping machine and a custom made die produce that door. Together they cost over 10 million US dollars and they must first be amortized before the new door can be economically produced. Given the high costs, it can take 10 years or more before that better door can enter production. You can see the impact of the need to amortize huge investments in the slow, incremental changes in automobiles from year to year, even from decade to decade!

WIKISPEED can change their design every seven days. They employ tools like value stream mapping not merely to reduce the variance of products produced or to optimize the flow through the production line, but first and foremost to reduce the cost of change. It does not cost them more to use a new design than to use an existing design. So if they have a safer way to build the door today, they start using it next week.

Welcoming and responding to change represent core Agile values and principles (see the Agile Manifesto and the Principles behind the Agile Manifesto). So by adopting this principle, you take a huge step towards becoming an Agile organization.

Tomorrow: Object-Oriented, Modular Architecture

The 10 Principles of Extreme Manufacturing

Comments

Tom Isaacson said…
I don't understand this. How can they avoid the cost of a new custom made die for the door by having a different process?
Unknown said…
Hi Tom! eXtreme Manufacturing uses completely different tools and processes with those tools. It's more than only process, it's process that demands specific technical practices for mass manufacturing. Just like an assembly line didn't have craft work and custom casting stations as the core, instead that practice mandated interchangeable parts. To learn more about it, come get immersive hands on experience with us, build a car end to end with us using those tools and techniques!

https://www.kickstarter.com/projects/joejustice0/develop-extreme-manufacturing-class-and-curriculum
Peter said…
Hi Tom,

The short answer is by not having an expensive die.

Stamping pieces on a hardened die optimizes the unit cost in high volume at the cost of a very high price of change (i.e. you have to make many pieces before the cost of die is amortized). The leads to a 7 year product change cycle, as is the case with most cars today.

By selecting different technologies to make it easier to change -- even though the unit cost is higher -- you gain flexibility, thereby lowering risk and cost, especially start-up costs.

In the case of WIKISPEED, rather than using a hardened die to stamp metal parts, they used a styrofoam die, which is easy and cheap to create on a garden variety milling machine. They then lay carbon fibre on top of it, much like making a fibreglass canoe.

Cheers,

Peter







Popular posts from this blog

Sample Definition of Done

Why does Scrum have a Definition of Done? Simple, everyone involved in the project needs to know and understand what Done means. Furthermore, Done should be really done, as in, 'there is nothing stopping us from earning value with this function, except maybe the go-ahead from the Product Owner. Consider the alternative:
Project Manager: Is this function done?
Developer: Yes
Project Manager: So we can ship it?
Developer: Well, No. It needs to be tested, and I need to write some documentation, but the code works, really. I tested it... (pause) ...on my machine. What's wrong with this exchange? To the developer and to the project manager, "done" means something rather different. To the developer in this case, done means: "I don't have to work on this piece of code any more (unless the tester tells me something is wrong)." The project leader is looking for a statement that the code is ready to ship.

At its most basic level, a definition of Done creates a sh…

Explaining Story Points to Management

During the February Scrum Breakfast in Zurich, the question arised, "How do I explain Story Points to Management?" A good question, and in all honesty, developers can be an even more critical audience than managers.

Traditional estimates attempt to answer the question, "how long will it take to develop X?" I could ask you a similar question, "How long does it take to get the nearest train station?

The answer, measured in time, depends on two things, the distance and the speed. Depending on whether I plan to go by car, by foot, by bicycle or (my personal favorite for short distances) trottinette, the answer can vary dramatically. So it is with software development. The productivity of a developer can vary dramatically, both as a function of innate ability and whether the task at hand plays to his strong points, so the time to produce a piece of software can vary dramatically. But the complexity of the problem doesn't depend on the person solving it, just …

Money for Nothing, Changes for Free

“Money for Nothing, Changes for Free” encourages both customers and suppliers to focus on value.

A key advantage of Scrum projects is that at least once per sprint you have something that could be shipped and no work in progress. You can change direction every sprint, and you can reevaluate whether the project is a good investment or if your money could be better spent elsewhere. Abrupt cancellation is risky for the supplier.

While the concept of an early-exit penalty is not new, Jeff Sutherland gave it a unique allure with his allusion to the Dire Straits hit.
Desired Benefit Incentivize both customers and suppliers to focus on functionality that provides genuine value.
Structure This works with Agile software projects because there is little or no work in progress. After each Sprint, functionality is either complete or not started. Work is basically on a Time and Materials basis with a cost target, often with the intention that the project should not use up the entire project budge…