PRODUCT DEVELOPMENT PROCESS
Production Development Process -Definition
“The process that provides a firm the capability to have
distintictivness in its offerings by rolling out new products and
services faster and at lower cost”
Product Development Process
A broad set of tools, techniques and concepts that enables firms
• to bring out new products & services
• faster and at a lower cost
• Organizations have experienced several tangible benefits from a good product
development process.
• While Japanese manufacturers such as Honda and Toyota introduced as much
as 85 models between 1982 and 1989, the American counterparts were able
to introduce only 49 models.
• By introducing products six months ahead of the competitors, a firm can gain
as much as three times of the cumulative profit over the life of the product,
compared to introducing the product along with the competitors
Potential Benefits/Outcomes
Potential Benefits/Outcomes
Provides unique benefits and features for the
customers
Meets customer expectations better than existing
Customer
products
Dimensions
Provides better quality as perceived by the
customers
Results in innovative offerings to the customers
Simplifies product use and maintenance
Sustained Reduces the cost of use over the life time
Performance Addresses environmental issues pertaining to
manufacture, use and disposal
Simplifies the manufacturing process
Operational Simplifies the assembly process
Advantages Minimises the need for revisions and changes
after introduction
Enables faster new product introduction
Strategic
Reduces the cost of the product
Advantages
Provides capabilities for mass customisation
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 (Prototype product)
• Production: Transfer of know-how to production personnel and
establishing the system for volume production. Typically, a few pieces
of the product are manufactured for the purpose of testing.
Idea development: all products begin with an idea
whether from:
customers,
competitors or
suppliers
Reverse engineering: buying a competitor’s product
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Idea developments selection affects
Product quality
Product cost
Customer satisfaction
Overall manufacturability – the ease with which the
product can be made
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Factors Impacting Product Design
Must Design for
Manufacturing – DFM
Guidelines to produce a
product easily and
profitably
Simplification -
Minimize parts
Standardization
Design parts for
multiply
applications
Use modular design
Simplify operations
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Remanufacturing
Uses components of old products in the production of
new ones and has:
Environmental benefits
Cost benefits
Good for:
Computers, televisions, automobiles
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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
Stage Gates
Gate 1 Gate 2 Gate 3
Concept Product Development Prototype
Generation Design Testing Production
0 7 12 20 24
Time (Months)
Traditional Approach to Product Development
Process
Customers Suppliers
Marketing Design Planning Procurement Production Finance
Concurrent Engineering
Old “over-the-wall” sequential design
process should not be used
• Each function did its work and passed
it to the next function
Replace with a Concurrent Engineering
process
• All functions form a design team that
develops specifications, involves
customers early, solves potential
problems, reduces costs, & shortens
time to market
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Modern Approach
e rs Planning Pro
om cur
u st e me
C nt
Concurrent Engineering
Marketing
Production
Team Structure
Des
ig n a n ce
Suppliers Fin
Quality Function Deployment
5. Tradeoffs
House of Quality
3. Product
2. Importance
characteristics
1. Customer 4. Relationship 6. Benchmarks
requirements matrix
7. Technical assessment &
target values
House of Quality : An Illustration for Restaurant
Correlation:
++: Strong Positive
+: Positive
+ -: Negative
Time taken to cook the
-- --: Strong Negative
Order processing time
counters in peak time
Thickness of packing
+
+ + +
Number of service
Number of tables
Temperature of
Competitive Evaluation
Technical
cooked item
Characteristics
X- Own Company
available
material
A - Competitor A
Customer B - Competitor B
food
Requirements (5 is best)
1 2 3 4 5
Steaming hot 7 ++ ++ A B X
Enough space to sit & eat 4 - ++ ++ X A B
Less time during peak hours 6 - -- ++ + X B A
Reduce time to 2 minutes
Increase the counters by
2 ++
Reduce it by 10% of the
Easy to carry home A X B
Maintain current Level
Quick order processing 2 - -- + + X A B
Maintain current level
Maintain current level
Importance Weighting 7 6 9 4 6 4 Importance Scale:
Strong: 9
Medium: 3
Small: 1
current level
Target Values
one
5
4 X A,B A,B X
Technical Evaluation
3 A X B X,B X,A,B
(5 is best)
2 B X A A
1
Performance Measures
Target costs achievement status
Cost based Quantum of value engineering efforts
measures Cost of first production run
Cost overrun of prduct development project
Percentage of standard parts & processes
Time to return to normal quality
Design Number of Revisions in the product design
effectiveness Cost of field repair/service during first year after
introduction
Time overrun of product development project
Time to market
Concept to market
Strategic
Number (or rate) of new products introduced
Measures
Percent of new products in the overall product
portfolio
Total Product Cost
Market share of the new product
Market impact
Total Product Sales in the first two years after
introduction
