Development
Processes
and
Organizations
Disclaimer:
• All images such as logos, photos, etc. used in this presentation are the property of their
respective copyright owners and are used here for educational purposes only
• Some material adapted from: Ulrich & Eppinger, “Product Design and Development,” 4th edition
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.1
Generic Development Process: Advantages
Term
Definition
Development Process Steps to conceive, design, and commercialize product
Advantage
Description
Quality Assurance
Specifies quality checkpoints along process
Coordination
Master plan to coordinate roles of multiple groups
When input needed, by whom, for how long
Planning
Contains milestones to anchor schedule of project
Management
Benchmark to assess ongoing progress
Compare planned status vs. actual status
Improvement
Identify opportunities for improvement
Risk Management
Risks identified in early stages
Market risk: Will market adopt new product?
Technology risk: Can new technology be developed?
Profit risk: Can cost be reduced to profitable level?
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.2
Standard Development Process: Six Phases
Planning
Function
Concept
Development
SystemLevel
Design
Detail
Design
Testing
and
Refining
Production
Ramp-Up
Develop
promotion
materials
Get orders
from key
customers
Marketing
Determine
market
opportunity
Collect
customer
needs
Engineering
Consider
product
architecture
Investigate Define major Define part Testing:
Evaluate
feasibility of subsystems geometry
performance production
concepts
& interfaces & materials & reliability Output
Develop plan Develop
for product marketing
family
plan
Manufacturing Set supplychain
strategy
Estimate
manuf.
cost
Other
Finance:
Finance:
Fin. analysis Make/Buy
Finance:
Target ROI
Identify key
component
suppliers
Define
production
processes
Train manuf. Launch
workforce
full-scale
production
Management: Legal:
Service:
Set resources Do Patents Identify issues
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.3
Concept Development: Front-End Process: 1 of 2
Process Step
Description
Identify Needs
Understand customers’ needs; Communicate to team
Example: Customers waiting at hotel check-in
Establish Specifications Translate customer needs into technical terms
Example: Customer wait time less than 1 minute
Generate Concept
Explore solutions to problem
Example: Brainstorm to get 50 solutions
Select Concept
Pick 1-3 solutions for in-depth analysis
Example: Select top 3 solutions to reduce waiting
Setting Specifications
Revise initial specifications with new information
Example: Wait time less important than being bored
Hotel Lobby Check-In Desk:
Typical version
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.4
Concept Development: Front-End Process: 2 of 2
Process Step
Description
Plan Project
Create schedule, highlighting time-critical tasks
Determine required manpower, equipment, & budget
Contract Book: Get management sign-offs on plan
Financials
Build economic model for new product
Justify overall development program
Benchmarking
Research competitive products
Prototyping
Build models to demonstrate different stages
Proof-of-concept; Form-only; Test models
Hotel Lobby Check-In Desk:
Revised with TVs
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.5
Specific Product Development Processes: 1 of 4
Process
Description
Market-Pull Products
Begin with market opportunity; Design to meet needs
Features: Uses standard development process
Examples: Sporting goods; Furniture
Technology-Push
Find an application for a proprietary technology
Features: Assumes technology will be used; Perilous
Examples: Gore-Tex; Tyvek; Post-Its
Market-Pull:
Tennis Racket
Technology-Push:
Tyvek House Wrap
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.6
Specific Product Development Processes: 2 of 4
Process
Description
Platform Products
Develop new product around common platform
Features: Assumes proven technology platform
Examples: Printers; Consumer electronics; PCs
Process-Intensive
Design new product around manufacturing process
Features: Process dictates product design attributes
Examples: Semiconductors; Breakfast cereals
Platform:
Computer Printer
Samsung 100/200/300
Process Intensive:
Semiconductor Wafer
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.7
Specific Product Development Processes: 3 of 4
Process
Description
Customized Products
Tailor products to meet unique specifications
Features: Similarity of products can streamline process
Examples: Motors; Switches; Dell PCs
High-Risk Products
Risk failure due to market or technical unknowns
Features: Risks are identified and tracked in process
Examples: Pharmaceuticals; Aerospace systems
Customized Product:
Motor: Many variants available
High-Risk Product:
Space Satellite
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.8
Specific Product Development Processes: 4 of 4
Process
Description
Quick-Build Products
Build many trial versions to determine final design
Features: Multiple design-build-test cycles
Examples: Computer software; Cellular phones
Complex Systems
Decompose complex system into subsystems
Features: Multiple teams working in parallel
Examples: Airplanes; Jet engines; Automobiles
Quick-Build Product:
Computer Software
Complex System:
Jet Engine
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.9
Product Development Process Flow Diagrams
Planning
Concept
Development
Mission
Approval
SystemLevel
Design
Concept
Review
Detail
Design
System Spec
Review
Testing
and
Refining
Production
Ramp-Up
Critical Design
Review (CDR)
Production
Approval
A: Standard Product Development Process
Planning
Concept
Development
Mission
Approval
Concept
Review
SystemLevel
Design
Multiple Iterations
Design
Build
Test
Cycle Plan
Review
Production
Approval
B: Quick-Build Product Development Process
Planning
Mission
Approval
Concept
Development
Concept
Review
SystemLevel
Design
System
Review
Production
Ramp-Up
Design
Test
Design
Test
Design
Test
Integrate
and Test
Production
Ramp-Up
Production
Approval
C: Complex Systems Development Process
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.10
Organizational Structure: Links Among People
Link
Description
Reporting
Formal reporting relationships in organizational chart
Example: Engineer A reports to VP Engineering B
Financial
Linked as part of same financial group
Example: Marketer A in Business Unit X
Physical Layout
Shared physical space: Office, Floor, Building
Example: Team A co-located in Floor 1 of Building Y
Engineering
Engineer A
Engineer B
Business Unit
Engineering
Marketing
Building 4,
3rd Floor
Production
Marketer A Marketer B
Reporting Structure: Formal
Financial Structure: Formal
Scorpio Team
Marketer A
Engineer B
Production C
Marketer D
Engineer E
Finance F
Co-location Structure: Informal
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.11
Organizational Structure: Functional vs. Project
Link
Description
Functional
Organized by function: Marketing, Engineering, etc.
Advantage: Develop deep expertise over time
Disadvantage: Slow projects; Bureaucracy of functions
Example: Aerospace fluid dynamics group; advanced
Project
Organized by project: Project 1, Project 2, etc.
Advantage: Personnel dedicated to projects over time
Disadvantage: Personnel do not develop new skills
Example: Lockheed’s “Skunk Works” in 1960s
General Manager
Engineering
VP Eng.
Marketing
VP Mktg.
Manufacturing
VP Manuf.
Marketer A Marketer B
Functional Organization
General Manager
Project 1
Project Mgr
Project 2
Project Mgr.
Engineer
Marketer
Project 3
Project Mgr.
Manufacturing
Project Organization
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.12
Organizational Structure: Matrix Organization
Link
Matrix
Lightweight Matrix
Heavyweight Matrix
Description
Hybrid of functional and project organizations
Advantage: Functional management AND project mgt.
Disadvantage: Two Bosses!
Functional org’n. with dedicated project managers
Advantage: Adds project focus, while maintaining skills
Example: Traditional high-tech companies
Project org’n. with dedicated functional managers
Advantage: Adds functional focus to project org’n.
Example: Some newer high-tech companies
General Manager
General Manager
Engineering
VP Eng.
Marketing
VP Mktg.
Manufacturing
VP Manuf.
Engineer A
Marketer B
Manuf. C
Project Manager
Lightweight Matrix Organization
Project 1
Project Mgr
Marketer A
Project 2
Project Mgr.
Marketer B
Project 3
Project Mgr.
Marketer C
Functional Manager
Heavyweight Matrix Organization
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Dev. Processes 2.13