PRODUCT DEVELOPMENT

Successful product development results in product that can be produced and sold
profitably.
Dimensions (important five) commonly used to assess the performance of a
product development effort- which ultimately relate to profit.
Dimensions:
1) Product Quality : How good is the product- does it satisfy customer needs- is it
robust and reliable ?

Reflected in market share and

price customers are willing to pay.

2) Product Cost : What is the manufacturing cost of the product,it includes spending on
capital equipment, tooling and incremental cost of producing each unit.

Determines how much profit accrues

for a particular sales volume and price

3) Development Time: How quickly did the team complete the product development
effort.

Determine the responsiveness to competitive forces and to

technological developments as well as how quickly the firm
receives economic returns from the teams effort

4) Development Cost: Spending to develop the product.

Is usually a significant
fraction of the investment
required
5) Development Capacity: Is the team/firm better able to develop future products
(as a result of their experience with a product
development project?).

Is an asset the firm can use to

develop products more effectively
and economically in the future.

There are other performance criteria at times; for example: third party may
demand that the product make ecologically sound case of resources and create
minimal hazardous waste products.
Product development is an interdisciplinary activity requiring contributions from
nearly all the functions of the firm; however three functions are always central to
a product development profit:
That is
1. Marketing
2. Design
3. Manufacturing

Marketing :
a) Mediates interaction between the firm and its customers
b) Facilitates the identification of product opportunities.
c) defines market segment
d) identifies customer needs
e) sets the target price
f) co-ordinates the launch and promotion of the products.
Design :
a) Define the physical form of the product to meet the need
b) Includes (i) Engineering Design ( Mechanical, Electrical, Software
etc)
and (ii) Industrial Design (aesthetics ergonomics, user interface
etc)
Manufacturing:
a) Responsible for designing and operating the product system (in order
to produce the product)
b) Includes usually the supply chain, comprising of purchasing,
distribution and installation.

The factors (challenges) of the Product Development

a) Trade-offs : A car can be better fuel efficient but the cost will go up. (
Recognising; understanding and managing such trade-offs to maximise the
success of the product)
b) Dynamics: => changes
1. Technologies improve
Decision
2. Customer preferences change (evolve)
making in
3. Competitors introduce new products
changing
environment is
4. Macro economic environment changes
a formidable
task

c) Details: Such as type of fastening.

(Decision on details)- Developing a product with even modest
complexity may require thousands of such decisions.
d) Time pressure: Product development decisions must usually be made quickly
and without complete information.

e) Economics : large investment required for developing, producing and marketing

a new product to earn ROI (Return on Investment) the product must be
appealing to customer and relatively inexpensive to produce.
A well defined product development process is useful for the following reasons :
Quality Assurance : Check point in the development process assures the quality
of the resulting product.

Co-ordination : A clearly articulated product development process acts as a

master plan which defines the roles of each of the members on the development
team.
Planning :A development process contains milestones corresponding to the
completion of each phase which anchors the schedule of the product
development project.

 Management : By comparing the actual events to the established process, a

manager can identify possible problem areas.
Improvement : The careful documentation of the product development process
helps to identify opportunities for improvement.

PRODUCT DEVELOPMENT PROCESS

Phase 0
Planning

Assessing
opportunity
&
Product
Planning

Phase 2 Phase 3
Phase 1
System Detail
Concept
Design
development level
Design

Phase 4

Phase 5
Testing
Prod.
And
Ramp-Up
refinement

Identifying
Customer
needs
Product
Specifications
Concept Gen.

Concept
Selection
Concept
Testing

Product Architecture
Industrial

Design
Design

For

Prototyping
Robust Design

Manufacturing

The Product Planning

Process

Whose outcome is the

mission statement for
concept development
phase
Mission statement specifies :
Target market of the
product
Business goals
Key assumptions
constraints

Identify
opportunity

Evaluate
and
Prioritize
projects
Portfolio of
project

Allocate
Resources
and Plan
Timing
Product plan

Mission statement
Complete
pre-project Concept development
phase
planning

Concept development
phase
Identify
customer
needs

In the concept development phase,

the needs of market are identified,
alternative product concepts are
evaluated and concepts(s) are
selected for development and
testing.

Establish
target
Spec.

Generate
Product
Concepts

Select
product
concepts

Test
product
concept

Set
final
spec.

Plan
down
stream
development

Perform economic analysis

Benchmark competitive product
Build and test model and prototypes
A concept is a description of the form, function and features of
a product, accompanied with specifications, an analysis of
competitors product and economic justification of the product.

System level design

System level
design phase
System level design phase includes the description of
Product Architecture
The documentation of the into subsystem and
components
Assembly

Geometric layout of the product

Fundamental spec. of subsystem
Preliminary process flow diagram of
assembly process

Input for

Detail
Design

Detail Design phase includes:

Complete specification of the
a) Geometry
Of all the unique
b) Materials
parts of the product
c) Tolerance
Identification of standard parts from suppliers
Process plan established
Tooling is designed for each part to be fabricated
Two critical issues

addressed in this
phase :
Product cost
Robust
performance

Control documentation of the product

The drawings or computer files describing the geometry of
each part and production tooling
The spec. of purchased parts
The process plan for fabrication and assembly of the product.
Input for

Testing and
refinement phase

Testing and refinement phase involves:

Construction and evaluation of multiple preproduction versions (prototype) of
the product

Early (ALPHA) prototypesbuilt with production-intent

parts (with some geometry and
material of the production
version). But not necessarily
fabricated with the actual
process to be used in
production

Later (BETA) prototypes- built with

parts supplied by the intended
production processes. But may not be
assembled
using intended
final
assembly process. this is done to check
the performance and reliability in order
to identify necessary engineering
changes in the final product.
Final stage

Production Ramp-Up
To train work force
Workout problems in production process