the characteristics of product platform development projects

JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement

Peter Harland & Zakir Uddin

The Characteristics of Product Platform Development Projects

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Liberec Economic Forum – LEF 2013

Peter E. Harland & Zakir Uddin

16 September 2013Liberec, Czech Republic



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Dr. Peter E. HarlandJunior Professor in Innovation Management and Entrepreneurship

Joint Master degree in Business Aministration andElectrical Engineering and PhD at TU Darmstadt, Germany

Research Assistant at TU Darmstadt and TU München 10 Years selfemployed

(Consulting and Publishing House) Endowed Junior Professorship in Innovation Management and

Entrepreneurship at TU Dresden, International Institut Zittau Head of Master Program Project Management



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IntroductionProject types as success factor in product development

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Source: Revolutionizing Product Development Wheelwright & Clark,1992, p. 93

Platform or Next generation

projects

Incremental orderivative projects

Extent of product change

Ext

ent o

f pro

cess

cha

nge

Breakthrough or Radical projects

Researchprojects New core

productNext generationof core product

Additionto product

family

Derivativesand

enhancements

New coreprocess

Next generation

process

Singledepartment

upgrade

Tuningand

incrementalchanges


Peter Harland & Zakir Uddin4

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OverviewThe Characteristics of Product Platform Development Projects

Product platforms Product platform development projects (PPDP) Expected effects, decisions, Risk management in PPDP Conclusion



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Product Platform Principle

ProductPlatform

(same parts)Pro

duct

A

Pro

duct

B

Pro

duct

C

Pro

duct

D

Pro

duct

D

Pro

duct

A

Pro

duct

B

Pro

duct

C

A collection of modules or parts which are common for a number of products, and this commonality is developed intentionally to attain certain effects; own definition based on [McGrath 1995] [Meyer and Lehnerd 1997]

A the collection of assets [Robertson and Ulrich 1998]



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Examples of product platforms

Product platforms are a well-known concept in industry:– Skoda/Volkswagen automotive platform (Karlsson and Sköld, 2007), e.g. MQB

Octavia/Golf

– Sony Walkman platform (Sanderson and Uzumeri, 1995)– Black & Decker power tools platform (Meyer and Utterback, 1993)– Hewlett Packard’s Deskjet printer platform (Meyer and Lehnerd, 1997)– Intel Microprocessor (Cusumano and Gawer, 2002)

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Service Platforms

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Service Platform

(same processes)Pro

cess

A

Pro

cess

B

Pro

cess

C

Pro

cess

D

Pro

cess

D

Pro

cess

A

Pro

cess

B

Pro

cess

C



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Motivation for product platforms

Modularization with same parts in all products, scaled parts, product specific parts and/or customized parts

Standardization of moduls (e.g. using norms) to achieve economy of scale Diversification of moduls to reach new customers

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Individualization of products Standardization of products



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Standardization

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Product Platform Development Project Framework

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Source: Modification from Harland and Yörür (2011)

Product Platform Development Project (PPDP)

Decisions

Externalfactors

Targets:increase

ofprofitand

marketshare

Productplatformeffects

Product Development Project (PDP)

Definition and development ofproduct platforms

Company (or profit center)

Steering Committee

Project Manager PM

Internalfactors



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Product Platform Development Projects (PPDP)vs. Product Development projects

PPDP are much more future-oriented than product development projects (PDP) i.e. ‘visionary’ in nature [Cooper 2001]

PPDP occur early in the life cycle (Tatikonda, 1999). PPDP’s Output is not a new product, but pieces or elements that enable

the development of subsequent products” (McGrath 1995). Longer development time for initial product based on a new platfom

(McGrath 1995) Shorter development time for products based on existing platform Usage phase of a platform is often longer than the usage of single

products (Meyer & Utterback, 1993). PPDP’s results have to be accepted by a limited number of internal

customers: Project leader of product development projects PPDP entail more product and process changes than derivative products.

(Koen, 2005)

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Product platforms Product platform development projects (PPDP) Expected effects, decisions, risk management in PPDP Conclusion



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Challenges and decisions in PPDP

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Synergies

Diversity

.

Development

Innovation Diversity

Development

Production

Production

Several products without platform

Standard product

.

.

.

Development

Development

Development Production

Production

Production

Methods platform

Samecomponents

Same moduls (platformstrategy)

(standardization)



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Literature research

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0 10 20 30 40 50 60

Increase qualityReduce customer lead time

Cover global marketImprove design flexibility

Reduce (product) costsIncrease product variants

Reduce development costsReduce time to market

Reduce production costsCover multiple market segments

Effects described in industry cases (n=67)

Effects describedin arguments (n=318)

67 paper, 385 identified effects, after classification 27 effects, top 10 of these are displayed



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Platform Effects

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Reduce logistic costs

Reduce procurement

costs

Reduce development

costs

Improve design flexibility

Coverglobal markets

Decrease

costs

Increase

profit

Increase revenue

Increasecompetitive advantage

Increasevolume

IncreasePrice

Production costs

Reduce risk

Reduce complexity in production

Increase product variants

Eco

nom

y of

sca

le

Strategic option: decrease price

Development costs

Competitive advantage

Reduce productioncosts

Company overheadis not considered

Reduce complexity in

design

Improve production flexibility

Reduce time to market of products

Improve global operations

Increase quality

Covermultiple market

segments

Reduce production lead time

Simplify marketing,

salesand service

Sales, Marketing and Service costs

Reduce sales, marketing and service costs

Reducecustomer lead time

Decrease investment risk

Use resourcesefficiently

Improve coherenceof products

Reduce customizing

lead time

Reducequotation lead time

Increase marketshare

With impact onconsist of with optional impact

Effects found in productplatform literatureother effects



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Reduction ofDevelopment costs

Platform Effects

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Decrease

costs

Increase revenue

Increasevolume

IncreasePrice

Reduction ofProduction costs

Eco

nom

y of

sca

le

Strategic option: decrease price

Increase ofcompetitive advantage

Reduction ofSales, Marketing and

Service costs

Increasemarketshare

Decrease costs

Increaserevenue

Increaseprofit



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Fuzzy targets: Platform variants funnel

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idea

idea

ideaidea

idea

idea

ideaconcept

product familyPlatform Variants FunnelIdea Funnel

marketCustomer Input



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Platform variants funnel

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idea

idea

ideaidea

idea

idea

idea

customer integration

customer ideas

project management decisions

concept

product family

customer surveys

Platform Variants Funnel

sales activities

Idea Funnel

core platform definition and variant dimension definitionplatform strategy (frequency of module usage)

target market definitionfunction definition

platform roadmap definition

variants and options specification

sales information

goods and service bundling

interface strategy

market entry strategy

synergy related decisions

market related decisions

price strategy

platform strategy (communality)

technology usage

marketCustomer Input

p roduct family definition

platform project strategyb uilding blocks strategy

variants and options definition



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Risk Management in Platform Projects

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Product platform development project (PPDP)

risk management

Future platform based product development projects (PDP)

PPDP risk identification

PPDP risk analysis

PPDP risk response planning

PPDP risk monitoring and control

PPDP risk reporting Transfer

Identification of expected effects

Future customerrequirements

Estimation of expected effects

Proactive / reactive measures

Anticipation



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– Product Platforms are important for companies to solve actual problems– Expected effects, decisions, Risk management are different than in regular PDP– Scientific literature about PPDP is still limited

• this paper contributes to further research by structuring the problem– Knowing the characteristics of product platform helps companies to be aware

of possible situations and to deal with them easily as PPDP have• high complexity• high number of interactive decisions• uncertainties in technologies and customer requirements



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Thanks for your attention

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Harland Team in a Platform Project, 2012

the characteristics of product platform development projects

Documents

zittau und

product development3source

tu darmstadt

innovation management

tu dresden

risk management

certain effects

collection of assets