W. Edwards Deming, one of the major influences on manufacturing as we know it today, noted, “Innovation comes from the producer, not the customer.” To me, that comment has the seed of why innovators need to be wary of looking to manufacturing for their lessons, because manufacturing is essentially concerned with the customer.
In a post on the HBR Blog Network, Donald Reinertsen and Stefan Thomke make that point directly by discussing the fundamental differences between manufacturing and product development: “Product developers can learn much from manufacturing, but many have gone too far in applying ideas that work in manufacturing to their realm. That’s because they have ignored some fundamental differences between the two disciplines.”
They list three main differences:
- Manufacturing produces physical objects; product developers produce information. The difference isn’t trivial. Physical objects are visible: in manufacturing you can see inventory and see precisely how it flows. In contrast, information is invisible: you can’t see it or how it moves. When blockages impede flows in manufacturing, you see piles of stuff on the factory floor. Blockages in product development result in invisible queues that can silently lead to massive delays. So, while manufacturers can easily assess flows by walking the factory floor, product developers need other ways (e.g., visual control boards) to make the flow of information visible.
- Manufacturing produces things; product developers produce the recipes for making things. Manufacturing can produce the same thing a million times in a row and add value every time. If product development produces the same design twice, it has wasted money. Product developers must change the recipe to add value, and when we change the recipe, we introduce uncertainty. Eliminating all variability in manufacturing creates impressive profits. Do the same thing in product development and you will eliminate all innovation. This is alarming news for those who are trying to transplant manufacturing’s passion for variability reduction into product development.
- Manufacturing deals with stationary targets; product developers deal with moving targets. When we start a work order on the factory floor, we know precisely where our target is, and it stays there. In manufacturing, our measure of execution is how close we come to our original goal. In product development, it is whether we can repeatedly realign our effort with a moving target. The best product developers recognize that they are beginning work with imperfect and unstable information. Markets and technologies change; obstacles and opportunities emerge. These changes invalidate many of our original choices. The measure of execution in product development is our ability to constantly align our plans to whatever is, at the moment, the best economic choice. The best product developers are like a soccer team: they have a plan, but they constantly adjust to the flow of the game.
The authors acknowledge that some ideas from manufacturing (e.g., that smaller batches allow one to improve cycle times, quality, and efficiency) translate well to product development, but that shouldn’t lead to ignoring the fundamental differences between the two. “Failure to respect these critical differences can undermine the planning, execution, and evaluation of product development processes. So learn from manufacturing, but be careful what you learn.”
Or as another philosopher put it, have the wisdom to know the difference between light and knowledge.