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Approaches to Crisis Prevention in Lean Product Development by High Performance Teams and Through Risk Management

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Approaches to Crisis Prevention in Lean Product Development by High Performance Teams and Through Risk Management Downloaded from orbit.dtu.dk on: Oct 05, 2021 Approaches to Crisis Prevention in Lean Product Development by High Performance Teams and through Risk Management Oehmen, Josef Publication date: 2005 Document Version Publisher's PDF, also known as Version of record Link back to DTU Orbit Citation (APA): Oehmen, J. (2005). Approaches to Crisis Prevention in Lean Product Development by High Performance Teams and through Risk Management. Technical University of Munich. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. 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APPROACHES TO CRISIS PREVENTION IN LEAN PRODUCT DEVELOPMENT BY HIGH PERFORMANCE TEAMS AND THROUGH RISK MANAGEMENT Diploma Thesis Technical University of Munich Chair of Product Development, Prof. Lindemann Registration Code 1037 Josef Oehmen September 2005 Chair of Product Development Josef Oehmen Lehrstuhl für Produktentwicklung Hellerweg 2 Boltzmannstr. 15 D-26524 Hage, Germany D-85748 Garching bei München, Germany http://www.pe.mw.tum.de Abstract i ABSTRACT This thesis investigates crisis prevention in lean product development, focusing on high performance teams and risk management methods. Lean product development and the Munich Procedural Model (MPM) are the guiding frameworks for this thesis. From the MPM, team work and risk management are derived as important elements in crisis prevention, from lean product development, especially the notion of value is used to define basic types of crisis in product development and the failure modes of risks in product development. High performance teams (HPT) are generally defined. Based on a literature review, 49 factors that describe HPT are identified and presented. They are characterized with Vester’s Influence Diagram and categorized into four groups, enablers, drivers, critical elements, and indicators. Risk and risk management are defined in the context of lean product development. Basic concepts are introduced to describe the axiomatic risk attributes (causal structure, failure modes, timeframe, cause-and-effect networks), resulting from the risk definition. Based on a literature review, a generic risk management process framework is defined, and a collection of methods for risk management in product development presented. The relation of high performance teams and risk management is discussed and it is shown that the two are mutually beneficial. A field study is conducted at a large North American company in the automotive sector. The theoretical findings from the literature are confirmed in large parts. Keywords: Lean Product Development, Crisis Prevention, Risk Management, High Performance Teams, Literature Review, Field Study Acknowledgements ii ACKNOWLEDGEMENTS I would like to extent my heartfelt gratitude to Prof. Warren Seering at the Massachusetts Institute of Technology for his invaluable guidance, advice, and for introducing me to the set- based approach of writing a thesis. My head is still spinning. I would also like to thank Prof. Lindemann of the Technical University of Munich and the Lean Aerospace Initiative, especially Eric Rebentisch, for making this work possible. My deepest thanks also go to my supervisor Birgit Dick for her guidance and support. I am also very grateful to the professionals at the industry partner for their extraordinarily friendly, insightful and generous support. I would like to thank Günter Lessing for his cunning and irreplaceable guidance in the field of risk management and other areas. My greatest thanks also go to Victor Tang, Jin Kato, Ryan Whitaker and Martin Graebsch for their ideas and friendly encouragement. Table of Contents iii TABLE OF CONTENTS 1 Introduction 1 1.1 Motivation and Context 1 1.2 Scope of Thesis 2 1.3 Research Goals and Hypotheses 3 1.4 Thesis Outline 4 2 Fundamental Concepts 6 2.1 Current Challenges in Product Development 6 2.1.1 The Munich Procedural Model (MPM) 6 2.1.2 Implications for Crisis Prevention from the MPM 8 2.1.3 An integral approach to Crisis Prevention in Lean Product Development 8 2.2 Lean Product Development 9 2.2.1 General Introduction to Lean Thinking 9 2.2.2 Lean Product Development 10 2.2.3 The Concept of Value in Lean Product Development 11 2.3 High Performance Teams in Product Development 14 2.3.1 Brief Introduction to teams and the role of teams 14 2.3.2 Definition of High Performance Teams 14 2.4 Risk Management in Product Development 15 2.4.1 General Introduction to Risk Management 15 2.4.2 Current Implementations of Risk Management 16 2.4.3 Current Trends in Risk Management 19 2.4.4 Approaches to Risk Management in Product Development 20 2.4.5 Definition of Risk 24 2.4.6 Axiomatic attributes of Risks and basic concepts for their description 25 2.4.7 Definition of Risk Management 30 2.4.8 Fundamentals of probability and reliability theory 31 2.5 Crises and Crisis Management in Product Development 33 2.5.1 Crisis Management 33 2.5.2 The relation of Crisis Management and Risk Management 34 2.5.3 Crises in Product Development 35 2.6 Summary of this chapter 37 Table of Contents iv 3 High Performance Teams in Product Development 39 3.1 Research Methodology 39 3.1.1 Identification of Product Development Programs and Projects 39 3.1.2 Identification of main factors of High Performance Teams 40 3.1.3 General description of Influence Diagram (according to Vester) 41 3.1.4 Specific Application of Influence Diagram (according to Vester) 46 3.1.5 Field Study 47 3.1.6 Limitations of approach 48 3.2 Literature base of discussions 48 3.3 Description of main factors 51 3.3.1 Individual Team Member Level 51 3.3.2 Team Level 52 3.3.3 Team Member to Team Member relation level 57 3.3.4 Team to Environment relation level 58 3.4 Characterization of Factors via the Influence Diagram (according to Vester) 61 3.5 Discussion of results 65 3.5.1 General assessment of overall system 65 3.5.2 General assessment of system levels 66 3.5.3 Discussion of factors along clusters in the Influence Diagram 67 3.6 Summary on High Performance Teams 72 Table of Contents v 4 Risk Management Methodology for Lean Product Development 73 4.1 Research Methodology 73 4.1.1 Literature Review 73 4.1.2 Selection of methods 74 4.1.3 Field Study 74 4.1.4 Limitations 74 4.2 Literature base of discussion 75 4.3 Process Framework for Risk Management 77 4.3.1 Risk Identification 79 4.3.2 Qualitative Risk Analysis 79 4.3.3 Quantitative Risk Analysis 80 4.3.4 Risk Prioritization 80 4.3.5 Definition of Actions 80 4.3.6 Execution of Actions 80 4.3.7 Monitoring of Risks 81 4.3.8 Aggregation of Risks 81 4.4 Methods of Risk Management 82 4.4.1 Overview of the methods 82 4.4.2 General Methods 88 4.4.3 Methods for Risk Identification 90 4.4.4 Methods for Qualitative Risk Analysis 96 4.4.5 Methods for Quantitative Risk Analysis 99 4.4.6 Methods for Risk Prioritization 110 4.4.7 Methods for Definition of Actions 112 4.4.8 Methods for Execution 113 4.4.9 Methods for Monitoring 114 4.4.10 Methods for Aggregation 117 4.5 Summary of Risk Management Methodology 118 5 Interim Summary: Relation of High Performance Teams and Risk Management 119 Table of Contents vi 6 Field Study on Product Level 120 6.1 Research method 120 6.1.1 Description of method 120 6.1.2 Limitations of approach 120 6.2 Description of situation 121 6.2.1 Context and process description 121 6.2.2 Problem description 121 6.3 Results 123 6.3.1 Applicability of Risk Management model in Field Study 123 6.3.2 Discussion of results regarding team structures 124 6.3.3 Discussion of results regarding process improvement 126 6.3.4 Discussion of the relation of team structures and processes 133 6.4 Summary 133 7 Conclusions 134 8 Outlook and Future Research 137 9 References 139 10 Appendix 155 10.1 Glossary 155 10.2 Influence Matrix of Influence Diagram 157 List of Figures vii LIST OF FIGURES Figure 1-1: Scope of Thesis........................................................................................................2 Figure 1-2: Thesis Goals and General Approach .......................................................................3 Figure 2-1: Overview of the Munich Procedural Model (MPM) [Lindemann et al. 2005] .......6 Figure 2-2: General Areas of Application of Risk Management .............................................16 Figure 2-3: Goals of Risk Management in Product Development ...........................................21 Figure 2-4: Areas of Application of Risk Management in Product Development...................22 Figure 2-5: Possible structure for categorizing the sources of risk ..........................................26 Figure 3-1: Basic model for the analysis of High Performance Teams ...................................40 Figure 3-2: Simple influence diagram (example).....................................................................44 Figure 3-3: Influence diagram with assessment of system elements (example) ......................46 Figure 3-4:
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