Product Design and

Development

Reference: Prof. Keith Lovegrove

Problem-Solution
 Product Selection

Metrics McDo JoliBee KFC

Price P 143 P 130 P 110
Skin Saltiest Crispy Salty
Meat Bland Bland Flavorful
Gravy Salty Watery Spicy

http://www.pepper.ph/treys-anatomy-fried-chicken-wars/
 Product Selection
Metrics Toyota Mitsubishi Ford Isuzu
Model Fortuner Montero Sport Everest Mu-X
Price (P) 2,260,000 2,058,000 2,239,000 1,968,000
Engine (li) 2.8L 2.4L 3.2L 3.0L
Transmission 6-speed auto 8-speed auto 6-Speed auto 6-speed auto
Valves 16 16 20 16
Power (Hp) 174 181 200 175
Torque (Nm) 450 430 470 380
Cylinders 4 4 5 4
Product Lifecycle
Target

???

Introduction Growth Maturity Decline

Product Launching Challenges
• Estimates of Failures at Launch:
• 35% (Crawford)
• 65% (Cooper)
• 50% – 70% most other studies
• Attrition (quoted by Cooper in 2 studies)
• 33 new ideas, 21 into development, 4 into launch, 3 successes
(14.3%)
• 8 into development, 3 to launch, 2 successes (25.0%)
• 46% of NPD and commercialization resources spent on
products that don’t yield adequate returns (USA)
• But, 20-30% of firms managed 80% success rate (i.e.
80% of resources went to product winners; 20-80 Rule)
What are the causes of failures1?
• Sales are too low
– Need is not shared by
enough customers
– Wrong market definition
• Lack of fit with company
– Low motivation
– Failure to build necessary
capabilities
• Not new or different
– No product improvement
– No perceived improvement
• Positioning issues
– Unclear Positioning
– Inferior Positioning
• Product design
problems
• Cost of product
development
• Competitive reaction
– Unanticipated
– Imitation and
Improvement
 What are the causes of failures2?
• Supply changes • Lack of channel
– Cost of raw material, labor or support
capital increase. – Availability
– Suppliers’ breakdown – Shelf space
• Lack of repeat purchase – Demo’s
– Product only “good on paper” – Service
– Product is too good • Bad Timing
• Not meeting financial goals – Too early
– ROI, breakeven time, etc. – Too late
• Forecasting error – Technological and
Marketing windows of
– Too optimistic
opportunity
– Too pessimistic
What was wrong?
• Development of new products come from within the company
and not from needs of customers;
• Marketing develops a product definition without adequate
understanding of requirements of engineering, manufacturing,
distribution, service, etc.;
• Design engineering is torn between marketing demands and
manufacturing needs;
• Lack of communication and coordination across functional
areas; and,
• Distribution and service support are reluctant to follow orders
or are forced to react to decisions made by the top
management.
How to overcome these challenges?
• Develop a unique and superior product – with better
quality, new features and greater value (value for
money)
• Clear definition of market and product concept
• Meeting segmented market needs
• Senior management commitment
• Relentless pursuit of innovation
• New product planning
• Systematic product design and development process
Framework

New Product Customer Concept Product In-life

The Product P1 P2 P3 P4
Design Needs Development Specification product

Products of Interest
• Agricultural Products
• Marine Products
• Energy (Biofuel, Solar, Wind, Hydro, etc.)
• Software
• Plant-Based Food
• Artificial Intelligence
• Mobile Phone
New Product Development (NPD)
Inputs Corporate objectives Outputs
• Financial objectives
• Budget
Customer • Operational targets
needs • Technology strategy
• Regulatory requirements Revenue
growth
Easy to
handle Flexible Market Image
Position Transformation
Robust
New Product
Migrations
Development Better Financial
Portable
customer Rewards
experience
Efficiency
Cross functional contributions (examples) targets
• Customer needs and perception
Operational • IT delivery capability
improvements • Changes for field force and Operations’ capacity to
train
• Process changes in Services
• HR issues
 Benefits of NPD
Market Position
o Increase market share
o Extend product range
o Image creation
o Barrier to competition
Renewal & Transformation
o Improves organizational
performance
o Improves ability to recruit
best people
o Encourages learning about
new approaches and
practices
Resource Utilization
o Improving returns on
existing assets (R&D,
salesforce, Manufacturing)
Financial Rewards
o Improved ROI
o Higher margins
o Increased sales
o Increased value added
o Lower costs
o Improved productivity
 Product Design Process
Idea Idea Concept Dev. Business Product Technical Product
Generation Screening & Testing Analysis Testing Implementation Commercialization

Customer
Customer Concept System Detailed Test & Production
S1 S2 S3 S4 S5
Needs Development Level Design Design Refine Ramp-up

Decisions Final design

Product
should be should be
The most specification Market Test Mass
based on the based on the
important should be (alpha and produce and
priority technical
stage to decided both beta) the ensure
needs of the capabilities,
successfully by the product and quality
stakeholders available
start or engineering make product
or customers resources,
expand a and significant (goods and
in a and financial
business marketing refinements service)
segmented consideratio
workforces
market n

Front-End Transition Back-End

 Front-end Activities
Identify
Identify Establish Generate Select
Refine
Customer
Customer Target System System
Specs
Needs Specs Concepts Concept

Analyse Perform Plan

Competitive Economic Remaining
Systems Analysis Development

Customer Needs Concept Development

Includes customer needs analysis, concept development and specification

development.

Product Design and Development (Ulrich & Eppinger, 1995, p. 58)

How to determine customers needs?
Six-Step Process:
1. Define the scope
2. Gather raw data from customers
3. Interpret raw data in terms of customer
needs
4. Organize the needs into a hierarchy
5. Establish the relative importance of the
needs
6. Reflect on the results of the process
 Rank Customer Needs
1st Good User Interface
Customer needs 2 nd (Mobile
Portable or Handy
Phone)
No. Needs 3rd Affordable (lowRating cost) Importance
The organizer has3ardgoodRobust
user interface-
Performance st
1
controllability
4.63 1
4th With- IP Capability
The organizer is inexpensive rd
2
affordability 5 th Expandable Memory
2.38 3
The organizer has a wide range of th
3
connectivity - connectivity
2.25 4
The organizer has the ability to be
4 expanded (in terms of memory and 1.63 5th
applications)- expandability
5 The organizer is robust- capability 2.38 3rd
The organizer is highly portable-
6
portability
3.00 2nd

Data Gathering Methods: Interviews, Focus Group Discussion, Questionnaires and others
 Concept Development
Identify
Identify Establish
Establish Generate Select
Refine
Customer
Customer Target
Target System System
Specs
Needs
Needs Specs Concepts Concept

Analyse
Analyse Perform Plan
Competitive
Competitive Economic Remaining
Systems
Systems Analysis Development

Customer Needs Concept Development

“A good concept is sometimes poorly implemented in subsequent

development phases, but a poor concept can rarely be manipulated to
achieve commercial success.” Ulrich and Eppinger (1995, p.78)

Product Design and Development (Ulrich & Eppinger, 1995, p. 58)

 Product Design Process
Customer
Customer Concept System Detailed Test & Production
S1 S2 S3 S4 S5
Needs Development Level Design Design Refine Ramp-up

Final design
Decisions should Product
should be based
The most be based on the specification Market Test Mass produce
on the technical
important stage priority needs of should be (alpha and beta) and ensure
capabilities,
to successfully the stakeholders decided both by the product and quality product
available
start or expand a or customers in a the engineering make significant (goods and
resources, and
business segmented and marketing refinements service)
financial
market workforces
consideration

Front-End Transition Back-End

 Benchmarking (Mobile Phone)
No. Needs Feature and Rank
Functionality
HP iPAQ 112 Classic
1 Good user interface Sony Ericson P1i
Controllability 1
A D
Handheld PDA Smartphone
2 Handy Portability 2
3 Low-cost Affordability 3
4 Robust design Performance 4
5
HTC Touch Cruise With With IP Capability Connectivity
ASUS M530W Windows 4
B CoPilot 7
E Mobile Smartphone
6 Expandable Memory Expandability 5

Palm Treo 680

C Smartphone
F iMate Ultimate 6150
 Benchmarking
Metric Imp unit A B C D E F
Cost 3 A$ 377 1199 549 899 650 1005
Speed 1 MHz 624 400 312 416 520
RAM 3 MB 128 128 64 160 64 128
ROM 3 MB 256 256 64 256 256
Battery 1 mAH 2200 1350 1200 1200 1530
OS 3 list Windows Mobile Windows PalmOS 5.4.9 Symbian OS Windows Windows Mobile
6 classic Mobile 6 pro Mobile 6 class 6 pro
Display size 2 inches 4.00 2.8 2.4 2.4 2.8
Video Resolution 2 pixels 640 x 480 240 x 320 320 x 320 240 x 320 320 x 240 640 x 480
Camera 2 Mpixel 0 3 1 3.2 2 2
Weight 3 grams 190 130 157 124 135 152
Dimension 2 cm 13.39 x 7.54 x 1.75 11.0 x 5.8 x 1.55 11.2 x 5.8 x 2.0 10.6 x 5.5 x 1.7 11.7 x 6.5 x 13.5 11.85 x 6.05 x 1.55
Int. WLAN 2 list 802.11b g 802.11b g 802.11b g 802.11b g 802.11b g/e/i
Bluetooth 2 list 2.0 2.0 1.2 2 2 1.1
Synchronization 3 list mini-USB ExtUSB USB USB USB USB
GPS 2 binary No Yes No No No No
Control Device 1 list Touch Screen Finger Touch Screen Touch Screen Touch Screen
& Stylus scrolling & Stylus & Stylus & Stylus
& Panning
Keypad 1 list QWERTY QWERTY QWERTY QWERTY QWERTY QWERTY
Expansion slots 5 list SDIO and CF microSD SD and SDIO Memory Stick microSD microSD

Importance: 1 is highest, 5 is lowest

 Target Specification
Design Specification
Need Marginal Ideal
Features & Functionality Imp Unit
No. Value Value
2 Cost 3 A$ >377 <1199
Speed 1 MHz >312 >624
RAM 3 MB >64 >128
5 Performance ROM 3 MB >64 >256
Battery 1 mAH >1200 >2200
OS 3 list Windows Mobile 6 classic Symbian OS
Display size 2 inches >2.4 >4.00
Video Resolution 2 pixels >240 x 320 >640 x 480
6 Portability Camera 2 Mpixel >0 >3.2
Weight 3 grams <190 <124
Dimension 2 cm <13.39 x 7.54 x 1.75 <10.6 x 5.5 x 1.7
Integrated WLAN 2 list 802.11b g 802.11b g/e/i
Bluetooth 2 list 1.1 2
3 Connectivity
Synchronization 3 list mini-USB ExtUSB
GPS 2 binary No Yes
Touch Screen Finger scrolling &
Control Device 1 list
1 Controllability & Stylus Panning
Keypad 1 list QWERTY QWERTY
4 Expandability Expansion slots 2 list SD microSD
 Concept Development: Transition
Activities
Identify Establish
Establish Generate Select
Refine
Customer Target
Target System
System System
Specs
Needs Specs Concepts
Concepts Concept

Analyse
Analyse Perform Plan
Competitive
Competitive Economic Remaining
Systems
Systems Analysis Development

Customer Needs Concept Development

Product Design and Development (Ulrich & Eppinger, 1995, p. 58)

5-Step Methodology
1. Clarify
the Problem

2. Search 3. Search
Externally Internally

4. Explore
Systematically

5. Reflect on
the Process

Note: that this same process should be used for subsystem development.
 Functional Decomposition

Energy
Product, Energy

Material Process, Material

Problem
Signal System, … Signal

Note: This concept will fit in many but not all types of systems.

Ulrich & Eppinger, 3rd Edition, p103

 Transition Activities
Identify Establish Generate Select
Refine
Customer Target System
System System
System
Specs
Needs Specs Concepts
Concepts Concept
Concept

Analyse Perform Plan

Competitive Economic Remaining
Systems Analysis Development

Customer Needs Concept Development

Concept selection follows from concept generation

Product Design and Development (Ulrich & Eppinger, 1995, p. 58)

Concept Selection Inputs
• Design concepts from concept generation
• Customer needs and metrics
• Target specifications
Concept Selection
Ways to select a preferred concept
• Choose the first concept you think of
• Use the customer or client for external decision
• A “product champion” drives their preferred
concept through Intuition…
• List Pros and Cons and make a subjective judgment
• Prototype and test all concepts
• Decision matrices to quantify strengths and
weaknesses of concepts
Concept Selection Process
• Prepare the selection matrix
• Rate the concepts
• Combine and improve concepts
• Select one or more concepts
• Reflect on the results and the process
 Product Design Process
Customer Concept System Detailed Test & Production
S1 S2 S3 S4 S5
Needs Development Level Design Design Refine Ramp-up

Final design
Decisions should Product
should be based
The most be based on the specification Market Test Mass produce
on the technical
important stage priority needs of should be (alpha and beta) and ensure
capabilities,
to successfully the stakeholders decided both by the product and quality product
available
start or expand a or customers in a the engineering make significant (goods and
resources, and
business segmented and marketing refinements service)
financial
market workforces
consideration

Front-End Transition Back-End

 Product Design Process
Customer
Concept Goal: Quality, Time, & Costs
Development Needs

Concurrent design and

engineering
Computer Aided Design (CAD)
Computer Aided Engineering (CAE)
Quote Design
Computer Aided Styling (CAS)
Computer Aided Manufacturing (CAM)
Industrial Engineering Product Data Management (PDM)
Concurrent
manufacturing
Manufacturing
Production
Resource
Planning (MRP)

Quality Control and Project Management

Certified
Products
Computer Aided Design and
Engineering

Catia
Computer Aided Manufacturing

EdgeCAM
 Mission Statement
Davao Mobile Phone
Product Description  A mobile cell phone or a lightweight personal digital assistant
(PDA) that performs specific and usable tasks
Key Business Goals  Product to be introduced in the fourth quarter of 2009
 50% gross margin
 5% of state-of-the-art mobile phone market in 2010
Primary Market  Top level office executive consumer
Secondary Markets  Business people
 Office workers
 Students
Assumptions  Smartphone
 Hand-held
 Lithium ion or Li-polymer battery
 Internet ready
Stakeholders  User
 Retailer
 Sales force
 Service Center
 Costumer support
 Production/manufacturing department
 Legal department
Planning and Risk Analysis

Primavera – Pertmaster (Oracle)

Activity 1
• Google and find at least three existing products
similar to your conceptualized product
• Create a simple matrix using at least 5 metrics or
attributes
• Identify or develop a differentiator of your product
to the other existing products