Chapter 11 Managing the New Product Development Process

Question 1

What are the three sometimes conflicting goals for new product development to be succesful?

Answer 1

(1) maximizing the product’s fit with customer requirements,
(2) minimizing the development cycle time, and
(3) controlling development costs.

Question 2

What does maximizing the fit with customer requirements mean?

Answer 2

For a new product to be successful in the marketplace, it must offer more compelling features, greater quality, or more attractive pricing than competing products.

Question 3

What are the reasons that maximizing the fir with customer requirements fail regularly?

Answer 3

First, the firm may not have a clear sense of which features customers value the most, resulting in the firm’s overinvesting in some features at the expense of features the customer values more.

Firms may also overestimate the customer’s willingness to pay for particular features, leading them to produce feature-packed products that are too expensive to gain significant market penetration.

Firms may also have difficulty resolving heterogeneity in customer demands;

Question 4

What is another important consideration regarding development cycle time?

Answer 4

Another important consideration regarding development cycle time relates to the cost of development and the decreasing length of product life cycles.

First, many development costs are directly related to time.

Second, a company that is slow to market with a particular generation of technology is unlikely to be able to fully amortize the fixed costs of development before that generation becomes obsolete.

Finally, a company with a short development cycle can quickly revise or upgrade its offering as design flaws are revealed or technology advances. A firm with a short development cycle can take advantage of both first-mover and second-mover
advantages.

Question 5

What is partly parallel development process?

Answer 5

A development process in which some (or all) of the development activities at least partially overlap. That is, if activity A would precede activity B in a partly parallel development process, activity B might commence before activity A
is completed.

Question 6

What is one type of parallel development process?

Answer 6

concurrent engineering:
A design method in which stages of product development (e.g., concept development, product design, and process design) and planning for later stages of the product lifecycle (e.g., maintenance, disposal, and recycling) occur
simultaneously.

Question 7

What is a project champion?

Answer 7

A number of studies on new product development have suggested that firms should assign (or encourage) a senior member of the company to champion a new product
development project.

Question 8

What does a project champion do/

Answer 8

They can facilitate the allocation of human and capital resources to the development effort, ensuring that cycle time is not extended by resource constraints, and help ensure that the project can sustain the necessary momentum to surmount the hurdles that inevitably will arise.11 A senior project champion also can stimulate communication and cooperation between the different functional groups involved in the
development process.

Question 9

What are the risks of championing?

Answer 9

A manager’s role as champion may cloud judgment about the true value of the project.

Though the champion’s seniority is an asset in gaining access to resources and facilitating coordination, this same seniority may also make others in the firm unwilling to challenge the project champion even if it has become
apparent that the project’s expected value has turned negative

Question 10

Why can customers be involved in the development process?

Answer 10

The end customer is often the one most able to identify the maximum performance capabilities and minimum service requirements of a new product. Including the end customer in the actual development team or designing initial product versions and encouraging user extensions can help the firm focus
its development efforts on projects that better fit customer needs.

Question 11

How can customers be involved in the development process?

Answer 11

Customers may be involved in the new product development process as an information source, or as actual co-developers of a new product.20 Many firms use beta testing to get customer input early in the development process. A beta version of a product
is an early working prototype of a product released to users for testing and feedback.

Question 12

What is agile development?

Answer 12

A process commonly used in software whereby the overall product is broken down into smaller independent pieces that are worked on by autonomous, self-organizing teams. Features are developed and presented to customers quickly so that the overall product can be rapidly and continuously
adapted.

Question 13

Who are lead users?

Answer 13

Customers who face the same general needs of the marketplace but are likely to experience them months or years earlier than the rest of the market and stand to benefit disproportionately from solutions to those
needs.

Question 14

Why can involving suppliers help with the development process?

Answer 14

By tapping into the knowledge base of its suppliers, a firm expands its information resources. Suppliers may be actual members of the product team or consulted as an alliance partner. In either case, they can contribute ideas for product improvement or increased development efficiency.

Question 15

What is crowdsourcing?

Answer 15

Firms can also open up an innovation task by directing an innovation challenge to third parties such as the general public, or specific, targeted groups of innovators from dif-
ferent networks.

Question 16

What are the four step processes of crowdsourcing?

Answer 16

1. Need translation. A clear, concise, and compelling need statement is articulated that reduces industry jargon to a minimum, and that brings the challenge down
   to its most basic science.
2. Connecting. The innovation challenge must be broadcast to the network of potential solution providers that have been selected as most suitable to respond.
3. Evaluation/Selection. Submitted proposals get an in-depth review, and the most interesting solution proposals get selected and collated in the form of a report.
4. Acquisition. The firm engages with the solution provider and negotiates an agreement to transfer knowledge, a license, patent, and so on.

Question 17

What are the most prominent tools used to improve the development process (can greatly expedite the new product development process and maximize the product’s fit with customer requirements)?

Answer 17

stage-gate processes, quality function deployment (“house of quality”), design for manufacturing, failure modes and effects analysis, and computer-aided design/computer-
aided manufacturing

Question 18

What are go/kill decision points?

Answer 18

Gates established in the development process where managers must evaluate whether or not to kill the project or allow it to
proceed.

Question 19

What are the stages of the stage-gate process?

Answer 19

in Stage 1, the team does a quick investigation and conceptualization of the project.

In Stage 2, the team builds a business case that includes a defined product, its business justification, and a detailed plan of action for the next stages.

In Stage 3, the team begins the actual design and development of the product, including mapping out the manufacturing process, the market launch, and operating plans. In this stage, the team also defines the test plans utilized in the next stage.

In Stage 4, the team conducts the verification and validation process for the proposed new product, and its marketing and production.

At Stage 5, the product is ready for launch, and full commercial production and selling commence.

Question 20

What is Quality Function Deployment (QFD) - the house of quality?

Answer 20

QFD was developed in Japan as a comprehensive process for improving the communication and coordination among engineering, marketing, and manufacturing ­personnel.32 It achieves this by taking managers through a problem-solving process in a very structured fashion. The organizing framework for QFD is the “house of quality” (see Figure 11.5). The house of quality is a matrix that maps customer requirements against
product attributes. This matrix is completed in a series of steps.

Question 21

What are the steps of the matrix of the house of quality?

Answer 21

1. The team must first identify customer requirements.
2. The team weights the customer requirements in terms of their relative importance from a customer’s perspective.
3. The team identifies the engineering attributes that drive the performance of the product
4. The team enters the correlations between the different engineering attributes to assess the degree to which one characteristic may positively or negatively affect
   another.
5. The team fills in the body of the central matrix. Each cell in the matrix indicates the relationship between an engineering attribute and a customer requirement.
6. The team multiplies the customer importance rating of a feature by its relationship to an engineering attribute (one, three, or nine). These numbers are then summed for each column, yielding a total for the relative importance of each engineering
   attribute.
7. The team evaluates the competition. A scale of one to seven is used (one indicating a requirement is not addressed, and seven indicating a requirement is completely satisfied) to evaluate the competing products (in this case A and B) on each of the
   customer requirements.
8. Using the relative importance ratings established for each engineering attribute and the scores for competing products (from step 7), the team determines tar-
   get values for each of the design requirements
9. A product design is then created based on the design targets from step 8. The team then evaluates the new design that was created.

Question 22

What are the advatages of the house of quality?

Answer 22

The great strength of the house of quality is that it provides a common language and framework within which the members of a project team may interact. The house of quality makes the relationship between product attributes and customer requirements very clear, it focuses on design trade-offs, it highlights the competitive shortcomings of the company’s existing products, and it helps identify what steps need to be taken to improve
them.

Question 23

What is design of manufacturing (DFM)

Answer 23

DFM is simply a way of structuring the new product development process. Often this involves articulat-
ing a series of design rules.

the purpose of such design rules is typically to reduce costs and boost product quality by ensuring that product designs are easy to manufacture. The easier products are to manufacture, the fewer the assembly steps required, the
higher labor productivity will be, resulting in lower unit costs.

Question 24

What are the benefits of DFM?

Answer 24

Considering manufacturing at an early stage of the design process can shorten development cycle time. In addition, by lowering costs and increasing product quality, DFM can increase the product’s fit with
customer requirements.

Question 25

What is FMEA (failure modes and effects analysis)`?

Answer 25

Failure modes and effects analysis (FMEA) is a method by which firms identify potential failures in a system, classify them according to their severity, likelihood, and detectability, and put a plan into place to address them.

First, potential failure modes are identified
Potential failure modes are then evaluated on three criteria of the risk they pose: severity, likelihood of occurrence, and difficulty of detection (how easy is it to determine the failure will occur).

Question 26

What is CAD and CAE?

Answer 26

Computer-aided design (CAD) and computer-aided engineering (CAE) are the use of computers to build and test product designs.

The combination enables product prototypes to be developed and tested in virtual reality. Engineers can quickly adjust prototype attributes by manipulating the three-dimensional model, allowing them to compare the characteristics of different product designs. Eliminating the need to build physical prototypes can reduce cycle
time and lower costs

Question 27

What is CAM?

Answer 27

Computer-aided manufacturing (CAM) is the implementation of machine
controlled processes in manufacturing. WCAM is faster and more flexible than traditional
manufacturing.

Question 28

What is three dimensional printing

Answer 28

A recent incarnation of computer-aided manufacturing is three-dimensional ­printing (also known as additive manufacturing

A method whereby a design developed in a computer-aided design program is printed in three dimensions by laying down thin strips of material until the model is
complete.

Question 29

What are the measures of success of the new product development process that can help management

Answer 29

• Identify which projects met their goals and why.
• Benchmark the organization’s performance compared to that of competitors or to the organization’s own prior performance.
• Improve resource allocation and employee compensation.
• Refine future innovation strategies.44

Question 30

What are new product development process metrics?

Answer 30

Many firms use a number of methods to gauge the effectiveness and efficiency of the development process. These measures capture different dimensions of the firm’s ability to successfully shepherd projects through the development process. To use such methods, it is important to first define a finite period in which the measure is to be applied in order
to get an accurate view of the company’s current performance

Question 31

What are measures that measure the overall innovation performance?

Answer 31

Firms also use a variety of methods to assess their overall performance at innovation. These measures give an overall view of the bang for the buck the organization is achieving with its new product development processes. Such measures include:
1. What is the firm’s return on innovation? (This measure assesses the ratio of the firm’s total profits from new products to its total expenditures, including research and development costs, the costs of retooling and staffing production facilities, and initial commercialization and marketing costs.)
2. What percentage of projects achieve their sales goals?
3. What percentage of revenues are generated by products developed within the past five years?
4. What is the firm’s ratio of successful projects to its total project portfolio?