NEW PRODUCT DEVELOPMENT

Life Cycles of Products or Services

Saturation

Maturity
Demand

Decline
Growth

Incubation

Time
New Product Development
• Objectives
• Product Design,
• Factors influencing,
Characteristics:
Function/Form/Shape
• Process Design
• Production Design
• Approaches
 New Product Development Process
Four Stages
• Concept Generation: understanding what the customer needs are
and translating them into alternative ideas for products that
services that can be developed
• Design: detailed specifications are first drawn about the
product/service
• Development: physical development of the product; during this
stage, the details arrived at the drawing board are physically
transferred to reality as a prototype.
• Production: regular production in smaller/pilot quantities followed
by mass production as per market demand.
 Product Development Process
Sequential Decision Points
Design
Concept Generation

Idea Feasibility Preliminary

Generation Study Design No
Yes
Product Process Design
feasible? Planning OK?
Yes
No Cost
Planning
Production
Final Yes Prototype
Prototype
Design & Manfg. Development
OK?
Specifications & Testing
No
Commercial
Development
Production
Operations Mgnt
Operations Mgnt
New
New product
product
Design
Design&& Market feedback Basic Prototype
development
development
cycle research research shop
cycle
Work
needs order

Sales & Product Tool Design

customer Mktg. Product design changes
specs
Tool design
specs & tool mfg.
Mfg Process
shops PL, planning samples
AIS
Field test
&approval
feedback Testing
Approved sample
products
Product dev
committee
POM
POM
New
New product
product
development
development
Market feedback Basic Prototype
cycle
cycle research research shop
Work
needs Customer order
reqmts
Sales & Product
customer Mktg. Product design Tool Design
changes
specs
Tool design
specs & tool mfg.
Mfg Process
shops PL, planning samples
AIS
Field test
&approval
feedback Testing
Approved sample
products
Product dev
committee
 Tools for Efficient Product Development:
Mass Customisation methods

• Standardisation
– uses commonly available parts
– reduces costs & inventory
• Modular design
– combines standardized building blocks/modules
into unique products
• Product Platforms
Tools for Product Development-Modular Design

Modular design is a form of standardization in which

component parts are subdivided into modules that are
easily replaced or interchanged. It allows:

– easier repair and replacement

– simplification of manufacturing and assembly
– easier diagnosis and remedy of failures
 Tools for Efficient Product Development: Value
Engineering

• Value engineering
– Refers to a set of activities undertaken to investigate the design
of components in a product development process
– Strictly from a cost – value perspective
– To alert the product development team to alternatives that
• could either bring down the cost or
• increase the value
– By improving on the functionalities and performance without
increasing the cost
 Approaches for Product Design/Dev

• Design for manufacturing (DFM)

• Design for assembly (DFA)
• Design for recycling (DFR)
• Re-manufacturing
• Design for disassembly (DFD)
• Robust design
 NEW PRODUCT DEVELOPMENT
CONCURRENT ENGINEERING

-Concurrent Engineering can be defined as

the simultaneous development of product
design with open and interactive
communication among all team members for
the purpose of
-Reducing time to market
-Decreasing cost and improving quality and
reliability
 Organisation for Product Development Process:
Traditional Approach

Customers Suppliers

Marketing Design Planning Procurement Production Finance

Organisation for Product Development Process:
Concurrent Engineering

e rs Planning Pro
st om cu rem
Cu ent

Concurrent Engineering
Marketing

Production
Team Structure
Des e
ign a nc
Fi n
Suppliers
NEW PRODUCT DEVELOPMENT

• REVERSE ENGINEERING…
• Another route for Product development
Moore’s Law

 Every 18 months processing

power doubles while cost
holds constant.
 STRATEGY- New Products
 3M dictates that 30% of revenues will come
from new products every year.
 British Airways refreshes its services classes
every five years.
 Starbucks opens 300 stores per year.
 Gillette brings out about 20 products each
year.
 Reasons for Product Failure

• Costs are too high

• Quality is too low
• Introduction was too late
• Production couldn't keep up with demand.