new product development. what is product development all about? “product development is the set of...
TRANSCRIPT
New Product Development
What is product development all about?
“Product development is the set of activities
beginning with the perception of a market
opportunity and ending in the production, sale,
and delivery of the product”
Ulrich & Eppinger, 2002
Some products…
Stanley Tools Jobmaster Screwdriver
Rollerblade In-Line Skate
HP DeskJet Printer
VW New Beetle Automobile
Boeing 777 Airplane
Annual Production volume
Sales lifetime
Sales price
Number of unique parts
Development time
Internal development team (peak size)
External development team (peak size)
Development cost
And their development efforts..
Product Development Strategy
Task: Define a well-defined product development process and propose a product development organization that will allow your company to compete effectively over the next decade.
• Is there a standard development process that will work for every company?• What milestones will be used to divide the overall product development process
into phases?• What role do experts from different functional areas play in the development
process?• Should the development organization be divided into groups corresponding to
projects or to development functions?
Product Development Process
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Ulrich and Eppinger 2004Generate mission statement(target market, business goals,key assumptionsand constraints)
ExampleMission: “design a better hand-held roofing nailer”Assumptions:The nailer will use nails (as opposed to adhesives, screws, etc.)The nailer will be compatible with nail magazines on existing toolsThe nailer will nail through roofing singles into woodThe nailer will be handheld.
Product Development Process
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Ulrich and Eppinger 2004Identify needs of target market;Select several product concepts for further development and testing
Example Needs of target market:The nailer inserts nails in rapid succession.The nailer is lightweight.The nailer has no noticeable nailing delay after starting tool.
Product concepts:Rotary motor with spring and single impactRotary motor with spring and multiple impactsLinear motor with a moving mass and single impact
Product Development Process
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Ulrich and Eppinger 2004Define product architectureDecompose product into subsystems and componentsDefine final assembly scheme
Product Development Process
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Ulrich and Eppinger 2004Complete specification of geometry, materials and tolerances of all partsList of standard parts to be purchasedDetailed drawingsProcess plans for fabrication and assembly
Product Development Process
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Building of alpha- and beta- prototypesalpha: same material and geometry - does it work? - does it satisfy customer needs?beta: parts supplied by production process - tested internally and by customers - tested for performance and reliability
Product Development Process
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Small volume production to train workforce and work out any remaining problems.
Finally…
LAUNCH!!
Variations to Product Development Process• Market pull products
– Market opportunity to technology, e.g. sporting goods, furniture– Uses generic process
• Technology push products – Technology to market opportunity, e.g. teflon, gore-tex– Concept development takes technology as given
• Platform products – Built around existing platform, e.g. consumer electronics, printers– Concept development assumes proven technology platform
• Process intensive products– Product constrained by production process, e.g. semiconductors, chemicals– Product and process developed from start
• Quick build products– Rapid modeling and prototyping, e.g. software, cell phones– Many design-build-test cycles
• Complex systems– System includes many subsystems and components, e.g. airplanes, jet engines– System and subsystems developed by many teams working in parallel
Some products…
Stanley Tools Jobmaster Screwdriver
Rollerblade In-Line Skate
HP DeskJet Printer
VW New Beetle Automobile
Boeing 777 Airplane
Annual Production volume
Sales lifetime
Sales price
Number of unique parts
Development time
Internal development team (peak size)
External development team (peak size)
Development cost
And their development efforts..
Stanley Tools Jobmaster Screwdriver
Rollerblade In-Line Skate
HP DeskJet Printer
VW New Beetle Automobile
Boeing 777 Airplane
Annual Production volume 100,000/year 100,000/year 4M/year 100,000/year 50/year
Sales lifetime 40 years 3 years 2 years 6 years 30 years
Sales price $3 $200 $300 $17000 $130M
Number of unique parts 3 35 200 10,000 130,000
Development time 1 year 2 years 1.5 years 3.5 years 4.5 years
Internal development team (peak size)
3 people 5 people 100 people 800 people 6800 people
External development team (peak size)
3 people 10 people 75 people 800 people 10,000 people
Development cost $150,000 $750,000 $50M $400M $3B
Some development efforts
• Plot development cost against the other rows and see if there is any correlation. Why or why not?
Food for thought..
What drives product development costs?
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# parts
development cost
What drives product development costs?
Internal team size x duration
development cost
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0 2000 4000 6000 8000 10000
What drives product development costs?
Total team size x duration
development cost
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Market issues…
“Rather than compete with the super jumbo (a 550-seat cruiser by
Airbus), Boeing has decided to concentrate on a smaller, faster
‘sonic cruiser’. So the petty snipping of old has been replaced by
a genuine battle of philosophies: on one side is size, on the other
speed”
The Economist, July 2001
Technical issues…
… “advance fuel cell-vehicles, could have a profound effect on
vehicle manufacturing - perhaps setting the stage for the
reinvention of the automobile business. One of the biggest
hurdles is the development of safe and effective on-board
hydrogen storage.”
L. D. Burns
Vice President of R&D, General Motors
Resource issues…
“AstraZeneca has to rein in some of its most promising drug
candidates because of lack of resources to develop them
simultaneously”
Claes Wilhelmsson
Head of R&D, AstraZeneca
• Marketing– Mediates interactions between firm and customers– Identifies product opportunities– Defines market segments– Identifies customer needs– Oversees launch and promotion of product
• Design– Lead role in defining physical form of product to best meet customer
needs– Includes engineering design and industrial design
• Manufacturing and supply chain– Designs and operates the supply chain in order to produce the product
from procurement to distribution
Who is Involved in Product Development?
• Product quality– How good is the product?
• Product cost– What is the capital equipment cost and unit production cost?
• Development time– How quickly did the team complete the effort?
• Development cost– How much did the firm have to spend to develop the product?
• Development capability– Are the team and firm better able to develop other products?
Characteristics of Successful Product Development
• Trade-offs– Lightweight vs costly
• Dynamics– Technologies, customer tastes, competition change environment
• Details– Screws vs snap fits on enclosure of computer
• Time pressure– Decisions made quickly and without complete information
• Economics– Large investment – will it pay off?
• Organizational realities– Team composition, empowerment, functional allegiance, resources
Challenges of Product Development
Design Changes over Time
Quality Function Deployment
• A method to translate customer requirements into engineering specifications
• Aims to get design, engineering and production people involved early on in the process
Quality Function Deployment
Quality Function Deployment (QFD)
Quality Function Deployment (QFD)
Quality Function Deployment (QFD)
Quality Function Deployment (QFD)
Quality Function Deployment (QFD)
Organizational challenges
• How should the product development team operate?
Project-Based Organization
Marketing Engineering Operations
Project Manager
Project Manager
Project Managers have
more power
“Heavy Weight” Project Manager
Project 1
Project 2
Functional-Based OrganizationMarketing manager Engineering
Functional managers have more power
Operations manager
Project 1
Project 2
Project 3
Project 1
Project 2
Project 1
Project 2
Project 3
Project 4
Matrix Organization
Marketing manager R&D manager
Project 1
Project 2
Engineering
Proj
ect M
anag
erPr
ojec
t Man
ager
Pros and consFunctional Matrix Project
Strength Fosters specialization and expertise
Provides integration and speed benefits
Optimal resource allocation, quick trade-off resolution
Weakness Coordination among groups can be slow
Requires more managers and administrators
Difficulty maintaining functional capabilities
Example Slight variations to custom design
Many recently successful projects in automobile, electronics, aero
Start-up companies, dynamic markets, to achieve breakthroughts
Major issue How to integrate different functions to achieve a common goal.
How to balance functions and projects. How to evaluate project & functional performance.
How to maintain functional expertise over time
Final Word…
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
PlanningConcept Development
System-level Design
Detail Design Testing and Refinement
Production Ramp-Up
Product development is a process and it can be managed!!