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Successful product development results in product that can be produced and sold
Dimensions (important five) commonly used to assess the performance of a
product development effort- which ultimately relate to profit.

1) Product Quality : How good is the product- does it satisfy customer needs- is it
robust and reliable ?

Reflected in market share and

price customers are willing to pay.
2) Product Cost : What is the manufacturing cost of the product,it includes spending on
capital equipment, tooling and incremental cost of producing each unit.

Determines how much profit accrues

for a particular sales volume and price

3) Development Time: How quickly did the team complete the product development

Determine the responsiveness to competitive forces and to

technological developments as well as how quickly the firm
receives economic returns from the teams effort
4) Development Cost: Spending to develop the product.

Is usually a significant
fraction of the investment

5) Development Capacity: Is the team/firm better able to develop future products

(as a result of their experience with a product
development project?).

Is an asset the firm can use to

develop products more effectively
and economically in the future.
There are other performance criteria at times; for example: third party may
demand that the product make ecologically sound case of resources and create
minimal hazardous waste products.

Product development is an interdisciplinary activity requiring contributions from

nearly all the functions of the firm; however three functions are always central to
a product development profit:
That is
1. Marketing
2. Design
3. Manufacturing
Marketing :
a) Mediates interaction between the firm and its customers
b) Facilitates the identification of product opportunities.
c) defines market segment
d) identifies customer needs
e) sets the target price
f) co-ordinates the launch and promotion of the products.
Design :
a) Define the physical form of the product to meet the need
b) Includes (i) Engineering Design ( Mechanical, Electrical, Software
and (ii) Industrial Design (aesthetics ergonomics, user interface

a) Responsible for designing and operating the product system (in order
to produce the product)
b) Includes usually the supply chain, comprising of purchasing,
distribution and installation.
The factors (challenges) of the Product Development
a) Trade-offs : A car can be better fuel efficient but the cost will go up. (
Recognising; understanding and managing such trade-offs to maximise the
success of the product)
b) Dynamics: => changes
1. Technologies improve
Decision 2. Customer preferences change (evolve)
making in
changing 3. Competitors introduce new products
environment is 4. Macro economic environment changes
a formidable

c) Details: Such as type of fastening.

(Decision on details)- Developing a product with even modest
complexity may require thousands of such decisions.

d) Time pressure: Product development decisions must usually be made quickly

and without complete information.
e) Economics : large investment required for developing, producing and marketing
a new product to earn ROI (Return on Investment) the product must be
appealing to customer and relatively inexpensive to produce.

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

Quality Assurance : Check point in the development process assures the quality
of the resulting product.

Co-ordination : A clearly articulated product development process acts as a

master plan which defines the roles of each of the members on the development

Planning :A development process contains milestones corresponding to the

completion of each phase which anchors the schedule of the product
development project.
Management : By comparing the actual events to the established process, a
manager can identify possible problem areas.

Improvement : The careful documentation of the product development process

helps to identify opportunities for improvement.

Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Planning Concept System Detail Testing Prod.
development level Design And Ramp-Up
Design refinement


Concept Gen.


Product Architecture

Industrial Design
Design For Manufacturing
Robust Design
The Product Planning Identify
Process opportunity

Whose outcome is the
mission statement for
concept development
Portfolio of
Mission statement specifies :
Target market of the
and Plan
Business goals
Key assumptions Product plan
Complete Mission statement
pre-project Concept development
planning phase
Concept development In the concept development phase,
the needs of market are identified,
alternative product concepts are

evaluated and concepts(s) are

selected for development and

Identify Establish Generate Select Test Set down
customer target Product product product final stream
needs Spec. Concepts concepts concept spec. develop-
i ment
Perform economic analysis
Benchmark competitive product
Build and test model and prototypes

A concept is a description of the form, function and features of

a product, accompanied with specifications, an analysis of
competitors product and economic justification of the product. System level design
design phase
System level

System level design phase includes the description of

Product Architecture
The documentation of the into subsystem and

Geometric layout of the product

Fundamental spec. of subsystem Detail
Input for
Preliminary process flow diagram of Design
assembly process
Detail Design phase includes:
Complete specification of the
a) Geometry
Of all the unique
b) Materials
parts of the product
c) Tolerance
Identification of standard parts from suppliers
Process plan established
Tooling is designed for each part to be fabricated

Two critical issues

addressed in this
phase : Control documentation of the product
Product cost The drawings or computer files describing the geometry of
Robust each part and production tooling
performance The spec. of purchased parts
The process plan for fabrication and assembly of the product.

Input for Testing and

refinement phase
Testing and refinement phase involves:
Construction and evaluation of multiple preproduction versions (prototype) of
the product

Later (BETA) prototypes- built with

Early (ALPHA) prototypes-
parts supplied by the intended
built with production-intent
production processes. But may not be
parts (with some geometry and
assembled using intended final
material of the production
assembly process. this is done to check
version). But not necessarily
the performance and reliability in order
fabricated with the actual
to identify necessary engineering
process to be used in
changes in the final product.

Final stage

Production Ramp-Up
To train work force
Workout problems in production process