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Exhibit 1: Integrated Product Development (IPD) – Level 1
• Innovation is the engine driving revenue growth
Innovation Engine Manufacturing Products
New
Mature
Revenues
Investment in Innovation
Other Purposes
Businesses invest in new products because the expected yield in long term growth and profits is greater than other alternatives
Pay
ing
Cu
stom
ers
The Innovation (IPD) Process
Parallel Development of Product, Production System and Marketing Materials
Manufacturing Ramp up and
Market Introduction
Project and Process Management
Documentation and Data Management
Sales, Service & Support
Conceptual Design & Product Planning
Opportunity Scanning
12
3
Overview: Level-2
4 5
2
Exhibit 3: Innovation Engine by Tina Seelig
Definition Freeze
Time to market
Break Even timeOpportunity
Investigation
Innovation Cycle time
Profit Zone
Release
Obsolescence
R&D
Market Research
+
_
Cumulative Discounted Cash Flow
Periodic Discounted Cash Flow
Step 1Steps 2 & 3 Step 4 Step 5
Investm
ent
IPD 1&2
Exhibit 4: New Product Cash Flow
Step #1: Opportunity Scanning
Cu
stom
er, u
sers
&
Com
pet
itio
n
World of Technology
Manufacturing Sciences
Scan & Identify
Scan & Identify
Scan & Identify
Learn TestTechnical
Markets
Manufacturing
Integrate &
Prioritize
Queue of Potential Business
Opportunities
Core Competencies
Business Strategy
Opportunities
Opportunities
Exhibit 5: IPD Overview- Level-3
Business Opportunity
SWAG* (Mission
Statement)
*Scientific Wild Ass Guess (swag)
Step #2: Conceptual Design
(Ulrich & Eppinger merged with Osterwalder)
Design and Develop Customers and Business Model
Customer Segments
Build and Test Mockups, Prototypes and Business Models
IdentifyCustomer
Needs
EstablishTarget
Specifications
GenerateProduct
Concepts
SelectProduct
Concept(s)
Set Final
Specifications
PlanDownstreamDevelopment
MissionStatement
TestProduct
Concept(s)
BusinessModel
Exhibit 6: IPD Overview -Level-3
Benchmark Competitive Products and Business Models
Product Specifications
Key Activities
Value Proposition Distribution and Sales Channels Customer Relationships
Key Resources Key Partnerships
Revenue Streams Cost Structures
Create and Manage Intellectual Property (IP)
Research and apply Appropriate Industry, Business and Engineering Standards
Step #3: Simultaneous Product-Manufacturing-Marketing Development (aka Detailed Design)
ProjectPlan
LessonsLearned
System Design
Product Definition
Dev
elop
me n
t T
eam
EngineeringSW/HW
PackagingProduction
LegalMarketing/Sales
Advertising
Integrate & Test
Product Data & Documentation Management
Manuf. Ramp-up
MarketIntro
Exhibit 7: IPD Overview: Level-3
Project Management
Step #4A: Manufacturing Ramp-up Production
Plan LessonsLearned
Production System:Build vs Buy, Fabrication, Assembly, Quality
Control, Packaging, Shipping
Supplier Management
Finished Products
Product Specs.
Relationships
Exhibit 8: IPD Overview: Level-3
Production Management Best Practices
Step #4B: Marketing Ramp-up Market
PlanLessons Learned
Distribution System: Sales and Advertising
Advertising and Distribution Management
Marketing Materials
Relationships
Sales Management
Step #5: Distribution, Sales and Service
Marketing Materials
LessonsLearnedDistribution System (channels):
Whole seller, retailer, sales and promotionService and Warranty
Payment
($$$$$$)
Finished Products
Exhibit 9: IPD Overview: Level-3
Sales, Service and Customer Support
New Product Cash Flow
Time to market
Break Even timeOpportunity
Profit Zone
Obsolescence
R&D
Market Research
+
_
Cumulative Discounted Cash Flow
Periodic Discounted Cash Flow
Step 1Steps 2 & 3 Step 4 Step 5
Investm
ent
New Product Cash Flow
Time to market
Break Even timeOpportunity
Profit Zone
Obsolescence
R&D
Market Research
+
_
Cumulative Discounted Cash Flow
Periodic Discounted Cash Flow
Step 1Steps 2 & 3 Step 4 Step 5
Investm
ent
5% of resources spent, 85% of future expenses defined
New Product Cash Flow
Definition Freeze
Time to market
Break Even timeOpportunity
Investigation
Innovation Cycle time
Profit Zone
Release
Obsolescence
R&D
Market Research
+
_
Cumulative Discounted Cash Flow
Periodic Discounted Cash Flow
Step 1Steps 2 & 3 Step 4 Step 5
Investm
ent
IPD 1&2
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In conclusion: we are in this to do good and to make money!Without profits we have no
economic development, no jobs and no societal wealth!
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Value of Opportunity
The value of an opportunity for new products is the sum of the following:
– the magnitude of the customer need– the price and profit margin the market will
tolerate– the technical, market, and manufacturing
feasibility– the magnitude of the sustainable competitive
advantage
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Opportunity Scanning Best Practices(Relate to New Product Cash Flow model)
• A prioritized queue of opportunities lead to earlier project start and finish
• Good alignment between product and market needs accelerates acceptance
• Early identification of large scale opportunities maximizes mature sales volume
• Sustainable competitive position delays product obsolescence
