Destin brass products co case study answers

Product Design and Development, Fifth Edition, blends the perspectives of marketing, design, and manufacturing into a single approach to product development. As a result, the book provides students with an appreciation for the realities of industrial practice and for the complex and essential roles played by the various members of product development teams. For industrial practitioners, in particular, the book provides a set of product development methods that can be put into immediate practice on development projects.

In addition, an industrial example or case study illustrates every method in the book. A different product example is used in each chapter to add interest and to illustrate that the methods can be applied to a wide range of products, from industrial equipment to consumer goods.

Highlights of this edition include: New chapter, Opportunity Identification (Ch. 3), explains the process of finding new product opportunities and choosing the most promising ones for development.

New chapter, Design for Environment (Ch. 12), explains the importance of environmental sustainability and teaches a method to make better design decisions to reduce the environmental impact of products.

New example in Chapter 2 presents the product development process and organization at Tyco International replacing the AMF example in earlier editions.

Chapter 17, Product Development Economics, has been revised to include a graphical method to understand financial uncertainties in product development.

Updated examples and data, new insights from recent research and innovations in practice, and other revisions have been incorporated throughout the book.

To supplement the text, the authors have developed a website for instructors, students, and practitioners, www.ulrich-eppinger.net, which contains additional references, examples, and links to available resources related to the product development topics.

Fifth Edition

Product Design and Development

Fifth Edition

Product Design and Developm ent

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Product Design and Development

Fifth Edition

Karl T. Ulrich University of Pennsylvania

Steven D. Eppinger Massachusetts Institute of Technology

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PRODUCT DESIGN AND DEVELOPMENT, FIFTH EDITION

Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2008, 2004, a nd 2000. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

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Vice President & Editor-in-Chief: Brent Gordon Vice President & Director of Specialized Publishing: Janice M. Roerig-Blong Editorial Director: Paul Ducham Managing Developmental Editor: Laura Hurst Spell Associate Marketing Manager: Jaime Halteman Project Manager: Erin Melloy Buyer: Laura Fuller Design Coordinator: Margarite Reynolds Cover Designer: Studio Montage, St. Louis, Missouri Media Project Manager: Balaji Sundararaman Compositor: Aptara®, Inc. Typeface: 10/12 Times Roman Printer: R. R. Donnelley

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Library of Congress Cataloging-in-Publication Data

Ulrich, Karl T. Product design and development / Karl T. Ulrich, Steven D. Eppinger.—5th ed. p. cm. Includes bibliographical references and index. ISBN 978-0-07-340477-6 (hardback) 1. Industrial management. 2. Production management. 3. Industrial engineering. 4. New products—Management. I. Eppinger, Steven D. II. Title. HD31.U47 2011 658.5�752—dc22 2011008557

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To the professionals who shared their experiences with us and to the product development teams we hope will benefit from those experiences.

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About the Authors Karl T. Ulrich University of Pennsylvania is the CIBC Professor and Vice Dean of Innovation at the Wharton School at the Univer- sity of Pennsylvania and is also Professor of Mechanical Engineering. He received the S.B., S.M., and Sc.D. degrees in Mechanical Engineering from MIT. Professor Ulrich has led the development efforts for many products, including medical devices and sport- ing goods, and is the founder of several technology-based companies. As a result of this work, he has received more than 20 patents. His current research concerns technological innovation, product design, and environmental issues.

Steven D. Eppinger Massachusetts Institute of Technology is the General Motors LGO Professor of Management Science and Innovation at the Massachusetts Institute of Technology Sloan School of Management and is also Profes- sor of Engineering Systems at MIT. He received the S.B., S.M., and Sc.D. degrees in Mechanical Engineering from MIT and served as Deputy Dean of the MIT Sloan School for five years. He specializes in the management of complex product development pro- cesses and has worked extensively with the automobile, electronics, aerospace, medical devices, and capital equipment industries. His current research is aimed at the creation of improved product development practices and project management techniques.

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Preface This book contains material developed for use in the interdisciplinary courses on product development that we teach. Participants in these courses include graduate students in en- gineering, industrial design students, and MBA students. While we aimed the book at in- terdisciplinary graduate-level audiences such as this, many faculty teaching graduate and undergraduate courses in engineering design have also found the material useful. Product Design and Development is also for practicing professionals. Indeed, we could not avoid writing for a professional audience, because most of our students are themselves profes- sionals who have worked either in product development or in closely related functions.

This book blends the perspectives of marketing, design, and manufacturing into a single approach to product development. As a result, we provide students of all kinds with an appreciation for the realities of industrial practice and for the complex and essential roles played by the various members of product development teams. For industrial prac- titioners, in particular, we provide a set of product development methods that can be put into immediate practice on development projects.

A debate often heard in the academic community relates to whether design should be taught primarily by establishing a foundation of theory or by engaging students in loosely supervised practice. For the broader activity of product design and development, we reject both approaches when taken to their extremes. Theory without practice is ineffec- tive because there are many nuances, exceptions, and subtleties to be learned in practical settings and because some necessary tasks simply lack sufficient theoretical underpin- nings. Practice without guidance can too easily result in frustration and fails to exploit the knowledge that successful product development professionals and researchers have accumulated over time. Product development, in this respect, is like sailing: proficiency is gained through practice, but some theory of how sails work and some instruction in the mechanics (and even tricks) of operating the boat help tremendously.

We attempt to strike a balance between theory and practice through our emphasis on methods. The methods we present are typically step-by-step procedures for completing tasks, but rarely embody a clean and concise theory. In some cases, the methods are sup- ported in part by a long tradition of research and practice, as in the chapter on product development economics. In other cases, the methods are a distillation of relatively recent and ad hoc techniques, as in the chapter on design for environment. In all cases, the meth- ods provide a concrete approach to solving a product development problem. In our expe- rience, product development is best learned by applying structured methods to ongoing project work in either industrial or academic settings. Therefore, we intend this book to be used as a guide to completing development tasks either in the context of a course project or in industrial practice.

An industrial example or case study illustrates every method in the book. We chose to use different products as the examples for each chapter rather than carrying the same example through the entire book. We provide this variety because we think it makes the

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vi Preface

book more interesting and because we hope to illustrate that the methods can be applied to a wide range of products, from industrial equipment to consumer products.

We designed the book to be extremely modular—it consists of 18 independent chap- ters. Each chapter presents a development method for a specific portion of the product development process. The primary benefit of the modular approach is that each chapter can be used independently of the rest of the book. This way, faculty, students, and practi- tioners can easily access the material they find most useful.

This fifth edition of the book includes new chapters on opportunity identification and design for environment, as well as updated examples and data, new insights from recent research and innovations in practice, and revisions throughout the book.

To supplement this textbook, we have developed a Web site on the Internet. This is intended to be a resource for instructors, students, and practitioners. We will keep the site current with additional references, examples, and links to available resources related to the product development topics in each chapter. Please make use of this information via the Internet at www.ulrich-eppinger.net.

The application of structured methods to product development also facilitates the study and improvement of development processes. We hope, in fact, that readers will use the ideas in this book as seeds for the creation of their own development methods, uniquely suited to their personalities, talents, and company environments. We encourage readers to share their experiences with us and to provide suggestions for improving this material. Please write to us with your ideas and comments at ulrich@wharton.upenn.edu and eppinger@mit.edu.

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vii

Acknowledgments Hundreds of people contributed to this book in large and small ways. We are grateful to the many industrial practitioners who provided data, examples, and insights. We appreci- ate the assistance we have received from numerous academic colleagues, research assis- tants, and support staff, from our sponsors, and from the McGraw-Hill team. Indeed we could not have completed this project without the cooperation and collaboration of many professionals, colleagues, and friends. Thank you all.

Financial support for much of the development of this textbook came from the Alfred P. Sloan Foundation, from the MIT Leaders for Manufacturing Program, and from the MIT Center for Innovation in Product Development.

Many industrial practitioners helped us in gathering data and developing examples. We would particularly like to acknowledge the following: Richard Ahern, Liz Altman, Lindsay Anderson, Terri Anderson, Mario Belsanti, Mike Benjamin, Scott Beutler, Bill Burton, Michael Carter, Jim Caruso, Pat Casey, Scott Charon, Victor Cheung, Alan Cook, David Cutherell, Tim Davis, Tom Davis, John Elter, George Favaloro, Marc Filerman, David Fitzpatrick, Gregg Geiger, Anthony Giordano, David Gordon, Kamala Grasso, Matt Haggerty, Rick Harkey, Matthew Hern, Alan Huffenus, Art Janzen, Randy Jezowski, Carol Keller, Matt Kressy, Edward Kreuzer, David Lauzun, Peter Lawrence, Brian Lee, David Levy, Jonathan Li, Albert Lucchetti, Paul Martin, Doug Miller, Leo Montagna, Al Nagle, John Nicklaus, Hossain Nivi, Chris Norman, Paolo Pascarella, E. Timothy Pawl, Paul Piccolomini, Amy Potts, Earl Powell, Jason Ruble, Virginia Runkle, Nader Sabbaghian, Mark Schurman, Norm Seguin, David Shea, Wei-Ming Shen, Sonja Song, Leon Soren, Paul Staelin, Michael Stephens, Scott Stropkay, Larry Sullivan, Malcom Taylor, Brian Vogel, David Webb, Bob Weisshappel, Dan Williams, Gabe Wing, and Mark Winter.

We have received tremendous assistance from our colleagues who have offered fre- quent encouragement and support for our somewhat unusual approach to teaching and research, some of which is reflected in this book. We are especially indebted to the MIT Leaders for Manufacturing (LFM) Program and to the MIT Center for Innovation in Product Development (CIPD), two exemplary partnerships involving major manufactur- ing firms and MIT’s engineering and management schools. We have benefited from col- laboration with the faculty and staff associated with these programs, especially Gabriel Bitran, Kent Bowen, Don Clausing, Tom Eagar, Charlie Fine, Woodie Flowers, Steve Graves, John Hauser, Rebecca Henderson, Maurice Holmes, Tom Magnanti, Kevin Otto, Don Rosenfield, Warren Seering, Shoji Shiba, Anna Thornton, Jim Utterback, Eric von Hippel, Dave Wallace, and Dan Whitney. We have received financial support from LFM, CIPD, and the Gordon Book Fund. Most important, LFM and CIPD partner companies have provided us with unparalleled access to industrial projects and research problems in product development and manufacturing.

Several faculty members have helped us by reviewing chapters and providing feed- back from their in-class trials in teaching with this material. We are particularly grateful

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viii Acknowledgments

to these reviewers and “beta testers”: Alice Agogino, Don Brown, Steve Brown, Charles Burnette, Gary Cadenhead, Roger Calantone, Cho Lik Chan, Kim Clark, Morris Cohen, Denny Davis, Michael Duffey, William Durfee, Donald Elger, Josh Eliashberg, David Ellison, Woodie Flowers, Gary Gabriele, Paulo Gomes, Abbie Griffin, Marc Harrison, Rebecca Henderson, Tim Hight, Mike Houston, Marco Iansiti, Kos Ishii, R. T. Johnson, Kyoung-Yun “Joseph” Kim, Annette Köhler, Viswanathan Krishnan, Yuyi Lin, Richard Locke, Bill Lovejoy, Jeff Meldman, Farrokh Mistree, Wanda Orlikowski, Louis Padulo, Matthew Parkinson, Robert Pelke, Warren Seering, Paul Sheng, Robert Smith, Carl Sorensen, Mark Steiner, Cassandra Telenko, Christian Terwiesch, Chuck Turtle, Marcie Tyre, Dan Whitney, Kristin Wood, and Khim-Teck Yeo.

Several industrial practitioners and training experts have also assisted us by reviewing and commenting on draft chapters: Wesley Allen, Geoffrey Boothroyd, Gary Burchill, Clay Burns, Eugene Cafarelli, James Carter, Kimi Ceridon, David Cutherell, Gerard Furbershaw, Jack Harkins, Gerhard Jünemann, David Meeker, Ulrike Närger, B. Joseph Pine II, William Townsend, Brian Vogel, and John Wesner.

We also wish to acknowledge the more than 1,000 students in the classes in which we have tested these teaching materials. These students have been in several teaching programs at MIT, Helsinki University of Technology, Rhode Island School of Design, HEC Paris, STOA (Italy), University of Pennsylvania, and Nanyang Technological University (Singapore). Many students provided constructive comments for improving the structure and delivery of the material finally contained here. Also, our experiences in observing the students’ use of these methods in product development projects have greatly helped us refine the material.

Several MIT students served as research assistants to help investigate many of the development methods, examples, and data contained in the first edition of this book. These individuals are Michael Baeriswyl (Chapter 12), Paul Brody (Chapter 11), Tom Foody (Chapter 17), Amy Greenlief (Chapter 14), Christopher Hession (Chapter 4), Eric Howlett (Chapter 8), Tom Pimmler (Chapter 13 Appendices), Stephen Raab (Chapter 18), Harrison Roberts (Chapter 13 Appendices), Jonathan Sterrett (Chapter 5), and Gavin Zau (Chapter 7).

Other MIT students have also contributed by assisting with data collection and by of- fering comments and stimulating criticisms related to some of the chapters: Tom Abell, E. Yung Cha, Steve Daleiden, Russell Epstein, Matthew Fein, Brad Forry, Mike Frauens, Ben Goss, Daniel Hommes, Bill Liteplo, Habs Moy, Robert Northrop, Leslie Prince Rudolph, Vikas Sharma, and Ranjini Srikantiah. We also appreciate the assistance of the MIT Sloan support staff over several years: Stephen Arnold, Yubettys Baez, Cara Barber, Anna Piccolo, Kristin Rocheleau, and Kathy Sullivan.

The staff throughout the McGraw-Hill/Irwin organization has been superb. We are par- ticularly grateful for the support of our sponsoring editor Laura Hurst Spell. We also ap- preciate the efforts of developmental editor Robin Bonner, project manager Erin Melloy, copy editor Rich Wright, photographer Stuart Cohen, and designer Margarite Reynolds.

Finally, we thank our families for their love and support. Our parents provided much encouragement. Nancy, Julie, Lauren, Andrew, Jamie, and Nathan have shown endless patience over the years of this ongoing product development project.

Karl T. Ulrich

Steven D. Eppinger

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ix

Brief Contents About the Authors iv Preface v Acknowledgments vii

1 Introduction 1

2 Development Processes and Organizations 11

3 Opportunity Identification 33

4 Product Planning 53

5 Identifying Customer Needs 73

6 Product Specifications 91

7 Concept Generation 117

8 Concept Selection 143

9 Concept Testing 165

10 Product Architecture 183

11 Industrial Design 207

12 Design for Environment 229

13 Design for Manufacturing 253

14 Prototyping 289

15 Robust Design 311

16 Patents and Intellectual Property 331

17 Product Development Economics 353

18 Managing Projects 379

Index 405

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Contents

About the Authors iv Preface v Acknowledgments vii

Chapter 1 Introduction 1

Characteristics of Successful Product Development 2 Who Designs and Develops Products? 3 Duration and Cost of Product Development 5 The Challenges of Product Development 6 Approach of This Book 6

Structured Methods 7 Industrial Examples 7 Organizational Realities 7 Roadmap of the Book 8

References and Bibliography 10 Exercises 10 Thought Question 10

Chapter 2 Development Processes and Organizations 11

The Product Development Process 12 Concept Development: The Front-End Process 16 Adapting the Generic Product Development Process 18

Technology-Push Products 18 Platform Products 20 Process-Intensive Products 20 Customized Products 20 High-Risk Products 21 Quick-Build Products 21 Complex Systems 21

Product Development Process Flows 22 The Tyco Product Development Process 23

Product Development Organizations 25 Organizations Are Formed by Establishing Links among Individuals 25 Organizational Links May Be Aligned with Functions, Projects, or Both 25 Choosing an Organizational Structure 28 Distributed Product Development Teams 28

The Tyco Product Development Organization 30 Summary 30 References and Bibliography 31 Exercises 32 Thought Questions 32

Chapter 3 Opportunity Identification 33

What Is an Opportunity? 34 Types of Opportunities 34

Tournament Structure of Opportunity Identification 36

Effective Opportunity Tournaments 37 Opportunity Identification Process 39 Step 1: Establish a Charter 39 Step 2: Generate and Sense Many Opportunities 40

Techniques for Generating Opportunities 40 Step 3: Screen Opportunities 46 Step 4: Develop Promising Opportunities 47 Step 5: Select Exceptional Opportunities 47 Step 6: Reflect on the Results and the Process 49 Summary 50 References and Bibliography 50 Exercises 51 Thought Questions 51

Chapter 4 Product Planning 53

The Product Planning Process 54 Four Types of Product Development Projects 55 The Process 56

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Establishing Target Specifications 94 Step 1: Prepare the List of Metrics 95 Step 2: Collect Competitive Benchmarking Information 99 Step 3: Set Ideal and Marginally Acceptable Target Values 99 Step 4: Reflect on the Results and the Process 103

Setting the Final Specifications 103 Step 1: Develop Technical Models of the Product 105 Step 2: Develop a Cost Model of the Product 106 Step 3: Refine the Specifications, Making Trade-Offs Where Necessary 108 Step 4: Flow Down the Specifications as Appropriate 109 Step 5: Reflect on the Results and the Process 111

Summary 111 References and Bibliography 112 Exercises 113 Thought Questions 113 Appendix Target Costing 114

Chapter 7 Concept Generation 117

The Activity of Concept Generation 118 Structured Approaches Reduce the Likelihood of Costly Problems 119 A Five-Step Method 119

Step 1: Clarify the Problem 120 Decompose a Complex Problem into Simpler Subproblems 121 Focus Initial Efforts on the Critical Subproblems 123

Step 2: Search Externally 124 Interview Lead Users 124 Consult Experts 125 Search Patents 125 Search Published Literature 126 Benchmark Related Products 127

Step 3: Search Internally 127 Both Individual and Group Sessions Can Be Useful 128 Hints for Generating Solution Concepts 129

Step 1: Identify Opportunities 57 Step 2: Evaluate and Prioritize Projects 57

Competitive Strategy 58 Market Segmentation 58 Technological Trajectories 59 Product Platform Planning 60 Evaluating Fundamentally New Product Opportunities 61 Balancing the Portfolio 63

Step 3: Allocate Resources and Plan Timing 64 Resource Allocation 64 Project Timing 66 The Product Plan 66

Step 4: Complete Pre-Project Planning 66 Mission Statements 67 Assumptions and Constraints 68 Staffing and Other Pre-Project Planning Activities 69

Step 5: Reflect on the Results and the Process 69 Summary 70 References and Bibliography 70 Exercises 72 Thought Questions 72

Chapter 5 Identifying Customer Needs 73

Step 1: Gather Raw Data from Customers 76 Choosing Customers 78 The Art of Eliciting Customer Needs Data 79 Documenting Interactions with Customers 80

Step 2: Interpret Raw Data in Terms of Customer Needs 81 Step 3: Organize the Needs into a Hierarchy 83 Step 4: Establish the Relative Importance of the Needs 86 Step 5: Reflect on the Results and the Process 87 Summary 88 References and Bibliography 88 Exercises 89 Thought Questions 90

Chapter 6 Product Specifications 91

What Are Specifications? 92 When Are Specifications Established? 93

Contents xi

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xii Contents

Chapter 9 Concept Testing 165

Step 1: Define the Purpose of the Concept Test 167 Step 2: Choose a Survey Population 167 Step 3: Choose a Survey Format 168 Step 4: Communicate the Concept 169

Matching the Survey Format with the Means of Communicating the Concept 173 Issues in Communicating the Concept 173

Step 5: Measure Customer Response 175 Step 6: Interpret the Results 175 Step 7: Reflect on the Results and the Process 178 Summary 179 References and Bibliography 179 Exercises 180 Thought Questions 180 Appendix Estimating Market Sizes 181

Chapter 10 Product Architecture 183

What Is Product Architecture? 184 Types of Modularity 186 When Is the Product Architecture Defined? 187

Implications of the Architecture 187 Product Change 187 Product Variety 188 Component Standardization 189 Product Performance 189 Manufacturability 190 Product Development Management 191

Establishing the Architecture 191 Step 1: Create a Schematic of the Product 192 Step 2: Cluster the Elements of the Schematic 193 Step 3: Create a Rough Geometric Layout 195 Step 4: Identify the Fundamental and Incidental Interactions 196

Delayed Differentiation 197 Platform Planning 200

Differentiation Plan 200 Commonality Plan 201 Managing the Trade-Off between Differentiation and Commonality 202

Step 4: Explore Systematically 130 Concept Classification Tree 132 Concept Combination Table 134 Managing the Exploration Process 137

Step 5: Reflect on the Solutions and the Process 139 Summary 140 References and Bibliography 141 Exercises 142 Thought Questions 142

Chapter 8 Concept Selection 143

Concept Selection Is an Integral Part of the Product Development Process 144 All Teams Use Some Method for Choosing a Concept 145 A Structured Method Offers Several Benefits 148 Overview of Methodology 149 Concept Screening 150

Step 1: Prepare the Selection Matrix 150 Step 2: Rate the Concepts 151 Step 3: Rank the Concepts 152 Step 4: Combine and Improve the Concepts 152 Step 5: Select One or More Concepts 152 Step 6: Reflect on the Results and the Process 153

Concept Scoring 154 Step 1: Prepare the Selection Matrix 154 Step 2: Rate the Concepts 155 Step 3: Rank the Concepts 156 Step 4: Combine and Improve the Concepts 156 Step 5: Select One or More Concepts 156 Step 6: Reflect on the Results and the Process 157

Caveats 157 Summary 159 References and Bibliography 159 Exercises 160 Thought Questions 161 Appendix A Concept-Screening Matrix Example 162 Appendix B Concept-Scoring Matrix Example 163

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Contents xiii

Chapter 12 Design for Environment 229

What Is Design for Environment? 231 Two Life Cycles 232 Environmental Impacts 233 History of Design for Environment 234 Herman Miller’s Journey toward Design for Environment 234

The Design for Environment Process 235 Step 1: Set the DFE Agenda: Drivers, Goals, and Team 236

Identify the Internal and External Drivers of DFE 236 Set the DFE Goals 237 Set Up the DFE Team 237

Step 2: Identify Potential Environmental Impacts 239 Step 3: Select DFE Guidelines 240 Step 4: Apply the DFE Guidelines to the Initial Product Design 242 Step 5: Assess the Environmental Impacts 243

Compare the Environmental Impacts to DFE Goals 244 Step 6: Refine the Product Design to Reduce or Eliminate the Environmental Impacts 244 Step 7: Reflect on the DFE Process and Results 245 Summary 247 References and Bibliography 247 Exercises 248 Thought Questions 249 Appendix Design for Environment Guidelines 250

Chapter 13 Design for Manufacturing 253

Design for Manufacturing Defined 255 DFM Requires a Cross-Functional Team 255 DFM Is Performed throughout the Development Process 255 Overview of the DFM Process 256

Step 1: Estimate the Manufacturing Costs 256 Transportation Costs 259 Fixed Costs versus Variable Costs 259 The Bill of Materials 260 Estimating the Costs of Standard Components 261

Related System-Level Design Issues 202 Defining Secondary Systems 203 Establishing the Architecture of the Chunks 203 Creating Detached Interface Specifications 204

Summary 204 References and Bibliography 205 Exercises 206 Thought Questions 206

Chapter 11 Industrial Design 207

What Is Industrial Design? 209 Assessing the Need for Industrial Design 211

Expenditures for Industrial Design 211 How Important Is Industrial Design to a Product? 211 Ergonomic Needs 212 Aesthetic Needs 213

The Impact of Industrial Design 213 Is Industrial Design Worth the Investment? 213 How Does Industrial Design Establish a Corporate Identity? 216

The Industrial Design Process 217 1. Investigation of Customer Needs 217 2. Conceptualization 217 3. Preliminary Refinement 218 4. Further Refinement and Final Concept

Selection 218 5. Control Drawings or Models 220 6. Coordination with Engineering, Manufacturing,

and External Vendors 220 The Impact of Computer-Based Tools on the ID Process 220

Management of the Industrial Design Process 221 Timing of Industrial Design Involvement 222

Assessing the Quality of Industrial Design 224 1. Quality of the User Interface 224 2. Emotional Appeal 224 3. Ability to Maintain and Repair the Product 224 4. Appropriate Use of Resources 226 5. Product Differentiation 226

Summary 226 References and Bibliography 227 Exercises 228 Thought Questions 228

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xiv Contents

Principles of Prototyping 297 Analytical Prototypes Are Generally More Flexible Than Physical Prototypes 297 Physical Prototypes Are Required to Detect Unanticipated Phenomena 297 A Prototype May Reduce the Risk of Costly Iterations 298 A Prototype May Expedite Other Development Steps 300 A Prototype May Restructure Task Dependencies 301

Prototyping Technologies 301 3D CAD Modeling and Analysis 301 Free-Form Fabrication 302

Planning for Prototypes 303 Step 1: Define the Purpose of the Prototype 303 Step 2: Establish the Level of Approximation of the Prototype 304 Step 3: Outline an Experimental Plan 304 Step 4: Create a Schedule for Procurement, Construction, and Testing 304 Planning Milestone Prototypes 305

Summary 306 References and Bibliography 307 Exercises 308 Thought Questions 308

Chapter 15 Robust Design 311

What Is Robust Design? 312 Design of Experiments 314 The Robust Design Process 315

Step 1: Identify Control Factors, Noise Factors, and Performance Metrics 315 Step 2: Formulate an Objective Function 316 Step 3: Develop the Experimental Plan 317

Experimental Designs 317 Testing Noise Factors 319

Step 4: Run the Experiment 321 Step 5: Conduct the Analysis 321

Computing the Objective Function 321 Computing Factor Effects by Analysis of Means 322

Step 6: Select and Confirm Factor Setpoints 323 Step 7: Reflect and Repeat 323

Estimating the Costs of Custom Components 261 Estimating the Cost of Assembly 262 Estimating the Overhead Costs 263

Step 2: Reduce the Costs of Components 264 Understand the Process Constraints and Cost Drivers 264 Redesign Components to Eliminate Processing Steps 265 Choose the Appropriate Economic Scale for the Part Process 265 Standardize Components and Processes 266 Adhere to “Black Box” Component Procurement 267

Step 3: Reduce the Costs of Assembly 268 Keeping Score 268 Integrate Parts 268 Maximize Ease of Assembly 269 Consider Customer Assembly 270

Step 4: Reduce the Costs of Supporting Production 270

Minimize Systemic Complexity 271 Error Proofing 271

Step 5: Consider the Impact of DFM Decisions on Other Factors 272

The Impact of DFM on Development Time 272 The Impact of DFM on Development Cost 272 The Impact of DFM on Product Quality 273 The Impact of DFM on External Factors 273

Results 273 Summary 275 References and Bibliography 276 Exercises 277 Thought Questions 278 Appendix A Materials Costs 279 Appendix B Component Manufacturing Costs 280 Appendix C Assembly Costs 286 Appendix D Cost Structures 287

Chapter 14 Prototyping 289

Understanding Prototypes 291 Types of Prototypes 291 What Are Prototypes Used For? 294

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Contents xv

When Should Economic Analysis Be Performed? 355 Economic Analysis Process 356

Step 1: Build a Base-Case Financial Model 356 Estimate the Timing and Magnitude of Future Cash Inflows and Outflows 356 Compute the Net Present Value of the Cash Flows 358 The Base-Case Financial Model Can Support Go/No-Go Decisions and Major Investment Decisions 359

Step 2: Perform Sensitivity Analysis 359 Development Cost Example 360 Development Time Example 361

Step 3: Use Sensitivity Analysis to Understand Project Trade-Offs 363

Six Potential Interactions 364 Trade-Off Rules 365 Limitations of Quantitative Analysis 366

Step 4: Consider the Influence of the Qualitative Factors on Project Success 367

Projects Interact with the Firm, the Market, and the Macro Environment 367 Carrying Out Qualitative Analysis 369

Summary 370 References and Bibliography 371 Exercises 372 Thought Questions 372 Appendix A Time Value of Money and the Net Present Value Technique 373 Appendix B Modeling Uncertain Cash Flows Using Net Present Value Analysis 375

Chapter 18 Managing Projects 379

Understanding and Representing Tasks 380 Sequential, Parallel, and Coupled Tasks 380 The Design Structure Matrix 382 Gantt Charts 383 PERT Charts 384 The Critical Path 384

Baseline Project Planning 385 The Contract Book 385 Project Task List 385

Caveats 324 Summary 324 References and Bibliography 325 Exercises 326 Thought Questions 326 Appendix Orthogonal Arrays 327

Chapter 16 Patents and Intellectual Property 331

What Is Intellectual Property? 332 Overview of Patents 333 Utility Patents 334 Preparing a Disclosure 334

Step 1: Formulate a Strategy and Plan 336 Timing of Patent Applications 336 Type of Application 337 Scope of Application 338

Step 2: Study Prior Inventions 338 Step 3: Outline Claims 339 Step 4: Write the Description of the Invention 340

Figures 341 Writing the Detailed Description 341 Defensive Disclosure 342

Step 5: Refine Claims 343 Writing the Claims 343 Guidelines for Crafting Claims 346

Step 6: Pursue Application 346 Step 7: Reflect on the Results and the Process 348 Summary 348 References and Bibliography 349 Exercises 349 Thought Questions 349 Appendix A Trademarks 350 Appendix B Advice to Individual Inventors 350

Chapter 17 Product Development Economics 353

Elements of Economic Analysis 354 Quantitative Analysis 354 Qualitative Analysis 354

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xvi Contents

Team Staffing and Organization 387 Project Schedule 388 Project Budget 389 Project Risk Plan 389 Modifying the Baseline Plan 391

Accelerating Projects 391 Project Execution 394

Coordination Mechanisms 394 Assessing Project Status 396 Corrective Actions 396

Postmortem Project Evaluation 398 Summary 399 References and Bibliography 400 Exercises 402 Thought Questions 402 Appendix Design Structure Matrix Example 403

Index 405

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Introduction

1

Clockwise from top left: Photo by Stuart Cohen; Copyright 2002 Hewlett-Packard Company. Reproduced with permission; Courtesy of Boeing; Courtesy of Volkswagen of America; Courtesy of Rollerblade, Inc.

C H A P T E R O N E C H A P T E R O N E

EXHIBIT 1-1 Examples of engineered, discrete, physical products (clockwise from top left): Stanley Tools Jobmaster Screwdriver, Hewlett-Packard DeskJet Printer, Boeing 777 Airplane, Volkswagen New Beetle, and Rollerblade In-Line Skate.

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2 Chapter 1

The economic success of most firms depends on their ability to identify the needs of customers and to 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 a manufacturing problem; it is a product development problem involving all of these functions. This book provides a collection of methods intended to enhance the abilities of cross-functional teams to work together to develop products.

A product is something sold by an enterprise to its customers. Product development is the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product. Although much of the material in this book is useful in the development of any product, we explicitly focus on products that are engineered, discrete, and physical. Exhibit 1-1 displays several examples of products from this category. Because we focus on engineered products, the book applies better to the development of power tools and computer peripherals than to magazines or sweaters. Our focus on discrete goods makes the book less applicable to the development of prod- ucts such as gasoline, nylon, and paper. Because of the focus on physical products, we do not emphasize the specific issues involved in developing services or software. Even with these restrictions, the methods presented apply well to a broad range of products, includ- ing, for example, consumer electronics, sports equipment, scientific instruments, machine tools, and medical devices.

The goal of this book is to present in a clear and detailed way a set of product devel- opment methods aimed at bringing together the marketing, design, and manufacturing functions of the enterprise. In this introductory chapter we describe some aspects of the industrial practice of product development and provide a roadmap of the book.

Characteristics of Successful Product Development

From the perspective of the investors in a for-profit enterprise, successful product devel- opment results in products that can be produced and sold profitably, yet profitability is often difficult to assess quickly and directly. Five more specific dimensions, all of which ultimately relate to profit, are commonly used to assess the performance of a product de- velopment effort:

• Product quality: How good is the product resulting from the development effort? Does it satisfy customer needs? Is it robust and reliable? Product quality is ultimately reflected in market share and the price that customers are willing to pay.

• Product cost: What is the manufacturing cost of the product? This cost includes spend- ing 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.

• Development time: How quickly did the team complete the product development ef- fort? Development time determines how responsive the firm can be to competitive forces and to technological developments, as well as how quickly the firm receives the economic returns from the team’s efforts.

• Development cost: How much did the firm have to spend to develop the product? De- velopment cost is usually a significant fraction of the investment required to achieve the profits.

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Introduction 3

• Development capability: Are the team and the firm better able to develop future prod- ucts as a result of their experience with a product development project? Development capability is an asset the firm can use to develop products more effectively and eco- nomically in the future.

High performance along these five dimensions should ultimately lead to economic success; however, other performance criteria are also important. These criteria arise from interests of other stakeholders in the enterprise, including the members of the develop- ment team, other employees, and the community in which the product is manufactured. Members of the development team may be interested in creating an inherently exciting product. Members of the community in which the product is manufactured may be con- cerned about the degree to which the product creates jobs. Both production workers and users of the product hold the development team accountable to high safety standards, whether or not these standards can be justified on the strict basis of profitability. Other individuals, who may have no direct connection to the firm or the product, may demand that the product make ecologically sound use of resources and create minimal dangerous waste products.

Who Designs and Develops Products?

Product development is an interdisciplinary activity requiring contributions from nearly all the functions of a firm; however, three functions are almost always central to a product development project:

• Marketing: The marketing function mediates the interactions between the firm and its customers. Marketing often facilitates the identification of product opportunities, the definition of market segments, and the identification of customer needs. Marketing also typically arranges for communication between the firm and its customers, sets target prices, and oversees the launch and promotion of the product.

• Design: The design function plays the lead role in defining the physical form of the product to best meet customer needs. In this context, the design function includes en- gineering design (mechanical, electrical, software, etc.) and industrial design (aesthet- ics, ergonomics, user interfaces).

• Manufacturing: The manufacturing function is primarily responsible for designing, operating, and/or coordinating the production system in order to produce the product. Broadly defined, the manufacturing function also often includes purchasing, distribution, and installation. This collection of activities is sometimes called the supply chain.

Different individuals within these functions often have specific disciplinary training in areas such as market research, mechanical engineering, electrical engineering, materi- als science, or manufacturing operations. Several other functions, including finance and sales, are frequently involved on a part-time basis in the development of a new product. Beyond these broad functional categories, the specific composition of a development team depends on the particular characteristics of the product.

Few products are developed by a single individual. The collection of individuals de- veloping a product forms the project team. This team usually has a single team leader, who could be drawn from any of the functions of the firm. The team can be thought of as

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consisting of a core team and an extended team. In order to work together effectively, the core team usually remains small enough to meet in a conference room, while the ex- tended team may consist of dozens, hundreds, or even thousands of other members. (Even though the term team is inappropriate for a group of thousands, the word is often used in this context to emphasize that the group must work toward a common goal.) In most cases, a team within the firm will be supported by individuals or teams at partner compa- nies, suppliers, and consulting firms. Sometimes, as is the case for the development of a new airplane, the number of external team members may be even greater than that of the team within the company whose name will appear on the final product. The composition of a team for the development of an electromechanical product of modest complexity is shown in Exhibit 1-2.

Throughout this book we assume that the team is situated within a firm. In fact, a for-profit manufacturing company is the most common institutional setting for product development, but other settings are possible. Product development teams sometimes work within consulting firms, universities, government agencies, and nonprofit organizations.

Extended Team (Including Suppliers)

Core Team

Finance

Sales

Legal

Marketing Professional

Industrial Designer

Manufacturing Engineer

Mechanical Designer

Electronics Designer

Purchasing Specialist

TEAM LEADER

EXHIBIT 1-2 The composition of a product development team for an electromechanical product of modest complexity.

4 Chapter 1

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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 are required to develop a new product. The reality is that very few products can be developed in less than 1 year, many require 3 to 5 years, and some take as long as 10 years. Exhibit 1-1 shows five engineered, discrete products. Exhibit 1-3 is a table showing the approximate scale of the associated product development efforts along with some distinguishing characteristics of the products.

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 develop- ment effort, a firm will almost always have to make some investment in the tooling and equipment required for production. This expense is often as large as the rest of the prod- uct development budget; however, it is sometimes useful to think of these expenditures as part of the fixed costs of production. For reference purposes, this production investment is listed in Exhibit 1-3 along with the development expenditures.

Introduction 5

Stanley Tools Rollerblade Hewlett-Packard Volkswagen Jobmaster In-Line DeskJet New Beetle Boeing 777 Screwdriver Skate Printer Automobile Airplane

Annual 100,000 100,000 4 million 100,000 50 production units/year units/year units/year units/year units/year volume

Sales lifetime 40 years 3 years 2 years 6 years 30 years

Sales price $5 $150 $130 $20,000 $260 million

Number of 3 parts 35 parts 200 parts 10,000 parts 130,000 parts unique parts (part numbers)

Development 1 year 2 years 1.5 years 3.5 years 4.5 years time

Internal 3 people 5 people 100 people 800 people 6,800 people development team (peak size)

External 3 people 10 people 75 people 800 people 10,000 people development team (peak size)

Development $150,000 $750,000 $50 million $400 million $3 billion cost

Production $150,000 $1 million $25 million $500 million $3 billion investment

EXHIBIT 1-3 Attributes of five products and their associated development efforts. All figures are approximate, based on publicly available information and company sources.

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The Challenges of Product Development

Developing great products is hard. Few companies are highly successful more than half the time. These odds present a significant challenge for a product development team. Some of the characteristics that make product development challenging are:

• Trade-offs: An airplane can be made lighter, but this action will probably increase manufacturing cost. One of the most difficult aspects of product development is recog- nizing, understanding, and managing such trade-offs in a way that maximizes the suc- cess of the product.

• Dynamics: Technologies improve, customer preferences evolve, competitors introduce new products, and the macroeconomic environment shifts. Decision making in an en- vironment of constant change is a formidable task.

• Details: The choice between using screws or snap-fits on the enclosure of a computer can have economic implications of millions of dollars. Developing a product of even modest complexity may require thousands of such decisions.

• Time pressure: Any one of these difficulties would be easily manageable by itself given plenty of time, but product development decisions must usually be made quickly and without complete information.

• Economics: Developing, producing, and marketing a new product requires a large in- vestment. To earn a reasonable return on this investment, the resulting product must be both appealing to customers and relatively inexpensive to produce.

For many people, product development is interesting precisely because it is challeng- ing. For others, several intrinsic attributes also contribute to its appeal:

• Creation: The product development process begins with an idea and ends with the production of a physical artifact. When viewed both in its entirety and at the level of individual activities, the product development process is intensely creative.

• Satisfaction of societal and individual needs: All products are aimed at satisfying needs of some kind. Individuals interested in developing new products can almost always find institutional settings in which they can develop products satisfying what they consider to be important needs.

• Team diversity: Successful development requires many different skills and talents. As a result, development teams involve people with a wide range of different training, ex- perience, perspectives, and personalities.

• Team spirit: Product development teams are often highly motivated, cooperative groups. The team members may be colocated so they can focus their collective energy on creating the product. This situation can result in lasting camaraderie among team members.

Approach of This Book

We focus on product development activities that benefit from the participation of all the core functions of the firm. For our purposes, we define the core functions as market- ing, design, and manufacturing. We expect that team members have competence in one or

6 Chapter 1

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more specific disciplines such as mechanical engineering, electrical engineering, indus- trial design, market research, or manufacturing operations. For this reason, we do not discuss, for example, how to perform a stress analysis or to create a conjoint survey. These are disciplinary skills we expect someone on the development team to possess. The integrative methods in this book are intended to facilitate problem solving and decision making among people with different disciplinary perspectives.

Structured Methods The book consists of methods for completing development activities. The methods are struc- tured, which means we generally provide a step-by-step approach and often provide templates for the key information systems used by the team. We believe structured methods are valu- able for three reasons: First, they make the decision process explicit, allowing everyone on the team to understand the decision rationale and reducing the possibility of moving forward with unsupported decisions. Second, by acting as “checklists” of the key steps in a develop- ment activity they ensure that important issues are not forgotten. Third, structured methods are largely self-documenting; in the process of executing the method, the team creates a record of the decision-making process for future reference and for educating newcomers.

Although the methods are structured, they are not intended to be applied blindly. The methods are a starting point for continuous improvement. Teams should adapt and modify the approaches to meet their own needs and to reflect the unique character of their institu- tional environment.

Industrial Examples Each remaining chapter is built around an example drawn from industrial practice. The major examples include the following: a wireless security system, a laser-based cat toy, a digital copier, a cordless screwdriver, a mountain bike suspension fork, a power nailer, a dose-metering syringe, an electric scooter, a computer printer, a mobile tele- phone, office seating products, an automobile engine, a mobile robot, a seat belt system, a coffee-cup insulator, a digital photo printer, and a microfilm cartridge. In most cases we use as examples the simplest products we have access to that illustrate the important aspects of the methods. When a screwdriver illustrates an idea as well as a jet engine, we use the screwdriver. However, every method in this book has been used successfully in industrial practice by hundreds of people on both large and small projects.

Although built around examples, the chapters are not intended to be historically accurate case studies. We use the examples as a way to illustrate development methods, and in doing so we recast some historical details in a way that improves the presentation of the material. We also disguise much of the quantitative information in the examples, especially financial data.

Organizational Realities We deliberately chose to present the methods with the assumption that the development team operates in an organizational environment conducive to success. In reality, some or- ganizations exhibit characteristics that lead to dysfunctional product development teams. These characteristics include:

• Lack of empowerment of the team: General managers or functional managers may engage in continual intervention in the details of a development project without a full understanding of the basis for the team’s decisions.

Introduction 7

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• Functional allegiances transcending project goals: Representatives of marketing, design, or manufacturing may influence decisions in order to increase the political standing of themselves or their functions without regard for the overall success of the product.

• Inadequate resources: A team may be unable to complete development tasks effec- tively because of a lack of staff, a mismatch of skills, or a lack of money, equipment, or tools.

• Lack of cross-functional representation on the project team: Key development deci- sions may be made without involvement of marketing, design, manufacturing, or other critical functions.

While most organizations exhibit one or more of these characteristics to some degree, the significant presence of these problems can be so stifling that sound development methods are rendered ineffective. While recognizing the importance of basic organiza- tional issues, we assume, for clarity of explanation, that the development team operates in an environment in which the most restrictive organizational barriers have been removed.

Roadmap of the Book We divide the product development process into six phases, as shown in Exhibit 1-4. (These phases are described in more detail in Chapter 2, Development Processes and Organizations.) This book describes the concept development phase in its entirety and the remaining phases less completely, because we do not provide methods for the more fo- cused development activities that occur later in the process. Each of the remaining chap- ters in this book can be read, understood, and applied independently.

• Chapter 2, Development Processes and Organizations, presents a generic product development process and shows how variants of this process are used in different in- dustrial situations. The chapter also discusses the way individuals are organized into groups in order to undertake product development projects.

• Chapter 3, Opportunity Identification, describes a process for creating, identifying, and screening ideas for new products.

• Chapter 4, Product Planning, presents a method for deciding which products to de- velop. The output of this method is a mission statement for a particular project.

• Chapters 5 through 9, Identifying Customer Needs, Product Specifications, Concept Generation, Concept Selection, and Concept Testing, present the key activities of the concept development phase. These methods guide a team from a mission statement through a selected product concept.

• Chapter 10, Product Architecture, discusses the implications of product architecture on product change, product variety, component standardization, product performance, manufacturing cost, and project management; it then presents a method for establish- ing the architecture of a product.

• Chapter 11, Industrial Design, discusses the role of the industrial designer and how human interaction issues, including aesthetics and ergonomics, are treated in product development.

• Chapter 12, Design for Environment, considers the environmental impacts associated with products and presents a method for reducing these impacts through better design decisions.

8 Chapter 1

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• Chapter 13, Design for Manufacturing, discusses techniques used to reduce manufac- turing cost. These techniques are primarily applied during the system-level and detail- design phases of the process.

• Chapter 14, Prototyping, presents a method to ensure that prototyping efforts, which occur throughout the process, are applied effectively.

• Chapter 15, Robust Design, explains methods for choosing values of design variables to ensure reliable and consistent performance.

• Chapter 16, Patents and Intellectual Property, presents an approach to creating a patent application and discusses the role of intellectual property in product development.

Introduction 9

Chapter 5: Identifying Customer Needs

Chapter 3: Opportunity Identification

Chapter 6: Product Specifications

Chapter 4: Product Planning

Chapter 2: Development Processes and Organizations

Chapter 7: Concept Generation

Chapter 8: Concept Selection

Chapter 9: Concept Testing

Chapter 10: Product Architecture

Chapter 11: Industrial Design

Chapter 12: Design for Environment

Chapter 14: Prototyping

Chapter 15: Robust Design

Chapter 16: Patents and Intellectual Property

Chapter 13: Design for Manufacturing

Many More-Focused Development Methods

Phase 0 Phase 1 Phase 2 Phase 4 Phase 5Phase 3 Planning Concept

Development System-Level

Design Detail Design

Testing and Refinement

Production Ramp-Up

Chapter 17: Product Development Economics

Chapter 18: Managing Projects

EXHIBIT 1-4 The product development process. The diagram shows where each of the integrative methods presented in the remaining chapters is most applicable.

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10 Chapter 1

• Chapter 17, Product Development Economics, describes a method for understanding the influence of internal and external factors on the economic value of a project.

• Chapter 18, Managing Projects, presents some fundamental concepts for understand- ing and representing interacting project tasks, along with a method for planning and executing a development project.

References and Bibliography A wide variety of resources for this chapter and for the rest of the book are available on the Internet. These resources include data, templates, links to suppliers, and lists of publications. Current resources may be accessed via www.ulrich-eppinger.net

Wheelwright and Clark devote much of their book to the very early stages of product development, which we cover in less detail.

Wheelwright, Stephen C., and Kim B. Clark, Revolutionizing Product Development: Quantum Leaps in Speed, Efficiency, and Quality, The Free Press, New York, 1992.

Katzenbach and Smith write about teams in general, but most of their insights apply to product development teams as well.

Katzenbach, Jon R., and Douglas K. Smith, The Wisdom of Teams: Creating the High-Performance Organization, Harvard Business School Press, Boston, 1993.

These three books provide rich narratives of development projects, including fascinating descriptions of the intertwined social and technical processes.

Kidder, Tracy, The Soul of a New Machine, Avon Books, New York, 1981.

Sabbagh, Karl, Twenty-First-Century Jet: The Making and Marketing of the Boeing 777, Scribner, New York, 1996.

Walton, Mary, Car: A Drama of the American Workplace, Norton, New York, 1997.

Exercises 1. Estimate what fraction of the price of a pocket calculator is required to cover the cost

of developing the product. To do this you might start by estimating the information needed to fill out Exhibit 1-3 for the pocket calculator.

2. Create a set of scatter charts by plotting each of the rows in Exhibit 1-3 against the development cost row. For each one, explain why there is or is not any correlation. (For example, you would first plot “annual production volume” versus “development cost” and explain why there seems to be no correlation. Then repeat for each of the remain- ing rows.)

Thought Question 1. Each of the chapters listed in Exhibit 1-4 presents a method for a portion of the prod-

uct development process. For each one, consider what types of skills and expertise might be required. Can you make an argument for staffing the development team from start to finish with individuals possessing all of these skills and areas of expertise?

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Development Processes and Organizations

11

Courtesy of Tyco International

C H A P T E R T W O

EXHIBIT 2-1 A wireless security alarm system control panel, one of Tyco’s products.

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12 Chapter 2

Tyco International is a leading manufacturer of sensors and controls, including home and industrial security systems. One of Tyco’s products is the wireless security alarm system control panel shown in Exhibit 2-1. Senior managers at Tyco wanted to establish a common product development process structure that would be appropriate for all of the many different operating divisions across the company. They also needed to create a product development organization that would allow Tyco to compete effectively in a va- riety of competitive business markets. Some of the questions Tyco faced were:

• What are the key product development activities that must be included in every project?

• What project milestones and review gates can be used to manage the overall develop- ment process by phases?

• Is there a standard development process that will work for every operating division?

• What role do experts from different functional areas play in the development process?

• Should the development organization be divided into groups corresponding to projects or to technical and business functions?

This chapter helps to answer these and related questions by presenting a generic de- velopment process and showing how this process can be adapted to meet the needs of particular industrial situations. We highlight the activities and contributions of different functions of the company during each phase of the development process. The chapter also explains what constitutes a product development organization and discusses why different types of organizations are appropriate for different settings.

The Product Development Process

A process is a sequence of steps that transforms a set of inputs into a set of outputs. Most people are familiar with the idea of physical processes, such as those used to bake a cake or to assemble an automobile. A product development process is the sequence of steps or activities that an enterprise employs to conceive, design, and commercialize a product. Many of these steps and activities are intellectual and organizational rather than physical. Some organizations define and follow a precise and detailed development process, while others may not even be able to describe their process. Furthermore, every organization employs a process at least slightly different from that of every other organization. In fact, the same enterprise may follow different processes for each of several different types of development projects.

A well-defined development process is useful for the following reasons:

• Quality assurance: A development process specifies the phases a development project will pass through and the checkpoints along the way. When these phases and check- points are chosen wisely, following the development process is one way of assuring the quality of the resulting product.

• Coordination: A clearly articulated development process acts as a master plan that defines the roles of each of the players on the development team. This plan informs the members of the team when their contributions will be needed and with whom they will need to exchange information and materials.

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Development Processes and Organizations 13

• Planning: A development process includes milestones corresponding to the comple- tion of each phase. The timing of these milestones anchors the schedule of the overall development project.

• Management: A development process is a benchmark for assessing the performance of an ongoing development effort. By comparing the actual events to the established process, a manager can identify possible problem areas.

• Improvement: The careful documentation and ongoing review of an organization’s de- velopment process and its results may help to identify opportunities for improvement.

The generic product development process consists of six phases, as illustrated in Exhibit 2-2. The process begins with a planning phase, which is the link to advanced research and technology development activities. The output of the planning phase is the project’s mission statement, which is the input required to begin the concept development phase and which serves as a guide to the development team. The conclusion of the prod- uct development process is the product launch, at which time the product becomes avail- able for purchase in the marketplace.

One way to think about the development process is as the initial creation of a wide set of alternative product concepts and then the subsequent narrowing of alternatives and in- creasing specification of the product until the product can be reliably and repeatably pro- duced by the production system. Note that most of the phases of development are defined in terms of the state of the product, although the production process and marketing plans, among other tangible outputs, are also evolving as development progresses.

Another way to think about the development process is as an information-processing system. The process begins with inputs such as the corporate objectives, strategic op- portunities, available technologies, product platforms, and production systems. Various activities process the development information, formulating specifications, concepts, and design details. The process concludes when all the information required to support pro- duction and sales has been created and communicated.

A third way to think about the development process is as a risk management system. In the early phases of product development, various risks are identified and prioritized. As the process progresses, risks are reduced as the key uncertainties are eliminated and the functions of the product are validated. When the process is completed, the team should have substantial confidence that the product will work correctly and be well received by the market.

Exhibit 2-2 also identifies the key activities and responsibilities of the different func- tions of the organization during each development phase. Because of their continuous involvement in the process, we choose to articulate the roles of marketing, design, and manufacturing. Representatives from other functions, such as research, finance, project management, field service, and sales, also play key roles at particular points in the process.

The six phases of the generic development process are:

0. Planning: The planning activity is often referred to as “phase zero” because it precedes the project approval and launch of the actual product development process. This phase begins with opportunity identification guided by corporate strategy and in- cludes assessment of technology developments and market objectives. The output of the planning phase is the project mission statement, which specifies the target market for the product, business goals, key assumptions, and constraints. Chapter 3, Opportunity

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EXHIBIT 2-2 The generic product development process. Six phases are shown, including some of the typical tasks and responsibilities of the key business functions for each phase.

Marketing • Articulate market

opportunity. • Define market

segments.

Design • Consider product

platform and architecture.

• Assess new technologies.

Manufacturing • Identify production

constraints. • Set supply chain

strategy.

Other Functions • Research:

Demonstrate available technologies.

• Finance: Provide planning goals.

• General Management: Allocate project resources.

• Collect customer needs.

• Identify lead users.

• Identify competitive products.

• Investigate feasibility of product concepts.

• Develop industrial design concepts.

• Build and test experimental prototypes.

• Estimate manufacturing cost.

• Assess production feasibility.

• Finance: Facilitate economic analysis.

• Legal: Investigate patent issues.

• Develop plan for product options and extended product family.

• Develop product architecture.

• Define major sub-systems and interfaces.

• Refine industrial design.

• Preliminary component engineering.

• Identify suppliers for key components.

• Perform make- buy analysis.

• Define final assembly scheme.

• Finance: Facilitate make- buy analysis.

• Service: Identify service issues.

• Develop marketing plan.

• Define part geometry.

• Choose materials.

• Assign tolerances.

• Complete industrial design control documentation.

• Define piece- part production processes.

• Design tooling. • Define quality

assurance processes.

• Begin procurement of long-lead tooling.

• Develop promotion and launch materials.

• Facilitate field testing.

• Test overall performance, reliability, and durability.

• Obtain regulatory approvals.

• Assess environmental impact.

• Implement design changes.

• Facilitate supplier ramp-up.

• Refine fabrication and assembly processes.

• Train workforce. • Refine quality

assurance processes.

• Sales: Develop sales plan.

• Place early production with key customers.

• Evaluate early production output.

• Begin full operation of production system.

• General Management: Conduct postproject review.

• •• • • •

Planning ConceptDevelopment System-Level

Design Detail Design

Testing and Refinement

Production Ramp-Up

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Identification, explains a process for gathering, evaluating, and choosing from a broad range of product opportunities. Chapter 4, Product Planning, presents a discussion of the subsequent product planning process.

1. Concept development: In the concept development phase, the needs of the target market are identified, alternative product concepts are generated and evaluated, and one or more concepts are selected for further development and testing. A concept is a descrip- tion of the form, function, and features of a product and is usually accompanied by a set of specifications, an analysis of competitive products, and an economic justification of the project. This book presents several detailed methods for the concept development phase (Chapters 5–9). We expand this phase into each of its constitutive activities in the next section.

2. System-level design: The system-level design phase includes the definition of the product architecture, decomposition of the product into subsystems and components, and preliminary design of key components. Initial plans for the production system and final assembly are usually defined during this phase as well. The output of this phase usually includes a geometric layout of the product, a functional specification of each of the prod- uct’s subsystems, and a preliminary process flow diagram for the final assembly process. Chapter 10, Product Architecture, discusses some of the important activities of system- level design.

3. Detail design: The detail design phase includes the complete specification of the geometry, materials, and tolerances of all of the unique parts in the product and the iden- tification of all of the standard parts to be purchased from suppliers. A process plan is established and tooling is designed for each part to be fabricated within the production system. The output of this phase is the control documentation for the product—the draw- ings or computer files describing the geometry of each part and its production tooling, the specifications of the purchased parts, and the process plans for the fabrication and assembly of the product. Three critical issues that are best considered throughout the product development process, but are finalized in the detail design phase, are: materials selection, production cost, and robust performance. These issues are discussed respec- tively in Chapter 12, Design for Environment, Chapter 13, Design for Manufacturing, and Chapter 15, Robust Design.

4. Testing and refinement: The testing and refinement phase involves the con- struction and evaluation of multiple preproduction versions of the product. Early (alpha) prototypes are usually built with production-intent parts—parts with the same geometry and material properties as intended for the production version of the prod- uct but not necessarily fabricated with the actual processes to be used in production. Alpha prototypes are tested to determine whether the product will work as designed and whether the product satisfies the key customer needs. Later (beta) prototypes are usually built with parts supplied by the intended production processes but may not be assembled using the intended final assembly process. Beta prototypes are extensively evaluated internally and are also typically tested by customers in their own use envi- ronment. The goal for the beta prototypes is usually to answer questions about perfor- mance and reliability in order to identify necessary engineering changes for the final product. Chapter 14, Prototyping, presents a thorough discussion of the nature and use of prototypes.

Development Processes and Organizations 15

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5. Production ramp-up: In the production ramp-up phase, the product is made using the intended production system. The purpose of the ramp-up is to train the workforce and to work out any remaining problems in the production processes. Products produced during production ramp-up are sometimes supplied to preferred customers and are care- fully evaluated to identify any remaining flaws. The transition from production ramp-up to ongoing production is usually gradual. At some point in this transition, the product is launched and becomes available for widespread distribution. A postlaunch project review may occur shortly after the launch. This review includes an assessment of the project from both commercial and technical perspectives and is intended to identify ways to im- prove the development process for future projects.

Concept Development: The Front-End Process

Because the concept development phase of the development process demands perhaps more coordination among functions than any other, many of the integrative development methods presented in this book are concentrated here. In this section we expand the con- cept development phase into what we call the front-end process. The front-end process generally contains many interrelated activities, ordered roughly as shown in Exhibit 2-3.

Rarely does the entire process proceed in purely sequential fashion, completing each activity before beginning the next. In practice, the front-end activities may be overlapped in time and iteration is often necessary. The dashed arrows in Exhibit 2-3 reflect the un- certain nature of progress in product development. At almost any stage, new information may become available or results learned that can cause the team to step back to repeat an earlier activity before proceeding. This repetition of nominally complete activities is known as development iteration.

The concept development process includes the following activities:

• Identifying customer needs: The goal of this activity is to understand customers’ needs and to effectively communicate them to the development team. The output of this step is a set of carefully constructed customer need statements, organized in a hi- erarchical list, with importance weightings for many or all of the needs. A method for this activity is presented in Chapter 5, Identifying Customer Needs.

• Establishing target specifications: Specifications provide a precise description of what a product has to do. They are the translation of the customer needs into technical terms. Targets for the specifications are set early in the process and represent the hopes

16 Chapter 2

Identify Customer

Needs

Establish Target

Specifications

Generate Product

Concepts

Select Product

Concept(s)

Test Product

Concept(s)

Set Final

Specifications

Plan Downstream Development

Development Plan

Mission Statement

Build and Test Models and Prototypes

Benchmark Competitive Products

Perform Economic Analysis

EXHIBIT 2-3 The many front-end activities comprising the concept development phase.

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of the development team. Later these specifications are refined to be consistent with the constraints imposed by the team’s choice of a product concept. The output of this stage is a list of target specifications. Each specification consists of a metric, and mar- ginal and ideal values for that metric. A method for the specification activity is given in Chapter 6, Product Specifications.

• Concept generation: The goal of concept generation is to thoroughly explore the space of product concepts that may address the customer needs. Concept generation includes a mix of external search, creative problem solving within the team, and systematic exploration of the various solution fragments the team generates. The result of this activity is usually a set of 10 to 20 concepts, each typically represented by a sketch and brief descriptive text. Chapter 7, Concept Generation, describes this activity in detail.

• Concept selection: Concept selection is the activity in which various product concepts are analyzed and sequentially eliminated to identify the most promising concept(s). The process usually requires several iterations and may initiate additional concept gen- eration and refinement. A method for this activity is described in Chapter 8, Concept Selection.

• Concept testing: One or more concepts are then tested to verify that the customer needs have been met, assess the market potential of the product, and identify any short- comings that must be remedied during further development. If the customer response is poor, the development project may be terminated or some earlier activities may be repeated as necessary. Chapter 9, Concept Testing, explains a method for this activity.

• Setting final specifications: The target specifications set earlier in the process are re- visited after a concept has been selected and tested. At this point, the team must commit to specific values of the metrics reflecting the constraints inherent in the product con- cept, limitations identified through technical modeling, and trade-offs between cost and performance. Chapter 6, Product Specifications, explains the details of this activity.

• Project planning: In this final activity of concept development, the team creates a detailed development schedule, devises a strategy to minimize development time, and identifies the resources required to complete the project. The major results of the front-end activities can be usefully captured in a contract book, which contains the mission statement, the customer needs, the details of the selected concept, the product specifications, the economic analysis of the product, the development schedule, the project staffing, and the budget. The contract book serves to document the agreement (contract) between the team and the senior management of the enterprise. A project planning method is presented in Chapter 18, Managing Projects.

• Economic analysis: The team, often with the support of a financial analyst, builds an economic model for the new product. This model is used to justify continuation of the overall development program and to resolve specific trade-offs between, for example, development costs and manufacturing costs. Economic analysis is shown as one of the ongoing activities in the concept development phase. An early economic analysis will almost always be performed before the project even begins, and this analysis is up- dated as more information becomes available. A method for this activity is presented in Chapter 17, Product Development Economics.

• Benchmarking of competitive products: An understanding of competitive products is critical to successful positioning of a new product and can provide a rich source of

Development Processes and Organizations 17

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ideas for the product and production process design. Competitive benchmarking is per- formed in support of many of the front-end activities. Various aspects of competitive benchmarking are presented in Chapters 5–9.

• Modeling and prototyping: Every stage of the concept development process involves various forms of models and prototypes. These may include, among others: early “proof- of-concept” models, which help the development team to demonstrate feasibility; “form- only” models, which can be shown to customers to evaluate ergonomics and style; spread- sheet models of technical trade-offs; and experimental test models, which can be used to set design parameters for robust performance. Methods for modeling, prototyping, and testing are discussed throughout the book, including in Chapters 5–7, 9, 11, 14, and 15.

Adapting the Generic Product Development Process

The development process described by Exhibits 2-2 and 2-3 is generic, and particular processes will differ in accordance with the unique context of the firm and the challenges of any specific project. The generic process is most like the process used in a market-pull situation: a firm begins product development with a market opportunity and then uses whatever available technologies are required to satisfy the market need (i.e., the mar- ket “pulls” the development decisions). In addition to the market-pull process outlined in Exhibits 2-2 and 2-3, several variants are common and correspond to the following: technology-push products, platform products, process-intensive products, customized products, high-risk products, quick-build products, and complex systems. Each of these situations is described below. The characteristics of these situations and the resulting de- viations from the generic process are summarized in Exhibit 2-4.

Technology-Push Products In developing technology-push products, the firm begins with a new proprietary technol- ogy and looks for an appropriate market in which to apply this technology (that is, the technology “pushes” development). Gore-Tex, an expanded Teflon sheet manufactured by W. L. Gore Associates, is a striking example of technology push. The company has devel- oped dozens of products incorporating Gore-Tex, including artificial veins for vascular surgery, insulation for high-performance electric cables, fabric for outerwear, dental floss, and liners for bagpipe bags.

Many successful technology-push products involve basic materials or basic process technologies. This may be because basic materials and processes are deployed in thou- sands of applications, and there is therefore a high likelihood that new and unusual char- acteristics of materials and processes can be matched with an appropriate application.

The generic product development process can be used with minor modifications for technology-push products. The technology-push process begins with the planning phase, in which the given technology is matched with a market opportunity. Once this matching has occurred, the remainder of the generic development process can be fol- lowed. The team includes an assumption in the mission statement that the particular technology will be embodied in the product concepts considered by the team. Although many extremely successful products have arisen from technology-push development, this approach can be perilous. The product is unlikely to succeed unless (1) the as- sumed technology offers a clear competitive advantage in meeting customer needs, and

18 Chapter 2

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Development Processes and Organizations 19

Process Type Description Distinct Features Examples

Generic (Market-Pull) Products

Technology-Push Products

Platform Products

Process-Intensive Products

Customized Products

High-Risk Products

Quick-Build Products

Complex Systems

The team begins with a market opportunity and selects appropriate technologies to meet customer needs.

The team begins with a new technology, then finds an appropriate market.

The team assumes that the new product will be built around an established technological subsystem.

Characteristics of the product are highly constrained by the production process.

New products are slight variations of existing configurations.

Technical or market uncertainties create high risks of failure.

Rapid modeling and prototyping enables many design-build-test cycles.

System must be decomposed into several subsystems and many components.

Process generally includes distinct planning, concept development, system- level design, detail design, testing and refinement, and production ramp-up phases.

Planning phase involves matching technology and market. Concept development assumes a given technology.

Concept development assumes a proven technology platform.

Either an existing production process must be specified from the start, or both product and process must be developed together from the start.

Similarity of projects allows for a streamlined and highly structured development process.

Risks are identified early and tracked throughout the process. Analysis and testing activities take place as early as possible.

Detail design and testing phases are repeated a number of times until the product is completed or time/budget runs out.

Subsystems and components are developed by many teams working in parallel, followed by system integration and validation.

Sporting goods, furniture, tools.

Gore-Tex rainwear, Tyvek envelopes.

Consumer electronics, computers, printers.

Snack foods, breakfast cereals, chemicals, semiconductors.

Motors, switches, batteries, containers.

Pharmaceuticals, space systems.

Software, cellular phones.

Airplanes, jet engines, automobiles.

EXHIBIT 2-4 Summary of variants of generic product development process.

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(2) suitable alternative technologies are unavailable or very difficult for competitors to utilize. Project risk can possibly be minimized by simultaneously considering the merit of a broader set of concepts that do not necessarily incorporate the new technology. In this way the team verifies that the product concept embodying the new technology is superior to the alternatives.

Platform Products A platform product is built around a preexisting technological subsystem (a technology platform). Examples of such platforms include the Intel chipset in a personal computer, the Apple iPhone operating system, and the blade design in a Gillette razor. Huge invest- ments are made in developing such platforms, and therefore every attempt is made to in- corporate them into several different products. In some sense, platform products are very similar to technology-push products in that the team begins the development effort with an assumption that the product concept will embody a particular technology. One differ- ence is that a technology platform has already demonstrated its usefulness in the market- place in meeting customer needs. The firm can in many cases assume that the technology will also be useful in related markets. Products built on technology platforms are much simpler to develop than if the technology were developed from scratch. For this reason, and because of the possible sharing of costs across several products, a firm may be able to offer a platform product in markets that could not justify the development of a unique technology.