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Implementing improvements
As in other industries where products
increasingly rely on software, the
automotive supply business needs to shift
from a hardware-development mentality to
one more attuned to the iterative nature of
software development. As compared with
many other software developers, those who
create the automotive industry’s embedded
software are less likely to follow norms that
have boosted productivity elsewhere—for
example, measuring both the productivity
of the development process (say, by
feature points per person, per month)
and the quality of the software (defects
per feature point). These developers still
labor under the hardware-development
legacy, so hardware-oriented productivity
measures still dominate their thinking. Until
companies learn to deploy software-oriented
metrics to measure the productivity of the
development process, they will struggle to
improve their performance and to make the
right trade-offs, such as increasing their upfront
investment in architecture to raise the
quality of the software.
Managers will also have a tough job
changing established mind-sets. Within
the company, they will have to persuade
engineers to adopt metrics that closely
monitor productivity—something that few
employees rush to embrace. They will also
have to make compelling fi scal arguments
for trading out established architecture and
development processes for more productive
internal standards. Examples from other
industries can help managers make the
case for change, and the job will inevitably
become easier as more auto suppliers get up
to speed. In the larger web of the automotive
supply network, individual players will
have to become more familiar with how
their systems interoperate with those of
their suppliers. Proprietary advantage is
important, but they can no longer afford
to work within a black box, hoping that
automakers will make all the necessary
connections. In the absence of strong
industry standards, systems integrators
will have many new opportunities.
Auto manufacturing is just one industry—
albeit a high-profi le case—where the
potential of embedded software is being
squandered and the weakness of current
models for developing it has been exposed.
If auto and other manufacturers are to
protect their reputation for quality, they
and their suppliers will have to raise the
quality of embedded software and make
its development more productive while
reducing time to market. MoIT
Wolfgang Huhn (wolfgang_huhn@mckinsey.com)
and Marcus Schaper (marcus_schaper@mckinsey
.com) are members of McKinsey’s global IT
practice. Wolfgang, a director, leads the industrial-
IT practice and is based in Frankfurt; Marcus,
an associate principal, specializes in managing
the performance of IT, particularly software and
applications, and is based in Hamburg. Copyright
© 2006 McKinsey & Company. All rights reserved.
Getting better software into manufactured products
Toyota Production System - TPS
Effective Worldwide operations for SME Worldwide Product Design &
Lifecycle Management 24/7
Role of technology at Toyota*: Use only reliable, thoroughly tested
technology that serves your people and processes.
■ Use to support people, not to replace. Try manual approach first.
■ New technology is often unreliable and difficult to standardize and
therefore endangers “flow.” Proven processes take precedence to flow
■ Conduct actual tests before adopting new technology in business
processes, manufacturing systems, or products.
■ Reject or modify technologies that conflict with your culture or that
might disrupt stability, reliability, and predictability.
■ Encourage your people to consider new technologies when looking
into new approaches to work. Quickly implement a thoroughly
considered technology if it has been proven in trials and it can improve
flow in your processes.
The core of TPS is the elimination of waste
and concentration on consistent high
quality by a process of continuous
improvement (kaizen). This relentless
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