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MSETM 5110 – New Product Development
Recap of Session IV
• Building Product Development and Realization Capability• Organizing and Managing Projects• Linkage of Product Development and Introduction to Business
Strategy and Values• Review of Types of Development Teams—Functional,
Lightweight, Heavyweight and Autonomous• Spiral Integration• Customer-centric Product Development• The Steps Between Product Concept and Customer Launch• Management Roles and Responsibilities• The HP DeskJet Printer Project—An Example of Planning and
Execution• Intellectual Property and Patent Portfolio• Introduced Assignment 2—McAlasdaire Imaging’s AE-1 Project
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MSETM 5110 – New Product Development
Intellectual Property
Presenter
Dr. Ron Buchanan
Sr. Research Consultant
Education and Research Foundation
Oklahoma State University
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MSETM 5110 – New Product Development
New Product Introduction
• Thinking Strategically
• Thinking Commercially
• Thinking Globally
• People, Programs, and Processes
• Transforming Knowledge Into Economic Value
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MSETM 5110 – New Product Development
Session 5, Part 2
Summary/Common Themes of Assignments
1. Living on Internet Time
2. McAlasdaire Imaging – the AE-1 Project
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MSETM 5110 – New Product Development
Summary of Living on Internet Time: Product Development at Netscape, Yahoo!™, NetDynamics, and Microsoft™
Common
• Each Aware of/Engaged in Competitive Benchmarking
• Each Used Effective Prototyping/Beta Models (Microsoft’s Approach More Internally Focused)
• Aware of Interoperability
(cont’d.)
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MSETM 5110 – New Product Development
Summary of Living on Internet Time: Product Development at Netscape, Yahoo!™, NetDynamics, and Microsoft™ (cont’d.)
Differences• Philosophy, Culture, and Development Process• Size of Development Staffs and Resources• Microsoft’s Total-System-Solution Mindset• Microsoft Sought to Expand Competencies/Respond to SIPs• Heavyweight Team Structure (Microsoft) vs. Lightweight (Yahoo!)• NetDynamics’ Philosophy of Open Architecture Based on
Standards• Netscape’s Heavy Focus on Early Releases Before Feature Release
Note: Netscape Acquired by AOLNetDynamics Acquired by Sun MicrosystemsBased on (SEC) 10-k Filings: 1) Microsoft, 2) Netscape; 3) Yahool!, 4) NetDynamics
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MSETM 5110 – New Product Development
Summary of Assignment 2 – McAlasdaire Imaging’s AE-1 Project
• No Clear Upfront Product Definition or Specifications
• Poor Communications Between Marketing and Engineering
• Overall Ingredients for Success Lacking
- “Start With The End in Mind” (Steven Covey, The 7 Habits of Highly Effective People)
- Alignment
- Commitment and Utilization of Resources
- Project Tracking to Meet Schedule and Costs Objectives
- Communication and Teamwork Across Functional Departments
• Capturing the Lessons Learned
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MSETM 5110 – New Product Development
Summary of the HP Deskjet Printer Project
• Clear Product Definition and Market Segment• Clear Focus/Objectives (Low Cost, High Quality)• Created New Development Process Emphasizing Speed, Design for
Manufacturability, and Teamwork• Effective Use of Early Production Tools (CAD, CAM, CAE, PDM,
SAP Software)• Effective Use of Heavyweight Team Structure• Effective Use of Prototypes/Customer Involvement• Achieved Objectives for Cost, Quality, Customer Satisfaction• Reduced Cycle Time from 36-60 Months to 22 Months• Became the Model for Subsequent Development at HP Vancouver
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Teradyne Aurora Project(Automatic Test Equipment – ATE)
Video Tape
• Cross Functional Team/Internal Board of Directors
• Market Concerns– Microcontrollers
– ASICs
• Technology Concerns– CMOS
– Windows NT
• Discontinuous Change (Disruptive Technology)– Platform
– Derivative
• Core Competency
• Business Plan/Business Case
• Getting Engineers Close to Customer
• Understanding the Customer’s Business and Operating Metrics
• Asset/Resource Allocation
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MSETM 5110 – New Product Development
• Organization Vision/Mission/Strategy
• Business Model/Architecture
• Development Portfolio and Development Teams
• Functional Integration (Wheelwright and Clark, Exhibit 8-1, p. 191)
- Functional Team Structure
- Lightweight Team Structure
- Heavyweight Team Structure
- Autonomous Team Structure
• Tools and Methods
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MSETM 5110 – New Product Development
Becoming a Fast Innovator
I. Time is the key performance variable to be managed to attain improved cost and quality.
II. Time benchmarks are set by the performance of competitors and, if faster, by what is technologically possible.
III. The support functions necessary to advance the development process are actively managed to be “invisible.” Their need is to be anticipated; they are to be invested in and kept up-to-date. They are never to be allowed to slow the development process.
IV. Each program is to be managed and executed by a small, dedicated, decision-empowered, and experienced team. Team members have common goals and are measured and evaluated as part of a team.
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MSETM 5110 – New Product Development (cont’d.)
Becoming a Fast Innovator (cont’d.)
V. The development programs are to have four steps, and company will organize itself around these steps:
1. Planning and preparation
2. Product definition
3. Design development
4. Manufacturing ramp-up
5. Product Improvement
VI. The objective of planning and preparation is to avoid having to invent in the middle of the development process—make unknowns be knowns.
VII. After definition, the product specification is frozen. The definition is committed to and not allowed to be changed. The improvement phase is to be used for costs and feature enhancements.
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MSETM 5110 – New Product Development (cont’d.)
Becoming a Fast Innovator (cont’d.)
VIII. Functional expertise resides in the development program. Manufacturing and design resources are full-time participants in the definition team. Manufacturing resources are full-time participants in the design team.
IX. Team members are collocated.
X. Senior management reviews are few. The role of senior management is to ensure that the program teams have the appropriate resources, incentives and environment to execute their tasks quickly.
XI. New programs are generated continuously, at regular market-driven intervals, and incorporate more incremental advances and fewer “great leaps forward.”
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MSETM 5110 – New Product Development
So, What Does This All Boil Down To:• Mission/Vision/Strategy• Technology Solutions in a Knowledge-based and
Global Economy• Customer- and Market-Focused• Creating Stakeholder Value• Speed, Flexibility• Repeatable, Sustaining NPD/NPI Process• Effective Use of People and Capital Resources• Being Competitive• Maintaining/Building Core Competency• Clock Speed
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MSETM 5110 – New Product Development
Time and Innovation
• Innovation is key to the long-term vitality of all enterprises
• Innovation means more than just new products; it also means new services and ways of doing business
• While the challenge to innovation is originating new ideas, time is at the core of an innovation’s success
• Timely execution is very demanding
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MSETM 5110 – New Product Development
Competing Through Innovation
Changing Business Climate• Globalization• Increased Competition• Technology Revolution/Evolution• Fragmented, Demanding Markets• Shorter Product Lifecycles• Virtual Organizations• E-Business
Competitive Factors• Speed• Efficiency• Quality/Reliability• Supply Chain/Distribution Channels
Translation: Creating Value for Customers
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MSETM 5110 – New Product Development
In Review
• Competing Through Development Strategy
• The Concept of a Development Strategy
• Maps and Mapping: Functional Strategies in Pre-Project Planning
• The Aggregate Project Plan
• Structuring the Development Funnel
• A Framework for Development
• Cross-Functional Integration
(cont’d.)
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MSETM 5110 – New Product Development
In Review (cont’d.)
• Organizing and Leading Project Teams
• Tools and Methods
• Prototype/Test Cycles
• Learning From Development Projects
• Building Development Capability
Wheelwright and Clark, Revolutionizing Product Development: Quantum Leaps in Speed, Efficiency, and Quality.
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MSETM 5110 – New Product Development
Four Types of Product/Process Development Projects
1. Research or Advanced Development Projects
2. Breakthrough Development Projects
3. Platform or Generational Development Projects
4. Derivative Development Projects
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MSETM 5110 – New Product Development
Summary of Clockspeed by Charles H. Fine, Sloan School of Management, M.I.T.
In the natural world, species evolve—that is, they change to meet new challenges—or they die. The same genetic imperative operates in business.
A Partial Listing of Contents:
The Genetics of BusinessLearning from the Fruit Flies
Evolution or ExtinctionCompetition in the Age of Temporary Advantage
(cont’d.)
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MSETM 5110 – New Product Development
A Partial Listing of Contents: (cont’d.)
What Fruit Flies Teach Us About BusinessThe Insights of Clockspeed
Survival of the FittestThe Temporary Nature of Advantage
Supply Chain DesignThe Ultimate Core Capability
Executing Strategy in the Age of Temporary AdvantageThree-Dimensional Concurrent Engineering
Genetic Engineering in A Fast-Clockspeed WorldBuilding Capabilities Through Dynamic 3-D Concurrent Engineering
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MSETM 5110 – New Product Development
Structuring for NPI and Continuous Performance Improvement
Mission/Values
Baseline/Benchmark
Metrics
Document the Lessons Learned
Adjust the Process
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MSETM 5110 – New Product Development
Purpose
Connectivity
Relevancy
Application
Science: “what is”
Engineering: “creating what has never been”
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MSETM 5110 – New Product Development
The Four Disciplines of a Healthy Organization
• Build and Maintain a Cohesive Leadership Team
• Create Organizational Clarity
• Over-Communicate Organizational Strategy
• Reinforce Organizational Clarity Through Human Systems
Source: Patrick Lencioni, “The Four Obsessions of an Extraordinary Executive.”
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MSETM 5110 – New Product Development
Objective(s)
Focusing on Things That Make a Difference (Value)
Flawless Execution
Continuous Improvement