JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The Characteristics of Product Platform Development Projects
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Liberec Economic Forum – LEF 2013
Peter E. Harland & Zakir Uddin
16 September 2013Liberec, Czech Republic
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
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of P
PDP
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Dr. Peter E. HarlandJunior Professor in Innovation Management and Entrepreneurship
Joint Master degree in Business Aministration andElectrical Engineering and PhD at TU Darmstadt, Germany
Research Assistant at TU Darmstadt and TU München 10 Years selfemployed
(Consulting and Publishing House) Endowed Junior Professorship in Innovation Management and
Entrepreneurship at TU Dresden, International Institut Zittau Head of Master Program Project Management
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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of P
PDP
IntroductionProject types as success factor in product development
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Source: Revolutionizing Product Development Wheelwright & Clark,1992, p. 93
Platform or Next generation
projects
Incremental orderivative projects
Extent of product change
Ext
ent o
f pro
cess
cha
nge
Breakthrough or Radical projects
Researchprojects New core
productNext generationof core product
Additionto product
family
Derivativesand
enhancements
New coreprocess
Next generation
process
Singledepartment
upgrade
Tuningand
incrementalchanges
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin4
The
Cha
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of P
PDP
OverviewThe Characteristics of Product Platform Development Projects
Product platforms Product platform development projects (PPDP) Expected effects, decisions, Risk management in PPDP Conclusion
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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of P
PDP
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Product Platform Principle
ProductPlatform
(same parts)Pro
duct
A
Pro
duct
B
Pro
duct
C
Pro
duct
D
Pro
duct
D
Pro
duct
A
Pro
duct
B
Pro
duct
C
A collection of modules or parts which are common for a number of products, and this commonality is developed intentionally to attain certain effects; own definition based on [McGrath 1995] [Meyer and Lehnerd 1997]
A the collection of assets [Robertson and Ulrich 1998]
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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of P
PDP
Examples of product platforms
Product platforms are a well-known concept in industry:– Skoda/Volkswagen automotive platform (Karlsson and Sköld, 2007), e.g. MQB
Octavia/Golf
– Sony Walkman platform (Sanderson and Uzumeri, 1995)– Black & Decker power tools platform (Meyer and Utterback, 1993)– Hewlett Packard’s Deskjet printer platform (Meyer and Lehnerd, 1997)– Intel Microprocessor (Cusumano and Gawer, 2002)
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JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
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of P
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Service Platforms
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Service Platform
(same processes)Pro
cess
A
Pro
cess
B
Pro
cess
C
Pro
cess
D
Pro
cess
D
Pro
cess
A
Pro
cess
B
Pro
cess
C
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
ract
eris
tics
of P
PDP
Motivation for product platforms
Modularization with same parts in all products, scaled parts, product specific parts and/or customized parts
Standardization of moduls (e.g. using norms) to achieve economy of scale Diversification of moduls to reach new customers
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Individualization of products Standardization of products
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
tics
of P
PDP
Standardization
9
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin10
The
Cha
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eris
tics
of P
PDP
OverviewThe Characteristics of Product Platform Development Projects
Product platforms Product platform development projects (PPDP) Expected effects, decisions, Risk management in PPDP Conclusion
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
tics
of P
PDP
Product Platform Development Project Framework
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Source: Modification from Harland and Yörür (2011)
Product Platform Development Project (PPDP)
Decisions
Externalfactors
Targets:increase
ofprofitand
marketshare
Productplatformeffects
Product Development Project (PDP)
Definition and development ofproduct platforms
Company (or profit center)
Steering Committee
Project Manager PM
Internalfactors
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
tics
of P
PDP
Product Platform Development Projects (PPDP)vs. Product Development projects
PPDP are much more future-oriented than product development projects (PDP) i.e. ‘visionary’ in nature [Cooper 2001]
PPDP occur early in the life cycle (Tatikonda, 1999). PPDP’s Output is not a new product, but pieces or elements that enable
the development of subsequent products” (McGrath 1995). Longer development time for initial product based on a new platfom
(McGrath 1995) Shorter development time for products based on existing platform Usage phase of a platform is often longer than the usage of single
products (Meyer & Utterback, 1993). PPDP’s results have to be accepted by a limited number of internal
customers: Project leader of product development projects PPDP entail more product and process changes than derivative products.
(Koen, 2005)
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JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin13
The
Cha
ract
eris
tics
of P
PDP
OverviewThe Characteristics of Product Platform Development Projects
Product platforms Product platform development projects (PPDP) Expected effects, decisions, risk management in PPDP Conclusion
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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of P
PDP
Challenges and decisions in PPDP
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Synergies
Diversity
.
Development
Innovation Diversity
Development
Production
Production
Several products without platform
Standard product
.
.
.
Development
Development
Development Production
Production
Production
Methods platform
Samecomponents
Same moduls (platformstrategy)
(standardization)
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
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Literature research
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0 10 20 30 40 50 60
Increase qualityReduce customer lead time
Cover global marketImprove design flexibility
Reduce (product) costsIncrease product variants
Reduce development costsReduce time to market
Reduce production costsCover multiple market segments
Effects described in industry cases (n=67)
Effects describedin arguments (n=318)
67 paper, 385 identified effects, after classification 27 effects, top 10 of these are displayed
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
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of P
PDP
Platform Effects
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Reduce logistic costs
Reduce procurement
costs
Reduce development
costs
Improve design flexibility
Coverglobal markets
Decrease
costs
Increase
profit
Increase revenue
Increasecompetitive advantage
Increasevolume
IncreasePrice
Production costs
Reduce risk
Reduce complexity in production
Increase product variants
Eco
nom
y of
sca
le
Strategic option: decrease price
Development costs
Competitive advantage
Reduce productioncosts
Company overheadis not considered
Reduce complexity in
design
Improve production flexibility
Reduce time to market of products
Improve global operations
Increase quality
Covermultiple market
segments
Reduce production lead time
Simplify marketing,
salesand service
Sales, Marketing and Service costs
Reduce sales, marketing and service costs
Reducecustomer lead time
Decrease investment risk
Use resourcesefficiently
Improve coherenceof products
Reduce customizing
lead time
Reducequotation lead time
Increase marketshare
With impact onconsist of with optional impact
Effects found in productplatform literatureother effects
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
ract
eris
tics
of P
PDP
Reduction ofDevelopment costs
Platform Effects
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Decrease
costs
Increase revenue
Increasevolume
IncreasePrice
Reduction ofProduction costs
Eco
nom
y of
sca
le
Strategic option: decrease price
Increase ofcompetitive advantage
Reduction ofSales, Marketing and
Service costs
Increasemarketshare
Decrease costs
Increaserevenue
Increaseprofit
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
tics
of P
PDP
Fuzzy targets: Platform variants funnel
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idea
idea
ideaidea
idea
idea
ideaconcept
product familyPlatform Variants FunnelIdea Funnel
marketCustomer Input
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
tics
of P
PDP
Platform variants funnel
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idea
idea
ideaidea
idea
idea
idea
customer integration
customer ideas
project management decisions
concept
product family
customer surveys
Platform Variants Funnel
sales activities
Idea Funnel
core platform definition and variant dimension definitionplatform strategy (frequency of module usage)
target market definitionfunction definition
platform roadmap definition
variants and options specification
sales information
goods and service bundling
interface strategy
market entry strategy
synergy related decisions
market related decisions
price strategy
platform strategy (communality)
technology usage
marketCustomer Input
p roduct family definition
platform project strategyb uilding blocks strategy
variants and options definition
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin
The
Cha
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eris
tics
of P
PDP
Risk Management in Platform Projects
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Product platform development project (PPDP)
risk management
Future platform based product development projects (PDP)
PPDP risk identification
PPDP risk analysis
PPDP risk response planning
PPDP risk monitoring and control
PPDP risk reporting Transfer
Identification of expected effects
Future customerrequirements
Estimation of expected effects
Proactive / reactive measures
Anticipation
JP Innovationsmanagement & EntrepreneurshipProf. Dr. Peter E. Harlandwww.ihi-zittau.de/innovationsmanagement
Peter Harland & Zakir Uddin21
The
Cha
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of P
PDP
OverviewThe Characteristics of Product Platform Development Projects
Product platforms Product platform development projects (PPDP) Expected effects, decisions, Risk management in PPDP Conclusion
– Product Platforms are important for companies to solve actual problems– Expected effects, decisions, Risk management are different than in regular PDP– Scientific literature about PPDP is still limited
• this paper contributes to further research by structuring the problem– Knowing the characteristics of product platform helps companies to be aware
of possible situations and to deal with them easily as PPDP have• high complexity• high number of interactive decisions• uncertainties in technologies and customer requirements