Step 6.1

Estimate market needs and costs for production.

Primary findings

Models

Design manufacturing integration is positively associated with NPD project efficiency, if product design and manufacturing personnel act in truly cooperative ways, overall project efficiency should increase.
Survey of 137 completed NPD projects. The degree of design and manufacturing integration significantly differed across the project groups in the expected direction.
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Methods

By using templates, the time required for new product development is drastically reduced. At the same time incorporating computer-aided process planning into the system gives the designer a better understanding of the cost implications of the modified design with respect to manufacturing. The major challenge in implementing of such system is that any changes in the manufacturing facility have to be incorporated in the process plans stored. This can be a tedious job but can be overcome by using hybrid process planning approach instead of variant based approach.
Author experience
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Cost Estimation — A product's costs include development, manufacturing, advertising, selling warranties and replacements. Relevant cost definitions include: Capital Cost — cost of borrowing money to finance entire development, production, commercialization process. Direct Cost — costs clearly traceable to a unit of output in terms of device or service unit. Manufacturing Overhead Cost - all costs excluding direct materials and direct labor. Prime Cost — total of direct material and direct labor.
Authors experience in industrial engineering, physical medicine and rehabilitation, and as Editor-in-Chief of the International Journal of Industrial Engineering.
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Create and maintain high levels of integration between Marketing and Research & Development functions and product prototype development, product launch and cycle times will all have increased proficiency. Market forecast accuracy and technological core competency fit will also be improved with function integration. Be sure to implement integration at step 4.1.
Survey. A multiple regression analysis revealed significance between integration and: product prototype development proficiency (F=70.80); product launch proficiency (F=122.74); product development cycle time (F=13.84), market forecast accuracy (F=75.65); and technological core competency fit (F=39.64), all interactions significant at the p<.001 level.
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Exxon/Mobil lists a key lesson as: Properly resource roll-outs of NPD work processes to avoid false starts; otherwise there may be fits and starts of activity with gaps in between because of resource problems.
Industry experience.
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Organizations should have coherent administrative procedures, including information-gathering systems reviewing new opportunities; flexible capital budgets that extend beyond two years; up-to-date capital budgeting manuals; full time capital budgeting staff; regular reviews of hurdle rates; and a capital appropriation committee to vet projects.
Survey with significant findings
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Process planning task involves the development of a set of work instructions used for part transformation from its initial to final form. In the proposed system, the process plan module provides detailed information and description of manufacturing processes and machine tools required. The information includes: list of required machines; specific cutting energy for the work material; standard set-up and tear down times; number of tools required; and cost per hour of operation. A search heuristic is developed for the selection of appropriate process plan. If a process plan is not found in the database, a new process plan will be generated based on the defined design features, dimensions and required tolerance for finished product. The information from the developed process plan is used to calculate the manufacturing time and cost.
Author developed template
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Product Demand Forecasting — helps an organization effectively manage issues including: monthly/quarterly/annual sales targets; estimating inventory on hand to meet orders without an excessive backlog; estimating raw materials necessary to meet manufacturing targets and deadlines; projection of time line for acquiring and stocking materials inventory for manufacturing; estimating labor force (workers, managers, technicians) required to commence and complete production schedule detailed above; effects of monetary value of forecasted activity on company's operating capital and profitability.
Authors experience in industrial engineering, physical medicine and rehabilitation, and as Editor-in-Chief of the International Journal of Industrial Engineering.
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Sound evaluation methods are needed for new product success, including strategic screenings of new product proposals; utilization of market research; and primary and secondary valuation using a variety of methods such as net present value or Payback.
Survey with significant findings.
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Tips

Higher levels of sophistication in capital budgeting are associated with new product development success.
Survey with significant findings.
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If operating as a defender, a company who focuses on existing products and stable markets, pay close attention to lowering costs and price in order to improve new product development performance.
Survey. The cost/price driver for NPD performance improvement was found to be significantly greater for defenders than for prospectors.
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Secondary findings

Barriers

Financial evaluation dilemma — Flimsy data may result in the elimination of potentially successful projects. However, failure to evaluate at an early stage (using any and all available data) results in new product development failure.
Source: Hayes & Abernathy, 1980; Hayes & Garvin, 1982; Pearson, 1986. In: Neale, C.W. (1994)

Methods

Use of methods such as design for manufacturing (DFM) to encourage the integration of product and process design decisions has been associated with lower product costs and better conformance quality.
Source: Youssef (1994), Swink (2002), Sanchez and Perez, (2003). In: Swink, M., Talluri, S., & Pandejpong, T. (2006)

Develop production and capacity plan.

Primary findings

Barriers

Neglecting Risk Management: To speed development time and save money, the project skipped the pilot demonstration phase of a new manufacturing process, with production designs derived from bench demonstrations, and concepts based on computer simulations only.
Conclusions drawn from case studies and experience.
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Models

Design manufacturing integration is positively associated with NPD project efficiency, if product design and manufacturing personnel act in truly cooperative ways, overall project efficiency should increase.
Survey of 137 completed NPD projects. The degree of design and manufacturing integration significantly differed across the project groups in the expected direction.
(View full citation)

Methods

By using templates, the time required for new product development is drastically reduced. At the same time incorporating computer-aided process planning into the system gives the designer a better understanding of the cost implications of the modified design with respect to manufacturing. The major challenge in implementing of such system is that any changes in the manufacturing facility have to be incorporated in the process plans stored. This can be a tedious job but can be overcome by using hybrid process planning approach instead of variant based approach.
Author experience
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Manufacturing Facilities Design — buildings to house and equipment to conduct manufacturing process. The design includes the following considerations: — Type of equipment; — Power rating of equipment; — Number of machines required; — Manufacturing facilities layout.
Authors experience in industrial engineering, physical medicine and rehabilitation, and as Editor-in-Chief of the International Journal of Industrial Engineering.
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Manufacturing processes can be categorized into three classes: 1) Primary — the main shape generating processes (cast, forge, mold). 2) Secondary — refine the part's features or form (machine, grind, broach). 3) Tertiary — finishing processes such as surface and heat treatments that typically affect only one attribute of the product.
Authors experience in industrial engineering, physical medicine and rehabilitation, and as Editor-in-Chief of the International Journal of Industrial Engineering.
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Once the product design is finalized, its cost structure determined and future demand forecasted, production manufacturing needs must be planned and build. The size, selection of equipment, material routing characteristics etc., of these facilities are largely dictated by the demand forecast. Over production increases inventory carrying costs, while under production fails to fill orders.
Authors experience in industrial engineering, physical medicine and rehabilitation, and as Editor-in-Chief of the International Journal of Industrial Engineering.
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Process planning task involves the development of a set of work instructions used for part transformation from its initial to final form. In the proposed system, the process plan module provides detailed information and description of manufacturing processes and machine tools required. The information includes: list of required machines; specific cutting energy for the work material; standard set-up and tear down times; number of tools required; and cost per hour of operation. A search heuristic is developed for the selection of appropriate process plan. If a process plan is not found in the database, a new process plan will be generated based on the defined design features, dimensions and required tolerance for finished product. The information from the developed process plan is used to calculate the manufacturing time and cost.
Author developed template
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Tips

Align product development with manufacturing capabilities, to ensure that any process issues or infrastructure upgrades are planned and implemented on a timetable appropriate for market launch.
Conclusions drawn from case studies and experience.
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Construct a Critical Path Analysis which specifies a schedule of events and dates with required timing for all production and marketing activities to be completed by launch.
Experiential
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The NPD scale-up and validation stages cannot be omitted to save time or money, particularly when revisions are made mid-project. It is a gamble that usually ends up costing more of both.
Conclusions drawn from case studies and experience.
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Theory of Performance Frontiers suggests that NPD project efficiency is improved through the implementation of changes to project execution processes. Such process changes might apply new technologies, operating procedures, organizational structures, or other practices that remove waste (inefficiency) from design and development activities.
Survey of 137 completed NPD projects. Authors interpretation of theory of performance frontiers as it relates to NPD
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Secondary findings

Methods

An interesting modification to concurrent engineering is the agile concurrent engineering (ACE) methodology. Its main characteristics are full utilization of resources through resource sharing, agile teams suited for medium or small-sized firms and minimum organization restructuring. In this methodology, a quantitative modeling tool for the concurrent engineering process was developed which describes the mini-circulations and resource sharing within the system. This tool (ESHLEP-N) was a high-level evaluation, stochastic Petri-net model.
Source: Yan and Jiang (1999). In: Kamrani, A., & Vijayan, A. (2006)

Coordination in this sense refers to the problem of ensuring that scarce development resources are allocated efficiently to the different tasks that must be accomplished, that task deadlines are set appropriately and communicated clearly, and that the sequence of planned activities leads to a total project duration that approaches the minimum possible. In the literature on project management, these problems are typically addressed in terms of PERT charts and 'critical path analysis'
Source: Eppen, Gould, and Schmidt (1993). In: Hoopes, D.G., & Postrel, S. (1999)

Use of methods such as design for manufacturing (DFM) to encourage the integration of product and process design decisions has been associated with lower product costs and better conformance quality.
Source: Youssef (1994), Swink (2002), Sanchez and Perez, (2003). In: Swink, M., Talluri, S., & Pandejpong, T. (2006)

Monitor product performance in market.

Primary findings

Methods

Customer expectations about products have increased so high quality and cost effectiveness are necessary but not sufficient. Today these factors need to be supported by after-sales service for successful results.
Survey of 87 manufacturers.
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The manufacturer can provide free users' manuals or online access to tutoring programs in order to reduce the learning cost incurred by customers.
Case analysis
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Voice of the Customer Information as a Best Practice for the NPD process: 1) Market and buyer behavior studies are a valuable source of information for planning the market launch. 2) Market research as a tool to help define the product. 3) The customer or user ought to be an integral part of the Development process. 4) Identification of customers or users real or un-articulated needs and their problems, is considered fundamental to voice-of-the-customer research, and should be a key input to product design. 5) Working with highly innovative users or customers.
A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
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Tips

Product support is essential to customer satisfaction.
Source: Lele and Sheth (1988). In: Goffin, K. (1998)

Secondary findings

Methods

The strategic activities which are essential to the successful marketing of complex, technology-based products include product customization, information gathering on product performance, product education and training, ongoing product support.
Source: Athaide et al (1996). In: Goffin, K. (1998)

Tips

Use the Internet to assist with customer and product support. Train salespeople and provide them answers to product questions online.
Source: The Baan Company: Case Study (2002), FileNew Corp: Case Study (2002), Tompkins Group: Case Study (2002). In: Ozer, M. (2003)

Troubleshoot and correct problems in product.

Primary findings

Carriers

Failure mode effect analysis (FMEA) techniques help the design team to study the causes and effects of product failures. FMEA specifies the various conditions the product will endure, and tests, how it reacts under those conditions, allowing designers to plan a product that will withstand a broader range.
Experiential. Authors' knowledge.
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Methods

Continually observe and correct problems or errors made by team members to improve the quality of decision making and implementation.
Literature review
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Detect problems early and communicate “fixes”
Survey.
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Failure Knowledge Network (FKN) — captures and inter-relates mechanical product quality knowledge from five areas: (i) the connection between failures and product functions, (ii) the relationship between failures and product components, (iii) the correlation between failures and organizations, (iv) the association between failures and product processes, and (v) the conjunction among different failures. FKN information is represented in a four-dimensional matrix that includes components, functions, processes and organization. Each element in the matrix is a failure scenario and represents the related failures within the corresponding dimensions. Conventional factors of failures are embodied in the FKN representation. They include event, detection, effect, severity, solution weight, cause, monitor, reappearance, operation, efficiency and precaution. The indexes of each factor are provided by subject matter experts and are set in accordance with the correlation between corresponding characteristics and failures
Failure knowledge based decision-making in product quality.
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Product quality-related decision-making using the Failure Knowledge Network (FKN) — The first step of the decision-making process is the identification of related failures and characteristics. The second step is determination of the important characteristics of the clusters. Next, there is a comparison between the characteristics of each target. Finally, the interdependent priorities of the characteristics are determined by analyzing dependencies among the targets and characteristics.
Failure knowledge based decision-making in product quality.
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Secondary findings

Barriers

One drawback to using Failure Modes and Effects Analysis (FMEA) is that it has deficiencies in the expression of the relationship between different failure components. As a result it can not be used as a technique for knowledge formulation. One way to represent and share failure information is to construct a knowledge network of failure scenarios.
Source: Dai (2009). In: Dai,W., Maropoulos, P.G. &Tang, X.Q. (2010)

One of the reasons that product quality failures reoccur is that the knowledge of past failures is not well represented or readily-available to respective parties. One way to represent and share past failures is to construct a knowledge network of failure scenarios.
Source: Hatamura (2003). In: Dai,W., Maropoulos, P.G. &Tang, X.Q. (2010)

Measures

NPD performance can be measured in various ways: 1) Development lead time and cost (Roemer et al, 2000); 2) Quality level in terms of number of open issues remaining (e.g., bugs in software) at time of launch (Yassine et al, 2003); 3) The number of features implemented or supported (Karlsson & Ahlstrom, 1999); 4) The amount of discrepancy between a desired goal and the actual NPD outcome (O'Donnell & Duffy, 2002).
Source: O'Donnell & Duffy (2002). In: Yassine, A.A., Sreenivas, R.S., & Zhu, J. (2008)

Tips

Use the Internet to assist with customer and product support. Train salespeople and provide them answers to product questions online.
Source: The Baan Company: Case Study (2002), FileNew Corp: Case Study (2002), Tompkins Group: Case Study (2002). In: Ozer, M. (2003)