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Web Site Attachment 5(Material not intended for print in DSJIE but will be available on a web site)
Payloads 9.8 Discussion
Payloads Drop Outcome Small Product Large Product .
Distance from Distance from Drop Time Bulls Eye Break? Drop Time Bulls Eye Break? Team (seconds) (meters) (yes or no) (seconds) (meters) (yes or no)1234567 Free Fall
Payloads 9.8 Performance Summary
#Part Mtls. Devel. Time Total Revenue .Team #Parts Types Cost Time Cost Cost Small Large Profit1
2
3
4
5
6
7
A big hand for the winner!
Fabulous Prizes: Egg Coloring Kits for Function Representatives• Manufacturing Engineering: Which team
had the lowest part cost?
• Business Development: Which team had the highest revenue?
• Marketing: Which team had the shortest development time?
Reflections
LeadershipGame Outcomes
TeamProcess
Cross functional
issues
Technical Issues
TimeMaterials
Mindmap
ProductPerformance
SocialIssues
NPD Performance RelationshipsCommunication Problems?
Let’s review the criteria and who knew it!
DevelopmentSpeed
DevelopmentProgramExpense
ProductPerformance
ProductCost
Revenue/Accuracy Relationships
$700,000
$500,000
$300,000
$200,000
Outside =$100,000
Within 1 meter of center point
Within .5 meter of center point Within 2 meters of center point
Within 3 meters of center point
$1,300,000
$ 1,000,000
$700,000
$500,000
Outside =$200,000
Small Payload:Camera
Large Payload: Atmospheric Monitoring
Note: revenue accruesonly with successful
landings.
Cost Structure and Parts WorksheetDiscrete PartsNumber of Units Used 1 2 3 4 5 6 7 8 Cost/Unit $20,000 10,000 5,000 2,000 2,000 2,000 2,000 2,000
Cumulative Costs
eggs $20,000 30,000 35,000 37,000 xx xx xx xxnewspaper sections $20,000 30,000 xx xx xx xx xx xxstyrofoam cups $20,000 30,000 35,000 37,000 39,000 41,000 43,000 45,000popsickle stks $20,000 30,000 35,000 37,000 39,000 41,000 43,000 45,000typing paper $20,000 30,000 xx xx xx xx xx xxplastic straws $20,000 30,000 35,000 37,000 39,000 41,000 xx xxpipe cleaners $20,000 30,000 35,000 37,000 39,000 41,000 xx xxrubber bands $20,000 30,000 35,000 37,000 39,000 xx xx xxsticks/bubble gum $20,000 30,000 35,000 37,000 39,000 41,000 xx xxpaper clips $20,000 30,000 35,000 37,000 xx xx xx xxballoons $20,000 30,000 35,000 37,000 39,000 41,000 xx xxhole reinforcers $20,000 30,000 35,000 37,000 39,000 41,000 43,000 45,000sections of plastic $20,000 30,000 xx xx xx xx xx xx
Non-Discrete PartsThe above cost structure applies to discrete parts only. A non-discrete part will cost $20,000, no matter how much of each is used. These include:
duct tape $20,000rubber cement $20,000string $20,000
ToolsThere is no charge for the scissors, ruler, markers, or bag, but they must not be used in the product.
Development Time as a Performance Factor
•Shorter development times have numerous benefits related to overhead costs, team morale, bonuses from NASA, and follow-on work. •The company has done a careful analysis of time-to-market costs for the Payloads Project. The results of these analyses are shown in Exhibit 3.
•Teams will be measured on the amount of time they use to complete their designs and submit them with the appropriate paperwork for review.
Development Time and Cost
0
500000
1000000
1500000
2000000
2500000
0 20 40 60 80
Development Time
Series1
Lesson from Prior Games
Work Quickly, but Carefully,
Keep it Simple and Good Things will Follow!
Product Development Field of Dreams
$ by # Part Types
-600
-300
0
300
600
900
1200
6 7 8
# Part Types
$Profit
1
2
3
45
6
$ by # Parts
-600
-300
0
300
600
900
1200
14 16 18 20# Parts
$Profit
3
1
4 5
6
2
$ by Development Time
-600
-300
0
300
600
900
1200
29 31 33 35 37
Development Time (Minutes)
$Profit
1
2
3
45
6
Cost Drivers --Keep it Simple!
$ by Product Reliability
-600-3000
300600900
1200
0.1 0.3 0.5 0.7 0.9Probability that Egg Breaks
$Profit
1
23
45
6
$ by Accuracy of Egg Drop
-600
-300
0
300
600
900
1200
2.4 2.9 3.4 3.9
Distance Ring to Bulls Eye
$Profit
1
23
46 5
Product Performance -- Revenue Drivers
How about new product development in the electronics industry?
Product Costs:Involve Key Personnel Early
% Design CostIncurred
% Product CostCommitted
3-5
5-8
8-10
10-15
15-100
40-60
60-80
80-90
90-95
95-100
90%
Pareto never rests!
McKinsey Study:“Better Expensive Than Late”
PercentLoss inTotalProfit
3.5%
22%
33%
50%DevelopmentCost Overrun
Product Cost9%
Too High
Ship Product6 Months
Late
Source: Electrical Engineering Times, August, 1989.
Payloads 9.8 Discussion
Technical Issues
• Seek out part commonality opportunities. • Short time-to-market has many advantages.• Feature creep plagues many NPD efforts.• Modularity has advantages.• Use and timing of beta tests = important.
Payloads 9.8Discussion
Social Issues
• Teams tend to “jump in” without discussing process.• Cross-functional communication can be incomplete.• Time pressure influences group behavior (half life rule).• Modularity allows for concurrent development work.• Functional rewards can lead to suboptimal designs.• It is useful to see, touch materials (Apollo 13 advantage).• Success is rewarding in itself.
Selected ReferencesClark, K.B. and Fujimoto, T. Product Development Performance. Boston: Harvard Business School Press, 1991.
DeMarco, T. & Lister, T. Peopleware: Productive Projects and Teams. New York: Dorset House, 1987.
Fine, C. Clockspeed, MIT Press, 1998.
Goldratt, E. The Critical Chain. North River Press, 1997.
King, Bob, Better Designs in Half the Time. Goal/QPC, 1989.
Marks, Peter and Riley, Kathleen, Aligning Technology, Design Insight, 1995. To order: 404-395-4001.
Marsh, S., Moran, J.W., Nakui, S., and Hoffherr, G., Facilitating and Training in Quality Function Deployment., Goal/QPC, 1991.
Norman, Donald, The Design of Everyday Things. Doubleday Currency, 1988.
Owen, Don M., Achieving Rational Process Control Plans in Process Industries Through Quality Function Deployment. Quality Integrity Systems, 1994. To order, call 615-671-8413.
Pugh, Stuart, Total Design: Integrated Methods for Successful Product Engineering. Addison-Wesley, 1991.
Shiba, Shoji, Graham, Alan, and Walden, David, A New American TQM. Productivity Press, 1993. ISBN#: 1-56327-032-3. To order, call: 503-235-0600.
Shirley, D. Managing Martians. Broadway Books, 1998.
Smith, Preston and Reinertsen, Donald, Developing Products in Half the Time: New Rules, New Tools. Van Nostrand Reinhold, 1997.
Utterback, James .M. Mastering the Dynamics of Innovation. Harvard Business School Press, 1994.