Transcript No Slide Title

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
email: [email protected]
http://www.mne.psu.edu/simpson/courses/me546
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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
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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 “closedloop” recycling in the world
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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
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Teaming for Concurrent Engineering at Kodak
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FunSaver I Project Timeline (Weeks 21-40)
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Kodak Single-Use Camera Family
http://www.kodak.com/global/en/consumer/film/otuc.shtml
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Fuji Single-Use Camera Family
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Fuji 35mm QuickSnap Camera Family
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Fuji 35mm QuickSnap Camera Family (cont.)
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Fuji’s QuickSnap Colors Family
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http://www.fujifilm.com/bridgepages/colors.html
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Overview of Today’s Lecture
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• Platform-Based Product Development

Chapter 3
• Development Drivers and Project Frameworks
• Risks & Downsides of Platforming
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Platform-Driven Product Development (Chp. 3)
Source: (Halman, et al., 2005)
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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

First
Product
Product
Platforms
Product
Families
PAS 2500/10
Platform
PAS 2500/5000
PAS 2500/30
PAS 2500/40
PAS 5000/50
PAS 5000/55
Steppers
PAS 5500/60
Platform
PAS 5500
PAS 5500/80
PAS 5500/90
PAS 5500/100
...
Step & Scan
AT 700S
Platform
AT
AT 400S
AT 400
AT 750
...
Twinscan
Market
Applications
Source: (Halman, et al., 2005)
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Skil Product Roadmap
• Component-based platform-driven development
Product platform for each tool type
 80% commonality within family; 50% commonality b/n families

Standard
Components
Product
Platforms
Motors
Platform 1
Saws
Product
Families
Market
Segments
Saw A
Saw B
Brand A
(opening price point)
Switches
Platform 2
Drills
Drill A
Drill B
Brand B
(lower price point)
Bearings
Platform 3
Routers
Router A
Router B
Source: (Halman, et al., 2005)
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SDI Product Roadmap
• Technology-driven platform-based development
2 platforms  multiple products  many market applications
 70-80% commonality within products of same family

Underlying
Technology
Single Nozzle
Technology
Product
Platforms
Single Nozzle
Platform
Product
Families
Single Nozzle
Products
Market
Applications
Graphic Arts
Applications
Textile
Application
Array
Technology
Array
Platform
Array
Products
Photo Printing
Application
Source: (Halman, et al., 2005)
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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
Source: (Alizon, et al., 2007)
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Top-Down Platform-Driven Development
Source: (Alizon, et al., 2007)
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Top-Down Product-Driven Development
Source: (Alizon, et al., 2007)
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Bottom-Up Platform-Driven Development
Source: (Alizon, et al., 2007)
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Bottom-Up Product-Driven Development
Source: (Alizon, et al., 2007)
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Examples of Drivers
Source: (Alizon, et al., 2007)
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Platform Projects vs. Derivative Projects
• Do they differ in terms of product tasks?

Source: (Tatikonda, 1999)
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
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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
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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
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Kodak’s Project Plan
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Reference:
Wheelwright, S.C. and Clark, K.B.
Leading Product Development
Free Press, New York, 1995.
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Aggregate Project Planning
Process Changes
1
Advanced
R&D Projects
New Core
Processes
Product Changes
New Core
Product
Next
Generation
Process
Single
Dept.
Upgrade
Tuning
and
Incremental
2
Breakthrough
Projects
Next
Generation
Product
Platform
Projects
3
4
Addition to
Product Family
Add-ons and
Enhancements
Source: (Wheelwright and Clark, 1995)
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Derivatives
(Enhancements,
Hybrids, and Cost
Reduced Versions)
5
Allied
Partnerships
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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
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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)
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Aggregate Project Planning at PreQuip
• PreQuip’s Development Projects (11)
after the Aggregate Project Plan
R&D
Breakthrough
projects
Mass spectrometers
Liquid chromatographs
Gas chromatographs
Data processing and handling products
Platform projects
R&D
Derivative
projects
Allied and Partnership
projects
Breakthrough
Platform
Derivative
Source: (Wheelwright and Clark, 1995)
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Management’s Involvement (Traditional)
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• Traditional Product Development Process

Management involved throughout entire process
Source: (Sanchez
and Collins, 2001)
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Risks with Platform-Based Development
• ASML





Source: (Halman, et al., 2005)
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
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Management’s Involvement (Modular)
• Modular Product Development Process

Management involved more at front-end and for integration
Source: (Sanchez
and Collins, 2001)
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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, goals
and assumptions (Roberston and Ulrich, 1998)
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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.
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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.
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