Reducing cost and improving function in new products

We’re excited to bring you our first-ever podcast series, Enabling Automation. This monthly podcast series will bring together industry leaders from across ATS Automation to discuss the latest industry trends, new innovations and more!

In our seventh episode of season 3, host Simon Drexler is joined by Tara Behnam and Slavko Saric to discuss Reducing cost and improving function and in new products.

What we discuss:

• Where should you start when thinking about applying technology to your automation process
• How do you plan when you don’t have all the information
• Example of avoiding pitfalls by investing in planning
• Customer focus and customer value

Host: Simon Drexler, ATS Corporation (ATS Products Group)

Simon has been in the automation industry for approximately 15 years in a variety of roles, ranging from application engineering to business leadership, as well as serving several different industries and phases of the automation lifecycle.

Guest: Tara Behnam, ATS Corporation 

Tara Behnam is the team lead for value engineering. She has been with ATS for five years in Value Engineering, which focuses on finding the right balance between functionality and cost, working with cross-functional teams to find and identify opportunities to enhance functionality without increasing cost significantly, or reducing costs without compromising on the features.

Guest: Slavko Saric, ATS Corporation 

Slavko is the Director of Engineering and Product Support and has been with ATS for just over two years. He was extensive experience in the industry where he has worked with various different companies where has has used automation  to improve and reduce the overall cost for operations, to improve the quality, and to scale up rapidly when needed.

——Full Transcript of Enabling Automation: S3, E7—–

SD: Welcome to the Enabling Automation Podcast, where we bring experts from across the ATS Corporation to discuss topics that are relevant to those that are using automation within their businesses. I’m your host, Simon Drexler. I’ve been a part of the automation industry for more than 17 years in various roles in companies, small and large. I’m passionate about applying new technology to issues that exist in companies, specifically ones that are looking to scale. And I’m excited about today’s topic. It’s the seventh episode of our third season, and we’re talking about reducing the cost and improving the function of new products using technology as companies scale. We’ve got two great resources from our ATS Corporation here in Tara and Slavko to have that conversation with me. And we’re excited to share it with you. Tara, can you give a short introduction to yourself, to our listeners?

TB: Thank you. Simon. I’m very fortunate to be here today. My name is Tara Behnam and I’m the team lead for value engineering. I’ve been with ATS for five years, and for those who don’t know what my role is as a Value Engineer, my primary focus is on finding the right balance between functionality and cost, so I work with cross-functional teams to find and identify opportunities to enhance functionality without increasing cost significantly, or reducing costs without compromising on the features, essential features. And the role basically combines the elements of engineering, business strategy and customer insights, which could be very rewarding and exciting and at the same time could be very challenging. And I’m very excited to be here today, particularly because this topic relates to what I do on a daily basis. And definitely it does.

SD: Slavko, how about yourself?

SS: Hello everyone. My name is Slavko Saric, Director of Engineering and Product Support. I have been with ATS for just over two years. However, I do bring extensive experience in the industry for close to 20 years in total. where I had a great opportunity to work with various different companies, automotive, electronics, and had the great opportunity to work with companies that where we used automation to enable us to improve and reduce the overall cost for operations, to improve the quality, and to scale up rapidly when needed. Just like Tara said, I’m very excited to be here today and looking forward to spending the next time with you. Thank you, Simon.

SD: And I actually have the benefit of working with Tara and Slavko, specifically day in and day out. And Slavko, I know you bring extensive experience in the automotive market, which is so much further along in its automation journey, probably the most mature automation market across the world. Yeah. So we’ll touch on that today. Shifting over for the topic of the day, where we’re talking about reducing the cost and improving function of new products by using technology. A large part of our listener base is looking to either bring their product to market, and using technology to do that and scale their operation, or specifically using technology to scale their products and trying to increase their volumes that are going out to the world. And, Tara, maybe we’ll start with you. Where should they start when they’re looking at their product and starting to think about applying technology to the manufacturing process from your perspective and what you’ve seen where, where do you begin?

TB: Excellent question to kick off the topic, I think before jumping into automation and, to get on the right path, you first need to understand your process the best, you need to thoroughly analyze and try to understand what are your inputs and outputs, what are the steps within your process, and look for inefficiencies. Look for waste. Look for areas of improvement before going into full blown automation. And with that I would suggest start small. Don’t go overboard and try to look at complex designs. Try to maybe look at standard, designs that you already have within your business units, the one that could bring you higher return on investment that are, maybe, prone to human errors. So by starting small, you basically are creating that momentum. You are looking at opportunities that could add value for you down the road and learning from those mistakes. And another point to automation is that, without having the right data, you’re not feeding that information to your system and you’re not going to get the best outcome out of it. So the integrity of your data is key to have the best success. And outcome of your automation process. So make sure to look for inconsistencies, errors, or gaps within your data and if it’s necessary, maybe automate a system to capture data, validate it, and analyze it. So when you’re feeding it, although it could be some time and money invested upfront, it will prevent you from headaches later on down your process.

SD: You touched on a couple of key themes here that we come back to with the podcast, and that’s make sure you have a solid process. It’s about inputs and outputs. If you have a bad process and you automate it, you just get a faster, bad process most commonly. And the other one that’s maybe more important is that momentum piece, because you don’t want to bite off more than you can chew and then halt yourself because you failed in some way. So one step at a time, trying to build that momentum is something that I care a lot about with the customers and the partners that I work with as well.

SD: Slavko, pulling from your background, coming more from automotive or like I said, more mature industries, how do you look at applying technology to something that you might not be able to scale slowly because if you’re launching a new car or maybe a new product on a global scale, it’s more binary. It’s on or off. So how would someone go through that process?

SS: Excellent question. With the product that has already matured and you bringing, call it, product revisions or new feature updates, the process of itself bringing that product to market, it’s very different from bringing a new product, something from that initial state where you just designing. When you start going with the product that has been already established and it’s a revision, but it has new features. One of the key steps is actually what Tara mentioned in her speech couple minutes ago, which comes from VAVE. So value engineering, it’s truly understanding, truly understanding your customers and the features that they’re willing to obviously pay for. In addition to that, how do you introduce automation to help you scale or improve your efficiency? It’s you apply the same principle in your process planning, in such a way that you look at what are the value added steps, what is the customer actually willing to pay? So in general, from my experience, what customers actually willing to pay is for things like, you know, putting the actual components together, but the customer is not actually willing to pay or hope they would like not to, spend, funds on delivering parts to the line, somebody or someone picking up those parts. So all these, call it, wasted motions need to be eliminated. So that’s where automation can help scale and eliminate those inefficiencies and create an extremely efficient process for you as a product manufacturer.

TB: Two great points that I think it’s Slavko touched based on. So I think it’s really important when you’re looking at automation, at what time, what phase of the project you’re looking at it, that time frame is key. So, studies shows that if you have that during the design and development stage, if you look at increasing functionality and reducing costs, you are getting the best bang for the buck because there’s more leniency towards changes and the cost of implementing changes are much lower. And basically any opportunities that come from production could have 20 to 30% cost advantage. Whereas when it comes during design and development stage, it could go up to 70 to 80% and another point to Slavko’s speech was value. It’s a key point, when you are considering what the customer is willing to pay and there’s a formula for it, maybe I’ll have my VAVE hat on again. Value, it equates to function over cost. So understanding that whether your numerator as function goes up and your denominator cost goes down, then you are adding that willingness for to pay by the customer. So understanding what is perceived as value to customer is a key point in analyzing those activities.

SS: And sometimes adding to that with the product that already exists. So that approach, like I said, it’s very different. However, if our listeners are focusing more and they have a product that hasn’t been introduced in the market, that the whole approach is completely different. Unfortunately, it’s not simpler. Sometimes it’s more challenging because you’re facing certain things that you don’t know. One thing that comes to my mind, it’s always you have to plan properly. If you don’t plan, you plan to fail. I know it sounds kind of, you know, maybe cheesy, but at the same time you have to start planning very early on your product design and  development before you do introduction, to understand how will you be putting this product together, putting products on a very small scale, small volumes it’s a completely different approach than products that require you to go in a high volume production. And that’s the key difference when in that stage planning, you have to make sure the design for manufacturing plan is intact and that you’re ready to use the automation to help you scale up, which then will help you prove your efficiencies, reduce the costs and satisfy your customers, improve your on time deliveries, and many, many other benefits that it can bring to the table.

SD: We’re going to come back to a couple of themes there from that portion of our conversation, and I’d like to pull on a few different threads and get some examples from the two of you for our listeners. Slavko, I like what you said about planning properly, but you also touched on something where it can be very difficult to plan properly if you don’t know what you don’t know. So could you pull from an example that you have from your background, where you’re bringing a new product to market, you’re trying to plan effectively, but you might not have all the information. How do you approach that?

SS: Overall you’re starting off with a couple of key phases. So in any product lifecycle management you will have new product development which is typically you’re doing your research. You’re doing some prototyping investigations collecting the data to make sure that the product that you are creating will satisfy the market requirements. After that, you’re moving to the stages of the new product introductions, further on testing to see how market and how the customers react to it, and potentially scaling up, which brings in your production, manufacturing, stabilization and then officially, you also have to plan for your how will you service this product in the market? The customers who will be buying your product, what are the requirements in a need in order to service them and help them If there are some challenges? What is the loop back on if there are some concerns or issues, it’s a new product. Let’s be real and let’s face the fact that that product will have some challenges in the market. You need to collect that data, create the feedback, use that for any future product iterations. This is a very high level product. Call it introduction or plan. It sounds very great, but what happens when it doesn’t work? What? What happens when we have hiccups along every phase and every stage of that product introduction into the market? One of the key words I would use here it’s teams flexibility You have to create mini cycles inside the larger plan, so that you can quickly react and shift the focus from if something goes wrong, and how do you quickly make the changes, necessary adjustments to come back on track and understand what are the impacts from maybe the original scope? How do you potentially you might have to tweak the scope, you might have an impact on your budget. It might have an impact on your product costs. Again, keep maintaining the focus on what is customer looking for when it comes to that product. And then if it’s coming to the stages where it’s scaling up again, the main focus is how do I eliminate all the ways automation is not brought in because, well, it is cool, but that’s not the main reason why we bring the automation into the world of manufacturing. We bring automation so that we eliminate the unnecessary waste, that without it, it will be just required or necessary steps inside of that process. So keep evaluating your plan while you’re executing a plan on an ongoing, constant basis.

SD: And there’s one thing that you said in there is things can go wrong, but it’s not necessarily always things going wrong. It’s them going differently. Differently than you expected. And that might be, a positive or a negative. But if we center on these phases and Tara, you touched on this as well, where you have a design phase, an introduction phase, a scaling phase, and a service and support phase inside your planning, the D phase. The NPD phase is really where you can have the most impact to your overall cost of product. By the time you hit the NPI phase, it could be too late, or you’ve given away somewhere between 70 and 80% of your opportunity if you’re not looking in the design phase.

TB: Yes. So you basically want to be in the preventative mode rather than remedial mode. And, I’ve seen that often times people are in that remedy phase. They would try to go back and fix the issues. Instead they could have focused before everything had started and went into production and have a detailed plan for it, even identifying risks and building strategy to mitigate those risks and as Slavko mentioned, it’s an ongoing process you need to revisit, go back within your cycle and try to make sure that every time you are maintaining within that criteria that you have defined. So you need to make that happen on an ongoing basis.

SD: And when you say life cycle, that’s across the four primary phases that we’re talking about, there’s a development phase. It’s heavily in the engineering and design, the introduction phase, which is more a combination but largely operational focused. And then marketing and scaling is more front facing, market facing resources. As well as the operations scaling on a foundation that they’ve built.

TB: Absolutely.

SD: The total cost of ownership is across all of them. Coming back to learning cycles, I think learning cycles are really important for those that are listening and trying to build up their organizational knowledge base. That’s something that we talk about a lot in the podcast, where you’re trying to build your organizational capability. You’re starting to try to fill gaps in those things that you don’t know yet. Tara, you do a lot of value engineering, a lot of exercises across the group of companies under the ATS Corporation. Have you seen a best practice for someone who’s incorporated these learning cycles, who may not have been there before? Because a lot of it comes with experience, but if I’m listening to our podcast, maybe I haven’t done this before, I might not know what I don’t know. I like the idea of these learning cycles, but I might not even know how to put them in place. So how would you guide them to be able to put this process practically into the work that they do every day?

TB: So a good point. I have gone through training people on the tools that we have developed and, make them aware of what, what the capability of the tools are. But once you don’t put them into an application, obviously you’re not learning them. The best practice is that try it first, doesn’t matter whether you’re doing it wrong or not in the right way. But once you start, utilizing the expertise of all the stakeholders and pulling in cross-functional team, you are building that again, building that momentum. That’s part of the continuous improvement, making those incremental steps in order to achieve to, to best results. So try to at least apply some of those ideas, on a real project or a new project that you’re going to launch, and then you’re able to, build that momentum for future advancement.

SD: That’s a good answer. And so coming back to the same type of thing is planning properly. And I’m going to put my black hat on for a second. I’m listening. I understand that all this stuff is really important, but I’m just trying to get this product design done. I’m just trying to get to my next milestone, because oftentimes the feedback in planning properly is I just don’t have time. I just don’t have time to do this. And again, maybe not having the benefits of experience. Slavko, have you seen a good example, something from your past where you could have easily avoided a pitfall, a major challenge that maybe took some time in the future by investing a little bit of time in the present?

SS: Definitely. And that resonates very well with me. I’m an extreme planner from that point of view, and I would encourage everybody else to spend a lot of time in planning. It might sound like a step in itself as a wasted time, wasted effort, but it will pay dividends as you progress. First you’re taking, like Tara just mentioned, your initial plan does not have to be perfect and a lot of steps, you don’t know what you don’t know, but at least put a plan or process that you will follow initially and adjust that plan and adjust that process and make small tweaks. I don’t think anybody will be able to, without doing it previously on a similar projects, will be able to put a perfect plan right from the get go, but you have to make a plan. It’s very important that all the steps and then reach out to different, what people fail to understand in the planning world that you’re responsible for planning, you’re responsible for capturing the necessary steps in order to achieve the common goal of your team. You’re not responsible for necessarily highlighting every step, but you have the team and resources usually around you. And if you don’t look for those resources who can guide you to highlight the steps that maybe you missed. Review your plans with different functional teams. Constantly I live in engineering world. We tend to go extremely detail on the engineering aspects, but then when we venture outside of that engineering world, world, you start dealing with, you know, customer support, you start dealing with supply chain things like that, that if you don’t reach to those functional teams early enough, you’re going to miss some crucial steps in your plan that later on, it’s going to be very challenging to align your product design or scaling up if you don’t involve them early. So key thing is communication. Without planning. Make sure you communicate to everybody, and everyone and overcommunicate. So that would be my advice to the team. Make sure you share your plan. Don’t just create a plan and create in a bubble thinking I have a perfect plan. Share your plan. Review our plan and get feedback from others that maybe went to that similar path on a similar project or a product and use their expertise to help you for the first time.

SD: And on that vein, one piece of advice that I was always given was don’t be afraid to ask. Put it out there, ask questions, see what you can learn. And it might speed up your learning cycles that we’re talking about as we go through these NPD, NPI, market scale phases.

SS: Yeah. And using the initial plan where you highlight where, let’s say an end of that plan of project, you have that specific target start of production or etc. work backwards now with all that functional team. So maybe for the initial step you create a plan and then bring your team in together and then review those steps and then walk backwards with our team to understand have we missed anything. And it will show the gap between what you originally or initially thought the plan would be versus what the new plan is, and that could be reflected in and potentially like the product scope itself could be, reflected in the timelines or even the, the budget itself. So don’t underestimate the team and the power of the team.

SD: It’s a good message. And Tara, I see you moved, I think you probably have something to add there because you’ve engaged with so many different teams and trying to build this new capability.

TB: Yes, absolutely. Because we talked about value and we talk to our customers. And I think, Slavko had a good point. We need to understand our immediate customers a lot throughout the lifecycle of the project, because the ultimate customer is the end user. We’re going to deliver the product or project. But along the way, you might have different immediate customers. For instance, as Slavko mentioned, for design team, the immediate customer could be supply chain, could be assembly team, could be fabrication shop. So knowing what they want and how we can make their life easier, understanding their pain points throughout the, the project lifecycle would help us addressing them sooner than later when we can actually take action. Because as we talked, when we go through that production face, it’s a much more difficult and challenging to go back and make those changes happen.

SD: I’m a big fan of frameworks and approaches that help you think differently, and we’ve already touched on the end state and starting with the end in mind, that’s a potential framework to start looking at these phases a little bit differently I how can we improve our total cost of ownership in a future state when all the way back from when we’re in NPD? And so if you’re looking at total cost, you’re looking at operational cost, you’re looking at the technology that you might need to invest to build this product or the technology that you might need to invest to get the data. If you always keep that total cost of ownership in mind, it’s a little bit more of a holistic view then I just want to make this product work. Is that a fair statement?

SS: Yeah, and with a mindset of keeping it simple, I know it’s very challenging to say we’re talking here also about bringing automation, which itself it’s a very complex topic. And usually automotive or automation products are very complex. But in the product itself that you might be designing to try to keep it as simple as possible. It’s not just for the benefit of product itself, it’s for the benefit for you to scale up. Keeping the product simple and minimizing the number of different parts. Simple example can be just from different type of screws that are used to maybe assemble something. If you have 20 or 30 different components, and for each component you have a different size and shape and a type of a head of the screw they’re using. Eventually when you move into the automation and where you need to scale up and to use your equipment, that’s going to be required to put those parts together, or the product together, is going to be extremely complex, which will drive the cost of that automation, which then are directly will impact the product cost itself. So keeping that in your in mind that while you’re going through the whole process, if simplifying and keeping a very minimal amount of different parts required. I know it’s easy to say, but depending on what product is. But keep that in mind. What as you go through your journey of the product design, and that will help you in the long run from reducing your inventory levels, ease of, you know, scaling up your automation is going to be a lot simpler, it can help you scale up quicker. And go from there.

SD: It’s one of those things that’s easy to say, hard to do, but absolutely worth the investment. And I always come back to I’m just a big fan of good communication. And as you scale up, there’s more and more people involved and there’s more and more communication. And so if you’re able to make things simpler, that’s an easier message to communicate to more stakeholders, new stakeholders, different geographies, different cultures. And so the benefits really start to cascade, even though you might not see it in if you’re looking only exclusively at the product design An extension of that conversation is also looking at modular design or product standardization. You talked about hardware standardization. Tara, have you seen that cause, a benefit in the work that you’ve done across the ATS Corporation?

TB: Absolutely. absolutely. Actually, to me, modularization is breaking down a large system into small, self-contained modules that could be independently designed, maintained and developed. And, there are different ways to modularize. Actually I learn from, a general manager of one of our divisions, Steven Murray, that, the way they looked at one of a large system was by identifying the number of hours required to assemble specific subassemblies and, try to break down a large system to those modules. Now, what it does is that it lets you identify inefficiencies and waste, because now you want to maintain within that X number of hours of assembly. So you are able to maybe look at overproduction, extra processing time, transportation, anything that could benefit your labor side of it. Also, it gives, engineers opportunity to look at modules from a different perspective, designing it for assembly, how simple it is to assemble the pieces together and try to take complexity out of it. As Slavko mentioned, maybe you need to look at it, how to build pieces symmetrical so it could go either way or how it could be approved. So poke yoke that it’s, you are not wasting time in fixing the errors. So it’s key to have that, modularization built in a way that you can also tied into standard components and make to make those modules standardized as well. And there’s always a trade off between standardization and customization, because you don’t want to over standardize, it will limit you and in terms of customization, but you don’t want to over customize as well because now you’re not benefiting from standardization. So finding the right balance could be challenging. But again, back to, the point we had, if we are, planning ahead of time, we might need to invest more time and more energy to have a deeper understanding of the architecture of the system to make sure that the modules would be compatible. They’re seamlessly integrating with each other. But then in the long term, you’re seeing a lot more benefit, because now it’s easier to train people on module modular designs, you can build work instructions because now you have standard design. It’s easier to troubleshoot because now if something has an issue has happened before, you might be able to pinpoint it next time it happens. And it’s, it actually creates, an opportunity for you to release your new product faster to market, because now you are able to maybe build modules, different modules simultaneously and irrelevant of maybe locations or suppliers, because now you can build one module done by one supplier and another one by another supplier, although it comes with complication, because now you’ve got to make sure that you have consistent quality. But if you can address that, address them ahead of time and during your planning stage, then you can benefit a lot from modularization and standardization.

SD: Absolutely. And I like that you touched on both the benefits and the challenges that come with it, because there’s no such thing as a free lunch. You know, every benefit comes with a con, and it’s really a trade off around the business that you’re trying to run, the resource that you’re available, the core competencies that you’re trying to, to leverage on the benefits that you’re trying to drive. And that will always come with a trade off. I want to pull on one more thread that’s been common throughout our chat today, and that’s the customer focus. So something that I’m really passionate about and what we’ve talked about here is really around customer value and what the customer’s willing to pay for, which is founded in lean practice and lean manufacturing approach. So, Slavko, I’ll start with you. Do you have an example that you could provide to those listening of a time where you saw a great example of somebody really, truly understanding their customer and bringing that through the NPD or NPI phase of product design.

SS: So based on my previous experiences, I haven’t worked in, let’s say, industry where I have dealt directly with the customers, but with my current role, we’re working on products that are designed and specifically targeting the customer needs. the focus here has to always be on a customer, as you already mentioned, and not necessarily just to say what customers willing to pay, but what customer actually needs. Living in a technology world, technology, automation in general is very interesting, very cool. Living in the engineering world, if you need to go 100 miles an hour, why not design something that can go a thousand? Because 1000 is better than 100. But if customer needs 100, stay within that swim lane. So it’s maintaining the focus of what actually customer needs are there. Kind of to connect with Tara mentioned create your core systems and add modularity of the features to it to scale up. If the future customer need expands so that you don’t have to redesign and go through the whole process of call it NPD and NPI in order to satisfy those customer needs. So try it in a way. You have to be visionary when it comes to this and you have to be able to predict, but at the same time do a very detailed market research and understand what are your customers are looking for. Create your core product design around those needs, and then look ahead of how do I scale up? How do we add the modular components to that product that will satisfy the needs if the change, if there’s additional customers that maybe need something slightly tweaked or presented in a different shape or form.

SD: It’s good context on how you bring that customer focus back into the product design.

TB: I’m going to add to what Slavko said, sometimes customers don’t know what they want either, and you got to guide them by asking the right questions. So that ah-ha moment happen for them. And once we gather all this information, then we can deep dive into introducing functions, whether we can eliminate some if they’re unnecessary or improving some if it would add value to our customer, and then gauge it with the cost associated with those functions we are trying to design within our system.

SD: Thank you both for joining the podcast today, talking about how to approach reducing the cost of products through the phase of applying automation or otherwise. Thank you for sharing your background and your experiences.

TB: Thank you so much for having me today.

SS: Thank you very much. and good luck in your journey.

SD: Thank you both again. And to those listening, as always, we’re so appreciative for you to turn in and listen to our conversations. I really hope today was helpful and a different perspective on how to implement technology into your businesses, and different things to look for as you’re looking to reduce cost, total cost of ownership, focus on customers that helps you along your own journey. Join us for our eighth episode, where members of the finance team will be coming in and talking about a different topic inside of the automation world. Thank you again for joining us.