New Product and Service

Development
By Vera Pujani

FEB - Universitas Andalas

 Learning Objectives
• Illustrate the importance of the development of new
products and services to a firm’s competitiveness.
• Identify the various types of new products that are
developed by companies.
• Introduce the new product design process and the concep
of a product’s life cycle.
• Demonstrate the necessity of concurrent product and
process design as a new product or service is developed.
• Present a framework for understanding how new services
are developed and introduced into the marketplace.
Managerial Issues
 Why the Emphasis on New
Goods and Services
• Increased Competition
– Improved worldwide telecommunications
– Lower trade barriers (import duties and tariffs) and the
creation of trade organizations (NAFTA and European
Union)
– Faster transportation of goods
• Advances in Technology
– Products become obsolete faster.
– Improved manufacturing processes (CAD and CAM and
industrial robots)
The Benefits of Introducing
New Products Faster
Categories of New Products
Categories of New Products
Generating New Products
 The New Product Development (NPD) Process
• New Product Development Process
– The method by which new products evolve from
conceptualization through engineering to manufac-
turing and marketing.
• Market Success Depends on NPD
– Continuously generate new product ideas.
– Convert ideas to reliable functional designs.
– Ensure that the designs are readily producible.
– Select the processes most compatible with cus-
tomer needs.
 Sequential Flow of Activities in
Product Design and Process Selection
Concurrent Engineering Approach to NPD
The New Product Development (NPD) Process
The New Product Development (NPD) Process
(cont’d)
The New Product Development (NPD) Process
(cont’d)
 Quality Function Deployment (QFD)

1. Identify customer wants

2. Identify how the good/service will satisfy
customer wants
3. Relate customer wants to product hows
4. Identify relationships between the firm’s hows
5. Develop customer importance ratings
6. Evaluate competing products
7. Compare performance to desirable technical
attributes
 QFD House of Quality
Interrelationships
Customer
importance
How to satisfy
ratings
customer wants

Competitive as-
sessment
What the cus-
tomer Relationship
wants matrix

Target values Weighted

rating
Technical
evaluation

© 2014 Pearson Education, Inc. 5 - 16

House of Quality Example
House of Quality Example

Completed
House of
Quality
 House of Quality Sequence

Deploying resources through the organiza-

tion in response to customer requirements
Categories of New Services
Types of Incremental and New Services
Categories of New Services (cont’d)
A Framework for Categorizing New Services
 Categories of New Services
Service Category Content Change
“Window Dressing” Not significantly different from other
services
Delivered in similar fashion

Breadth of Offering Significant design change in content of

service
Delivered in similar fashion

Revolutionary New in both content and delivery

method

Channel Development Delivery of same/existing service

through a different/new channel
 The New Service Development (NSD) Process

Stage Activity
Design Formulating the objectives and strategy of the
new service.

Analysis Considering the financial implications of the

new service.
Examining supply chain issues for delivery of
service.

Development Testing the service design, training

personnel, conducting pilot runs.

Full Launch Releasing the service to the market place.

Designing a New Service Organization
Designing a New Service Organization (cont’d)
Service-System Design Matrix
 Strategic Uses of the
Service-System Design Matrix
Process Selection in Services
Process Selection in Services (cont’d)
 Common Characteristics of
Well-Designed Service Systems
 Common Characteristics of
Well-Designed Service Systems (cont’d)
 Referensi

Davis, MM., Aquilano N.J, & Chase RB., 2003,

Fundamentals of Operations Management, Mc-
Graw-Hill, NY.

Heizer and Render, Operation Management,

Pearson Education,Inc Upper Saddle River .New
Jersey.
Good Luck