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Product Planning Teaching materials to accompany: Product Design and Development Chapter 4 Karl T. Ulrich and Steven D. Eppinger 5th Edition, Irwin McGraw-Hill, 2012.

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  • Product Planning

    Teaching materials to accompany:Product Design and Development Chapter 4Karl T. Ulrich and Steven D. Eppinger 5th Edition, Irwin McGraw-Hill, 2012.

  • Product Design and DevelopmentKarl T. Ulrich and Steven D. Eppinger5th edition, Irwin McGraw-Hill, 2012.Chapter Table of Contents:IntroductionDevelopment Processes and OrganizationsOpportunity IdentificationProduct PlanningIdentifying Customer NeedsProduct SpecificationsConcept GenerationConcept SelectionConcept TestingProduct ArchitectureIndustrial DesignDesign for EnvironmentDesign for ManufacturingPrototypingRobust DesignPatents and Intellectual PropertyProduct Development EconomicsManaging Projects

  • PlanningProduct Development ProcessConceptDevelopmentSystem-LevelDesignDetailDesignTesting andRefinementProductionRamp-UpFour Phases of Product DevelopmentThe product planning phase precedes the product development process.

  • The Product Planning Process

  • **OutlineProduct PlanProblems with no product planProjects Mission StatementProduct Planning Process

  • **Product PlanPortfolio of products to be developed by the organization and the timing of their introduction to the market.

    A set of projects approved by the planning process, sequenced in time

  • Xerox Lakes Project ExampleXerox Document Centre 265

  • A Product Plan

  • **Problems with no product planInadequate coverage of target markets with competitive productsPoor timing of market introduction of productsPoor capacity planning and under-utilizing or development resources.Initiation and cancellation of ill-conceived projectsFrequent changes in project directions.

  • **Four types of product development projectsFundamentally new products New product or production technology for new and unfamiliar marketsNew product platforms New products for familiar markets and product categoriesDerivatives of existing product platforms Use existing product platforms to better address familiar markets with new products. Incremental improvements to existing productsOnly add or modify some features of existing products to keep the product line current and competitive

  • The Product Planning Process

  • **Product Planning QuestionsWhat product development projects will be undertaken?What mix of fundamentally new products, platforms, and derivative products should be pursued?How do the various projects relate to each other as a portfolioWhat will be the timing and sequence of the projects?

  • **The Product Planning ProcessIdentify & select opportunitiesEvaluate and prioritize projectsProduct/project portfolio Allocate resources and plan timingProduct/project planComplete pre-project planningProduct/project mission statementReflect on the results and the process.

  • **1. Identify opportunities, from Marketing and sales personnelResearch and technology development organizationsCurrent product development teamsManufacturing and operations organizationsCurrent and potential customersThird parties such as suppliers, inventors, and business partners

  • **2. Evaluate and prioritize projects- 2.1 for existing platforms or markets, depend onCompetitive strategy, by focusing on at least one of the followingTechnology leadership (R&D)Cost leadershipCustomer focusImitative (lead time leadership)Market segmentationDivide the market into segments in order to be more focused on the customer and competitorsTechnological trajectoriesConsider when to adopt a technology in its S-shape curve of use.Product platform planningProduct platform: a set of assets such as components and subassemblies, shared across a set of products in the companyPlatform development projects may take 2-10 times as much time and money as derivative product development projectsTechnology roadmap is usually used to represent the expected availability and future use of various technologies relevant to the product being considered. See a roadmap in EX4-7 on page 62.

  • Market Segment MapMarket Segment

  • Technology S-CurvesLight-Lens TechnologyDigital TechnologyTimeCopier Performance

  • Platforms vs. Derivatives

  • Technology Roadmap

  • **2. Evaluate and prioritize projects- 2.2 For new markets or new technologies, considerMarket size (annual sales x unit price)Market growth rateCompetitive intensity (competitors and their strength)Depth of the firms existing knowledge of the market.Depth of the firms existing knowledge of the technologyFit with the firms other productsFit with the firms capabilitiesPotential for patents, trade secrets, and other barriers for competitors to enterExistence of product champion within the firm

  • **2. Evaluate and prioritize projects- 2.3: balance the portfolioThe choice of competitive strategy affects the product development portfolio

    Use of the product-process change matrix to balance the portfolio, as shown in page 63.

    Product development is closely coupled with technology development, though it is usually not in the companys control.

  • Product-Process Change MatrixExtent of Production Process ChangesExtent of Product ChangesNewCoreProcessNextGenerationProcessSingleDepartmentUpgradeTuning andIncrementalChangesNoProcessChangeNewCoreProductNextGenerationProductAdditionto ProductFamilyMinorProductEnhancementNoProductChangeLakesProjectResearch andTechnologyDevelopmentBreakthroughDevelopmentProjectsPlatformDevelopmentProjectsDerivativeProductDevelopmentCurrentProduct/ProcessSupport

  • **3. Allocate resources and plan timingEvery company has finite resourcesIt estimates resource requirements for each project in the plan by month, quarter, or year.The resources plan is usually prepared at aggregate level by major resource categories, as shown on page 65The effort of resource planning and project timing should also consider:Timing for product introductionTechnology readinessMarket readinessCompetition

  • Aggregate Resource Planning

  • **4. Complete pre-project planningFinalize a mission statement for each project (shown on page 67) that includesA brief (one sentence) description of the productMajor benefit propositionKey business goalsPrimary and secondary markets for the productAssumptions and constraints for the development effort Stakeholders Sign up key members of the development staff

  • **Projects Mission StatementMarket segments to be considered for the product design and its features.New technologies (if any) to be incorporated into the new productManufacturing and service goals and constraintsFinancial targets for the product designBudget and time frame for the project

  • Lakes Project Mission StatementProduct DescriptionNetworkable, digital machine with copy, print, fax, and scan functionsKey Business GoalsSupport Xerox strategy of leadership in digital office equipmentServe as platform for all future B&W digital products and solutionsCapture 50% of digital product sales in primary marketEnvironmentally friendlyFirst product introduction 4thQ 1997Primary MarketOffice departments, mid-volume (40-65 ppm, above 42,000 avg. copies/mo.)Secondary MarketsQuick-print marketSmall satellite operationsAssumptions and ConstraintsNew product platformDigital imaging technologyCompatible with CentreWare softwareInput devices manufactured in CanadaOutput devices manufactured in BrazilImage processing engine manufactured in both USA and EuropeStakeholdersPurchasers and UsersManufacturing OperationsService OperationsDistributors and Resellers

  • **5. Reflect on the result and processDoes the opportunity funnel generate good product opportunities?Does the product plan support the firms competitive strategy?Does the product plan address the most important opportunities?Does each project core team accept the challenge as stated in mission statement?Are resources sufficient and effectively utilized?

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