The major attraction of a Product Family oriented Business Unit (PFOBU) is the time and cost performance achieved by targeting a relatively small, well-defined, highly-focused set of products and processes and a well-defined group of customers. PFOBUs are fairly small in size (the actual size depending on the product and market) and focused so they are fairly easy to manage.
PFOBUs don't have the features of large monolithic corporations (such as numerous layers of hierarchy, large staff groups, multiple product lines, departmental fiefdoms, managers supplying conflicting information) that make it impossible for their corporate management to understand what is happening or what actions will lead to improved performance.
The clear focus on a limited range of activities makes it easy to develop a coherent Engineering vision, strategy and plan for a PFOBU. It's almost obvious which metrics should be used and which targets should be set. It's relatively easy to introduce TQM because the organization is by definition clearly focused on a particular set of customers, and it's very clear what has to be done to satisfy them.
A PFOBU focuses on a single product family. Within the family there may be several product lines, but all the products are basically similar. This means there are similarities between the specifications, parts, drawings, manufacturing processes, assembly techniques, and distribution channels.
At any given time, two, three or even more generations of the family may be under development. Once the first generation of the family has been developed, the cost and time to develop succeeding products will decrease. The second generation may re-use 75% of the parts used in the first generation, so there is a tremendous reduction in design work, process design, and verification. There is no need to re-invent the wheel for each new product.
A PFOBU focuses on a single product family, so it can also focus on a single product development process. This results in a better understanding of the process, how it can be improved and where most value can be added. The parts of the process where the PFOBU does not, for some reason, want to carry out all activities internally can be outsourced - probably to world-class suppliers. The process can be continuously improved. The PFOBU gets more and more competitive, closer and closer to customer requirements.
Because they focus on one product family, the people in the PFOBU get to know their product in depth. They don't run the risk of being transferred to projects on completely different products with completely different requirements. Instead, through training and experience they learn how to make a valuable contribution to their product line. Everyone learns about the process. They know who does what, what has to be done, where everything is, and how things are organized.
Successful PFOBUs make use of concurrent engineering, product development teams, a phased development process and a well-defined development methodology. At each stage of the process - concept, feasibility, development, production, launch, support and recycling - cross-functional team members work together for the good of the family. The milestones and goals of each phase are defined in advance, and it is only when everyone agrees they have been attained that the next phase is started.
Because PFOBUs focus on one product family, the best equipment, such as machines and computer systems can be purchased, installed and optimized. It can be cost-justified over several generations of the product family, not just on one project.
Because PFOBUs focus on one product family, planning and scheduling is much easier. There is no longer the need to continually switch resources between projects on completely different products. It's easier to plan to have the right resources available when they are needed. It's easier to plan ahead, since so much is already known about the next generation of the product
In a PFOBU, people want to make use of existing parts. An Engineering Data Management / Product Data Management (EDM/PDM) system will provide information, ranging from specifications to user documentation, about existing products, parts and processes. It will allow people to re-use or make small changes to an existing part rather than design a completely new one. It will allow them to see what problems have occurred in the past, and will help them to avoid repeating them.
In a PFOBU, information is shared among team members. An EDM/PDM system makes information available according to their rights to access and modify it. In a global PFOBU, people may work on the same project in different countries, maintaining close contact with customers throughout the world. It is difficult to maintain control over concurrent processes and information use in multiple locations. An EDM/PDM system makes it possible to support global information usage and international workflow.