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Organizing for Effective Platform Development. ME 546 - Designing Product Families - IE 546. Timothy W. Simpson Professor of Mechanical & Industrial Engineering and Engineering Design The Pennsylvania State University University Park, PA 16802 USA phone: (814) 863-7136

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slide1

Organizing for EffectivePlatform Development

ME 546 - Designing Product Families - IE 546

Timothy W. Simpson

Professor of Mechanical & Industrial

Engineering and Engineering Design

The Pennsylvania State University

University Park, PA 16802 USA

phone: (814) 863-7136

email: tws8@psu.edu

http://www.mne.psu.edu/simpson/courses/me546

PENNSTATE

© T. W. SIMPSON

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
combating the negative image of single use
Combating the Negative Image of Single-Use
  • 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
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 s quicksnap colors family
Fuji’s QuickSnap Colors Family

http://www.fujifilm.com/bridgepages/colors.html

overview of today s lecture
Overview of Today’s Lecture
  • Platform-Based Product Development
    • Chapter 3
  • Development Drivers and Project Frameworks
  • Risks & Downsides of Platforming
platform driven product development chp 3
Platform-Driven Product Development (Chp. 3)

Source: (Halman, et al., 2005)

asml product roadmap
ASML Product Roadmap
  • Product-driven platform-based development of family
    • 3 platforms for 3 market applications
    • 80% commonality within family; low commonality b/n families

Source: (Halman, et al., 2005)

skil product roadmap
Skil Product Roadmap
  • Component-based platform-driven development
    • Product platform for each tool type
    • 80% commonality within family; 50% commonality b/n families

Source: (Halman, et al., 2005)

sdi product roadmap
SDI Product Roadmap
  • Technology-driven platform-based development
    • 2 platforms  multiple products  many market applications
    • 70-80% commonality within products of same family

Source: (Halman, et al., 2005)

development drivers vs approaches

Source: (Alizon, et al., 2007)

Development Drivers vs. Approaches
  • We can also examine the different “drivers” (e.g., platform and product) for both top-down and bottom-up approaches to product family design from the companies we have discussed
top down platform driven development
Top-Down Platform-Driven Development

Source: (Alizon, et al., 2007)

top down product driven development
Top-Down Product-Driven Development

Source: (Alizon, et al., 2007)

bottom up platform driven development
Bottom-Up Platform-Driven Development

Source: (Alizon, et al., 2007)

bottom up product driven development
Bottom-Up Product-Driven Development

Source: (Alizon, et al., 2007)

examples of drivers
Examples of Drivers

Source: (Alizon, et al., 2007)

platform projects vs derivative projects
Platform Projects vs. Derivative Projects

Source: (Tatikonda, 1999)

  • Do they differ in terms of product tasks?
    • Yes, they differ in the amount of new technology development undertaken and project complexity as well as market newness
  • Do they differ in terms of project success?
    • No, not in achievement of project objectives, level of company satisfaction, and perceived customer satisfaction or smoothness of project execution
  • Do they differ in terms of how they are executed?
    • No, platform and derivative projects generally are executed in similar ways
  • Do managerial approaches affect project success?
    • Yes, contingency planning, project-based evaluation of personnel, and overlap of design and manufacturing are associated with higher project execution success for both platform and derivative projects
  • Does either project type suffer from the use of interdependent technologies and novel project objectives?
    • Yes, they are associated with project execution failure for platform projects
platform projects vs derivative projects cont
Platform Projects vs. Derivative Projects (cont.)
  • Results are based on interview and survey data from 108 new product development projects from a variety of assembled products industries
  • Platform and derivative projects differ significantly in their task characteristics and market newness, but do not differ significantly in their planning, execution, smoothness, and success
  • The results suggest that firms can continue to employ a single product development management process for both platform and derivative projects, as long as modest customization of the process is made for the given project type
recall kodak s platform strategy
Recall: 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 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

Next

Generation

Process

Single

Dept.

Upgrade

Tuning

and

Incremental

New Core

Processes

Aggregate Project Planning

Process Changes

1

Advanced

R&D Projects

Product Changes

2

Breakthrough

Projects

New Core

Product

Platform

Projects

Next

Generation

Product

3

4

Addition to

Product Family

Derivatives

(Enhancements,

Hybrids, and Cost

Reduced Versions)

5

Add-ons and

Enhancements

Allied

Partnerships

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
slide29

Aggregate Project Planning at PreQuip

  • PreQuip’s Development Projects (30) before the Aggregate Project Plan

R&D

Breakthrough

projects

Mass spectrometers

Liquid chromatographs

Gas chromatographs

Data processing and handling products

Platform projects

Derivative

projects

R&D

Allied and Partnership

projects

Breakthrough

Platform

Derivative

Source: (Wheelwright and Clark, 1995)

aggregate project planning at prequip
Aggregate Project Planning at PreQuip

R&D

  • PreQuip’s Development Projects (11) after the Aggregate Project Plan

Breakthrough

projects

Mass spectrometers

Liquid chromatographs

Gas chromatographs

Data processing and handling products

Platform projects

R&D

Allied and Partnership

projects

Derivative

projects

Breakthrough

Platform

Derivative

Source: (Wheelwright and Clark, 1995)

management s involvement traditional
Management’s Involvement (Traditional)
  • Traditional Product Development Process
    • Management involved throughout entire process

Source: (Sanchez and Collins, 2001)

risks with platform based development
Risks with Platform-Based Development

Source: (Halman, et al., 2005)

  • ASML
    • Development time and costs of platform
    • Rigidity in design
    • Restrictions on the integration of new technologies
    • Incorrect forecast of future user needs
    • Change form one platform to another
  • Skil
    • High cost and time for integration of existing elements
    • Platform development becomes easily a goal in itself
    • Mistakes made in the beginning have a high impact
    • Failure to forecast customer needs correctly
  • SDI
    • Development time and costs to meet specifications of all target markets
    • Development process becomes more complex
    • Restrictions for all market segments
    • Selecting the right platform
management s involvement modular
Management’s Involvement (Modular)
  • Modular Product Development Process
    • Management involved more at front-end and for integration

Source: (Sanchez and Collins, 2001)

the downsides of platforming
The Downsides of Platforming
  • Developing a product platform can cost 2-10 times more than a single product (Ulrich & Eppinger, 2000)
    • In automotive industry, up to 80% of total vehicle development cost is spent on platform including engine and transmission (Muffato, 1999); ~ 60% according to (Sundgren, 1999)
  • Data collected at one firm over a five-year period further showed the platform-based development approach to be negatively correlated with profitability (Hauser, 2001)
  • Sharing components across low-end and high-end products can increase unit variable costs due to overdesigned low-end products (Gupta & Krishnan, 1998; Fisher, et al., 1999)
  • Platforms are not appropriate for extreme levels of market diversity or high levels of non-platform scale economies (Krishnan and Gupta, 2001)
  • Platform development requires multifunctional groups, and problems may arise over different timeframes, jargon, goalsand assumptions (Roberston and Ulrich, 1998)
planning product platforms
Planning Product Platforms
  • Robertson and Ulrich (1998) advocate a three-step approach:

1) Product plan – which products to offer when

2) Differentiation plan – how products will be differentiated

3) Commonality plan – which components/modules will be shared

Source: D. Robertson and K. Ulrich, 1998, "Planning Product Platforms," Sloan Management Review, 39(4), pp. 19-31.

references cited
References Cited
  • Erens, F., 1997, Synthesis of Variety: Developing Product Families. Eindhoven, The Netherlands, University of Technology.
  • Fisher, M. L., Ramdas, K. and Ulrich, K. T., 1999, "Component Sharing in the Management of Product Variety: A Study of Automotive Braking Systems," Management Science, 45(3), 297-315.
  • Gupta, S. and Krishnan, V., 1998, "Integrated Component and Supplier Selection for a Product Family," Production and Operations Management, 8(2), 163-182.
  • Hauser, J. R., 2001, Metrics Thermostat, Journal of Product Innovation Management, 18(3), 134-153.
  • Krishnan, V. and Gupta, S., 2001, "Appropriateness and Impact of Platform-Based Product Development," Management Science, 47(1), 52-68.
  • Lutz, R. A., 1998, Guts: The Seven Laws of Business that Made Chrysler the World's Hottest Car Company, New York, John Wiley.
  • Muffatto, M., 1999, "Introducing a Platform Strategy in Product Development," International Journal of Production Economics, 60-61, 145-153.
  • Robertson, D. and Ulrich, K., 1998, "Planning Product Platforms," Sloan Management Review, 39(4), 19-31.
  • Sanchez, R. and Collins, R. P., 2000, "Competing—and Learning—in Modular Markets," Long Range Planning, 34(5), 645-667.
  • Sundgren, N., 1999, "Introducing Interface Management in New Product Family Development," Journal of Product Innovation Management, 16(1), 40-51.
  • Tatikonda, M. V., 1999, "An Empirical Study of Platform and Derivative Product Development Projects," Journal of Product Innovation Management, 16(1), 3-26.
  • Ulrich, K. T. and Eppinger, S. D., 2000, Product Design and Development, New York, McGraw-Hill, Inc.
  • Wheelwright, S. C. and Clark, K. B., 1992, "Creating Project Plans to Focus Product Development," Harvard Business Review, 70(2), 70-82.