1Product Design & DevelopmentandNew Products Management
2• The following are based on the book“Product Design and Development” by K.T. Ulrich and S. D. Eppinger
3Introduction• Definition of Product and ProductDevelopment (PD)• Characteristics of a Successful ProductDevelopment• Who ...
4Definition of a Product and ProductDevelopment• A Product is something sold by anenterprise to its customers• Product Dev...
5Why Is Product DevelopmentImportant• It is “big business”• Hundred billion dollars• New products answer to biggest proble...
6Who ‘owns’ the problem• Marketing• Design• Manufacturing
7Product Development ProcessIs a Roadmap
8Characteristics of SuccessfulProduct Development• Product quality– How good is the product resulting fromdevelopment ?– D...
9Characteristics of SuccessfulProduct Development• Development time– How long did the PD effort take ?• Development cost– ...
10Who Designs and DevelopsProducts• Marketing• Design• Manufacturing
11Challenges• Trade-offs• Dynamics• Details• Time pressure• Economics• Creation• Satisfaction ofsocietal andindividual nee...
12Products vs. development effort
13Products vs. development effort
14Structured MethodologiesStructured methodologies are valid forthree reasons:• They make the decision-making processexpli...
15ApproachAssumes the core functions of a firm to be:• Marketing• Design• Manufacturing
16Organizational realities• Lack of empowerment of the team• Functional allegiances transcendingproject goals• Inadequate ...
17Products that make companiessuccessful
18New Products Management• The following are based on the book byMerle Crawford and Anthony Di Benedetto
19Opportunity Identification andSelection
20Some Hot New Products• Kawasaki Z1000 – a “naked” sport bike with a minimal plasticbody designed to show off the inner w...
21Products of the Future• Intelligent refrigerators will track food inventories, and will either provide ahard-copy shoppi...
22Not All New Products ArePlanned• Microwave ovens• Aspartame (NutraSweet)• ScotchGard fabric protector• Teflon• Penicilli...
23What Is a New Product?• New-to-the-world (really-new) products (10% of new products):Inventions that create a whole new ...
24What About…• New Services?• New Business-to-Business Products?• New International/Global Products?
25What Is a Successful NewProduct?9040100102030405060708090Sometimes Quotedin PressResearch Reports Sometimes ClaimedPerce...
26Classic Brand Names• Budweiser• Ivory• Coca-Cola• Maxwell House• Kodak• General Electric• Steinway• Wrigley• Kleenex• Wa...
27The Conflicting Masters of NewProducts Management• Three inputs to the newproducts process: the rightquality product, at...
28Breakthrough Innovations thatChanged Our Lives• Personal Computer• Microwave Oven• Photocopier• Pocket Calculator• Fax M...
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Etm551 lecture01

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Etm551 lecture01

  1. 1. 1Product Design & DevelopmentandNew Products Management
  2. 2. 2• The following are based on the book“Product Design and Development” by K.T. Ulrich and S. D. Eppinger
  3. 3. 3Introduction• Definition of Product and ProductDevelopment (PD)• Characteristics of a Successful ProductDevelopment• Who design and develops products• Duration and Cost of ProductDevelopment• The Challenges of Product Development
  4. 4. 4Definition of a Product and ProductDevelopment• A Product is something sold by anenterprise to its customers• Product Development is the set ofactivities beginning with the perception ofa market opportunity and ending in theproduction, sale,and delivery of a product
  5. 5. 5Why Is Product DevelopmentImportant• It is “big business”• Hundred billion dollars• New products answer to biggest problems• A successful new product does more goodfor an organization than enything else• It is great life; it is fun and exciting
  6. 6. 6Who ‘owns’ the problem• Marketing• Design• Manufacturing
  7. 7. 7Product Development ProcessIs a Roadmap
  8. 8. 8Characteristics of SuccessfulProduct Development• Product quality– How good is the product resulting fromdevelopment ?– Does it satisfy customer needs ?– Is it robust and reliable ?– Product quality is reflected in market share ?• Product cost– What is the manufacturing cost ?– It includes capital equipment and tooling ?
  9. 9. 9Characteristics of SuccessfulProduct Development• Development time– How long did the PD effort take ?• Development cost– How much spent in PD effort ?• Development capabilities– Did the team/firm acquire any experience forfuture projects ?
  10. 10. 10Who Designs and DevelopsProducts• Marketing• Design• Manufacturing
  11. 11. 11Challenges• Trade-offs• Dynamics• Details• Time pressure• Economics• Creation• Satisfaction ofsocietal andindividual needs• Team diversity• Team spirit
  12. 12. 12Products vs. development effort
  13. 13. 13Products vs. development effort
  14. 14. 14Structured MethodologiesStructured methodologies are valid forthree reasons:• They make the decision-making processexplicit• They provide “checklists” to ensure thatimportant issues are not forgotten• They are readily documented in astructured way
  15. 15. 15ApproachAssumes the core functions of a firm to be:• Marketing• Design• Manufacturing
  16. 16. 16Organizational realities• Lack of empowerment of the team• Functional allegiances transcendingproject goals• Inadequate resources• Lack of cross-functional representation onthe project team
  17. 17. 17Products that make companiessuccessful
  18. 18. 18New Products Management• The following are based on the book byMerle Crawford and Anthony Di Benedetto
  19. 19. 19Opportunity Identification andSelection
  20. 20. 20Some Hot New Products• Kawasaki Z1000 – a “naked” sport bike with a minimal plasticbody designed to show off the inner workings.• Trivection ovens – GE’s Profile and Monogram ovens use acombination of thermal, convection, and microwave technology.• PalmOne Treo 6000 – A handheld PDA with phone,speakerphone, camera, music player, and keyboard.• Clorox Bleach Pen – A gel pen that lets you put bleach where youwant to, such as on mildew between shower tiles.• Apple’s iTunes Music Store – Allows you to download hundreds ofthousands of songs from the Internet to save or play on an AppleiPod.• P&G’s Mr. Clean Magic Eraser – Melamine scouring pad with aneraser-like function: it wears down with use.• Toyota Prius – Hybrid car with futuristic styling and 55 MPG gasmileage.
  21. 21. 21Products of the Future• Intelligent refrigerators will track food inventories, and will either provide ahard-copy shopping list or send an electronic list to a home-deliveryservice.• Intelligent wallpaper will transform a wall to a television, a computer screen,works of art, etc.• Robotic lawn mowers will tend the grass within any specified boundary.• “Nanny-cams” hidden in teddy bears permit parents to watch their childrenat daycare; camera-surveillance systems will keep an eye on latchkey kidshome alone.• Holographic storage will be used to store and retrieve home videos.• Lasers and decay-preventive gum and toothpastes will minimize the needfor the dentist’s drill.• Robots will dispense gasoline, and know your preferred grade.• “Smart” heart pacemakers will be placed in the wrist.
  22. 22. 22Not All New Products ArePlanned• Microwave ovens• Aspartame (NutraSweet)• ScotchGard fabric protector• Teflon• Penicillin• X-rays• DynamiteIn each case, an accidental discovery -- but someone knewthey had something when they saw it!
  23. 23. 23What Is a New Product?• New-to-the-world (really-new) products (10% of new products):Inventions that create a whole new market. Ex.: Polaroid camera,Sony Walkman, Palm Pilot, Rollerblade skates, P&G Febreze andDryel.• New-to-the-firm products (20%): Products that take a firm into acategory new to it. Ex.: P&G brand shampoo or coffee, Hallmark giftitems, AT&T Universal credit card, Canon laser printer.• Additions to existing product lines (26%): Line extensions and flankersin current markets. Ex.: Tide Liquid, Bud Light, Apple’s iMac, HPLaserJet 7P.• Improvements and revisions to existing products (26%): Currentproducts made better. Ex.: P&G’s continuing improvements to Tidedetergent, Ivory soap.• Repositionings (7%): Products that are retargeted for a new use orapplication. Ex.: Arm & Hammer baking soda sold as a refrigeratordeodorant; aspirin repositioned as a safeguard against heart attacks.• Cost reductions (11%): New products that provide the customer similarperformance but at a lower cost. May be more of a “new product” interms of design or production.
  24. 24. 24What About…• New Services?• New Business-to-Business Products?• New International/Global Products?
  25. 25. 25What Is a Successful NewProduct?9040100102030405060708090Sometimes Quotedin PressResearch Reports Sometimes ClaimedPercent of Products that FailAlthough you may hear much higher percentages, carefulstudies supported by research evidence suggest that about40% of new products fail -- somewhat higher for consumerproducts, somewhat lower for business-to-business products.
  26. 26. 26Classic Brand Names• Budweiser• Ivory• Coca-Cola• Maxwell House• Kodak• General Electric• Steinway• Wrigley• Kleenex• Waterford• L.L. Bean• Ford• John Deere• Maytag• JCPenney• Sears• Colgate• Hershey• Gillette• TiconderogaWhich of these have the most value today as launch padsfor new products?
  27. 27. 27The Conflicting Masters of NewProducts Management• Three inputs to the newproducts process: the rightquality product, at the righttime, and at the right cost.• These conflict with eachother but may havesynergies too.• Issue: how to optimizethese relationships in anew product situation.QualityTime CostValue
  28. 28. 28Breakthrough Innovations thatChanged Our Lives• Personal Computer• Microwave Oven• Photocopier• Pocket Calculator• Fax Machine• Birth Control Pill• Home VCR• Communication satellite• Bar coding• Integrated Circuit• Automatic Teller• Answering Machine• Velcro Fastener• Touch-Tone Telephone• Laser Surgery• Apollo Lunar Spacecraft• Computer Disk Drive• Organ Transplanting• Fiber-Optic Systems• Disposable Diaper• MS-DOS• Magnetic ResonanceImaging

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