Product Design

and
Development
Hapsoro Agung Jatmiko
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An Overview
• The economic success of most firms depends on their ability to
identify the needs of customers
• Firms are also quickly create products that meet these needs, and can
be produced at low cost
• Achieving these goals, is not solely a marketing problem, nor is it
solely a design problem or manufacturing problem
• It is also a product development problem, involving all of these
functions
• From 2 previous slide, we could say that there are “Successful
Product” and some “Un-Successful Product”
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Characteristics of Successful Product Development
• As we mention before, there are several “variables” that could shows us what
and how a successful product (development) is
• At least, there are 5 Specific Dimensions, which ultimately relate to profit,
that are commonly used to assess the performance of a product development
effort
1. Product Quality
2. Product Cost
3. Development time
4. Development Cost
5. Development Capability
• We are going to talk about it in our next slide

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Product Quality and Cost
• How Good is the product resulting from the development effort? Does it
satisfy customer Needs? Is the “new” product reliable?
• Product Quality is ultimately reflected in market share and the price that
customers are willing to pay
• What is the manufacturing cost of the product? This cost includes spending
on capital equipment and tooling, as well as the incremental cost of producing
each unit of the product
• Product Cost determines how much profit accrues to the firm, for a
particular sales volume and a particular sales price

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Development Time, Cost and Capability
• Development time represent how quick and fast the team could complete the
development process
• Dev time determine how responsive the firm can be to competitive force and
tech development
• Development Cost represent how much money the firm need to spend on
developing the product
• Dev Cost usually a significant fraction of the investment required to achieve
the profits
• Development Capability represent how capable the firm and the team to
develop future product as a result of their experience with current project
• Dev Capability is an asset for the firm in order to create a more effective and
economic product in the future
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Characteristics of Successful Product Development
• High performance along those five dimensions, should ultimately
lead to economic success
• However, bear in mind that other performance criteria are also
important
• These criteria arise from interests of other stakeholders in the
enterprise, including the members of the development team, other
employees and community in which the product is manufactured

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Who Designs and Develop Products?

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Who Designs and Develop Products?
• Product development is an interdisciplinary activity,
requiring contribution from nearly all the functions of a firm
• However, three function are almost always central to
product development project
• Marketing
• Design
• Manufacturing

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Who Designs and Develop Products? (Marketing)
• The marketing function mediates the interaction between Firm and
Customers
• Marketing often facilitates the identification of product
opportunities, the definition of market segments, and identification
of customer needs
• Marketing also typically arranges for communication between the
firm and customers, sets target prices and oversees the launch of
the product

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Who Designs and Develop Products? (Design)
• The design function plays the lead role in defining the physical form of the
product to best meet customer needa
• The design function includes : engineering design (mechanical, electrical,
software etc) and industrial design (aesthetics, ergonomics, user interfaces)

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Who Designs and Develop Products? (Manufacturing)
• The Manufacturing Function is primarily responsible for
designing, operating and/or coordinating the production system in
order to produce the product
• We can say that, manufacturing function also often includes such
action namely:
1. Purchasing
2. Distribution
3. Installation
• This collection of activities is sometimes called the supply chain

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Who Designs and Develop Products?
• Different individuals within these function, often have specific
disciplinary training in areas such as : market research,
mechanical engineering, electrical engineering, material science
or manufacturing operations
• Several other function including finance and sales are frequently
involved on part time basis in developing new product
• Beyond these broad functional categories, the specific composition
of a development team, depends on the particular characteristics of
the product

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Who Designs and Develop Products?
• Few products, are developed by a single individual, the collection of
individuals developing a product forms the project team
• This team, usually have a single team leader, who could be drawn from any
functions of the firm
• The team itself, can be thought of as consisting of core team and extended
team (check the previous slide)
• In order to work together effectively, the core team usually remains small,
while the extended team may consist of dozens, hundreds or even thousands
(although the term team is inappropriate in group of thousand)
• In a huge group consist of thousand member, will still have to work together
to achieve the common goal

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Duration and Cost of Product Development
• Most people without experience in product development are astounded by
how much time and money required to develop a new product
• In the old days, developing a new product might take a long time until the
product being published (approx. 3-5 years)
• Present time shows, that product design and development has taking a huge
leap in duration
• Most successful and powerful product in the market, has the advantages of
short duration in developing the product (i.e. : apple, Samsung, Sony, etc)
• The sooner the firm could launch the product, the more advantages they have
to control the market

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Duration and Cost of Product Development
• The cost of product development is roughly proportional to the
number of people on the project team and to the duration of the
project
• In addition, to expenses for development effort, a firm will almost
always have to make some investment in the tooling and equipment
required for production
• Those expense, is often as large as the rest of the product
development budget, however, it’s sometimes useful to think of
these expenditures as part of fixed cost of production

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The Challenge of Product Development
• Several prominent challenge in product design such as :
1. Trade-offs : one of the most difficult aspect of product development is recognizing,
understanding and managing trade-off(s) in a way maximize the success of the
product
2. Dynamics : technologies improve, customer needs changes, competitors, such
condition requires a good decision making in order for the firm to survive
3. Details : developing a product of even modest complexity, require a meticulous
decision and details
4. Time pressure : its not a secret that time is the biggest constraint. You can easily and
calmly design any product with sufficient time given, but if not?
5. Economics : developing, producing, and marketing needs a huge investment. To earn
reasonable return on the investment, the resulting product must be both appealing to
customers and inexpensive to produce

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The Realities?
• In reality, some organization/firm exhibit characteristics that lead to
dysfunctional product development teams namely :
a) Lack of empowerment of team
b) Functional Allegiances transcending project goals
c) Inadequate resources
d) Lack of cross-functional representation of project team
• While most organization exhibit one or more of these
characteristics to some degree, the significant presence of these
problem can be so stifling and rendered our product development
team

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Thank You!

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