Lean Development at Mclaren Automotive

Lean development has a long history in the automotive environment starting from the early 1940s when Toyota introduced a management philosophy derived largely from the Toyota Production System (TPS). The term "Lean" was introduced in the 1990s and was first used to describe Japanese automobile manufacturing. Since then, Lean has become synonymous with efficient manufacturing throughout the world.

It is worth noting that Lean is not just related to manufacturing; it can be applied to all other areas of a modern company, following several principles that are the backbone of this philosophy. Product development is one of the areas where Lean principles can be applied, as within this function sits the responsibility for designing new products that meet the end customer's expectations. This can be a complex and risky environment, where development could be potentially disengaged from the delivery of value if the company does not follow Lean principles.

There are multiple Lean principles that can be summarised by Value, Value Stream, Flow, Pull, and Perfection. What do these terms mean? They identify several workstreams that the company needed to achieve a Lean development process.

The Value workstream aims to understand what the ultimate customer expects from McLaren products and how to position them. It is important in this preliminary phase to understand how much the customer is prepared to pay for this product. Organizations can sometimes lose product and customer focus through internal metrics and initiatives. Product marketing, product development, and finance work together to define the specific value of the product and the market positioning; this is the first step in Lean principle application.

Value definition might lead to a confirmation or a change of the existing product, or it might result in reinventing the product entirely to meet customer needs. At the beginning of this phase, Product Development identifies critical knowledge gaps, a practice known as “Learning First.” Teams are identifying knowledge gaps that help the rest of the organization determine the technology that will be used, providing insights on consumer interaction and key risks in the proposition and business case.

Once the value is specified, the next step in lean development is to define a Value Stream map. This is about defining activities, processes, and workstreams that have the tasks to transform the whole set of targets and requests identified in the value analysis phase into outputs by minimizing ‘waste.’ Lean often refers to waste in relation to inefficient or unclear processes (unnecessary code or functionality; starting more than can be completed; delay in the software development process; unclear or constantly changing requirements; bureaucracy; slow or ineffective communication; partially completed work; task switching; undisciplined communication).

During Lean analysis, all actions can be clustered into three main categories, namely ones creating value for the customer (Product Development, Marketing, and more), actions that are necessary from the system but do not create value for the customer (staff activities, Purchasing, Finance, HR, etc.) and actions that are not required by the system and identified as ‘waste’ to be eliminated.

“Product marketing, product development, and finance work together to define the specific value of the product and the market positioning; this is the first step in Lean principle application”

At McLaren, we adopted Lean principles to shorten development times and underpin Product Development, relying on a robust plan and process flow optimization. Our ability to work in this first phase of Lean allowed us to kick off series tooling from first prototypes, reducing validation costs and reducing development time. We also focused on strong DFMEA in that phase, as well as the implementation of simulation tools, in order to enable a low margin of error in future workstreams. In that regard, thanks to the application of Lean principles and extensive adoption of a Building Block Approach for composite manufacture, the McLaren Artura was able to achieve 97% Right First Time in crash tests.

At this point in time, the system is ready to Flow and must work without interruption. This process could also identify further inefficiencies and might require reconsidering the Value Stream.

The Pull phase is the next step in the route toward lean development. Once a product–let us assume an all-new model– is readied to go to market, Product Development and Marketing must be reassured that customer needs are met. There may be cases where customer needs or expectations have evolved, and the product is not fully meeting them. That is the moment where Product Development and Marketing must apply the “pull” logic. This means keeping up-to-date with technology shifts, demographic trends, or global economic changes.

Continuous product improvement at McLaren is allowing us to tackle the evolution of customer needs, including in the areas of infotainment, ADAS, and on-board systems, as well as vehicle performance, light-weighting, and perceived quality. Effective innovation also requires an understanding of true customer profiles to shape a solid product proposition and, at the same time, balance costs. Global economic changes see automotive customer expectations evolve rapidly, quicker than in any previous era. A Lean company such as McLaren maintains a constant focus on understanding how the market evolves, translating customer needs into state-of-the-art products, through the correct timing of the entire value creation process.

Perfection Lean principle is the final stage. Luxury companies like McLaren should never stop improving Lean principles in relation to value, flow, pull and waste elimination. The ‘Lessons Learned’ process has helped us in eliminating waste and redundancies in the development process, implementing standards such as Kamishibai and the Kaizen philosophy (improvement by everyone, everywhere, every time).

Lean product development also includes a simultaneous engineering team, as well as quick learning cycles, chief engineers, and project houses. Visual methods such as Kanban can help activity assignments and avoid overload by allowing project managers to quickly reference exactly the status of each step in the process. It also reduces the need to verbally translate and explain the status of project tasks by conveying insight that is based on easily recognizable visual cues such as card positioning, color, symbology, and more.

As a final consideration, it is worth reiterating that planning complex development projects remain a difficult process. There is a natural reluctance to apply Lean principles to product development, especially when this implies cultural change. However, Lean is proven as a powerful system for developing new products, as well as the processes needed to produce and deliver them. Effective in companies large and small across diverse industries, it is more than merely a strategy for product development, rather it enables leveraging companies to build a sustainable system for consistently creating profitable value streams that, from the start, eliminate upstream issues.