Chapter 9
Developing Products
© David O’Sullivan 2008
9-1
Reflections
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Outline the key stages of a project life cycle.
Explain the issues around planning, scheduling, and
controlling a project.
Explain the difference between workpackages, tasks,
and deliverables.
Construct a simple cost–benefit analysis for a project.
Explain the following expression: Risk = ƒ(event,
probability, impact).
What are the six stages of the buyer experience life
cycle?
Detail a simple form for capturing critical data for a
project workpackage.
9-2
Activities
[Discussion of selected student
‘Activities’ from previous chapter]
9-3
Learning Targets
 Outline the key stages in the stage gate
process for new product development
 Detail project investment issues for new
product innovation
 Define a number of ways to share
investment in product development
 Outline a number of ways of protecting
innovations
 Explain the product exploitation process
 Discuss the special role of
entrepreneurship in product exploitation
9-4
New Product Development
 Development leads times can range
from a few months to decades
 First to market offers monopoly with
premium pricing and ease of
marketing
 E.g. a 6 month delay can results in
33% reduction in profits
 Protection can be important and adds
to delay
9-5
The Design
Process
Stage Gate Process
9-7
Design Process
 Effective design can provide a competitive
edge
 matches product or service characteristics with
customer requirements
 ensures that customer requirements are met in
the simplest and least costly manner
 reduces time required to design a new product
or service
 minimizes revisions necessary to make a design
workable
9-8
Design Process (cont.)
 Product design
 defines appearance of
product
 sets standards for
performance
 specifies which
materials are to be
used
 determines
dimensions and
tolerances
 Service design
 specifies what
physical items,
sensual benefits, and
psychological benefits
customer is to receive
from service
 defines environment
in which service will
take place
9-9
(Source: Wheelwright and Clark, 1992)
8-10
Premarket
Phase
100
Idea
Mortality
Rate
Profits
0
Dollars
Ideas
Abandoment
Stage
Decline Stage
Maturity Stage
Competitive
Turbulence Stage
Rapid Growth Stage
Market
Development Stage
Introduction Stage
Commercial
Procuction Stage
Market
Testing Stage
Preliminary
Production Stage
Product (Market)
Research and
Development Stage
Techbical Research
and Development
Stage
Business / Technical
Feasibility Analysis Stage
Idea Evaluation Stage
Idea Generation Stage
Product Life Cycle
R&D
Sales
Market
Phase
Negative
Profits
(Investment)
Time
9-11
Feasibility Studies
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Marketing Screen
Operations Screen
Finance Screen
Competitor Analysis
Price-performance Screening
Financial Analysis
9-12
Rapid Prototyping
 Build a prototype
 form design
 functional design
 production design
 Test prototype
 Revise design
 Retest
9-13
Quality Function Deployment
Quality Function Deployment
Traditional Approach
An approach to product design that tends to
separate design and manufacturing
engineering
 Product design develops the new design,
sometimes with small regard for the
manufacturing capabilities possessed by the
company
 There is little interaction between design
engineers and manufacturing engineers who
might provide advice on producability
Concurrent Engineering
An approach to product design in which
companies attempt to reduce elapsed time to
bring a new product to market by integrating
design and manufacturing engineering, and
other functions
 Manufacturing engineering becomes involved
early in the product development cycle
 In addition, other functions are also involved,
such as field service, quality engineering,
manufacturing departments, vendors, and in
some cases customers
Concurrent Engineering
 All of these functions can contribute to a
product design that performs well functionally,
and is also manufacturable, assembleable,
inspectable, testable, serviceable,
maintainable, free of defects, and safe
 All viewpoints have been combined to design a
product of high quality that will deliver customer
satisfaction
 Through early involvement of all interested
parties, the total product development cycle
time is reduced
Design for
Manufacturing and Assembly
 Estimated that 70% of the life cycle cost
of a product is determined by basic
decisions made during product design
 Decisions include material for each part,
part geometry, tolerances, how parts are
organized into subassemblies, and assembly
methods
 Once these decisions are made, the ability
to reduce manufacturing cost of the product
is limited
How Design Affects Process
Planning
 Example: If the product engineer designs an
aluminum sand casting with features that can
be achieved only by machining
 Then the process planner must specify sand casting
followed by the necessary machining operations
 The manufacturing engineer might advise the
designer that a plastic molded part would be superior
 It is important for the manufacturing engineer to
have an opportunity to advise the design engineer as
the product design is evolving
Design for
Manufacturing and Assembly
An approach to product design that
systematically includes considerations
of manufacturability and
assembleability in the design
 DFM/A includes:
 Organizational changes
 Design principles and guidelines that
should be implemented during product
design
Organizational Changes in
DFM/A
 To implement DFM/A, a company must make
organizational changes to provide closer
interaction between design and manufacturing
personnel
 Often done by forming design project teams
consisting of product designers, manufacturing
engineers, and other specialties
 In some companies, design engineers must spend
some career time in manufacturing to learn about the
problems encountered in making things
DFM/A Principles and Guidelines
 DFM/A includes principles and guidelines that
indicate how to design a given product for
maximum manufacturability
 Many of these principles and guidelines are
universal
 Rules of thumb that can be applied to nearly any
product design situation
 In addition, DFM/A includes principles that are
specific to given manufacturing processes
Examples of DFM/A Principles
 Minimize number of components in the product
 Use standard commercially available components
wherever possible
 Use common parts across product lines
 Design parts with tolerances that are within process
capability
 Design product for foolproof assembly
 Use modular design
 Shape parts and products for ease of packaging
 Eliminate or reduce adjustments
Other Product Design
Objectives
 Design for quality
 Principles and procedures to ensure that the highest
possible quality is designed into the product
 Design for product cost
 Efforts to specifically identify how design decisions
affect product costs and to develop ways to reduce
cost through design
 Design for life cycle
 Gives consideration to costs associated with
reliability, maintainability, serviceability, etc., which
may be a significant portion of the total cost of the
product
Product Funding
9-27
Protecting New Products
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patents
copyright
design rights
trademarks
9-28
Commercializing New Products
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Compliance with industry standards
Compatibility with existing products
Production costs
Distribution capability
After-sales service
 Production Plan
 Market Launch Plan
9-29
Feasibility Studies
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Marketing Screen
Operations Screen
Finance Screen
Competitor Analysis
Price-performance Screening
Financial Analysis
9-30
Linkages with Marketing
 Relative advantage of the new offering over its
predecessors and competitors
 Compatibility of the new offering with existing skills,
technological platforms, and industrial standards
 Complexity, relating to how easily the offering can
be understood and used by the customer
 Trialability, relating to the amount of opportunity
that the potential customers have to test the offering,
to learn more and reduce their risk perception
 Observability, which reduces risk perception and
relates to the degree to which potential customers can
see other consumers use and benefit from the offering
9-31
Adoption of New Products
9-32
Entrepreneurship
 Entrepreneurial zeal
 Business planning
 Exit strategy
9-33
Summary
 Outline the key stages in the stage gate
process for new product development
 Detail project investment issues for new
product innovation
 Define a number of ways to share
investment in product development
 Outline a number of ways of protecting
innovations
 Explain the product exploitation process
 Discuss the special role of
entrepreneurship in product exploitation
9-34
Activities
9-35
Search Online
 http://mitworld.mit.edu/
 Democratizing Innovation (E. von Hippel)
 A Conversation with Jack Welch
 Innovation at the Interface:
Technological Fusion at MIT - Edward B.
Roberts, Rodney A. Brooks
9-36