product-service information systems – designing new...

Product-Service Information Systems – Designing New Products Univ.-Prof. Dr.-Ing. Wolfgang Maass Chair in Economics – Information and Service Systems (ISS) Saarland University, Saarbrücken, Germany WS 2011/2012 Fridays, 10:00 – 11:30 a.m. Room HS 020, B4 1

Univ.-Prof. Dr.-Ing. Wolfgang Maass

18.11.11 Slide 2

Agenda

1.  Introduction 2.  Design Science in Information Systems 3.  Nature of Products 4.  Guest Lecture: Product Design 5.  New Product Development (NPD) 6.  Nature of Services 7.  New Service Development (NSD) 8.  Nature of Product-Service Systems (PSS) 9.  Product-Service Information Systems 10.  Designing PSS (1) 11.  Designing PSS (2) 12.  Empirical Evaluation of PSS (1) 13.  Empirical Evaluation of PSS (2) 14.  Advanced Topics: Design Science of PSS


18.11.11 Slide 3

Product Development

•  „Product development is the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product.“ (Ulrich & Eppinger, 2011, p. 2)

•  Assessing the performance of product development – 5 dimensions ①  Quality of resulting product regarding satisfaction of customer needs and reliability ②  Costs of product concerning manufacturing ③  Development time ④  Development costs ⑤  Development capability of the firm

(Ulrich & Eppinger, 2011)


18.11.11 Slide 4

Personnel, Time & Costs

•  Interdisciplinary teams; three central functions: marketing, design and manufacturing

•  Exemplary team for electromechanical product of modest complexity; e.g., coffee maker (Ulrich & Eppinger, 2011)

Rollerblade In-Line Skater Boeing 777 Airplane

Annual production time 100.000 units/year 50 units/year

Sales lifetime 3 years 30 years

Sales price $150 $260 million

Number of unique parts 35 parts 130.000 parts

Development time 2 years 4,5 years

Internal development team (peak size) 5 people 6.800 people

Development cost $750.000 $3 billion


18.11.11 Slide 5

Product Development Process

•  „A product development process is a sequence of steps or activities that an enterprise employs to conceive, design, and commercialize a product.“ (Ulrich & Eppinger, 2011, p. 12)

•  Challenges of Product Development •  Trade-Offs: management of trade-offs that maximizes success of the product •  Dynamics: decision making in an environment of constant change •  Details: many decisions to be made even for products with modest complexity •  Time pressure: product development decisions must usually be made quickly and without

complete information •  Economics: for a reasonable ROI, resulting product must be both appealing to customers

and realtively inexpensive to produce



18.11.11 Slide 6

Product Development Process

•  Generic product development (PD) process


•  Why are well-defined development processes important? •  Quality assurance – phases and checkpoints •  Coordination – roles and contributions •  Planning – milestones •  Management – benchmark for performance •  Improvement – documentation and reviews


18.11.11 Slide 7

Variants of Generic Product Development Process

Product Type Description Distinct Features of PD Process Examples

Generic (market-pull) products

Starting with market opportunity and selecting appropriate technologies to meet needs Generic PD process Furniture

Technology-push products

Starting with new technology, then finding appropriate market

Matching technology with market in planning phase; given technology in concept development

Gore-Tex rainwear

Platform products

New product will be built around established technological subsystem

Given technology platform in concept development

Consumer electronics

Process-intensive products

Characteristics of product highly constrained by production process

Either production process must be specified or both – product and process from the start Snack foods

Customized products

New products = slight variations of existing configurations

Similarity of projects allows streamlined PD process Cars

High-risk products

Technical or market uncertainties create high risk of failure Analysis and testing as early as possible Pharmaceuticals

Quick-build products

Rapid modeling and prototyping enables many design-build-test cycles Phases are repeated a number of times Software

Complex systems

Systems must be decomposed into several subsystems/components

Parallel development by many teams; then integration and validation Airplanes



18.11.11 Slide 8

Brainteaser

•  Draw a process for planning and cooking a family dinner.

•  Is your process similar to the generic product development process?

•  Is cooking dinner analogous to a market-pull, technology-push, platform, process-intensive, customization, high-risk, quick-build, or complex system process?

•  One student will present his solution! (papers will be collected)

5 Minutes


18.11.11 Slide 9

Product Development Process – 0. Planning

•  „Phase zero“ -- launch of PD process •  Identification of opportunities guided by corporate strategy •  Assessment of technology developments and market objectives

•  Output: project mission statement consisting of specification of target market for product, business goals, production constraints etc.


•  „An opportunity is a product description in embryonic form, a newly sensed need, a newly discovered technology, or a rough match between a need and a possible solution.“ (Ulrich & Eppinger, 2011, p. 34)


18.11.11 Slide 10

Product Development Process – 0. Planning Types of Opportunities

Existing need/market that we currently serve

Existing need/market that we do

not address

New need/market Exploration into new markets

New-category products and service

Exploration with new

solutions, approaches

Next generation products snd

services for core markets

Improvements, extensions, variants, cost reductions

Adjacent growth

(Terwiesch & Ulrich, 2009) Knowledge of Solution

Kno

wle

dge

of N

eed


18.11.11 Slide 11

New Development Process

(Schilling & Hill, 1998; p. 67)


18.11.11 Slide 12

Product Development Process – 0. Planning How to Identify Opportunities?

(Terwiesch & Ulrich, 2009)

•  Identifying set of opportunities and select subsets for further development

•  Often, hundreds or thousands of raw opportunities are considered for one commercial success

•  Selection of subsets by filtering processes to gain exceptional opportunities

•  To be effective: •  Generate large number of opportunities •  High quality of opportunities •  High variance in quality of opportunities



18.11.11 Slide 13


•  Step 1: Establish a charter (closely analogous to the mission statement of a product)

•  „Create a physical product in the cat toy category that we can launch to the market within about a year through the existing retail sales channel.“


•  Step 2: Generate and sense many opportunities •  Focus on (organization-) internal and external sources of

opportunity •  Structured techniques for generating opportunities: e.g.,

„imitate, but better“ approach – exploiting solutions by other firms and considering alternative solutions that address the same/alternative needs

•  Step 3: Screen opportunities (cf. VanGundy, 1998) •  Eliminate opportunities unlikely to result in creation of value •  Focus on opportunities worthy of further investment •  How? – 2 methods: web-based surveys and workshops with „multivoting“ („dots“)


18.11.11 Slide 14


•  Step 4: Develop promising opportunities •  Resolve greatest uncertainty at the lowest cost in time and money •  Developing a few of the opportunities •  Investigation concerning existing solutions; informal discussion with potential customers;

concept generation; quick prototypes; customer interviews


•  Step 5: Select exceptional opportunities •  Handful of opportunities; uncertainty

resolved; pick exceptional few opportunities •  Real-Win-Worth-it (RWW) method (Day,

2007) summarizes 3 questions: (1) Is the opportunity real?; (2) Can you win with this opportunity?; (3) Is the opportunity worth it financially?

•  Step 6: Reflect on the results and the process


18.11.11 Slide 15


Real-Win-Worth-it (RWW) method (Day, 2007, p. 115)


18.11.11 Slide 16

Product Development Process - 1. Concept Development

Perform economic analysis

Benchmark competitive products

Build and test models and prototypes

Mission statement

Development plan



18.11.11 Slide 17

Product Development Process - 1. Concept Development Establish Target Specifications

•  What? •  Customer needs expressed in „language of customers“ – to much margin for subjective

interpretation, e.g., „the notebook boots fastly“ •  Specifications spell out in precise, measureable detail what product has to do •  = unambigous agreement on what the team wants to achieve in order to satisfy customer

needs, e.g., „the average time for booting is less than 120 seconds“ •  Specification consists of metric (e.g., average time for booting) and value (e.g., less than

120 seconds) labeled with unit

•  When?

•  After identifying customer needs – setting of target specifications that represent hopes and aspirations of the team

•  After selection of product concept, target specification have to be refined to final specifications (later subphase in concept development)

•  How? ①  Prepare list of metrics ②  Collect competitive benchmmarking information ③  Set ideal and marginally acceptable target values ④  Reflect on the results and the process (Ulrich & Eppinger, 2011)


18.11.11 Slide 18

Product Development Process - 1. Concept Development Establish Target Specifications

①  Prepare list of metrics - Example •  simple needs-metrics matrix represents

relationship between needs and metrics •  Key element of „House of Quality“, graphical

technique used in Quality Function Development (QFD) (Hauser & Clausing, 1988; Rawasamy & Ulrich, 1994)

Need/Metrics

Processor faster than

4GHz

Dimension max. 25 x

15 cm

Max. 500g

High speed processor

Highly portable

Low weight

②  Collect competitive benchmmarking information - Example

•  Competitive benchmarking chart with rows = customer needs and columns = competitive products

•  Compare customers‘ perceptions of relative degree to which products satisfy their needs (Urban & Hauser, 1993)

•  More „dots“ – greater perceived satisfaction of needs



18.11.11 Slide 19





Mission statement

Development plan



18.11.11 Slide 20

Product Development Process - 1. Concept Development Generate Product Concepts

Sub- problems

Sub- problems

Existing concepts

New Concepts Integrated

solutions



18.11.11 Slide 21

Product Development Process - 1. Concept Development Generate Product Concepts

Example: accessible syringe doser that gives dosed syringe combined with audiovisual output Concept classification tree of subproblem syringe dosing Concept combination table


18.11.11 Slide 22





Mission statement

Development plan



18.11.11 Slide 23

Product Development Process - 1. Concept Development Select Product Concept(s)

•  Two-stage concept selection methodology •  Several iterations •  Both stages follow six-step process

①  Preparing matrix ②  Rate concepts ③  Rank concepts ④  Combine and improve concepts ⑤  Select one or more concepts ⑥  Reflect on results and process

Exemplary screening m

atrix (Pugh, 1990, 1996)

(Alger & Hays, 1964; Ulrich & Eppinger, 2011)


18.11.11 Slide 24

Product Development Process – Further Phases

2.  System-level design •  Definition of product architecture, decomposition of product into subsystems and

components, design of key components •  Output: geometric layout of product, functional specification of subsystems, process flow

diagram of assembly process

3.  Detail design •  Complete specification of geometry, materials etc. of all parts, identification of standard

parts to be purchased •  Output: control documentation for product, i.e. drawings describing geometry, production

tooling, process plan for fabrication and assembly



18.11.11 Slide 25

Product Development Process – Further Phases

4.  Testing and refinement •  Construction and evaluation of multiple preproduction versions of product •  Output: beta prototypes evaluated internally and tested by customers in their own

environment

5.  Production ramp-up •  Product is made using the intended production system, training of workforce in

production processes •  gradual transition from ramp-up to ongoing production, launch of product and widespread

distribution



18.11.11 Slide 26

Outlook

1.  Introduction 2.  Design Science in Information Systems 3.  Nature of Products 4.  Guest Lecture: Product Design 5.  New Product Development (NPD) 6.  Nature of Services 7.  New Service Development (NSD) 8.  Nature of Product-Service Systems (PSS) 9.  Product-Service Information Systems 10.  Designing PSS (1) 11.  Designing PSS (2) 12.  Empirical Evaluation of PSS (1) 13.  Empirical Evaluation of PSS (2) 14.  Advanced Topics: Design Science of PSS


18.11.11 Slide 27

Literature

Books: •  Alger, J. and Hays, C. Creative Synthesis in Design, Prentice Hall, 1964. •  Kepner, C. H. and Tregoe, B. B. The Rational Manager, McGraw-Hill/Irwin, 1965. •  Pugh, S. Creating Innovative Products Using Total Design, Addison-Wesley, 1996. •  Pugh, S. Total Design, Addison-Wesley, 1990. •  Terwiesch, C. and Ulrich, K. Innovation Tournaments: Creating and Selecting Exceptional Opportunities, Harvard

Business School Press, 2009. •  Ulrich, K. T. and Eppinger, S. D. Product Design and Development, McGraw-Hill/Irwin, 2011. •  Urban, G. L. and Hauser, J. R. Design and Marketing of New Products, Prentice Hall, 1993. •  VanGundy, A. B. Techniques of Structured Problem Solving, Springer Netherlands, 1988.

Papers: •  Day, G. S. "Is it real? Can we win? Is it worth doing? Managing risk and reward in an innovation portfolio," Harvard

Business Review (85:12), 2007, pp. 110-120. •  Hauser, J. R. and Clausing, D. "The House of Quality," Harvard Business Review (3), 1988, pp. 63-73. •  Ramaswamy, R. and Ulrich, K. T. "Augmenting the House of Quality with Engineering Models," Research in

Engineering Design (5), 1994, pp. 70-79. •  Melissa A. Schilling; Charles W. L. Hill “Managing the new product development process: Strategic imperatives”

The Academy of Management Executive; Aug 1998; 12, 3, pg. 67.


Univ.-Prof. Dr.-Ing. Wolfgang Maass Chair in Information and Service Systems Saarland University, Germany

product-service information systems – designing new...

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