New Product Development Process

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New Product Development Process
Front end Product Realization
Market Opportunity
Product Realization Process
Product Idea
Technology Opportunity
Real Product
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Views of Successful Product Realization

• Heroic Age
• Creative geniuses,
• Driven by their understanding of project needs,
  shielded from management presentations, etc,
• Put in long days and nights,
• And create break though products

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Charles Ginsberg et al with the Ampex VRX-1000
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List of Famous Failures
(A. T. Bayhill)
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Views of Successful Product Realization

• Heroic Age
• Creative geniuses,
• long days and nights,
• etc
• break though products
• Repeatable Disciplined Product Realization
• Talented people,
• Following well understood processes
• etc
• break though products, time after time

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GE Medical Systems
LightSpeedTM CT Scanner

GEs First DFSS System (98) Full Use of Six
Sigma/DFSS Tools

• Leading-Edge Technology
• Worlds first 16-row CT detector
• Multi-slice data acquisition
• 64-bit RISC computer architecture
• Long-life PerformixTM tube

• Key customer CTQs identified
• Image quality
• Speed
• Software reliability
• Patient comfort
• Disciplined systems approach 90 system CTQs
• 33 Six Sigma (DMAIC) or DFSS projects
• Scorecard-driven
• Part CTQs verified before systems integration
  

• Results
• Better image quality
• Earlier, more reliable diagnoses
• New applications vascular imaging, pulmonary
  embolism, multi-phase liver studies, ...
• Much faster scanning
• Head from 1 min to 19 sec (9 million/ yr)
• Chest/abdomen from 3 min to 17 sec (4
  million/yr)
• Clinical productivity up 50
• 10x improvement in software reliability
• Patient comfort improved - shorter exam time
• Development time shortened by 2 years
• High market share significant margin increase

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Disciplined Product Realization

• toll-gate processes
• tools
• Engineering/Business Decisions with everyone on
  the same page

• Examples
• Multigeneration Product Planning
• Customer Requirements Definition
• Technical Risk Management
• Management and Control of Defects
• Supplier Management
• Reliability Engineering

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Toll-Gate Process Example
Product Plan
Phase 2
Analysis
Phase 1
Test, Debug
Visual Freeze Req. Freeze
Code Freeze
Require-ments agreement
Product release
Gate 3
Gate 4
Gate 1
Gate 2

• Gate 2 Requirements nailed
• Gate 3 All functions working
• Gate 4 Bugs and performance acceptable

After Steve Maguire, Microsoft
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Toll Gate and Concurrent Engineering

• Concurrent Engineering is an abstraction of
  effective interaction of cross functional teams

• Toll gate is a prescription for developing
  products .

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Concurrent Engineering in a Toll-Gate Process

• Modification of cast metal refrigerator handle

Business Case
Design and Process Confirmation
Detailed Product and Process Design
Initial Production
Full Production
1. Program Contract
2. Technical Signoff, Order long lead items

• Checklist for tollgate 1
• Program Definition
• Program Plan
• Program Resources
• Production cost
• Technical risk
• Return on Investment

• When should we confirm that are no patent
  interferences?
• When should we review safety (sharp edges or
  pinching little fingers)?

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Tool Example Robust Design (Taguchi)

• Reducing product failure is valuable - for the
  customer and for the business
• Robust design
• Rational decisions based on analysis and
  designed experiments
• Account for variability in manufacture and use

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Robust Design and Appliances
Repair history of Side by Side Refrigerators with
Icemakers 1999-2003 (From Consumer Reports)

• All manufacturers take robust design concepts
  seriously
• But some do better than others, with some
  consistency

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Business/Engineering Decisions - Quiz

• Rarely enough resources to hit all the targets
• performance of the product (or service)
• cost of development and production
• time for development before the market window
  starts to close
• Quiz
• How do technical and business people in a world
  class competitive company respond when
  constraints close in?
• Report to upper management that everything is
  fine, and start circulating your resume
• If the first prototype works, ship it and hope
  that the production units will all work too
• Throw in the towel
• Turn the experience into a Dilbert cartoon
• Manage the conflicting requirements as part of a
  data-driven, disciplined process with engineers
  and managers on the same page

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Process Discipline and Bureaucracy

• All disciplined processes entail some bureaucracy
• Some processes are clearly valuable, some are a
  waste of time, and some can go either way

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The Next Quality Initiative
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Effective Product Development Process

• Develops great products that
• work in real use environments
• appeal to customers (beyond just working)
• have low cost of production and delivery
• Develops products fast
• meet market windows, recover investment
• Develop products efficiently
• Low development cost

Business Success
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Product Planning Decision
Product Planning
Market Opportunity
Product Realization Process
Product Idea
Technology Opportunity
Real Product

• Product Planning
• Lots of great ideas
• Fund only those that will contribute most to
  business success

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Specific Types of Product Planning Decision
Processes

• Quantitative return on investment (ROI)
  calculations based on discounted cash flow
  projections
• Qualitative view of factors based on data
  opinions
• Overriding strategic consideration

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Return on Investment (ROI)
ROI return on investment For equity funding,
this is the same as Discounted Cash-flow Rate of
Return Higher for a, than for b, since a returns
cash sooner Payback time is sometimes used as a
surrogate for ROI Higher ROI usually means
shorter payback
a
Cash flow
b
time
Payback time for b
Payback time for a
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Funding Decision Process

• Always more items that can be funded
• How do we decide?
• Whether informal or formal, there is a decision
  matrix like this at work

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ROI Based Decision Making