Product Development Process


Product development is a broad field of process dealing with the design, creation, and marketing of new products. The main purpose of a successful product development process is to meet the customer requirements at the shortest period of time with the se of lees resources. Therefore, this process requires special environment and sensible formation of the development teams consists of personnel from various fields.

In this report the background and principles of different collaborative development methods has been discussed as well as the review their reported weakness and strengths.

A wide focus is given to the Concurrent Engineering (CE) process including the team formation and their principles as this method has gained a vast popularity among the industries as the business leaders have been able to draw a number of positive outcomes from the implementation of Concurrent Engineering (CE).

A comparison of all the product development methods has been drawn at the end as this will help to find out the appropriate method for a specific industry.

1. Background

Product development is a broad field of professional dealing with the design, creation, and marketing of new products. Sometimes referred to as new product development (NPD), the field is focused on developing systematic methods for guiding all the processes involved in getting a new product to market.

The main purpose of Product Development Process (PDP) is “to improve the effectiveness of people engaged in developing and managing new products - both new manufactured goods and new services. This mission includes facilitating the generation of new information, helping convert this information into knowledge which is in a usable format, and making this new knowledge broadly available to those who might benefit from it."[1]

Methods for innovating faster and better in order to gain competitive advantage in the market have been the first priority for business leaders. The efforts for dealing with issues of design, manufacturing and marketing have included collaborative product development methods where all participants gather at the start of a project in order to avoid time consuming remodelling later in the process various industries practice various Product Development Process (PDP).

The product development method can be divided into process-oriented and product-oriented categories.

The main concern in process-oriented product design is the design. The objective is “the indirect improvement of design or, more precisely, a more efficient design process.”[2] Product-oriented methods concern the product itself and the direct improvement of the product.

2. Types of Product Development Process

When developing a new product it is necessary to harmonise all development stages—only in this way the product development time can be reduced. The more traditional product development program involves the sequential interaction with product development process. For example marketing information is passed to the product designers. When they have added their value the project is passed on to the process designers, then to production, then to purchasing and so on. Whatever the exact flow, the point here is that the design process is a fragmented sequential flow.

The negative aspect of sequential product development process is “in sequential product and process development, product development costs increase slowly due to sequential execution of activities, while costs of manufacturing and use increase rapidly because of long iteration loops for execution of required modifications.”[3]

To overcome the drawbacks of sequential product development process business leaders carried out various research and came out with various methods such as;

* Integrated product development (IPD),

* Dynamic product development (DPD),

* Lean product development (LPD),

* The Stage-Gate model,

* Concurrent Engineering (CE).

3. Integrated Product Development (IDP)

The method was introduced in the mid 80s as a reaction to the mainly engineering-based CE-methodology. In addition to engineers from different disciplines, people from other branches like marketing and design were also included in the process.[4]

The Product Development and Management Association (PDMA) defines IPD as the following[5]

“A philosophy that systematically employs an integrated team effort from multiple functional disciplines to develop effectively and efficiently new products that satisfy customer needs.”

The IPD process is identified as being parallel and activity based, as opposed to sequential and functional based which means the people involved are more or less the same while the tasks at hand differ throughout the process. A rather well-known illustration is used at several technical universities for describing the parallel work of marketing, design, production and administration in an IPD process.[4]

3.1 Principles of IDP

Better understanding of the customer need's and management requirements is the basic principle of IPD. Methodologies such as Quality Function Deployment aid in defining customer needs and translating those needs into specific product, process and quality requirements.[6] Once customer requirements are defined, track and tightly manage those requirements and minimize creeping elegance that will stretch out development.

Early involvement of marketing/ program management, manufacturing, material, test, quality, and product support personnel in product development provides a multi-functional perspective and facilitate the parallel design of product and process, reducing design iterations and production problems.

The design of manufacturing and product support processes must be integrated with the design of products in order to optimize the performance, availability and life cycle cost of the product. Understand existing and planned process capabilities and constraints.[6]

Forming compact product development teams with highly experienced and motivated members is the root to success for IDP which means creating a "skunk works" environment by minimizing bureaucracy, empowering product development teams, and providing technical productivity tools.

3.2 IDP vs Sequential product development

In contrast to the more traditional approach IPD is the integration of all needed skills (program management, technical development, producibility, etc.) early in the product's life cycle. In the language of IPD, the team, the (IPT) implements the IPD philosophy. The core IPT has overall responsibility for managing both the programmatic and technical decisions and looks for means to integrate the product (i.e., tries to understand the mutual impacts of the product's various piece parts) early in the life cycle.[7]

The team leader and members are empowered by their respective organizations. Indeed, most decisions can be made within the context of the team. Consequently, many of the briefings, meetings, and staffing requirements are reduced if not eliminated.

Ultimately, rapid communication, team empowerment, integration of all relevant skill sets, and team synergy result in a shorter decision cycle and lower development costs.

4. The Stage-Gate model

Some IPD-processes include an external steering group which comes in between each stage and reviews the progress. This is to ensure that the development team stays on track and reaches the planned goals on time. Dependent on the assessment, the project might be taken to the next step, or have to go through further development at the current stage. Stage-Gate model is mainly based on this philosophy.

The Stage-Gate model, originally designed by Dr. Robert G. Cooper, is an extremely useful and powerful tool in product development. It splits progress into a series of “Stages” and “Gates” to give a well organised and structured flow to the project.[8]

Research has shown that businesses that implement the Stage-Gate model are much more likely to have success when marketing their product or service, because they have followed a well structured procedure which covers all of the bases.[9]

According to several independent research studies (i.e. Product Development & Management Association, AMR Research, Booz-Allen Hamilton, etc.) between 70-85% of leading U.S. companies now use Stage-Gate to drive new products to market. The method is also implemented in the telecom company Telenor in Norway.[10]

5. Lean product development (LPD)

Lean Product Development provides a shorter, but more intense path to success for products and processes under development. Using discipline, process, quality and reliability tools, measuring risk as a substitute for potential failure, and working in a collaborative team, Lean Product Development provides a means to get to market faster with a better product. The roadmap for increased velocity to market, lower risk, and higher customer satisfaction includes processes such as Supply Chain Management, and APQP (Advanced Product Quality Planning) and tools such as Quality Function Deployment (QFD), FMEA (Failure Mode and Effects Analysis), DFM/A (Design for Manufacturing and Assembly), and DVP&R (Design Verification Plan and Report).[11]

In 1990, the researchers of the MIT International Motor Vehicle Program (IMVP) published The Ma­chine that Changed the World: The Story of Lean Production.[12] They coined the term “Lean Production” to describe an approach that used less of everything—less manufacturing space, tooling, raw materials, inventory, and labour—and did it significantly faster and cheaper than traditional mass-production techniques. Since then, “lean” has leapt into the corporate lexicon: Lean Manufac­turing, Lean Office, Lean Enterprise, Lean Supply Chain, Lean Six Sigma, and now Lean Product Development.

5.1 Lean organization

In 1996, James Womack and Daniel Jones published Lean Thinking, which outlined five principles that they believed a lean organization embodied throughout the enterprise: (1) value, (2) identifying the value stream, (3) flow, (4) pull, and (5) per­fection.

A lean organization understands what value means—for a specific customer at a specific point in time, knows how the value stream creates that value, improves the flow of value to the customer, leverages the power of pull systems, and relentlessly pursues perfection.

5.2 Lean manufacturing

Lean manufacturing has evolved a number of specific tools for improving production productivity. These tools include value stream mapping, a tool for visualizing flow in a factory process; 5S, which cleans up and organizes a physical space; and kanbans, which control the flow of work-in-progress inventory through the factory. It seemed natural to the proponents of these tools to move them upstream into product development, especially when teams began running into issues that only a design change could fix. That led to attempts to translate the tools into product development, especially value stream mapping.[13]

To cover up we can say Lean Product Development (LPD) simply stands for doing more with less. A lean ap­proach can help a prod­uct development team deliver products better, faster, and cheaper than they have been able to do in the past.

6. Dynamic product development (DPD)

One of the very last contributions to new product development methods is Dynamic Product Development (DPD). This process was developed as result of the project aim of developing the IPD process further by Halmstad University in Sweden in 1997.[14]

The main DPD-principles include strong customer focus and the use of visualization tools with the use of an internal concept group working as the steering group in order to avoid delays resulting from external interference. Furthermore, the method is highly iterative (hence the term 'dynamic') and allows for fundamental concept changes at later stages in the development process.

In contrast to IDP, DPD allows the concept changes after the planning phase which is claimed by the creator, S. Ottosson as a better way for ensuring market success.[14]

A natural concern is of course to what extent such late iterations will slow down time-to-market, and thus reducing the competitive advantage. The possibility of changing the terms of the production basis long after the planning phase is over stands also in stark opposition to the thorough initial stage of concurrent engineering as well as Baggerud's arguments of having a consistent design platform forming the basis of any development project. The conflicting views introduce important questions regarding the interface between the development phase and the production phase.

When should the collaborative efforts of the development team be succeeded by streamlined production execution? Still, having some sort of well-founded platform regarding the innovation strategy can hardly be considered as too rigid for any company - even if it should contain the possibility of fundamental concept changes close up to market launch.

7. Concurrent Engineering (CE)

As opposed to the traditional approach, the development tasks within the concurrent engineering are the simultaneous execution of several tasks. Therefore, it allows the reconfiguration process; with the intention of reduce development time while improving product quality.

In 1987, the Defense Advanced Research Projects Agency (DARPA) followed up with an extensive survey on the matter, naming the process Concurrent Engineering and created a definition [15]:

“Concurrent engineering is a systematic approach to the integrated, concurrent design of products and their related processes, including manufacturing and support. This approach is intended to cause the developers, from the outset, to consider all elements of the product life cycle from conception through disposal, including quality, cost, schedule, and user requirements.”

Concurrent engineering requires a close collaboration between all departments of organisation from the very early stages of design, so that design, development, manufacturing and marketing are no longer to carried out in series of process, but logically performed simultaneously.

7.1 Concurrent Engineering Objectives and Basic Principles

The objective of improving product quality is very important, as today's customer is becoming very quality conscious. There could be many objectives for practicing concurrent engineering in an organization and some of the important ones are listed in Table 1. Each of these objectives is discussed next.

As the application of concurrent engineering helps to improve product quality, the primary objective of some companies for practicing concurrent engineering is to improve the quality of their products. For example, Hewlett-Packard practiced concurrent engineering to enhance the quality of its products by 100% in a given time. [16]

As the development cost is an important element in the selling price of a product, its reduction can help to improve the competitive advantage of the manufacturer.

Similarly, the manufacturing cost is a significant component of the total product cost, and the practice of concurrent engineering can help to reduce the manufacturing cost by producing manufacturing-friendly product designs.[17]

Reducing marketing time basically means responding faster to the customer requirements, and the concurrent engineering approach is a useful tool for achieving this.

Improving the competitiveness of manufactured products is vital, as the competition in today's world increases globally. Many manufactured products have to compete with internally and externally manufactured products. Consequently, the practice of concurrent engineering is not only important to increase the market share but also to maintain it, because the manufacturers of the competitive products could very well be taking advantage of concurrent engineering.

Reducing the cost of testing is also important. As many manufactured products continue to increase in complexity and sophistication, the cost of testing is becoming a larger component of the overall product cost equation. For example, the cost of testing may increase due to the incorporation of built-in test systems in such products. Concurrent engineering is a useful tool to reduce such cost.

Increasing profit margins is a major benefit—usually organizations in business give a very high importance to profit margins and employ concurrent engineering to achieve their goals concerning profit.

Reducing service cost is beneficial, as many large-size products require some form of servicing after their installation at the customers' facility. The concept of concurrent engineering is a useful tool to direct attention during product design to lower serviceability-related costs.

7.2 Concurrent Engineering Team Formation

For the success of the application of the concurrent engineering concept, careful consideration is needed during team formation. For example, it is not only essential to include team members from all concerned areas and disciplines, but also to ensure that they all have appropriate qualifications, experience, and interpersonal skills.

A typical concurrent engineering team includes members such as a concurrent engineering mentor, team leader (engineering), design engineer, information-technology specialist, engineering manager (lead), vendor or customer representative, marketing manager, quality-control engineer, service engineer, manufacturing engineer, human factor or environmental specialist, safety engineer, reliability engineer, and software engineer. [18]

The team members should represent all involved disciplines, possess a broad view, believe in the company's success, have a strong team spirit, possess adequate capability for compromising and accepting consensus decisions, and possess some knowledge about other disciplines.

A study conducted in 1990 revealed that the typical component-design team in the U.S. electronics industry was composed of an average of eight people as opposed to 18 in Japan. [19]

7.3 Concurrent Engineering Team Plan

This is an important document of concurrent engineering and includes the major components of the activity. The important categories that should be used at the initial stage of the development cycle include team charter and membership, preliminary development schedule, applicable standards, key competing products, projected product volume and cost market requirements, applicable regulatory requirements, preliminary business projections, customer need projections, projection of competitors' market positioning, manufacturing risk or impact, key competitive advantages, development budget needs, product distribution requirements, key technologies to be used, competitive market position, and a customer information collection process. [18]

7.4 Implementation of concurrent engineering

The application of the concurrent engineering concept may not be beneficial to all companies. These factors dictate the degree and the need for concurrent engineering in an organization:

· Size of organization;

· Type of product;

· Process used to produce the product;

· Physical locations of the company branches.

Concurrent Engineering brings together multidisciplinary teams, in which product developers from different functions work together and in parallel from the start of a project with the intention of getting things right as quickly as possible, and as early as possible. A cross-functional team might contain representatives of different functions such as systems engineering, mechanical engineering, electrical engineering, systems producibility, fabrication producibility, quality, reliability and maintainability, testability, manufacturing, drafting and layout, and program management.

Sometimes, only design engineers and manufacturing engineers are involved in Concurrent Engineering. In other cases, the cross-functional teams include representatives from purchasing, marketing, production, quality assurance, the field and other functional groups. Sometimes customers and suppliers are also included in the team.

In the Concurrent Engineering approach to development, input is obtained from as many functional areas as possible before the specifications are finalized. This results in the product development team clearly understanding what the product requires in terms of mission performance, environmental conditions during operation, budget, and scheduling.

Multidisciplinary groups acting together early in the workflow can take informed and agreed decisions relating to product, process, cost and quality issues. They can make trade-offs between design features, part manufacturability, assembly requirements, material needs, reliability issues, serviceability requirements, and cost and time constraints. Differences are more easily reconciled early in design.

Getting the design correct at the start of the development process will reduce downstream difficulties in the workflow. The need for expensive engineering changes later in the cycle will be reduced. Concurrent Engineering aims to reduce the number of redesigns, especially those resulting from post-design input from support groups. By involving these groups in the initial design, less iteration will be needed. The major iterations that do occur will occur before the design becomes final. The overall time taken to design and manufacture a new product can be substantially reduced if the two activities are carried out together rather than in series. The reductions in design cycle time that result from Concurrent Engineering invariably reduce total product cost.

7.5 Rapid Product Prototyping

To reduce the time taken for design Con current Engineering implements product prototyping technology. In the business of product prototyping, it all comes down to speed. Rapid product prototyping is absolutely essential when dealing with an important client or performing crucial in house research. It is imperative to maintain marketplace presence and one's competitive place within the business cycle. Among the key factors behind being able to do product prototyping quickly is the efficient design of electronic circuits.

Prototyping is the process of building a model of a system. In terms of an information system, prototypes are employed to help system designers build an information system that intuitive and easy to manipulate for end users.

There are many advantages to using prototyping - some tangible, some abstract.

Reduced time and costs: Prototyping can improve the quality of requirements and specifications provided to developers. Because changes cost exponentially more to implement as they are detected later in development, the early determination of what the user really wants can result in faster and less expensive software.

Improved and increased user involvement: Prototyping requires user involvement and allows them to see and interact with a prototype allowing them to provide better and more complete feedback and specifications. The presence of the prototype being examined by the user prevents many misunderstandings and miscommunications that occur when each side believe the other understands what they said. Since users know the problem domain better than anyone on the development team does, increased interaction can result in final product that has greater tangible and intangible quality. The final product is more likely to satisfy the user's desire for look, feel and performance.

The traditional sequential procedure for designing a product is often referred to as the "over-the-wall" approach. When this design strategy is followed, individuals are only responsible for their designated function. Marketing or upper-level management will conceive of a need and throw the idea for a new or improved device over the wall to the design engineering department. After the engineering staff has designed a product meeting the requirements given them, they will pass the project on to manufacturing, which will attempt to produce the product. However, only rarely does a new product move into production without design changes. Often, the project will move back and forth from design to manufacturing several times before the product is manufacturable within established quality levels. Then, once the product is marketed, customers will pass on their opinions of it and the process will begin again as the marketing department relays to engineering the product changes needed to accommodate customer desires. Because this method of designing does not encourage interaction between functional departments during the product development process, important issues, such as the ease of manufacture and assembly, are often left unaddressed by the design engineers.

Concurrent engineering provides an excellent alternative strategy since it encourages communication and focuses on a full identification of needs early in the product development cycle. Manufacturing and assembly requirements are expressed and considered at the same time that the needs of the end-user are investigated. As a result, fewer design iterations will be required. Although the conceptual design phase may be longer than with sequential design, because careful consideration must be given to all of the product's functional aspects, this time will be made up later in the development cycle because the product will go into full production sooner.

Thus bring design process, manufacturing, marketing process all together, Concurrent Engineering can reduce the overall process time and cost, thus gives more reliability and market place.

Examples of implementing Concurrent Engineering

The practice of concurrent engineering helps to generate many advantages, including shortening the time and lessening the cost for products to get to market, inherent quality in product design, many processes occurring con-currently rather than sequentially.

Therefore more and more industries and companies are implementing concurrent engineering on their workforce. The US Air Force conducted a study in 1987 showing that CE led to an average of 40% reduction in overall development time (figure ). An interesting aspect of the survey is the extended time spent on planning - about 10 times more than in a sequential one. [20]

Most for the companies that have employed concurrent engineering have reported savings in terms of time, cost and quality. Hewlett-Packard: Instrument Division who implement CE on their production line has reported 42% reduction in manufacturing costs, reduction in product field failure rate; scrap and rework by 60% and 75%, respectively with a 35% reduction in overall development cycle time.[21]

Another example of the use of Concurrent Engineering can be found in General Electric's Aircraft Engines Division's approach for the development of the engine for the new F/A-18E/F. It used several collocated, multi-functional design and development teams to merge the design and manufacturing process. The teams achieved 20% to 60% reductions in design and procurement cycle times during the full-scale component tests which preceded full engine testing. Problems surfaced earlier and were dealt with more efficiently than they would have been with the traditional development process. Cycle times in the design and fabrication of some components have dropped from an estimated 22 weeks to 3 weeks. [22]

8. Comparison of the methods

We see that for the most parts, the methods are quite similar, with cross-functional teams, customer focus and use of visualization tools. The issue of steering groups was introduced mainly with the Stage-Gate Model and is thus not much mentioned as a tool for the CE process. The biggest difference between CE and the two other is probably the technological focus and the lack of extensive use of customer representatives in the process. DPD differs from the two others by allowing change after the planning stage is over. As mentioned before, there is some difference in literature describing the characteristics of the different methods.

Based on the descriptions of the different collaborative methods, a summarized comparison of the principles is shown in the table;

9. Conclusion

To gain the highest market place, companies should focus on the customer requirement. This process requires perfect and appropriate development method which will take short period to the overall product development, design, manufacturing and marketing. Therefore companies are more tempted to the execution of all the steps of product development simultaneously which gives rise to various development methods appropriate for different shorts of industries. All the methods discussed above have their own advantages and disadvantages. So market research should be carried out to find the customer requirements and proper product development method associated to that particular product.

10. Reference

[1][Online]. (URL (Accessed 30 September 2009).

[2] Salvendy G. Handbook of industrial engineering technology and operations management. 3rd ed. USA: Wiley-Interscience Publication, 2001,pp 206.

[3] Janez G., Marko S. Robotics and Computer-Integrated Manufacturing. University of Ljubljana Slovenia, Elsevier, 24 April 2003.

[4] Ottoson S. Handbook in innovation management - Dynamic Business and Product Development. Tervix AB, 2006, pp 126.

[5] The PDMA Glossary for New Product Development. [Online]. (URL 16 October 2006. (Accessed 30 September 2009).

[6] Kenneth Crow. [Online]. (URL DRM Associates,2002. (Accessed 2 October 2009).

[7] Wheelwright, S and Clark, K. Revolutionizing product development. New York: Free Press, 1992. pp 192.

[8] Robert G. and Scott J. Your Roadmap for New Product Development. [Online]. (URL Stage-Gate®. (Accessed 3 October 2009).

[9]York University. The Stage-Gate® Model. [Online]. (URL (Accessed 3 October 2009).

[10] Davidsen B. On the path to a new product process. New York: Telektronikk , 2004.

[11] Quality Associates International (QAI). [Online]. (URL (Accessed 4 October 2009).

[12] James P., et al. The Machine that Changed the World: The Story of Lean Production . New York: Harper Perennial, 1990, pp 460.

[13] Katherine R. and SuttonT.

An overview of Lean Product Development. PDMA Visions Magazine JUNE 2007, pp-38.

[14] Ottosson S. Dynamic product development — DPD. Linköping University, Sweden. October 2002.

[15] ][ Institute of Defence Analysis, Report R-338 in S. Skalak, Implementing Concurrent Engineering in Small Companies. New York: Marcel Dekker Inc, 2002, p. 4.

[16] Shina, S. G., Concurrent Engineering and Design for Manufacture of Electronics Products,

New York: Van Nostrand Reinhold, 1991, pp 232.

[17] Dennis L., ed. The Gower Handbook of management. 4th edition, Hampshire : Gower Publishing Limited ,2003.

[18] Salomone, T. A., Concurrent Engineering, New York: Marcel Dekker, 1995, pp 101.

[19] Askin, R. G., and M. Sodhi, “Organization of Teams in Concurrent Engineering,” in Handbook of Design, Manufacturing, and Automation, R. C. Dorf and A. Kusiak (eds.), New York: John Wiley and Sons, 1994, pp. 85-105.

[20] US Air Force R&M 2000 Process Study Report in S. Skalak, Implementing Concurrent Engineering in Small Companies. New York, NY: Marcel Dekker Inc, 2002.

[21] Turimo, J., Managing Concurrent Engineering, New York: Van Nostrand Reinhold, 1992.

[22]Stark J. A few words about concurrent engineering. [Online]. (URL 1998. (Accessed 8 October 2009).

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