Developing a New Product

Dr. Omer L Hageniers, P Eng.February 2012

© 2011 MSCI Limited

Developing a New Product

Idea To Product

What is the Process?1st you need a PLAN.

Developing a New ProductProduct Development Needs:• A Product Concept• Skilled, Qualified Staff• Necessary Prototype Materials• Resources – Facility, $s, etc.• A Defined Customer Need to Fulfill• A Market• Sales Channels (Access to the Market)• A Development Plan

Developing a New ProductSo; You Want to Develop a New

Product.Why? How? When?

The Answers to These Three Questions are Very Important and Must be

Answered Before You Start.

Developing a New ProductWhy Develop a New Product?Potential Answers to This Question Include:

My Competition has One of These!The World Needs This Product!

I Have a Great Idea!It’s Going to Sell Millions!

We Have the Cash to Spend!It’s Part of Our Strategic Plan!

Developing a New ProductIf Your Answer is Anything Other Than

It’s Part of Our Strategic Plan!You Had Better Get Started on That Strategic Plan.All of the Other Possible Answers Could be Part of

Your Strategic Plan; But if You do Not Have a Strategic Plan You Will Never Know.

Developing a New ProductStrategic Planning

Mission &Objectives

EnvironmentalScan

StrategyFormulation

StrategyImplementation

Evaluation &Control

Who are You & What do You Want to Do?

Regulations, Competition, Economy, Market Size, Etc.

Plan How to Achieve Your Goals

Work Your PlanA Good Strategic PlanningProcess Requires That You Look at All of The Possibilities for Your Business. A Good Guide to the Preparation of a Strategic Plan is Provided in the Books by Michael E. Porter (Harvard Business School).

Developing a New Product

Developing a New ProductRisk Analysis

New Technology Caution Danger

Existing Technology Safe Caution

Existing New Market Market

Developing a New ProductTypes of Products:1) Improvement on an Existing Product (Progress)2) Replacement of an Existing Product (Evolution)3) A New Product in an Existing Market (Growth)4) A New Product in a New Market (Risky)5) A Pioneering Product (Very Risky)6) A Commodity Product (Cost is King)7) A Prestige Product (Image is Everything)

Developing a New ProductHow to Develop a New Product.Potential Answers to this Question Include:

Copy an Existing Competitive Product!Adapt One of Your Existing Products!

Build a Prototype & Test it in the Market!The Process Is Part of Our Strategic Plan!

Copy?Adaptation?Prototype?

Developing a New ProductMaking a Product Development PlanFirst Establish the Following:• Functional Statement – What is the Product

Supposed to do?• Design Requirements – Specification, Standards,

Safety, Production Quantity, Duty Cycle, Efficiency, Cost, Etc.

• Evaluation Criteria – How Will You Know When the Product is Finished?

Developing a New ProductExample:• Functional Statement: A Small, Low Cost Toy to

Entertain Kids Under 5 Years Old• Design Requirements: Manufacturing Cost < 5¢

per for 100,000 Units, Weight <1 Oz., Shatter Resistant, Cannot be Swallowed or Eaten by a 5 Year Old.

Evaluation Criteria: Child Appeal Testing (>90%), Field Trial @ a Day Care (>85%)

Developing a New ProductCreate the Step by Step Plan in the Form of a Gantt Chart- Each Step Should Represent a Task

- Each Task Must Have an Outcome- An Outcome can be a Deliverable or the Achievement of a Goal

Each Task has Resources Assigned and Has its Cost CalculatedThe Cost of the Individual Tasks are Summed to get the Total Development Cost.

Developing a New Product

• In Addition to the Gantt Chart, Create a Written Document That Lays Out the Development Plan Milestone by Milestone. This Document Details Resources, Method, and Objectives. Everyone Involved in the Project Should Have Access to This Document. It is a Roadmap Designed to get You to Your Destination “The Product”.

• Keep All Parties to the Project Informed of Where You are in Your Development Plan. Monitor & Report Progress or its Lack.

Development Plan

Developing a New ProductIntellectual Property (IP)• Prior To & During the Product Development

Project Make Every Effort to Identify IP and Keep it Confidential.

• When the Time is Right, File for Patent Protection, it is a Strategic Advantage.

• You Have Invested Heavily in Product Development, Protect Your Investment.

• Involve a Professional in Your IP Strategy (Which is More Than Just Patents).

Developing a New ProductComments on Development PersonnelDo You Have Personnel With the Required Skills on Staff?

You May Need to Add Staff in the Form of Consultants or University Professors. Specialists in Areas of Knowledge Where Your Own Staff Does Not Have the Required Skills.

Developing a New ProductThe Role of Innovation in Product

DevelopmentInnovation is an Overworked Word

What is Innovation?My Definition is “The Incorporation of Technology From one Area of Endeavour into Another Area.”

A Product Break-Through Requires InnovationInventors Trained or Experienced in Multi-

Disciplinary Product Development are Most Likely to Innovate.

Developing a New ProductThe Role of Product Knowledge• If Your Company is Selling a Product in a Market

Place – You & Your Staff Have Product Knowledge.• This Knowledge is Crucial to Successful New

Product Development.• This Knowledge Can Also be a Barrier to Creating a

New Product.• A Balance Between the Existing Product

Knowledge & An Improved Product Must be Achieved.

Developing a New ProductThe Role of the Customer• Your Customer (Existing or Potential) is the only

One Who can Judge the Value of Your Product.• Knowing or Learning Your Customer’s Needs is

Critical to New Product Development.• For Small Production Volume Products it is Easier

to Determine Customer Needs.• For Mass Produced Products, Customer Needs

May be Very Diffuse and Unfocused.

Developing a New ProductWhen to Develop a New ProductPotential Answers to this Question Include:

When we need one!Next Week!

When Our Strategic Plan Tells Us!

Developing a New ProductComments on When• Since Product Development is a Process That Takes

Time – Development Must Start Long Before the Need for a New Product is Clear.

• Product Development Outcomes are Often Not Certain – Remember Thomas Edison’s Statement to Shareholders “I have not failed. I've just found 10,000 ways that won't work.

• “We will sell no wine before its time.” The slogan of a famous Paul Masson winery advertising campaign.

Developing a New ProductFurther Comments on When• Having a Product Development Pipeline is

Essential to the Steady Creation of New Products.• Introduction of New Products Must be Paced to

Prevent Consumer Confusion.• If a New product is Being Planned to Replace an

Existing Product, it Must be Discernibly Superior.

Developing a New ProductProduct Development

ExamplesFrom My Experience

Developing a New ProductNew Product – New MarketNew Laser Cladding Nozzle

Traditional Designs Cannot Control Size of Laser Spot or Powder Spread.

Developing a New Product2D Nozzle Testing

No Vacuum With Vacuum

Developing a New Product

Computer Simulation of Particle Flow and Pressure Distribution at the Exit of the Nozzle.

Developing a New ProductProduct Concept was for a new Nozzle That Used a Vacuum Port to Control Powder Spread

Government Funding was Used – IRAP• Computer Simulation

Study & 2D model Study Showed Idea Worked.

• US Patent Has Been Issued.

• Nozzle will be Integrated With a Variable Spot Size Laser Beam Generator.

• Idea May be Licensed.

Developing a New ProductVariable Spot Size Optics

Lens Train with Variable Collimator

Lens 3 Lens 1

o

d2

d1

f’

w

dw

2

1 f

ds

A

dA

Zoom Collimator

Custom Optics Commercial Product

The Next Stage in This Project is to Combine the New Nozzle with Variable Spot Size Optics.

Developing a New ProductApplications of a New Material• To Self Limiting Heating Applications• The New Plastic Formulation is a Conductor that

has its Resistance Increase as it Heats up – Thereby Limiting its Upper Temperature

• This Material Is Injection Mouldable• The Company in Question Has a License to Use

the Material• The Company is a Seat Heater ManufacturerNew Product – Existing Market

Developing a New Product6 Provisional US Patent Applications Were Filed for Various Products – Including Heated Steering Wheel.

Developing a New ProductSensor Evolution – Goal Cost ReductionExisting Product – Existing Market

From Generation I to Generation IIIManufacturing Cost Reduced from $5,000 to $800 – No Performance Impact!Continuous Improvement in Action!

Developing a New ProductCar Body Being Measured in Vigo- Spain.• Two Competitors –

Share Market ≈ 50/50.• Technological

Improvements Were Continually Carried out By Both Companies.

• Annual In-Line Vision Gaging Sales ≈ $20M to $30M

Developing a New ProductSkate Sharpening Project – Consumer Product• Company Manufactured Professional Skate

Sharpening Equipment• Wanted to Make a Consumer Skate

Sharpening System – Issues: Cost (<$1000), Ease of Use (Wheel Dressing Too Complicated)

New Product - Existing MarketGovernment R&D Funding Used - IRAP

Developing a New ProductOriginal Concept for Wheel Dressing Failed!Modified Concept Worked so Well that it is Now Retrofitted to all Company Products!4 US Patents Have Been Granted, 2 more in the Pending File, 2 Canadian Patents PendingTwo Whole New Shapes Invented: The FBV, and the A-TrapCompetition is Playing Catch-Up and is Losing Market Share

Developing a New Product

TraditionalCircular Arc

FBV A-Trap

Two New Shapes Have Been Developed to Replace the Traditional Circular Arc

Developing a New Product

Black Stone X-02 Consumer Portable Ice Skate Sharpener

Spinner Magazine In Use

Developing a New ProductProgrammable Airfoil Contouring System- PACSNew Product – New MarketOnly 8 Systems Were Ever Sold• High Price Tag – $300K• Traditional CMMs – Large Entrenched Companies• Development Cost Never

Recovered

Developing a New ProductD Sight™This is a Technique for Visualizing Surface DefectsNew Product – New MarketThis Was a True Inspirational Discovery3 US Patents, A Canadian Patent, A Euro PatentEuro Patent was Contested by Siemens Based on Prior Art. Siemens Lost Their Objection.

Developing a New ProductThe Audit Station Was Developed for the Auto Industry – 45 Units Were Sold. A Less Capable Portable System was Also Developed – 40 Units Sold. A Specialized Unit was Developed for the Plastics Industry to do Test Plaques. An even more Specialized Unit – DIAS was Developed for the Aircraft Industry.Total Sales Volume - $8M.

Developing a New ProductD Sight™ Images of the Sides of two Different Cars.This Tool Was Very Useful in Die Try-Out Prior to Acceptance by the Customer.The Ultimate Goal was to Convert the Image into Surface Dimensions. This Goal was Never Really Achieved.

Developing a New ProductTwo Pertinent Sayings for

Product Development Programs:

Plan Your Work & Work Your Plan.O’Toole’s Commentary: Murphy

was an Optimist.

Developing a New Product

Any Questions?