Relaunching a company from products

How to face the challenges of the furniture industry?
In our in-depth study “The 7 challenges for the Made in Italy furniture sector”, we examined the main challenges companies in the sector are encountering in combining the valorization of the most authentic Made in Italy with the ability to apply industrial logic and processes.

Let’s now look at a concrete example of a leading Italian industrial group specializing in the production and sale of sofas, armchairs, furniture, and furnishing accessories for residential use, followed by Lenovys in a project focused on new product development.

The company operates in a context characterized by a real price war and enormous complexity, such as questioning the company’s competitiveness in the market daily.

One of the most important challenges to overcome was the reduction of the design Lead Time. In fact, the launch –on average every two days– of a new model coexisted with average market launch times of 4/5 months.

In a context now accustomed to obtaining new products in a much shorter time, even sometimes in the face of sudden customer requests, this performance was not acceptable.

The aim of the project was to introduce the principles of Lean Product & Process Development into the R&D area to achieve 2 main objectives:

• Reduction of the average development time of a new product
• Product cost del reduction

After the methodological alignment phase and the definition of the project’s “reason for action”, the complex mapping of the current state was performed, which highlighted 101 critical issues throughout the process and an estimate of the average Lead Time between 15 and 20 working weeks depending on the type of product.

The main critical issues identified were:

• Difficulties in synchronizing Marketing and Product Development functions
• Not always optimal correlation between material quality and product performance
• Frequent states of organizational emergency
• Need to standardize the materials used
• Weaknesses of design processes and systems functional to the creation of industrial platforms and reduction of complexity
• Absence of a cross-cutting coordination figure from the beginning to the end of development
• Wastes in the process of making prototypes, testing, costs and putting into production
• Need to improve the effectiveness of planning, visualizing and synchronizing the status of ongoing projects

Below are some of the guidelines applied for the realization of the future state:

• Cross-functional working committees have been created to constantly align people and filter the products to be launched in the development process
• Industrial platforms have been designed from which to start the entire product development process
• A task synchronization system has been introduced
• A Visual Planning system has been developed that can update anyone on the progress of each project

One of the project strands that had the greatest impact was the intervention carried out to create industrial product platforms based on the modular approach. The goal was threefold: to build modularity, make it sustainable over time, and regulate its growth by managing the demand for new models in this area.
The focus in this project was to make the largest number of models with the fewest components.

Through the comprehensive analysis carried out with cross-functional teams, a profound intervention was conducted aimed at finding all the opportunities to reduce product costs: material reviews, geometries, functional optimizations, component standardization, mergers, reduction of the number of components, supplier changes, etc. In this case, we adopted an operational technique called “Tear Down”, that is, progressively streamlining the product, with a hunt for value waste that represents an opportunity for cost reduction.

Hundreds of cost reduction or simplification proposals were generated by the various working teams, each of which was valued at an economic level and evaluated at an industrial and commercial feasibility level.

Of the hundreds of proposals generated, 75 were validated and brought into production, resulting in both a significant reduction in waste and an optimization of design choices.
Furthermore, it produced a significant reduction in the cost of the materials used and an even more marked decrease in the cost of production.

120 high-circulation models were chosen to be re-engineered and were entrusted to a task force responsible for integrating them as quickly as possible into the new respective industrial platforms to start the new operation and achieve the required targets.

The review of the entire product development process, including organizational changes and the introduction of new tools, has led to a significant reduction in Lead Time:

• By 20% after the first 6 months of project
• By a further 25% after 12 months

The process then continued independently on the rest of the models in production, with the complete renewal of the entire range according to the new rules introduced, obtaining further results:

• Material savings of over 5 million €
• A reduction of more than 10% in the cost of the goods sold (COGS)
• The introduction of 80 design rules and 52 industrial platforms

The real result was to demonstrate, once again, how the logic of Lean Thinking is successfully applicable in all industrial sectors, even those characterized by their nature by high manual skills and subjectivity of the processing phases.

Waste must be fought at every stage and people’s resistance to not wanting to see the waste that floods businesses every day must be fought.

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