1 Instructor:Mr. C. Michael Carolina Industry Relations, OSU Education and Research Foundation Adjunct Professor, OSU College of Engineering, Architecture and Technology Background:5 Years in Environmental Enforcement/Consumer Safety 5 Years in Education (Physical Sciences, Tulsa Community College) 25 Years in Industry (Western Electric, AT&T and Lucent Technologies) July, 2001:Retired as Engineering Director, Lucent’s Oklahoma City Facility. Duties included Product, Process, Current and NPI Engineering

2 Associations:CEAT Associates Advisory Board College of Engineering, Board of Visitors, University of Oklahoma Director, Oklahoma Medical Research Foundation (OMRF) Director, Memorial Institute for the Prevention of Terrorism (MIPT) Jim Thorpe All Sports Association and Oklahoma Sports Hall of Fame Other Boards of Directors Education: Bachelor of Science, Oklahoma State University Master of Science, University of Oklahoma Post graduate studies, University of Oklahoma and Vanderbilt University AT&T Executive Development Program, Princeton, New Jersey

3 Assignment “O” Individual Profile By 6/19 Company/Affiliation Current Assignment Where You Are in ETM Program Career Aspirations Other Pertinent Information

4 MSETM 5110 – New Product Development Class Profile Students in Six States: CA, IL, NC, OK, TN, UT Degrees: Range from B.S. to Ph.D Fields: IT, Biotech/Pharmaceutical, Telecom, Computers/Computer Storage Devices, Energy, Automotive Filtration Systems, Security Systems Assignments/Positions: Engineers, Team Leaders, Engineering Managers, Engineering Director, Research Technician/Leader, Quality Managers, IT Managers

5 Course Syllabus MSETM 5110 – New Product Development Scope The elements of NPI--marketing, design, development, manufacturing, provisioning, and support NPI as an integral part of business strategy and business planning NPI as a vehicle to create competitive advantage for the organization and its customers The environment for sustaining NPI consistency and realizing improvement project after project The tools and metrics of new product development and introduction The order realization infrastructure needed to get new products to customers in a manner that meets or exceeds their expectations, and that delivers the desired financial and overall business objectives

6 MSETM 5110 – New Product Development Recap of Session I NPI the Lifeblood of a Company The Forces Driving Development –Intense International Competition –Fragmented, Demanding Markets –Diverse and Rapidly Changing Technologies Discontinuous Change or Disruptive Technologies Defining Core Competence/competencies of an Organization The Competitive Imperatives –Speed –Efficiency –Quality The Environment for NPI The NPI Process The Metrics of NPI

7 MSETM 5110 – New Product Development Recap of Session I (cont’.d) Fast Innovators vs. Slow Innovators The Customer as a Strategic Partner in NPI The Infrastructure for Successful Product Development (From Idea to Volume Production/Order Fulfillment) –Cross-functional Teams –Order Realization Full Stream Lifecycle Management (D B O D) It’s About Choices!

8 MSETM 5110 – New Product Development The Ultimate Creativity Machine: How BMW Turns Art into Profit* Three Operating Principles Protect the creative team, i.e., shield them from unproductive commentary of others in the company. Safeguard the artistic process, i.e., “construct a barrier” around model development to prevent time-to-market pressures from disrupting the actual work. (Guarantees that BMW’s design is never compromised.) Be an inventive communicator. In any organization dependent on art and commerce finding common ground, managers must use powers of persuasion and mediation to manage at the intersection of art and commerce. *HBR Article by Chris Bangle, Global Chief of Design for BMW. (Includes the Z3 M-Coupe). January 2001, Reprint R0101B.

9 MSETM 5110 – New Product Development Moore’s Law (Gordon Moore, CEO, Intel) Transistor Count (Power) Will Double Every 18 Months and Will Continue for Many Years Transistors/Chip in ’65; IB Today

10 MSETM 5110 – New Product Development Why Do It? Competitive Advantage Short-term and Long-Term Viability/Sustainability Fund More Research New Platforms and Derivative Products Improve Productivity and Efficiency Protect Installed Base Protect Customer’s Investment Create Brand Loyalty Vehicle for Strategic Partnership Meet Stakeholders’ Expectations –Customers –Employees –Investors Renewal and Transformation of the Organization

11 MSETM 5110 – New Product Development Applying Development Strategy and Resources to Stay Ahead of the Power Curve Preemptive Proactive Maximum Value

12 MSETM 5110 – New Product Development The Role of the Engineer in Product Development D B O D Create Sustained Value for Customers and Stakeholders Do No Harm (Product Safety and Environmental Protection) Do the Right Things to Meet Objectives for Top-line Revenue and Bottom-line Profitability

13 MSETM 5110 – New Product Development A Model for Product Development Inv. $’s R&D New Product Tech Transfer IP Publication

14 MSETM 5110 – New Product Development The Essentials of NPD/NPI NPI in Strategic Terms/Linkage(What) NPI in Tactical Terms(How) The Entrepreneurial/Intrapreneurial Mindset(Innovation) Baselining/Benchmarking(Continuum) The New Product Development Game(Competition)

15 MSETM 5110 – New Product Development The Essentials of NPD/NPI (cont’d.) An Imperative for a High Performance Team Recognition (Excellence) DFX (Manufacturability, Testability, Installation, Supply Chain, E-Business, Environment)(Integration)

16 MSETM 5110 – New Product Development Business Planning and Business Case Marketing Decisions Risk Analysis/Mitigation Project’s Resource Requirement Financial Projections Production Demands Supply Chain/Provisioning Product Support/Technical Assistance Personnel Needs

17 MSETM 5110 – New Product Development New Marketing Paradigms Fit Both “Old World” and “New World” Economy Total Access IP/Networked World Globalization Hypercompetition Virtual “Always On” Presence (Anywhere/Anytime) Relationship Marketing Delivering Value to Customers, Collaborators, Company

18 MSETM 5110 – New Product Development Design and Development Methodologies Quality Function Deployment (QFD) Design for Manufacturability (DFM) Computer-aided Design (CAD) Computer-aided Engineering (CAE) Computer-aided Manufacturing (CAM) Total Quality Management (TQM) System of Systems

19 MSETM 5110 – New Product Development The Continuum Exercise Checklist Are strategy and goals clearly defined, understood, communicated, aligned, executed? Are there the right metrics around the process? –Time to market/development cycle (e.g., concept to customer, design freeze to ready-to-order) –Status vs. project schedule –Recovery plan in place –Quality and reliability –Change activity –Target cost –Percent revenue from new products Poor 0 Average 5 Flawless Execution 10

20 MSETM 5110 – New Product Development The Continuum Exercise (cont’d.) Is there a mechanism to capture learnings from each introduction that can be used to improve project after project? Are the right tools available for project tracking? Is there effective integration and communication across the functional teams (design, mfg., marketing)? Are there the right skills on the team? Is there the right commitment and passion for flawless execution? Poor 0 Average 5 Flawless Execution 10

21 MSETM 5110 – New Product Development Creating Breakthroughs at 3M Step-by-Step Process Phase 1: Laying the Foundation –Identify target markets and involve key stakeholders in the company Phase 2: Determining the Trends –Identify experts in the field—people who have a broad view of emerging technologies and leading-edge applications in the area being studied Phase 3: Identifying Lead Users –Identify and learn from users at the leading edge of the target market and related markets to shape preliminary product ideas and to assess the business potential and how they fit with the mission of the company

22 MSETM 5110 – New Product Development Creating Breakthroughs at 3M (cont’d.) Phase 4: Developing the Breakthroughs –Move preliminary concepts toward completion…host workshops with several lead users, marketing and technical people to arrive at final design that fits customer’s and company’s needs. At conclusion, design team may disband; however, one team member should stay involved for continuity and help with related products and services. Source: von Hippel, Thomke, and Sonnack, Creating Breakthroughs at 3M. HBR, October, Reprint