S S i i m m p p l l e e M M e e t t h h o o d d o o l l o o g g y y f f o o r r
P P ro r o d d u u c c t t P P l l a a t t f f o o rm r m D D e e v v el e l o o p p m m e e n n t t
Di D ia a gn g no os se es s R Re es se ea ar rc ch h P Pr ro oj je e ct c t
By B y
I I ng n ge e v va an n K Ke es s se s el l
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Technology Management
Faculty of Management & Organization University of Groningen
Supervised by: Jeroen Vos
Jannes Slomp
Date of submitting: 2
ndof August 2007
Abstract - Management summary
Company Y’s problem is characterized as follows: Company Y’s current working method does not allow Company Y to develop these future products as resource efficient and effective as possible. Next, the current products do not fulfill the customer requirements. Mainly because of the capacity shortage at the engineering and R&D department, recognized customer requirements are not designed and developed into new products. As a result of all, possible sale opportunities are lost.
A product platform strategy is the solution to this problem. Therefore, the goal of this research is: Develop a simple product platform development methodology that will help Company Y to translate their customer requirement structurally into products that are derived from a common basis (a product family).
The concepts (taken from Robertson & Ulrich (1998)) that, successively, will be investigated are: customer requirements of market segments, product attributes, models and chunks.
Insight in these concepts is gathered through the formulation of four research questions and several sub- questions This, ultimately, to give considerations to the trade- off between distinctiveness and commonality.
The developed methodology is hardly based on factor analysis, therefore, is not complex and relatively easy, without much background knowledge, to execute. In this methodology, several information tools (figures, tables and matrices) are used to develop a product family (based on a product platform). These information tools are the input for the engineering and R&D department to develop a product platform.
The most important advantage for Company Y is that they will be able to produce products that closer meet the customer needs (Robertson & Ulrich, 1998; Ulrich & Eppinger, 2003).
The disadvantage that will have the most impact on Company Y is that the designing of a
common basis of the product platform may be difficult and time-consuming and thus will
consume high initial designing costs (Tollenaere & Jose, 2005; Kuijpers, 2006).
Table of contents
Abstract - Management summary ... 2
Preface ... 5
1. Introduction to Company Y and their current products ... 6
1.1 Company Y ... 6
1.2 Company Y’s market situation ... 6
1.3 Current products: A, B and C ... 6
1.4 Development of current products ... 6
1.5 Types of the A, B and C ... 6
1.6 Functions, components and interfaces of current products ... 6
2. Problem description... 7
2.1 Problem description in main lines... 7
2.2 Problem holders ... 7
2.2.1 Problems of problem holder 1... 7
2.2.2 Problems of problem holder 2... 8
2.2.3 Problems of problem holder 3... 8
2.2.4 Problems of problem holder 4... 8
2.2.5 Summary of problem holders ... 8
X2.3 Conceptual model of the total problem situation ... 8
2.3 Conceptual model of the total problem situation ... 9
2.4 Summary and conclusions – Problem description ... 10
3. Simple design and development approach for company Y... 11
3.1 Product platform and related advantages... 11
3.2 Disadvantages of product platforms ... 12
3.3 Distinctiveness versus commonality... 13
3.4 Trade-off between distinctiveness and commonality... 14
3.4.1 The product plan... 16
3.4.2 The differentiation plan... 17
3.4.3 The commonality plan... 17
3.5 Concepts of the product platform-planning process ... 18
3.6 Research goal ... 20
3.7 Research questions ... 20
3.8 Summary and conclusions - Usable design and development approach for company Y20 4. Customer requirements of market segments ... 22
4.1 What market segments can be identified? ... 22
4.2 What are the individual market segment requirements?... 22
4.3 Summary and conclusions – Customer requirements of market segments ... 23
5. Product attributes... 24
5.1 What are the product attributes related to company Y’s products?... 24
5.2 What are the interpretations of the product attributes?... 25
5.3 What are the individual market segment scores on the product attributes? ... 26
5.4 How can the product attributes be classified on increasing value of variety? ... 27
5.6 Summary and conclusions – Product attributes... 30
6. Models ... 31
6.1 How will future models of products differ from each other? ... 31
6.2 What models (based on a product family) should be developed for which market segments? ... 34
6.3 Summary and conclusions – Models ... 35
7. Chunks... 36
7.1 What chunks are needed in products?... 37
7.2 Which chunks will be the focus of the product platform planning? ... 37
7.3 What sub-chunks form the chunks that are the focus of the product platform?... 38
7.4 Which sub-chunks will be the focus of the product platform planning? ... 38
7.5 Which chunks are common and which are distinct across the models? ... 39
7.6 How are distinct sub-chunks different (Robertson & Ulrich, 1998)? ... 41
7.7 What is a possible product architecture for the product family of future products? ... 41
7.8 How are the chunks of the proposed product family in relation to the chunks of the A, B and C? ... 43
7.9 Summary and conclusions – Chunks ... 44
8. Conclusions, recommendations and directions for further research ... 46
8.1 Conclusions ... 46
8.2 Recommendations and directions for further research... 48
References ... 50
Appendices ... Error! Bookmark not defined.
Preface
This master thesis is the conclusion of my study Technology Management at the University of Groningen. Its purpose is twofold. On the one hand it serves to prove my scientific capability to graduate for my master’s degree in Technology Management. On the other hand it serves to provide company Y a simple product platform development method to design and develop their future products.
This thesis could not have been written without the extensive supervision of Mister A and Mister B at company Y. Their divergent views provided me with a real stimulus - and at the same time a challenge - to conduct this research. Furthermore my gratitude goes out to Jannes Slomp and Jeroen Vos who, with their flexible and professional attitude, made it possible for me to graduate within the 3 months I granted myself. In addition, I would like to thank all my colleagues at company Y, with whom I had such a good time, for their work-related and social support.
In my master thesis a lot of strategic relevant information of the company is processed. This confidential information should not be delivered outside the company. Therefore, in this public master thesis, information about the company, their market and their products is removed.
Groningen, August 2007
Inge van Kessel
1. Introduction to Company Y and their current products
1.1 Company Y
1.2 Company Y’s market situation 1.3 Current products: A, B and C 1.4 Development of current products 1.5 Types of the A, B and C
1.6 Functions, components and interfaces of current products
1.7 Summary and conclusions - Introduction to company Y and
their current products
2. Problem description
2.1 Problem description in main lines
To start with the most important part of the problem, the current products do not fulfil the customer requirements that are identified in current and possible future market segments.
Because of these unfulfilled customer requirements, market share is lost to competitors and, subsequently, sale opportunities are lost.
Company Y wants to introduce replacements for current products because these are matured.
In addition, company Y wants to introduce several new products to fulfil the identified unfulfilled customer requirements. Company Y wants to renew the product types and questions whether or not more use can be made from possible commonalities that are created through an integral development approach. This integral development approach for the replacement and new products seems necessary because the level of standardization of the current components that are not differentiating for the customers of the current products is too low and thus too costs too much.
2.2 Problem holders
2.2.1 Problems of problem holder 1
(sub)Problem
Symtom Cause
Requirement
Figure 2.1. Problem situation of problem holder 1
2.2.2 Problems of problem holder 2
(sub)Problem
Symtom Cause
Figure 2.2. Problem situation of problem holder 2
2.2.3 Problems of problem holder 3
(sub)Problem
Symtom Cause
Figure 2.3. Problem situation of problem holder 3
2.2.4 Problems of problem holder 4 Not considered as principal problem holder.
2.2.5 Summary of problem holders
2.3 Conceptual model of the total problem situation
Now that the principal problem holders are known, it is possible to relate their problems to each other and to structure this. This structure is needed to define the total problem situation at company Y in more detail. To relate the problems of the problem holders, firstly their schematically problem pictures will be added to a total problem picture (this conceptual model is given in figure 2.4 (the colors represent the related problem holder(s)).
(sub)Problem Cause
Require ment
Figure 2.4. Total problem picture
The total problem picture of company Y can be interpreted as follows: company Y wants to
replace the current products and it wants to introduce three new kinds of products (because of
possible increased sales opportunities). However, through their current resource consuming
working method, in which the current products are separately and successively designed and
developed, there is a capacity shortage for the development of the replacements and new
products. In addition, because the current products do not closely fulfil the customer
requirements, customer specific orders (with priority) are accepted which require adaptation
to the current products. These adaptations to the current products take up a part of the design
and development capacity that could have been used for the development of the replacements
and new products. Furthermore, through the capacity shortage for the development of the
replacements and new products, the recognized customer requirements are not translated into
new products. Consequently, possible sale opportunities, through products that better fulfil
customer requirements, are lost.
In short, with Company Y’s current working method it is not resource efficient possible to fulfill current and future customer requirements. Therefore, there is a need for an efficient, integral and customer focused product design and development approach. In my opinion, Company Y needs a kind of product architecture in which it easily can digest new customer requirements from market segments (additional or new functions and additional or new product attributes). Also, it would be interesting for Company Y to build a common basis of components that are not interesting for the customer, but which are necessary for the total functioning of a product. From this common basis (with the right product architecture), new products can be developed time and cost efficiently and, more important, according to customer requirements.
2.4 Summary and conclusions – Problem description
The principal problem holders at Company Y are problem holder 1, 2 and 3.
The current products should be replaced and new product should be introduced by company Y. But, their current working method does not allow company Y to develop these future products as resource efficient and effective as possible. This, because their current working method can be characterized as separate and successive design and development. Next, the customer requirements are not fulfilled by the current products. Mainly because of the capacity shortage at the problem holder 3, recognized customer requirements are not designed and developed into new products. As a result of all, possible sale opportunities are lost.
Now that the total problem situation of company Y is characterized and a direction –
development of products from a common basis - into a possible solution is given, firstly this
direction into a possible solution for company Y will be further investigated. This will be
done in the next chapter.
3. Simple design and development approach for company Y
As stated in section 2.3, Company Y is searching for an efficient, integral and customer focused product design and development approach. As stated in the previous chapter, a common basis of non-differentiating components looks promising for Company Y. This, because a lot of functions and components of the current products are comparable. From this basis, distinguishing components can be added to create customized products for customers.
3.1 Product platform and related advantages
An approach, identified in literature, which is grounded on a common basis and additional product attributes (expressed in differentiating components) that are added to fulfill the customer requirements is a product platform. A product platform is, according to Halman et al. (2003), ‘neither the same as an individual product, nor the same as a product family; it is the common basis of all individual products within a product family’. A product family is the collection of products that share the same assets (components, processes, knowledge and people and relationships) (Halman et al., 2003; Ulrich & Eppinger 2003).
A product platform (and a product family) is a good solution in the problem situation at Company Y, this because of the following reasons/advantages:
• A platform strategy distinguishes parts that do serve the distinctiveness and the commonality of products (Qin et al., 2005);
• While using a product platform, several products can share components and process steps (Robertson & Ulrich, 1998);
• A platform strategy creates a common base of non-distinctive components for several products (Ulrich & Eppinger, 2003);
• The common base of a product platform creates structure in the whole family of products through which it is possible to structure the design and development process (Muffatto & Roveda, 2000);
• In a product platform, the parts of the common base can be standardized, designed, developed and produced as resource-efficient as possible (Robertson & Ulrich, 1998;
Ulrich & Eppinger, 2003);
• Because the common base of a product platform only has to be designed once, more
development time can be spent on the derived products, therefore more effort can be
used to produce products that closer meet the customer needs (Robertson & Ulrich,
1998; Ulrich & Eppinger, 2003). Also, product can be updates through the update of
only the distinctive components (Siddique & Rosen, 1998);
• Through a product platform strategy, derived products can be produced with reduced lead times (Meyer & Lehnerd, 1997), through which the time-to-market can be reduced and companies will response faster to market changes (Qin et al., 2005);
• With a product platform, differentiated products can be differentiated efficiently (possible options for and combinations of distinctive components) from a common basis in such a way that these derived products meet the needs of individual customers (Meyer & Lehnerd 1997; Qin et al., 2005; Du et al., 2003; Rai & Allada, 2003;
Robertson & Ulrich, 1998). In addition, according to Simpson, ‘derived product from a product platform meet customer needs more completely’;
• While using a product platform strategy, the incremental cost of addressing the specific needs of a market segment are reduced (Meyer & Lehnerd, 1997; Robertson
& Ulrich, 1998).
To conclude, a product platform strategy indeed closely fits Company Y’s need for an efficient, integral and customer focused product development approach. Through a product platform, Company Y will gain increased distinctiveness as well as the increased commonality (figure 3.1).
Figure 3.1. Distinctiveness and commonality
3.2 Disadvantages of product platforms
However, attention should be paid to the advantages as well as the disadvantages of product platforms. To start with the first disadvantage, through the introduction of a product platform, products may look alike. Because of this, customers will view the product as a standardized product. Subsequently, they do not want to pay a premium price. Also, customers can think that, because of the amount of commonalities between several products, the product platform will reduce the variety of products (Tollenaere & Jose, 2005; Kuijpers, 2006).
Desired situation
Current Situation
Percentage of Common parts 100%
Distinctiveness (subjective index) 100%
The designing of a product platform may be difficult and time-consuming. But, more important, the initial designing costs of a product platform (the shared common basis) are higher than those of an integral product (Tollenaere & Jose, 2005; Kuijpers, 2006). Also, certain common (individual) parts can be more expensive than the parts before performing that certain function (Kuijpers, 2006).
Through the decreased degree of specific and tacit knowledge in the product platform, it is easier for the competition to copy the design. Moreover, craftsmanship will be lost and the barrier to enter the market will be lowered (Tollenaere & Jose, 2005). What the real advantages as well as the disadvantages will for company Y, when they design and develop a product platform, will be discussed in the chapter 8. Conclusions, recommendations and directions for further research.
3.3 Distinctiveness versus commonality
Through a product platform, increased distinctiveness as well as the increased commonality will be achieved. During the product platform design, much of the focus revolves around the trade-off between commonality and distinctiveness: according to Simpson (2003) ‘designers must carefully balance the commonality of the individual products in the family with the performance (i.e., distinctiveness) of each product in the family’. Three assumptions are often made when a product family is derived from a common basis (Simpson, 2003):
• Maximizing product performance maximizes demand (1);
• Maximizing commonality minimizes production as well as purchase costs (2);
• Resolving the trade-off between (1) and (2) yields the most profitable product family.
In addition, according to Robertson & Ulrich (1998), ‘the product architecture of a product dictates the nature of trade-off between distinctiveness and commonality’.
The distinctiveness of products is expressed in differentiating product attributes. According to Robertson & Ulrich (1998), ‘differentiating product attributes do denote a characteristic that customers deem important in distinguishing between products’. Thus, two products are distinctive from each other if the values of the differentiating product attributes that characterize the products are noticeably different (Robertson & Ulrich, 1998). A product is nothing but attributes and therefore any product can be described by citing its product attributes. Product attributes are of three types: features, functions, and benefits (Crawford &
Di Benedetto, 2006).
The commonality of products is expressed in chunks. Chunks refer to the major physical elements of a product, its key components and subassemblies. A set of products exhibits high levels of commonality if many chunks are shared (Robertson & Ulrich, 1998; Ulrich &
Eppinger, 2003). ‘Commonality is best obtained by minimizing the non-value added variations across the products within a family without limiting the choices of the customers in each market segment’ (Thevenot & Simpson, 2006).
3.4 Trade-off between distinctiveness and commonality
Methodologies for developing product platforms, and weighting commonality versus distinctiveness, are developed by Veenstra et al. (2005), Fisher et al. (1999) and Martin &
Ishii (2002). These three methodologies are shortly explained in the following paragraphs.
1. Veensta et al. (2005) generated a methodology for developing product platforms which
‘provides practical guidelines and decision rules to help building companies develop their product platform architectures effectively’. This methodology is based on the indices GVI (example of calculation: 1. Determine market needs; 2. Create Quality Function Deployment (QFD) matrix; 3. List expected changes in customer requirements; 4.
Estimate engineering metric target values; 5. Create GVI matrix and 6. Calculate GVI) CI- R and CI-S, which is generated for each module. With these indices, a design team can determine which modules to standardize or further modularize to get a platform. The GVI (external drivers of change) and CI–R (measure of the internal drivers) give an indication of how much the component is expected to change, and the CI–S is a measure of how likely those changes are to be passed on (Veensta et al., 2005).
2. Fisher et al. (1999) wrote a paper about the component sharing in the management of product variety. In this paper they discuss the challenge of component sharing. Fisher et al. (1999), propose one approach that is based on a static analysis to increase the components that are shared. The variables of the statistic analysis that are discussed in their statistic analysis are given in figure 3.2.
3. Martin & Ishii (2002) describe a methodology that ‘aids to in developing a product
platform architecture that incorporates standardization and modularization to reduce
future design costs and efforts’. According to Martin & Ishii (2002), the methodology
helps standardize and modularize the architecture. The methodology consists of the
indices GVI and CI, which are the same as the indices used by Veenstra et al. (2005).
Figure 3.2 Variables of Fisher et al. (1999) static analysis
However, these methodologies are, for Company Y, too intricate and too much based on factor analysis and calculations. Company Y does at the moment not have a methodology with which they structurally translate customer requirements into product related issues.
Therefore, when introducing a methodology to truly translate customer requirements into products related product characteristics, this methodology should be easy to use, and mainly, easy to understand by it users. When the involved stakeholders consider this relative simple methodology as a success, it can be researched whether more complex product platform methodologies will generate additional value for Company Y. Therefore, the product development methodology used in this master thesis, will be less based on calculations. In the used product development methodology in this paper, the information tools initiated by Robertson & Ulrich (1998) will be deepened (these three plans are also mentioned in Ulrich &
Eppinger (2003)). These information tools are: the differentiation plan, the commonality plan and the product plan. The relations between these three information tools are shown in figure 3.3. Ultimately, the goal of the product platform methodology is to achieve coherence among the three plans.
The three plans developed by Robertson & Ulrich (1998) can closely be linked to the
identified total problem situation at company Y. This is made visible in figure 3.4. Now
firstly, these three plans will be introduced in the way Robertson & Ulrich (1998) view them.
Figure 3.3. The platform-planning process (Robertson & Ulrich, 1998)
Product
Commonality
Differentiation
Figure 3.4 Product, commonality and distinctiveness linked to the total problem situation
3.4.1 The product plan
The product plan for the collection of products derived from the platform specifies, according
to Robertson & Ulrich (1998) ‘the distinct market offerings over time and usually comes from
the company’s overall plan’. The timing and the segment of each planned product are
indicated by location (see figure 3.3, top most picture). The genealogy of the products is
indicated by links. In addition, the product plan is a reflection of the organization’s strategy.
3.4.2 The differentiation plan
The differentiation plan indicates the customer wished values of the differentiating product attributes for each product in the indicated in the product plan. An example of a differentiation plan is given in figure 3.5. As stated by Robertson & Ulrich (1998), ‘the first column of the table shows the values of the differentiating product attributes; the second and third columns show the critical differentiating product attributes for each product in the product plan; and the fourth column gives an approximate assessment of the relative importance to the customer of each differentiating product attributes’.
Figure 3.5. The differentiation plan – an example of Robertson & Ulrich (1998)
The best level of abstraction for platform planning results in no more than ten to twenty differentiating attributes, otherwise the amount of information laboured into the differentiating plan is too high (too complex to consider all facts). In the beginning of the process, these differentiating product attributes focus on the overall properties of the product (Robertson &
Ulrich, 1998). While working on the product plan, the team must avoid a focus on existing (competing) products at the expense of anticipating on the future market (Robertson & Ulrich, 1998; Kuijpers et al., 2006).
3.4.3 The commonality plan
The commonality plan describes the extent to which the products in the plan share physical
elements. The plan is an explicit accounting of the costs associated with designing,
developing and producing each product. In the commonality plan, the values of the costs are
have to be estimated, this is because actual values cannot be determined until the products
have been designed, developed and produced (Robertson & Ulrich, 1998).
3.5 Concepts of the product platform-planning process
The concepts that are mentioned in the visualized platform-planning process of Robertson &
Ulrich (1998) are: customer requirements of market segments, product attributes, models and chunks. This will be the concepts that will be further investigated in this paper. However, before starting to investigate the individual concepts, the concepts should firstly be related to eachother, this to understand the input of one concept in another concept.
Because Company Y at the moment lacks the ability to translate the wishes of customer systematically into product characteristics, the customer requirements of Company Y’s market segments are taken as starting point. Therefore, in Simpson’s view (2003), the used platform approach will be the top-down (proactive platform) approach. In this approach, a company strategically manages and develops a family of products based on a product platform and its derivatives. This is the opposite of this is the bottom-up (reactive redesign) approach in which a company redesigns or consolidates a group of distinct products to standardize components and improve economies of scale.
Product attributes enable companies to translate customer requirements into characteristics of elements of a product. Product attributes are the dimensions of the product that are meaningful to customers (Robertson & Ulrich, 1998)). Therefore the second concept that will be investigated is product attributes.
According to D’Souza and Simpson (2002), after identifying the parameters of interest for the product design, analysis should be done to generate a product family design. This analysis is based on models of product within the product family and also on the chunks of the product family. So, the concepts models and chunks are highly related. This interdependency is, by Crawford & Di Benedetto (2006), described as follows ‘if the product architecture permits the designers to replace chunks or modules easily, several new models of products can be designed as technology improves, market tastes change, and manufacturing skills increase’.
Oin et al. (2005) state that firstly the product family should be formulated and then the
element that support the product family should be identified. The same is also declared by Du
et al. (2003), they say that firstly the product, then the features, then the modules and then the
relationship between these modules should be investigated. Based on this literature, after the
Company Y wants to introduce one platform (a common basis of chunks) from which al the replacements (models of the product family) as well as new products (models of the product family) can be derived. More general, one single common basis of a platform is used from which all products for all market segments are derived (vertical and horizontal leveraging is combined). Thus, all price/performance markets are served with the same platform. According to Simpson (2003), this approach is the beachhead approach. The beachhead approach is visualized in figure 3.6.
Figure 3.6. Beachhead approach (Simpson, 2003)
The relations between the concepts are schematically given in figure 3.7. Also a dotted line is drawn from models and chunks to customer requirements of market segments. This is step is introduced to check whether the new developed model of the product platform truly fulfils the customer requirements. This check will be a part of the conclusion in this paper.
Figure 3.7. Research sequence of concepts
3.6 Research goal
The research goal of this paper is to:
Develop a simple product platform development method that will help company Y to translate their customer requirement structurally into products that are derived from a common basis (a product family).
To reach this research goal, research questions are formulated.
3.7 Research questions
Related to the concepts, the following research questions will be used as guideline to develop a product platform development method for company Y:
1. What are the customer requirements of Company Y’s market segments?
2. What are product attributes, their interpretations and their value related to variety, of Company Y’s products for the Dutch market segments?
3. What family (models) of products should be introduced in the market segments?
4. What chunks are needed to develop Company Y’s platform based new products?
After answering all these research questions, and the needed steps to answer the questions, a method is developed. These successive steps to develop a platform for company Y’s products, is the ultimate goal of this paper. Each research question will be deepen and answered, through the development of sub questions and answers on these sub questions, in a separate chapter.
3.8 Summary and conclusions - Usable design and development approach for company Y
Arguments from literature are gathered to found my own choice for a common basis, or
worded differently, a product platform strategy. For Company Y a product platform strategy
will have the following two main advantages: products that better fulfill customer
requirements (which will result in increased sale opportunities) and design and development
capacity that only will be invested in the design and development of chunks that are
While developing a product platform for Company Y, considerations should be given to the trade- off between distinctiveness and commonality. Several researcher developed methodologies for this trade-off. However, these methodologies are for Company Y too much focused on factor analyses. In the product platform development methodology for Company Y the information tools (the differentiation plan, the commonality plan and the product plan) initiated by Robertson & Ulrich, (1998) will be deepened. This is my contribution to the product platform development methodology for Company Y.
The concepts (that are taken over from Robertson & Ulrich (1998)) that, successively, will be investigated in this paper are: customer requirements of market segments, product attributes, models and chunks. The concepts models and chunks are highly related (shown in figure 3.8 by a dotted box). In addition, one common basis will be developed for all the derived product that should be designed and developed for the Dutch market. Therefore, this methodology can be viewed as a top-down (proactive platform) beachhead approach.
The ultimate goal of this research is to develop a methodology for Company Y with which they can structurally translate their customer requirements into customized products that are derived from a product platform. The four research questions (related to the concepts) that will be used as a guideline to develop this methodology are shown in figure 3.8.
Figure 3.8. Research questions
A dotted line is drawn from models to customer requirements of market segments. This is step
is introduced to check whether the new developed model of the product platform truly fulfils
the customer requirements.
4. Customer requirements of market segments
What are the customer requirements of Company Y’s market segments?
To answer the first research question, firstly, the current and future market segments have to be identified with the sales department. After identifying the current and future market segments, the main individual market segment requirements have to be identified and structured. To acquire this information, two sub questions (shown in figure 4.1 on the right) can be formulated. These sub questions will be answered in separate sections.
Figure 4.1 Sub questions related to customer requirements of market segments
4.1 What market segments can be identified?
The current and future market segments that are identified by the sales department are:
X
4.2 What are the individual market segment requirements?
After identifying the market segments, the individual market segment requirements can be
given by the sales department. Of these individual market segments requirements, the main
requirements are given in figure 4.2. These main requirements can be considered as the order
winning aspect of company Y’s products. Figure 4.2 also shows some example customers in
Figure 4.2. Market segment requirements
4.3 Summary and conclusions – Customer requirements of market segments
X
With this information, answer is given to the first research question, which is: What are the customer requirements of company Y’s market segments?
Market segments Example customers Main requirements
5. Product attributes
What are product attributes, their interpretations and their value related to variety, of Company Y’s products for the Dutch market segments?
To answer the second research question, firstly, all product attributes related to products will be identified by and discussed with the sales department. When all the product attributes are identified and checked on inclusiveness by other departments, interpretations should be given to all the product attributes. Based on the interpretations of the product attributes, it will be possible to distinct several types of product attributes. To make the distinction between the different product attributes even more clear, the identified individual market segments requirements (in chapter 4) will be translated into scores on the product attributes. With these scores on the product attributes, two factors will be introduced to classify the product attributes on increasing value of variety for the customer. In this paper, the customer is viewed as several market segments (see chapter 4). To acquire this information, four sub questions (shown in figure 5.1 on the right) can be formulated. These sub questions will be answered in separate sections.
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Figure 5.1 Sub questions related to product attributes
5.1 What are the product attributes related to company Y’s products?
The sales department did identify the product attributes that are considered by customers in
their product purchasing process. These product attributes are given in figure 5.2.
5.2 What are the interpretations of the product attributes?
Robertson & Ulrich (1998) do, while balancing the need for differentiation with the need for commonality, classify the product attributes on increasing value of variety to customer.
However, they do not provide a methodology to classify the product attributes on increasing value of variety to customer. Here starts my contribution to Robertson & Ulrich’s (1998) planning for product platforms.
Firstly, to classify the product attributes on increasing value of variety to customer, the identified product attributes will be interpreted per market segments. In figure 5.3 and 5.4, the interpretations of the product attributes per market segment are given. The product attribute price is not interpreted because the price of a product, according to the sales department, is by the customer seen as a resultant of all the product attributes.
Figure 5.3. Interpretation of product attributes 1 Figure 5.4. Interpretation of product attributes 2 Figure 5.5. All interpretations of the product attributes
All the wanted ‘interpretations’ on all the product attributes are given in figure 5.5.
Nevertheless, the differentiating product attributes: X need to be researched more thorough.
This is because these interpretations can only be subjective (depend on person who interprets).
From figure 5.5, two conclusions can be made. Firstly, all the interpretations that are given for product attributes X are wanted by all identified market segments. The variety in these product attributes is asked by all market segments and therefore very important. Therefore, these product attributes are named: ‘variation product attributes’.
The second conclusion is about the product attributes X. All market segments do give one, and the same, interpretation for these product attributes. So, the variety, asked by the customer, on these product attributes is low. These product attributes are named: ‘non- differentiating product attributes’.
The remaining product attributes, X, are product attributes on which variation is whished, but the variation differs per market segment. These product attributes, are from now on, named:
‘differentiating product attributes’. What the effect of these three broad groups of product
attributes is on the rest of this master thesis will be discussed in section 5.4.
5.3 What are the individual market segment scores on the product attributes?
Then, after dividing the product attributes in three broad categories, variation; differentiating and non-differentiating product attributes, a more precise distinction should be made between the product attributes. This distinction will be based on the individual market segment scores on the product attributes. Logically, firstly these scores should be investigated.
With the product attributes that apply for Company Y’s products, it is possible for the sales department to score these product attributes for the identified market segments. These scores of the individual market segments are given in appendix 1. A Likert-type scale of 1-5 is used in which 1 stands for very un-important; 2 for un-important; 3 for neutral; 4 for important and 5 stands for very important for a customer (Ulrich & Eppinger, 2003). These scores on the product attributes are schematically reflected in snake plots (Ulrich & Eppinger, 2003). These snake plots of the identified market segments are, in groups of three, given in figure 5.6, 5.7 and 5.8.
1 2 3 4 5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Product attributes
Level of importance
1 2 3
Figure 5.6 Snake plot of market segment 1-3 (1= very un-important; 2= un-important; 3= neutral; 4=
important; 5= very important)
1 2 3 4 5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Product attributes
Level of importance
4 5 6
1 2 3 4 5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Product attributes
Level of importance
7 8 9
Figure 5.8. Snake plots of market segment 7-9 (1= very un-important; 2= un-important; 3= neutral; 4=
important; 5= very important)
5.4 How can the product attributes be classified on increasing value of variety?
With the individual market segment scores on the product attributes, a more precise distinction can be made for the till now identified three broad groups of product attributes. To make this distinction, Company Y should use an analysis that focuses on the absolute difference between the product attribute scores (difference between the highest and the lowest score on a certain product attribute) and the average product attribute score (the average of all the scores of the identified market segments on a certain product attribute).
To explain the chosen factors to distinct the product attributes of the three broad categories more precisely: the higher the absolute difference between the product attribute scores, the higher the market segment wishes differ on this product attribute, and thus, the higher the value of variety to customer. Then, the higher the average product attribute score, the higher the overall importance of a certain product attribute for all the market segments. The higher the overall importance of a certain product attribute, the more effort should be invested to express this product attribute in the right way in future products.
For Company Y the absolute difference is most important. The X department share this idea.
Because the absolute difference is considered as most important factor to value the variety to
customer, firstly the scores of this factor (per product attribute) are classified on decreasing
value. As a second step, the average product attribute scores of the same absolute difference
are classified on decreasing values. These values (on decreasing value) and their order are
shown in figure 5.9.
With figure 5.9, the product attributes can be, per broad categories of product attributes, classified on increasing value to variety to customers. This order of increasing value of variety to customer is given in figure 5.10. In this order, the broad categories of product attributes is maintained as main structure, this because interpretations of product attributes provide more reliable information than the product attribute scores (more subjective).
Now, the product attributes on increasing value of variety to customer of Robertson & Ulrich (1998) are filled in. This order of product attributes, firstly the variation, then differentiating and lastly the non-differentiating, has influence on the product platform. Ideally, a company positions their product with respect to the interpretations of the product attributes. However, another objective is to minimize the development costs, complexity etc. Shortly, these objectives conflict (Robertson & Ulrich, 1998).
Figure 5.9. Factors to make a precise distinction on the product attributes
Product attributes Absolute
difference Average product attribute score
x 3 3,9
x 2 4,3
x 2 4,2
x 2 4,0
x 2 3,9
x 2 3,9
x 2 3,6
x 2 3,0
x 2 2,7
x 1 4,8
x 1 4,2
x 1 4,1
x 1 3,6
x 1 3,2
x 1 3,1
Variation product attributes 1
2
3
Differentiating product attributes 4
5
6
7
8
9
10
Non-differentiating product attributes 11
12
According to Robertson & Ulrich (1998), the matrix that is given in figure 5.11, ‘becomes useful when the product attributes are arranged in order of decreasing value of variation to customer and when the chunks are arranged in order of decreasing cost of variation. When organized this way, the product attributes and the chunks in the upper left portion of the matrix whose corresponding cells are filled have special significance. These elements are the critical few on which platform planning is focused’. In addition, the product attributes and the related chunks that are not important to vary in the customers view should be rigorously standardized and incorporated into the product platform. Furthermore,’ the valuable product attributes that are not related to costly chunks can be varied arbitrarily without incurring high cost and so should be varied directly in accordance with market demands’ (Robertson &
Ulrich, 1998).
Figure 5.11. Relationship between product attributes and chunks (Robertson & Ulrich, 1998)
When relating this literature of Robertson & Ulrich (1998) to the variation, differentiating and non-differentiating product attributes that are introduced in this chapter, the variation product attributes have special significance. These are, at least, the product attributes on which the platform planning is focused. Whether the individual differentiating product attributes become also the focus of the platform planning, depend on their relations to the chunks and their place in the order of increasing value of variety to customer. Thus, which differentiating product attributes are of special significance will be investigated in chapter 7 that is about the chunks.
Then, it can be stated that the non-differentiating product attributes can be standardized and
incorporated into the product platform. So, in figure 5.11, after identifying the chunks and the
relations between the product attributes and the chunks, a line can be drawn between the
interesting and less interesting product attributes and the interesting and less interesting
chunks for the platform planning. For the product attributes, this line (drawn by internal
decisions of Company Y) will be somewhere between the differentiating product attributes.
5.6 Summary and conclusions – Product attributes
In this chapter the product attributes, that are related to Company Y’s products are identified.
The wanted interpretations of the product attributes are given in figure 5.5. From this figure, three broad categories of product attributes can be formed: variation, differentiating and non- differentiating product attributes. To make a more precise distinction between the product attributes, the product attributes are scored per individual market segment. With these scores, and two introduced factors, absolute difference and average product attribute score, a product attribute order of increasing value of variety to customer is given in figure 5.10. From this figure at least the variation product attributes, and some of the upper differentiating product attributes will be the focus of the product platform; the remaining product attributes will be, as most as possible, standardized. However, the significance of this focus of the product platform depends on the relationship between the product attributes, the related chunks and the cost of variety of the considered chunks. In chapter 7, where the chunks of products are considered, the focus of the product platform for Company Y will be discussed in more detail.
With this information, answer is given to the second research question, which is: What are
product attributes, their interpretations and their value related to variety, of Company Y’s
products for the Dutch market segments?
6. Models
What family (models) of products should be introduced in the market segments?
To answer the third research question, firstly it should be determined how the future products will differ from each other (based on the interpretations of the product attributes). Then, it will be possible to determine which models, based on a product family, for which market segment will be developed. To acquire this information, two sub questions (shown in figure 6.1 on the right) can be formulated. These sub questions will be answered in separate sections.
Figure 6.1 Sub questions related to model
6.1 How will future models of products differ from each other?
While determining how future products will differ from each other, firstly, the product attributes, on which the interpretations differ per market segment, will be related, in an insightful way, to the considered market segment. The product attributes on which the interpretations differ are: X
These relations are shown in figure 6.2. The green blocks, in this figure, indicate the desired score of the market segment on the considered product attributes; the yellow blocks indicate that the score of the product attributes exceeds the desired score of the market segment, the red blocks indicate that the score of the product attributes are too low compared to the desired score of the market segment on the product attribute interpretations.
The other product attributes (which have the same interpretation for all the market segments)
should be expressed in the same way in all the future models of products.
Figure 6.2 shows that there are some resemblances on the considered product attributes between the considered market segments. For instance, X. While combining the similar scores on the product attributes, green (exact customer wish) as well as yellow (exceed customer wish) blocks are considered, otherwise an unmanageable number of possible models will be developed. Number X of models can be developed.
The number of models can be reduced, this with three assumptions (for Company Y this are internal decisions that have to be taken):
1. X 2. X
3.
XIn figure 6.3, the product attributes on which the possible future models of products differ, after the reduction step, are given. To explain, X Therefore, these future models are all part of the same product family.
Figure 6.3. Possible future models of products (after reduction step)
These models (figure 6.3) have to be evaluated in which degree they will attract Company Y’s target customers (dotted line in research sequence figure 3.8). The models given in figure 6.3 will be evaluated on the main customer requirements that are given in figure 4.2. This is done to check whether the main requirements are processed in the developed models. However, it would be advisable for Company Y to check whether the interpretations of these requirements used in the development of the models, did not change. Also, it can be insightful to ask customers whether they feel that these possible models fulfill their wishes related to products.
As stated in section 3.5, the models and the chunks that form the models are highly related.
Therefore, after determining which chunks are needed in future products, it should be checked whether the combinations of chunks are still in accordance with customer requirements and Product
attributes Model 1 Model 2 Model 3 Model 4
Figure 6.2. Interpretations of product attributes on which the interpretations differ – search for correspondence
Product attributes Interpretation
Market Market Market Market Market Market Market Market Market
undesired perfect match too good
6.2 What models (based on a product family) should be developed for which market segments?
In section 6.1, four models are proposed, model 1, 2, 3 and 4 (henceforth referred to as Model Basic, Model Recessed, Model Expression and Model Reflection). These models and the market segments that are related to the model are given in figure 6.4. Through the related market segments, it becomes visible which models should be positioned in which market.
Figure 6.4. Models developed in the product plan
The X identified market segments in section 4.1 can be divided into five more general segments. These general segments are:
1. X 2. X 3. X 4. X
5. X
Figure 6.5 Model positioning in marketsegment
The relations between the four models and
the general segments are shown in figure 6.5.
In figure 6.5 a thicker horizontal line represents the common basis (at the moment expressed in product attributes) of the platform from which all the models should be designed and developed. The chunks from which this platform will be formed, and which will be shared by
Product
attributes Model 1 Model 2 Model 3 Model 4
Market segments
Model 3
Model 2
Model 1 Segment
3 & 4
2
1
Time Model 4 4 & 5
Figure 6.6. Major options for Model 1,2,3 and 4
The major options for the four models are schematically given in figure 6.6. In figure 6.6, the interpretation of the product attributes that are linked to the appearance of a product can not directly be compared. For the other product attributes, this comparison is possible. Thus, the mentioned models can share the chunks that execute these corresponding product attribute interpretations.
6.3 Summary and conclusions – Models
Firstly, the product attributes, on which the interpretations differ per market, are related to the considered market segments. On basis of three assumptions, four models are proposed for the market. All models are available for X. All models can share the chunks that make possible these product attributes. How the models differ is shown in figure 6.4. This models also shows which models should be positioned in which market segment.
Figure 6.6 shows that the product attributes that have different interpretations per market segment also do have some correspondences. The mentioned models can share the chunks that execute these corresponding product attribute interpretations.
With this information, an answer is given to the fourth research question, which is: What family (models) of products should be introduced in the market segments? Also, it is made clear that the models are highly related to chunks.
Product
attributes Interpretation Model 1 Model 2 Model 3 Model 4
7. Chunks
What chunks are needed to develop Company Y’s platform based new products?
To answer the fourth research question, firstly, the chunks needed in all basic products will be
defined. Then, it should be determined which (sub-) chunks will get the focus of the product
platform planning. Furthermore, it should be investigated whether the chunks that get the
focus of the product platform are common or distinct across the models that are proposed in
the previous chapter. Subsequently, it will be investigated how the distinct chunks of the
proposed models differ. With this information about the focus and the common versus distinct
chunks, it will be possible to determine a product architecture for the new products. When all
this information about the chunks is gathered, it will be interesting to compare these chunks to
the chunks that are present in the Company Y’s current products. To acquire this information,
eight sub questions (shown in figure 7.1 on the right) can be formulated. These sub questions
will be answered in separate sections.
7.1 What chunks are needed in products?
When determining the chunks of a product, a phenomenon that is inevitable is nested hierarchies: ‘almost all assembled products simultaneously display some sort of inner hierarchy and are also part of a larger system and it hierarchies’ (Fixson, 2005). Working backwards through the assembly tree, starting from full product, all components that are assembled directly to the main components are considered on relevant level (Fixson, 2005).
The chunks that are, in Fixson’s (2005) view relevant in products are (identified by Snoey &
Meppeling (2007) in their Technology Business Plan Report):
1. X
7.2 Which chunks will be the focus of the product platform planning?
The chunks are, firstly, related to all the product attributes (figure 7.2). A ‘1’ in the figure means, according to Robertson and Ulrich (1998), that a strong interdependence exists. A ‘x’
in the figure means that a weak interdependence exists between the product attribute and the chunk (Robertson & Ulrich, 1998). The relations that are marked with a ‘x’ can be used by the designer to ‘dot your i's and cross your t's’ of a certain product attribute.
Figure 7.2 is not totally structured on increasing cost of variety (as shown in figure 5.11) as introduced by Robertson & Ulrich (1998). This, because it is not straightforward and easy to determine the costs of variety (out of the scope of this paper). However, it was possible to make a kind of structure in the identified chunks. To start, X are considered to be ‘add’
chunks. By adding these chunks and not by changing these chunks, a product can be changed.
So, no cost of variety are related to the add chunks. Then, Company Y has long delivery times on purchase chunks and Company Y also has some purchase contract for certain chunks. As a result, Company Y cannot easily vary in purchase chunks and therefore the cost of variety of the purchase chunks is relatively high. Furthermore, Company Y is internally relatively flexible with regard to the chunks they produce. So, the cost of variety related to production chunks is low in comparison to the purchase chunks. This order of cost of variety related to the purchase, production and add chunks is shown in figure 7.2.
According to Roberston & Ulrich (1998) ‘the chunks in the upper left portion of the matrix
(figure 7.2: Variation&differentiating product attributes and purchasing&production chunks)
whose corresponding cells are filled have special significance. These elements are the critical
few on which platform planning is focused’. For Company Y, X (red 1 in figure 7.2) should
get the focus of the platform planning.
Figure 7.2. Product attributes related to chunks (1=strong interdependency; x=weak interdependency – model is based on Robertson & Ulrich 1998)
7.3 What sub-chunks form the chunks that are the focus of the product platform?
The sub-chunks that form the chunks that are the focus of the product platform are identified by the X department and are shown in figure 7.3 (on the horizontal axis under the focus chunks). To make it easier to visualize the named (sub-) chunks in this section, figure 7.4 relates the named (sub-) chunks to the chunks of one current product.
7.4 Which sub-chunks will be the focus of the product platform planning?
The sub-chunks that form the chunks that are the focus of the product platform are, in figure 7.3, linked to all the identified product attributes. The sub-chunks are related to all the product attributes (except price) to see which sub-chunks carry which product attributes. In this figure, a ‘1’ means, according to Robertson and Ulrich (1998), that a strong interdependence exists.
A ‘x’ in the figure means that a weak interdependence exists between the product attribute and
Chunks
Purchasing Production Add
Variation x 1 x
product x 1 x x x attributes 1 x
Differentiating 1 1 x product 1 x x x x x x attributes 1 x x x
1 1
1 x x x 1 x 1
Non- 1
differentiating x x 1
product 1 x x 1 1
attributes 1 x 1 x
