Product Design and development

Phase 0: Planning
Phase 1: Concept development
Phase 2 : system -level design
Phase 3: Detail design
Phase 4: Testing and refinement
Phase 5: Production Ramp-up

Lecture 1: “Introduction to concurrent Engineering in product design”

Product Engineering-

Design Intent: The ideal goal of design is to develop a reliable product that is best for
functioning, manufacturing, assembling, and servicing- which is difficult to achieve.

Product Realization Process

Characteristics of a new product Launch

 Changes in Competitive Environment
- Rapidly evolving technologies
- Complex products
- Consumer demands
- Time to market (TTM)
- Cost competitiveness
- Global Trends- less government Regulations

Strategic Plan:
- The strategic plan is the organization‟s major vehicle for policy deployment and its
execution.
1. Identifies the company‟s mission
2. Identifies its strengths and weaknesses and long- range business objectives
3. Selects market segment to pursue
4. Formalizes process for selecting products for development
 5. Selects products and identifies strategic and tactical issues that must be
resolved
6. Projects financial returns from selected markets and products

Product Development
- The product development process uses customer expectations and input, and
concurrent engineering as a design approach.

Concurrent Engineering Approach

● Concurrent engineering is a design approach that merges product design and
manufacturing.
○ Characteristics of concurrent engineering:
■ More precise definition of the product without late changes
■ Manufacture and assembly design undertaken in the early design
stage
■ Well-defined product development
■ More accurate cost estimates

Traditional Design process

Traditional Design process

Conventional Product Design approach - Partial processes

Traditional Design process

Over the wall Engineering (the old way of thinking)

Traditional Design Process Problems?

• Limited/Traditional communication between different groups
i.e. INITIATOR and IMPLEMENTOR
• CSB (Customer Support Business) and other staff only see the design at the design
review stage i.e. it is almost complete
• Any revisions or deficiencies resulting from the design reviews are costly and difficult to
implement; Time consuming; resulting in them being partially or not being implemented at all.

● Cost to Detect and Repair a defect at various levels of product Integration

Traditional Design Process : Some of the Major problems

- Minimal understanding of customer requirements
- Poor communication within different groups
- Loosely defined guidelines/process
- Integrated lessons learnt database missing
- Last minute changes resulting in schedule pressures, manufacturing problems resulting
in waste of time, money and resources.
- RESULT ----> DELAYED MARKET ENTRY

Why is time to market so important?

● On time but development costs 50% over budget (4% less profit)
● 6 months delay in market entry (33% less profit)*
What is concurrent Engineering?

Concurrent Engineering: is a work methodology based on the parallelization of tasks

(i.e. concurrently)
- It refers to an approach used in product development in which functions of design engineering,
manufacturing engineering and other functions are integrated to reduce the elapsed time
required to bring a new product to the market.

- Concurrent Engineering means that there is a tight link between all participants in the
product development process, such that they can perform much of their work at about the same
time.
- It is not just a link between design and engineering
- Industrial design (aesthetic) should work concurrently with manufacturing.
 - Sales strategies, mechanisms for delivering service after sale, methods of the disposal
should be also concurrent with design and manufacturing.

Is concurrent engineering for me?

What things are the core of concurrent engineering?
- Increased role of manufacturing process issues on product design decisions
- Formation of cross-functional teams
- Focus on meeting customer products requirements
- Lead time as competitive advantage

Concurrent Engineering is an attempt to balance three key factors

Is concurrent engineering for me?

What is the cost in Concurrent Engineering practice? When is it a bad idea?

- Concurrent engineering practices are not warranted when the product is simple, or when
the incremental change is marginal.
- Concurrent engineering is difficult, that is, it involves some administrative and
communication overhead, as well as effort to change company culture.
Concurrent Design

Concurrent Product Design Approach

Concurrent Engineering
- Simultaneous decision-making by design teams
- Integrates product design & process planning
- Details of design more decentralized
- Needs careful scheduling - tasks done in parallel

Five Key Elements in Concurrent Engineering

1. Design for Cost
2. Design for Performance/Quality Function Deployment: provides a methods for
rating the importance of specific product features using customer input; These
features are then compared to competitive products
3. Design for Manufacturability and Assembly: the ease with which a product can be
assembled and tested quickly and with least labor
4. Design for Serviceability: the ease and speed with which a product‟s status can
be assessed and any faults repaired
5. Design for Compliance: with customer and internal regulatory requirements
BENEFITS OF CONCURRENT ENGINEERING
- Representatives from the different groups can better consider trade-offs in cost & design
choices as each decision is being made
- Development time is reduced due to less rework (traditionally, groups would argue with
earlier decisions & try to get them changed)
- Emphasis is on problem-solving (not placing blame on the „other group‟ for mistakes)

Sequential Vs. Concurrent Product Development

Concurrent Engineering Statistics

The Product Life Cycle

Concurrent Engineering Benefits

- 30% to 70% less development time

- 65% to 90% fewer engineering changes
- 20% to 90% less time to market
- 200% to 600% higher quality
- 20% to 110% higher white collar productivity
Examples : Boeing 777 Development Program

Concurrent Engineering Allowed to:

- Reduce development time from 60 to 48 months
- Meet customer requirements better by involving them in the development process;
allowed Boeing to better configure the aircraft by making it modular.
- The airliner to be 100% designed using 3-D solid modeling technology, helped avoid
building full-sized mock-ups; savings of over $2.25 million
- Overall program cost reduced by 25%
- Over 3000 redundant assembly interfaces eliminated

Examples: Chrysler
- Chrysler reduced its concept to market cycle for new cars from 60 months in 1988 to 24 months
in 1996
- Minimized development cost per car: $550 per car vs. $2,000 at Mercedes-Benz
- Collocated all functions together: engineering, design, marketing, purchasing
- By 1988 Chryslers vehicle line-up was one of the most innovative in the industry

HOW TO SUCCEED WITH CONCURRENT ENGINEERING : THE CE ELEMENTS

1. Create cross-functional teams
2. Improve Communication with the customer
3. Design process concurrently with the product
4. Involve Suppliers and subcontractors Early
5. Simulate product performance
6. Simulate process performance
7. Integrate Technical reviews
8. Incorporate “lessons learned”
9. Integrate CAD tools with the product model
10. Continuously improve the design process

How to succeed with concurrent Engineering

1. Use team's body knowledge to ensure that things will be done right the first time

2. Design trade-offs must be carefully analyzed for performance characteristics vs. design to cost goals
and producibility

3. Complexity for complexity's sake must be eliminated

4. Keep it Low Cost and Simple

5. Concurrent Engineering requires that one or more Teams Work together and thus effective
Communication is crucial
Concurrent Engineering Teams – Kick-Off Meetings

Kick-off Meetings

- Official beginning
- Set the tone of the project
- Ensure all relevant stakeholders attend
- Explain the scope

Communication

- Define common vocabulary

- Agree on a common purpose
- Agree on individual priorities
- Commitment

Set Goals
- Must be
- Realistic
- Measurable
- Specific
- Associated with Deadlines

Focus

- Understanding customer value

- Goals which beat the competition
- Faster Cycle Time
- Target Cost
Plan, Plan, Plan
“Failure to plan is planning to fail.”
• Start with procurement strategy
• Scheduled
– release of information as needed
– completion of design tasks to prevent manufacturing scrap
– design reviews for program protection and risk management
– manufacturing process development
– test program
• Alignment of supplier and customer detail plans
• Monitor plan progress and performance
 Measure Performance
• Product Development Schedule Lengths
• Meeting Product Development Schedules
• Meeting Project Development Budgets
• Reducing The Number Of Design Iterations
• Increasing Up Front Effort, Decreasing Back End Efforts

How to Succeed with Concurrent Engineering

Continuous Improvement

• Look At Processes As A Whole

• Engineer Small Changes Constantly
• Use Evolutionary Steps
• Design Measurements For Each Step In The Process
• Automate Measurement And Analysis As Appropriate
• Six Sigma and Manufacturing Process Capability Assessment
Map The Process

How to Succeed with Concurrent Engineering

Integrate everything together:
Key Process areas with Key Values to Maximize Performance
HOW TO SUCCEED WITH CONCURRENT ENGINEERING
Effective Concurrent Engineering Requires:
1. Effort
2. Discipline
3. Dedication

Stages of Concurrent Engineering:

Stages of Concurrent Engineering and their primary Criteria:

1. Project Identification

Goal: Ensure a single direction for corporate development to avoid shifting priorities, false
project starts, and pre- empted project efforts. Provide a simple, clear process to start the
project track.

- Get executive commitment and goal consistent with business objectives and corporate vision for
the project.
- Define a central point for approval, prioritization, and scheduling for all projects.

2. Project Scope

Goal: Estimate the project's effort, time, and cost so executives can make an informed decision about the
project's worth
- Confirm the expectations of the Customers and get consensus with them and the executive and
corporate goals.
- Support the project's success by avoiding unrealizable date or budget constraints or unallocated
resources.
3. Requirement and Analysis

Goal: Build and validate a model of the business problem domain to ensure the correct problem is defined
and customer needs are accurate before attempting a solution.

- Get requirements jointly with the user and write a specification that can be implemented, tested
and explained.
- Provide traceability between the customer needs, system solution and testing to enable change
management.
- Justify project needs are best met by comparing purchase, build, or hybrid solutions (cost/benefit
analysis of vendor proposals).

4. System Design

Goal: Provide a technical solution that meets the customer needs and enhances the corporate
business position and value.

- Design and validate a technical solution at the high level.

- Define metrics to predict time of implementation and development effort, and to be used later for
process improvement.
- Build a test plan from the requirements, not the design or code.

5. Development Planning

Goal: Define a work plan for implementing a technical solution, whether a purchased package, new
development, maintenance change, or a hybrid.

- Collect work plans for testing, customer acceptance, development, and documentation, and
ratify with all involved.
- Get written consensus on the project plan specification from all involved.
- Define a strong QA policy to ensure process compliance and product correctness.
- Establish configuration management for changes, defect resolution, and project control.

PRODUCT DEVELOPMENT TEAMS

INTRODUCTION

- Engineering schools requiring students work in teamS

- Collaborative study groups
- Laboratory groups
- Design groups
- as part of individual classes
- participating in extracurricular competitions

- Teams emphasis mirrors business management philosophy

- Why do Corporations focus on the use of Teams?

Increasing Complexity of Projects

More than Just One Part
- Modern design problems involve individual parts AND subsystems

- Mechanical
- Electrical
- Controls
- Thermal
- Many Others

Each Requires specialists acting in teams

Digital tools For Product Design

-The digital age in product design and manufacturing has driven the creation of
electronically stored information to never before seen levels.

• Areas seeing a major increase in storage requirements:

• Complex design files
• Simulation data for design optimization
• Design and estimation information shared between different departments
• Parts and assembly files
• Data created on the plant floor

Simulation and Modeling Tools

Simulated Models from the Virtual to the Real World

Virtual prototyping (VP) is rapidly gaining importance as the engineering practice of choice to
shorten the design cycle and aid rapid product development

Advantages:
- Availability of low-cost PC-based parametric simulation/analysis tools
- Integration of multi- physical simulations into a unified environment

Simulated Models from the Virtual to the Real World

Engineering Design Factors

● Initial Price
● Life Cycle Costs
● Performance
● Aesthetics
● Overall Quality
● Ergonomics
● Reliability
● Maintainability
● Manufacturability
● Environmental Factors
● Safety
● Liability
● World Market Acceptance

No One can be Expert in Everything!

Engineers are Doers

- Involves solving difficult problems

- Finding technical solutions while considering numerous constraints
- Make things happen

INTERNATIONAL FACTOR

- Many corporations are international in scope

- Requires communication and sharing data electronically
- Teams may never physically meet
– At any point in a 24-hour period in any part of the world, an engineer may be
working on the product

USE OF TEAMS

- Use of teams and new technologies have changed the process of engineering
- CAD/CAM
- Rapid Prototyping
- Shared Data
- Advanced Communications
PROJECT MANAGEMENT USES TEAMWORK

- Developed in 1950s and 1960s as a way to manage defense contracts

- Way of organizing individuals by products/projects not function
- Cross-functional team approach
- Not vertical divisions

NO Easy Task!

- Project managers never given all the time, people, and money needed
- Mirrored in student design teams
- Uncomfortable, but prepares for engineering world
- Planning work, schedules, and direct resource use
– Gantt Charts

TEAMS → Purpose - Its task at hand, reason it was formed

-Collective style is how the members worked together

– Each has own style, approach, dynamic, and ways of communication
- Friendship IS NOT a requirement for successful team

Successful Teams
Growth Stages of a team

- Teams require nurturing

- Must pass through several development stages before becoming successful
- Every team challenge is to grow through these stages and achieve performance

STAGE 1: FORMING

- Team members become acquainted with

– One another
– The Leader
– Team‟s Purpose
– Overall level of commitment (workload) required
– Learn one another‟s personalities, abilities, talents, and weakness

STAGE 2:STORMING

- Enormity and complexity of task sinks in

- May discourage
- One person doing ALL the work is FAILURE
- Leadership is critical and must focus team on task and strengths during rough
times

STAGE 3: NURTURING

- Members begin to accept one another instead of complaining

- Shared expectations or rules among the team
- Feelings of closeness, interdependence, unity, and cooperation develop

STAGE 4: PERFORMING

- Teams accomplish a great deal

- Responsibilities distributed and executed individually
- Each member holds the other accountable
- Members may pitch in to help one another
- Leader becomes indistinguishable
STAGE 5: ADJOURNING

- Team disbands
- Accomplished goals
- Successful teams may feel euphoric
- Underperforming team may feel disappointment or anger

PRODUCT DEVELOPMENT TEAMS

- Interdisciplinary, cross-functional
- Includes customer, marketing, design, engineering, manufacturing, sales, support
- Engineering teams are typically physically collocated to promote collaboration

Concurrent Engineering Teams - (GROUP VS.TEAM)

Group : Several individuals in some proximity to one another
Team: Two or more persons working together to achieve a common purpose

A Team IS not the same as a GROUP!

Attribution of Successful Teams

- Common goal or purpose
- Leadership
- Every member contributes
- Each member makes unique contributions
- Effective team communication
- Effective meetings, honest and open discussion
- Creative Spark
- Harmonious relationships among members
- Effective planning and use of resources
-
Individual team member attributes to be a success
- Attendance → Attends all meetings on time (Dependable)
- Responsible → Accepts and completes tasks on time
- Abilities → Meets team‟s needs fully for the purpose
- Creative and Energetic→ Is excited and has a positive attitude
- Personality→ Encourages, creates productive and fun setting
Conclusion:

- The process of creating a product is influenced by the process of designing,

identifying the quality needs, and determining the overall cost.

- The goal is to develop a reliable product that is best for performing its function,
manufacturing, assembling, and servicing.

Definitions
- Deliverables -The desired outcomes or results of a project.
- Interdependencies -Relations between organizational functions where one
function or task is dependent on others.
- Life Cycle -A standard concept of a product or project wherein it goes through a
start-up phase, a building phase, a maturing phase, and a termination phase.
- Parties-at-Interest -Individuals or groups with a special interest in a project,
usually the project team, client, senior management, and specific public interest
groups.
- Program -Often not distinguished from a project, but frequently meant to
encompass a group of similar projects
- Project Management -The means, techniques, and concepts used to run a
project and achieve its objectives. The process whereby a single leader
exercises centralized authority and responsibility for planning, organizing staffing,
controlling, leading the combine efforts of a multidisciplinary team.
- Project Manager/Engineer –provides work schedule and task assignments
based on skill or personnel assignments; provides information used in work
levelling; identifies requirements for additional resources. Identifies adjustments
in plan when new resources are acquired. Allows measurements against the
plan; identifies tasks where automation could be of benefit; justifies expenses on
tool purchases and build. Demonstrates level of progress.
- Risk -The chance that outcomes will not turn out as planned.
- Task -One of the work elements in a project.
- Technology -The means for accomplishing difficult tasks.
- Trade-off -Taking less on one measure, such as performance, in order to do
better on another, such as schedule or cost.
- Uncertainty -Having only partial information about the situation or outcomes.
- Work Package -A sub-element of a task that needs to be accomplished in
order to achieve the objectives of the task.

PD Teams- Discussion and Leader Nomination ?

 Lecture 2: Product Development Processes and Organization

Research and Development (Basic Research, Technology Development, Product

Development)

Changing Dimensions Of Competition

Competitiveness today is more than ever based on product development capability.

Three Innovation Challenges

 - Creating value through product development:
- It’s all about the product.

- “SOME EXAMPLES OF PRODUCTS”

Apple: Simply better products
- Black & Decker Snake light
- GoodGrips Angled Measuring Cups
- Target Prescription Pill Bottle
- Bodum Payina Glasses
- iRobot Roomba

What is a Product?
What is a Product Development Process ?

- A product is something that is sold by an organization to its customers. This definition

includes both physical products (e.g. cars, washing machines, iPhone) as well as
services (e.g. insurance, banking, private health care).
- Product development process is the set of activities to achieve this goal

- Is there a standard development process that will work for every

company ?
- What role do experts from different functional areas play in this
development process?
- What milestones can be used to divide the overall development process into phases?

Characteristics of Successful Product Development

● Product Quality – How good is the product resulting from the development process?
● Product Cost – What is the manufacturing cost of the product?
● Development Time – How quickly did the team complete the product development effort?
● Development Cost – How much did it cost to develop the product?
● Development Capability – Are the team and the firm better able to develop future
products as a result of their experience with a product development project?
Who Designs and Develops Products?
Product development is an interdisciplinary activity requiring contributions from nearly all the
functions of a firm; however, three functions are almost always central to a product development
project: ∙

1. Marketing – Mediates the interactions between the firm and its customers. Marketing
often facilitates the identification of product opportunities, the definition of market
segments, and the identification of customer needs
2. Design – The design function plays the lead role in defining the physical form of the
product to best meet customer needs. . In this context, the design function includes
engineering design (mechanical, electrical, software, etc.) and industrial design
(aesthetics, ergonomics, user interfaces).
3. Manufacturing – Primary responsible for designing and operating the production system
in order to produce the product. The manufacturing function also often includes
purchasing, distribution, and installation. This collection of activities is sometimes called
the supply chain.

Who Designs and Develops Products?**

- The composition of a product development team for an electromechanical

product of modest complexity

Duration and Cost of Product Development

- This table showing the approximate scale of the associated product development efforts
along with some distinguishing characteristics of the products:
 -
- Attributes of five products and their associated development efforts. All figures are
approximate, based on publicly available information, estimates, and company sources.

The Challenges of Product Development

Developing great products is hard. Few companies are highly successful more than half the
time. These odds present a significant challenge for a product development team. Some of the
characteristics that make product development challenging are:

- Trade Offs – An airplane can be made lighter, but this action will probably increase
manufacturing cost. One of the most difficult aspects of product development is
recognizing, understanding, and managing such trade-offs in a way that maximizes the
success of the product.
- Dynamics – Technologies improve, customer preferences evolve, competitors introduce
new products and the macroeconomic environment shifts. Decision making in an
environment of constant change is a challenging task.
- Details – The choice between using screws or snap-fits on the enclosure of a computer
can have economic implications of millions of dollars. Developing a product of even
modest complexity may require thousands of such decisions.
- Time Pressure: Any one of these difficulties would be easily manageable by itself given
plenty of time, but product development decisions must usually be made quickly and
without complete information.
- Economics – Developing, producing and marketing a new product requires a large
investment. To earn a reasonable return on this investment, the resulting product must
be both appealing to customers and relatively inexpensive to produce
Product Development – Interesting and Challenging
- For many people, product development is interesting precisely because it is challenging. For
others, several essential characteristics also contribute to its appeal:

- Creation – The product development process begins with an idea and ends with the
production of a physical artifact
- Satisfaction – All products are aimed at satisfying needs of some kind. Individuals
interested in developing new products can almost always find institutional settings in
which they can develop products satisfying what they consider to be important needs.
- Team Diversity – Successful development requires many different skills and teams. As
a result, development teams involve people with a wide range of different training,
experience, perspectives, and personalities.
- Team Spirit – Product development teams are often highly motivated cooperative
groups

-----------------------------------------------------------------------------------------------------------chp 2.

DEVELOPMENT PROCESS → A Generic Development Process

- A process is sequence of steps that transforms a set of inputs into a set of outputs
- e.g. baking a cake or assemble an automobile

- Product development process is a sequence of steps or activities that an enterprise

employs to conceive, design and commercialize a product.

- A well-defined development process is useful for the following reasons:

1. Quality assurance: A development process specifies the phases a development
project will pass through and the checkpoints along the way. When these phases
and checkpoints are chosen wisely, following the development process is one
way of assuring the quality of the resulting product.
2. Coordination: A clearly articulated development process acts as a master plan
that defines the roles of each of the players on the development team. This plan
informs the members of the team when their contributions will be needed and
with whom they will need to exchange information and materials.
3. Planning: A development process includes milestones corresponding to the
completion of each phase. The timing of these milestones anchors the schedule
of the overall development project.
4. Management: A development process is a benchmark for assessing the
performance of an ongoing development effort. By comparing the actual events
to the established process, a manager can identify possible problem areas.
5. Improvement: The careful documentation and ongoing review of an
organization’s development process and its results may help to identify
opportunities for improvement.
 Product Life Cycle (PLC)
- Businesses should manage their products carefully over time to ensure that they deliver
products that continue to meet customer needs.
- The stages through which individual products develop over time commonly known as the
"Product Life Cycle".
- The classic product life cycle has four stages: introduction; growth; maturity and
decline

1. Introduction Stage

- At the Introduction (or development) Stage market size and growth is slight.
- Possible that substantial research and development costs have been incurred in getting
the product to this stage.
- Marketing costs may be high in order to test the market, undergo launch promotion and
set up distribution channels.
- It is highly unlikely that companies will make profits on products at the Introduction
Stage.**
- Products at this stage have to be carefully monitored to ensure that they start to grow.
Otherwise, the best option may be to withdraw or end the product.

2. Growth Stage
- The Growth Stage is characterised by rapid growth in sales and profits.
- Profits arise due to an increase in output and possibly better prices.
- At this stage, it is cheaper for businesses to invest in increasing their market share as
well as enjoying the overall growth of the market.
- Accordingly, significant promotional resources are traditionally invested in products that
are firmly in the Growth Stage

3. Maturity Stage
- The Maturity Stage is, perhaps, the most common stage for all markets.
 - It is in this stage that competition is most intense as companies fight to maintain their
market share.
- Here, both marketing and finance become key activities.
- Marketing spend has to be monitored carefully, since any significant moves are likely to
be copied by competitors.
- The Maturity Stage is the time when most profit is earned by the market as a whole.
- Any expenditure on research and development is likely to be restricted to product
modification and improvement.

4. Decline Stage
- In the Decline Stage, the market is shrinking, reducing the overall amount of profit that
can be shared amongst the remaining competitors.
- At this stage, great care has to be taken to manage the product carefully.
- It may be possible to take out some production cost, to transfer production to a cheaper
facility, sell the product into other, cheaper markets.
- Care should be taken to control the amount of stocks of the product.
- Ultimately, depending on whether the product remains profitable, a company may decide
to end the product.

Examples
Set out below are some suggested examples of products that are currently at different stages of
the product life-cycle:
 CONCEPT DEVELOPMENT PROCESS:
THE FRONT-END PROCESS

- Identifying customer needs: The goal of this activity is to understand customers'

needs and to effectively communicate them to the development team.
Establishing target specifications: Specifications provide a precise description of what
a product has to do.
- Concept generation: The goal of concept generation is to thoroughly explore the space
of product concepts that may address the customer needs. The process usually requires
several iterations and may initiate additional concept generation and refinement.
- Concept selection: is the activity in which various product concepts are analyzed and
sequentially eliminated to identify the most promising concept(s). The process usually
requires several iterations and may initiate additional concept generation and refinement
.
- Concept testing one or more concepts are then tested to verify that the customer needs
have been met assess the market potential of the product and identify any shortcomings
which must be remedied during further development.
- Setting final specifications: The target specifications set earlier in the process are
revisited after a concept has been selected and tested.
- Project Planning: In this final activity of concept development, the team creates a
detailed development schedule, devises a strategy to minimize development time, and
identifies the resources required to complete the project.
- Economic analysis: the team often with the support of a financial analyst, builds an
economic model for the new product . This model is used to justify continuation of the
overall development program and to resolve specific trade-offs among, for example,
development costs and manufacturing costs.
- Benchmarking of competitive products: an understanding of competitive products is
critical to successful positioning of a new product and can provide a rich source of ideas
for the product and production process design.
- Modeling and prototyping: Every stage of the concept development process involves
various forms of models and Prototypes. These may include among others early
“proof-of-concept” model which help the development team to demonstrate feasibility
“form-only” models which can be shown to customers to evaluate ergonomics and style;
and spreadsheet models of technical trade-offs.
 Generic Product Development Process - Variants

Product Development Process Flows

a. Generic product development process

 b. Spiral product development process

C. Complex Systems development process

Example- Development Process

Example - Development Process

Example - Development Process

 Example- Engineering Development Process

Product Development Organizations

Organizations Are Formed by Establishing Links among Individuals

In addition to constructing an effective development process, successful firms must organize
their product development staff to implement the process in an effective manner.

A product development organization is the scheme by which individual designers and

developers are linked together into groups. The links among individuals may be formal or
informal and include, among others, these types

- Reporting Relationships – give rise to the classic notion of supervisor and subordinate.
These are the formal links most frequently shown on an organization chart.
- FinancialArrangements – Individuals are linked by being part of the same financial entity,
such as a business unit or department within a firm
- Physical Layout – Links are created between individuals when they share the same
office, floor, building or site.
 Organization Links May Be Aligned with Functions,
Projects or Both

Regardless of their organizational links, particular individuals can be classified in two different
ways: according to their function and according to the projects they work on.

- A function (in organizational terms) – is an area of responsibility usually involving

specialized education, training or experience. The classic functions in product
development organizations are Marketing, Design and Manufacturing..
- Regardless of their functions – individuals apply their expertise to specific products for
example, identifying customer needs and generating product concepts.

Organizational Structures

- In Functional organizations: the organizational links are primarily among those who
perform similar functions

- In project organizations: the organizational links are primarily among those who work
on the same project.
 The Matrix Organization: Hybrid of functional and project organizations

- Lightweight – contains weaker project links and relatively stronger functional links.
Project Manager is more of a coordinator and administrator.
- Heavyweight – Strong project links. Project Manager has complete budget authority,
resource allocation etc. Also known as Integrated Product Team (IPT),

Characteristics of Different Organizational Structures

Choosing an Organization Structure

1. How important is cross-functional integration?

2. How critical is cutting-edge functional expertise to business success?
3. Can individuals from each function be fully utilized for most of the duration of a project?
 4. How important is product development speed?

- Functional organizations – tend to breed specialization and deep expertise in the

functional areas
- Project organizations– tend to enable rapid and effective coordination among diverse
functions

Opportunity Identification

1. An opportunity is an idea for a new product.

2. An opportunity is articulated in a document with a description of the idea and the
proposed end product.
3. The document is top level and does not contain details of the proposed product.
4. There are mainly 2 type of opportunities:
- Opportunities that are developed while knowing the technology knowledge of the
technology,
- Opportunities that are developed to meet a certain demand - Knowledge of the
market.

Opportunities Begin the Product Planning and Product Development processes

Effective Opportunity Tournament:

1. Generate a large number of opportunities: Ask for multiple resource to come up with
ideas etc..
2. Seek high quality of opportunities generated: Methodology of generating ideas, use of
customer feedback, or internal workshops
3. Create high variance in the quality of opportunities: different ideas, strange one, the
more the better, this can lead to high quality ideas (thinking out of the box)
 What Drives the Quality of the Opportunities?

- Mean quality of the opportunity identification process.

- Variance in quality of the opportunity identification process.
- Number of “draws” from the opportunity identification process.
- Accuracy of discerning the best subset of opportunities generated.

Where do Opportunities come from?

Product Design- Guidelines

Successful mechanical design and engineering is environment and process dependent. There
are many factors that affect the design. The following are major factors:
1. Product scope, intent and complexity
2. Time to market
3. Cost
4. Product Competitive Environment
 5. Organization infrastructure
6. Design, engineering and manufacturing tools
7. Staff experience
General Design Guidelines
Practice the "KIS" principle, (Keep It Simple)
e.g.The designer, engineer's and manufacturing should concurrently review all components
within an assembly to determine whether components can be eliminated, combined with
another component, or the function can be performed in a simpler way

Design for Manufacturing Intent (DFM)

- DFM is a technique for developing a product that meets the desired performance
specifications while optimizing the design through the production system

DFM - Design for Manufacturing

DFA- Design for Assembly
- The aim of DFM - Design for Manufacturing and Design for Assembly (DFA) is to simplify
the product so that the cost of manufacturing and assembly is reduced.
- Consequences of applying DFM and DFA usually include improved quality and reliability,
and a reduction in production equipment and part inventory.
DFA- Xerox Latch Mechanism Design
Contradictions between Design for Manufacturability and Design for Assembly
- Two of the rules of concurrent engineering are:
- Make a product as easy as possible to manufacture
- make a product as easy as possible to assemble.
- In the general case, these rules contradict one another.
- Consider a single product, say a coffee maker.
- Now consider two designs for this product such that both designs satisfy exactly
the same set of requirements, characteristics, constraints, and performance
metrics.
- The only difference between them is that one design was created using the first
rule (so-called design for manufacturability – DFM) and the other was designed
using the second rule (so-called Design for Assembly - DFA).

Contradictions between Design for Manufacturability and Design for Assembly

- In order to make something easy to manufacture, one would make its parts easy
to manufacture.
- Simple parts are typically easy to manufacture, but tend to provide relatively low
functionality. Thus, to attain all the functionality needed for the coffee maker,
many simple parts would be needed. But if there are many parts, then
assembly will be complex.
- On the other hand, in order to make something easy to assemble, one would
make its parts easy to assemble. Simple assembly means few parts. But to
maintain all the required functionality, each part would have to be complex
(because there are few of them to share the functionality). Thus, to attain the all
the functionality needed for the coffee maker, a few complex parts would be
needed. But if the parts are complex, then the manufacture of those parts
will be difficult.

- So it would appear that you cannot win, and therein is the contradiction.
- As it happens, this general case almost never occurs in reality. The particular
requirements of a particular product specification, carried out by a particular company, in
a particular (economic, technological, cultural, etc.) context virtually guarantee that one
or the other of the DFM and DFA approaches will be best.
- Therefore, the key is NOT to know the rules of concurrent engineering, but rather HOW
and WHEN to use them. This requires designers to be reflective and to think not only
about the design problem, but also about the environment in which they work and their
own capabilities.
- Reflective designers will have much more success than designers who just plow through
a problem assuming that there is a "cookbook" answer available.
 LECTURE 3 : PRODUCT PLANNING /IDENTIFYING CUSTOMER NEED

Product Development Process

Four Phases of product Development:

Planning > Concept Development > System-Level Design > Detail Design > Testing and
Refinement > Production Ramp-Up

- The product planning phase precedes the product development process and
determines which product development projects are initiated.

• The planning process considers product development opportunities identified by many

sources, including suggestions from marketing, research, customers, current product
development teams, and benchmarking of competitors.

Principles of Product Planning

- Sources of product opportunities

- Opportunity tournaments and filtering
- Down selection (funneling) during PD
- Platform development
- Technology evolution
- Project portfolio balancing
- Resource allocation
- Project launch
Project Downselection: The PD Process Funnel

Planning > Concept Development > System-Level Design > Detail Design > Testing and
Refinement > Production Ramp-Up

The Product Planning Process

Xerox Lakes Project Example (Xerox document Centre 265)

Four Types of Product Development Projects

- New Product Platforms

- Derivatives of Existing Product Platforms
- Incremental Improvements to Existing Products
- Fundamentally New Products
Four Types of Product Development Projects

There are four types of Product Development Projects:

1. Fundamentally new products

• New product or production technology for new product that is different from existing
products and unfamiliar markets (example Bombardier CSeries)

2. New product platforms

-New products for familiar markets and product categories

- Large development effort to create a new family of products on a new platform

3. Derivatives of existing product platforms

• Extend an existing product to better address familiar markets with new products using
an existing platform.

4. Incremental improvements to existing products

• Only add or modify some features of existing products to keep the product line current
and competitive to extend its market life (Example Bombardier Challenger 350, or 650
(more power using different engine))

The Product Planning Process

- The product planning process takes place before a product development

project is formally approved, before substantial resources are applied, and before
the larger development team is formed.
- Product planning is an activity that considers the portfolio of projects that an
organization might pursue and determines what subset of these projects will be
pursued over what time period.
[identify opportunities > evaluate and prioritize projects > allocate resources and plan
timing > complete pre-project planning > product development process]

Fig. The product planning process. These activities address a portfolio of product
development projects, resulting in a product plan and, for each selected project, a
mission statement

Product Plan

- Portfolio of products to be developed by the organization and the timing of their

introduction to the market.
- A set of projects approved by the planning process, sequenced in time

Problems with no product plan

- Inadequate coverage of target markets with competitive products

- Poor timing of market introduction of products
- Poor Capacity Planning And Under-utilizing or development resources.
- Initiation and cancellation of ill-conceived projects
- Frequent changes in project directions.

Product Planning Questions

The product planning activity ensures that product development projects support the
broader business strategy of the company and addresses these questions:

- What product development projects will be undertaken?

- What mix of fundamentally new products, platforms, and derivative products
should be pursued?
- How do the various projects relate to each other as a portfolio
- What will be the timing and sequence of the projects?
- The team needs to know its mission before beginning development.

The answers to these critical questions are included in a mission statement for the team:

- What market segments should be considered in designing the product and

developing its features?
- What new technologies (if any) should be incorporated into the new product?
- What are the manufacturing and service goals and constraints?
- What are the financial targets for the project?
- What are the budget and time frame for the project
The 5 Step Process

1- Identify & select opportunities

2- Evaluate and prioritize projects - Product/project portfolio

3- Allocate resources and plan timing - Product/project plan

4- Complete pre-project planning - Product/project mission statement

5-Reflect on the results and the process.

The product planning process. These activities address a portfolio of product

development projects, resulting in a product plan and, for each selected project, a
mission statement

The 5 Step Process – STEP 1

Identify opportunities, from

● Marketing and sales personnel

● Research and technology development organizations
● Current product development teams
● Manufacturing and operations organizations
● Current and potential customers
● Third parties such as suppliers, inventors, and business partners

e.g. Lakes project opportunity statement

Develop a new black and white (B&W), digital, networkable, document center platform
for the office market, including scanning, storage, fax, distribution and printing
capabilities
The 5 Step Process – STEP 2

- Evaluate and prioritize projects

- Competitive strategy, by focusing on at least one of the following
- Market Segmentation
- Technological Trajectories
- Product Platform Planning
- Evaluating Fundamentally New product Opportunities
- Balancing the Portfolio

e.g. Lakes project Competitive Strategy

- Xerox believed that the Internet would enable a paradigm shift in business
practices from one of “print and then distribute” to “distribute and then print”

The 5 Step Process – Step 2

Market Segmentation –Dividing a market into segments allows the firm to consider the
actions of competitors and the strength of their existing products – Product Segment Map

Product segment map showing Xerox B&W digital products and the competition in three market
segments: personal, workgroup, and department machines. Key performance dimensions
(pages per minute, networking capability) and price points are listed for each product in the
map, along with the time of its market introduction
The 5 Step Process – Step 2

Technological Trajectories – A key product planning decision is when to adopt a new

basic technology in a product line – S Curve

The S-curve illustrates a basic but important concept:

→ Technologies evolve from initial emergence when performance is relatively low,

through rapid growth in performance based on experience, and finally approach
maturity where some natural technological limit is reached and the technology may
become obsolete.

- Technology S-curves are a conceptual tool to help think about such decisions.
- The technology S-curve displays the performance of the products in a product
category over time, usually with respect to a single performance variable such as
resolution, speed, or reliability.
- S-curves is often difficult to predict the future trajectory of the performance curve
(where is the ultimate performance limit and when will it be reached)
The 5 Step Process – Step 2

Product Platform Planning – Set of assets shared across a set of products; Platforms
Vs Derivatives

● Platform development project creates the architecture of a family of products.

● Derivative products may be included in the initial platform development effort
(Platform A) or derivative products may follow thereafter (Platform B).

Product Platform Planning – Diagram showing a product’s key functional elements

and the sequence of technologies expected to implement these elements over time-
Technology Roadmap

• The technology roadmap is a technique for coordinating technology development

with product planning.

It is a way to represent the expected availability and future use of various technologies
relevant to the product being considered.

The technology roadmap can be enlarged with the timing of projects or products that
would utilize these technological developments.

• This is sometimes then called a product-technology roadmap.

[Functional elements, technologies, photoreceptor, scanner layout, toner type, output
modes, user interface, image processing, diagnostics]

Used by Motorola, Philips, Xerox, NASA, Facebook,

The 5 Step Process – Step 2

Evaluate and prioritize projects → Evaluating Fundamentally New Products

Opportunities

● To maintain company competitiveness product rejuvenation is needed.

● These products are developed to enter a new market or to introduce a new
technology

• The following criteria is used to evaluate fundamentally new product

opportunities:

- Market size (units/year * average price).

- Market growth rate (percent per year).
- Competitive intensity (number of competitors and their strength). – Depth of the
firm’s existing knowledge of the market.
- Depth of the firm’s existing knowledge of the technology.
 - Fit with the firm’s other products.
- Fit with the firm’s capabilities.
- Potential for patents, trade secrets or other barriers to competitors
- Existence of a product champion within the firm

The 5 Step Process – Step 2

- Evaluating fundamentally new product opportunities

- Balancing the portfolio – Product Balance Change Matrix

product‐process change matrix (Portfolio mapping): plots the portfolio of projects

along two specific dimensions:

- the extent to which the project involves a change in the product line and,
- the extent to which the project involves a change in production processes

Size of Circle indicates

relative development Cost

[new core product,next generation product, addition to product family, minor product
enhancement, no product change, new core process, next generation process, single
department upgrade, turning incremental changes, no process change, EXTENT OF
PRODUCT CHANGES, EXTENT OF PRODUCTION PROCESS CHANGES]

- A product-process change matrix can be useful to illuminate imbalances in the

portfolio of projects under consideration and in assessing the consistency between a
portfolio of projects and the competitive strategy. For example, a firm may discover that
it has identified essentially no breakthrough opportunities or that it has no projects aimed
at incremental improvements to existing products
The 5 Step Process – Step 3 - Allocate resources and plan timing

Resource Allocation- Aggregate Planning helps an organization make efficient use of

its resources by pursuing only those projects that can reasonably be completed with the
budgeted resources
Project Timing: Determining the timing and sequence of projects, sometimes called
pipeline management, must consider a number of factors, including
- Timing of product introductions:Generally the sooner a product is brought to
market the better. However, launching a product before it is of adequate quality can
damage the reputation of the firm.
- Technology readiness:The robustness of the underlying technologies plays a
critical role in the planning process. A proven, robust technology can be integrated into
products much more quickly and reliably.

- Market readiness: The sequence of product introductions determines whether

early adopters buy the low-end product and may trade up or whether they buy
the high-end product offered at a high initial price. Releasing new products too
slowly risks lagging behind competitors.

-Competition: The anticipated release of competing Products May accelerate

the timing of development projects.

Aggregate Resource Planning

[capacity utilization ion, year 1, year 2, year 3, lakes project, 6010 project, 595 project, astro
project, resource demand, resource capacity, capacity utilization, mechanical,
electrical,manufacturing, software, industrial design]

Aggregate (total) resource planning can be achieved using a simple spreadsheet

method based on estimates of resource demands over time. This example spreadsheet
uses units of person-years, although smaller time units (quarters or months) are
commonly used in practice. The associated chart highlights where capacity is
insufficient to handle all of the projects.

The 5 Step Process – Step 4

Complete Pre-Project Planning – Identify the Core Team

- Product Vision Statement

- e,g Lakes concept team begin with the following product vision statement:

-Develop a networked, mid-range, digital platform for imaging, marking and finishing

- The objective defined by a product vision statement may be very general.

- It may not say which specific new technologies should be used, nor does it
necessarily specify the goals and constraints of functions such as production and
service operations.

Mission Statements

- Brief (one-sentence) description of the product

- Brief Proposition
- Key Business Goals
- Assumptions and Constraints that Guide the Development Effort
- Stakeholders

The 5 Step Process – Step 4

Lakes Project Mission Statement

Product Description

- Networkable, digital machine with copy, print, fax, and scan functions

Key Business Goals

- Support Xerox strategy of leadership in digital office equipment

 - Serve as platform for all future B&W digital products and solutions
- Capture 50% of digital product sales in primary market Environmentally friendly
- First product introduction 4thQ 1997

Primary Market

- Office departments, mid-volume (40-65 ppm, above 42,000 avg. copies/mo.)

Secondary Markets

- Quick-print market
- Small ‘satellite’ operations

Assumptions and Constraints

- New product platform

- Digital imaging technology
- Compatible with CentreWare software
- Input devices manufactured in Canada
- Output devices manufactured in Brazil
- Image processing engine manufactured in both USA and Europe

Stakeholders

- Purchasers and Users

- Manufacturing Operations
- Service Operations
- Distributors and Resellers

The 5 Step Process – Step 5

In this final step of the planning and strategy process, the team should ask several
questions to assess the quality of both the process and the results.

Some suggested questions are:

- Is the opportunity funnel collecting an exciting and diverse set of production

opportunities?
- Does the product plan support the competitive strategy of the firm?
- Does the core team accept the challenges of the resulting mission statement?
- How can the product planning process be improved?
 - Because the mission statement is the handoff to the development team, a
“reality check” must be performed before proceeding with the development
process.
- This early stage is the time to remedy known flaws, lest they become more
severe and expensive as the development process progresses

Example

[Shark ION Flex] [Shark ION Powered Lift-Away]

******************A Product Plan

Product plan for Shark brand vacuums in six product categories, showing historical and future
market release of each product platform and some of their derivative products

******************Market Segment Map

Product segment map showing SharkNinja cordless vacuum products and the leading
competition spanning three market segments. Considering the trajectory of key product
specifications (runtime and price point shown here) is one way to identify opportunities for future
offerings
******************Technology S-Curves

This technology S-curve illustrates the cost improvement over time of two available battery
chemistry options for cordless appliances.

****************Product-Technology Roadmap

The product-technology roadmap shows the evolution of several subsystem technologies and
helps to plan which technologies may be used in future products
Platforms vs. Derivatives

[research and technology development, platform product development, derivative product development]

A platform development project creates the architecture of a family of products. Derivative

products may be included in the initial platform development effort (Platform A) or derivative
products may follow thereafter (Platform B).

Project Portfolio Planning

Product development portfolio decisions may begin with a top-down allocation of budgets to
different project types, followed by prioritization of projects within each type.
Aggregate Resource Planning

Aggregate resource planning can be achieved using a simple spreadsheet method based on
estimates of resource demands over time. This example uses units of person-months, although
other time units (quarters, weeks, or days) are commonly used in practice. The associated chart
highlights where capacity is insufficient to handle all of the projects at target utilization of 90
percent

Mission Statement : Corless Powered Lift- Away Vacuum

Product Description New powered lift-away cordless upright vacuum

platform for the whole-house cleaning

Benefit Proposition - Large battery capacity and dust cup

suitable for multi-room and whole-house
cleaning
- Swappable battery pack, multiple
charging options
- Powered lift-away from factor for
convenient floor and detail cleansing

Key Business Goals - Launch in Fall, 2018

- Competitive pricing allowing for target
sales volume and margins
- Consistent 5-star customer reviews
- Grow cordless market share and segment
penetration

Primary Market US household multi-room and whole house

cleaning

Assumptions and Constraints - Swappable lithium-ion battery pack

- Upright form factor with lift-away pod
- Powered hose for motorized lift-away
 - Carpet and hard floor cleaning with a
single DuoClean head

Stakeholders - Major retailers

- New and existing customers
- Marketing and sales
- Manufacturing supply chain

Summary
I. Product planning involves a five-step process
1. identify Opportunities
2. evaluate and prioritize projects
3. Allocate resources and plan timing
4. Complete pre-project planning
5. Reflect on the results and the process

II. Potential Product development projects are evaluated based on : The organization competitive
strategy, technological trajectories, and product platform plans

III. A balanced portfolio of development projects may include : investment in breakthrough products, new
platforms, derivatives, and current product support

IV. Aggregate planning assures that selected projects have adequate resources for successful
completion.

V. A mission statement for each product for each product development project documents the product
vision, business goals, target markets, critical assumptions, and the product’s stakeholders.

IDENTIFYING CUSTOMER NEEDS

Product Development Process

[planning,concept development, system-level design, detail design, testing and refinement, production
ramp-up]
Concept Development Process

[Identify Customer Needs, Establish Target Specifications, Generate Product Concepts, Select
Product Concept(s), Test Product Concept(s), Set Final Specifications, Plan Downstream
Development]

Identifying your Customers

- Everyone has a different opinion / desire on how a product should be

designed..
- Customers of a product are NOT just the end-users
- Who do you think are customers of an airplane?
- Customers include the people that manufacture, maintain, sell,
dissassemble... etc.

Requirements

• Requirements are a ‘wish list’ that the product needs to do.

• This is usually given by the customers or sponsors or even as a list of

requirements in the designer’s mind

● They are not usually technical

● E.g. for a coffee cup ... ‘something that will hold coffee’ etc..
Requirements for a Kettle

● Heat varied amounts of water

● Energy efficient
● Easy to move around
● Safe handling during pouring
● Aesthetically pleasing surface
● Boil water fast
● Automatic switching off from the energy source or alert user when water is
boiling

*****Requirements for a Automatic Coffee Maker

Step 1. Prepare a list of design objectives

A. Safety
B. Efficiency
C. Quality
D. Convenience
E. Easy to use
F. Fast
G. Makes good coffee
H. Doesn’t burn user
I. Good mixture
J. Right temperature
K. Splash proof
L. Cheap to consumer
M. Volume of coffee
N. Automatic
O. Timer
P. Energy saver
Q. Temperature control
R. Easy to clean
S. .(complete per project objectives

Step 2. Order the list into sets.

Objective Tree/ Functional Decomposition

Step 3. Draw an objective tree

A Classification of Customer Needs

[explicit, easy for customers to express, widely known and understood, likely to be
already fulfilled, unfulfilled, easy for customers to express, known to be difficult to
address, generally not fulfilled, latent, hard to express for customers to express, not yet
widely understood, currently unaddressed]
Customer Needs and Markets

Lead or extreme users may experience needs more strongly than others. Customers
with specific needs may be in small market segments, but their needs may indicate
important directions for larger markets.

Customer Needs – A Process

Identifying customer needs is a process that can be done in 5 –step method

1. Gather Raw Data - Interviews, Observations, Focus Groups

2. Interpret Raw Data-Establish Need Statements
3. Organize the Needs-Hierarchy
2. Establish Importance-Surveys
3. Reflect on the Results and the Process–Continuous Improvement
Customer Needs – A Process

1. Gather Raw Data – Identify Lead Users/Extreme Users

- Interviews
- Observations
- Focus Groups

Needs Exist in Advance of the Product/Service

Customer Needs for Space Flight (example)

- Experience zero gravity

- Enjoy the view
- Have fun
- Return safely

Customer Needs Analysis: Process Steps

1. Define the Scope → Mission statement // Stakeholders

2. Gather Information – Interviews // Focus groups // Observation
3. Interpret Customer Data → Write need statements // Organize in a hierarchy //
Identify latent needs
4. Quantify Relative Importance –> Focus on the trade-offs
5. Reflect on the Process – Continuous improvement
Customer Needs

The goals of the methods are to:

- To ensure that the product is focused on customer needs

- Identify latent or hidden needs as well as explicit needs
- Provide a fact base for justifying the product specifications
- Create an archival record of the needs activity of the development process.
- Ensure that no critical customer need is missed or forgotten.
- Develop a common understanding of customer needs among members of
the development team.

Customer Need Analysis : Process Steps

Example cordless Screwdrivers

Mission statement - Result of product planning

Customer Needs – Data Template (Partial List from an Interveiw for Screw Driver
(SD)

Customer Needs – A Process

2- Interpret Raw Data in Terms of Customer Needs

- Express the need in terms of what the product has to do, not in terms of how it
might do it.
- Express the need as specifically as the raw data
- Use positive, not negative, phrasing.
- Express the need as an attribute of the product
- Avoid the words must and should.
Five Guidelines for Writing Needs Statements

Customer Needs – A Process

3. Organize the Needs into a hierarchical list that consist of a set of:

- Primary Needs
- Secondary Needs
- Intuitive Process
- Print or write each need statement on a separate card
- Eliminate redundant statements
- Group the cards according to the similarity of the needs
- For each group choose a label
- Consider creating supergroups consisting of two to five groups
- Review and edit the organized needs statement
Hierarchy-Organized List of Customer Needs

4. Establish the Relative Importance of Needs-

- Characterized by standard deviation or number of responses in each category

- Assign an importance weighting to the need statements (Hierarchy )
Customer Needs – A Process

5. Reflect on the Results and the Process

- Have you interacted with all the important types of customers in your target
market ?
- Have you identified any potential customers that would be good participants in
your ongoing development efforts?\
- Have you involved everyone within your organization who needs to deeply
understand customer needs?
- How might you improve the process in future efforts?

Mission Statement

Example: The Nest Thermostat.

1. Gather Raw Data - Identify Lead

- Users/Extreme Users
- Interviews,
- Observations
- Focus Groups

2. Interpret Raw Data in Terms of Customer Needs

- Express the need in terms of what the product has to do, not in terms of how it
might do it.
- Express the need as specifically as the raw data
- Use positive, not negative, phrasing.
- Express the need as an attribute of the product
- Avoid the words must and should.

3. Organize the Needs into a Hierarchy

- Primary Needs
- Secondary Needs
- Intuitive Process
Mission Statement---- Example: The Nest Thermostat.

- Product Description
- A programmable thermostat for residential use
- Benefit Proposition
- Simple to use, attractive, and saves energy
- Key Business Goals
- Product introduced in Q4
- 50% gross margin
- 10% share of replacement thermostat market in 4 years
- Primary Market
- Residential consumer
- Secondary Markets
- Residential heating, ventilation, and air conditioning contractors
- Assumptions
- Replacement for an existing thermostat
- Compatible with most existing systems and wiring
- Stakeholders
- User, Retailer, Sales force, Service center, Production, Legal department

Customer Needs – A Process

4. Establish the Relative Importance of Needs-

- Characterized by standard deviation or number of responses in each category

- Assign an importance weighting to the need statements (Hierarchy )
Primary Customer Needs

5. Reflect on the Results and the Process

- Have we interacted with all of the important types of customers in our target
market?
- Are we able to see beyond needs related only to existing products to capture the
latent needs of our target customers?
- Are there areas of inquiry we should pursue in follow-up interviews or surveys?
- Which of the customers we spoke to would be good participants in our ongoing
development efforts?
- What do we know now that we didn’t know when we started? Are we surprised
by any of the needs?
- Did we involve everyone within our own organization who needs to deeply
understand customer needs? ∙ How might we improve the process in future
efforts

**********************Primary Customer Needs

important needs identified are:

- The thermostat is easy to use.

- The thermostat can adjust temperature during the day according to user
preferences.
- The thermostat works with my existing heating and/or cooling system.
- The thermostat reduces energy consumption.

The latent needs are:

- The thermostat can be programmed from a comfortable position.

- The thermostat works pretty well right out of the box with no setup.
- The thermostat automatically responds to occupancy.
- The thermostat exterior surfaces do not fade or discolor over time
- The thermostat prevents pipes from freezing in cold months.
-

Complete List of Customer Needs

Five Guidelines for Writing Needs Statements ***********

Caveats

- Capture “What, Not How”.

- Observe real customers in the use environment.
- Collect visual, verbal, and textual data.
- Interviews are more efficient than focus groups.
 - Interview all stakeholders and lead users.
- Props will stimulate customer responses.
- Develop an organized list of need statements.
- Look for latent needs.
- Survey to quantify tradeoffs, if necessary.
- Use photos or video to communicate results.

Topic 4: : Product Specification

Two- Stage Process for establishing specifications

- Target Specs: Based on customer needs and benchmarking
- Final Specs: Based on selected concept, feasibility, models, testing, and trade offs.

Terminology

- Product requirements come in many forms

- Customer Needs
- Voice of the customer translated into proper form
- Product Specifications
- Customer needs translated into measurable terms
- Sub-system Specifications
- Product specs decomposed into sub-system specs

- Product specifications: the precise description of what the product has to do

- Product specifications do not tell the team how to address the customer needs, but they
do represent a clear agreement on what the team will attempt to achieve in order to
satisfy the customer needs.
 Challenge: Translate Customer Needs into Product Specifications

- Customer needs are captured in the customer’s language. Non-technical

- Product specifications are in technical terms that can be measured
- We must establish specs for each need.

Two questions for each one:

1. How will we measure it?
2. What is the right value?

The Product Specification Process

- Set Target Specifications
- Based on customer needs and benchmarks
- Develop metrics for each need
- Set ideal and acceptable values
- Refine Specifications
- Based on selected concept and feasibility testing
- Technical modeling
- Trade-offs are critical
- Reflect on the Results and the Process
- Critical for ongoing improvement
 Specialized Bicycle Components

e.g. Specialized Bicycle Components was interested in developing a new front

suspension fork for the mountain bike market
- How could the relatively subjective customer needs be translated into precise
targets for the remaining development process?
- How could the team and its senior management agree on what would constitute
success or failure of the resulting product design?
- How could the team develop confidence that its intended product would acquire a
substantial share of the suspension fork market?
- How could the team resolve the inevitable trade- offs among product
characteristics like cost and weight?

What Are Specifications?

A specification consists of a metric and a value. Values are always labeled with the
appropriate units
Example, “average time to assemble” is a metric, while “less than 75 seconds” is the
value of this metric.

Spec = Metric + Value(s) + Units

Establishing Target Specifications: The 4 step process

- Target specifications: the goals of the development team, describing a

product that the team believes would succeed in the marketplace.
- The target specifications are established after the customer need have
been identified but before product concepts have been generated and the
most promising one(s) selected

The process of establishing the target specifications contains 4 steps:

1. Prepare the List of Metrics
2. Collect Competitive Benchmarking Information
 3. Set Ideal and Marginally Acceptable Target Values
4. Reflect on the Results and the Process

STEP 1: PREPARE THE LIST OF METRICS

- The most useful metrics are those that reflect as directly as possible the
degree to which the product satisfies the customer needs.
- A few guidelines should be considered when constructing the list of metrics

- Metrics should be complete

- Metrics should be dependent, not independent variables
- Metrics should be practical
- Some need cannot be translated into quantifiable metrics
- The metrics should include the popular criteria for comparison in the marketplace

→ Metrics should be complete. Ideally each customer need would correspond to a single
metric, and the value of that metric would correlate perfectly with satisfaction of that need. In
practice, several metrics may be necessary to completely reflect a single customer need.
→ Metrics should be dependent, not independent, variables. As do customer needs,
specifications also indicate what the product must do, but not how the
→ Metrics should be practical. It does not serve the team to devise a metric for a bicycle
suspension that can only be measured by a scientific laboratory at a cost of $100,000. Ideally,
metrics will be directly observable or analyzable properties of the product that can be easily
evaluated by the team.
→ Some needs cannot easily be translated into quantifiable metrics. The need
that the suspension encourages pride may be quite critical to success in the fashion-conscious
mountain bike market, but how can pride be quantified? In these cases, the team simply repeats
the need statement as a specification and notes that the metric is subjective by entering “Subj.”
in the units’ column.
→ The metrics should include the popular criteria for comparison in the
marketplace. Many customers buy products based on independently published
evaluations or Consumer Reports. If the team knows that its product will be evaluated by the
trade media and knows what the evaluation criteria will be, then it should include metrics
corresponding to these criteria.
 Start with the customer Needs
- Customer needs for the suspension fork and their relative importance

○ Establish Metrics and Units

- List of metrics for the suspension.
- The relative importance of each metric and the units for the metric are also shown.
- “Subj.” is an abbreviation indicating that a metric is subjective
- Using Binary as unit when the result is Pass/fail
- The “Monster” is a suspension test developed by Mountain Bike magazine.)
Link Metrics to Needs
Quality Function Deployment (QFD)
 Quality Function Deployment (House of Quality)

The needs‐metrics matrix is a key element of the House of Quality, a graphical technique used
in Quality Function Deployment, or QFD

4 Step Process - Step 2

Collect Competitive Benchmarking Information

- The relationship of the new product to competitive products is paramount in determining

commercial success.
- Gathering the data for each competitive product can be very time consuming, involving
(at the least) purchasing, testing, disassembling, and estimating the production costs of
the most important competitive products; however, this investment of time is essential,
as no product development team can expect to succeed without having this type of
information.
Competitive Benchmarking – Another Alternative Benchmark on Customer Needs

- Competitive benchmarking chart is used to compare customers’ perceptions of the

relative degree to which the products satisfy their needs.
- Securing more “dots” corresponds to greater perceived satisfaction of the need this
shows which competitive product do well in certain

4 Step Process – Step 3

4 step Process - Step 3
Set Ideal and Marginally Acceptable Target Values
Set the target values for the metrics
Two types of target value are useful:
1. The ideal value is the best result the team could hope for.
2. The marginally acceptable value is the value of the metric that would just barely make
the product commercially viable.
------5 Ways to express the values of the metrics:
1. At least X (Lower Bound) e.g. Brake Mounting Stiffness is at least to be 325 KN/m
2. At Most X (Upper Bound) e.g. The mass of the suspension fork is set to be most 1.4 Kg
3. Between X and Y e.g.. Spring preload is set to be between 480 and 800 N
4. Exactly X e.g. Particular dimension is exactly 38 mm – Should be avoided as it “constrains”
the design
5. A set of discrete values – e.g. the headset diameters are 1.000, 1.1.25 or 1.250 inches
- Using these five different types of expressions for values of the
metrics, the team sets the target specifications.

Target Specs : ASSIGN MARGINAL AND IDEAL VALUES 4

4 Step Process – Step 4
Reflect on the Results and the Process

- Are there any specifications missing?

- Should the team consider offering multiple products or at least multiple options for the
product or will one “average” product suffice?
- Are members of the team “gaming”? E.g. aggressive values set by marketing team, to
get the “best” or “more” from the team.

Once the targets have been set, the team can proceed to generate solution concepts

Dynamics of Product Specifications

• Target specs change for several reasons:

- Customers change
- Competitors respond
- Technical capabilities improve
- Designs evolve as details develop
- Tradeoffs and conflicts become apparent
• Initially, we can set a range for specs.
• Then we learn what is feasible and can deliver.
• Finally, we commit to final point values.

When to Set the Final Specs

• Two Failure Modes:

- Freezing specs too early.
- Changing specs too late.
• Early Freeze
- Allows downstream tasks to get started with firm input information
- Facilitates downstream optimization (cost, performance, etc)
• Late Freeze
- Allows better match with changing market (customers, competition)

• Question:
– When to freeze the specifications?
• Answers:
– Competing on cost, performance – freeze early
– Competing on market match – freeze late
Concept Development Process

Setting the Final Specifications

- Revisiting specifications – Targets expressed as broad ranges of values are now refined
and made more precise
- Trade Offs- inverse relationships e.g. Cost and Mass- The team could make some
components out of Titanium instead of steel but the cost will go up
- The difficult part of refining the specifications is choosing how such trade-offs will be
resolved
- How can these trade offs be resolved
Suggested 5 step Process
1. Develop technical models of the product
2. Develop a cost model of the product
3. Refine the specifications, making trade-offs where necessary
4. Flow down the specifications as appropriate
5. Reflect on the results and the process.

STEP 1 → Develop Technical Models of the product

Technical Model : Tool for predicting the value of the metrics for a particular set of
design and decisions
Step 2 → Develop a Cost Model of the Product
- Cost Model → Tool for predicting if the product can be produced at a
target cost → The target cost is the manufacturing cost at which the
company and its distribution partners can make adequate profits while still
offering the product to the end customer at a competitive price.

Below: A bill of materials with cost estimates. This simple cost model allows early cost
estimates to facilitate realistic trade‐offs in the product specifications

Step 3 - Refine the Specifications, Making Trade-offs where

Necessary
Competitive or Trade-Off Map
Made from selected set of metrics
• This map is particularly useful in showing that all of the high‐performance
suspensions (low Monster scores) have high estimated manufacturing costs.
• Armed with technical performance models and a cost model, the team can
assess whether or not it will be able to “beat the trade‐off” exhibited in the
competitive map

Set Final Specifications

Set Final Specifications

Step 4 - Flow Down the Specifications as Appropriate

- Used for complex designs where multiple subsystems are being designed by
multiple development teams
- The challenge is to flow down the overall specifications for each subsystem e.g.
the overall specifications for an automobile contain metrics like fuel economy,
0-100 km/h , acceleration time etc.
- However, specifications must also be created for several dozen subsystems
including the body, engine, transmission etc
 - Challenge in the flow down process is to ensure that the subsystem
specifications in fact reflect the overall product specifications
- Systems Engineering Concepts

Requirements Flow Down

• System-level specs determine whether we can meet the customer
needs.
• Sub-system specs determine how to meet the system specs.
• Component specs determine how to meet the sub-system specs.
• Manufacturing specs determine how to meet the component specs.
• Process specs determine how to meet the component specs.

Step 5- Reflect on the results and the process

Some questions the team may want to consider are:

Is the product a winner?
- The product concept should allow the team to actually set the specifications so
that the product will meet the customer needs and excel competitively.
 - If not, then the team should return to the concept generation and selection phase
or abandon the project.
How much uncertainty is there in the technical and cost models?
- If competitive success is dictated by metrics around which much uncertainty
remains, the team may wish to refine the technical or cost models to increase
confidence in meeting the specifications.
Is the concept chosen by the team best suited to the target market, or
could it be best applied in another market? (say low or high end instead
of the middle)
- The selected concept may actually be too good. If the team has generated a
concept that is dramatically superior to the competitive products, it may wish to
consider employing the concept in a more demanding, and potentially more
profitable, market segment.
Should the firm initiate a formal effort to develop better technical models
of some aspect of the product’s performance for future use?
- Sometimes the team will discover that it does not really understand the
underlying product technology well enough to create useful performance models.
In such circumstances, an engineering effort to develop better understanding and
models may be useful in subsequent development projects.

Target Costing

Target Costing is a simple idea: Set the value of the manufacturing cost specification
based on the price the company hopes the end user will pay for the product and on the
profit margins that are required for each stage in the distribution channel.

e.g. Specialized company wishes to sell the suspension fork to its

customers through bicycle shops.

- If the price it expected the customer to pay was $250 and if

normally the bicycle shops normally expect a gross profit of 45%
on components, then company would have to sell the fork to the
bicycleshops for (1-0.45)*250 = $137.50.
- If the company wishes to earn a gross margin of at least 40% on
its components, then its unit manufacturing cost must be less
than (1-0.40)*137.50 = $82.50
 - Target Costing is the reverse of Cost- Plus Approach i.e. Cost
Plus approach begins with what the firm expects its
manufacturing costs and then sets its prices by adding its
expected profit margin to the cost

Which method would you choose?

- Some products are sold directly by the manufacturer to the
consumer
- Frequently, products are distributed through one or more
intermediate stages (Distributors and Retailers)

- M is the gross profit margin of a stage in the distribution channel

- P is the price this stage charges its customers
- C is the cost this stage pays for the product it sells
Eg. Approximate Margins

- Figure: Approximate margins for manufacturers, wholesalers,

distributors, sales representatives, and retailers.
- Note that these values are quite approximate. Actual margins depend
on many characteristic factors, including competitive intensity, the
volume of units sold, and the level of customer support required.
- Sales representatives are paid by commission and are not strictly part
of the distribution channel; however, the team may wish to account for
commissions in its analysis of target cost.
Target Cost C is:

this formula takes into consideration all the steps in the distribution channel

P is the price paid by the end user

n is the number of stages in the distribution channel

Mi is the margin of the ith stage

EXAMPLEEE:

Message :

- Requirements planning is hard work.

- Learning the principles will help you understand how to get it right
- Some tools and methods can help you do it more carefully and completely
- It's still hard work.
TOPIC 5 - CONCEPT GENERATION

- CONCEPT GENERATION IS AN INTEGRAL PART OF THE CONCEPT

DEVELOPMENT PHASE.

Invention, innovation and creativity

Great Ideas : To have a great idea… have a lot of them” Thomsan Edison

Why are some people able to generate a lot ideas?

Sources of Innovation
"Creativity is just having enough dots to connect …
… to connect experiences and synthesize new things. The reason creative people are able to do
that is that they've had more experiences or have thought more about their experiences than other
people.”
Developing Ideas and Solutions

External + Internal search

External Search: Finding Existing and Related Solutions (PATENT, MARKET,

USERS)

INTERNAL SEARCH: Brainstorming to explore the solution space (Simulation +

connection + transformation )
Group Creativity (Brainstorming)

Some Common Rules

• Defer judgment of ideas
• Build on the ideas of others
• Encourage wild ideas
• Express ideas visually
• Stay focused on the topic
• One conversation at a time
• Use stimuli related to the topic

• Setting It Up
• Advance prep
• Stimulating space
• 4 to 8 people
• Paper and markers
• White boards
• Coffee and snacks
• Skilled facilitator

Research on Brainstorming and creativity (Generating Ideas and group creativity,

Value of Dissent and debate)
Concept Sketches

Sketch Modeling

Research on Expression and Creativity

Research on space and evaluation

INDIVIDUAL + GROUP CREATIVITY

The Concept Generation Process

- Set Target Specifications
- Based on customer needs and benchmarks
- Develop metrics for each need
- Set ideal and acceptable values
 - Refine Specifications
- Based on selected concept and feasibility testing
- Technical modeling
- Trade-offs are critical
- Reflect on the Results and the Process
- Critical for ongoing improvement

CONCEPT GENERATION EXAMPLE - POWER NAILER

e.g. The president of Stanley-Bostitch commissioned a team to develop a new hand-held nailer
for roofing market. The mission of the team was to consider broadly alternative product
concepts, assuming only that the tool would employ conventional nails as the basic fastening
technology. The team had identified the customer needs and established target product
specifications but needed to answer the following:
- What existing solution concepts, if any could be successfully adapted for this
application?
- What new concepts might satisfy the established needs and specifications?
- What methods can be used to facilitate the concept generation process?

Concept Generation→ 5 Step Process

1. Clarify the Problem
2. Search Externally
3. Search Internally
4. Explore Systematically
5. Reflect on the Solution and the Process
CONCEPT GENERATION PROCESS

1. Clarify the Problem → Problem Decomposition

1. External Search
- Lead Users
- Experts
- Patents
- Literature
- Benchmarking
2. Internal Search
- Individual Methods
- Group Methods
3. Systematic Exploration
- Classification Tree
- Combination Table
4. Reflect on the Process → Continuous Improvement
STEP 1 - CLARIFY THE PROBLEM

Step 1 -Clarify the Problem

- Divide the single black box into subfunctions
- Each subfunction can generally be further divided into simpler functions; Team
members should agree that the each subfunction is simple enough to work with;
Normally create between 3 and 10 subfunctions
 Step 2 –Search Externally
- External Search is aimed at finding existing solutions (both for overall problem and sub
problems)
- A bit deceptive (listed as second option) as usually external search occurs continually
throughout the development process

e.g. Patent Search for Nailers described a motor-driven double flywheel

Nailer (Text describing the patent was 9 pages long)
- Accumulation of the Rotational KE in the flywheel is converted suddenly into
translational energy by a friction clutch.
- The energy is then delivered to the nail with a single impact of the drive pin.
Step 3 – Search Internally
- Suspend judgement
- Generate a lot of ideas
- Infeasible ideas are welcome
- Use graphical and physical media
- Make analogies
- Wish and wonder
- Use related stimuli
- Use unrelated stimuli
- Set quantitative goals
- Use the gallery method

Power Nailer – Example

Some of the Solutions to the Subproblems
(1) Storing or Accepting Energy (2) Delivering Translational Energy to the Nail
Step 4 – Explore Systematically
Concept fragments – solutions to subproblems are organized
and synthesized with an aim to navigate the space of
possibilities
Two specific tools are available to do this:
Concept Classification Tree – helps the team to divide
the possible solutions into independent categories
Concept Combination Table – Guides the team to
selectively considering combinations of fragments

Step 4 – e.g Concept Classification Tree for Nailer

Step 4 – e.g Concept Classification Tree for Nailer

- Refinement of the problem decomposition for a particular branch
- For the nailer example the team determined that the instantaneous power delivered during the
nailing process was about 10,000 watts for a few milliseconds that they needed
- Not available from wall outlet, a battery or a fuel cell.
- They concluded , therefore , that the energy must be accumulated over a substantial period of the
nailing process (say 100 milliseconds) and then suddenly released to supply the instantaneous
power to drive the nail

A new problem decomposition assuming an electrical energy source and the accumulation of energy in
the mechanical domain.
Step 4 – e.g Concept Combination Table for Nailer
- Provides a way to consider combinations of solution fragments systematically
- 24 possible combinations (4x2x3)
- you write down what you subsystem has to do step by step, then you can look at what solutions you can combine

Concept combination table for the handheld nailer.

Step 4- e.g Concept Combination Table for Nailer

- Solenoid compresses a spring and then releases in repeatedly in order to
drive the nail with multiple impacts
Step 4 – e.g Concept Combination Table for Nailer

Multiple solutions arising from the combination of a motor with transmission, a spring and single
impact

Multiple solutions arising from the combination of a motor with transmission, a spring
and multiple impacts
5 Step Process ---Step 5– Reflect on the Solutions and the Process
- Is the team developing confidence that the solution space has been fully explored?
- Have external sources been thoroughly used?
- Have ideas from everyone been accepted and integrated in the process?
- Are there alternative ways to decompose the problem?

One of the Several Refined Concepts

Summary
 Concept Selection Process

- Concept Selection is part of the overall concept development phase.

Concept Development Funnel

The Decision Matrix (Concept Screening Matrix) → A systematic way to design a

multifunctional design
- Evaluates strength and weakness of designs
- Use suggestive terms such as low weight, low cost, easy to manufacture etc.
 Some Concept Selection Methods

1. Open Multi-voting (very fast)

2. Secret Ballot Voting(very fast)
3. Pro/Con or Benefit/Effort List(common)
4. Group Consensus(common)
5. Leader’s Decision (sometimes necessary)
6. Client’s Decision (sometimes necessary)
7. Market Testing (difficult)
8. Online Community Rating (trendy)
9. Screening Matrix (fast)
10. Scoring Matrix (balanced)

- How to Fill Out a Decision Matrix

Step 1: Identify the evaluation criteria - Ex. Durability
Step 2: Weight the evaluation criteria
- Weight values are assigned in proportion to importance to overall success of the design; the
larger the weight, the more important the evaluation criterion – usually define the weights
such that their sum is 1.

- Set up the decision Matrix

- Step 3: Set up the decision matrix as illustrated (next slide)

- The names of the concepts being evaluated filled onthetop of each column. Likewise, the
evaluation criteria and their assigned weights are written in the leftmost columns of the
matrix.
- Scoring and intermediate calculations are recorded within the sub columns under each
concept and totaled at the bottom of the matrix.
 THE DECISION MATRIX

Step 4: Assign values to each concept

- Starting in the first row, each concept is assigned a value between 0 and 10
according to how well it satisfies the evaluation criterion under consideration.
0 = Totally useless concept in regard to this criterion
5 = Average concept in regard to this criterion
10 = Perfect concept in regard to this criterion

Step 5: Interpret the results

- The highest overall value provides an indication of which design is best. It should be
regarded as a tool aimed at fostering an exhaustive discussion of strengths and
weaknesses.
the highest overall value = best concept in terms of criterion
Concept Selection Example: Reusable Insulin Syringe

CONCEPT SELECTION PROCESS

SYRINGE EXAMPLE: CONCEPTSSSS

Concept screening principles
• Be focused on customer needs
• Match or exceed competitors’ performance along key dimensions
• Improve the product’s manufacturability
• Reduce lead time
• Encourage more and effective participation from the design team members
• Have better documentation of the decision process.

Syringe Example: Concept Screening Matrix

Concept scoring steps

1. Prepare a selection matrix, based on the selection criteria
2. Rate the concepts
3. Rank the concepts
4. Combine and improve concepts
5. Select one or more concepts
6. Reflect on the results and the process
Syringe Example: Concept Scoring Matrix

Issues in the decision process

- It assumes that the selection criteria reflect customer’s needs
- It assumes that the selection criteria are independent
- Manufacturing costs and manufacturability are not included in the decision
- It is better to directly evaluate those independent, simpler concepts supporting the
design concepts, if they constitute all the product concepts.
- The process of concept selection can be applied to throughout the development
process.

Concept Selection Caveats

- The goal of concept selection is not to select the best concept. The goal is to create and
develop the best concept.
- So remember to combine and refine the concepts to develop better ones!
- Beware of selecting the best average product.
- Note features which can be applied to other concepts.
- You can perform concept selection for each different customer group and compare
results.
- Check sensitivity of selection to the importance weightings and any uncertain ratings.
• The full set of detailed requirements can be used in the final stages of selection.
TOPIC 6- Concept Testing and Product Architecture
Fastest Route to Failure

• Testing is about avoiding failures by identifying the risks, finding the potential failure
modes, and eliminating them.

• The FRF principle is about prioritizing the failure modes to spend your time working on
the most important ones.

Failure is not the opposite of success, it is part of the success.

Product Development Process

[planning, concept development, system-level design, detail design, testing and refinement, production
ramp-up, qualitative concept testing, quantitative concept testing]

Concept Development Process

[Identify Customer Needs, Establish Target Specification, generate product concepts, select product concepts, test product
concepts, set final specifications, plan downstream development, perform economic analysis, benchmark competitive products, build
and test models and prototypes.]
Testing in the Product Development Process

- Go/No-Go Decision Gates

- Specification Testing (benchmarking)
- Prototype Testing (design iterations)
- Qualitative Concept Testing
- Performance and User Interface Testing (alpha)
- Quantitative Market Testing
- Validation/Acceptance Testing (beta)
- A/B Testing (release versioning)

Concept Testing is Used for Several Purposes

- Go/no-go decisions
- What market to be in?
- Selecting among alternative concepts
- Confirming concept selection decision
- Benchmarking
- Soliciting improvement ideas
- Forecasting demand
- Ready to launch?

Concept Testing Process

1. Define the purpose of the test

2. Choose a survey population
3. Choose a survey format
4. Communicate the concept
5. Measure customer response
6. Interpret the results
7. Reflect on the results and the process
Scooter Example
Step 1: Define the purpose of the test → What market to be in?

Step 2: Choose a survey population → College students who live 1-3 miles from campus
Factory transportation

Step 3: Choose a survey format

Face-to-face interviews
Telephone
Postal mail
Internet

Step 4: Communicating the Concept

- Verbal description
- Sketch
- Photograph or rendering
- Storyboard
- Video
- Simulation
- Interactive multimedia
- Physical appearance model
- Working prototype

Step 4: Communicating the Concept ---****Verbal Description*******

- A verbal description is generally a short paragraph or a collection of bullet points

summarizing the product concept.
- This description may be read by the respondent or may be read aloud by the
person administering the survey.

For example, the scooter concept might be described as follows:

- The product is a lightweight electric scooter that can be easily folded and taken
with you inside a building or on public transportation.
- The scooter weighs about 25 pounds. It travels at speeds of up to 15 miles per
hour and can go about 12 miles on a single charge.
- The scooter can be recharged in about two hours from a standard electric outlet.
- The scooter is easy to ride and has simple controls: just an accelerator button
and a brake.
Step 4: Communicating the Concept ********Sketch:

Sketches are usually line drawings showing the product in perspective, perhaps with
annotations of key features. Exhibit 9‐4 shows a sketch of the scooter concept

Step 4: Communicating the Concept --- ****Photos and Rendering

- Photographs can be used to communicate the concept when appearance models

exist for the product concept.
- Renderings are nearly photo‐realistic illustrations of the concept.
- Renderings can be created with pens and markers or using computer‐aided
design tools.

************Storyboard : illustrating storage, transportation, and use scenarios

- A storyboard is a series of images that communicates a temporal sequence of

actions involving the product.
- For example, one of the potential benefits of the scooter is that it can be easily
stored and transported.
Step 4: Communicating the concept*******Simulation using 3D Solid CAD Model

- Simulation is generally implemented as Solid CAD Model Software that mimics

the function or interactive features of the product.

- Simulation would probably not be the ideal way to communicate the key features
of a scooter, but in some other cases simulation can be effective.

- For example, in testing controls for electronic devices, a visual image of the
device can be created on the computer screen, and the user can control the
simulated device via a touch screen or mouse clicks and can observe simulated
displays and sounds.

*******Physical Appearance Model

- Physical appearance models, also known as “looks like” models, vividly display
the form and appearance of a product.
- They are often made of wood or polymer foams and are painted to look like real
products.
- In some cases, limited functionality is included in the model.
- The scooter team built several looks‐like models, one of which was articulated so
that the folding feature could be demonstrated.

Step 4: Communicating the Concept **********Working Prototype

- When available, working prototypes, or works‐like models, can be useful in

concept testing; however, the use of working prototypes is also risky
- The primary risk is that the respondents will equate the prototype with the
finished product.
- In some cases, prototypes perform better than the ultimate product (e.g.,
because the prototype uses better, more expensive components such as motors
or batteries).
- In most cases, the prototype performs worse than the ultimate product and is
almost always less visually attractive than the ultimate product .
Step 4: Communicating the Concept : Beta Prototype

• Beta prototypes are typically used to assess reliability and to identify remaining bugs in
the product.

• These prototypes are often given to customers for testing in the intended use
environment.
• The parts in beta prototypes are usually made with actual production processes
or supplied by the intended component suppliers, but the product is usually not
assembled with the intended final assembly facility or tooling.

• For example, the plastic parts in a beta prototype might be molded with the production
injection molds but would probably be assembled by a technician in a prototype shop
rather than by production workers or automated equipment.

Step 4: Communicating the Concept : video animation interactive multimedia live

demonstration

- Video images allow even more dynamism than the storyboard.

- With video, the form of the product itself can be clearly communicated, as can
the way in which the product is used.
- The scooter team used a video in its purchase‐intent survey.
- The video showed students and commuters riding prototypes of the product and
showed an animation of the folding mechanism.

Step 5: Measure Customer Response

Matching the Survey Format with the Means of Communicating the Concept

Survey Format

PART 1: Qualification

- How far do you live from campus?

- <If not 1-3 miles, thank the customer and end interview.>
- How do you currently get to campus from home?
- How do you currently get around campus?

• PART 2 :Product Description

<Present the concept description.>

Survey Format

SURVEY FORMAT: PART 3: Purchase Intent

- If the product were priced according to your expectations, how likely would you
be to purchase the scooter within the next year?

PART 4, Comments
What would you expect the price of the scooter to be?
What concerns do you have about the product concept?
Can you make any suggestions for improving the product concept? Thank you.
Step 6: Interpreting the Results: Forecasting Sales

Forecasting Example: Factory Transport Market

Scooter Sold as Single‐Person Transportation in Large Factories

• Assume that scooters are currently sold into this market at a rate of 150,000 units per
year (N = 150,000).
• Assume that the company sells the product through a single distributor that accounts
for 25 percent of the sales in this category (A = 0.25).
• Assume that results from a concept test with factory managers responsible
for purchasing transportation devices indicate a definitely‐would‐buy fraction of 0.30
(top‐box)and probably‐would‐buy fraction of 0.20 (second box).

Forecasting Example: Factory Transport Market

Please see textbook Chapter 9 Appendix (Estimating Market Sizes - Exhibit 9-11 and 9-12)

Forecasting Example:

Scooter Sold to College students

- This is a new category- Challenging to estimate N

- For e.g. how many students purchase bicycles or motor scooters intended for
basic transportation ~ 1 million
- Alternatively, how many students must travel distances of between 1 and 3 miles
in commuting ~ 2 million
- Assume that we sample students in this second group and we obtain a
definitely-would-buy fraction of 0.10 and a probably – would-buy fraction of 0.05
(these numbers represent the fraction of respondents that indicate intent to
purchase within 1 year) Based on this, the company expects 30% in the target
market will be aware of the product
- P= 0.4x0.10+0.2x0.05
- Q = 2,000,000 x 0.30 x 0.05
- = 30,000 units in the first year

Sources of Forecast Error

Some of the factors that can cause actual purchase patterns to differ from the purchase
intentions expressed in surveys include:

- Importance of word‐of‐mouth and social media: When the benefits of a

product are not immediately obvious, the enthusiasm of existing users may be an
important factor in generating demand. This factor is not generally captured in
concept testing.
- Fidelity of the concept description: If the actual product differs substantially
from the description of the product in the concept test, then actual sales are likely
to differ from the forecast.
- Pricing: If the price of the product deviates substantially from the price indicated
in the survey, or from the expectations of survey respondents, then forecasts are
likely to be inaccurate.
- Level of promotion: Spending on advertising and other forms of promotion can
increase demand for most products.
- The influence of promotion is accounted for only weakly in the forecasting model
via the awareness/availability term and via the materials used to present the
concept(s)
- Competition
Product Development Process

[planning, concept development, system-level design, detail design, testing and refinement, production
ramp-up, platform decision, concept decision, decomposition decision]

- Product architecture is determined by decisions at several points in the early

stages of the development process.
- Product architecture defines the embodiment of the concept and plans how it will
be implemented in the downstream process.

Product Architecture

- A product can be thought of in both functional and physical terms

- The functional elements are the individual operations that are part of the
overall performance of the product. For a printer: store paper, communicate with
computer and access user input.
- The physical elements of a product are the parts, components, and
subassemblies that generate the product’s functions
- The physical elements are grouped into several major physical building block,
which are called chunks
- Each chunk is made up of a collection of components that implement the
functions of the product
- The Architecture of a product is the scheme by which the functional elements
of the product are arranged into physical chunks and by which the chunks
interact.
 - The most important characteristic of a product architecture is its modularity

[modular architecture, integral architecture, bicycle brake and shift control]

In the traditional design (left), the shift control function and the brake control function are
allocated to separate chunks, which in fact are mounted in separate locations on the bicycle.
This design exhibits a modular architecture.

In the design on the right, the shift and brake control functions are allocated to the same chunk.
This design exhibits an integral architecture—in this case motivated by aerodynamic and
ergonomic concerns.

Trailer Example: Integral Architecture

- The physical elements of a product are typically organized into several

major physical building blocks, which are called chunks.
- Functional elements of the product are implemented using more than one
chunk
- A single chunk implements many functional elements
 - Chunks implement one or a few functional elements in their entirety
- The interactions between chunks are well defined and are generally
fundamental to the primary functions of the product.

Three Types of Modularity

- The physical elements of a product are typically organized into several major
physical building blocks, which are called chunks

- Slot – Modular : Each of the interfaces between chunks is of a different

type from others e.g. – Automobile Radio
- Bus – Modular : There is a common bus to which the other chunks
connect via the same interface. e.g., Expansion card for a personal
computer, adjustable roof racks for automobiles
- Sectional-Modular – All interfaces of the same kind but there is no single
element to which all the other chunks attach. e.g. office partitions,
sectional sofas
Modular Product Architectures

- Chunks implement one or a few functions entirely.

- Interactions between chunks are well defined.
- Modular architecture has advantages in simplicity and reusability for a product
family or platform.

[swiss army knife, sony CD Walkman]

Modular Architecture Examples

[sectional furniture, DIN audio system, modular home, smartphone OS]

Modular Software Architecture Example

[turboTax]

Integral Product Architectures

- Functional elements are implemented by multiple chunks, or a chunk may

implement many functions.
- Interactions between chunks are poorly defined.
- Integral architecture generally increases performance and reduces costs for
any specific product model.

[high performance wheels, compact camera]

Integral Architectures examples

[BMW Motorcycle frame, F/A-18 super hornet, macbook air unibody, taurus
audio/climate controls]

Choosing the Product Architecture

Architecture decisions relate to product planning and concept development decisions:

- Product Change (copier toner, camera lenses)

- Product Variety (computers, automobiles)
- Standardization (motors, bearings, fasteners)
- Performance (racing bikes, fighter planes)
- Manufacturing Cost (disk drives, razors)
- Project Management (team capacity, skills)
- System Engineering (decomposition, integration)

Implications of the Architecture – Product Change

- Upgrade: Replacing a pump in a cooling system with more powerful model;

Changing a CPU in the computer
- Add-Ons: Third party storage devices may be added to a basic computer
- Adaptation: Conversion from 220V to 110V;Conversion of engines from gasoline
to a propane fuel supply.
- Wear: Razor blades allow dull blades to be replaced; tires on vehicles
- Consumption: Batteries in watches ; print cartridges
- Flexibility in Use: Many cameras can be used with different lens;
 - Reuse: Consumer electronics may update a product line by changing only the
user interface and enclosure while retaining the workings from a previous model

Implications of Product Architecture (1) and (2)

[Upgrade or add-ons, flexibility in Use, wear or consumption, production variety]

[standard components, holistic performance, manufacturing cost, delayed

differentiation]
Coffee Maker Product Family

Establishing the Architecture

To establish a modular architecture, create a schematic of the product, and cluster the
elements of the schematic to achieve the types of product variety desired.

- Create a schematic of the product

- Cluster the elements of the schematic
- Create a rough geometric layout
- Identify the fundamental and incidental interactions

DeskJet Printer Schematic

[enclose printer, provide structural support, print cartridge, position paper, pick, store
blank paper, functional or physical elements, flow of forces of energy, of material, of
signals or data, communicate with host, command, supply DC power, display status]

Cluster Elements into Chunks

[enclosure, chassis, paper tray, chunks, print mechanism, user interface board, power
cord and brick, host driver software, logic board]

Geometric Layout
Incidental Interactions

[enclosure, chassis, paper tray, chunks, print mechanism, user interface board, power
cord and brick, host driver software, logic board, styling, vibration, thermal distortion, RF
shielding, RF interference]

System Team Assignment

Based on Product Architecture

Fundamental Decisions

- Modular vs. Integral architecture

- What type of modularity?
- How to assign functions to modules?
- manufacturability, maintainability, customization opportunities
- How to assign modules to teams
- Which modules to outsource?

Product Architecture

Product Architecture can allow for Delayed Differentiation

- A company can produce 3 different printers for 3 different markets

- The difference between products is the voltage used to run the printers
- The architecture of the product will dictate the manufacturing process and the
supply chain activity required that will allow for delayed differentiation

Modularity Enables Delayed Differentiation`

Early Differentiation

Postponement
Product Architecture

There are 2 conditions required for delayed differentiation

1. The differentiating elements of the product must be concentrated in one or a few

chunks
2. The product and production process must be designed so that the differentiating
chunk can be added to the product at the end of the supply chain

Platform Planning

- A company that produces multiple products could produce different products for
different markets
- Product architecture enable a company to offer two or more different products by
modifying only subset of the product components
- Product architecture enables the company to offer also commonality between
different products
- This trade-off is known under the differentiation plan and the commonality plan
Planning a Modular Product Line Example – Differentiation Plan for a Family of
Three Printers

Differentiation Plan explicitly presents the ways in which multiple versions of a product
will be different

[differentiating attributes, family, student, SOHO (small office, home office)]

Planning a Modular Product Line Example – Commonality Plan for a Family of

Three Printers

Commonality plan explicitly represents the ways in which the different version of a
product are the same physically
[Digital] Platform Ecosystem

[content, content management, ad creation, ad payer, sales optimization, subscriptions, viewers,

search services, internal monetization, analytics, external partners, content creation]

Product Architecture

Managing the Trade-Off between Differentiation and Commonality

- There is a tension between Differentiation and Commonality

- For example a student printer offers a small footprint, this can require a different
print mechanism chunk, which can add to the cost of designing the printer
- These guidelines could help manage this tension:

- Platform planning decision should be informed by quantitative estimates of cost

and revenue implications

- Iteration is beneficial

- The product architecture dictates the nature of the trade-off between

differentiation and commonality (modular architecture allows for greater
commonality)
Practical Concerns

- Planning is essential to achieve the desired variety and product change

capability.
- Coordination is difficult, particularly across teams, companies, or great distances.
- Special attention must be paid to handle complex interactions between chunks
(system engineering methods).

Summary

- Product Architecture affects, product change, product variety, component

standardization, performance, manufacturability, and product
development.
- Product architecture will affect the degree at which the product is integral
or modular.
- Product architecture can enable delayed differentiation which offers
substantial cost savings
- For platform architecture, there is a trade off between differentiation and
commonality that is needed. This trade-off is established in light of
customer requirements, marketing input and impact on program
profitability.

Conclusion

- Architecture choices define the sub-systems and modules of the product platform
or family.
- Architecture determines: ease of production variety, feasibility of customer
modification, system-level production cost
- Key Concepts: modular vs integral architecture, clustering into chunks, planning
product families.