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Chapter 2: Development Processes and Organizations

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1 Chapter 2: Development Processes and Organizations
Chapter 1: Introduction Chapter 2: Development Processes and Organizations Chapter 3: Product Planning Product Design and Development Fourth Edition by Karl T. Ulrich and Steven D. Eppinger

2 On-the-spot Design What did you learn?
Challenges of Product Development Trade-offs Dynamics Details Time pressure Economics Why do I love it? Getting something to work Satisfying societal needs Team diversity Team spirit

3 Organization of an enterprise can have a lot to do with whether or not the enterprise succeeds. This is an example of a functional map, but there can be characteristics that lead to failure: lack of empowerment, functional allegiances transcending project goals, inadequate resources, lack of cross-functional representation

4 This represents cross-funtional teams
Functions – Could be Design, Manufacturing, Marketing, etc.


6 Marketing, Design, Manufacturing have a role to play in each of these phases.
Other areas that can be involved are research, finance, general management, legal

7 Most designs are one of these two, with Market pull as the primary.
Process Type Description Examples Market Pull Team begins with market opportunity and selects technology to meet customer needs. Fuel efficient cars Technology Push Team begins with a new technology, then finds an appropriate market. Velcro Platform Products The team assumes that the new product will be built around an established technological subsystem. Many new cars share the same chassis (Civic and CRV) (Nissan Ultima and Maxima –just laser blank different wheel base) Process-Intensive Products Characteristics of the product are highly constrained by the production process. Coke Customized Products New products are slight variations of existing configurations. Boiling water reactor pressure vessels High-Risk Products Technical or market uncertainties create high risks of failure. Nuclear power plants, drug delivery devices Quick-Build Products Rapid modeling and prototyping enables many design-build-test cycles. Software Complex Systems System must be decomposed into several subsystems and many components. Space shuttle More than one of these may apply. Market pull and Technology push

8 Boomers have created a number of marketing opportunities
Aging Baby Boomers have created a number of marketing opportunities Aerogel is a technology looking for commercial applications

9 Customized Products Customized Products While Pacific Bearing has a large number of stock choices, they also sell unique combinations and modifications of existing designs

10 Platform Products Dyson Vacuum cleaners are all built around the same “Cyclone”


12 Product Development Process
Planning Concept Development System-Level Design Detail Design Testing and Refinement Production Ramp-Up Four Phases of Product Development 3 speed to 4 speed or Continuously variable (GM Tech Center) GM sees Energy Crisis, needs better gas mileage The product planning phase precedes the product development process. For transmissions, more speeds = better mileage e.g. Find clutch area needed for full throttle upshift with current engine. (Division Level)

13 ZF’s 8-Speed Automatic Transmission - Tech Dept.
BY K.C. COLWELL December 2009

14 Xerox Lakes Project Example
Xerox Document Centre 265

15 The Product Planning Process

16 A Product Plan

17 Market Segmentation A market segment is a group of actual or potential customers who can be expected to respond in a similar way to a product or service offer. They want the same types of benefits or solutions to problems from a product or service, or they respond in a similar way to a company’s promotional programs. Successful segmentation: Heterogeneity of wants and needs. Customers will actively seek and pay a premium for products and services that better meet their wants/needs. Customers do cluster into specific groups whose members’ needs are more similar to those of other customers in that groups than they are to the needs of customers in other groups. (Tennis shoes) The costs of serving a customer in a segment must be no more than they are willing to pay. When successful segmentation conditions exist, a firm that does not segment the market presents its competitors with an opportunity to enter the market.

18 Market Segment Map Market Segment

19 Light-Lens Technology
Technology S-Curves Digital Technology Copier Performance Light-Lens Technology Time

20 Technology Roadmap

21 Segmentation Examples
Cummins Peerless Pump Class 3-4 Truck Industrial Class 5-7 Truck Agricultural School Bus Municipal RV Chassis Chemical Construction Equipment Building Trades/New Construction Dell computers Apple Computers Harley Davidson

22 http://www. colbertnation

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