How to connect reliability goals to business objectives
Reliability goals provide you and your team a focus for the reliability program. They provide a measurable way to design, test, and maintain systems that meet customer expectations.
A goal of any kind in a business is relatively easy to set and publish. They are not easy to entwine into the culture of the organization so the objectives desired by achieving the goal become a meaningful focus. A product development team may have hundreds of pages of specifications and a long list of priorities and objectives. Simple listing a reliability goal, no matter how clearly stated, may not be sufficient to garner the interest of your team.
Simple listing a reliability goal, no matter how clearly stated, may not be sufficient to garner the interest of your team.
There are a few traits of goals that command attention in an organization. Creating reliability goals that have these traits may help your team engage and focus on achieving the product reliability goals. Let’s focus on the traits of important and connected.
Any team working to create a system has thousands of tasks, from design concept to sourcing packing tape. Not all the decisions are the same as not all are critical to the product’s success. It is common in project management to include broad priorities for making the myriad of decisions.
A team working on a consumer device that sells well during the holiday season will likely focus on time to market as the top priority. A team working on improving the profit margin or toward achieving a specific cost target will focus on costs, naturally. And, a team creating the product built around the technology (new features, capabilities, etc.) will focus on the implementing and inventing what is needed to create the desired functions.
a specific cost target will focus on costs, naturally. And, a team creating the product built around the technology (new features, capabilities, etc.) will focus on the implementing and inventing what is needed to create the desired functions.
In each case, product reliability may or may not be important, or received as important. The stated priority is time, cost or function and other tasks have to garner attention as resources permit.
How to tell what’s important
First, listen to your management discussions. What commands the most attention, questions, or stories? Does senior management as for status updates and what is on the top of the first page or slide?
Second, listen to your team and the decision criterion. When considering a component to add to the design, what information is necessary to frame the decision?
Third, what are the thresholds that determine when something is ‘important’. If 50% of prototypes fail within a few days due to construction quality issues, then prototype quality becomes a priority. If cost estimates exceed the target costs by too much, then cost becomes the priority. If a product fails in an unexpected and dangerous way, then safety increases dramatically in importance. Each aspect of a product has a threshold to trigger additional attention. The highest priority aspects have very sensitive thresholds.
Fourth, how is the team being rewarded? If there are bonus payouts when the products ships on time, then time to market priority has an added incentive to become the top priority.
Business Objectives and Reliability
The establishment of clear reliability goals includes meeting customer and business expectations. For example, part of the profitability equation for a product includes the expected cost of warranty or service. Improve the reliability performance generally reduces warranty expenses and improves profitability. Setting a reliability goal related to the duration of the warranty connects that specific goal to the product’s profits estimates. The reliability goal is connected to specific business objectives.
For example, part of the profitability equation for a product includes the expected cost of warranty or service. Improve the reliability performance generally reduces warranty expenses and improves profitability. Setting a reliability goal related to the duration of the warranty connects that specific goal to the product’s profits estimates. The reliability goal is connected to specific business objectives.
While many products have an expressed interest in creating a profit, that may not be the priority during the development process. The means to achieve the desired sales and profit may focus on time to market, cost, or functions, for example.
Thus, a reliability goal that is not clearly connected to the development team’s priorities is just another goal or specification. It is not part of the priority focus. So, let’s connect the reliability goal to what is important.
Team focused on cost
For a team focused on cost, including the cost of failures in the discussion.
Provide the cost per unit warranty claim or product return to the expected failure rate values. This permits the calculation of the impact of different decisions on the cost of the product. You may need to expand the definition of cost, from just the bill of material cost used to create a single product, to include the cost to the company for the expected failure of that product.
One way to do this is to estimate the warranty cost per unit, which sets the warranty expense in the same units as component costs.
Team focused on time to market
For the team focused on time to market, connecting the ability to address reliability issues (threshold triggering reliability problems) earlier in a program enables the team to address and solve the problems well before the launch date is imminent.
Also, connect the product reliability goals to the cost of field failures, as it becomes a balance between solving a reliability problem that may delay a program at the cost of lost sales, with the expense of the cost of failures/warranty and potentially lost sales due to brand damage (think social media).
Team focused on function
And with a team focused on function, connecting the reliability goals to the customer’s acceptance of the new product and functions is in part on the ability to benefit from that function actually working over the time of ownership.
For a product to be truly successful in the market they have to sell systems beyond the early adopters (Crossing the Chasm by Geoffrey Moore). Early adopters will tolerate faulty products in order to be among the first to experience a new function or feature.
The rest of market has less patience.
Even when reliability is not an expressed priority by connection the impact of system reliability on the dominant priorities you can elevate the importance of reliability. With a little additional information or analysis, reliability becomes a natural part of the decision-making process as your team considers how to achieve their business objectives.
Reliability Goals (article)
3 Elements of Reliability Goal Setting (article)