MSE415 Product Design Chapter 3 Product Planning 1

MSE-415: Product Design Chapter 3 Product Planning 1 9/4/07 MSE-415: B. Hawrylo

Website http: //www. csun. edu/msem/ or http: //www. csun. edu/~rsh 12598/ • Course Description – Syllabus • Lecture notes and slides • Additional readings 2 9/4/07 MSE-415: B. Hawrylo

Lecture Objectives: • Syllabus Review • Complete student bio-handouts • Discuss types of product development projects New product platforms q Derivatives of existing product platforms q Incremental improvements to existing products q Fundamentally new products q • Discuss the Product Planning process Identify opportunities q Evaluate and prioritize projects q Allocate resources and plan timing q Complete pre-project planning q Reflect on the results of the process q 3 9/4/07 MSE-415: B. Hawrylo

Project Planning • The Project Planning process takes place before: a product development project is formally approved. q substantial resources are applied. q the larger development team is formed. q • Product planning ensures that product development projects support the broader business strategy of the company and addresses: What product development projects will be undertaken? q What mix of fundamentally new products, platforms, and derivative products should be pursued? q How do the various projects relate to each other as a portfolio? q What will be the timing and sequence of the projects? q 4 9/4/07 MSE-415: B. Hawrylo

Project Planning • Each of the selected projects is then completed by a product development team. In order for the team to complete the project they need to know the following: What market segments should be considered in designing the product and developing its features? q What new technologies (if any) should be incorporated into the new product? q What are the manufacturing and service goal constraints? q What are the financial targets for the project? q What are the budget and time frame for the project? q 5 9/4/07 MSE-415: B. Hawrylo

Project Planning • So what is a project plan? A project plan identifies the portfolio of products to be developed and the timing of their introduction to market. q Opportunities are identified from many sources including: q – – – Marketing Research Customers Current product development teams Benchmarking of competitors • A project plan breaks projects into four types: q New product platforms q Derivatives of existing product platforms q Incremental improvements to existing products q Fundamentally new products 6 9/4/07 MSE-415: B. Hawrylo

Project Planning • New product platforms Major development effort q Something totally new – Digital copier platform (instead of light-lens) q • Derivatives of existing product platforms q Extension of an existing product platform to better address familiar markets with one or more new products. – A new light-lens copier. • Incremental improvements to existing products q Addition or modification of features on existing products in order to keep product line competitive. – A slight change to remedy minor flaws. • Fundamentally new products q 7 9/4/07 Radically different products or production technologies. MSE-415: B. Hawrylo

Discussion • What is the difference between New Platforms and Fundamentally New Products? Provide Examples 8 9/4/07 MSE-415: B. Hawrylo

Project A Typical Project Plan Product Release Value-lock: Lock Manufacturer New Platforms Key-type lock Derivatives Waterproof Lubricated Improvements Bio-scan Type Fundamentally New 2006 9 9/4/07 CRES 2007 2008 2009 2010 2011 MSE-415: B. Hawrylo

Project Create a Project Plan Product Release New Platforms Derivatives Break into groups and create a project plan for a product of your choice. Improvements Fundamentally New 2006 10 9/4/07 2008 2009 2010 2011 MSE-415: B. Hawrylo

Project Planning • What happens if the organization does not carefully create the project plan? Inadequate coverage of target markets with competitive products. q Poor timing of market introductions of products. q Mismatches between aggregate development capacity and the number of projects pursued. q Poor distribution of resources, with some projects overstaffed and others understaffed. q Initiation and subsequent cancellation of ill-conceived products. q Frequent changes in the direction of products. q 11 9/4/07 MSE-415: B. Hawrylo

Project Planning – The Process • The Project Planning Process Identify opportunities q Evaluate and prioritize projects q Allocate resources and plan timing q Complete pre-project planning q Reflect on the results and the process q Identify opportunities Second Screen Idea Screen Discovery Gate 1 Stage 1 Scoping 12 9/4/07 Allocate resources And plan timing Evaluate and prioritize projects Gate 2 Complete pre-project planning Go to Development Go to Testing Gate 3 Gate 4 Stage 2 Build Business Case Stage 3 Development Product development process Go to Launch Stage 4 Testing & Validation Gate 5 Stage 5 Launch MSE-415: B. Hawrylo

Project Planning • Step 1: Identify Opportunities q Ideas for new products and/or features can come from: – Marketing and sales personnel – Research and technology development organizations – Current product development teams – Manufacturing and operations organizations – Current/potential customers – Third parties such as suppliers, inventors, business partners Opportunities can be collected passively or actively. 13 9/4/07 MSE-415: B. Hawrylo

Project Planning • What are some active approaches to identify opportunities? Document complaints about current products. q Interview lead users with attention devoted to innovations. q Consider new trends in lifestyles, demographics, and technology. q Systematically gather suggestions from current customers. q Carefully study competitors products. (Benchmarking) q Track the status of emerging technologies q 14 9/4/07 MSE-415: B. Hawrylo

Project Planning • Step 2: Evaluate and Prioritize Projects Competitive Strategy q Market Segmentation q Technological Trajectories q Product Platforms q 15 9/4/07 MSE-415: B. Hawrylo

Project Planning • Competitive Strategy q An organization’s competitive strategy defines a basic approach to markets and products with respect to competitors. Technology Leadership Emphasis on basic R/D of new technologies and the deployment of these technologies. Cost Leadership Compete on production efficiency, either through economies of scale, superior manufacturing methods, low-cost labor, or better management. Customer Focus Close work with new and existing customers to assess their changing needs and preferences. Imitative Allow competitors to explore the market. Once a viable market is identified, firm quickly develops and launches product into that market. 16 9/4/07 MSE-415: B. Hawrylo

Project Planning • Market Segmentation Divide the market into segments. q Evaluate which market segments current products cover. q Address which new products can best cover weakly covered market segments. q 17 9/4/07 MSE-415: B. Hawrylo

Project Planning • Technological Trajectories Used to evaluate when to make a transition from one technology to the next. Product Performance q Maturity Rotary Time 18 9/4/07 Bio-scan Today MSE-415: B. Hawrylo

Project Planning Product Platform Planning Bio-scan Voice-Recognition What could some product derivatives be? 19 9/4/07 MSE-415: B. Hawrylo

Project Planning Evaluating Fundamentally New Product Opportunities • Market Size (units/year x average price) • Market Growth Rate (%/year) • Competitive Intensity (# of competitors and their strength) • Depth of the firm’s existing knowledge of market. • Depth of the firm’s existing knowledge of technology. • Fit with the firm’s other products. • Fit with the firm’s other capabilities. • Potential for patents, trade secrets, or other barriers for competition. • Existence of a product champion within the firm. 20 9/4/07 MSE-415: B. Hawrylo

Project Planning Product Process Change Matrix Extent of Production Process Changes Research and Technology Development Extent of Product Changes New Core Product Next Generation Process Single Department Upgrade Tuning and Incremental Changes No Process Change Breakthrough Development Projects Platform Development Projects Next Generation Product Bio-scan Addition to Product Family Minor Product Enhancement No Product Change 21 9/4/07 New Core Process Derivative Product Development Current Product/Process Support MSE-415: B. Hawrylo

Project Planning • Step 3: Allocate Resources and Plan Timing q 22 9/4/07 It is likely that a firm cannot afford to invest in every product development opportunity in its desired balanced portfolio of projects. – Allocate Resources – Project Timing MSE-415: B. Hawrylo

C a p a c it y 60% 40% 23 9/4/07 80% Year 1 Year 2 Industrial Design Software/ Firmware Manufacturing Engineering Electrical Engineering Mechanical Design Industrial Design Software/ Firmware Manufacturing Engineering U ti li z Design Mechanical a ti o n Electrical Engineering . . Project Planning Allocate Resources 140% 120% 100% 0% Year 3 MSE-415: B. Hawrylo

Project Planning Project Timing Determining the timing and sequence of projects must consider a number of factors: 1. Timing of product introductions 2. Technology readiness 3. Market readiness 4. Competition 24 9/4/07 MSE-415: B. Hawrylo

Project Planning • Step 4: Complete Pre-Project Planning Core Team – Small, cross-functional team q Creates the Mission Statement q 25 9/4/07 MSE-415: B. Hawrylo

Project Planning • Effective Mission Statement Brief description of product. q Key business goals. q Target Market q Assumptions and constraints that guide the development effort. q Stakeholders q 26 9/4/07 MSE-415: B. Hawrylo

Valu-Lock Mission Statement Fill in information for mission statement. Product Description Key Business Goals Primary Market Secondary Markets Assumptions and Constraints Stakeholders 27 9/4/07 MSE-415: B. Hawrylo

Project Planning • Step 5: Reflect on the Results and the Process q What are some questions that should be asked at this step to assess the quality of both the process and the results? See page 49 28 9/4/07 MSE-415: B. Hawrylo

Next Week September 12, 2007 Homework • • q q q Thought Question #1 on Page 52 of “Product Design and development” Identify two (2) potential design and development ideas for use as a group project. A brief, descriptive project title (2 -4 words). This is critical! The two (2) nearest competitors (existing solutions) and price. A description of the product opportunity you have identified. Your description may include any of the following: Documentation of the market need, shortcomings of existing competitive products, and definition of the target market and its size. Ideas can make a job; faster, safer, less labor intensive, less expensive, improve on an existing design, solve a problem, simplify a task, etc. But ultimately the product MUST be profitable. Examples: – Can opener for someone with arthritis – Flashlight for firemen – Method for securing luggage when traveling – Tool to determine when a fruit/vegetable is optimal ripeness – Cell phone operated without fingers (used in cold weather) Read Chapter 16 – Gantt, PERT charts, managing projects, etc 29 9/4/07 MSE-415: B. Hawrylo