Lecture 03-03-09 - Karthik Ramani School of Mechanical...

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Unformatted text preview: Karthik Ramani School of Mechanical Engineering School of Electrical and Computer Engineering (by Courtesy) Approaches to Product Family Design Definition of Key Terms Product Family Maps Market Segmentation Grid Examples of Platform Leveraging Aggregate Project Plan Kodak Example In 1908 Ford told the world he will build a car for the masses and he did. Model T sold more than 15 million vehicles and Ford captured the world market. The core of his success was not just the car, which was made well, but the value customers received for their money. 1908 Model T sold for $950, but with innovation in the production line and more productive workers he was able to sell it for $300 in 1927. He paid his workers twice as much as others. To help produce cars Ford bought the mines, forests, glassworks, rubber plantations and raw materials needed, as well as the ships and trains to transport them. Today’s market is characterized by: rapid innovation globalization and customization market saturation, fragmentation, and niching “Since many companies design new products one at a time, the focus on individual customers and products often results in a failure to embrace commonality, compatibility, standardization, or modularization among different products or product lines.” (Meyer and Lehnerd, 1997) “Rarely does the full spectrum of product offerings get reviewed at one time to ensure it is optimal for the business.” (McGrath, 1995) ! 62% US Businesses were 62% willing / able to customize willing / able to customize relationships in 2004 as compared to 28% in 1998 compared to 28% in 1998 " Automotive: Automotive: 5,000 – 10,000 parts 1012 to 1017 possible combinations - Tanner et al. “Design for simplicity – Optimizing Tanner Design Optimizing Logistics through complexity management” Logistics through complexity management” Customization Trends -OSU Career Patterns Survey 60,000 new factories were 60,000 opened in China by opened in China by foreigners in 2002-2003 foreigners -Wall Street Journal (9/04) Cell Phones: Product Design - Theresa Metty, “War on complexity” Theresa Metty Single brand has 145 Batteries, 78 Single displays, 1447 software versions displays, 1447 software versions Globalization and Outsourcing Supply Networks Customization Customization Pressures Pressures Decreased design-to-realization realization cycle time is a major problem. cycle time is a major problem. - RTBC (10/04) Knowledge Management Increasing Product Complexity Customer Business inventories Business inventories reached $1.49 Trillion in 2003 in the US 2003 in the US - IDC Consulting Software Tools By 2003, average cost of By redundant effort in Fortune 500 redundant effort in Fortune 500 companies reached $ 5,850 per employee - per year employee - per year Manufacturing systems - Perry Trunick, Metal Producing and Perry Trunick Metal Processing, Sept. 2004 Processing, Increasing Inventory Costs Information Overload $ % The end result: a “mushrooming” or diversification of products and components with proliferating variety and costs Many companies are being faced with a challenge: provide as much variety for the market as possible... ...with as little variety between products as possible To remain competitive, companies are utilizing product families and product platforms to: increase product variety shorten product lead-times reduce cost # ' Early 1970’s B&D portfolio was broad and deep. Eight groups contributed to 73% of sales and 91% of units sold. Drills, jigsaws, shrub and hedge trimmers,power hammers, circular saws, grinders and polishers, and edger’s – 122 models in all. ( )* ) & , Uncoordinated designs, materials and technologies. Its power tools relied on 30 different motors with different tooling for each. Sixty different housings and 104 different armatures. Several switches and buttons populated the bin’s and bill-of-materials. + , Thousands of parts required thousands of sq.Ft. Of stockroom space, 10’s to shelve and inventory. In elegant designs => high labor inputs. Dedicated production lines or frequent linechangeovers. Competitors were not any better. . % - ) Offshore manufacturers making inroads and overseas attacks. Margins lower – rising labor, materials, services, capital goods. Regulations in Europe were to move to U.S. For higher safety standards for protection against electric shocks. Increase in insulation would take them 10 years of effort if change was done one product at a time. THREAT = OPPORTUNITY ! / 0 Distinctive “family look”. Standardize parts, interfaces, couplings and connections. New materials and automation, introduce double insulation at lower costs than single. Make it possible to add new features with minimal costs. Global products: world-wide regulations. ! ( A product platform is a set of common components, modules, or parts from which a stream of derivative products can be efficiently created and launched. Motor: a major sub-system – 30 different motors with manually attached wires (interfaces between subsystems). Motor Field Assembly Manual wires eliminated and plug-in connection replaces it. Standardization, modularization and scalability. Fixed axial diameter, allowing variation in length. Create a common housing for a drill, sander, etc. Power could be added by increasing length. Lead to breakthroughs in manufacturing automation (e.g: variations in motor length could be produced without touching with hands). 1 2 Armature connects to a set of gears that turns the business end of the power tool at 20-30 k rpm => secure attachment. Has to be balanced, like a car wheel. Defects in layer of insulation for consumer protection caused balancing problems. Loctite: cures in the absence of air on a metal. All subassemblies were attached to the shaft with loctite and as it cures, could be aligned properly. # Standardization, modularization and automation became pervasive. Each major sub system was attacked. Powder metal gears eliminated gear cutting, heat treating, and gauging. Increased volume purchase from suppliers reduced costs further. Field failures and scrap fell further due to improved design and manufacturing (quality). & + ( Robust platform that lead to multitude of power tools. For new product concepts much of the basic design and manufacturing was eliminated, because of significant standardization. Designers could concentrate on the “business end” => the core function such as the new drill. The job was to understand customer needs, integrate modular subsystems, and perfect incremental subsystems. 23 - ( 23 Cycle time for new derivative products accelerated, to even one per week ! Since minimal special tools were used, the mature product drop-off was not costly. Avoided being tied to dying products. Labor cost difference in motor manufacturing alone was $4.6 million in 1976 dollars. / )1 Aggressive pricing with reductions of more than 50%. Even at lower price points gross margin of 50% was maintained. Competitors blind sided by innovations. Attempts to match prices diluted profits. Patents kept many from being reverse engineered. Plant tour of Black and Decker dismissed unfair pricing lawsuits. ' Avoid piecemeal, single product focus. Deal with power tool product as a whole. Engineering manufacturing divide was bridged --- product and process were simultaneously redesigned. Senior management made long-term horizon a priority. 0 1 Product Family Planning and Platforms. Simultaneous design for production. Global product design and manufacturing. Discover latent, unperceived customer needs. Elegance in design. 4 Intel: different speeds and price points. Honda’s: Accord and Civic lines. Microsoft excel’s in word processing, spreadsheets, database, presentations, home entertainment, software development and Internet usage. Continues to be a cornerstone for corporate success. 4 ' Often manufacturing engineering guides product design decisions to match capabilities of existing factories and subcontractors. One of the greatest barriers to product innovation and results in incrementalism in many industries. Early and continuous integration of product design and manufacturing is critical. Subsystems in Black and Decker: motors, armatures and gears were designed in conjunction with process innovations (loctite, automated balancing, and powder metal processing). # 5, 3 Global perspective for sourcing. Market research including customers, distribution channels, support requirements at the global level. Allow for local customization such as accessories and packaging. ) & 6 7 Finding latent needs is as much an art as a science. New product platforms designed to address latent needs can generate renewed excitement. A $10 power drill ! And Safety ! Internet applications is based on latent needs. + . Norm in industry is to add bells and whistles to existing products. Customer resistance to complexity is observable. Effort to master the VCR operation is not worth the trouble! Complexity can also be a sales killer. - / 8 What is a product family and a product platform? Product family: a group of related products that share common features, components, or subsystems; and satisfy a variety of markets Product platform: the set of features, components or subsystems that remain constant from product to product, within a given product family Derivative: products derived from the product platform through: addition, removal, or substitution of one or more modules (modulebased product family) scaling or “stretching” the platform in one or more dimensions (scalebased product family) 0 ( 13 3 Top-down Approach (Proactive platform): a company strategically manages and develops a family of products based on a product platform and its module- and/or scale-based derivatives Bottom-up Approach (Reactive redesign): a company redesigns/consolidates a group of distinct products by standardizing components to improve economies of scale and reduce inventory .9 3 2100 5000 4050 8100 8150 .9 3 Nippondenso 650 60 Watts 0.8” Lutron Stack length 1.75” Source: Development Car Division :) Audi A3 (3+ 5-door) 1; Audi TT coupe Audi TT roadster VW Golf IV Skoda Octavia (Octavia sedan, and station wagon) (3+5 door, station wagon, convertible, and Minivan) VW Bora (Bora sedan, coupe, convertible, and station wagon) (New Beetle, New Beetle convertible) VW Beetle Seat Toledo Successor (Toledo, coupe, station wagon, and convertible) VW plans for 19 vehicles based on A-platform VW estimates development and investment cost savings of $1.5 billion/yr using platforms 3 :) Source: Shimokawa, K., Jurgens, U., and Fujimoto, T. (Eds.), 1997, Transforming Automobile Assembly, Springer, New York. # 1 (C. Moccio, K. Ewing, At Ford, an automobile platform includes: G. Pumpuni, MIT, 2000) A common architecture (e.g., assembly sequence, joint configuration, system interfaces, etc.) Definition of subsystem and module interfaces A set of common hardpoints used by the range of products that share the platform and the manufacturing processes Source: , Ford defines a platform as a set of subsystems and interfaces that form a common structure from which a stream of derivative products can be efficiently produced & ' common car features Source: http://www.smart.com + 1 Platform = Elements can be all kind of architectural elements , e.g. parts, components, systems, processes, organizations - objects or processes C B C E A Product 2 Product 3 - A defined set of common or shared elements and its interface definition D E A B B C A Product 1 '0 Set Theory: P1 DSM: A A ; ' B C D E A C E P3 B P2 B C D E D P1 ∩ P 2 P3 = { A, B, C} Platform = common set= ABC P1 P2 P3 Interconnections: A / 03 ; In the top-down approach, product families do not emerge one product at a time “They are planned so that a number of derivative products can be efficiently created from the foundation of a common core technology” (i.e., product platform) Product platforms do not just come off the shelf; they must be planned and managed from start to finish “If platform is not rejuvenated, its derivative products will become dated and will fail” It is important to see the evolution of a product family in order to expose the markets and technologies that have been driving its evolution and identify new opportunities for technological advancement and leveraging 13 3 3 Used to map evolution of product family, platform, and derivatives over time; see (Wheelwright and Clark, 1989) Increasing Functional Value Development Work Enhanced Core Cost Reduced Core Time Customized Prototype Leveraged Products Hybrid .9 3 Deluxe Development Work Plus Maybel’s Housekeeper Workman Stratovac Leveraged Products 58 59 60 61 62 63 64 65 66 67 68 3: Royal Housekeeper Housekeeper Canadian Stratovac 1950 51 52 53 54 55 56 57 Reference: Wheelwright, S. C. and Sasser, W. E., Jr., 1989, "The New Product Development Map," Harvard Business Review, Vol. 67, pp. 112-125. 3< 4 = nd Used to map product families, product platform renewal, and their evolution (Meyer and 2 Generation Platform Extension Lehnerd, 1997) 1st Generation New features, cost reductions Derivative Product 1 Product 2 Original Product Platform Platform development Plan multiple generations Derivative Product 1 Product 2 Product 3 Product 4 New market applications Product n 3rd Generation New Product Platform Reference: Meyer, M. H., and Lehnerd, A. P., 1997, The Power of Product Platforms, The Free Press, New York. Next generation platform Derivative Product 1 Product 2 Integrate the best of the old with new technology Product n .9 3 Advanced twin-blade razor Men’s Sensor Excel New features, cost reductions New market applications 2nd Generation Plan multiple generations 3rd Generation 35 Trac II Atra !" 1st Generation New twin-blade razor platform Platform development Men’s Sensor Sensor for Women Sensor Excel for Women Triple-blade razor Next generation platform Integrate the best of the old with new technology Gillette Mach 3 2 6 ' Market segmentation grid can be used to identify and map platform leveraging strategies (Meyer, 1997) High Cost High Performance Mid-Range Low Cost Low Performance Segment A Segment B Segment C What Market Niches Will Your Product Serve? Derivative Products Product Platform # ' Niche-specific platforms (products) with very little sharing of subsystems and/or manufacturing processes High-end Mid-range Product 2 Low-end 76 Product 1 Product 3 Product 4 Disadvantages: Segment A Segment B Segment C R&D can be easily duplicated by different product teams Manufacturing and capital investments much higher Manufacturing improvements not adopted by others Potential for synergy in marketing development is lost Result: myriad of products, higher costs, lower margins & ' 6 High-end Mid-range Low-end > " Horizontally leverage platform subsystems and/or manufacturing processes across different segments High-end platform Low-end platform Segment A Segment B Segment C Benefits: Introduce series of related products for different customer groups without having to “reinvent the wheel” R&D can develop products more rapidly and with less risk (since technology has been proven in other market segments) Manufacturing procurement and retooling costs can be minimized + ' Vertically scale key platform subsystems and/or manufacturing processes within a market segment Scale up Platform 2 High-end : 6 Platform 1 Scale down Mid-range Low-end Benefits: Segment A Segment B Segment C Leverage knowledge of customer wants and needs within a given market segment Product development is less costly (R&D and manufacturing enjoy same benefits as horizontal leveraging) Risk: Weak platform may undermine competitiveness of product family - ' ( 13 3 Beachhead approach combines horizontal leveraging with upward vertical scaling High-end Mid-range Low-end Platform Segment A Segment B Segment C Key Aspects: Develop low-cost, effective platform and efficient processes Extend platform for customers in different market segments Combine extensions and scaling to provide step-up functions required by mid- and high-end users in other segments Scale up performance characteristics of low-cost platform to appeal to needs of mid- and high-end users / 6 Rolls Royce scales its aircraft engines to efficiently and effectively satisfy a variety of performance requirements .9 3 ! ! . Incremental improvements and variations made to increase thrust and reduce fuel consumption RTM322 is common to turboshaft, turboprop, and turbofan engines When scaled 1.8x, RTM322 serves as the core for RB550 series .9 3 6 !" TripleBlade Razor Men’s Mach3 ' Venus (Women’s Mach 3) Women’s SensorExcel 5 Advanced TwinBlade Razor Men’s SensorExcel TwinBlade Razor Men’s Sensor Men Women’s Sensor Women Industry (Heavy) Use .9 3 6 (* ' MidRange Home (Light) Use Saws Drills & Drivers Lighting .9 3 6 <4 = Vertically leverage power supply around 9.6, 12, 14.4, and 18 volt batteries ' (* Horizontally leverage power supply within each voltage range .9 3 6 1 Boeing 737 is divided into 3 platforms: Initial-model (100 and 200) Classic (300, 400, and 500) Next generation (600, 700, 800, and 900 models) ' ( The new 777 is also being designed knowing a priori that it will be stretched to carry more passengers and increase range ( 737-300 & &2 6 110 passengers (8 first class) 737-600 126 passengers (8 first class) 126 passengers (8 first class) 147 passengers (10 first class) 162 passengers (12 first class) 737-700 737-400 737-800 737-500 110 passengers (8 first class) 177 passengers (12 first class) 737-900 # ! & &; / ? / ? / / ; / ;#/ ? ; &/ / Capacity: 126 Passengers Capacity: 110 Passengers Flight Ranges for 737-300 Flight Ranges for 737-500 Flight Ranges for 737-700 Flight Ranges for 737-600 & ( & &; / ? / ? /; / ;/ / All three aircraft share common height and width... …but their fuselage lengths are different: Boeing 737-300 Boeing 737-400 Boeing 737-500+ ( -/ / The same holds true for the 737-600 through 900 & &;#/ ? / ;+/ ? / ;&/ ? / ; Boeing 737-800 Boeing 737-600 Boeing 737-900 Boeing 737-700 - $ ' Improves the attractiveness and cost position of your products through standardization, modularity, and better economies of scale for common subsystem components The end result: a well-researched, multi-year, multi-product strategy that can be presented to management for funding on a multi-year basis Allows companies to “recapture the entrepreneurial essence” of their early years: to be fast moving to achieve competitive excellence in technology to leverage common assets across individual products A new mindset? Obsolete your own products with better ones through continuous product platform renewal #/ ' 1. Segment your markets 2. Identify growth areas 3. Define and map current product platforms 4. “Clean-sheet” a new product platform 5. Perform in-depth research in customer needs 6. Analyze competing products 7. Revisit manufacturing process and distribution channels 8. Understand the core competency implications of the new product platform 9. Formulate platform development team, project timeline, and budget # High Cost High Performance Entry premium product (features/cost) Entry premium product (features/cost) Entry premium product (features/cost) Mid-Range Entry mid-range product (features/cost) Entry mid-range product (features/cost) Entry mid-range product (features/cost) Low Cost Low Performance Entry low-end product (features/cost) Entry low-end product (features/cost) Entry low-end product (features/cost) Initial Platform Segment A Platform Extension Platform Extension Segment B Segment C Shared Product Platform Common Subsystems and Interfaces # ' Fuji introduced QuickSnap 35mm single-use camera in the U.S. market in 1987. Kodak, which did not have a single-use camera of its own, was caught unprepared. The single-use camera market grew by more than 50 percent per year for the next 8 years: In 1988, 3 million single-use cameras were sold By 1994, over 43 million were sold Kodak introduced its first model over a year later, but Fuji had already developed a second model, the QuickSnap Flash # ;@ .9 3 8 From April 1989 and July 1990, Kodak redesigned its base model and introduced three additional models ) A ' Because of their platform strategy, Kodak was able to develop its products faster and more cheaply, delivering twice as many products as Fuji By 1994, Kodak had captured more than 70% of the U.S. market. # 8 )' ;@ http://www.kodak.com/global/en/consumer/film/otuc.shtml # B' ;@ ## B C )3 ' #& B C )3 ' #+ BC A )3 ' http://www.fujifilm.com/bridgepages/colors.html #- 8 ) A B Reference: Wheelwright, S.C. and Clark, K.B. Leading Product Development Free Press, New York, 1995. &/ 1 Advanced R&D Projects Product Changes 2 New Core Product Next Generation Product 3 Addition to Product Family 4 New Core Processes Next Generation Process Single Dept. Upgrade Tuning and Incremental 1 B Process Changes Breakthrough Projects Platform Projects Derivatives (Enhancements, Hybrids, and Cost 5 Reduced Versions) Allied Partnerships & Add-ons and Enhancements Source: (Wheelwright and Clark, 1995) 1 B Advanced R&D Projects Innovations and technology development that provides a precursor to commercial development Breakthrough Projects Projects that involve significant change in the product and process establish a new core product and process Platform Projects Projects provide a base for a product and process family that can be leveraged over several years Derivative Projects Cost-reduced versions of an existing product or platform or addons or enhancements to an existing production process Allied Partnerships Partnerships in any of these project areas to leverage development resources and activities & 1 1 R&D B B PreQuip’s Development Projects (30) before the Aggregate Project Plan Breakthrough projects C3 C3 Mass spectrometers Liquid chromatographs Gas chromatographs Data processing and handling products Platform projects Derivative projects R&D Allied and Partnership projects Breakthrough Platform Derivative Source: (Wheelwright and Clark, 1995) & R&D 1 B C 3 PreQuip’s Development Projects (11) after the Aggregate Project Plan Breakthrough projects Mass spectrometers Liquid chromatographs Gas chromatographs Data processing and handling products Platform projects R&D Derivative projects Allied and Partnership projects Breakthrough Platform Derivative Source: (Wheelwright and Clark, 1995) & 8 Initially called “Kodak Fling” cameras, single-use cameras viewed as “disposables” or “throwaways” In 1990-1991, a massive redesign effort began to facilitate recycling and part reuse Integrated design, development, manufacturing, business, and environmental personnel to create a new design that was easier to disassemble, inspect, reuse, and reload By weight, 77-86% of a Kodak single use camera can be reused or recycled Kodak now provides the best example of “closed-loop” recycling in the world & )2 3 ! 0 8 ) . &# ' <) $ 2 B0 ;/ = && . 0 Your project will simulate what it is like to work in a product development team Each of you can be assigned to work within one of the following “departments” Customers Marketing Engineering Manufacturing Quality Control/Testing Inventory Accounting Purchasing Suppliers to design, (build, and test) a successful product for class. &+ ' How do companies develop winning platform strategies? 0. Assemble a multidisciplinary team composed of: engineering marketing manufacturing 1. Segment your markets Identify major market segments and the price/performance tiers within them Construct a market segmentation grid of individual market niches Incorporate emerging segments as well as existing ones &- ' 2. Identify growth areas Identify growth opportunities in these segments and niches: a) b) c) d) e) your current sales volumes your market share in the niche five-year expected growth rate leading competitors in each niche driving customer needs in each niche Data should represent a clear picture of where opportunities exist in your markets 3. Define and map current product platforms Define your major product platforms (or product offerings) Define where these platforms “fit” within the market segmentation grid +/ ' 4. “Clean-sheet” a new product platform Take a fresh look at market needs, product technologies, materials, and manufacturing processes to formulate a superior product solution At the major subsystem level, define a platform architecture that will satisfy its key objectives of market coverage and scalability Address the following questions during platform development: a) How will your company go on the attack? b) Can the new platform make you more competitive in the lower-price and low performance tiers of the market segments? c) Are there opportunities for horizontal leveraging or vertical scaling? < 4 = Lastly, envision the entry-level products to be derived from the new platform initiative + ' < 4 = 5. Perform in-depth research on customer needs Overriding goal is to bring excitement to the market in the form of value-cost leadership Team must work hard to uncover latent, unperceived needs Identify frustrations that customers have in using currentgeneration products and services Global platform developers must pay attention to needs of customers in different parts of the world Develop a list of both perceived and latent needs Validate list through external customer research Identify major performance and cost drivers that can make your products superior to those of your competitors + 0 Dissatisfiers are product characteristics that are “basic” or “expected” and are usually taken for granted by customers when present. Delighters Performance Satisfiers are product 0% 100% characteristics that customers want in their Dissatisfiers Satisfiers products and are “one dimensional” or “linear” in the sense of the more we provide, the happier the customer. Delighters are product characteristics that are “attractive” or “exciting” which often pleasantly surprise customers when they are first encountered. + 13 Customer Satisfaction + C 8 A 8 A < 4 = Dissatisfiers: Cause dissatisfaction only when missing; customer complaints are the primary source of information for finding them Satisfiers: Tend to be easy to measure and are usually used for benchmarking and comparative analysis Delighters: Difficult to assess since they represent “unexpected quality” which cannot be ascertained through surveys and/or complaints Represent “unspoken” and “unmet” needs, possibly new markets Lessons from Kano’s model: Not all customer attributes are equal Customer attributes are important to customers in different ways Our job: ensure the satisfiers, avoid the dissatisfiers, and create delighters within our products in order to satisfy customers + ' 6. Analyze competing products Understand how existing products stack up against those of competitors Perform analysis on a major subsystem-by-subsystem basis to identify strengths and weaknesses of competitors’ products Acquire competitors’ products and study them in a “tear down” room < 4 = Establish objective measures of price and performance for each subsystem Index functionality and cost of competing products relative to your own on a subsystem-by-subsystem basis Discover best-in-class approaches taken by competing products in the design and manufacturing of their own particular subsystems Use as a guide for your own engineering ...OR... License technology as part of the new platform effort + ' < 4 = 7. Revisit manufacturing process and distribution channels Apply similar “clean sheet” approach to production and distribution channels DO NOT limit potential of new products by imposing existing manufacturing processes and materials on new product designs 8. Understand the core competency implications of the new product platform Identify core competencies (e.g., “building blocks”) required to create, manufacture, and distribute the new product line Differentiate between those building blocks that currently exist within the firm and those that do not; the latter will have to be developed, licensed, or acquired in some form +# 2 Shared Product Platform Common Subsystems and Interfaces A B D E C D( ( )E Market Insights and Research Product Technologies Manufacturing Processes Sales Channels Articulate what your firm can already do well and what it needs to do better in order to achieve commercial success Perform a “reality check” of the proposed new platform +& ' < 4 = 9. Formulate platform development team, project timeline, and budget Specify individuals, both internal and external to your firm, who should be part of the development effort Include major customers on platform team if possible Identify budget and resource requirements needed to complete the project successfully Plan the phased rollout of derivative products emerging from the new product platform ++ ...
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