Why ‘Connectedness’ is Critical to Product Development Part 2 (Mercury Marine)

The interaction between program management, cost engineering, and how those work within a PLM deployment have been popular blog topics lately.  Like many manufacturers, Mercury Marine has worked through challenges such as reconciling the CAD or PDM system design content with the ERP transactional data using Excel spreadsheets to manage new product programs. 

While cost management is important to a program’s success, it is just one facet.  What often gets missed in all the fire-fighting, meetings, and organizational chaos is why the cost information isn’t more easily available, or why it isn’t populated sooner during a program.  Plus, all time devoted to manual or semi-automatic data reconciliation takes away from the opportunity for cross-functional innovation.

Using the Large Assembly Management methodology as a foundation for managing the engineering bill of material allows other systems outside of Teamcenter to consistently access product structure and improve collaboration. 


Effective product data management provides Mercury program teams with the foundation for improvements with product costing, change management, part reuse, and configuration control.

For example, the SharePoint-based, patent-pending, Parts Planning Application (PPA) provides product teams with the ability to receive BOM structure changes automatically, along with attributes from Teamcenter, ProE, and ERP.  Cross-functional team members can populate all program-related attributes using the Mercury Marine developed .NET application while having read-only visibility to all necessary design and ERP attributes.



“By having the bill of material managed within ProE, then saved into Teamcenter and flow into the PPA for cross-functional use and reporting, the product teams avoid all the manual reconciliation and data population issues associated with an Excel-based solution,” commented John Bayless, director of program management for Mercury Marine.  “Users can easily pick which functional level of the bill to report against, interrogate, and simultaneously contribute to from any location, at any time globally.”

Information is provided by all cross-functional contributes and allows everyone on the project team with instant visibility to the latest available information.  This includes critical program metrics like product cost or weight roll-ups, or whether an important attribute like a drawing release date has been provided so purchasing can begin long-lead part procurement.

By doing this so early within the design concept stage, cross-functional teams can immediately start determining make/buy parts, establishing target costs, and identifying long lead time parts.  Parts requiring tooling or special manufacturing processing are also identified and tracked early. 

Program managers can open a single application (PPA) in SharePoint and know exactly how their program is performing.  It also allows for more efficient team sessions because the meetings become more about providing status updates on progress, rather than resolving issues because the team members have proactively collaborated ahead of time.

This has the following benefits:

  • Parts are here on time for development builds, and they assemble correctly the first time
  • Collaboration among global cross-functional contributors is vastly improved, which helps program teams make better decisions faster, and early in the program
  • Product quality is improved and attention to the details, or craftsmanship can be emphasized over fire-fighting
  • At the earliest stages of product development, the design team populated a Target Cost into the PPA, which was used to develop a cost baseline and ultimately became the contracted cost bogey with management.  As the design matures, engineers populate the Most Likely Cost, which is based on verbal quotes from suppliers or the engineer’s experience.

“This is where PLM helps drive cost management,” noted Bayless.  “The standard Large Assembly Management methodology based on the functional partitioning of the workforce provides a consistent product structure across all development programs to drive BOM accuracy in addition to cost validation and reporting.”

Another key component to the cost strategy is the introduction of BDI piece cost modeling with the Boothroyd–Dewhurst Design for Manufacturing and Assembly Software.  This software has provided a detailed, benchmark-derived, customizable cycle time database for estimating piece cost with inputs that range from back of napkin design ideas up to ProE models.

Cost engineers begin using Cost modeling feedback during Concept Phase (CV) of engine development to help identify problem areas early to understand changes taking place on paper versus new tools.

The program team employed diligent data management to ensure consistent treatment of cost data, broken down to the lowest levels that allows for manipulation and presentation of data in various forms.

In addition, the cost team delegated the Cost Target to the functional system owners.  Because the engineering teams are organized by function (base engine, electrical, drives, peripherals, etc.), it was logical to assign meaningful, aggressive, yet achievable cost targets to those design managers and commodity managers responsible for their area, as well as to challenge their engineers toward creative solutions.

“This cost management strategy involves relying on information from ERP for current part costs, then using an aggressive quoting strategy for new parts,” stated Gordon Flores, cost engineering manger.  “As quotes come in the team populates the Quoted Production Price attribute within the PPA that is tracked by design revision.  This allows the team to know which revision of the part was quoted, the cost provided at that time, and to rank the risk dollars of that quote.”

The Best Information Material Cost attribute, or the final product cost, is a calculated value within the PPA based the Quoted Production Price plus all applicable burdens stored in the PPA.  The program team works toward having a firmed-up Best Information Material Cost by the end of the program Design Validation (DV) phase.

Finally, visual management provides consistent presentation of product cost information over time via weekly feedback of cost run charts for each functional partition using visual management powered by the PPA. 

When combined, these cost management techniques provide product teams with early, accurate data in an easily understood format that enables better decision making throughout the product development process.  Having access to information to manage issues at the earliest opportunity are critical. 

By combining the large assembly and cost management disciplines, program teams have been able to consistently perform at, or under cost targets despite a new product launch cadence of every six weeks for several years.

Next, the product change management process helps keep people inside and outside of engineering informed as part adjustments occur.  This helps people in quality, purchasing, and manufacturing work better with engineering and product managers to make the best possible product decisions for Mercury Marine.

 “As a program manager, I have led my change board through some controversial changes.” emphasized Bayless.  “For example, I had an engineer recommend a change on a cowl seal for an outboard engine without regard to the capital budget.  Luckily, the issue was resolved at the change board when the chief engineer suggested an alternative solution and the manufacturing engineer supported it with a lower-cost manufacturing option.  In the end, we were able to meet the functional requirement and stay within the budget.  Without the change board, we would not necessarily have had the opportunity to collaborate or the time within the program schedule to find an alternative solution.” 

To help better manage the changes, there are three change classes, Class A, B, and C. Class A changes apply only to new product development programs during CV and DV phase.  Once a program reaches the Production Validation (PV) phase, changes are handled similar to production-released parts as a Class B type, which affects fit, form, function, and product cost.   In the case of a class B change, the change initiator is asked to present their change proposal to the program-led Change Board that will decide how to proceed based upon the information provided by the requestor.  A change board typically invites cross-functional, and cross-plant representatives affected by the change request to meet weekly.

“Having a smooth change process for the new programs really helps keep the program under control during the design validation phase,” said Bayless.  “In that regard, the change process has helped us maintain our cost, quality, and timing targets.”

Contact us about implementing the patent-pending Parts Planning Application or large assembly management practices within your organization at mercuryplm.com.  We also offer SharePoint best practices and cost engineering services.

Mercury PLM Services Unique Perspective

Our differing approach concentrates on understanding your process as a must for success. A process-centric approach requires businesses to review and question existing work streams to understand “why,” “what,” and “how” work should be done to establish efficient cross-functional work flows that are consistent, repeatable and scalable for growth.

We also offer a unique perspective for helping organizations considering a Product Lifecycle Management implementation because we view PLM from a manufacturing business user’s vantage point since we live and breathe it daily.

Because we work in a dynamic, global product-development environment that supports a worldwide manufacturing footprint, we have a user’s perspective that helps drive results and realize improvements. Several of our experts also have been deeply involved with our ISO 9000 certification effort, as well as configuration management, and engineering document-management practices.  Mercury PLM Services is a Siemens Zone SI Partner.  Attend our next Information Exchange on October 20.  Visit www.mercuryplm.com/informationexchange for more information.

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