June 1996 € Volume 6 € Number 6
Developing And Introducing New Products
This department is provided to answer technical questions regarding
problems in production and inventory control. Readers are invited to contact
George Johnson, APICS National Research Committee, Rochester Institute of
Technology, College of Business, P.O. Box 9887, Rochester, N.Y. 14623, (716)
By George Johnson, CFPIM
Dear APICS: What are some good sources and possibly an outline of
the new product introduction process?
Reply: I'm going to respond to this as a new product "development
AND introduction" process, because I suspect this wording reflects
the intended scope of the inquiry.
Various models of this process appear in different books and articles. One
reason for the variety is that circumstances differ from company to company.
For example, a fascinating account of dramatically different processes is
given in the book, The Machine That Changed The World, (Womack, et al.,
1990). It is based on a worldwide study of the auto industry done by researchers
at MIT with assistance from associates at collaborating institutions. Chapter
5, "Designing the Car," illustrates the sharp contrast between
design processes at General Motors and at Honda. The account is so compelling
that it is obvious why an excellent development and introduction process
is a key factor in the long-run survival of a company.
Insight into the revenue and profit effects of the development and introduction
process can be acquired in the article by Vesey (1991). In it he cites data
from McKinsey & Company which documents, for example, that being on
budget but late to market by six months can reduce gross profit by 33 percent.
Variety of conceptual "models" also stems from the creativity
of people struggling to characterize the key differences between more and
less effective processes. Despite this variety, there is some agreement
around major stages of a fairly generic development and introduction process:
conceptualize the product, design it, develop it, introduce it.
Berg and Loeb (1990) portray the role of field service in the development
and introduction of new products using the generic framework above as a
backdrop. Data and experience from field service clearly are places to look
for design improvement ideas.
Huthwaite (1991) explains cost "committed" versus cost "expended"
across a process which contains five stages: Concept, Detail Design, Prototype,
Validate, Trial Production.
Schulze-Gullett (1993) provides more of a project management flavor to a
product development process in the aerospace and defense community.
Hewlett Packard apparently has taken a larger view of the process, recognizing
that a product may need shepherding during its entire life-cycle. HP portrays
an ongoing process with five stages: Development, Transition to Manufacturing,
Volume Production, Obsolescence and End of Support Life. Matrixed against
these stages are the major organizational units responsible for the support:
Product Development, Manufacturing Engineering, Materials/Materials Engineering,
Production, and Marketing. See Table 1, adapted from Chase & Aquilano
(1995, pg. 59).
| Development | Transition to Production | Volume
Production | Obsolescence | End Support |
|---|
| Product
Development | € | € | € | € | € |
|---|
| Manufacturing Engineering | € | € | € | € | € |
|---|
| Materials/Materials Engineering | € | € | € | € | € |
|---|
| Production | € | € | € | € | € |
|---|
| Marketing | € | € | € | € | € |
|---|
Table 1. Each organizational unit of a company has some responsibility
during every phase of a product's life cycle.
The key point of Table 1 is that all functions have some responsibility
for products during every phase of their life cycle. The type and degree
vary, of course. For example, marketing and product development probably
have the largest load at the beginning. However, under the concept of concurrent
design, each of the other major functions has something to offer in the
conversation about a new product and its related processes. Manufacturing
engineering probably has the leadership during transition; production probably
has it during volume manufacture, etc. Nearing the end of the cycle, it
may be possible to renew the life cycle with input from marketing about
niche opportunities, or from product development about how to add new value
with a technological tweak. If not, then the materials people may be primarily
responsible for disposing of scrap or surplus materials. By collaborating
in teams over the life of one product, the product development function
may gain insight into how to initially design products for renewal, for
recycling, or for "green" disposal.
Other, research-based discourse on this subject that may be of interest
is in Hayes, et al. (1988) and in Wheelwright and Clark (1995). Additional
references also are cited below.
References
Berg, J., and J. Loeb, "The Role of Field Service in New Product Development
and Introduction," AFSM International Journal, May 1990. (Also
in CIRM Customers and Products, Revised Reprints, APICS, 1992, pp. 1-6)
Chase, R., and N. Aquilano, Production and Operations Management,
Seventh Edition, Irwin, 1995.
Cooper, R., Winning at New Products, Second Edition, Addison-Wesley,
1993.
Dimancescu, D., and K. Dwenger, World-Class New Product Development:
Benchmarking Best Practices of Agile Manufacturers, AMACOM, 1996.
Hayes, R., S. Wheelwright and K. Clark, Dynamic Manufacturing, Free
Press, 1988. See Chapter 10, "Laying the Foundation for Product and
Process Development," and Chapter 11, "Managing Product and Process
Development Projects."
Huthwaite, B., "Managing at the Starting Line: How to Design Competitive
Products," Workshop at the University of Southern California, Los Angeles,
January 14, 1991, pg. 3.
Meyer, C., Fast Cycle Time, Free Press, 1993.
Schulze-Gullett, D., "Integrated Product Development: An Overview,"
Aerospace & Defense Symposium Proceedings, APICS, March 3-4, 1993, Washington,
DC, pp. 110-113.
Smith, P., and D. Reinerston, Developing Products in Half the Time,
Van Nostrand Reinhold, 1991.
Takeuchi, H., I. Nonaka, "The New New Product Development Game,"
Customers and Products, APICS Readings for CIRM, Harvard Business Review,
1991, pp. 23-32.
Vesey, J., "The New Competitors: Thinking in Terms of Speed-to-Market,"
MA Manufacturing Engineering, June 1991, pp. 16-24. (Also in CIRM
Customers and Products, Revised Reprints, APICS, 1992, pp. 128-135.)
Wheelwright, S., and K. Clark, Leading Product Development, Free
Press, 1995. (This book provides a senior executive overview of the subject.)
Wheelwright, S., and W.E. Sasser Jr., "The New Product Development
Map," Customers and Products, APICS Readings for CIRM, Harvard Business
Review, 1991, pp. 40-54.
Womack, J., D. Jones and D. Roos, The Machine That Changed The World,
Harper Perennial, 1991. Chapter 5: Designing the Car.
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