1. Typical Business >$100M Sales
Organizations
Typical Business >$100M Sales
CEO,
Business Leader
Marketing
Sales
Engineering
Research
Manufacturing
Operations HR
Legal
Finance
Info
Technology
Service
Operations

2. Typical Business Roles CEO – Chief Executive Officer
Sets Strategic Direction
Formulates and Drives overall Operating Plan
Allocates Funding to Supporting Functions
Sets/Approves Supporting Function Annual Goals
Company Image and Morale
Meets Strategic Commitments: OM, CM, Cash, Net Income, etc
Ultimate Responsibility for Quality

3. Typical Business Roles Marketing & Sales
Assess Customer Needs & Satisfaction
Determine Market Size, Demographics
Transform Customer Needs into High Level Product Definitions
Communicate Product Definitions to Eng
Drive Promotion and Advertising
Assess Competitive Product Features
Set Sales Prices
Determine Suitable Distribution with Mfg
Predict/Communicate Sales Volume & $ for each Product on Annual Basis

4. Typical Business Roles Engineering
Transform High Level Product Definition into Quantifiable and Verifiable System Requirements
Estimate Resources Required for Proposed Product Development
Provide Technology and Design Solutions to System Requirements
Develop System Architecture, Requirement Flowdown, and Detailed Design Solutions
Integrate and Verify Block and System Level Requirements
Provide Mfg with all documentation to produce the product
Provide/Integrate Competitive New Technology

5. Typical Business Roles Manufacturing & Operations
Purchase & Procurement of Materials
MRP (Material-Resource Planning)
Build, Produce, Distribute the Products
Develop Automated and Manual Assembly
Develop Automated and Manual Processes
Drive for Lower Cycle Time, Inventory, Defects, Rework, Variable Costs, Safety
Drive Promotion and Advertising
Justify Equipment Expenditures, ROI
Maintain Product Mfg Records
Shipping and Receiving

6. Typical Business Roles Info Technology (Supporting Function)
Provide Computer Automation of Manual Functions including Order Entry, Purchase Orders, Shop Orders, Inventory, Payments, and Shipping Orders
Support eBusiness Transactions
Provide Basic Computer Platforms to Departments including HW, OS, , Internet, Word Processing, Spreadsheet, Charting, E-CAD, etc
Provide Networking, File Storage and Server Infrastructures

7. Typical Business Roles Finance (Supporting Function)
Manage Accounts Payable
Manage Accounts Receivable
Provide Periodic Accounting Summary of Base Cost, Var Cost, OM, CM, Net Inc & Cash
Provide Operating Plan Assessment
Allocate Depreciation
Provide Tax Justification and Payment
Drive Controllership, Identify and Reduce Unnecessary Costs
Manage Company Payroll

8. Typical Business Roles Human Resources & Legal (Supporting Functions)
Find Qualified New Hire Candidates
Drive Periodic Performance Assessments and Salary Actions
Drive Compliant & Legal Operations
Formulate and Communicate Company Policies including vacation, work rules, sick leave, disability, bereavement, internal job posting, seniority, use of company assets, job elimination
Provide Employee Complaint & Appeal Systems
Manage Intellectual Property Usage/Ownership
Manage Company Legal Actions

9. Business Planning Process Culminates in 1 Year Operating Plan
Typical Annual Business Planning Processes
Month 1
Month 5
Month 6-7
Month 9-12
Month1
Tech
Platform
Products
LT Financial
ST Financial
Tech
Technology Assessment
And Planning
3-5 Year
Platform Plan
3-5 Year
Product Plan
3-5 Year Financial
Estimates
1 Year (Next Year’s)
Operating Plan
Technology Emphasis
Business Emphasis
Technology Capability Over Time
Competitive Differentiation
Technology Ownership
Common Hardware and Software Platforms
Platform Owners & Roadmaps
Market-Backed Multi Year Roadmap
Competitive Differentiation
Product Plan Linked to …
Technology Plan Linked to …
Resource Plan
Financial Plan
Business Planning Process Culminates in 1 Year Operating Plan

10. $ Base Costs $ $ Variable Costs $
Cost Associated with developing a product plus all costs not associated with an individual production unit
Product Design Engineering Compensation and Benefits (Salary)
Eng and Mfg Capitol Equipment Depreciation
Office supplies, tools, computer rental, network, etc
Travel and Living Expenses
RTS – Ready-to-Serve typically includes Eng Management, Administration and other support staff
Base costs are those that stay the same regardless of production volume
$ Variable Costs $
Cost Associated with an individual production unit
Product material costs
Product labor and scrap costs
Product Shipping, Distribution and Installation costs
Product Warranty costs
Cost of Selling Product – Commisions
Variable Costs scale with production volume

11. Basic Business Financial Terms
Sales to Net Income Walk
Cash Flow and Net Cash
is also Very Important
Total
Sales $
Revenue
Variable
Costs $
- COGS
- DSC
Contribution
Margin $
(CM)
Base
Costs $
- C&B
- RTS
Operating
Margin $
(OM)
Financial
Costs $
& Taxes
Net Inc $
COGS = Cost of Goods Sold (Inventory Value of Goods including material, production costs, scrap)
DSC = Direct Selling Costs (Installation, Warranty, Sales Commissions)
C&B = Compensation & Benefits (Salaries of Engineering & New Product Development Staff)
RTS = Readiness To Serve (Support and Infrastructure, Management, Depreciation, Facilities)
Financial Costs = Other Costs and Income (Royalties + Investments +/- Interest Expense/Income)

12. Basic Business Case For A New Product Program
Inputs
Estimated Average Product Selling Price (ASP$):
Estimated Annual Product Sales Volume in Units:
Estimated Per Unit Cost of all Parts & above volume:
Estimated Per Unit Cost of all Assembly, Test & above volume:
Estimated Total Development Cost in $ incl Labor & Material:
(In this class we will assume 1 Hr of Eng = ~$150)
Calculate the Annual Sales Revenue $ = ASP$ * Annual Volume
Calculate the Annual Var Costs $ = (Unit Material $ + Mfg $) * Annual Volume
Calculate the Per Unit CM$ = ASP$ – (Unit Material $ + Mfg $)
Calculate the CM% = Per Unit CM$/ASP$
Calculate the Annual CM$ = Unit CM $ * Volume = Annual Sales $ - Annual Var Costs $
Calculate the ROI (Return on Investment) Time in Years = Est Dev Cost $/Annual CM$
Outputs

13. Industry Compliance Control Systems
Management
Design Controls
Production &
Process Controls
Corrective &
Preventive
Actions
Equipment &
Facility Controls
Material Controls
Records, Documents, &
Change Controls
Controls

14. Terms and Definitions Design Inputs
Requirements, Constraints and other information which is needed to formulate a set of design outputs for a given product.
Design Inputs must include customer (user) level as well as product/system level.
Design Outputs
All drawings, documents and other information necessary to describe the constituent parts, assembly, manufacturing process, service and disposal processes for a product.
Design outputs from one team often become the design inputs to another team.
All Design Inputs/Outputs Must Be Reviewed in Many Industries… …. ie Aerospace, Transportation, Medical, etc

15. Terms and Definitions Reviews
Peer review of design inputs and design outputs are a mandatory part of many industry product development processes.
Reviews must include objective evidence of attendees, documented issue list with dispensation actions, signatures and dates.
Reviews must include appropriate stake holders (management, customers, other design teams) plus at least 1 unbiased, knowledgeable external reviewer

16. Terms and Definitions Verification Validation
Design analysis, simulation or prototype testing which provides objective evidence that a design meets all of its block or product level requirements.
Verification is used to prove that a design meets all of its specifications.
Is performed at component, block and product levels
Validation
Product field, clinical or customer trial which provides objective evidence that a product meets its customer (user) requirements.
Intended use is an important part of the product labeling.
Is only performed at the product level

17. Stadtmiller 6 Project Steps
“Electronic Project Management & Design”
Research and Gather Information (Chapter 5, Lab 1)
Market and Competitive Assessments
Key Component and Technical Feasibility Information
Define the Product, Develop Design Specs (Chapter 6, Labs 1,2 & 4)
Standard Requirements – Common; Performance Requirements – Unique
Block Diagram and Assignments
Develop a Program Plan (Chapter 7, Lab 3)
Specific to Design Blocks and Product Needs
Common tasks based on Check List
Execution, Detailed Design Phase (Chapters 8-11, Labs 5-8, 10)
Detailed Design
Packaging and Component Selection, Mfg Process Design
Prototype Design and Construction
Design Verification (Chapter 12, Labs 8-9)
Mfg Test and Calibration, Serviceability, Obsolescence
Environmental Stress Screening, Design for Reliability, Design for Manufacturability
Conclusion, Institutionalize Design Knowledge and Improvements

18. Typical Industry Product Development Process
Business Planning & Definition
Execution
Commercial Introduction & Production Ramp
Full Production
Product End 0f Life
Milestones are used to control and monitor product development execution
A program cannot proceed to the next milestone tasks until Management has approved the current milestone
Each milestone requires specific tasks & documentation, checklists and review
Some milestones may be skipped if the programs are smaller 1 2A 2 3 4 5 6 7 8 9 3A
Program Timeline
0 Business Case Confirmed
1 System Design, Funding Committed
2A External Evaluation Authorized
2 Detail Design Complete, Xfer to Mfg
3A Sales Announcement
Pilot Production Authorized
Full Production Authorized
Customer Satisfaction Confirmed
6 Authorization to Stop Sales and Production
7 Communicate End-of-Life to Customers
8 Decisions to Scrap Spare Parts
9 End of Product Life and Data Management
Plan to spend some time on this slide. Talk through the meaning of each of the milestones.
Note that the framework is proven. The framework has been consistent at GEHC since the 1980’s and is very similar to many other companies benchmarked
Multiple ME Milestones
There are two main reasons:
A major project may be divided into incremental versions of hardware/software that are evaluated externally at different points during the design phase. (In this case, the multiple ME milestones are planned.)
Customer feedback after ME may drive program teams to make changes that require additional external evaluation(s) or to validate the changes. (In this case, the second ME is unplanned; it is repeated to address serious issues.)
Multiple M3 Milestones
Release of a product or service in a foreign region requires the region to be ready to begin shipping a product or to use a service. Readiness may involve regulatory clearance, infrastructure, service metrics, or field training. (In this case, the multiple M3 milestones are planned.)
Customer feedback after M3 may drive program teams to make significant changes that require additional pilot build(s) to validate the changes. (In this case, the second M3 is unplanned; it is repeated to address serious issues.)
Multiple MS Milestones
The most common reason for planning to execute multiple MS milestones is that the clearance to market and sell products in multiple countries or regions can lead to staggered regional sales announcements. Many countries and regions have unique requirements that manufacturers must satisfy to obtain special permission to market and sell in those areas.
Multiple M4 Milestones
Multiple M4 milestones should only be considered after other alternatives have been exhausted. Products or services should be released to all targeted regions at M4, unless business or competitive pressure demands otherwise.
For a new product, the most common reason for planning to execute multiple M4 milestones is that the clearance to ship products to multiple countries can lead to staggered regional product introductions. (Many countries and regions have unique requirements that manufacturers must satisfy to obtain special permission to ship to those countries.)
For a new service, the most common reason for planning to execute multiple M4 milestones is that regional readiness to start full use of the service can lead to staggered regional releases. (Each region has service metrics that must be satisfied to fully release the service in that region).
Reference Information
PRD Phase Definitions
Phase 1 – Business Planning & Definition
The Business Planning & Definition phase involves the identification of opportunity or need. The project team establishes project goals based on customer needs and intended use, and then develops detailed requirements and formal plans to accomplish project goals.
Phase 2 – Execution
The Execution phase involves designing the product or service. The program team builds and tests prototypes to verify the product or service meets requirements.
Phase 3 – Commercial Introduction
The Commercial Introduction phase involves the sales announcement of the product or service. Production pilot units are built, shipped, and installed at customer sites.
Phase 4 – Production
The Production phases involves initiating full production. The production units are shipped and installed at customer sites.
Phase 5 – End-of-Product Life
The End-of-Product Life phase involves the decision to discontinue production of the product. This decision is followed by discontinuing service at a later date.

19. Step 1-2: Team & Project Identification
Project Suggestions
Project Brainstorming
Productization Aspects
Team Formation
Resource Assessment
Logistics and Roles
Review
Initial Product Level Requirements
Performance Requirement Formulation
Standard Requirement Formulation
Define Customer, Country, Demographics
Outputs P1 (Steps 1-2)
Projects Considered
Selection Rationale
Basic Product/Project Description
Key Requirements
Architectural Block Diagram
Review

20. Step 2-3: System Design, Program Plan
Inputs
Define Product Source Power Requirements
Define Product Elec Interfaces
Define Product Mech Interfaces
Define Safety Stds
Define EMC Stds
Basic Product/Project Description
Key Requirements
Architectural Block Diagram
Define All Operating Modes
Define Initial Assembly Levels
Define PCB Count, Block to Board Allocations
Block Electrical Interface Reqs
Analog: voltage range, impedance, freq, etc
Digital: Vih,Vil, Iih, Iil, Voh, Vol, Ioh, Iol, etc
Product Level Requirement Allocation and Association to Blocks
Requirement Flowdown to Blocks
Block Interface Requirements
Outputs: P2 (Step 2-3)
Prod Level Std Reqs Defined
Prod Level Perf Reqs Defined
Block Diagram Defined
Block Interfaces Defined
System Allocation and Association of Prod Level Reqs
Project Roles and Block Assignments Defined
Project Plan, Tasks Defined & Estimated
Scope & Resources Reconciled
Block Task Estimates
Product Level Estimates
Resource Allocations
Overall Project Plan
Scope Add/Subtract
Review

21. Step 4: Detailed Design Inputs Define Block Electrical Perf Reqs
PS Voltage Range
PS Current Range
Analog Perf Gain, SNR, Freq Resp, Xfer Func etc
Digital Perf Ops/Sec, Clock Freq Range, State Diagram
Define Block Mechanical Reqs
Define Connector Types
Define Mech Mounting for PCB’s
Define Mech Mounting for any Non PCB components
Refine PCB Sizes
Block Diagram
Block Interfaces
System Allocation & Association of Prod Level
Block Tasks Defined & Estimated
Block Scope & Resources Reconciled
Final X-Check Block Electrical Interface Reqs
Analog: voltage range, impedance, freq, etc
Digital: Vih,Vil, Iih, Iil, Voh, Vol, Ioh, Iol, etc
Signoff with Interfacing Teammates
Execute Detailed Circuit Design
Research Circuit Solutions
Review
Review Proposed Solution with Team
Outputs: P3
Schematic Diagram
Initial Parts List
Design Equation and Theory of Operation: Nom Values of R, L, C
Analog DFM Analysis: Tol%, Power, Comp Select,
Digital DFM Analysis: DC Drive, Timing
Firmware: State Diagram, VHDL, uCode
Review
Analog DFM and worst case analysis
Digital DFM and worst case analysis

22. Step 5-6: DFM, DFR, Verification, Conclusion
Inputs
Define Block Verification Plan
Procure Initial Prototype Components
Breadboard Initial Prototype
Verify functional performances in Lab
Document Block Verification
Schematic Diagram
Initial Parts List
Design Equation and Theory of Operation: Nom Values of R, L, C
Analog DFM Analysis: Tol%, Power, Comp Select,
Digital DFM Analysis: DC Drive, Timing
Firmware: State Diagram, VHDL, uCode
Procure Final Prototype Components
Define PCB Layout for Final Prototype
Define Production Parts List for Block
Refine Prototype Parts List for Block
Integrate Design Block Proto/Production Parts Lists
Execute Overall PCB Layouts
Construct Prototype PCBoards
Integrate Prototype
Define Prototype Verification & Validation Plan
Execute Verif & Valid
Conduct Reli Analysis
Conduct Sustaining Analysis
Develop User Manual
Develop Overall Mfg Process Design
Repair Strategy
Review
Outputs P4, Final Deliverables:
Functional Prototype
Verified System Requirements
MS Word Design Report
MS Powerpoint Project Presentation
Objective Evidence of Robust Design Solution and Control
Drawing Package for Mfg
Review