Chapter 3 Product Design

Operations LeaderThe Product Development Process at Ford

The product development process is how Ford’s vision
becomes reality—and how societal needs are arrayed
and accommodated through innovative design and
engineering.
An automobile is the most complex product that
most people are ever likely to own. A typical midsize
family car is made up of more than 20,000 individual
parts compris-
ing 600 major
subsystems or
components. At
least 73 different materials are used in a typical vehicle,
including 24 different types of plastics.
The process of designing and producing a modern
vehicle is similarly complex. It begins with information
inputs of three major types:
• Ford strategy and goals for performance and
leadership.
• Market research.
• Research and development technical approaches to
a variety of environmental, safety, and performance
challenges.
To accomplish its goals, Ford spends about $4
billion per year on research and development. The
product development process itself is changing in
significant ways. Ford is developing a global approach
to product development by integrating the engineering
and pur- chasing organizations and assigning
development responsibilities to particular vehicle
segments such as small, midsize, and large cars and
utilizing expertise from around the world. This should
result in more customer- focused products at lower
costs with better quality by eliminating duplicate
engineering and purchasing prac- tices. Ford has
achieved this realignment of its Global Product
Programs.
Source: corporate.ford.com, 2015.

3.1 STRATEGIES FOR NEW-PRODUCT INTRODUCTION

LO3.1 Compare the
There are three fundamentally different ways to introduce new products. These approaches
three strategies
are called market pull, technology push, and interfunctional view.
for new-product
introduction. Market pull. According to this view, the market is the primary basis for determining
the products a firm should make, with little regard for existing technology. A firm
should make what it can sell. Customer needs are determined, and then the firm orga-
nizes the technology, resources and processes needed to supply the customer. The mar-
ket will “pull” through the products that are made.
Technology push. In this view, technology is the primary determinant of the products
the firm should make, with little regard for the existing markets. The firm should pur-
sue a technology-based advantage by developing superior technologies and products.
The products then are pushed into the market, and marketing’s job is to create demand
for these superior products. Since the products have superior technology, they will
have a natural advantage in the market and the customers will want to buy them.
Interfunctional view. This view holds that the product should not only fit the market needs
(new or existing markets) but have a technical advantage as well. To accomplish this, all
functions (e.g., marketing, engineering, operations, and finance) should cooperate to design
the new products needed by the firm. Often, this is done by forming cross-functional teams
that are responsible for the development of a new product. This is the most appealing of the
three views but also the most difficult to implement. Often cross-functional rivalry and
friction must be overcome to achieve the degree of cooperation required for interfunctional
product development to succeed. If it can be implemented, the interfunctional approach
usually will produce the best results, and we emphasize it in the remainder of this chapter.
The lack of interfunctional cooperation is depicted in Figure 3.1.
FIGURE 3.1 Lack of cooperation in designing a swing.
The Firm Designs a Swing for the Children

As proposed by the marketing department As specified in the product request As designed by the senior designer

As produced by manufacturing As used by the customer What the customer wanted

3.2 NEW-PRODUCT DEVELOPMENT PROCESS

LO3.2 Describe the
Most firms have an organized new-product development (NPD) process that follows spe-
three phases of
cific phases or prescribed steps. These phases may be formally defined in company docu-
new-product
ments and require sign-offs by senior management between phases. The purpose of this
development.
process is to gain control of product development and ensure that all important issues are
addressed by the NPD team. ISO 9000 certification requires that a prescribed NPD
process be defined and followed by the company in the development of its products.1
The typical phases followed by firms in developing new products are concept
develop- ment, product design, and pilot production/testing. The names of these
phases and the number of phases may vary from one company to the next, but there is a
great deal of similarity among the various approaches used.
Concept This phase is concerned with idea generation and the evaluation of alternative ideas for
Development the new product. During this phase, several product concepts usually are generated and
evalu- ated. The physical product is not designed during concept development; rather,
different approaches to defining and meeting the market need are considered and the best
approach

1
ISO stands for the International Organization for Standards. ISO 9000 is a standard that applies to
new- product development and to production to ensure that quality products are designed and
manufactured.
The ISO 9000 standard requires that a procedure manual for new-product development be
defined and used by the company.
 is selected by the company. For example, when a new smart phone is developed, it must
start with concept development. What features should the new phone have including the
size of the screen, the amount of memory, the type of cameras, and the features of the
soft- ware to name only a few? What will appeal to the customers and the market?
Among the several conceptual designs considered and evaluated, one will be selected
for the next phase of product development. The decision to proceed to the product design
Product phase ordinarily requires top management approval. At the time of approval, a cross-
Design functional team will be established, if one does not exist already, to design the new
product.

This phase is concerned with designing the physical new product. At the beginning, the
firm has a general idea of what the new product will be but not too many specifics. At the
end of the product design phase, the firm has a set of product specifications and digital
images (or engineering drawings) specified in sufficient detail that production prototypes
can be built and tested.
Product design requires consideration of many different trade-offs between product
cost, quality (features), and schedule. Engineers will be assigned to work on the various
parts of the project. As they work, they will make decisions that ultimately will affect the
product’s cost, its quality (features), and the schedule for product introduction. It is easy
to see why marketing, operations, and finance/accounting must also be involved with
engineering dur- ing this phase so that appropriate trade-offs can be made for the greatest
benefit of the entire business.
Engineering probably will use computer software to design the product and simulate
its operation before it is made. This will help ensure that the product works when it is
produced. Virtual prototypes, designed and tested inside a computer, are frequently used
to speed up and simplify the engineering design tasks. Computer-aided design (CAD)
systems are also used to view the product on a computer screen and, in most cases, to
eliminate the need for blueprints or drawings. At the end of this phase, the computer
images and database are transmitted to production as a basis for pilot production. In the
smart phone example above,
all of the physical components and the software will
have detailed specifications for manufacturing.
Process design should be taking place simultane-
ously with product design. Manufacturing should not
wait for the final design to be completed before process
design begins. As a matter of fact, it is better if process
design is done in parallel with product design so that
changes can be made in the product to facilitate the
pro- duction process before finalizing the product
design. It is also a good idea for the product designers
to have some manufacturing experience so that they are
aware of the process choices that are available and the
pitfalls of designs that can lead to poor production
processes.
This is a CAD system used for product Figure 3.2 shows how process design should proceed in
design.
© Juice Images/Alamy
parallel with product design.

Pilot In this third phase, products require testing of production prototypes before they are put
Production/ into production. For example, in the design of a new laptop computer, several laptops
Testing would be built as prototypes and tested for their ability to meet the product specifications.
This may include performance tests of hardware and software and lifetime tests of
reliabil- ity of the laptop. Similar pilot production and testing is done for aircraft,
automobiles, new cereals, and many other new products.
FIGURE 3.2 Concept development
New-product design
process.

Product design Preliminary process design

Pilot production/testing Final process design

3D printing or additive manufacturing has made physical prototype development easy

and fast. Almost any three-dimensional shape can be made by laying down successive
layers of metal, plastic, or ceramics. An inkjet type of printer is used to make successive
and addi- tive layers of the three dimensional prototype. Prototypes for testing can be
produced in a few hours instead of days or weeks with older technologies. 3D printing,
described in more detail later, can also be used to produce low-volume customized
products not just prototypes. During this phase, the process for production is finalized.
Since the product design is near- ing completion, the process can be designed in great detail
and tested for its capability to make the product that has been designed. Process and product
modifications should be considered so that the process is optimized before full-scale
production and market introduction begin. To facilitate full-scale production, an
information package should be finalized that contains not only product specifications but
also process design specifications, training procedures for
operators, and test results. This will facilitate the transition from design to production.

3.3 CROSS-FUNCTIONAL PRODUCT DESIGN

LO3.3 Evaluate how
The new-product development process is one of frequent misalignment. No matter how
concurrent engi-
excellent the advanced planning or the technology is, misalignment between marketing,
neering deals with
product design and operations is a common occurrence. Misalignments can occur in mar-
misalignment.
keting, technology, infrastructure, and reward systems.
Misalignment in marketing occurs when the product does not meet market needs. This
can occur because of poor market intelligence or a misinterpretation of market needs. As
a result sales may be low and the product may need to be redesigned or eliminated.
Technology misalignment occurs when the product designed by engineering cannot be
made by operations. This happens when technologies are new or unproven or are not well
understood. Operations can have an infrastructure that is misaligned with the new product
in terms of labor skills, control systems, quality assurance, and organization. Finally,
reward systems may reinforce the use of current technology rather than the new processes
needed. To overcome these problems in NPD, a concurrent marketing, engineering, and
produc- tion approach has been suggested. The traditional approach proceeds in stages or
steps, as shown in part (a) of Figure 3.3. It is assumed that technology will be transferred
in stages, as a handoff, between marketing, engineering, and operations. This is a
sequential process,
with each function completing its work before the next one starts.
Figure 3.3 (b) illustrates a simultaneous development process, also called concurrent
engineering (or simultaneous engineering). All functions are involved from the
beginning, frequently by forming a NPD team, as soon as concept development is started.
In the first stage, marketing has the major effort, but other functions also have a role.
During the