Slide1 : PENNSTATE Timothy W. Simpson
Associate Professor
Mechanical & Nuclear Engineering and
Industrial & Manufacturing Engineering
The Pennsylvania State University
University Park, PA 16802
phone: (814) 863-7136
email: tws8@psu.edu
http://www.me.psu.edu/simpson/courses/me579 ME 579 - Designing Product Families - IE 579
TR 9:45 - 11:00 a.m. © T. W. SIMPSON
Overview of Lecture : Overview of Lecture Approaches to Product Family Design
Definition of Key Terms
Product Family Maps
Market Segmentation Grid
Examples of Platform Leveraging
Aggregate Project Plan
Kodak Example
Motivation for Product Families : Motivation for Product Families 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)
Why Product Families? : Why Product Families? 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
Definition of Key Terms : Definition of Key Terms 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 ( module-based product family)
scaling or “stretching” the platform in one or more dimensions ( scale-based product family) What is a product family and a product platform?
Basic Approaches to Product Family Design : Basic Approaches to Product Family Design 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
Work by: K. Otto, K. Ulrich, K. Wood, K. Ishii, M. Tseng
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
Work by: D. Rosen, S. Kota, K. Ishii, Z. Siddique
Our primary focus is on the former since it eliminates the need for the latter; however, tools and metrics for both will be discussed
Classifying Product Family Examples : Classifying Product Family Examples 2100 5000 8100 4050 8150
Classifying Product Family Examples : Classifying Product Family Examples
Volkswagen A-Platform : Volkswagen A-Platform VW plans for 19 vehicles based on A-platform
VW estimates development and investment cost savings of $1.5 billion/yr using platforms
Common Components in Volkswagen Platform : Common Components in Volkswagen Platform Source:
Shimokawa, K., Jurgens, U., and Fujimoto, T. (Eds.), 1997, Transforming Automobile Assembly, Springer, New York.
Automobile Platforms at Ford : Automobile Platforms at Ford At Ford, an automobile platform includes:
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
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 PENNSTATE Source:
(C. Moccio, K. Ewing,
G. Pumpuni, MIT, 2000)
Smart : Smart Source: http://www.smart.com
Alternative Definitions of Platform : Alternative Definitions of Platform Platform = A defined set of common or shared elements and its interface definition
Elements can be all kind of architectural elements , e.g. parts, components, systems, processes, organizations - objects or processes A B C D A B C A B C E E Product 1 Product 2 Product 3
Set Theory - DSM : Set Theory - DSM Set Theory: A B C D E P1 P2 P3 Platform = common set= ABC
Top-Down Approach to Product Family Design : Top-Down Approach to Product Family Design 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
Product Family Maps : Product Family Maps Used to map evolution of product family, platform, and derivatives over time; see (Wheelwright and Clark, 1989)
Development Work Leveraged Products
Example Product Family Map: Vacuum Cleaners : Example Product Family Map: Vacuum Cleaners Development Work Leveraged
Products Reference: Wheelwright, S. C. and Sasser, W. E., Jr., 1989, "The New Product Development Map," Harvard Business Review, Vol. 67, pp. 112-125.
Product Family Maps (cont.) : Product Family Maps (cont.) Used to map product families, product platform renewal, and their evolution (Meyer and Lehnerd, 1997) New features,
cost reductions Plan multiple
generations New market
applications Platform
development Next generation
platform Integrate the best of the
old with new technology Reference:
Meyer, M. H., and Lehnerd, A. P., 1997, The Power of Product Platforms, The Free Press, New York.
Example Product Family Map: Gillette Razors : Example Product Family Map: Gillette Razors New features,
cost reductions Plan multiple
generations New market
applications Next generation
platform Integrate the best of the
old with new technology
Identify Platform Leveraging Strategy : Identify Platform Leveraging Strategy Market segmentation grid can be used to identify and map platform leveraging strategies (Meyer, 1997) What Market Niches
Will Your Product Serve?
Platform Strategies: No Leveraging : Platform Strategies: No Leveraging Niche-specific platforms (products) with very little sharing of subsystems and/or manufacturing processes Segment A Segment B Segment C Disadvantages:
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
Platform Strategies: Horizontal Leveraging : Horizontally leverage platform subsystems and/or manufacturing processes across different segments Platform Strategies: Horizontal Leveraging 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
Platform Strategies: Vertical Leveraging : Platform Strategies: Vertical Leveraging Vertically scale key platform subsystems and/or manufacturing processes within a market segment Benefits:
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
Platform Strategies: Beachhead Approach : Platform Strategies: Beachhead Approach Beachhead approach combines horizontal leveraging with upward vertical scaling Platform Key Aspects:
Develop low-cost, effective platform and efficient processes
Scale up performance characteristics of low-cost platform to appeal to needs of mid- and high-end users 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
Platform Leveraging Examples: Rolls Royce Engines : Platform Leveraging Examples: Rolls Royce Engines Rolls Royce scales its aircraft engines to efficiently and effectively satisfy a variety of performance requirements
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
Example Leveraging Strategies: Gillette Razors : Example Leveraging Strategies: Gillette Razors Twin-
Blade
Razor Advanced
Twin-
Blade
Razor Triple-
Blade
Razor
Example Leveraging Strategies: B&D Cordless : Example Leveraging Strategies: B&D Cordless Mid-
Range
Example Leveraging Strategies: B&D Cordless (cont.) : Example Leveraging Strategies: B&D Cordless (cont.) Vertically leverage power supply around 9.6, 12, 14.4, and 18 volt batteries Horizontally leverage power supply within each voltage range
Example Leveraging Strategies: Boeing Aircraft : Example Leveraging Strategies: Boeing Aircraft 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)
Boeing 737 Interior Layouts : Boeing 737 Interior Layouts
Flight Ranges for 737-300, -500, -600, and -700 : Flight Ranges for 737-300, -500, -600, and -700 Capacity: 126 Passengers Capacity: 110 Passengers
Dimensions of Boeing 737-300, -400, and -500 : Dimensions of Boeing 737-300, -400, and -500 All three aircraft share common height and width... …but their fuselage lengths are different:
Dimensions of Boeing 737-600, -700, -800, and -900 : Dimensions of Boeing 737-600, -700, -800, and -900 The same holds true for the 737-600 through 900
Winning Platform Strategies : Winning Platform Strategies 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
Defining a Platform Strategy : Defining a Platform Strategy 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
Product Family Planning : Product Family Planning
Single-Use Camera Example : Single-Use Camera Example 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
Kodak’s Platform Strategy : Kodak’s Platform Strategy From April 1989 and July 1990,
Kodak redesigned its base
model and introduced
three additional
models
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.
Kodak Single-Use Camera Family : Kodak Single-Use Camera Family http://www.kodak.com/global/en/consumer/film/otuc.shtml
Fuji Single-Use Camera Family : Fuji Single-Use Camera Family
Fuji 35mm QuickSnap Camera Family : Fuji 35mm QuickSnap Camera Family
Fuji 35mm QuickSnap Camera Family (cont.) : Fuji 35mm QuickSnap Camera Family (cont.)
Fuji’s QuickSnap Colors Family : Fuji’s QuickSnap Colors Family http://www.fujifilm.com/bridgepages/colors.html
Kodak’s Project Plan : Kodak’s Project Plan Reference:
Wheelwright, S.C. and Clark, K.B.
Leading Product Development
Free Press, New York, 1995.
Aggregate Project Planning : Aggregate Project Planning Breakthrough
Projects New Core
Product Next
Generation
Product Addition to
Product Family Add-ons and
Enhancements Product Changes Process Changes Platform
Projects Derivatives
(Enhancements,
Hybrids, and Cost
Reduced Versions) Advanced
R&D Projects Allied
Partnerships 1 2 3 4 5 Source: (Wheelwright and Clark, 1995)
Aggregate Project Plan Classifications : Aggregate Project Plan Classifications 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 add-ons or enhancements to an existing production process
Allied Partnerships
Partnerships in any of these project areas to leverage development resources and activities
Slide47 : R&D Breakthrough
projects R&D Breakthrough Platform Derivative Allied and Partnership
projects Derivative
projects Platform projects PreQuip’s Development Projects (30) before the Aggregate Project Plan Mass spectrometers Liquid chromatographs Gas chromatographs Data processing and handling products Source: (Wheelwright and Clark, 1995)
Aggregate Project Planning at PreQuip : R&D R&D Platform Derivative Allied and Partnership
projects Derivative
projects Platform projects Breakthrough Aggregate Project Planning at PreQuip PreQuip’s Development Projects (11) after the Aggregate Project Plan Mass spectrometers Liquid chromatographs Gas chromatographs Data processing and handling products Breakthrough
projects Source: (Wheelwright and Clark, 1995)
Kodak Improves Camera Recycling : Kodak Improves Camera Recycling 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
Teaming for Concurrent Engineering at Kodak : Teaming for Concurrent Engineering at Kodak
FunSaver I Project Timeline (Weeks 21-40) : FunSaver I Project Timeline (Weeks 21-40)
Working in a Concurrent Engineering Team : Working in a Concurrent Engineering Team In the next class, we will simulate what it is like to work in a product development team
Each of you will be randomly assigned to work within one of the following “departments”
Customers
Marketing
Engineering
Manufacturing
Quality Control/Testing
to design, build, and test a successful product for class.
Please be here promptly at 9:45 a.m. so that your company can develop its product(s) on time! Inventory
Accounting
Purchasing
Suppliers
Defining a Platform Strategy : Defining a Platform Strategy 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
Defining a Platform Strategy (cont.) : Defining a Platform Strategy (cont.) 2. Identify growth areas
Identify growth opportunities in these segments and niches:
a) your current sales volumes
b) your market share in the niche
c) five-year expected growth rate
d) leading competitors in each niche
e) 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
Defining a Platform Strategy (cont.) : Defining a Platform Strategy (cont.) 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?
Lastly, envision the entry-level products to be derived from the new platform initiative
Defining a Platform Strategy (cont.) : Defining a Platform Strategy (cont.) 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 current-generation 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
Three Aspects of Quality: Kano’s Model : Three Aspects of Quality: Kano’s Model Dissatisfiers are product characteristics that are “basic” or “expected” and are usually taken for granted by customers when present.
Delighters are product characteristics that are “attractive” or “exciting” which often pleasantly surprise customers when they are first encountered. Satisfiers are product characteristics that customers want in their products and are “one dimensional” or “linear” in the sense of the more we provide, the happier the customer.
Kano’s Model (cont.) : Kano’s Model (cont.) 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
Defining a Platform Strategy (cont.) : Defining a Platform Strategy (cont.) 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
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
Defining a Platform Strategy (cont.) : Defining a Platform Strategy (cont.) 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
Identify Core “Building Blocks” : Identify Core “Building Blocks” 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
Defining a Platform Strategy (cont.) : Defining a Platform Strategy (cont.)
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