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Lean R&D at Goodyear

A new book entitled Lean-Driven Innovation: Powering Product Development at the Goodyear Tire and Rubber Company, describes in detail how Goodyear has improved its R&D through learning, understanding and implementing lean product development principles and as a result, greatly increased its revenue

 

Extract: Lean has been proven to work repeatedly in Goodyear’s manufacturing processes, but would it work with R&D processes? A critical first step we made with lean in Goodyear R&D was that we didn’t focus lean as a tool to cut product development costs. Unlike manufacturing, the R&D function is a small direct cost to the business (about 2% at Goodyear), and only so much cost savings are available to be gained. But R&D casts an enormous shadow over the products and activities of the entire company: product development decisions affect product performance (value), cost, manufacturability, complexity, and even distribution, and design processes assure that the right product is available at the right time. We focused lean on how R&D designs product, the powerful ways it can increase value for customers, and its impact on the profitability of the value streams. A lean focus on the shadow provides a return that is an order of magnitude greater than direct cost savings in R&D (see R&D Shadow). But none of that occurred quickly or easily.

For the full extract see this year’s Tire Technology Annual Review.

Meanwhile, Goodyear South Africa recently announced investment plans of ZAR 670m (US$47.8m) to increase production of high-value-added (HVA) consumer tires at its Uitenhage manufacturing plant. This will see the introduction of state-of-the-art manufacturing technology for the plant and will enable Goodyear to meet the strong and growing market demand for HVA consumer tyres in South Africa and Sub-Sahara Africa. The tyre market in South Africa and Sub-Sahara Africa is expected to experience double-digit growth through 2020 led by the consumer segment.

The combination of new technology and accompanying employee training will further improve the plant’s capability and capacity to produce low rolling resistance tires.

To enable the expansion, Goodyear South Africa also proposes to relocate the plant’s production of medium radial truck tires (MRT) to other plants across the company’s Europe, Middle East and Africa region.Under the proposals, Goodyear has affirmed its intention to consult with the union representatives and employees who are currently working in the MRT area to minimize the impact through offering a variety of alternatives.

Subject to consultation, the company expects to be substantially complete the investment plans by the end of 2016 or early 2017. The company does not anticipate disruption to tire services or supply during this period.

September 24, 2015

 

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