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.
 Product Design and Development
Karl T. Ulrich and Steven D. Eppinger
5th edition, Irwin McGraw-Hill, 2012.

Chapter Table of Contents:

1. Introduction
2. Development Processes and Organizations
3. Opportunity Identification
4. Product Planning
5. Identifying Customer Needs
6. Product Specifications
7. Concept Generation
8. Concept Selection
9. Concept Testing
10. Product Architecture
11. Industrial Design
12. Design for Environment
13. Design for Manufacturing
14. Prototyping
15. Robust Design
16. Patents and Intellectual Property
17. Product Development Economics
18. Managing Projects
 Product Development Process
Concept System-Level Detail Testing and Production
Planning Development Design Design Refinement Ramp-Up

Four Phases of Product Development

The product planning phase precedes the product development process.

The Product Planning Process
 Outline
Product Plan
Problems with no product plan
Projects Mission Statement
Product Planning Process

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 Product Plan
Portfolio 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

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Xerox Lakes Project Example

Xerox Document Centre 265

A Product Plan
Problems with no product plan
Inadequate coverage of target markets with
competitive products
Poor timing of market introduction of products
Poor capacity planning and under-utilizing or
development resources.
Initiation and cancellation of ill-conceived
projects
Frequent changes in project directions.

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 Four types of product
development projects
Fundamentally new products
New product or production technology for new and unfamiliar
markets
New product platforms
New products for familiar markets and product categories
Derivatives of existing product platforms
Use existing product platforms to better address familiar
markets with new products.
Incremental improvements to existing products
Only add or modify some features of existing products to
keep the product line current and competitive
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 The Product Planning Process

Multiple Projects

Evaluate and Allocate Complete Product

Identify
Prioritize Resources and Pre-Project Development
Opportunities
Projects Portfolio Plan Timing Product Planning Mission Process
of Plan Statements
Projects
 Product Planning Questions
What 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 portfolio
What will be the timing and sequence of the
projects?
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The Product Planning Process
1. Identify & select opportunities
2. Evaluate and prioritize projects
Product/project portfolio
3. Allocate resources and plan timing
Product/project plan
4. Complete pre-project planning
Product/project mission statement
5. Reflect on the results and the process.
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 1. Identify opportunities, from
Marketing and sales personnel
Research and technology development
organizations
Current product development teams
Manufacturing and operations organizations
Current and potential customers
Third parties such as suppliers, inventors,
and business partners
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 2. Evaluate and prioritize projects
- 2.1 for existing platforms or markets, depend on
Competitive strategy, by focusing on at least one of the following
Technology leadership (R&D)
Cost leadership
Customer focus
Imitative (lead time leadership)
Market segmentation
Divide the market into segments in order to be more focused on the customer and competitors
Technological trajectories
Consider when to adopt a technology in its S-shape curve of use.
Product platform planning
Product platform: a set of assets such as components and subassemblies, shared across a set of
products in the company
Platform development projects may take 2-10 times as much time and money as derivative
product development projects
Technology 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.

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 Market Segment Map
65 ppm 65 ppm
network
$23k $31k
55 ppm 60 ppm
Department Lakes network
$20k
Project
$35k Lakes
40 ppm
Extensions
$16k
Market Segment

25 ppm 35 ppm 40 ppm

$10k $15k $20k
Legend
Xerox
Workgroup product
30 ppm 40 ppm
network competitor
$10k $20k product

Hodaka Project potential

20 ppm 25 ppm 30 ppm competitor
$8k $9k $10k
Personal
20 ppm
$7k

1997 1998 1999 2000 Year of

Release
 Technology S-Curves
Copier Performance

Digital
Technology

Light-Lens
Technology

Time
Platforms vs. Derivatives
 Technology Roadmap
Functional Elements Technologies

Photo- Cylindrical 3-Pitch Belt n-Pitch Belt

receptor Drum Photoreceptor Photoreceptor

Scanner 2D CCD Array Full-Width, Linear Array

Layout w/Optical Reduc. without Optical Reduction

Toner High Low Melting Low Melting Point,

Type Temperature Point Low Emission

Output Monochrome: Paper, Fax, Scan, Color: Paper, Fax, Scan,

Modes Local Network, Internet Local Network, Internet

User Keypad
Interface Touch Screen Touch Screen, Remote PC

Image Automatic Image Quality

Processing 600 dpi 600/1200 dpi 1200 dpi 1800 dpi

Diagnostics On-Board Remote-Dialup Remote

Diagnostics Diagnostics Repair

Document Document Document Document

Centre Centre Centre Centre
220, 230 240, 255, 265 2XX 3XX
Hodaka Lakes Lakes Next
Project Project Extensions Platform

Time
 2. Evaluate and prioritize projects
- 2.2 For new markets or new technologies, consider
Market size (annual sales x unit price)
Market growth rate
Competitive intensity (competitors and their strength)
Depth of the firms existing knowledge of the market.
Depth of the firms existing knowledge of the technology
Fit with the firms other products
Fit with the firms capabilities
Potential for patents, trade secrets, and other barriers for
competitors to enter
Existence of product champion within the firm
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 2. Evaluate and prioritize projects
- 2.3: balance the portfolio

The 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.
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 Product-Process Change Matrix
Extent of Production Process Changes
Research and New Next Single Tuning and No
Technology Core Generation Department Incremental Process
Development Process Process Upgrade Changes Change
New Breakthrough
Core Development
Product Projects
Extent of Product Changes

Platform
Next Development
Generation Projects
Product
Lakes
Project
Addition
to Product
Family Derivative
Product
Minor Development
Product
Enhancement

Current
No
Product Product/Process
Change Support
3. Allocate resources and plan timing
Every company has finite resources
It 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 65
The effort of resource planning and project timing
should also consider:
Timing for product introduction
Technology readiness
Market readiness
Competition
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Aggregate Resource Planning
 4. Complete pre-project planning
Finalize a mission statement for each project
(shown on page 67) that includes
A brief (one sentence) description of the product
Major benefit proposition
Key business goals
Primary and secondary markets for the product
Assumptions and constraints for the development effort
Stakeholders
Sign up key members of the development staff

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 Projects Mission Statement
1. Market segments to be considered for the
product design and its features.
2. New technologies (if any) to be incorporated
into the new product
3. Manufacturing and service goals and
constraints
4. Financial targets for the product design
5. Budget and time frame for the project

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 Lakes Project Mission Statement
Product Description
Networkable, digital machine with copy, print, fax, and scan functions
Key Business Goals
Support Xerox strategy of leadership in digital office equipment
Serve as platform for all future B&W digital products and solutions
Capture 50% of digital product sales in primary market
Environmentally friendly
First product introduction 4thQ 1997
Primary Market
Office departments, mid-volume (40-65 ppm, above 42,000 avg. copies/mo.)
Secondary Markets
Quick-print market
Small satellite operations
Assumptions and Constraints
New product platform
Digital imaging technology
Compatible with CentreWare software
Input devices manufactured in Canada
Output devices manufactured in Brazil
Image processing engine manufactured in both USA and Europe
Stakeholders
Purchasers and Users
Manufacturing Operations
Service Operations
Distributors and Resellers
 5. Reflect on the result and
process
1. Does the opportunity funnel generate good product
opportunities?
2. Does the product plan support the firms competitive
strategy?
3. Does the product plan address the most important
opportunities?
4. Does each project core team accept the challenge
as stated in mission statement?
5. Are resources sufficient and effectively utilized?

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