Case studies
 
 
 
 
 
 
  
  Case studies
TSS (UK) Limited
Robert Manson - Managing Director
Jim Ramshaw - Engineering Manager
 
The Company, its products and customers
We are based in Witney, Oxfordshire with offices in Aberdeen and a USA base in Houston. Sales in 1998 will be more than £7 million with 48 staff on the payroll.
A core strength is the ability to offer a rapid and comprehensive 24 hr a day, 7 days week clients support service anywhere in the world. This uses a network of 32 representatives in 26 countries together with TSS staff.
We concentrate on developing dynamic motion and target detection technologies, which form the basis of a range of specialist products for the marine market. These include motion sensing, heading, positioning, pipe survey and cable survey systems. They are installed on some of the world's most advanced vessels.
Our customers are mainly operating companies carrying out activities such as underwater survey work. A large number are OEMs. A typical example manufactures large sonar systems. Our sensor is a key element in their product, so they are naturally interested in our developments now and in the future. They are also keen to discuss their future developments and the associated requirements that will be demanded of our technology. We brand-engineer our product for them.
Another example: we are developing a pipe and cable tracking system. It's a two-year development programme, technically advanced and close to completion. A number of clients are desperately keen to get their hands on it because the new product will give them more capability. They are offering support to test it, which will require an underwater vehicle and support ship.
Continuous strategy development
We take great care to make sure that everyone understands what we are doing and where we are going. And we encourage everyone to contribute.

- formal and informal team building activities
We take great care to make sure that everyone in the company understands what we are doing and where we are going. And we encourage everyone to contribute. We aim at building an effective company team by continual open communication and discussion, through formal and informal meetings.
Every six months we have an away-day for everyone. The MD gives a strategic overview and the whole management team answers questions that staff have submitted beforehand. Each department team nominates a member to describe the team's personal targets, their projects, the challenges they face, and the help they need from other departments to achieve them. Other presentations and activities are included to inject fun into the proceedings.
Every 3 to 4 weeks we have a staff lunch with a number of presentations. At the last meeting we discussed ISO9001, had a general review of the business performance and reports from those who attended training courses.
Each morning the managers, or representatives from their departments, meet informally for 10 minutes. We review day-to-day problems and get the departments to resolve them rapidly by working as a team. Longer-term strategic issues do crop up. These are either tackled immediately or more commonly dealt with at the monthly management meeting.
Every month we hold the formal managers' meeting. All the managers report on each project in graphical form, showing targets, man-hours spent, cost, and resource needed to complete the project.
After reviewing day-to-day problems, we move on to strategic issues. How are we complying with the business plan, what are each department's targets for the year-end? We also debate an opportunity or threat from the strategic plan SWOT analysis. For example, we recently spent a couple of hours discussing the threat of low oil prices. Around 35% of our sales come from offshore oil business. So if oil prices collapse, how will it affect our business? What could we do about it?
From that meeting came two sound ideas for new products, one for fast ferry stabilisation and one for deep sea fishing boats. We are now doing desk studies to develop a marketing plan and, if the studies prove positive, a product development plan.
Keeping the business plan current
We continually develop and refine our strategic plan to maintain its relevance.

This is how we continually develop and refine our strategic plan to maintain its relevance. We find it more effective than sitting down once a year, creating a strategic plan, then waiting until it's up for revision next year!
From our plan, we identify requirements for particular sensors. These are reviewed at the monthly management meeting. We prioritise and plan new products on a simple graphical chart headed Add at least one new application each year. We test each new application against our strategy. We examine the product development requirements, staffing levels, marketing and selling issues. Some projects may be cradle-deaths; some may be viable to develop into new products. One such example is related to sensing the motion, position and heading of a sub-sea vehicle or structure.
The tabulation also includes potential projects that we shall evaluate in more detail. Although many ideas may look promising, we can't do everything. We concentrate on our core business skills.
A business plan is developed from the strategic plan. They are integral documents, showing actions for each department for the year. For example R&D are to complete the DMS2 and Deeptrack projects, hire additional staff and so on.
The output from these monthly management meetings provides a full briefing on the strategic plan for the full board meeting every month.
Evaluating new product opportunities
Before we spend any time and money on developing a product, we evaluate its potential. This is a detailed three-phase process to evaluate the risks and opportunities.

We are market-led. We talk to customers every day, analyse new product opportunities and investigate new markets. But before we spend time and money developing a product, we evaluate its potential. This is a detailed three-phase process to evaluate the risks and opportunities. The assessment will depend on the type of product and where it fits, either within one of our existing markets or a new market. It applies whether the product is an in-house idea or from a customer. The evaluation is the first stage of the new product development process.
Phase 1: The senior management team examines the idea to see whether it could be viable. Initial filtering must be good because phase 2 takes resource away from other work. We need to be really sure that it's worth proceeding.
The phase 1 specification that R&D get for their phase 2 evaluation is always inadequate. That's why it's so important for the senior management group to analyse the key issues thoroughly. We used to use a checklist to formalise this process but it was not sufficient: people will tick off points without sufficient consideration. So we made people sign off the key issues. That ensures the right level of analysis and commitment; the result is far more thorough.
Phase 2: If the answer is positive, we move to the heart of the process: getting solid market feedback to convince ourselves it's viable. We discuss and examine it in detail with potential customers, using a non-disclosure agreement. If that looks positive, we review the return on investment:
- we evaluate the market and estimate sales;
- R&D estimate the time and resource to develop it;
- finance estimate costs and cash flow;
- production evaluate how feasible is it to make the product, the manufacturing implications including any special processes.
We rely on effective teamwork to achieve the level of confidence we need. R&D must have faith in the MD and the Commercial Director's initial assessment of markets and customers. In turn they must believe that R&D will competently evaluate that the proposed specification is feasible within the target cost and time. And that finance will do their detailed task in predicting costs and preparing the discounted cash flow and return on investment.
From this, we know the potential returns and costs in detail. It tells us whether the project is worth pursuing or not. Most importantly, it avoids committing resources on non-viable products.
Phase 3 presents the proposal to the Board to get it rubber-stamped. Having been approved by the Board, the next phase is to design and prove the product prior to manufacture.
Once a product is released, we track its sales performance and review its return on investment. This allows us to improve our estimating process by evaluating how good our initial estimates were.
Project management in product design and proving
We carefully project manage co-development projects with key suppliers. But we retain all the core technology: that is what our engineers concentrate on.

Co-development with suppliers:
We always retain and work on all our products' core technology ourselves. But more than half our products' content is designed and developed by key suppliers. We carefully manage the co-development process. For example, the supplier of a sophisticated gimbal assembly for heave-motion sensors integrates their design team as part of ours. We also sub-contract particular items such as software and mechanical design.
All our development engineers must therefore have project management skills to be able to design our products. Half our development teams are other companies' employees, in our suppliers and sub-contractors.
Even our most junior development engineers manage small, short time scale projects. They can say their piece without fear of more senior engineers putting them down. Starting as junior project managers, they feel the effects of not meeting project milestones more acutely than their colleagues on more major projects do. The open atmosphere has proved to be highly effective.
Our manufacturing parallels this approach. This year our sales will be in excess of £7 million with good margins; but we employ only 48 people. We do not manufacture components or sub-assemble them. We do the final assembly and have full testing facilities, kept very much in-house.
Team working
Daily and longer term, we manage our teams to ensure they are committed and effective. Our flat departmental structure helps that. We assign an engineer as project manager for each project. As and when required, they draw on the expertise of others. Each member has specific skills and expertise.
We do a lot of teamwork with a lot of interchange of labour. For example, some from service will work in production and vice versa.

Flexibility: We do a lot of teamwork with a lot of interchange of labour. For example, some from service will work in production and vice versa. When a product is in its final stages of development, some production staff will work in R&D on the structure and final assembly of the product. They may well modify it to make it easier to build. Then, to minimise disrupting other R&D work, we select an R&D engineer to give production support when a product moves into production.
Everyone sets their own targets. Sales staff will strive to respond to a quotation request in 24 hours; service department quote for repair costs within 48 hours; development engineers set themselves demanding milestones.
Allocating resources: Resourcing projects is organised weekly, each Monday morning. It is milestone driven. The whole development department reviews the previous week's work and the project milestones that are due in the next week. They examine it in the context of the longer-term milestones for each project. They then set intermediate milestones in the forthcoming week and assign responsibility for each.
Managing partnerships with suppliers
The relationship with suppliers and sub-contractors has to be mutual. You give them information and involve them in developments up-front. And you have to be robust enough to let them know you are not a soft target to be exploited.

We work closely with our 40-50 suppliers, about one supplier for each member of staff! We are reducing the number of suppliers and giving each of them more work to do. We involve them in the development phase, so work passes between company and supplier as part of the team. We expect and rely on their honesty and loyalty - working with them as partners - because their non-performance and delivery will affect ours.
The relationship with suppliers and sub-contractors has to be mutual. You give them information and involve them in developments up-front. And you have to be robust enough to let them know you are not a soft target to be exploited. The suppliers themselves have to be able to buy-in to that. We don't shop around. They know that if they work with us in the development phase and their pricing and quality are good, they are guaranteed our work.
Suppliers fall into major component suppliers and sub-assembly suppliers. British Aerospace is a major component supplier for example, fundamental to our products. They are involved in our development work; their feedback is essential for us to optimise our design.
Quality is the supplier's responsibility. We have installed test facilities into each of our main suppliers including British Aerospace: any PCB delivered here will already have been tested with the relevant software installed.
Developing variants on established products - specials.
A new product needs the full product development process. But creating a variant does not - there is clear distinction. We have learnt that separating these two activities is important.

New product development is an investment for the company's future. So all variants must either be profit making, chargeable to the client; or maybe a loss leader if it leads to further opportunities.
A new product needs the full product development process. But creating a variant does not - there is clear distinction. We have learnt that separating these two activities is particularly important because of our size.
To do this, we created a Systems and Product Support Group. They interface with production, are close to production problems and to the release of new products into production. They are a gateway between R&D and Production.
We used to have only one form for all new product developments. There was a backlog of about 40. But only two were new products that needed the complete process. The rest were specials! So the new group now quotes for and project manages all customer specials. This has had a major beneficial effect on our long-term product development programme.
In the past, every time we had an enquiry for a special, engineers were taken off important critical projects for a few days. They would consider the special, write a specification for Sales, and do all the planning to make it happen.
A Systems and Product Support Group project manages all variants. This avoids major disruptions to the new product programmes. The engineers working on key projects no longer have to deal with a constant stream of minor interruptions.

Now, the Systems and Product Support Group engineers project manage them all. If they determine that the special needs say three hours of software time, they can arrange to use the software engineer for three hours. This avoids major disruptions to the new product programmes. The engineers working on key projects no longer have to deal with a constant stream of minor interruptions.
They also use sub-contractors extensively to achieve rapid turn-around, because commonly specials are not core technology. They can make modifications by sub-contract without disturbing long-term developments. This is far cheaper than disrupting engineers on long term projects
Improved documentation
Traditionally we have had specific experts on specific products with a lot of knowledge in their heads. Now, with the flat R&D department structure, we try to involve most of the department to spread the knowledge around. We also ensure that enough of that knowledge is recorded on the project files, in the product specification, design specification and test specification.
This allows the product to continue to be supported even if the engineer leaves or is working on another project. It also enables the engineer to get on with new product development and the Systems and Product Support Group to modify existing products for customers' specials.

Summary of key issues:
Achieving fast and effective product development
We use six effective rules to get the performance we need:
1 The flat structure of the R&D department: everyone is a project manager for something.
2 Be milestone-led to achieve work targets and time scales.
3 Use a single point to handle specials that would otherwise interrupt long term development. This permits minimum disruption of key new projects and allows us to meet our milestone targets.
4 Identify suppliers and sub-contract companies that have the capability, skill and ability to assist and work closely as part of our team on product development work. Develop a partnership arrangement.
5 Achieve a company culture of commitment and enthusiasm throughout the whole company. As part of this, do ISO 9000 internal audits. Use the Sales Manager to do the R&D audit; and the R&D Manager to audit Production. This leads to good understanding across departmental boundaries!
6 Give everyone responsibility for setting their own objectives and targets. Instil the understanding that, to be more effective, they must respond to the needs of their own department and make use of knowledge in other departments.
 

All the elements of what this company did are part of a methodology you can learn - adaptable to any product development project from the totally new to just a small change. Develop products that customers clamour to buy. Cut the cost of developing them. Cut the cost of manufacturing them. Drastically reduce the time it takes to develop them. Learn how...
 
Dr C B Mynott, Managing Director, TICS Limited