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ETM 5391 – New Product Development and Commercialization

Spring, 2004

Instructor: Mr. C. Michael Carolina

Date: March 25 – April 22, 2004

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ETM 5391 Web site:

http://www.okstate.edu/ceat/msetm/courses/etm 5391/.

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Recap of Lecture 4

• The Opportunity and Threat of Disruptive Technologies

Professor Clayton ChristensenHarvard Business School

• Summary of Living on Internet Time: Product Development at Netscape, Yahoo!™, NetDynamics, and Microsoft®

• The Balanced ScorecardKaplan and Norton, HBR. (January, 1992)

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Why Do It?

• Competitive advantage/staying competitive• Short-term and long-term viability/sustainability• Fund more research• To improve the quality of life• To solve technology-based problems• New platforms and derivative products• Improve productivity and efficiency

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Why Do It? (cont’d.)

• Protect installed base• Protect customer’s investment• Create brand loyalty• Vehicle for strategic partnership• Meet stakeholders’ expectations

– customers– employees– investors

• Renewal and transformation of the organization

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Starting Premise

• Innovation is key to the long-term vitality of all enterprises

• Innovation means more than just new products; it also means new services and ways of doing business

• While the challenge to innovation is originating new ideas, time is at the core of successful innovation.

• Timely execution is very demanding

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Environment

• Technology evolution• Globalization• Shorter product lifecycles• Increased competition• Downsizing/rightsizing• Entrepreneurial/intrapreneurial• Virtual corporation• Corporate corruption• Workforce development• Continuous improvement

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Competitive Factors• Speed• Efficiency• Quality/Reliability• Supply Chain/Distribution Channels

Translation: Creating Value for Customers

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Our New Product Development JourneyThe Basics• The elements of NPD• NPD as the lifeblood of the corporation• Linkage to strategic and business planning• Baselining, benchmarking, and planning for continuous

improvement and competitive advantage

Becoming a Fast Innovator• Planning and preparation• Product definition• Design development• Manufacturing ramp-up• Product improvement

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Our New Product Development Journey (cont’d.)

Some Examples of Successful Innovators

• Across industry sectors

• Core values, organizational structure, results-oriented

• Sustainable value (systems and processes)

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The Language of NPD

• Disruptive technologies• Core competence• Benchmarking• Traditional vs. emerging markets• Mergers and acquisitions (M & A)• Full stream life cycle management (ISO 15288)• Exit strategies• “Hurdle” rates (ROI)• Percent revenue from new products

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The Language of NPD (cont’d.)

• Green technology• Value engineering• Multi-disciplinary solutions• Sustainable development• Mission• Vision• Strategic priorities• Implementation plan• Performance metrics

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New Product Introduction

• Thinking Strategically

• Thinking Commercially

• Thinking Globally

• People, Programs, and Processes

• Transforming Knowledge Into Economic Value

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• Strategy, Technology, Investment, and Value• Bringing Disruptive Technologies and

Processes to Market• Improving Existing Products and Services• Comparative and Competitive Advantage• Avoiding the “Blinded by Success Syndrome”

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A New Paradigm for Innovation• Invention vs. Innovation• A Business Imperative• Sources of Innovative Ideas• Building Innovation Capabilities• The Culture for Innovation• Ringing the “Cash Register”

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Successful Innovation Companies

• Vision/mission/values• Alignment around values• People systems around values• Organize for success• Effective integration and communication• Clarity of responsibility and accountability• Focus on results thru flawless execution

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Applying Development Strategy and Resources to Stay Ahead of the Power Curve

Preemptive

Proactive

Maximum Value

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Business Planning and Business Case

• Marketing Decisions• Risk Analysis/Mitigation• Project’s Resource Requirement• Financial Projections• Production Demands• Supply Chain/Provisioning• Product Support/Technical Assistance• Personnel Needs

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Four Types of Product/Process Development Projects

1. Research or Advanced Development Projects

2. Breakthrough Development Projects

3. Platform or Generational Development Projects

4. Derivative Development Projects

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Types of Development Teams

• Functionally Organized Team Structure

• Lightweight Team Structure

• Heavyweight Team Structure

• Autonomous Team Structure

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Benchmarking

Strengths

Weaknesses

Opportunities

Threats

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Design and Development Methodologies

• Quality Function Deployment (QFD)• Design for Manufacturability (DFM)• Computer-aided Design (CAD)• Computer-aided Engineering (CAE)• Computer-aided Manufacturing (CAM)• Total Quality Management (TQM)• System of Systems

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Innovation

An economic, social, and environmental responsibility.

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Innovations based on:

• Economic justification

• Technological feasibility

• Addressable market

• Customer/supplier relationship

• Multi-disciplinary, seamless solutions

• Technology forecasting/roadmapping

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Innovation

Building on:

• Documented and sustained successes

• Common themes

• Correlations

• Lessons learned

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What do successful innovators do well?

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• AT&T

• Boeing

• Lockheed Martin

• GE

• Intel

• GM

• Ford

• Toyota

• Yahoo

• Microsoft

• IBM

• Cisco Systems

• HP

• Sonic

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Summary of the HP Deskjet Printer Project

• Clear Product Definition and Market Segment• Clear Focus/Objectives (Low Cost, High Quality)• Created New Development Process Emphasizing Speed,

Design for Manufacturability, and Teamwork• Effective Use of Early Production Tools (CAD, CAM, CAE,

PDM, SAP Software)• Effective Use of Heavyweight Team Structure• Effective Use of Prototypes/Customer Involvement• Achieved Objectives for Cost, Quality, Customer

Satisfaction• Reduced Cycle Time from 36-60 Months to 22 Months• Became the Model for Subsequent Development at HP

Vancouver

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Assignment 3

Case Study 2 (HBR9690069) – McAlasdaire Imaging, PLC: AE-1 Project

In 400 words or less, characterize the development of the MI AE-1 Project.

- Successful Intro? Why?- Introduction Failure? Why?

Due By: 4/22/04

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Summary of Assignment 3 – McAlasdaire Imaging’s AE-1 Project

• No clear upfront product definition or specifications• Poor communications between marketing and engineering• Lacked overall ingredients for success

- “Start With The End in Mind” (Steven Covey, The 7 Habits of Highly Effective People)- Alignment- Commitment and utilization of resources- Project tracking to meet schedule and costs objectives- Communication and teamwork across functional departments

• No clear path for capturing the lessons learned

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Video “Guest” Lecture

Clayton Christensen, The Opportunity and Threat of Disruptive Technologies

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“We are living in a period of time that will produce more change for humanity than any previous era in history.”

John Peterson

Wave Period Activities Time Span

•------ Hunter/Gatherer Nuts/Berries & Game 10,000 Years

•First Wave Agricultural Farming 1,000 Years

•Second Wave Industrial Age Mass Production 100 Years

•Third Wave Information Age Knowledge Based Decades

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Structuring for NPI and Continuous Performance Improvement

Mission/Values

Baseline/Benchmark

Metrics

Document the Lessons Learned

Adjust the Process

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Successful companies look for successful suppliers and partners with a history of excellence:

• new products• enhanced products• quality and reliability• customer satisfaction• price value