Developing Operational Excellence: Designing a Production System for New Products


Developing Operational Excellence: Designing a Production System for New Products


In the Lean product development scenario, the Production System Design (PSD) is a challenging phase. This article explores PSD’s fundamental principles and presents a guide for its effective implementation. The primary goal is to facilitate the creation of efficient systems geared towards operational excellence, thereby driving organizational success.

Introduction to Production System Design Process

With the application of the Production System Design methodology, the aim is to develop efficient systems for manufacturing new products aligned with Lean principles. This is a fundamental phase in the product development process.

PSD ensures timely and systematic integration of all relevant parts of the process, encompassing product design, planning, logistics, and production. The links between the various facets of development and production are crucial for achieving high-quality results.

Lean Principles at the Foundation of the Production System

Lean principles form the foundation for the Production System Design, offering a proven approach to maximize efficiency and minimize waste. Two fundamental principles that underpin this philosophy are creating value for the customer and the efficiency of the flow.

Creating Value for the Customer

As mentioned, one of the central principles of Lean is creating value for the customer. All activities within the production system must be oriented to meet the needs and expectations of the customer. This involves profoundly understanding market needs and aligning production processes to deliver products or services that genuinely add value.

The first step in creating value is identifying what is considered valuable to the customer. This implies understanding their needs, desires, and expectations.

On the other hand, focusing on quality excellence is essential to providing value to the customer. PSD meets and exceeds customer expectations by prioritizing quality at every stage of development and production. This not only strengthens competitiveness but also reduces costs associated with rework.

Creating Flow Efficiency

Flow efficiency is another Lean principle, optimizing processes to reduce cycle time and increase operational efficiency.

Eliminating waste (MUDA), variability (MURA), and overburden (MURI) is essential for optimizing the production system. Identifying and removing these elements results in more efficient and economical processes.

Furthermore, the continuous improvement of the entire value chain flow is a fundamental pillar of Lean Production System Design. Eliminating bottlenecks promotes process flexibility, increasing efficiency and reducing waiting times.

Finally, implementing a production system driven by customer demand is crucial to avoid overproduction and optimize available resources. This also requires flexible systems capable of adapting to demand.

By incorporating Lean principles into the production system design, organizations can meet customer expectations more effectively and achieve higher operational efficiency.

Production System Design Step-by-Step

This approach focuses on designing production systems with minimal waste and mitigating project risks.

Stages of the Production System Design Process


The kick-off event marks the beginning of the production system development. The objectives of this workshop are:

  • Establish a Solid Foundation for the Project: Launch the development of the production system, creating a robust base for the project’s success.
  • Align the Team’s Vision: Introduce the team, the project, the vision, goals, and overall strategies, providing a comprehensive view of the production system to be developed.
  • Establish Key Milestones: Define relevant milestones, creating a shared understanding of the timeline and identifying the workshops to be conducted to achieve the objectives.
  • Establish Commitment with a Contract: Complete a formal contract among critical stakeholders.

The project team should be multifunctional, including individuals from development, purchasing, production, logistics, and other relevant areas, thus promoting a collaborative and holistic approach.

This event is the starting point for the PSD team. The project presentation provides a comprehensive overview, addressing the rationale of the production system. At this stage, specific project goals are highlighted, providing a clear understanding of its purpose and strategic importance.

To ensure the team’s total commitment, a formal contract with all relevant project information is filled out and signed by all stakeholders. The contract is not static and should be periodically adjusted to align with the evolution of business requirements. This flexibility ensures that the production system remains adaptable to changes in the business environment, staying relevant and effective over time.


The assumptions workshop plays an important role in the development process of the Production System, providing a comprehensive understanding of the project and the contract. This phase aims to achieve several essential objectives, laying the groundwork for subsequent phases of DSP activities:

  • Balance Team Knowledge: Ensure all members of the DSP team have the same level of information about the project.
  • Foundation for Subsequent Workshops: The results of this workshop lay the groundwork for all subsequent DSP workshops, offering clear guidance for upcoming events.
  • Risks Awareness: Raise team awareness about existing risks, ensuring a proactive approach in mitigating potential challenges.
  • Initial Investment Strategy: Conclude the degree of automation from the basic concept of machines/equipment based on risk analysis and develop an initial strategy for subsequent investment steps.

This workshop evaluates project assumptions, including decisions on production location, procurement process status (in-house manufacturing/external purchasing), supplier capacity, quantities, product lifecycle, variants complexity, and other relevant topics.

A project risk assessment is also conducted, covering various areas like product lifecycle (technological leadership and degree of innovation in the market), sales volume, variants complexity, and regulatory and location factors (qualified personnel, wage levels, etc.).

Another point of discussion is the degree of automation; based on risks, it’s necessary to establish the degree of automation of the initial concept of machines/equipment. Finally, the initial investment strategy is defined based on the known premises at the time.

Design for Manufacturing and Assembly

Design for Manufacturing and Assembly (DFMA) is a crucial approach to optimizing the efficiency of the manufacturing process. This methodology aims to ensure that, during the initial phases of product design, there is enough flexibility for adjustments. The main objectives of this stage are:

  • Minimize Production Costs: Use a simplified, process-oriented product design to reduce production costs.
  • Achieve Safe Production and Assembly Processes: Ensure safe and efficient processes, promoting quality and consistency in production.
  • Minimize Planning Expenses: Reduce planning workload by supporting the Production System Design process early on.
  • Develop a Foundation for Subsequent Workshops: Establish the groundwork for the Line Concepts, Lean Line Design, and Process Failure Mode and Effects Analysis workshops.
  • Agree on Product and Process Concept: Ensure team consensus regarding the product and process concept, strengthening collective commitment.

The DFMA workshop begins with an analysis of assumptions (quantity scenarios, range of variants, dates, etc.) and an evaluation of the product concept (function, structure, component geometry, tolerances, etc.).

This is followed by creating a process chart, presenting all processes in sequence, including possible alternatives and impacts of variants, and defining process optimization actions (opportunities to simplify and improve production through targeted product design modifications). Individual processes are then assessed according to three main criteria: process capability, robust design, and orientation towards lean production, aiming at error prevention.

The findings are documented, recording problem descriptions, improvement measures, indicators, deadlines, and parties in charge on the DFMA worksheet. Finally, the results are compiled, summarizing the main conclusions and documenting critical issues for future actions.

The workshop’s outcome is a list of measures to optimize the product design to enable safe, economical, and simple production in compliance with the company’s criteria.

An additional result is a coordinated and evaluated process chart between production and development, which forms the basis for Value Stream Design and Lean Line Design.

Value Stream Design

Value Stream Design (VSD) is a tool for assessing and designing integrated flows of materials and information aligned with the factory vision and KAIZEN™ Lean principles.

This approach, in the context of DSP, includes two kinds of exercises:

  • Analysis and Design of the Global Value Stream: Examining all aspects of the value chain, from the customer to the supplier.
  • Process-Level Value Stream Design: Focusing on the details.

The main objectives of this event are:

  • Create a Clear Vision for a Lean Production System: Establish a clear understanding of the required production system aligned with KAIZEN™ Lean production principles. This implies defining the ideal process flow, identifying wastes, and establishing a vision that promotes efficiency, quality, and flexibility.
  • Identify Hidden Potentials for Optimization: Thoroughly analyze the value chain to identify improvement opportunities that may not be obvious at first glance.
  • Define Practical Actions Needed for Implementation: Develop practical and concrete measures to implement the envisioned design for the production system. The aim is to turn improvement ideas into tangible and effective actions.

This process encompasses defining the information, material, and logistics flows, detailing specific elements associated with each. The essential requirements for the concept and design of the production line are then established.

A strategy for zero defects is also developed, and planning assumptions are reviewed and updated to ensure their validity.

A preliminary draft for the flow of material, information, and logistics from the customer to delivery is created.

Finally, the production system requirements for suppliers are set, including delivery strategies for externally acquired parts. This process aims to ensure an effective and efficient integration of all elements in the production line.

Line Concepts

The Line Concepts workshop aims to evaluate various alternatives of line concepts and their operational times and estimate the needs of machines and equipment and associated costs. The idea is to build different scenarios for the line concept.

The objectives of this workshop are:

  • Minimize Investment Risks: Highlight the importance of phased investments to reduce risks.
  • Efficient Production: Focus on low-waste production lines, adjusted automation, and aim for high availability and flexibility.
  • Phased Investment Planning: Define the best investment phase for assembly and production systems.
  • Definition of Line Numbers and Production Concepts: Evaluate how many lines are needed and define the properties of production and assembly concepts (cycle time, automation, flexibility, cost).
  • Alternative Concepts: Develop various production concepts with adjusted automation and create an overview of concepts, natural cycle times, and estimated costs.
  • Selection of Solutions: Choose the best solutions and expand the data for the selected solutions with more detailed planning.
  • Cost Transparency: Provide transparency in spending for minimum and superior production capacities.

This systematic analysis aims to develop production concepts with an optimized investment ratio to production (natural cycle times). This allows for the targeted selection of a degree of automation for a single concept or a combination of different production concepts adapted to the product lifecycle.

Furthermore, successively developing alternative concepts allows for planning and preparing investment and expansion stages (if technically feasible) from the beginning. Systematic preparation and support for planning decisions and documentation of results lead to greater transparency in the planning process.

Production Lifecycle Planning

Production Lifecycle Planning involves evaluating different assembly concept scenarios, validating the line strategy, and defining the natural cycle time for the Lean Line Design (LLD) workshop.

The objectives of this phase are:

  • Evaluate Planning Alternatives and Investment Scenarios: Analyze various planning options, considering different investment scenarios throughout the product lifecycle.
  • Support the Selection of an Efficient Production Strategy: Support the choice of a production strategy that is efficient and adapted to the different phases of the product lifecycle, considering critical factors like costs, capacity, and flexibility to ensure an approach aligned with the project’s objectives and requirements.

In this workshop, production capacity is calculated for each concept from the Line Concepts workshop. Key cost factors for each item (investments, personnel costs, maintenance, etc.) are identified.

The maximum annual costs in the entire operation are calculated based on the identified cost factors. Various product lifecycle investment scenarios are generated, aligning with the investment strategy and defined quantity planning.

Sensitivity analysis examines how changes in requirements can affect the scenarios, considering best/worst cases. Additionally, the assessment includes non-monetary criteria, such as alignment with project objectives, adherence to principles, capacity flexibility, and risk management.

The final evaluation considers both financial and non-financial criteria. The goal is to select a scenario that balances cost efficiency and risk mitigation throughout the product lifecycle.

Lean Line Design

The guiding principles of Lean Line Design are eliminating waste, standard work, separating production and logistics tasks, and operator accountability. LLD aims to create flexible work systems that can be adapted to changes in customer consumption, using different numbers of operators. The objectives of this event are:

  • Reduction of Processing Times: Seek workflow efficiency to reduce task times significantly across the production line.
  • High Flexibility: Design lines that are highly flexible and capable of quickly adapting to changes in demand or production conditions.
  • Consistent Productivity (low variability): Focus on creating work environments that promote consistent productivity, ensuring efficiency and quality over time.
  • Low Investment: Seek optimization of financial resources, looking for design solutions that achieve operational efficiency with reduced investments.
  • Reduced Space Requirement: Plan layouts that minimize the need for physical space, promoting efficiency in the production environment.

LLD begins with preparation, including analyzing the outputs from previous workshops. Different topics, such as balancing, automation, and layout design, are examined during the workshop. A mock-up is also created at this stage to simulate the line.

Border of Lines are also sized, and required physical changes are planned. Finally, the data flow is defined.

Flow Oriented Layout

A flow-oriented layout (FOL) is essential in planning new lines. In the production process, machines and equipment (planned in LLD) are placed in a process-oriented order so that the outcome requires minimum transport effort and the highest level of transparency possible for prompt waste identification.

The FOL event is a must for material flow with shorter times, buffers, and batch sizes. The objectives of this workshop are:

  • Minimize Waste: Material supply with minimal waste, minimal transport distances, reduced movements, reduced storage periods, and minimum stock between and within processes.
  • Ensure Unit Flow: Smallest transfer quantities between and within processes.
  • Minimize Cycle Time: Short cycle times.

During the structuring of production areas with FOL, specific products, processes, and material flow data are assessed in the analytical phase—the value stream design and bubble diagram support structured acquisition and representation.

The location of logistic areas – supermarkets, FIFO routes, delivery areas, spaces for residual quantities – and the number of machines and equipment in the bubble diagram are key in determining space needs. This enables the generation of both rough and detailed layouts for the planned production system and integration into the factory layout and connections with the mizusumashi.


DSP is a valuable methodology for developing systems that seek to minimize waste and mitigate risks throughout the product lifecycle. By embracing each phase of this approach, organizations can create efficient production systems and maintain the required flexibility to adapt to constant market changes, thus solidifying their commitment to achieving operational excellence.

Still have questions about Production System Design?

What is MUDA, MURA, and MURI?

There are three Japanese words for different types of inefficiencies associated with production processes:

  • MUDA: Refers to wastes in the process that can include activities that do not add value to the final product, such as waiting periods or stock, transport or movements, defects, overproduction, etc.
  • MURA: Refers to variability in the production process that can cause instability and inefficiencies.
  • MURI: Means overload or excess. It relates to imposing excessive loads on machines, equipment, or people, leading to production beyond standard capacity and causing problems.

What is Value Stream Design?

Value Stream Design (VSD) is an approach that aims to optimize the value flow in a chain. It involves mapping and analyzing all the steps involved in creating and delivering a product or service, identifying wastes, inefficiencies, and opportunities for improvement. The goal is to create a more efficient workflow and eliminate activities that do not add value to the customer. Mapping involves both the flow of materials and information.

What is a Process Chart?

A process chart represents the order of assembly and material incorporation. It begins with the main component, to which all other components will be connected. The pace of incorporation of each element should also be represented. Only value-adding operations are depicted.

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