Anda di halaman 1dari 38

New Product Development

Some products

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

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 So the petty snipping of old has been replaced by a genuine battle of philosophies: on one side is size, on the other speed The Economist, July 2001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

Characteristics of Successful 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?

Challenges of 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

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
Planning

Phase 1
Concept Development

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
Production Ramp-Up

Ulrich and Eppinger 2004 Generate mission statement (target market, business goals, key assumptions and constraints) Example Mission: 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 tools The nailer will nail through roofing singles into wood The nailer will be handheld.

Product Development Process

Phase 0
Planning

Phase 1
Concept Development Identify needs of target market; Select several product concepts for further development and testing

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
Production Ramp-Up

Ulrich and Eppinger 2004 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 impact Rotary motor with spring and multiple impacts Linear motor with a moving mass and single impact

Product Development Process

Phase 0
Planning

Phase 1
Concept Development

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
Production Ramp-Up

Define product architecture Decompose product into subsystems and components Define final assembly scheme

Ulrich and Eppinger 2004

Product Development Process

Phase 0
Planning

Phase 1
Concept Development

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
Production Ramp-Up

Complete specification of geometry, materials and tolerances of all parts List of standard parts to be purchased Detailed drawings Process plans for fabrication and assembly

Ulrich and Eppinger 2004

Product Development Process

Phase 0
Planning

Phase 1
Concept Development

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
Production Ramp-Up

Building of alpha- and beta- prototypes alpha: 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
Planning

Phase 1
Concept Development

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
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

Cost and Duration of NPD Projects

Cost and Duration of NPD Projects


Stanley Tools Jobmaster Screwdriver 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 Rollerblade InLine Skate HP DeskJet Printer VW New Beetle Automobile Boeing 777 Airplane

Cost and Duration of NPD Projects


Stanley Tools Jobmaster Screwdriver 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 100,000/year 40 years $3 3 1 year 3 people 3 people $150,000 Rollerblade InLine Skate 100,000/year 3 years $200 35 2 years 5 people 10 people $750,000 HP DeskJet Printer 4M/year 2 years $300 200 1.5 years 100 people 75 people $50M VW New Beetle Automobile 100,000/year 6 years $17000 10,000 3.5 years 800 people 800 people $400M Boeing 777 Airplane 50/year 30 years $130M 130,000 4.5 years 6800 people 10,000 people $3B

Cost and Duration of NPD Projects


Plot development cost against the other rows and see if there is any correlation. Why or why not?

What drives product development costs?


development cost
3500000000 3000000000 2500000000 2000000000 1500000000 1000000000 500000000 0 -20000 0 -500000000 20000 40000 60000 80000 100000 120000 140000

# parts

What drives product development costs?


development cost
30000 50000 30000 00000 20000 50000 20000 00000 10000 50000 10000 00000 50000 0000 0 - 0000 50000 0 20 00 40 00 60 00 80 00 100 00

Internal team size x duration

What drives product development costs?


development cost
3500000000 3000000000 2500000000 2000000000 1500000000 1000000000 500000000 0 -20000 0 -500000000 20000 40000 60000 80000

Total team size x duration

What drives product development costs?


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)

Who is Involved in Product Development?


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

Organizational challenges
How should the product development team operate?

Project-Based Organization
Marketing Engineering Operations

Project Manager Project Managers have more power Heavy Weight Project Manager Project Manager

Project 1

Project 2

Functional-Based Organization
Marketing manager Engineering Operations manager

Project 1 Project 2 Project 3

Project 1 Project 2

Project 1 Project 2 Project 3 Project 4

Functional managers have more power

Matrix Organization
Marketing manager R&D manager Engineering

Project Manager Project Manager

Project 1

Project 2

Pros and cons


Functional Strength Matrix Project Fosters specialization Provides integration Optimal resource and expertise and speed benefits allocation, quick trade-off resolution Coordination among Requires more groups can be slow managers and administrators Slight variations to custom design Many recently successful projects in automobile, electronics, aero How to balance functions and projects. How to evaluate project & functional performance. Difficulty maintaining functional capabilities

Weakness

Example

Start-up companies, dynamic markets, to achieve breakthroughts How to maintain functional expertise over time

Major issue

How to integrate different functions to achieve a common goal.

Final Word

Phase 0
Planning

Phase 1
Concept Development

Phase 2
System-level Design

Phase 3
Detail Design

Phase 4
Testing and Refinement

Phase 5
Production Ramp-Up

Product development is a process and it can be managed!!