1. 1 MSETM 5110 – New Product Development Recap of Session IV Building Product Development and Realization Capability Organizing and Managing Projects Linkage of Product Development and Introduction to Business Strategy and Values Review of Types of Development Teams—Functional, Lightweight, Heavyweight and Autonomous Spiral Integration Customer-centric Product Development The Steps Between Product Concept and Customer Launch Management Roles and Responsibilities The HP DeskJet Printer Project—An Example of Planning and Execution Intellectual Property and Patent Portfolio Introduced Assignment 2—McAlasdaire Imaging’s AE-1 Project

2. 2 MSETM 5110 – New Product Development Intellectual Property Presenter Dr. Ron Buchanan Sr. Research Consultant Education and Research Foundation Oklahoma State University

3. 3 MSETM 5110 – New Product Development New Product Introduction Thinking Strategically Thinking Commercially Thinking Globally People, Programs, and Processes Transforming Knowledge Into Economic Value

4. 4 MSETM 5110 – New Product Development Session 5, Part 2 Summary/Common Themes of Assignments 1.Living on Internet Time 2.McAlasdaire Imaging – the AE-1 Project

5. 5 MSETM 5110 – New Product Development Summary of Living on Internet Time: Product Development at Netscape, Yahoo!™, NetDynamics, and Microsoft™ Common Each Aware of/Engaged in Competitive Benchmarking Each Used Effective Prototyping/Beta Models (Microsoft’s Approach More Internally Focused) Aware of Interoperability (cont’d.)

6. 6 MSETM 5110 – New Product Development Summary of Living on Internet Time: Product Development at Netscape, Yahoo!™, NetDynamics, and Microsoft™ (cont’d.) Differences Philosophy, Culture, and Development Process Size of Development Staffs and Resources Microsoft’s Total-System-Solution Mindset Microsoft Sought to Expand Competencies/Respond to SIPs Heavyweight Team Structure (Microsoft) vs. Lightweight (Yahoo!) NetDynamics’ Philosophy of Open Architecture Based on Standards Netscape’s Heavy Focus on Early Releases Before Feature Release Note: Netscape Acquired by AOL NetDynamics Acquired by Sun Microsystems Based on (SEC) 10-k Filings: 1) Microsoft, 2) Netscape; 3) Yahool!, 4) NetDynamics

7. 7 MSETM 5110 – New Product Development Summary of Assignment 2 – McAlasdaire Imaging’s AE-1 Project No Clear Upfront Product Definition or Specifications Poor Communications Between Marketing and Engineering Overall Ingredients for Success Lacking - “Start With The End in Mind” (Steven Covey, The 7 Habits of Highly Effective People) - Alignment - Commitment and Utilization of Resources - Project Tracking to Meet Schedule and Costs Objectives - Communication and Teamwork Across Functional Departments Capturing the Lessons Learned

8. 8 MSETM 5110 – New Product Development Summary of the HP Deskjet Printer Project Clear Product Definition and Market Segment Clear Focus/Objectives (Low Cost, High Quality) Created New Development Process Emphasizing Speed, Design for Manufacturability, and Teamwork Effective Use of Early Production Tools (CAD, CAM, CAE, PDM, SAP Software) Effective Use of Heavyweight Team Structure Effective Use of Prototypes/Customer Involvement Achieved Objectives for Cost, Quality, Customer Satisfaction Reduced Cycle Time from 36-60 Months to 22 Months Became the Model for Subsequent Development at HP Vancouver

9. 9 Teradyne Aurora Project (Automatic Test Equipment – ATE) Video Tape Cross Functional Team/Internal Board of Directors Market Concerns –Microcontrollers –ASICs Technology Concerns –CMOS –Windows NT Discontinuous Change (Disruptive Technology) –Platform –Derivative Core Competency Business Plan/Business Case Getting Engineers Close to Customer Understanding the Customer’s Business and Operating Metrics Asset/Resource Allocation

10. 10 MSETM 5110 – New Product Development Organization Vision/Mission/Strategy Business Model/Architecture Development Portfolio and Development Teams Functional Integration (Wheelwright and Clark, Exhibit 8-1, p. 191) - Functional Team Structure - Lightweight Team Structure - Heavyweight Team Structure - Autonomous Team Structure Tools and Methods

11. 11 MSETM 5110 – New Product Development Becoming a Fast Innovator I.Time is the key performance variable to be managed to attain improved cost and quality. II.Time benchmarks are set by the performance of competitors and, if faster, by what is technologically possible. III.The support functions necessary to advance the development process are actively managed to be “invisible.” Their need is to be anticipated; they are to be invested in and kept up-to- date. They are never to be allowed to slow the development process. IV.Each program is to be managed and executed by a small, dedicated, decision-empowered, and experienced team. Team members have common goals and are measured and evaluated as part of a team.

12. 12 MSETM 5110 – New Product Development (cont’d.) Becoming a Fast Innovator (cont’d.) V.The development programs are to have four steps, and company will organize itself around these steps: 1.Planning and preparation 2.Product definition 3.Design development 4.Manufacturing ramp-up 5.Product Improvement VI.The objective of planning and preparation is to avoid having to invent in the middle of the development process—make unknowns be knowns. VII.After definition, the product specification is frozen. The definition is committed to and not allowed to be changed. The improvement phase is to be used for costs and feature enhancements.

13. 13 MSETM 5110 – New Product Development (cont’d.) Becoming a Fast Innovator (cont’d.) VIII.Functional expertise resides in the development program. Manufacturing and design resources are full-time participants in the definition team. Manufacturing resources are full-time participants in the design team. IX.Team members are collocated. X.Senior management reviews are few. The role of senior management is to ensure that the program teams have the appropriate resources, incentives and environment to execute their tasks quickly. XI.New programs are generated continuously, at regular market- driven intervals, and incorporate more incremental advances and fewer “great leaps forward.”

14. 14 MSETM 5110 – New Product Development So, What Does This All Boil Down To: Mission/Vision/Strategy Technology Solutions in a Knowledge-based and Global Economy Customer- and Market-Focused Creating Stakeholder Value Speed, Flexibility Repeatable, Sustaining NPD/NPI Process Effective Use of People and Capital Resources Being Competitive Maintaining/Building Core Competency Clock Speed

15. 15 MSETM 5110 – New Product Development Time and Innovation Innovation is key to the long-term vitality of all enterprises Innovation means more than just new products; it also means new services and ways of doing business While the challenge to innovation is originating new ideas, time is at the core of an innovation’s success Timely execution is very demanding

16. 16 MSETM 5110 – New Product Development Competing Through Innovation Changing Business Climate Globalization Increased Competition Technology Revolution/Evolution Fragmented, Demanding Markets Shorter Product Lifecycles Virtual Organizations E-Business Competitive Factors Speed Efficiency Quality/Reliability Supply Chain/Distribution Channels Translation: Creating Value for Customers

17. 17 MSETM 5110 – New Product Development In Review Competing Through Development Strategy The Concept of a Development Strategy Maps and Mapping: Functional Strategies in Pre-Project Planning The Aggregate Project Plan Structuring the Development Funnel A Framework for Development Cross-Functional Integration (cont’d.)

18. 18 MSETM 5110 – New Product Development In Review (cont’d.) Organizing and Leading Project Teams Tools and Methods Prototype/Test Cycles Learning From Development Projects Building Development Capability Wheelwright and Clark, Revolutionizing Product Development: Quantum Leaps in Speed, Efficiency, and Quality.

19. 19 MSETM 5110 – New Product Development Four Types of Product/Process Development Projects 1.Research or Advanced Development Projects 2.Breakthrough Development Projects 3.Platform or Generational Development Projects 4.Derivative Development Projects

20. 20 MSETM 5110 – New Product Development Summary of Clockspeed by Charles H. Fine, Sloan School of Management, M.I.T. In the natural world, species evolve—that is, they change to meet new challenges—or they die. The same genetic imperative operates in business. A Partial Listing of Contents: The Genetics of Business Learning from the Fruit Flies Evolution or Extinction Competition in the Age of Temporary Advantage (cont’d.)

21. 21 MSETM 5110 – New Product Development A Partial Listing of Contents: (cont’d.) What Fruit Flies Teach Us About Business The Insights of Clockspeed Survival of the Fittest The Temporary Nature of Advantage Supply Chain Design The Ultimate Core Capability Executing Strategy in the Age of Temporary Advantage Three-Dimensional Concurrent Engineering Genetic Engineering in A Fast-Clockspeed World Building Capabilities Through Dynamic 3-D Concurrent Engineering

22. 22 MSETM 5110 – New Product Development Structuring for NPI and Continuous Performance Improvement Mission/Values Baseline/Benchmark Metrics Document the Lessons Learned Adjust the Process

23. 23 MSETM 5110 – New Product Development Purpose Connectivity Relevancy Application Science: “what is” Engineering: “creating what has never been”

24. 24 MSETM 5110 – New Product Development The Four Disciplines of a Healthy Organization Build and Maintain a Cohesive Leadership Team Create Organizational Clarity Over-Communicate Organizational Strategy Reinforce Organizational Clarity Through Human Systems Source: Patrick Lencioni, “The Four Obsessions of an Extraordinary Executive.”

25. 25 MSETM 5110 – New Product Development Objective(s) Focusing on Things That Make a Difference (Value) Flawless Execution Continuous Improvement