Organization and Management Background

Organization

Grove Worldwide is an industrial lifting equipment manufacturer that is privately owned by Keystone Inc., a financial institution.  The company manufactures mobile hydraulic cranes and self-propelled aerial work platforms, and their mission is “to be recognized by our customers for providing superior products and services and the quickest response time in the industry.”

Grove markets their industrial lifting equipment to the construction industry worldwide with distribution in more than 125 countries on six continents, and the company achieves this goal through the sale of lifting equipment to distributors, large house accounts, and the Government.  Distributors make up the largest percentage of sales.  They can be large rental companies such as Anthony Crane, All-Erection, and Amquip, or they can be the distributors such as Coast Crane, Gleason, and ICM/ACM which sell the lifting equipment to the private industry.  Large house accounts include companies like Dupont who purchase the equipment for use at their own factories.  About 5-6% of the company’s sales come from bids on government contracts.  Grove bids on government contracts both directly as the main contractor and indirectly as subcontractor to the main contractor.  When Grove bids directly for a government contract, they subcontract the Integrated Logistic Support, ILS, due to limited resources, capabilities, and time.  ILS specializes in the development of system models and system analysis.  Some examples of ILS that Grove subcontracts to are Booz-Allen & Hamilton Inc., STV Group, and O’Neil & Associates.  Grove will also perform government work by subcontracting to the main contractor.  Some examples of companies that Grove has subcontracted to for government work are Oshkosh Truck, Stewart & Stevenson, United Defense, and FMC Corporation.

Competition plays a major factor in the sale of the equipment, since Grove competes in a worldwide marketplace with many other companies who are trying to sell to the same distributors, house accounts, and government contracts.  Major competition in North America comes from Link-Belt and Terex, while European and Asian competition includes companies such as Liebherr and Tadano.  This competition is responsible for driving the prices of the equipment down and increasing the functionality and quality of the product.

However competition is not the only factor of influence, the selling of industrial lifting equipment is a cyclical process that is also based on both politics and nature.  The political side of retail depends on interest rates, import/exports, and the country’s economy in general.  Lift equipment generally follows the same economic indicators as the road construction and earthmoving industries.  Nature plays a role when a society has to rebuild after natural disasters such as earthquakes and flood which will increase the demand for lifting equipment.  Manmade disasters such as war and construction failures have the same effect on the industrial economy as natural disasters.

Management

In order to develop and build lifting equipment for the marketplace, the organization focuses it’s resources on four major aspects:  product development, product manufacture, product distribution, and after market product support.  These aspects are controlled by an Integrated Product Development (IPD) process that “can be described as a cross-functional, multi-discipline concurrent team approach to product development.”  This process is defined by six main stages with approval gates defining the end of one stage and the beginning of the next stage. (See Figure 1)

 Figure 1:  IPD Process Overview

The first stage of the IPD process is Forward Project Planning, Gate #1.  At this level, new product concepts are evaluated and compared to market information and the business strategy. (See Figure 2)  This process is utilized to develop a Product Line Proposal for the next five years that forecasts which products will be developed and when the resources will be allotted to develop them.  This Product Line Proposal is reviewed quarterly, and the product concepts that prove to be a profitable business move will pass to Gate #2.

Figure 2:  Forward Project Planning

Project Planning and Conceptual Design, Gate #2, begins with the formation of the IPD team and official launch of the new product. (See Figure 3)  The IPD team develops project requirements and then a conceptual design.  This conceptual design is used as a tool to test the project requirements and establish how these requirements can be met.  The findings from this level are used to develop the detailed design of the product in Gate #3.

Figure 3:  Project Planning and Conceptual Design

Detail Design, Costing, Product Integration, and Optimization, Gate #3, is the third stage in the IPD process.  At the beginning of this stage, the IPD team creates documentation necessary to build prototypes and production units of the new product, and the product design is optimized through product evaluations. The development of both the product and the process as well as preliminary versions of manufacturing, marketing, and customer support’s deliverables should be completed at this stage.  Before any of the materials are ordered for the prototypes, the details of product design are evaluated in a final design review. (See Figure 4)

Figure 4:  Detail Design, Costing, Production Integration, and Optimization

The Prototype Build and Test, Gate #4, verifies the project requirements, product design, and manufacturing process developed in Gate #3.  This stage also includes the development of required tooling, process plans, and assembly methods that will be needed for the Production stage. (See Figure 5)

Figure 5:  Prototype Build, Test Activities, and Customer Documentation

Pilot Build and Final Documentation, Gate #5, completes the documentation for the product by creating pilots units.  Final documentation at this stage includes training personnel, scheduling, coordinating components, and developing final assembly layout.  Sales and distributor training is also completed.  At the end of this stage, the product is ready for production. (See Figure 6)

Figure 6:  Pilot Build and Final Documentation

The final stage of the IPD process is Production, Gate #6.  Full-scale production of the product includes loading orders, building the units, optimizing the manufacturing process, reviewing the costs, and monitoring quality.  This stage ends with the project final report and IPD review. (See Figure 7)

Figure 7:  Production

Major software tools used in the implementation of the IPD process are Baan and Structural Dynamics and Research Corporation’s IDEAS, SDRC.  Baan is an Enterprise Resource Management system.  Baan applications are used to support design, manufacturing, distribution, and financial operations.  SDRC is a 3D computer aided design, CAD, system.  The IPD process uses SDRC to design, test, document, and manufacture the product.

Along with the use of software tools, there are several key groups of people who participate in the IPD process; these groups are Process Owners, Team Leaders, Core Team Members, and Support Team Members. (See Figure 8)

Figure 8: The Design Team

The Process Owners consists of individuals from New Marketing Development (NMD), New Product Development (NPD), and Order Management (OM).  The team members report to the Company President and participate in the projects on a part time basis (as required).  Their responsibilities include the following:

The Team Leader is committed full-time to the IPD Team and reports to the Process Owners.  The Team Leader may come from any of the involved process areas, Marketing, Engineering, Manufacturing, Accounting, and Service.  Their responsibilities include the following:

The Core Team Members consists of one individual from each of five process areas listed above.  Marketing is responsible for communicating with customers to find out exactly what is wanted in a product and conveying these design specifications to Engineering.  Engineering is responsible for the product’s design and uses these design specifications to produce a design that will meet the customer’s needs.  Manufacturing is responsible for designing and building the tooling required for the build of the design and for overseeing production.  Accounting is responsible for tracking the project costs.  Service is responsible for servicing the design after the product has been shipped to the customer.  Core Team Members report to the Team Leader and are committed to the IPD Team full-time.  Member responsibilities include the following:

Support Team Members consist of individuals from the five process areas and report to their corresponding Core Team Member and/or Process Area Management.  Individuals work on projects on an as required basis.  Their responsibilities include the following: