Lecture 3 - Product Planning

3rd Section - Learning objectives
SECTION 3 (11.00 - 11.45):

Choosing the right projects
Product Planning and Platforms
To be able to:
1. Define the different types of new product developments in relative terms. 2. List the 2 Li t th 5 stages of the product planning t f th d t l i process. 3. Explain what is meant by a product platform. 4. Apply portfolio management techniques.
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DTU Management Engineering, Technical University of Denmark
27690 Introduction to Project Management
June 2011
Types of New Product Development

Enhancement product improvement: Modify features to keep product competence- familiar market Slight change to address any flaws EXAMPLE: Software updates Derivatives of existing product platforms: Extend existing products into a new market Use of new modules onto an existing platform EXAMPLE: Creative N EXAMPLE C ti New A Apps for the I h f th Iphone New product platform: Major development (but familiar markets and product categories) Create new family EXAMPLE: Iphone3 to Iphone4 Breakthrough products: Radically different product or technology new market More risk EXAMPLE: Virgin Galactic Space Programme
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Exercise (in pairs)
Derivative
Breakthrough
Try to come up with an analogous example for drug developments for each of the following product types:
Enhancement product improvement
Mark kets
New
Existing
Enhancement
Platform
Derivatives of existing product platforms New product platform Enhancements products
Incremental Innovation
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Radical
Adapted from Betina Von Stamm (Managing Innovation, Design and Creativity)
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Product Development Process
How is a product development project initiated?
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Product Planning Process
Identify Opportunities Where do ideas for new projects arise?

Marketing and sales personnel R&D Product development teams Manufacturing / Operations Customers Third parties
Also referred to as Portfolio management
Each promising opportunity written in a short statement and stored in a database
Identifies the portfolio of products to be developed by an organization and the timing of their introduction to the market
What is a portfolio ?
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Evaluate and Prioritise Market segmentation: consider customers and competitors Technological trajectories: when to adopt a new technology Product platform planning
Evaluate & Prioritise: Competitive Strategy
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Evaluate & Prioritise: Technology Trajectory S-curves
Evaluate & Prioritise: Technology Trajectory Technology Roadmap
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Evaluate & Prioritise: Technology Trajectory Product-Process Change Matrix
Evaluate & Prioritise: Platform Planning
Product Platforms are a base for deriving a stream of derivative products. are base on either a common product architecture or a set of reusable modules.
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Case Study Xerox: Project-Product timeline
New Platform Derivatives
Portfolio Management
Enhancement Breakthrough
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Why do we need portfolio management?

Maximise return & R&D productivity (for financial goals) Maintain competitive position Allocate resources efficiently Link project selection to business strategy Focus not too many projects but instead resourcing projects, great projects Achieve balance- long term projects v short term, high risk v low risk Communicate priorities within organisation Better objectivity in project selection
Cooper, Egdett, Kleinschmidt
Portfolio Management: Popularity of methods used
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Financial Method
Business Strategy Method
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Bubble Diagrams / Portfolio Maps
Scoring Model
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Rolls Royce: Portfolio Map (civil engines)
The best compared to the worst
have explicit, established methods for portfolio management have management buy in, and support through their actions have clear rules and procedures for methods treat all projects as part of a portfolio consistently apply methods across all appropriate projects rely less on financial method alone use multiple methods Results are strategically aligned, have a high value portfolio, the right number of projects and result in good time-to-market
Source: Rolls-Royce website
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Complete Planning: Resource Planning
Capacity Utilisation U
Reproduced from (Wheelwright and Clark 1995)

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Product Planning Process

Objectives of product planning is to address: What product development projects will be undertaken? What mix of projects? - New products, platform or derivatives How do the projects relate to a product portfolio? How to time and sequence product development projects?
Complete Pre-project Planning
Factors to be considered in a mission statement: Market segments (new diseases, illnesses, customer needs) New technologies (new enzymes, mechanisms) Manufacture and service goals / constraints (new production methods, administering techniques, supply chain, legalities) Financial targets (competition, profit margins) Budget and time frame (time to market, first to market)
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PRODUCT PLAN: Brief

Objective Team & plan Brainstorm brief Target Market M Musts Desirables Mission Statement
Target Market Product range Pack sizes Consumer profile Outlets Target price Target cost Overall market size Target market size Target launch date
Technology Technical risk IP protection Development timescale
Manufacturer Materials Line speed Line changes Capital investment Retailer Shelf presentation Multipack Vending Stackability Abuse resistance Spoilage indication
Reflect on the Results and Process Assessing the quality of the process and the results:
Firms strategy and opportunities: Does product plan support competitive strategy ? Does product plan address current opportunities? Resources: Are sufficient resources allocated? Mission statement: Are challenges of the mission statement acceptable to the core team? Are assumptions in mission statement needed (or over constrained)? Improvements: How can product planning process be improved?
Consumer Transport & storage Opening Dispensing Reclose Disposal Appearance Tamper evidence Safety
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Brand Owner Integrity Shelf life Filling line speed Filling line changes Capital investment Customising Promotions Recyclability
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Summary
Five-step product planning process: Identify opportunities Evaluate and prioritise projects Allocate resources and plan timing Complete pre-project planning Reflect on the results and the process Meeting the learning objectives? To be able to:
Exercises (in pairs)

1) For either a old project or your forthcoming project: A. Draw out a market segmentation map (Slide 12), considering the axis in which to position your product. OR: B. Draw a technology trajectory chart (Slide 14), considering future and current technologies (drugs?) (drugs?). Hint: Reference slide 29 for relationships 2) Write 3 questions that you will ask of your project company in order to place your project within their bubble diagram (slide 23).
1. 2. 3. 4.
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Define the different types of new product developments in relative terms. List the 5 stages of the product planning process. Explain what is meant by a product platform. Apply portfolio management techniques.
27690 Introduction to Project Management June 2011 34
June 2011

Lecture 3 - Product Planning

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3rd Section - Learning objectives

SECTION 3 (11.00 - 11.45):

Product Planning and Platforms

27690 Introduction to Project Management

Types of New Product Development

Types of New Product Development

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Types of New Product Development

Exercise (in pairs)

Derivatives of existing product platforms New product platform Enhancements products

27690 Introduction to Project Management

27690 Introduction to Project Management

Product Development Process

How is a product development project initiated?

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Product Planning Process

Identify Opportunities Where do ideas for new projects arise?

Also referred to as Portfolio management

Each promising opportunity written in a short statement and stored in a database

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Evaluate & Prioritise: Competitive Strategy

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Evaluate & Prioritise: Technology Trajectory S-curves

Evaluate & Prioritise: Technology Trajectory Technology Roadmap

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Evaluate & Prioritise: Technology Trajectory Product-Process Change Matrix

Evaluate & Prioritise: Platform Planning

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Case Study Xerox: Project-Product timeline

New Platform Derivatives

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Why do we need portfolio management?

Portfolio Management: Popularity of methods used

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Business Strategy Method

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

DTU Management Engineering, Technical University of Denmark

27690 Introduction to Project Management

Bubble Diagrams / Portfolio Maps

DTU Management Engineering, Technical University of Denmark