Chapter 2: Development Processes and Organizations

Product Design and DevelopmentFourth Edition

by Karl T. Ulrich and Steven D. Eppinger

Chapter 1: Introduction

Chapter 3: Product Planning

Functions – Could be Design, Manufacturing, Marketing, etc.

This represents cross-funtional teams

Process Type Description Examples

Market Pull Team begins with market opportunity and selects technology to meet customer needs.

Fuel efficient cars

Technology Push Team begins with a new technology, then finds an appropriate market.

Velcro

Platform Products The team assumes that the new product will be built around an established technological subsystem.

Many new cars share the same chassis (Civic and CRV) (Nissan Ultima and Maxima –just laser blank different wheel base)

Process-Intensive Products

Characteristics of the product are highly constrained by the production process.

Coke

Customized Products

New products are slight variations of existing configurations.

Boiling water reactor pressure vessels

High-Risk Products Technical or market uncertainties create high risks of failure.

Nuclear power plants, drug delivery devices

Quick-Build Products

Rapid modeling and prototyping enables many design-build-test cycles.

Software

Complex Systems System must be decomposed into several subsystems and many components.

Space shuttle

Most designs are one of these two, with Market pull as the primary.

More than one of these may apply.

http://en.wikipedia.org/wiki/Technology_push

http://cleantechnica.com/files/2009/02/ls.jpg

Aerogel is a technology looking for commercial applications

https://www.besttvbuys.com/loudandclear/index.asp?did=978&refcode=lnc4

Aging Baby Boomers have created a number of marketing opportunities

http://www.pacific-bearing.com/default.aspx

Customized Products

While Pacific Bearing has a large number of stock choices, they also sell unique combinations and modifications of existing designs

Platform Products

http://www.unplggd.com/uimages/unplggd/james_dyson_sz.jpg

Dyson Vacuum cleaners are all built around the same “Cyclone”

Risk

Companies face many forms of risk which they need to report in an SEC filing.We will look at the issues raised by Medtronic (a medical device company) in their SEC filing.

Name the risks you expect Medtronic to list.

From the 2011 SEC 10K filing

• Market competition, Price Risk

• Supply Chain• Government Regulation• Reimbursement Rates• Quality Issues• Intellectual Property• Product Liability• Obamacare Tax

• R&D Pipeline• Customer Relations• Credit Markets• Clinical Trials• Business Acquisitions• Global Business• Tax Law (International)

PlanningPlanning

Product Development Process

ConceptDevelopment

ConceptDevelopment

System-LevelDesign

System-LevelDesign

DetailDesign

DetailDesign

Testing andRefinement

Testing andRefinement

ProductionRamp-Up

ProductionRamp-Up

Four Phases of Product Development

The product planning phase precedes the product development process.

GM sees Energy Crisis, needs better gas mileage

For transmissions, more speeds = better mileage

3 speed to 4 speedor

Continuously variable(GM Tech Center)

e.g. Find clutch area needed for full throttle upshift with current engine.(Division Level)

ZF’s 8-Speed Automatic Transmission - Tech Dept.BY K.C. COLWELL

December 2009

Xerox Lakes Project Example

Xerox Document Centre 265

The Product Planning Process

Evaluate and Prioritize Projects

Allocate Resources and

Plan TimingPortfolioof

Projects

Multiple Projects

Complete Pre-Project PlanningProduct

PlanMission

Statements

Product Development

Process

Identify Opportunities

A Product Plan

1996 1997 1998 1999 2000

Hodaka

Lakes

H-Net

L-Net

Astro

595 6010 392 393

New Platforms

Derivatives

Improvements

Fundamentally New

Legend

Project

Product Release

Market Segmentation• A market segment is a group of actual or potential customers who can be

expected to respond in a similar way to a product or service offer. They want the same types of benefits or solutions to problems from a product or service, or they respond in a similar way to a company’s promotional programs.

• Successful segmentation:– Heterogeneity of wants and needs. Customers will actively seek and pay a premium

for products and services that better meet their wants/needs.– Customers do cluster into specific groups whose members’ needs are more similar to

those of other customers in that groups than they are to the needs of customers in other groups. (Tennis shoes)

– The costs of serving a customer in a segment must be no more than they are willing to pay.

When successful segmentation conditions exist, a firm that does not segment the market presents its competitors with an opportunity to enter the market.

Market Segment Map

1998 19991997 2000

Department

Workgroup

Personal

40 ppm network

$20k

30 ppm $10k

20 ppm $8k

40 ppm

$16k

65 ppm

$23k

55 ppm

$20k

25 ppm $9k

30 ppm $10k

25 ppm $10k

35 ppm $15k

20 ppm $7k

40 ppm $20k

60 ppm network

$35k

LegendXerox

product

competitor product

potential competitor

65 ppm network

$31k

Year ofRelease

Hodaka Project

Lakes Project Lakes

Extensions

Hodaka Project

Lakes Project Lakes

Extensions

Ma

rke

t S

eg

me

nt

Technology S-Curves

Light-LensTechnology

DigitalTechnology

Time

Cop

ier

Per

form

ance

Technology RoadmapFunctional Elements

Photo- receptor

Scanner Layout

Toner Type

Output Modes

User Interface

Cylindrical Drum

2D CCD Array w/Optical Reduc.

Keypad

3-Pitch Belt Photoreceptor

Full-Width, Linear Array without Optical Reduction

Touch Screen, Remote PC

Color: Paper, Fax, Scan, Local Network, Internet

Document Centre

220, 230

Document Centre

240, 255, 265

Document Centre 2XX

Hodaka Project

Lakes Project

Lakes Extensions

Document Centre 3XX

Next Platform

Technologies

n-Pitch Belt Photoreceptor

High Temperature

Low Melting Point

Low Melting Point, Low Emission

Touch Screen

Image Processing

Automatic Image Quality

Diagnostics On-Board Diagnostics

Remote-Dialup Diagnostics

Remote Repair

Time

1200 dpi600/1200 dpi 1800 dpi600 dpi

Monochrome: Paper, Fax, Scan, Local Network, Internet

Segmentation Examples

Cummins Peerless Pump

Class 3-4 Truck Industrial

Class 5-7 Truck Agricultural

School Bus Municipal

RV Chassis Chemical

Construction Equipment

Building Trades/New Construction

Dell computers http://www.dell.com/

Apple Computers http://store.apple.com/us/browse/home/shop_mac?mco=NzcwNjgzMA

Harley Davidson http://en.wikipedia.org/wiki/Harley-Davidson

Quiz