Md.

Shohel Parvez
Assistant Professor
Dept. of IEM, KUET.

PRODUCT DESIGN AND

DEVELOPMENT
Chapter 3 : Product Planning
OBJECTIVES & STRATEGY
 Product development teams generally begin with a
project mission statement.
 This relates strongly to concepts of corporate strategy.

 A cross-functional planning process develops the

product development team's mission statement.

 Note: The multiple-product, multiple-project context of

product development in established firms.
 The ability to choose the right set of development projects and
to define the scope of these projects in such a way that they are
complementary
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.

(i.e., before substantial resources are applied)

It considers the portfolio of projects that an organization might pursue

PRODUCT PLANNING
 Ensures product development projects support the
broader business strategy of the company.
Addresses:
 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 projects?
PRODUCT DEVELOPMENT TEAMS
• Work on selected projects and start with a mission.
The mission statement answers:
• What market segments should be considered in
designing the product and developing its features?
• What new technologies (if any) should be
incorporated into the new products?
• What are the manufacturing and service goals and
constraints?
• What are the financial targets for the project?
• What are the budget and the time frame for the
project?
 THE PRODUCT PLANNING PROCESS
The product plan identifies the portfolio of products to be
developed by the organization and the timing of their
introduction to the market through proper allocation of
resources.

The planning process considers:

• Product dev. Opportunities identified from various
sources
• Suggestions from marketing, research, customers,
current product development teams
• Benchmarking of competitors
INEFFICIENCIES
Some inefficiencies in organizations that do not engage in
product planning:
 Inadequate coverage of target markets with competitive
products.
 Poor timing of market introductions of products.
 Mismatches between aggregate development capacity
and the number of projects pursued.
 Poor distribution of resources, with some projects
overstaffed and others understaffed.
 Initiation and subsequent cancellation of ill-conceived
projects.
 Frequent changes in the directions of the projects.
FOUR TYPES OF PRODUCT DEVELOPMENT
PROJECTS

31-Mar-22
 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 8
 THE PRODUCT PLAN
The product plans developed by keeping in mind:
 Company’s goals

 Capabilities

 Constraints

 Competitive environment

The product plan is regularly updated to reflect changes in:

 Competitive environment

 Technology

 Info on successes of existing products

The Product Planning Process

1. Identify opportunities.
2. Evaluate and prioritize projects.
3. Allocate resources and plan timing.
4. Complete pre-project planning.
5. Reflect on the results and the processes.
Note: Selecting a promising project is iterative in
nature
STEP 1: IDENTIFY OPPORTUNITIES
Sources of product development opportunities:
 Marketing/Sales
 Research/Technology Development (Xerox PARC)
 PD Teams
 Manufacturing
 Customers
 Third party: Suppliers, Inventors, and business partners
 Other business groups (Xerox Supplies Division)

Some proactive approaches:

 Document frustrations and complaints
 Study Competitors’ products (Competitive benchmarking)
 Track the status of emerging technologies
 More…see text
 XEROX LAKES PROJECT EXAMPLE
Xerox’s Competitive
Strategy ➔ Exploit
technological innovation
in a rapidly changing
market

DIGITAL COPIER
PLATFORM
(AS OPPOSED TO
EXISTING LIGHT
LENS )

Xerox Document Centre 265

XEROX
Some opportunity statements proposed at Xerox:
 Create a document distribution system in which a
networked printing, device resides on each office
worker’s desk and automatically drives mail and other
documents.

 Create document delivery software that allows the

digital delivery and storage of most intra-
organizational documents via a worker’s personal
computer.

Opportunity statement: Lakes Project

 Develop a new black & white (B&W), digital,
networkable, document center platform for the office
market, including scanning, storage, fax, distribution,
and printing capabilities
STEP 2: EVALUATE AND PRIORITIZE PROJECTS
Competitive strategies
 Technology leadership
 Cost leadership
 Customer focus
 Imitative
Market Segmentation

Technology Trajectories

Product Platform Planning

Evaluating Fundamentally New Product Opportunities

Balancing the portfolio

 Competitive Strategies
Defines a basic approach to markets and products with
respect to competitors.
 Technology leadership ➔ Basic R & D

 Cost leadership ➔ Superior manufacturing methods;

Design for manufacturing to reduce costs
 Customer focus ➔ Rapid development of derivatives
through carefully designed product platforms
 Imitative ➔ Fast development process
NOTE XEROX:
Paradigm shift in business practice to participate in digital revolution of office
aligned with the growth of the Internet….

from “print & then distribute”

to “distribute & then print”

 Market Segmentation: Market Segment
Map
Divide the market into segments in order to be
more focused on the customer and competitors

Exh 3.4: Product segment map showing Xerox B&W digital products and the competition in three
markets (Segmentation based on number of users sharing office equipment) . Key performance
dimensions ➔ pages per minute & networking capability
 Technology Trajectories
Consider when to adopt a technology in its S-
shape curve of use.

Exh 3.5: This technology S-curve illustrates that

Xerox believed digital copier technologies were
just emerging and will improve product
performance in coming years. Xerox believed that
it could develop a full-featured digital copier in the
near future with performance exceeding that of
light-lens copiers.

Q: How near or far is the ultimate performance limit?

 Product Platform Planning: Platforms vs.
Derivatives
Platform ➔ Set of assets shared across a set of products (e.g. components & sub assys)
Derivatives ➔ For different segments

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.

Exh 3.6: A platform development project creates the architecture of a family of products. Derivative
products may be included in the initial platform development effort (Platform A) or derivative
products may follow thereafter (Platform B)
Product Platform Planning: Technology
Roadmap Exh 3.7: This technology
roadmap shows the life
cycles of several digital
photocopying technologies &
identifies which technologies
would be used in each
product. For Lakes
platform➔ Higher speeds
and color capabilities
required of its derivatives.

Note: decisions about

product platforms are
closely related to the
technology development
efforts of the firm
Evaluating Fundamentally New Product
Opportunities
Some criteria for evaluating fundamentally new product
opportunities:
 Market size (units/year * average price)
 Market growth rate (percent per year)
 Competitive intensity (#competitors & their strengths)
 Depth of the firm’s existing knowledge of the markets
 Depth of the firm’s existing knowledge of technology
 Fit with the firm’s other products
 Fit with the firm’s capabilities
 Potential for patents or other barriers to competition
 Existence of a product champion within the firm
 Balancing the portfolio
 Exh 3.8: The product-process change matrix
 The extent to which the project involves changes in the
product line and/or the production processes
 Helps identify projects ➔ breakthrough opportunities as well
as incremental improvements

 Firms typically benefit from a diverse set of projects

 Firm’s choice of competitive strategy influences product

development portfolio:

(FIRM STRATEGY) (PORTFOLIO)

 LOW COST STRATEGY ➔ MORE OF PRODUCTION PROCESS
IMPROVEMENT PROJECTS
 HIGH PRODUCT VARIETY ➔ DERIVATIVE PRODUCTS UPON EXISTING
PLATFORMS
 TECHNOLOGICAL SUPERIORITY ➔ TECH DEV. & BREAKTHROUGH
PROJECTS
 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
Extent of Product Changes

Product Projects
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
STEP 3:ALLOCATE RESOURCES & PLAN TIMING
Resource Allocation
 Careful use of the limited development resources
 Avoid starting too many projects. May result in:
 Skilled engineers and managers stretching their capabilities
 Affects productivity, time-to-market, quality, and profitability
 Aggregate Product Planning (Exh 3.9):
 makes efficient use of resources within budgeted resources
Project Timing
 Timing of product introductions
 Technology readiness
 Market readiness
 Competition
The Product Plan (Exhibit: 3.2)
 Set of projects approved by the planning process and sequenced in
time.
 Mix of: Fundamentally new product, platform and derivative
projects.
 Updated periodically as a part of the strategic planning activity.
 C
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Year 1
Software/ Firmware

Industrial Design

Mechanical Design

Electrical Engineering

Year 2 Manufacturing Engineering

Software/ Firmware

Industrial Design

Mechanical Design

Electrical Engineering

Manufacturing Engineering
Year 3
AGGREGATE RESOURCE PLANNING

Software/ Firmware

Industrial Design
Exh 3.9: Aggregate
Resource Planning
 Product Plan
The Product Plan (Exhibit: 3.2)
•Set of projects approved by the planning process and sequenced in time.
•Mix of: Fundamentally new product, platform and derivative projects.
•Updated periodically as a part of the strategic planning activity.

Exh 3-2: The product plan identifies the portfolio of projects to be pursued by the development
organization. This plan divides projects into four categories.
STEP 4: COMPLETE PRE-PROJECT PLANNING
Product Vision Statement
Develop a networked, mid-range digital platform for imaging, marking, and
finishing
Mission Statements
 Brief (one sentence) description of the product
 Key business goals
 Target market(s) for the product
 Assumptions and constraints that guide the development effort
 Stakeholders
Assumptions and constraints
 Manufacturing
 Service
 Environment
Staffing and other pre-project planning activities
 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
 ASSUMPTIONS & CONSTRAINTS
Some may ask:
 Why manufacturing, Service and Environmental
strategies should be part of the mission statement for a
new product?

Some may even hold:

 Decisions about these issues should arise from customer
needs for new products and should not be determined in
advance.

Why then do we have Xerox mentioning these in the

project mission statement?
ASSUMPTIONS & CONSTRAINTS
(CONTD..)

 For complex projects (as in this Xerox example), the

design of the manufacturing systems are equally
complex.
 Thus manufacturing facilities involved in the product need to be
identified very early in the process.

 Some product requirements cannot be derived strictly

from customer needs.
 Environmentally responsible design (as a Corporate
Responsibility of Xerox

Mission statements must reflect such corporate

objectives and constraints.
 ASSUMPTIONS & CONSTRAINTS (CONTD..)
FOR LAKES PROJECT OF XEROX
Manufacturing
 Capabilities, capacities, and constraints of existing manufacturing
processes
 Which internal production facility to be used?
 What key suppliers to be involved and when?
 For Xerox: Input devises at Canada, Output devices in Brazil etc.
Service
 Note: Customer service and service revenue important in this business
 Strategic goals for improving service quality
 Designing components requiring few parts
 Designing for ease of serviceability (quick service)

Environment
 Design for environment
 Developing new products with environmental sustainability
 Xerox’s ➔ “Zero to landfill” policy with an energy efficiency goal “most efficient
machine in its class”
 Remanufacture or recycle [no part should be disposed by the customer to end up in
a landfill]
STEP 5: REFLECT ON THE RESULTS & THE
PROCESS
Some suggested questions:
 Is the opportunity funnel collecting an exciting and diverse set of
product opportunities?
 Does the product plan support the competitive strategy of the
firm?
 Does the product plan address the most important current
opportunities facing the firm?
 Are the resources allocated product development adequate to
pursue the firm’s competitive strategy?
 Have creative ways of leveraging finite resources been
considered…?
 Does the core team accept the challenges of the resulting mission
statement
 Are the elements of the mission statement consistent?
 Are assumptions listed in the mission statement really necessary
or is the project over-constrained? Will the development team
have the freedom to develop the best possible design?
 How can the product planning process be improved?
 Concept of S-Curves

TQ-1: How might a portfolio of development projects differ for product technologies at
position A or B?
That’s all folks !

Draw S-curves of your choice. What are the disruptive technologies here? What
dimensions of performance are affected?