2. Product Design and Development
Karl T. Ulrich and Steven D. Eppinger
5th edition, Irwin McGraw-Hill, 2012.
Chapter Table of Contents:
1.Introduction
2.Development Processes and Organizations
3.Opportunity Identification
4.Product Planning
5.Identifying Customer Needs
6.Product Specifications
7.Concept Generation
8.Concept Selection
9.Concept Testing
10.Product Architecture
11.Industrial Design
12.Design for Environment
13.Design for Manufacturing
14.Prototyping
15.Robust Design
16.Patents and Intellectual Property
17.Product Development Economics
18.Managing Projects
3. Session Outline
Product development opportunities Sourcing ideas on a regular
basis
Market competition Planning products w.r.t competition
Technology The concept of technology S-curves
Portfolio planning The need for balanced portfolios; product-
process change map & aggregate product planning
Mission statements For each project
4. Objectives & Strategy
Product development teams generally begin with a project mission
statement.
This relates strongly to concepts of corporate strategy.
A cross-functional planning process develops the product
development team's mission statement.
Note: The multiple-product, multiple-project context of product
development in established firms.
The ability to choose the right set of development projects and
to define the scope of these projects in such a way that they are
complementary
6. Product Planning
Ensures product development projects support the broader
business strategy of the company.
Addresses:
What product development projects will be undertaken?
What mix of fundamentally new products, platforms and derivative
products should be pursued?
How do the various projects relate to each other as a portfolio?
What will be the timing and sequence of projects?
7. Product Development Teams
Work on selected projects and start with a mission.
The mission statement answers:
What market segments should be considered in designing the
product and developing its features?
What new technologies (if any) should be incorporated into the new
products?
What are the manufacturing and service goals and constraints?
What are the financial targets for the project?
What are the budget and the time frame for the project?
8. The Product Planning Process
The product plan identifies the portfolio of products to be developed by
the organization and the timing of their introduction to the market
through proper allocation of resources.
The planning process considers:
Product dev. Opportunities identified from various sources
Suggestions from marketing, research, customers, current product
development teams
Benchmarking of competitors
9. Inefficiencies
Some inefficiencies in organizations that do not engage in product
planning:
Inadequate coverage of target markets with competitive products.
Poor timing of market introductions of products.
Mismatches between aggregate development capacity and the number
of projects pursued.
Poor distribution of resources, with some projects overstaffed and
others understaffed.
Initiation and subsequent cancellation of ill-conceived projects.
Frequent changes in the directions of the projects.
10. Xerox Lakes Project Example
Xerox Document Centre 265
Xerox’s Competitive
Strategy Exploit
technological innovation
in a rapidly changing
market
DIGITAL COPIER
PLATFORM
(AS OPPOSED TO
EXISTING LIGHT
LENS )
11. TQ-1: How might a portfolio of development projects differ for product technologies
at position A or B?
Concept of S-Curves
Draw S-curves of your choice. What are the disruptive technologies here? What
dimensions of performance are affected?
12. The Product Plan
The product plans developed by keeping in mind:
Company’s goals
Capabilities
Constraints
Competitive environment
The product plan is regularly updated to reflect changes in:
Competitive environment
Technology
Info on successes of existing products
13. Product Plan
Exh 3-2: The product plan identifies the portfolio of projects to be
pursued by the development organization. This plan divides projects into
four categories.
14. The Product Planning Process
1. Identify opportunities.
2. Evaluate and prioritize projects.
3. Allocate resources and plan timing.
4. Complete pre-project planning.
5. Reflect on the results and the processes.
Note: Selecting a promising project is iterative in nature
15. Step 1: Identify opportunities
Sources of product development opportunities:
Marketing/Sales
Research/Technology Development (Xerox PARC)
PD Teams
Manufacturing
Customers
Third party: Suppliers, Inventors, and business partners
Other business groups (Xerox Supplies Division)
Some proactive approaches:
Document frustrations and complaints
Study Competitors’ products (Competitive benchmarking)
Track the status of emerging technologies
More…see text
16. Xerox
Some opportunity statements proposed at Xerox:
Create a document distribution system in which a networked
printing, device resides on each office worker’s desk and
automatically drives mail and other documents.
Create document delivery software that allows the digital delivery
and storage of most intra-organizational documents via a worker’s
personal computer.
Opportunity statement: Lakes Project
Develop a new black & white (B&W), digital, networkable, document
center platform for the office market, including scanning, storage,
fax, distribution, and printing capabilities
18. Technology leadership Basic R & D
Cost leadership Superior manufacturing methods; Design for
manufacturing to reduce costs
Customer focus Rapid development of derivatives through
carefully designed product platforms
Imitative Fast development process
Competitive Strategies
19. Market Segmentation: Market Segment Map
Exh 3.4: Product segment map showing Xerox B&W digital products and the competition in three
markets (Segmentation based on number of users sharing office equipment) . Key performance
dimensions pages per minute & networking capability
20. Technology Trajectories
Q: How near or far is the ultimate performance limit?
Exh 3.5: This technology S-curve
illustrates that Xerox believed digital
copier technologies were just emerging
and will improve product performance
in coming years. Xerox believed that it
could develop a full-featured digital
copier in the near future with
performance exceeding that of light-
lens copiers.
21. Product Platform Planning: Platforms vs.
Derivatives
Ex 3.6: A platform development project creates the architecture of a family of products.
Derivative products may be included in the initial platform development effort (Platform
A) or derivative products may follow thereafter (Platform B)
Platform Set of assets shared across a set of products (e.g. components & sub assys)
Derivatives For different segments
22. Ex 3.7: This technology
roadmap shows the life cycles
of several digital
photocopying technologies &
identifies which technologies
would be used in each
product. For Lakes
platform Higher speeds
and color capabilities
required of its derivatives.
Product Platform Planning: Technology Roadmap
Note: decisions about
product platforms are
closely related to the
technology development
efforts of the firm
23. Some criteria for evaluating fundamentally new product opportunities:
Market size (units/year * average price)
Market growth rate (percent per year)
Competitive intensity (#competitors & their strengths)
Depth of the firm’s existing knowledge of the markets
Depth of the firm’s existing knowledge of technology
Fit with the firm’s other products
Fit with the firm’s capabilities
Potential for patents or other barriers to competition
Existence of a product champion within the firm
Evaluating Fundamentally New Product Opportunities
24. Ex 3.8: The product-process change matrix
The extent to which the project involves changes in the product
line and/or the production processes
Helps identify projects breakthrough opportunities as well as
incremental improvements
Firms typically benefit from a diverse set of projects
Firm’s choice of competitive strategy influences product
development portfolio:
(FIRM STRATEGY) (PORTFOLIO)
LOW COST STRATEGY MORE OF PRODUCTION
PROCESS IMPROVEMENT PROJECTS
HIGH PRODUCT VARIETY DERIVATIVE PRODUCTS
UPON EXISTING PLATFORMS
TECHNOLOGICAL SUPERIORITY TECH DEV. &
BREAKTHROUGH PROJECTS
Balancing the portfolio
25. Product-Process Change Matrix
Extent of Production Process Changes
ExtentofProductChanges
New
Core
Process
Next
Generation
Process
Single
Department
Upgrade
Tuning and
Incremental
Changes
No
Process
Change
New
Core
Product
Next
Generation
Product
Addition
to Product
Family
Minor
Product
Enhancement
No
Product
Change
Lakes
Project
Research and
Technology
Development
Breakthrough
Development
Projects
Platform
Development
Projects
Derivative
Product
Development
Current
Product/Process
Support
26. Step 3:Allocate Resources & Plan
Timing
Resource Allocation
Careful use of the limited development resources
Avoid starting too many projects. May result in:
Skilled engineers and managers stretching their capabilities
Affects productivity, time-to-market, quality, and profitability
Aggregate Product Planning (Ex 3.9):
makes efficient use of resources within budgeted resources
Project Timing
Timing of product introductions
Technology readiness
Market readiness
Competition
The Product Plan (Exhibit: 3.2)
Set of projects approved by the planning process and sequenced in time.
Mix of: Fundamentally new product, platform and derivative projects.
Updated periodically as a part of the strategic planning activity.
29. Product Plan
Exh 3-2: The product plan identifies the portfolio of projects to be pursued by the
development organization. This plan divides projects into four categories.
The Product Plan (Exhibit: 3.2)
•Set of projects approved by the planning process and sequenced in time.
•Mix of: Fundamentally new product, platform and derivative projects.
•Updated periodically as a part of the strategic planning activity.
30. Step 4: Complete Pre-Project
Planning
Product Vision Statement
Develop a networked, mid-range digital platform for imaging, marking, and
finishing
Mission Statements
Brief (one sentence) description of the product
Key business goals
Target market(s) for the product
Assumptions and constraints that guide the development effort
Stakeholders
Assumptions and constraints
Manufacturing
Service
Environment
Staffing and other pre-project planning activities
31. Lakes Project Mission Statement
Product Description
• Networkable, digital machine with copy, print, fax, and scan functions
Key Business Goals
• Support Xerox strategy of leadership in digital office equipment
• Serve as platform for all future B&W digital products and solutions
• Capture 50% of digital product sales in primary market
• Environmentally friendly
• First product introduction 4thQ 1997
Primary Market
• Office departments, mid-volume (40-65 ppm, above 42,000 avg. copies/mo.)
Secondary Markets
• Quick-print market
• Small ‘satellite’ operations
Assumptions and Constraints
• New product platform
• Digital imaging technology
• Compatible with Centre Ware software
• Input devices manufactured in Canada
• Output devices manufactured in Brazil
• Image processing engine manufactured in both USA and Europe
Stakeholders
• Purchasers and Users
• Manufacturing Operations
• Service Operations
• Distributors and Resellers
32. Product Description
• Networkable, digital machine with copy, print, fax, and scan functions
Key Business Goals
• Support Xerox strategy of leadership in digital office equipment
• Serve as platform for all future B&W digital products and solutions
• Capture 50% of digital product sales in primary market
• Environmentally friendly
• First product introduction 4thQ 1997
Primary Market
• Office departments, mid-volume (40-65 ppm, above 42,000 avg. copies/mo.)
Secondary Markets
• Quick-print market
• Small ‘satellite’ operations
Assumptions and Constraints
• New product platform
• Digital imaging technology
• Compatible with Centre Ware software
• Input devices manufactured in Canada
• Output devices manufactured in Brazil
• Image processing engine manufactured in both USA and Europe
Stakeholders
• Purchasers and Users
• Manufacturing Operations
• Service Operations
• Distributors and Resellers
Lakes Project Mission Statement
33. Assumptions & Constraints
Some may ask:
Why manufacturing, Service and Environmental strategies should be
part of the mission statement for a new product?
Some may even hold:
Decisions about these issues should arise from customer needs for new
products and should not be determined in advance.
Why then do we have Xerox mentioning these in the project
mission statement?
34. Assumptions & Constraints (contd..)
For complex projects (as in this Xerox example), the design of the
manufacturing systems are equally complex.
Thus manufacturing facilities involved in the product need to be
identified very early in the process.
Some product requirements cannot be derived strictly from customer
needs.
Environmentally responsible design (as a Corporate Responsibility
of Xerox
Mission statements must reflect such corporate objectives and
constraints.
35. Assumptions & Constraints (contd..)
For Lakes Project of Xerox
Manufacturing
Capabilities, capacities, and constraints of existing manufacturing processes
Which internal production facility to be used?
What key suppliers to be involved and when?
For Xerox: Input devises at Canada, Output devices in Brazil etc.
Service
Note: Customer service and service revenue important in this business
Strategic goals for improving service quality
Designing components requiring few parts
Designing for ease of serviceability (quick service)
Environment
Design for environment
Developing new products with environmental sustainability
Xerox’s “Zero to landfill” policy with an energy efficiency goal “most efficient machine in
its class”
Remanufacture or recycle [no part should be disposed by the customer to end up in a
landfill]
36. Step 5: Reflect on the Results & the
Process
Some suggested questions:
Is the opportunity funnel collecting an exciting and diverse set of product
opportunities?
Does the product plan support the competitive strategy of the firm?
Does the product plan address the most important current opportunities facing the
firm?
Are the resources allocated product development adequate to pursue the firm’s
competitive strategy?
Have creative ways of leveraging finite resources been considered…?
Does the core team accept the challenges of the resulting mission statement
Are the elements of the mission statement consistent?
Are assumptions listed in the mission statement really necessary or is the project
over-constrained? Will the development team have the freedom to develop the best
possible design?
How can the product planning process be improved?