CONTENTS

PREFACE xix
1. INTROOUCTlON
CHARAcrERISTICS OF SUCCESSFUL PRODUcr DEVELOPMENT
WHO DESIGNS AND DEVELOPS PRODUCTS
DURATION AND COST OF PRODUcr DEVELOPMENT
THE CHALLENGES OF PRODUcr DEVELOPMENT
APPROACH OF THIS BOOK
Structured Methodologies 7
Industrial Examples 8
Organizational Realities 8
Rilad Map of the Book 9
REFERENCES AND BIBLIOGRAPHY
EXERCISES
THOUGHT QUESTIONS
2. OEVELOPMENT PROCESSES ANO ORGANIZATIONS
A GENERIC DEVELOPMENT PROCESS
CONCEPT DEVELOPMENT: THE FRONT-END PROCESS
ADAPTING THE GENERIC PRODUcr DEVELOPMENT PROCESS
Technology-Push Products 21
Platform Products 21
Process-Intensiue Products 22
Customized Products 22
THE AMF DEVELOPMENT PROCESS
PRODUcr DEVELOPMENT ORGANlZATIONS
1
2
3
4
5
7
10
11
11
13
14
18
20
22
23
ix
X CONTENTS
Organizalious Are Formed by Establishing Links among
Indiuiduals 23
Organiuional Links May Be Aligned witlt Functions, Projects,
or Bolh 25
Choosing an Organizational Structure 26
THE AMF ORGANIZATION 28
SUMMARY 30
REFERENCES ANO BIBLIOGRAPHY 31
EXERCISES 32
THOUGHT QUESTIONS 32
3. IDENTIFYING CUSTOMER NEEDS
STEI' 1: DEFINE THE SCOPE OF THE EFFORT
STEI' 2: GATHER RAW DATA FROM CUSTOMERS
Choosing Customers 39
Tite Art ofEliciting Customer Needs Data 41
Documenting Interaetions with Customers 42
STEP 3: INTERPRET RAW DATA IN TERMS OF CUSTOMER NEEDS
STEP 4: ORGANIZE THE NEEDS INTO A HIERARCHY
STEP 5: ESTABLISH THE RELATlVE IMPORTANCE OF THE NEEDS
STEP 6: REFLECT ON THE RESULTS AND THE PROCESS
SUMMARY
REFERENCES ANO BIBLIOGRAPHY
EXERCISES
THOUGHT QUESTIONS
4. ESTABLlSHING PRODUCT SPECIFICATIONS
WHAT ARE SI'ECIFICATIONS?
WHEN ARE SPECIFICATIONS ESTABLISHEn?
ESTABLISHING TARGET SPECIFICATIONS
Slel) 1: Prepare lite List of M etrics 57
Slep 2: Collect tite Competitiue Bendimarking Information
Stej) 3: Set Ideal and Marginally Acceptable Target
Values for Eacli Metric 64
Stej) 4: Reflec: on tite Results and tite Process 65
REFlNING THE SPECIFlCATIONS
.')'Iep 1: Develop Teclmical Models of the Produ ct 67
Slej) 2: Develop a Cost Model of the Product 69
Step 3: Refine tite Specifications, Making Trade-O.ffs
\Vhere Necessarv 70
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36
38
43
46
48
49
50
51
52
52
53
54
56
57
61
Slej) 4: Reflea on the Results and the Process
SUMMARY
REFERENCES AND nIBUOGRAPI-IY
EXERCISES
THOl! CHT QUESTIONS
5. CONCEPT GENERATION
71
CONTENTS xi
73
74
74
75
77
TI-lE TASK OF CONCEI'T GENERATION IN pRODUCT DEVELOPMENT 78
Structured Approaches Reduce the Likelihood of Costl)'
Problems 79
A Fioe-Step Methodology 79
STEP 1: CLARIFYTI-I E PROBLEM 81
Decompose a Complex Problem into Simpler Subproblems 82
Focus Initial EJJorts on the Critical Subproblems 84
STEp 2: SEARCH EXTERNALLy 84
Interview Lead Users 85
Consult Experts 85
Searcb Patents 86
Search Published Literature 86
Benchmark Relat ed Produ cts 88
STEp 3: SEARCH INTERc'\lALLY 88
Both Individual and Group Sessions Can Be Useful 89
Hints fo r Generating Solut ion Concepts 90
STEp 4: EXPLORE SYSTEMATICALLY 91
Concept Classification Tree 93
Concept Combination Table 95
Managing the Exploration Process 98
srrr 5: REFLECT ON THE SOLUTIONS AJ"l O THE pROCESS 100
SUMMARY 101
REFERENCES ANO BIBLlOGRAPHY 102
EXERC1SES 103
TI-I OUGHT QUESTI0NS 104
6. CONCEPT SELECTION 105
Concept Selection Is An In tegral Part of the Product Deoelopment
Process 106
All Teams Use Some Method for Choosing a Concept 107
A Stru ctured Methodology Offers Seueral Benefits 111
OVERVIEW OF METHOOOLOGY 111
CONCEPT SCREENING 113
;d CONTENf.
StejJ 1: Prepare the Selection Matrix 113
Step 2: Rate the Concepts 114
Step 3: Rank the Coneepts 115
Step 4: Combine ami Improve the Coneepts 115
Step 5: Select One or More Concepts 115
Step 6: Reflect on the Results and the Process 116
CONCEPT SCORING
Step 1: Prepare the Selection Matrix 117
Step 2: Rate the Coneepts 118
Step 3: Rank the Coneepts 119
Step 4: Combine and Improve the Coneepts 119
Step 5: Select One or More Concepts 119
Step 6: Reflect on the Results and the Process 120
CAVEATS
SUMMARY
REFERENCES AND BIBLIOGRAPHY
EXERCISES
THOUGHT QUESTIONS
APPENDIX A: SCREENING MATRIX EXAMPLE
APPENDIX B: SCORING MATRIX EXAMPLE
7. PRODUCT ARCHITECTURE
WHAT IS PRODUGf ARCHITEGfURE?
IMPLICATIONS OF THE ARCHITEGfURE
Product Change 133
Product Variety 134
Component Standardization 135
Product Performance 135
ManuJacturability 137
Product Deoelopment Management 137
ESTABLISHING THE ARCHITEGfURE
Step 1: Create a Schematic oJ the Product 138
Step 2: Cluster the Elements oJ the Schemati c 140
Step 3: Create a Rough Geometric Layout 142
Step 4: Identify the Fundamental and Incidental
Interactions 144
RELATED SYSTEM-LEVELDESIGN ISSUES
Dejining Secondary Systems 146
Establishing the Architecture of the Chunks 146
Migration oJFunctionality across Chunk Interfaces 146
Creating Detailed Interface SpeciJications 147
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122
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124
124
126
129
131
133
138
146
CONTENTS xIII
SUMMARY 148
REFERENCES AND BIBLIOGRAPHY 148
EXERCISES 149
THOUGHT QUESTIONS 150
8. INDUSTRIAL DESIGN 151
WHAT IS INDUSTRIAL DESIGN? 154
ASSESSING THE NEED FOR INDUSTRIAL DESIGN 155
Statistics on Expenditures for Industrial Design 155
How Important Is Industrial Design to a Produc 156
Ergonomic Needs 157
Aesthetic Needs 157
THE IMPACf OF INDUSTRIAL DESIGN 158
Is IndustriaL Design Worth the Investment? 158
How Does Industrial Design EstabLish a Corporate Identity? 161
THE INDUSTRIAL DESIGN PROCESS 161
Investigation of Customer Needs 162
Conceptualization 162
PreLiminary Refinement 164
Further Refinement and FinaL Concept SeLection 164
Control Drawings 165
Coordination with Engineering, Manufacturing, and
ExternaL Vendors, 165
The Impact of Computer-Based TooLs on the ID Process 165
MANAGEMENT OF THE INDUSTRIAL DESIGN PROCESS 167
TechnoLogy-Driven Products 167
User-Driven Products 168
TechnoLogy-and-User-Driven Products 168
Timing ofIndustriaL Design. InvoLvement 169
ASSESSING THE QUALITY OF INDUSTRIAL DESIGN 172
l. Qy,ality of the User Interfaces 172
2. EmotionaL AppeaL 172
3. AbiLity to Maintain and Repair the Product 174
4. Appropriate Use of R.esources 174
5. Product Differentiat ion 174
SUMMARY 175
REFERENCES AND BIBLIOGRAPHY 175
EXERCISES 176
THOUGHT QUESTIONS 177
9. DESIGN FOR MANUFACTURING
DESIGN FOR MANUFACTURING DEFINED
179
181
xlv CONTENTS
[)FM Rrquirrs a Cross-Functional '1"('(Im 181
J)/'M Is Performed throughou t the Deuelopment Process 182
Ouenn eto of the DFM Methodology 182
ESTI MArE THE MANUFACTURI NG COSTS 183
Fi xed Costs versus Variable Costs 185
Th e Bill uf Materials 186
Estimating the Costs of Standard Components 187
Estimating the Costs of Custom Components 188
Estimating the Cost ofAssembly 189
Estimating the Ouerhead Costs 190
REDUCE THE COMI' ONENT COSTS 191
Understand the Process Constraints and Cost Drivers 191
Redesign Components to Eliminate Processing Steps 192
Choose the Appropriate Economi c Scale for the Pan Process 193
Standardize Compon ents and Processes 193
Adhere to "Black Box" Component Procurement 194
REDUCE THE ASSEMBLY COSTS 195
Keeping Score 195
Integrate Parts 196
Maximize Ease of Assembly 197
Consider Customer Assembly 198
REDUCE THE SUI'I'ORT COSTS 198
Minimize Systemic Complexity 199
Error Proofing 200
CONSIDER THE IMPACT OF DFM DECISIONS ON OTHER FACTORS 20 1
The Impact ofDFM on Deoelopment Time 201
The Impact of DFM on Deoelopment Cost 201
The Impact of DFM on Produ ct Quality 201
The Impact of DFM on External Factors 202
RESULTS 202
SUMMARY 204
REFERENCES AND BIBLIOGRAPHY 205
EXERCISES 206
THOUGHT QUESTIONS 206
Al'PENDIX A: MATERIALS COSTS 207
Al'PENDIX B: COMPONENT MANUFACTURING COSTS 208
Terminolog 208
Description of Processes 208
APPENDIX C: ASSEMBLY COSTS 214
10. EFFECTIVE PROTOTYPING
PROTOTYPE BASICS
217
218
CONTENTS xv
What t, a Pmtllt)j)('? 218
TyjJes oJPrototypes 219
What Are Prototypes Used For? 220
PRINCIPLES OF PROTOTYI'INC 223
Analytical Prototvpes Are Cenerally More Flexible Than
Physical Prototvpes 223
Physical Prototspes Are Required to Detect Unanticipated
Phenomena 223
A Prototype May Reduce the Risk oJ Costly Iterations 224
A Prototype May Expedite Other Deoelopment Steps 225
A Prototype May Restructure Task Dependencies 225
PLANNING FOR PROTOTYPES 226
Step 1: Define the Purpose oJ the Prototype 226
Step 2: Establish the Leoel oJApproximation oJ the
Prototype 227
Step 3: Outline an Experimental Plan 228
Step 4: Create a Schedule Jor Procurement, Construction,
and Test 228
Planning Milestone Prototypes 229
SUMMARY 230
REFERENCES AND BIBLIOGRAPHY 231
EXERCISES 231
THOUGHT QUESTIONS 232
11. ECONOMICS OF PRODUCT DEVELOPMENT
PROJECTS 233
ELEMENTS OF ECONOMIC ANALYSIS 234
Quantitative Analysis 234
Qualitative Analysis 235
When Should Economic Analysis Be PerJormed? 235
Methodology 236
STEP 1: BUILD A BASE-CASE FINANCIAL MODEL 236
Estimate the Timing and Magnitude oJFuture Cash Inflows
and Outflows 236
Compute the Net Present Value oJ the Casli Flows 239
The Base-Case Financial Model Can Support Go/No-Go Decisions
and Major Investment Decisions 239
STEP 2: SENSITIVITY ANALYSIS 240
Deoelopment Cost Example 240
Development Time Example 242
STEP 3: USE SENSITIV1TY ANALYSIS TO UNDERSTAND
PROJECT TRADE-OFFS 243
xvi CONTENT8
Six Potential Interactions 243
Trade-Off Rules 245
Limitations 01Quantitative Analysis 246
STEP 4: CONSIDER THE INFLUENCE OF THE QUALITATIVE FACTORS
ON PROjECT SUCCESS 247
Projects Interact with the Firm, the Market, and the
Macro Environment 247
Carrying Out Qualitative Analysis 249
Example I : Decrease in the Price 01a Substitu te Product 250
Example 2: Increased Competition in a
Product Market 250
Example 3: The "Option" Value 01Creating a Good Platform.
Product 251
SUMMARY 251
REFERENCES AND BIBLIOGRAPHY 252
EXERCISES 252
THOUGHT QUESTIONS 253
APPENDIX A: THE TIME VALUE OF MONEY AND THE NET
PRESENT VALUE TECHNIQUE 253
What Interest Rate Should We Use? 255
Sunk Costs Are Irreleuant [or Net Present Value
Calculations 255
Denling with Uncertai nty in the Cash Inflotu and Outflow
Estimates 256
12. MANAGING PRODUCT DEVELOPMENT PROJECTS
UNDERSTANDING AND REPRESENTING TASKS
Sequential, Parallel, and Coupled Tasks 260
The Design Structure Matrix 262
Gantt Charts 263
PERT Charts 264
The Critical Path 265
BASELINE PROj ECT PLANNING
The Contract Book 265
Project Task List 266
Team Staffing and Organization 268
Project Schedule 269
Project Budget 270
Project Risk Areas 271
Modifying the Baseline Plan 271
ACCELERATING THE PROjECT
259
260
265
272
CONTENTS xvII
PROJEGf EXECUTION 274
Coordination Mechanisms 274
Assessing Project Status 276
Correctiue Actions 278
POSTMORTEM PR()JECT EVALUATION 279
SUMMARY 280
REFERENCES AND BIBLIOGRAPHY 280
EXERCISES 281
THOUGHT QUESTIONS 282
INDEX 283