Innovation and New Product Development
Key Themes Product planning, Product life cycle, Product development process tools, SCRUM. Creativity
Key Themes Product planning, Product life cycle, Product development process tools, SCRUM. Creativity
Product Life Cycles
Cost of development and production Sales revenue w o l f h s a c d n a , t s o c , s e l a S
Net revenue (profit)
Cash flow Negative cash flow
Introduction
Loss
Growth
Maturity
Decline Figure 5.1
Product Life Cycle Costs 100 – 100 –
Costs committed
80 – 80 – t s o c l 60 – 60 – a t o t f o t 40 – n 40 – e c r e P
Costs incurred
20 – 20 –
Ease of change
0 –
Concept design
Detailed design prototype
Manufacturing
Distribution, service, and disposal
Importance of New Products Percentage of Sales from New Products
50% 40% 30% 20% 10%
Industry leader
Top third
Middle third
Position of Firm in Its Industry
Bottom third Figure 5.2
Scope of Change Incremental change - change of a relatively relatively small scope, such as making small improvements Strategic change - change of a larger scale, such as Strategic organizational organizational restructuring Transformational change - change in which the organization moves to a radically different, and sometimes unknown, future state state
Sources: Adapted from Kidd (1995) Warren, (1995), Unipart 10-to-Zero (1995)
Key Performance Metric Improvement Over Time - Satisfaction, Success and Failure. Increased rate of improvement
Elevated Supplier Performance
Success Customer Satisfaction (Expectations)
Future Customer Requirements
Or competitor's systems design performance
Increasing gap
Big improvements
Customer’ 100% Just ok? Our 100%
Failure Short time
Time
Co-ordinated Application of Improvement Techniques
Critical Performance Measure
Co-ordinated Business System Engineering Continuous Improvement (Kaizen/C.I.) BPR and C.I.
Market Leader BPR then nothing
Target Company
Kaikaku + C.I.
Kaizen • Continuous improvement • Requires total employment involvement • Essence of JIT is willingness of all supply chain associates to – spot quality problems – halt production when necessary – generate ideas for improvement – analyze problems – perform different functions
Benchmarking • Compare all, not necessarily a competitor • Find the best • Learn how • Plan to catch-up • Design new products & services • Implement • Overtake • Paper Plane exercise
Product Development System Ideas Figure 5.3
Ability Customer Requirements Functional Specifications
Scope of product development team
Product Specifications Design Review Test Market
Scope for design and engineering teams
Introduction Evaluation
Product planning Specifications – inside group, outside group Families of product (Product Mix) Upgrade programme, development trajectory Group Technology (Process Commonality, Flow efficiency) Design for X – Manufacture, Assembly, Logistics, Dis-assembly, End of Life Change of Use
Matching Product Design to Market Demand
• Concurrent engineering reduces the design cycle • Greater product variety is achieved through modular design • Reduced number of parts and components is achieved through good design, and through standardization and reuse of common items • Commonality, Compatibility, Carry-over
Platform Management
9 8 p y t e c e e r g i d u a / d i / m o c . n i a m o d d n u o s . w w w / / : p t t h
http://www.geocities.com/MotorCity/1108/passtown.html
VW Passat 1995-7
Seat Cordoba 4 4 5 0 4 6 / e g a p r e b m e m / m o c . n i a m o d r a c . w w w / / : p t t h
Skoda Octavia c2003
An Engine is an Engine is an Engine • The same engine in the Audi TT is in the Skoda Octavia • Great car for getaways, plenty of room for criminals and booty
Variation for variant’s sake?
Originally made in the 1980s, Ninja Turtles hit the shops again for Christmas 2003 Mickey Mouse & Donald Duck, etc Snow White (Shrek – SW doll not redesigned) Peter Pan Batman (car has changed to sell merchandise) Spiderman Darth Vader masks for children
French Fries – add sauce, large portion? Lays & Pringles
Supply Chain Position and Value Add: In The Box Value micro (Intel ) added content processors software
job specific systems
(Microsoft )
customisation
printed circuit
(D2D)
Final Assembly + Test Model from Price Waterhouse/Arthur Anderson
Supply Chain
Fault tree analysis (FTA)
Guidelines for DFL Three viewpoints:
1. Design for Easy Variability 2. Inbound Logistics Chain Design 3. Distribution Channel Design
Process Improvement
• https://jdsupply.deere.com/business_processes/sup plier_development_process/sd_tools/docs/industry_ standard_value_stream_map.JPG
Problem Driven to Pareto Prioritised Number of Stock Items versus Value Percentage cost of BOM
%
5
%
15
%
80
%
20
%
50
%
30
Achieving an integrated supply chain Stage One: Baseline Material flow Purchasing
Customer service Material Control
Production
Stage Two: Functional Integration Material flow Materials Management
Manufacturing Management
Manufacturing Management
Distribution
Customer service Distribution
Stage Four: External Integration Material flow Suppliers
Internal Supply Chain
Distribution
Customer service
Stage Three: Internal Integration Material flow Materials Management
Sales
Customer service Customers
Ramp-Up On-Time and Speed Volume
Lost Production and Sales Opportunity Cost Planned Ramp-up rate
Actual Ramp-up rate Time
Typical Layout of Trim and Functional Elements
Reduced Part Numbers => Reduced Hand Time => Increased Productivity
Mercedes – Motors & Light Mounted in the Mirror
Renault Altenate Solution
Component Count
Component Count Reduction, Same Customer Value
Ability to Late Configure
Rapid Fitting & Rapid Colour Customisation, Rapid Fitting
Developing an integrated supply chain Material flow direction
Competitors Quantity Sold
Round One: Traditional Mass Production – Baseline Conditions Good Received
Supplier
Raw Materials
Components
Inspected Components
Manufacturing Management
Distribution
Manufacturing Management
Distribution
Alpha Co. Quantity Sold
POS
Round Three: Agile – Mass Customisation Responsive Suppliers
PO S
Trade Customer Stock
Finished Goods + Competitor products
Round Two: Lean Manufacturing Integrated Suppliers
Trade customer
Production
POS
Core Common Module Stock
POS = Point of sale – the shops Low cost customer appreciated variant to be
Variants in the Supply Chain
Variants
Time through the supply chain
Value analysis (VA) • • • • •
Can we do without it? Does it do more than is required? Does it cost more than it is worth? Can something else do a better job? Can it be made – by a less costly method? – with less costly tooling? – with less costly material?
• Can it be made cheaper, better, or faster by someone else?
Design for Environment • Design for environment – – – – –
designing a product from material that can be recycled design from recycled material design for ease of repair minimize packaging minimize material and energy used during manufacture, consumption and disposal
• Extended producer responsibility – holds companies responsible for their product even after its useful life
Design for Environment (cont.)
Teddy Bear Factory
Child Height Product Placement
Baby Safe Products
All Products are empty of filling
Filling Added
Personal Stroking during the sale
Hearts and Voices
Stitching Up
Clothes Variants
Theme and Special Occasion Clothes
Product Life Cycle In t r o d u c t i o n
s e u s s I / y g e t a r t S y n a p m o C
Growth
M at u r i t y
Best period to increase market share
Practical to change price or quality image
Poor time to change image, price, or quality
R&D engineering is critical
S t r en g t h e n n i c h e
Competitive costs becom e critical D e f en d m a r k e t position
Color printers Internet Flat-screen monitors Sales
USB Key
DVD+HDD Writers
Decline Cost control critical
F ax m a c h i n e s
DVD Readers
Drive-through restaurants
CD-ROM 3 1/2 ” Floppy disks
VCRs
Operations strategies related to Product Life Cycle In t r o d u c t i o n Product design and development critical
s e u Frequent s s p r o d u c t a n d I / p r o c e s s d e s i g n y g c h a n g e s e t Short production a r r u n s t S H i g h p r o d u c t i o n M c o s t s O L i m i t ed m o d e l s Attention to quality
Grow th Forecasting critical Product and process reliability Competitive product improvements and options
M at u r i t y Standardization Less rapid p r o d u c t c h a n g es – m o r e m i n o r changes Optimum capacity
Increase capacity
Increasing stability of process
Shift toward product focus
Long production runs
Enhance distribution
Product improvement and cost cutting
Decline Little prod uct differentiation Cost minimization
Overcapacity in the industry Prune line to eliminate i t em s n o t returning g o o d m a rg i n Reduce capacity
Measure Design Quality • % of revenue from new products or services • % of products capturing 50% or more of market • % of process initiatives yielding a 50% or more improvement in effectiveness • % of suppliers engaged in collaborative design
• % of parts that can be recycled • % of parts used in multiple products • % of parts with no engineering change orders • Average number of components per product • Things gone wrong (TGW)
Build Quality First time boot rate Number of products without fault Number of faults per product
The Lean Transformation at Lantech
Flow/1995
Product Development Time
Batch and Queue/1991 3-4 years
Employee hours per machine
160
80
Manufacturing space per machine
100 sq. ft.
55 sq. ft.
Delivered defects per machine
8
0.8
Dollar value of inventory (with doubled sales) Throughput time
$2.6 million
$1.9 million
16 weeks
14 hours – 5
4 – 20 weeks
days 1-4 weeks
Delivery lead time
From: Womack and Jones, Lean Thinking , p.121
1 year
Relative Performance in Auto Industry Toyota Japan USA
Productivity Assembly st 1 -tier suppliers
100 100
Quality (delivered defects)
Assembly (per 100 cars) 30 1st-tier suppliers (PPM) 5 n 2 -tier suppliers (PPM) 400
1993-94, from Womack and Jones, Lean Thinking
Europe
(average)
(average)
(average)
83 85
65 71
54 62
55 193 900
61 263 6100
61 1373 4723
Relative Performance in Auto Industry Toyota Japan
Deliveries
Europe
(average)
(average)
(average)
0.04 0.5
0.2 2.6
0.6 13.4
1.9 5.4
Na 248
37 81
135 69
138 45
(percent late)
st
1 -tier suppliers nd 2 -tier suppliers
Stocks
USA
(1st-tier suppliers)
Hours Stock turns (per year)
1993-94, from Womack and Jones, Lean Thinking
Porsche’s Lean Transition 1991 1993 1995 1997 Time
7 years -
5 days
3 years 3 days
17.0
4.2
4.2
3.2
120
95
76
45
Concept to launch Welding to finished car 6 weeks -
Inventories Days on hand
Effort Hours to assemble
Source: Womack and Jones, Lean Thinking
Porsche’s Lean Transition 1991 1993 1995 1997 Errors
10,000 4,000 100 60
1,000 45
100 25
Sales
3,102
1,913
2,607
-
Profits
+17
-239
+2
-
Supplied parts (PPM) Finished cars (index)
Hours to assemble Source: Womack and Jones, Lean Thinking
Product development process tools, Kanban SCRUM X Foundation
Developments in Revolutionary Change • Innovation: the process by which organizations use their skills and resources: – To develop new goods and services OR – To develop new production and operating systems so that they can better respond to the needs of their customers
Open and Closed Innovation
Jugaad (Jugard) • Indian pioneered innovation method • Survival based solution creation without large investments • Innovative fix, a simple work-around • Holistic thinking • The creativity of … people to make existing things work or to create new things with meagre resources • Any kind of creative and out of the box thinking which maximizes resources for a company and its stakeholders http://en.wikipedia.org/wiki/Jugaad
The Need For Change Quality •Right first time •Less than 1 fault/product •Quality as company philosophy •Company set up for quality
Logistics and Response Time •Real JIT manufacture •Increased stock turns •Short development times
Product Change and Innovation •Improve management of change •Variety is high •Supplier is involved up front •Responsibility is devolved to the supplier
Cost •Reduce indirect labour •Reduce overhead Eliminate unexpected events
A Dynamic Model of Process and Product Innovation High
Product innovation
n o i t a v o n n I f o e t a R
Need stimulated region Output rate stimulated region
Uncoordinated process
Technology Stimulated
Process Innovation
Cost stimulated
Systemic process
The four-stage model of operations contribution
t c a p m i c i g e t a r t s g n i s a e r c n I
Redefining industry expectations
STAGE 4 Give an operations Advantage STAGE 3 Link strategy with operations
Clearly the best in the industry STAGE 2 Adopt best practice
As good as competitors Holding the organisation back
STAGE 1 Correct the worst problems Internally neutral
Externally neutral
Internally supportive
Increasing operations capabilities
Externally supportive
Innovation in Manufacturing Invention Scientists discover a previously unknown principle. Innovation Engineers create new marketable products
E n g i n e er i n g i s t h e ap p l i an c e o f S c i en c e Technological advances create possibilities Rapidly changing customer needs and wants International competition - more competitive
Strategic Innovation Decisions 1 - Specialisation OR Diversifiation (Product range) 2 - LEVEL of product innovation Basic (technical breakthrough) Incremental (improvements) Adapted adoptions (improvements on copies) Pure adoptions (straight copying) 3 - CLASS of product innovation New for the market (product leadership) New for the company (market share) Improved company products (market expansion)
Reactive Innovation Strategy (Market Pull) Product follows demand • Market share / expansion • Low risk / low reward • Investment in market research • Product diversification • Rapid response to market demand
Proactive Innovation Strategy (Design Push) Demand follows product • Basic innovation • Product leadership • High risk / high reward • Investment in Technology • Research & Development
Product Innovation Process Generation of an idea Perceived need or technological opportunity Systemic thinking Lateral thinking Delphi technique Brainstorming
Product development Planning, manufacturing & marketing
Financing of Innovation Funds are required for: Project evaluation Research and development Acquisition of technology Production facilities Marketing activities Sources of Finance ‘Venture capital’ Banks / Merchant Banks Shareholders capital Retained Profit
THE DESIGN BRIEF Market Evidence of potential customer demand. Market segment and target share. Advantages over competing products. Specification Basic performance requirements. Target costs and selling price. Relevant legislation and standards. Requirements for reliability & safety. Design Tolerances Resource requirements
Law in Innovation Patents - covers products (things made) A patent gives protection to an inventor and legal rights to financial benefits from an invention. A patentee can licence someone else to make it A patent can be bought and sold .
Registered Design - to prevent copying Registered Trade Mark - product name or logo Copyright - covers literary works and music
Innovation Strategy Reactive
Pro-active
Low Risks Low Aims
High Risks High Aims
k s i R
Reward Traditional Current Current Practice Practice Trends (Drifter) (Mainstream) (Fast follower)
Novel Experiments (Pioneer)
Intellectual Property Inventions can be exploited without patent but others can copy. Patents provide protection, preventing copying Vital not to disclose or use commercially until patent has been applied for
Patents Monopoly right to exclusive use Maximum twenty years Property - may be bought, sold, hired or licensed Must be new. Must be inventive Must be capable of ‘application’
THE PROBLEM SOLVING CIRCLE create problem spec’n
many solutions
clarify
select
needs (aim)
best solution
make
satisfy hardware
prepare communicate solution spec’n
Total Design a Product-Centred approach
Sales & Marketing Packaging and Despatch
Management & Finance Purchasing & Suppliers
PRODUCT
Manufacture
Customer
Engineering Industrial
DESIGN PROCESS Classification of the task Conceptual Design
Market Need (or idea) Specification Concept
Embodiment Design Layout Detail Design Manufacturing
Computer Aided Design (CAD)
Using computers to design
products and prepare engineering documentation Shorter development cycles, improved accuracy, lower cost Information and designs can be deployed worldwide
Extensions of CAD Design for Manufacturing and Assembly
(DFMA) Solve manufacturing problems during the
design stage 3-D Object Modeling Small prototype development
International data exchange through STEP
Computer-Aided Manufacturing (CAM)
Utilizing specialized computers and program to control manufacturing equipment
Often driven by the CAD system
• CAD
computer aided design
• CAM
computer aided manufacture
• DNC
distrubuted numerical control
• CNC
computer numerical control
• ERP
enterprise requirements planning
• MRPII
manufacturing resource planning
• PDM
product data management
• EDM
engineering data management
System Relationships PDM/EDM ERP CAD
CAM
MRPII
DNC CNC
Business Systems
The basis of design What the product must do? Who is going to use it? How many will be made? The cost range? Information
Data
Intelegence
Information
Data
Creativity
Problems
Concepts
Solutions
Production Design Simplification – reducing number of parts, assemblies, or options in a product
Standardization – using commonly available and interchangeable parts
Modularity – combining standardized building blocks, or modules, to create unique finished products
Design Simplification (a) Original design
Assembly using common fasteners
(b) Revised design
(c) Final design
One-piece base & elimination of fasteners
Design for push-and-snap assembly
Cost Reduction of a Bracket through Value Engineering
Sources of Inspiration Historical - back ground arrangements used before i.e. bikes - bone shakers, penny farthings Micro cars - post war bubblecars Use of Analogies Component and product matrixing
EDGAR KAUFMANN Jr. “A modern design should be integrated as a visually direct and unembellished whole.”
STYLE AND SYMBOLISM MASCULINE ORNAMENTED
COMPLEX
SIMPLE
STRAIGHT FORWARD FEMINE
CHECK LIST •Solution to whole problem •Elegant, Solved with Economy and with a Balance of Proportions •Visually Coherent - The Parts Look as if They Go Together •Parts Do Their Job •The Whole Design Communicates Function •Symbols Conveyed are Correct •Subtle Messages •Colour, Texture, Finish All = Quality •Right Style to Fit The Users Style
Thinking - Creative, Disruptive
Input proposals ideas problemstatement definition
Designer Innovator/Team black box process mysterious mental processes checklists information data intelegence design ideas
Output drawings solutions ideas products markets problems proposals
OSBORN’S GENERALISED CHECKLIST •PUT TO OTHER USES? •ADAPT? •MODIFY? •MAGNIFY? •MINIFY? •SUBSTITUTE? •REARRANGE? •REVERSE? •COMBINE?
CONSIDERATIONS •USERS •APPLICATIONS •PERFORMANCE •APPEARANCE AND MARKETING •REGULATIONS •COST •MANUFACTURING
Developments in Revolutionary Change • Reengineering: involves rethinking and redesigning business processes to increase organizational effectiveness • Instead of focusing on an organization’s functions, the managers of a reengineered organization focus on business processes. – Business process: an activity which cuts across functional boundaries and which is vital to the quick delivery of goods and services, or that promotes high quality or low costs 100
Order of magnitude improvements
10 1
Service Design
Service typically includes direct interaction with the customer Increased Reduced
opportunity for customization
productivity
Cost and quality are still determined at the design stage Delay
customization
Modularization Reduce
customer interaction, often through
Service Design (a) Customer participation in design such as pre-arranged funeral services or cosmetic surgery
(b) Customer participation in delivery such as stress test for cardiac exam or delivery of a baby
(c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating
Moments-of-Truth Computer Company Hotline Experience Enhancers Standard Expectations
Experience Detractors
Only one local number needs to be dialed I never get a busy signal
I had to call more than once to get through A recording spoke to me rather than a person
I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem
While on hold, I get silence,and wonder if I am disconnected
A timely resolution to my problem is offered
The technician sounded like he was reading a form of routine questions
The technician is able to explain to me what I can expect to happen next
The technician sounded uninterested I felt the technician rushed me
The technician was sincerely concerned and apologetic about my problem He asked intelligent questions that allowed me to feel confident in his abilities The technician offered various times to have work done to suit my schedule Ways to avoid future problems were suggested
Documents for Services
High levels of customer interaction necessitates different documentation
Often explicit job instructions for moments-of-truth
Scripts and storyboards are other techniques
Service Quality T h e O p e r at i o n s M a n ag e r m u s t r ec og n iz e: 1. Th e t an g i b le c o m p o n en t o f s e r v i c e s i s im p o r t an t 2. Th e s er v i c e p r o c e s s is im p o r t an t 3. Th e s er v i c e i s ju d g ed ag a in s t t h e
customer’s expectations 4. Ex c ep tio n s w i ll o c c u r
Service Specs at UPS
Determinants of Service Quality
Reliability
Credibility
Responsiveness
Security
Competence
Understanding/
Access Courtesy Communication
know ing the customer Tangibles
• People have had plenty of time to learn and practice undesirable behaviours. • Change requires – Stopping doing things not required,
Lean / Toyotism
– Starting to do things that are needed – Learning to do these things faster, better and cheaper than anyone else – Creating, maintaining and increasing the competitive gap. – Being prepared to do all this over again.
Creating the Future How Creative are you? • An object will appear. Your job is to identify as many uses for it as you can in two minutes.
http://www.sxc.hu/photo/205250
• 1 in 2 come up with 4 or less • 1 in 500 come up with 8 or more • 1 in 2000 come up with 16 or more suggestions
http://depositphotos.com/103 6786/stock-photo-Moneywith-paper-clip.html
http://www.allaboutsymbian.com/news/item /8442_The_paper_clip_solution.php
http://www.diytrade.com/chi na/4/products/2800102/soft _PVC_paper_clip.html
http://www.promotionalpromo.com/C ustom-made/Clock-PaperClip/DCC63244.htm
http://www.clippa.co.uk/fancy_shaped_p aper_clip_promotional_shaped_invente d_fancy.html http://snazzlecraft.blogspot.co m/2008/12/paper-clip-ring2.html
http://www.geeky-gadgets.com/paper-clipmario-kart/
http://universallyamazing.blogspot.com/201 1_05_01_archive.html
It isn’t a magnet, it is showing water tension
http://www.trenddelacrem e.com/2008_09_21_archi ve.html
http://www.thisne xt.com/tag/dogbone-paper-clips/
http://www.awebguy.com/2 010/08/how-to-sell-paperclips-a-closer-look-atmarketing/
