nikitin artur seminar paper final
Post on 18-Jan-2017
91 Views
Preview:
TRANSCRIPT
TAMPERE UNIVERSITY OF TECHNOLOGY
Faculty of Business and Built Environment
ARTUR NIKITIN
FULLY FUNCTIONAL MOCK-UPS AS A TOOL FOR COST REDUCTION
IN THE PRODUCTION PROCESS
Seminar Report
ii
Nikitin, A.
ABSTRACT
Nowadays, companies are trying to get competitive advantage. To achieve it,
companies, among other things, want to have cheaper products than competitor.
Thus they use product development processes to create new products. Companies
also are using prototypes during this process to estimate potential cost of a product
and.
The objective of this paper is to introduce fully functional mock-ups as a tool for
cost reduction of an existing product by the improvement of a production process.
This paper is trying to show the importance of early feedback which fully
functional mock-ups provide in case of improvement of production process.
The final outcome of the paper shows that fully functional mock-ups are an
efficient tool for a cost reduction of a lunched product. Moreover, the potential
impact of these reductions is analyzed.
iii
Nikitin, A.
PREFACE
Paper discusses types of prototypes, product development process and applying
fully functional prototypes to improve production.
I would like to thank Dr. Jouni Lyly-Yrjänäinen for his advices and ideas according
to this paper.
Tampere, December 2015
Artur Nikitin
iv
Nikitin, A.
TABLE OF CONTENTS
ABSTRACT ______________________________________________________ ii
PREFACE _______________________________________________________ iii
1 INTRODUCTION ____________________________________________ 1
1.1 Background __________________________________________________ 1
1.2 Objective of the Paper __________________________________________ 1
2 PROTOTYPES AND MOCK-UPS ______________________________ 3
2.1 Definition of a Prototype ________________________________________ 3
2.2 Different Types of Prototypes ____________________________________ 3
2.3 Mock-ups ____________________________________________________ 5
3 COST IMPLICATIONS OF PRODUCT DEVELOPMENT _________ 7
3.1 Product Development __________________________________________ 7
3.2 Cost Implication _______________________________________________ 8
3.3 Importance of Early Feedback ___________________________________ 9
4 MOCKUPS AS TOOLS IN PROCESS DEVELOPMENT __________ 11
4.1 Fully Functional Mock-ups _____________________________________ 11
4.2 Not Committed Cost __________________________________________ 12
4.3 Impact of Early Feedback ______________________________________ 13
5 CONCLUSIONS ____________________________________________ 15
REFERENCES __________________________________________________ 16
Nikitin, A.
1
1 INTRODUCTION
1.1 BACKGROUND
Nowadays, it is highly important to make products as efficient as possible. This
includes quality, satisfaction of customers’ needs and of course cost level of a
product. However, there is small opportunity to reduce cost level of existing
product.
New requirements force manufacturing companies to undergo a revolution in the
way they are doing things. One of the biggest changes is related to the process
development, which is most important in terms of long range competitiveness in
the market (Atkinson et al., 2004). However sometimes process development takes
enormous period of time and huge investments, and all of a sudden managers
realize that this innovation, for example, in the manufacturing process, does not
work properly. Thus, to make sure that the innovation will work in a right way,
managers could build prototypes or mock-ups. Moreover, these tests help to
understand how this innovation could be improved.
Mock-ups are the initial prototypes of a product and their aim is to understand the
functionality of the final design. A mock-up is designed and produced in order to
test a product without building or buying it. There are various reasons to start with
mockups while implementing a process innovation. These are generally: (1) mock-
ups are economically cheap, (2) generally easy to produce and (3) give the close
results with the real products. Therefore, a considerable amount of money and time
can be saved with mock-ups. (Smith, 1999; Treder, 2012)
Moreover, Karimian (2013) introduced fully functional mock-ups. They are more
complicated than simple mock-ups and copy all functions of a product. However,
they are still cheaper than prototypes.
1.2 OBJECTIVE OF THE PAPER
Prototypes and mock-ups play a huge role in the product development process and
a make serious impact on costs. However, it also could be possible to reduce cost
of a production process. Therefore the objective of the paper is…
… is to introduce fully functional mock-ups as a tool for cost reduction of
the production process
Nikitin, A.
2
The second chapter aims to present definitions as well as a process of prototyping
and introduces mock-ups. In third chapter, product development and cost
implication are explained. Finally, the fourth chapter provides benefits of using
fully functional mock-ups for reduction costs by improving production of a
product.
Nikitin, A.
3
2 PROTOTYPES AND MOCK-UPS
2.1 DEFINITION OF A PROTOTYPE
According to Ulrich and Eppinger (2012) prototypes are an approach to the final
product along with one or more range interests. They also say that it could be a
drawing, computer or plastic model, or it could also be almost a copy of the final
with all functions and features. Hence, a prototype could be made from substitute
materials or material close to the final version.
A prototype is a physical instantiation of a product used to help to find and solve
possible problems during the product development (Otto and Wood, 2001). Thus,
prototypes mostly are used in product development process.
There are two most important reasons which motivate companies to use prototypes.
First, prototyping is good to understand is new product or innovation works in a
proper way and how it could be improved. Second, completed prototype could be
used to present a product (Yang and El-Haik, 2009).
Moreover, prototyping provides advantages through reducing costs and saving
time, because creating a prototype is always faster than making a fully working
product (Smith, 1999). Although sometimes prototypes in the latest stages could be
expensive, in a long run they reduce the cost of a final product (Szczecinki, 2013).
2.2 DIFFERENT TYPES OF PROTOTYPES
In the 1970s and early 1980s, the demand to prototypes was quite high and thereby
using them in all stages of product development lead to higher cost (Otto & Wood,
2001). Thus, there was a need to have different types of prototypes to apply them in
different situations. According to Ulrich and Eppinger (2012) prototypes can be
classified into two dimensions. The first dimension according to Dutson & Wood
(2005) is that prototypes are divided into analytical and physical prototypes with
own advantages and disadvantages. Therefore, tests of a development can be done
through a combination of both virtual and physical prototypes.
Nikitin, A.
4
Figure 1. Prototyping Categorization (Adapted from Yang & El-Haik, 2003).
According to Otto and Wood (2001), generally, a physical prototype is a
simplification of a product concept. They also claim that the most usable types are
experimental, alpha, beta, and pre-production prototypes. Experimental prototypes
should be made as simply, cheaply, and quick as possible, since the focus is aimed
to copy general ideas of the product. Materials and geometry could be similar to the
final product. However, alpha prototypes are fabricated from the materials and with
shapes which designers considered good after doing experimental prototypes and
which might be used for the final product. Alphas also usually include some
functional features for testing and measurement of the product as a system. On the
other hand beta prototypes are the full-scale functional prototypes of a product
which was made with the same materials and look the same, although they are not
necessarily constructed using the same production process. In the end,
preproduction prototypes are the final class of physical models. These prototypes
are used to show the final version of a product, which is done with actual
production line. On the other side, analytical prototypes represent a product via
intangible, usually mathematical or visual, manner. Here features of a product are
mostly analyzed, rather than built.
The second dimension is the degree to which a prototype could be comprehensive
or focused. A comprehensive prototype represents most or all of the attributes of a
product while focused prototypes implement one or a few of the features of a
product (Ulrich and Eppinger, 2012).
Since there are different types of prototypes, they are used in different situations
and to solve different issues, according to Ulrich and Eppinger (2012) there are
three main goals why prototypes are used: learning, communication and
integration. They mentioned that prototypes are used to understand will the product
work and how well it meets the customer needs. Hence it is learning goal. The
Nikitin, A.
5
second goal is communication; prototypes help to communicate to top managers,
partners or team members. The last one is integration. It is used to ensure that
components of a prototype are working properly together and to present the
prototype.
It is evident, that each type of a prototype is better for one goal while other is more
appropriate for another. Moreover, some prototypes could achieve several goals.
Figure shows the types of prototypes and their goals.
Figure 2. Appropriateness of different types of prototypes for different purposes
(Adapted from Ulrich and Eppinger, 2012).
Thus, when prototypes become more complicated, they could serve for more goals.
While simple prototypes such as paper or mathematical could achieve only leanring
goal. Alpha and more complicated physical prototypes are widely applicable.
2.3 MOCK-UPS
Mock-up is a slightly different term than prototype. Mock-up is usually a visual
design that represents the structure of information, visualizes the contents, and
demonstrates the basic functionalities; aim is to encourage people to review the
visual side of the projects. (Treder, 2012)
Prototypes are more commonly used for testing, while mock-ups are usually
designed for feedback from stakeholders. However, depending on the industry or
product, mock-ups can be considered and used as prototypes.
Communication Integration Learning
Focused analytical
Focused physical
Comprehensive physical
More appropriate
Less appropriate
Nikitin, A.
6
When considered in general, there are four major benefits of using mock-ups for
product development. These are:
Faster process (Smith, 1999; Deflorin et al., 2012)
Cheap process (Smith, 1999; Deflorin et al., 2012)
Ease of implementation (Smith, 1999)
Ability to notice flaws beforehand (Chaffee, 2012)
First, mock-ups are fast processes when the whole process or product development
is considered. Since mock-ups should not be the fully functional copy of the final
product, it can be much simpler. Second, mock-ups are cheap because there is no
need to create them from the same material as the final product, for instance it
could be build from wood or even from lego, since the idea of using mock-ups is to
understand basic principles of the innovation and visualize it. Third, the ease of
implementation is another benefit of mock-ups. Since a mock-up is not a copy of a
final version, it should not be complicated than rather just a simple model. Finally,
mock-ups enable designers to notice their flaws in the logic of designing and fixing
them. When the prototyping begins, it will be more difficult hence costly to notice
and fix these flaws (Chaffee, 2012). According to these, it is possible to estimate
which goals mock-ups could satisfy in the best way. This is illustrated in the figure
below.
Figure 3. Appropriateness of different types of mock-ups.
It is evident that mock-ups close to experimental prototypes, since they have
similar goals. Thus, they could be applied in the same cases.
Communication Integration Learning
Mock-ups
More appropriate
Less appropriate
Nikitin, A.
7
3 COST IMPLICATIONS OF PRODUCT DEVELOPMENT
3.1 PRODUCT DEVELOPMENT
Nowadays in the world of high competitiveness it is extremely important for
companies to make their product as efficient as possible. Thereby, companies focus
on their product development. According to Ulrich & Eppinger (2012), product
development is the set of activities starting with the idea or opportunity and ending
in the production or sale of a product. Furthermore, Otto & Wood (2001) add that
this set includes also business case analysis, marketing efforts and technical
engineering design activities. They also claim that development process include
manufacturing process, when the product are physically made.
However, many companies have failed in their product development, because of a
wrong sequence of actions (Cooper, 2008). Thus, a simple guidebook was
suggested and developed mainly by Robert Cooper, which consists of several steps
aiming to increase the efficiency of the product development process (Gadegaard,
2010). Cooper (2008) explains that in the Stage-gate model (Figure 4).
Figure 4. Stage-gate model (Adapted from Cooper, 2008).
According to the figure, stage-gate model consists of 5 stages and 5 gates and the
post launch review in the end. Each gate is needed to estimate information collected
during the previous stages and to make new ideas which could be applied in future.
The first stage is scoping. Generally small groups of people with some technical
and marketing knowledge begin the research with estimating of preliminary market
situation, technical and business ideas. The second stage is focused on deeper
research which leads to building a business case. This stage consists of a more
Nikitin, A.
8
detailed analysis including market research, technical and manufacturing
assessment, study of financial and business aspects. Usually in this stage more
competent team is required.
The third stage is development. During this stage plans from previous steps are
executed. Usually there could be some simple test with customers using prototypes.
Moreover, this stage includes creating a marketing plan. The fourth stage is testing
and validation. This phase consists of several tests which aim to find issues with a
new product, furthermore, some marketing and sales trials. As a result the product
is absolutely validated and ready for production. The final stage consists of full
production and market launch.
3.2 COST IMPLICATION
One of the main goals of product development, except the creation of a useful
product which satisfies customers’ needs is to create this product as cheap as
possible according to chosen quality. It is important since, according to Turney
(1991), 60-80% of costs are already locked in by the time the product design is
completed. Moreover, Figure 5 illustrate that, by the time the design of the
production process is completed, these numbers increase to 90%.
Figure 5. The critical role of design (Adapted from Turney, 1991).
According to Atkinson et al. (2004), committed costs are those that a company
knows it will have to incur in a future date. Thus, during process development, the
opportunity for cost reduction is huge (Turney, 1991). Belay (2009) also supports
the idea that 80 percent of the costs are usually determined before the design stage
of a product is finished. Moreover, he claims that the impact of cost improvement
activities becomes insignificant in later stages of product development. It is
supposed that the cost impact of design stage could be ten times more effective
than during the manufacturing stage. Applying Turney’s idea to the stage-gates
model (Figure 6) it is evident which stages have more impact on cost.
Process design
Product design
0% 100%
Committed cost
Not committed cost
Nikitin, A.
9
Figure 6. Stage-gate model and committed cost.
According to the figure first two stages have the biggest impact on committed cost.
Thus, companies should pay more attention in early stages of product development,
on the other hand, it should not be forgotten that in the latest stages there are also
opportunities for cost reduction.
3.3 IMPORTANCE OF EARLY FEEDBACK
According to Atkinson et al., (2004) committed costs accumulate in early stage of
product development. Figure 7 shows an example of cost behavior during the
product development process.
Nikitin, A.
10
Figure 7. Committed cost through the product development process (Adapted from
Atkinson et al., 2004).
Thus, the decisions which were made in the first stages have huge impact on costs.
According to Ulrich & Eppinger (2012) one of the most challenging things in
product development is to recognize, understand and manage trade-off such as
increase quality of the product by using more expensive material or use the cheaper
one. They also claim that these difficulties would be easier to manage if there wes
plenty of time, however, product development decisions are made quickly and
without full information.
Moreover, according to Turney (1991) cost information is usually reported too late,
hence it cannot impact on reduction of committed costs. Furthermore, companies
typically test their product too late and too little, thus, they do not have enough
information to estimate real cost and decide is it approximate level for them (Loch
and Kavadias, 2011). Hence, there is a need of early feedback, which could help
product development team to estimate potential costs or realize issues which the
product might have. This feedback might be from customers of this product or from
any type of prototype which product development team could make or from the top
managers of a company. Each type of feedback could bring different useful
information and will have positive impact on quality or cost, depends the goals of
the product development team.
Nikitin, A.
11
4 MOCKUPS AS TOOLS IN PROCESS DEVELOPMENT
4.1 FULLY FUNCTIONAL MOCK-UPS
It was discussed in previous chapters that prototypes divided in physical and
analytical prototypes, however in categorization madden by Yang & El-Haik
(2003) there is a gap between experimental and alpha prototypes. Sometimes it is
not possible to estimate all functionality of a product using experimental prototype
and on the other hand it is difficult and too expensive to build alpha prototype,
thus, according to Karimian (2013) fully functional mock-ups should be used.
Because they could show almost whole functionality of the finished product and
they could be made of a cheap material. In Figure 8 the position of fully functional
mock-ups is shown.
Figure 8. Positioning of fully functional mock-ups (Karimian, 2013).
Thus, using fully functional mock-ups it is possible to achieve more goals then
with usual mock-ups. It is shown in Figure 9, that fully functional mock-ups could
be uses as comprehensive prototypes.
.
Figure 9. Appropriateness of fully functional mock-ups.
Introducing fully functional mock-ups Karmian (2013) claims that they should be
used in the second stage of product development process, since they are fast and
cost efficient solution for testing different types of product, however they are also
Communication Integration Learning
Fully functional mock-ups
Prototypes
Pre-production
Beta
Alpha
Experimental
Physical
Fully
Functional
mock-up
Nikitin, A.
12
comprehensive enough to estimate future costs. Thus, among other positive
moments, fully functional mock-ups provide early understanding of product cost or
in other words they provide early feedback of future committed costs and hence
companies have opportunities to reduce them. However they also could be used in
any other development process. For instance, Hatmann and Klemmer (2006) claims
that prototyping is the core activity innovation, collaboration and creativity in any
design.
4.2 NOT COMMITTED COST
However, sometimes companies underestimate the cost saving of early testing and
evaluation, and when they try to solve issues of the product in late stages of the
development process it costs 100 times more than in the early stage (Thomle,
2003). Although, it is important to remember that even the product is already
designed and the production line is designed to according to Turney (1991) there is
steal opportunities for cost reduction, since 10% of cost are not committed yet.
Because changes in the product are impossible or quite expensive the best way to
decrease cost is to make the production process more efficient (Belay, 2009).
According to the Figure 10 the impact on the cost is indeed small, however, even
this could bring the potential advantage against the competitors, and since they may
have the same product and production process even 5% reduction of the product
cost is important.
Nikitin, A.
13
Figure 10. Committed and incurred cost on product life phase (Belay, 2009).
In figure below it is shown, that actions that may reduce this 10% could be done in
latest stage of product development process or even after product has been
launched. Thus in Figure 11 not committed costs are shown.
Figure 11. Not committed cost in the end of product development process.
On the other side, it is evident that it might take a lot of investment to improve
production, thereby companies and managers often do not try to find tools which
would have influence on this 10%. Moreover, most of the existing literature of
prototypes and mock-ups are focused on cost reduction of product during early
stages of product development, however fully functional mock-ups excellent fit for
this role.
4.3 IMPACT OF EARLY FEEDBACK
It was previously discussed that fully functional mock-ups provides different
benefits for the product development process such as early feedback and costs
estimations. These benefits are highly important in case if fully functional mock-
ups are used for improving exciting production. Also, since it is not relevant to
invest huge money for making a research to find the way for improvement
production, cheap cost of mock-ups is crucial.
First goal of mock-ups is learning, so if there is an idea for an improvement in
production mock-ups are the best tool to understand cheap and fast ‘Will it work or
not’. Second is integration helps managers estimate how much money will this
innovation cost, it should not be forgotten, that the costs reduction will not be huge,
thus estimation of the cost shows is it relevant to invest in this improvement or not.
Nikitin, A.
14
Third is communication. It is also important, since managers could influence on
people who decide in company their invest money, that invention is working well
and do not requires huge investments. Thus, using fully functional mock-ups to
improve production is an effective tool and could potentially impact on cost of
already launched product up to 10%.
Nikitin, A.
15
5 CONCLUSIONS
In today’s business market competition becomes fierce and companies to stay in
business need to develop product which will be not only satisfies customer needs,
however also would be cost efficient. Using prototypes during product
development process could have positive impact on costs, however, companies
often do not realize that there are opportunities for cost reduction in late stages of
product development or even after a product has been launched.
The objective of the paper was to introduce fully functional mock-ups as a tool for
cost reduction of an existing product by improvement of production process. For
this purpose the types of prototypes were discussed. Then, product development
with its processes was explained and the behavior of cost during stages of
production process was analyzed. In last chapter, fully functional mock-ups were
introduced and their application for improvement production of a product was
discussed.
The key findings of the paper show that companies are able to reduce cost of
development process of already launched product by using fully functional mock-
ups. The most valuable benefit of fully functional mock-ups is that they allow
receiving feedback fast and cheap.
Nikitin, A.
16
REFERENCES
Atkinson, A.A., Kaplan, S.R., Young, S.M., (2004). Management accounting.
Fourth edition. New Jersey Prentice Hall. Pp. 288-289
Belay, A.M. (2009). Design for manufacturability and concurrent engineering for
product development. World Academy of Science, Engineering and
Technology. P. 49
Cooper, R.G., (2008). Perspective: The Stage-Gate® Idea-to-Launch Process-
Updated, What’s New, and NexGen System. Journal of Product innovation
Management, 25(3), Pp. 213-232
Chaffee, H., (2012). 4 advantages of Prototype Models.
Deflorin, P., Dietl, H., Lang, M. & Scherrer-Rathje, M., (2012). The lead factory
concept: benefiting from efficient knowledge transfer. Journal of
Manufacturing Technology Management. 23 (4). Pp. 517–534
Dutson, A.J., and Wood, K.L., (2005). Using rapid prototypes for functional
evaluation of evolutionary product designs. Rapid Prototyping Journal. 11
(3). Pp. 125– 131
Gaderaard, H., (2010). Controling New Product Development: A study of the style-
of-use of Stage-Gate as Management Control System. Copenhagen
Business School. Pp. 10-12
Hartmann, B., & Klemmer, S.R., (2006). Reflective physical prototyping through
integrated design, test, and analysis. In Proceeding of the 19th
annual ACM
symposium on User interface software and technology. Pp. 299-308
Karimian, M., (2013). Mock-ups as new stage in stage-gate model. Tampere
University of Technology. Pp. 25-40
Loch, C.H., and Kavadias, S., (2007). Handbook of New Product Development
Management. Butterworth-Heinemann. Pp. 401-417
Otto, K.N., and Wood, K.L., (2001). Product design. New Jersey Prentice Hall. Pp
840-842
Smith, P.G., (1999). The business of rapid prototyping. Rapid Prototyping Journal.
5 (4). Pp. 179–186
Szczecinski, S., (2013). Changes in costs while designing mock-ups and prototypes
to achieve efficient prototyping. Tampere University of Technology. P.11
Treder, M., (2012). Wireframing, Prototyping, Mockuping – What’s the Difference
Designmodo.
Turney, P.B., (1991). Common cents: The ABC performance breakthrough: How to
succeed with activity-based costing. Hilsboro, OR: Cost Technology. Pp.
8-10
Ulrich, K.T., and Eppinger, D.S., (2012). Product design and development, fifth
edition. New York: McGraw-Hill. Pp. 2-3. Pp 290-300
Yang, K., and EL-Haik, B.S., (2003). Design for six sigma. New York: McGraw-
Hill. Pp. 184-186
Nikitin, A.
17
pe. University of Milano. Pp. 1-5
top related