Product development in a mature, continually operating business is an
interminable, cyclic activity. Each finished new product provides in turn a basis for
the next sequence of product development, see the figure on the left.
In spite of its unending nature, product development is usually organized as a series of linear projects as we see in the figure on the right. The reason is that it is easier to steer the activity in this way.
In any case, the starting points of product development are the company idea and strategy, or the product policy. These usually exist in some form (cf. Three Modes of Knowing) even if they are not always documented in small companies. Other important issues are the state of the market and the pressure from the competitors.
The costs of product development tend to escalate sharply as the project unfolds ( red line in the figure on the right). The same is true for the costs caused by any change in the design. In other words, the possibilities ( green line in the figure) to affect the qualities of the product decrease at the same time as the process advances. Therefore, the company should carry out all the necessary studies as early as possible in the product development phase.
Product development must be well organized because there is usually no time to lose. "The fast will eat the slow." The company which launches a product before its competitors do will profit from a longer selling time before the commercial ageing of the product takes place (see diagram on the left, red curve). Moreover, the initially higher price of the new product will yield more profit than the belated products of the more sluggish competitors (violet and blue curves) can yield.
A product development project includes several aspects of research, operations planning, and product design, and it is intimately controlled by the management of the enterprise. It usually includes the following operations:
|Phase||Result of the phase|
|Research and strategic design
||Analysis of the market
Analyses of competitors' manoeuvres
Facts on possible importable new product ideas and patents
|Developing the product concept
Specifications, perhaps diversified for various markets
Concept of production (Where? Which parts are bought?)
|Developing the product and the production process
Specifications for components
Preliminary plan of production
Patenting of the innovations when appropriate
|Final preparation of the design and the production process
||First products are made on the production line and their quality is tested
Workers are trained
Production team is ready for the final speed of the production (it is tested)
Marketing organization is ready
After sales organization is ready
|Start of regular production||(there are specific goals for regular production, not given here)|
Note, however, that the process described in the table above does not always continue until the happy end. Reasons for this can be:
The product development process normally entails, like any other project in a large organization, the usual activities of project administration. After each completed stage, the project reports to the management and receives the targets for the next stage. If the management wants to control the job very tightly, the normal way is to start the next phase only after the preceding one is approved of. This kind of scheduling is shown in the diagram below. The red arrows indicate steering actions taken by the management.
Successive scheduling of a development project takes a great deal of precious
That is why an alternative is sometimes used where the phases overlap (simultaneous or concurrent engineering, fig. on the right).
The exact procedure of product development depends on the nature of the product, on the extent of the production and on many local circumstances. Especially the phase of production planning is usually so adversely affected by practical conditions that this phase will be omitted from the following explanation of the typical process of product development.
Despite individual variation, a basic logical structure can be found in most projects of product development. The dominant activity in the initial phases of the project is analysis, while at the midpoint the focal point shifts into synthesis and finally into evaluation. These three procedures are therefore selected as the structure of the following presentation.
Of course, the process of product development is seldom so simple that it could simply consist of a succession of just three routines. Instead, it often happens that when a sub-routine in the process has produced a report that seems finished, it nevertheless turns out to be unacceptable and you have to redo it, perhaps again as a similar succession of analysis, synthesis and evaluation, in a smaller scale. The whole process can thus often more resemble a spiral than a straight path.
August 3, 2007.
Comments to the author:
Original location: http://www2.uiah.fi/projects/metodi