S S u u c c c c e e s s s s f f u u l l P P r r o o d d u u c c t t d d e e v v e e l l o o p p m m e e n n t t
Through a structured specification and management process
Author: Bart.P.J.Roth
Successful product development through a structured specification and management process
Final thesis for the study of
Technische bedrijfswetenschappen
(Industrial engineering and management sciences)
At the Faculty of Management & Organization University of Groningen
Author: Mr. B.P.J.Roth Student Nr: 1090372
Date: July, 2005
Place: Hong Kong University supervisors: Dr.Ir. F.W.Melissen
Ir. G.Henstra
Company supervisor: Mr. W.Or, MSc in Computer sciences
Acknowledgements
I would like to thank all the people who made this thesis and the opportunity for me to perform my final project at Longshore ltd possible. I realize that the opportunity to perform my final project at a local Hong Kong company is really unique and has given me insights that will be of use to me for the rest of my career.
I would especially like to thank Mr Obbens who introduced me to Longshore, Mr Or who invited me to Longshore, Mr Wai Or who helped me with my project from within the
organization, Mr Melissen, my first assessor, who gave me feedback whenever I needed it and never doubted me for a minute when I would ask if he thought I could finish the thesis on time and Mr Henstra who not only acted as a second assessor at the end of the project but also gave me feedback during the project.
Bart Roth July, 2005
Management summary
This research designs a new product development (NPD) system for Longshore ltd, a toy company that is based in Hong Kong. Longshore feels its NPD process is too slow. Many projects are not finished on time and final shipping dates have to be postponed.
To be able to know exactly what aspects of Longshore’s NPD process are causing these delays a research question is defined:
What are the main factors that must be taken into account when designing a NPD system which will solve the preventable delays that are currently experienced by Longshore?
Because Longshore feels that its specification process is one of the most important factors that slow down the NPD process they have pointed out some specification process specific problems and goals for improvement. The problems they have stated are:
- The lack of clear task descriptions within the specification process - The lack of clear task understandings within the specification process - The lack of a standard for communication during the specification process - The lack of traceability of project history
The goals they have stated are:
- Improving the communication of requirements in the specification process - Improving the predictability of late requirements
- Improving the management of product iteration - Maintaining quality in the specification process
The answer to this research question and an understanding of the specification process problems and goals can be given by reviewing existing NPD theory. Three NPD functions can be discovered as being the main problem causing factors. These functions are the main processes for improvement/redesign.
They are:
-The requirements processing function -The communication function
-The NPD management function The requirements processing function
The requirements processing function is the part of the NPD process that deals with the generation and management of the Product specification. The Product specification is one of the most important used communication interfaces during new product development. It provides all the involved stakeholders with complete, up-to-date, verifiable, consistent, and traceable product requirements. It is made and managed through three processes: a requirement analysis process, a requirements’ specifying process and a specification management process.
The communication function
The communication function makes it possible to communicate the Product specification and all other project information to all the involved stakeholders. Furthermore it communicates feedback during the NPD process.
The NPD management function
NPD management calls for three management functions: Risk management, project management and monitoring, and quality control.
Together these functions assure that risks are minimized, all processes and stakeholders are managed and/or monitored and the level of quality is maintained throughout the process.
To be able to implement these functions into Longshore’s NPD system, a design objective is defined. It is defined as:
To design a new system for NPD within Longshore and Richbo that can be adopted to develop and finish a product before or on the targeted shipping date while maintaining a sufficient level of quality
The system design
The designed requirements processing function
The requirements processing function for Longshore’s NPD system should follow a cycle of processes. This can be seen in the illustration.
This requirements’ processing cycle consists of a Collection phase, an Evaluation phase, a Prioritizing phase, a Specification management phase and a Verifying phase.
In the Collection phase all the identifiable requirements are collected and specified into a preliminary Product specification. Then, in the Evaluation phase, the collected requirements are evaluated and validated for their completeness, accuracy, relations and associated risks.
If any incompleteness, inaccuracy in the requirements and/or conflicts between the
requirements is recognized, the preliminary specification must be adjusted until it is accurate and complete in representing the customer’s requirements.
The next phase is the Prioritizing phase. The Prioritizing phase is an extension of the Evaluation phase. In it, the evaluated risks are displayed in a requirements priority list. This list makes it impossible for “risky” requirements to be forgotten during the project.
In the Specification management phase the specification document is managed. This means that the specification is maintained and kept up to date. Because it is maintained and updated centrally it becomes impossible for different stakeholders to work with different specifications.
Finally, in the Verification phase, the completeness of the specification is verified with the customer. For this, the product is specified by both the specification document and a sample.
It must be stressed that the customer can only be asked for verification if the Quality department confirms that the sample is in accordance with the specification document.
The designed communication function
The communication function identifies the stakeholders that need to be involved in the NPD process, their roles and responsibilities, the needed specification process, the means for storing and accessing project information and the methods and instruments that must be used to communicate feedback.
The necessary stakeholders are:
- The customer
- The Requirements engineer - The Development engineer
- The Quality department
- The development and manufacturing parties (both internal and external)
Evaluation
Prioritizing Collection
Specification Management Verification
OK?
Of these stakeholders, the Requirements and the Development engineer introduce the largest changes to Longshore’s current NPD system.
The Requirements engineer is an engineer in the NPD process to whom the responsibility for maintaining customer contact, requirements processing, communication with the
Development engineer and updating all customer data is assigned. The Development engineer is responsible for communicating with the Requirements engineer, developing the product with the development and manufacturing parties and updating all development data.
This distinction is made because of the complexity of Longshore’s NPD process. There are two reasons for this complexity: (1) during a project the customer continuously changes its requirements and/or introduced new ones. (2) The product is developed through the use of multiple parties (internal and external).
Another important role that is present in the NPD process is that of the Quality department.
The Quality department is responsible for the quality of all the samples and products that are submitted to the customer. The most important effect that assigning this responsibility will have is that no samples will be submitted to the customer without the Quality department checking it. In a case that the quality of the sample or product is unacceptable it will be send back to the development parties for improvement.
The needed communication flow in the specification process can be illustrated by the following figure.
For the communication sub-function that deals with making information available, a Product data management (PDM) system is made. In it, all product data is implemented for its most recent version.
To be able to develop this system for Longshore six questions have been asked:
- Who creates what data in the NPD process?
- Where and by whom do data in the NPD process need to be collected?
- Who in the NPD process needs to access what data in the NPD process?
- What available data in the NPD process can be integrated into data sets?
- Where in the NPD process does data need to be communicated?
- Where, by whom and how does data need to be maintained and updated in the NPD process?
Customer
Requirements engineer
= Spec document
= Prototype, 1st, 2nd,..
Shot, final product + Spec document
Manufacturing parties Development
Quality Department 1
2
3
4 5/10/15
6/11
7/12
9/14 Development engineer
8/13
The developed PDM system is illustrated in the next figure; it shows us that:
- The Requirements engineer is responsible for implementing and updating all customer data.
- The development parties can easily access the customer data set.
- The Development engineer is responsible for implementing and updating the development data set.
- The Requirements engineer can easily access the development data
- The Requirements engineer communicates the development data to the customer.
- Customer data and development data are held in, and distributed from one data core.
The data core that is used in this system is the specification document.
The last defined communication sub-function provides feedback throughout the NPD project.
For defining this function a general rule is used. The rule is that product feedback must be given almost continuously in early development phases and must be given only few times in latter phases. The reason for this is that the complexity of a NPD project grows during a project. If in latter phases one would have to communicate specific feedback to all the involved parties the end will be lost.
The latter feedback should be represented by “all activities summarizing” instruments. For Longshore’s NPD system they are represented by the different samples.
The designed NPD management function
The final defined NPD function is the NPD management function. The NPD management function assures that all the involved NPD parties are managed and/or monitored. The management and monitoring responsibilities in it are: the management of the customer and the monitoring of the development parties (including the Development Engineer) which is the responsibility of the Requirements engineer, the management of the development parties and the monitoring of the Requirements engineer which is the responsibility of the Development engineer, and the controlling of quality throughout all processes which is the responsibility of the Quality department.
The instruments that must be used for these processes are the specification document for the monitoring of the Requirements engineer and the development parties, a development schedule for the monitoring of the development parties, setting Quality department
responsibilities for controlling the level of quality, and a part specification for monitoring and managing the used subcontractors. The part specification is a simple version of the Product specification. It states all the part’s requirements. Furthermore, to limit risks, it also states the deliverable dates for the subcontractors.
Maintains
Data core
Development data Customer data Requirements eng
Development eng Developing parties
Customer
Accesses Maintains
Data interchange Data interchange
Accesses
Not every aspect of this system will be easy to implement. Two aspects of it can be
considered as being the most difficult aspects to implement. They are: the introduction of the new engineering roles and the introduction of the PDM system. The new engineering roles will be difficult to implement because of the respectively large changes in the engineers’ current job roles and responsibilities; the Product data management system will be hard to implement because a lot of effort and work will have to spend on collecting all the available information from multiple parties and structuring it into a centrally managed format.
Despite these implementation difficulties both the new engineering roles and the Product data management system cannot be excluded from the designed system. They are both essential for it to work.
Besides designing a new NPD system for Longshore this research also provides a prototype for implementing the system. The main part of this prototype is represented by prototype documents which can be found in the appendix.
TABLE OF CONTENTS
1 INTRODUCTION TO COMPANY ... 12
1.1 PREFACE... 12
1.2 THE HONG KONG TOY INDUSTRY... 12
1.3 INTRODUCTION TO LONGSHORE... 12
1.4 ORGANIZATIONAL STRUCTURE... 13
1.5 MANUFACTURING PROCESS... 13
2 FIELD OF STUDY AND RESEARCH REASON ... 16
2.1 PREFACE... 16
2.2 INTRODUCTION TO FIELD OF STUDY:NEW PRODUCT DEVELOPMENT... 16
2.3 NEW PRODUCT DEVELOPMENT, REQUIREMENTS AND THE SPECIFICATION PROCESS... 17
2.4 PRODUCT SPECIFICATION PROBLEMS... 19
2.5 SPECIFICATION PROCESS PROBLEMS... 20
2.6 NPD PROCESS PROBLEMS AT LONGSHORE... 21
2.6.1 Reason for the research ... 21
2.6.2 Research question ... 21
2.7 OUTLINE OF THIS THESIS... 22
3 THEORETICAL FRAMEWORK ... 25
3.1 PREFACE... 25
3.2 NEW PRODUCT DEVELOPMENT... 25
3.2.1 NPD methods ... 25
3.2.2 The specification process... 27
3.2.2.1 Identifying stakeholders ... 27
3.2.2.2 Knowledge management ... 28
3.2.2.3 The design of interfaces ... 29
3.2.2.4 The Product specification ... 29
3.2.3 NPD management ... 31
3.2.3.1 NPD management roles ... 31
3.2.3.2 Instruments for monitoring the NPD process ... 33
3.2.3.3 NPD risk management ... 34
3.3 CONCLUSION... 34
4 NPD AT LONGSHORE ... 36
4.1 PREFACE... 36
4.2 INTRODUCTION... 36
4.3 STRUCTURE... 36
4.4 DEVELOPING A NEW PRODUCT... 38
4.5 SPECIFICATION INSTRUMENTS... 40
4.6 ROLES AND RESPONSIBILITIES... 42
4.7 PROJECT PLANNING AND MONITORING... 43
4.8 CONCLUSION... 43
5 RESEARCH DESIGN ... 44
5.1 DESIGN OBJECTIVE... 44
5.2 BOUNDARY ASSUMPTIONS AND CONSTRAINTS... 44
5.3 MEASURES OF PERFORMANCE... 45
6 SYSTEM ANALYSIS ... 47
6.1 PREFACE... 47
6.2 FUNCTION ANALYSIS... 47
6.2.1 Processing requirements... 48
6.2.2 Project communication ... 50
6.2.3 NPD management ... 52
6.3 SUMMARIZATION OF PROBLEMS... 53
6.4 PREREQUISITES OF A SYSTEM, DEMANDS AND CRITERIA... 55
7 SYSTEM DESIGN ... 56
7.1 PREFACE... 56
7.2 A SYSTEM FOR PRODUCT REQUIREMENTS PROCESSING... 56
7.2.1 Collecting requirements... 56
7.2.2 The Evaluation phase... 57
7.2.3 Prioritizing requirements... 59
7.2.4 The Specification management phase ... 59
7.2.4.1 Managing the specification for requirements’ changes ... 59
7.2.4.2 Managing the specification for development progress ... 60
7.2.5 The Verification phase ... 61
7.2.5.1 Improving the specification after verification ... 61
7.3 SYSTEM STAKEHOLDERS, ROLES AND RESPONSIBILITIES... 62
7.3.1 Preface... 62
7.3.2 Determining stakeholders, roles and responsibilities ... 62
7.3.2.1 The customer ... 63
7.3.2.2 The Project manager... 63
7.3.2.3 The Requirements engineer and the Development engineer ... 63
7.3.2.4 The Quality department ... 64
7.3.2.5 Development parties ... 64
7.3.2.6 Manufacturing parties... 64
7.4 THE COMMUNICATION FUNCTION... 65
7.4.1 Preface... 65
7.4.2 A specification process structure ... 65
7.4.2.1 Considerations ... 66
7.4.3 Making information available, developing a PDM system ... 67
7.4.3.1 A PDM system concept ... 69
7.4.4 Providing and communicating feedback... 70
7.4.4.1 Determining feedback info ... 70
7.4.4.2 Determining feedback roles ... 71
7.4.4.3 Determining feedback flow ... 71
7.5 PROJECT MANAGEMENT... 71
7.5.1 The “concurrent management link” ... 71
7.5.2 Shared and individual responsibilities... 72
7.5.3 Deadlines, deliverables and time-based managing and monitoring... 72
7.5.3.1 The management and monitoring of project risks... 73
7.5.3.2 The management and monitoring of stakeholders and the product ... 73
7.5.3.3 Managing and monitoring project information... 75
7.6 QUALITY CONTROL... 76
7.7 SYSTEM DESIGN CONCLUSION... 77
8 EVALUATION, IMPROVEMENT AND FINDING ALTERNATIVES ... 79
8.1 PREFACE... 79
8.2 EVALUATING THE SYSTEM... 79
8.2.1 The first criterion, providing quality ... 79
8.2.2 The second criterion, supporting shorter lead times ... 79
8.2.3 The third criterion, reducing costs... 80
8.2.4 The fourth criterion, the ease of implementation and use... 80
8.3 OPPORTUNITIES FOR IMPROVEMENT... 82
8.4 FINDING ALTERNATIVE SOLUTIONS BASED ON THE CRITERIA... 83
8.5 FINDING ALTERNATIVE SOLUTIONS BY ELIMINATING CRITERIA... 84
8.6 CONCLUSION... 85
9 FINAL RESEARCH DESIGN, SYSTEM PROTOTYPE... 87
9.1 PREFACE... 87
9.2 FINAL RESEARCH DESIGN, SYSTEM PROTOTYPE... 87
9.2.1 Prototype roles... 87
9.2.2 Prototype Instruments... 87
9.2.2.1 The Product specification ... 87
9.2.2.2 The development schedule... 88
9.2.2.3 Sample feedback... 88
9.2.2.4 The part specification... 88
9.3 A PROTOTYPE EVALUATION... 88
9.4 CONCLUSION... 89
10 CONCLUSIONS, PRACTICAL USEFULNESS AND RECOMMENDATIONS ... 90
10.1 PREFACE... 90
10.2 CONCLUSIONS... 90
10.3 PRACTICAL USEFULNESS... 92
10.4 RECOMMENDATIONS... 93
BIBLIOGRAPHY... 94
TABLE OF FIGURES FIGURE 1: THE INJECTION MOULDING PROCESS... 14
FIGURE 2: TOTAL DESIGN ACTIVITY MODEL AND THE SPECIFICATION PROCESS ... 17
FIGURE 3:PRODUCT REQUIREMENTS... 18
FIGURE 4: THE DESIGN PROCESS... 22
FIGURE 5: SEQUENTIAL ENGINEERING... 26
FIGURE 6:SEQUENTIAL AND CONCURRENT ENGINEERING... 26
FIGURE 7: SPECIFICATION PROCESS STAKEHOLDERS... 27
FIGURE 8:STRUCTURE QA DEPARTMENTS... 37
FIGURE 9:HK AND CHINA PRODUCT DEVELOPMENT... 38
FIGURE 10: THE REQUIREMENTS CORE... 48
FIGURE 11:THE REQUIREMENTS FUNCTION... 49
FIGURE 12:THE COMMUNICATION FUNCTION... 50
FIGURE 13:THE MANAGEMENT FUNCTIONS... 52
FIGURE 14: REQUIREMENTS PROCESSING... 56
FIGURE 15:A COMMUNICATION STRUCTURE... 65
FIGURE 16:GENERATING INFORMATION AND PARTIES IN THE MIDDLE... 68
FIGURE 17:APDM-SYSTEM CONCEPT... 69
FIGURE 18: A SYSTEM FOR FEEDBACK... 71
FIGURE 19: THE “CONCURRENT MANAGEMENT LINK” ... 72
FIGURE 20: CRITERIA TRADE-OFFS... 84
TABLE OF TABLES TABLE 1:ADVANTAGES AND DISADVANTAGES OF THE PLASTIC MOULDING PROCESS... 14
TABLE 2:PRODUCT SPECIFICATION PROBLEMS... 19
TABLE 3: SPECIFICATION PROCESS PROBLEMS... 20
TABLE 4:PERM REQUIREMENTS... 32
TABLE 5:COMMUNICATION INSTRUMENTS... 42
TABLE 6:REQUIREMENTS PROCESSING RESEARCH FINDINGS PRIMARY APPROACHES... 48
1 Introduction to company 1.1 Preface
This research is about new product development. It has been initiated on behalf of Longshore.
Longshore is a Hong Kong based toy company. To be able to fully understand the
continuance of this research it is necessary that a short background of both the Hong Kong toy industry and the organization itself is given. This is done in chapter one.
1.2 The Hong Kong toy industry
The toy industry is one of Hong Kong’s oldest and largest export industries. It produces a wide range of toys with particular strength in plastic toys, including games, action figures, dolls etc.
and is considered the worlds second largest in toy exporting. In 1996, its production and export output had reached HK$ 2.5 billion1 (+/- 250 million euro).
Since then, to reduce operation costs and stay competitive, the majority of Hong Kong toy makers have set up production facilities offshore, mainly on the China mainland. Because of this relocation trend, many toy companies in Hong Kong can be reclassified as import-export establishments. The export output reached by these Hong Kong establishments in 2004 was approximately HK $ 75 billion1 (7.5 billion euro).
Because Hong Kong’s toy companies have always been famous for producing high quality toys a large portion of these toy exports has always been (and still is) derived from contract manufacturing for overseas industry giants such as Disney, Hasbro, Mattel, Wall-mart and Kmart1. Product requirements are usually provided by these overseas buyers. This type of arrangement in effect minimises local manufacturing risks related to product designs, inventory taking and marketing.
Increasingly, however, customers are also asking the manufactures for expertise in design, product engineering, modelling, quality control and other technical know-how1. The reason for this is that, although the market for toys is huge and remains promising, competition is increasing. To sustain in this market it has become necessary for HK toy companies to help the customers develop more complex toys in smaller batch sizes and in shorter delivery and development lead times2.
1.3 Introduction to Longshore
Longshore limited became active in trading in September, 1985, incorporated in Hong Kong as a privately owned limited company.
Building on experience gained by the owner as a general manager for a few American owned toy companies, Longshore has been led into the toys and games field.
Longshore limited is now a major supplier in OEM plastic injection toys & games to most of the games companies around the world - Pressman, Mattel, Ravensburger, Jumbo Toys.... to name a few.
In order to have better in house control and better co-ordination between Longshore and the manufacturers, in 1992 Longshore has set up their own manufacturing facility in Paoan, Shenzhen China named Richbo limited. The directors of Longshore hold more than 51%
shares of Richbo limited. Richbo in Paoan rented two blocks of two-storey factory building, totalling over 40,000 square feet of production space, employing over 200 workers, with 11 injection machines, 4 production lines and equipped with all supporting machineries.
In 1996, the directors of Longshore and Richbo formed Longet Co., Ltd. to own 130,000 square feet of land in Dongguang, China, and built up a manufacturing facility, warehouse and dormitory to rent to Richbo ltd.
1 www.tcdtrade.com
2 Hongyi Sun, Wong Chung Wing., “Critical success factors for new product development in the Hong Kong toy industry”, Technovation, 2005, 25(3), pages 293-303
Richbo now (2005) has more than 22 injection machines, one blow-mould machine, 9 production lines plus all supporting machineries as well as a fairly equipped in house mould building facility. Employing over 500 workers, it is a medium sized China toy factory.
1.4 Organizational structure
The organizational structure of both Longshore and Richbo will be only briefly discussed here.
The reason for this is that a large part of the internal structure and its relations will be discussed in the explanation of their new product development process which can be found later on in this thesis.
Longshore and Richbo Hong Kong
The organizational structures of Longshore and Richbo have some important aspects that should be noted at the beginning of this research. The companies have been set up as two independent companies who work closely together. To realize this Richbo is partly situated in the same office.
In this working relationship Longshore represent the interests of the customer and Richbo represents the interests of the factory. This means that all customer contact is handled by Longshore. However, because one of the HK based Richbo engineers will sit with one of the teams on every new project, the distance between the customer and Richbo should not be considered large.
As mentioned, Longshore works through the use of teams. These teams are mostly classified by the nature of the customer, which means that most customers will always work with the same team. The team communicates with the factory through the HK based Richbo engineer.
The Richbo engineer will communicate the demands of the team to its counterparts at the factory.
Richbo China
Richbo China is roughly divided in three departments: Product development, Quality
assurance (QA) and production engineering. Product development works closely with the HK based Richbo engineer on finding ways to satisfy product requirements. Quality assurance will test products, incoming materials and the production process. Production engineering is occupied with developing all necessities for production and production itself.
1.5 Manufacturing Process
The two main manufacturing processes performed at Richbo China are plastic injection moulding and final assembly. All parts that are not injected are subcontracted to other vendors. This involves any electrical parts, the packaging, the production of prototypes and the production of injection moulds. In this paragraph a short overview of these manufacturing processes will be given.
The injection process
Plastic injection moulding is the most widely used method for producing parts out of
thermoplastic material. Plastic is known to be very versatile and economical material that is used in many applications. Although tooling for plastic injection moulding is expensive, the cost per produced part is relatively low. Furthermore, complex geometries are possible and limited only by mould manufacturability3.
An example of the plastic injection machine can be seen in figure 1. The raw plastic material is inserted in the injection machine at point a. and is then heated and melted.
3 www.what-is-injection-molding.com
The molten thermoplastic material is injected into the mould at high pressure. Once this material cools and solidifies, the mould opens and the part is ejected. During the injection moulding cycle the mould serves several purposes, including:
- Determining the finished shape of a part - Venting trapped air or gas during injection
- Acting as a heat exchanger to draw heat from the part to aid in solidification
Figure 1: the injection moulding process
All moulds contain a number of common features. The mould base is an arrangement of steel blocks manufactured to specific dimensions.
The development and manufacturing of injection moulds is a complex processing technology that is performed in a job shop structured factory.
The injection process has both advantages and disadvantages as seen in table 1.
Prototyping
The making of the prototype is subcontracted to another company. During product development Richbo works closely together with the prototype maker. In most cases
prototyping is a process of adjusting the prototype until it is approved. An approved prototype (a signed sample) is the model that is used to make the moulds for the injection process. The making of the prototype is real craftsmanship and is performed in a job shop structured layout.
The shape of the prototype is first made out of an easy workable material, such as plaster or wood. Then confirming to the shape a plastic mould is made. In this plastic mould some liquid plastic will be injected. After baking the mould a plastic prototype is made. The moulds are usually good for three to four prototypes. While some principles are the same as the injection process in the factory, it is all done on a smaller scale and by hand.
The Tooling phase
During the Tooling phase all activities that have to be completed before the factory can actually produce are carried out. Such activities as the making of the moulds for the injection process, the making of the fixtures and the ordering of the necessary raw material are performed.
Pros Cons
High production rates Expensive equipment investment
High tolerances are repeatable Running costs may be high
wide range of materials can be used Parts must be designed with moulding consideration
Low labour costs Minimal scrap losses
Little need to finish parts after moulding
Table 1: Advantages and disadvantages of the plastic moulding process
For Longshore the designing and manufacturing of the mould is also subcontracted to another company. However Longshore does have its own mould adjusting department. Their function is primarily to inspect the moulds and perform minor adjustments. After a mould has been used it will be stored.
The assembly process
After all parts are accounted for, the different products will be assembled at Richbo factory.
The assembly line is divided into different lines. Each one of these lines performs the assembly of an individual product. The assembly of a product involves the fixture of all small parts and packaging,
Shipping
After a batch of products is finished it is transported to the port of Hong Kong. From there it is shipped overseas.
2 Field of study and research reason 2.1 Preface
This chapter describes the reason for the research and gives an introduction to its background, context and origin.
2.2 Introduction to field of study: New product development
Hong Kong’s toy manufactures have become some of the world’s most efficient toy
producers, and are one of the world’s biggest exporters of toys. However, the Hong Kong toy industry is mainly Original equipment manufacturing (OEM) and does not invest large
amounts in R&D activities such as the development of new designs and the creation of new toys2. With increasing competition from mainland China and other Asian countries, this needs to be changed. It is important that Hong Kong toy companies start focussing on more complex toys and create some advantages over other toy companies.
Furthermore, because even after developing such advantages competition will remain strong and margins will stay low, HK toy manufactures need to make other adjustments as well.
These adjustments should allow the company to speed up the development process without any losses in the quality of the product. Speeding up the development process has become critical for survival in the toy industry2. Many customers are now demanding periods of less than 6 months for realizing a new product.
Longshore tries to develop their toys in the shortest time possible. Both their organizational structure and the structure of their new product development process try to support such a short development time.
However, despite their efforts up to now, many predetermined shipping dates still have to be postponed. Different factors are slowing the new product development process down.
Finding factors that are slowing down Longshore’s new product development process and finding improvements that can be made to it is the backbone of this thesis. As new product development involves many different aspects, which are not all of equal importance for this research, specific choices will be made in the continuance of this research.
New product development (NPD)
Proficiency in NPD can contribute to the success of many companies. According to Poolton and Barclay (1998), ‘if companies can improve their effectiveness at launching new products, they can double their bottom line’. It is one of the areas left with the greatest potential
improvement.
Before linking the subject NPD to this thesis, a short introduction to the NPD field and its managerial implications will be given.
NPD has been subject to two major pressures in recent years. The first is the increasing
‘disintegration’ of NPD processes as both production and development activities are more and more outsourced or performed in partnership. Whereas previously, vertically integrated companies conducted product development using their own geographically co-located development teams, it is increasingly common for products to be created by a globally distributed chain involving multiple locations and multiple companies. From a company's perspective the NPD process seems to be disintegrating from a ‘completely owned’ process to a chain with many players4.
Because the HK toy industry has always developed products through a disintegrated NPD process (in cooperation with overseas buyers, subcontractors etc.) they have been dealing with these pressures for a long time now.
4 S. Minderhoud, P Fraser, “Shifting paradigms of product development in fast and dynamic markets”, Reliability engineering and system safety,2005, 88 (2), pages 127-135
The second pressure is the quest for cycle-time reduction to improve the time-to-market.
Cycle time reduction is a problem that many industries have to deal with. As most consumer market demands are changing faster and faster, there is urgency for a faster NPD process. In the toy industry many products are generated, designed, manufactured and marketed within 3-6 months.
NPD processes have evolved over recent years from sequential technology, push/market pull models to more overlapped and integrated processes, employing internal cross-functional teams and early supplier involvement (ESI) to improve the time to market4.
Cooper5 (1995) defined some key characteristics of these “new” NPD processes; they include an emphasis on upfront homework, tough go/kill decision points, sharp early product definition and flexibility.
The ways in which design iterations and information are handled are of key importance in this.
It is noted that information flows in organisations are essential indicators for the quality of development processes4. The ways in which design, design iterations and information are handled during the NPD process is the essence of this thesis.
Figure 2: total design activity model and the specification process
2.3 New product development, requirements and the specification process When facing today’s competitive environments, practicing the concept of “fast new product development” that tries to realize new products in short periods of time is a surviving matter.
5 R.G.Cooper E.J.Kleinschmidt, “Benchmarking the firm’s critical success factors in new product development”, Product innovation management, 1995, 12 (5), pages 374-391
The specification process
Most organizations adhere to one form of product design methodology as the core of their
“new” product development process. It is said that the dominant design methodology is the foundation upon which the process has to be based6.
Traditionally, a design methodology will focus on the technical aspects of a product such as:
the strength, the stiffness and the endurance of the product or perhaps the use of material7. Nowadays a design methodology involves many other aspects. Pugh8 (1991) summarises all aspects of design in the total design activity model. He defines the methodology of total design as the systematic activity necessary, from the identification of the market/user, to the selling of the successful product to satisfy that need; an activity that encompasses product, process, people and organization. Pugh’s total design methodology is illustrated by the total design activity model as seen in figure 28.
The model shows a core of design activities, which are influenced by different technologies and techniques. The design core consists of market (user) need, product design specification, conceptual design, and detail design, manufacturing and sales.
The users’ needs for the product express themselves through product requirements. Product requirements can be defined as all functions that the product must satisfy9. Requirements describe different aspects of a product. They are often categorized into Performance requirements, Manufacturing requirements, Operating requirements, Acceptance Standards and others such as disposal9. This is illustrated in figure 39.
Figure 3: Product requirements
Because the development of a new product can be a long process with many small steps and interacting parties it is possible that when commencing a new project the exact requirements are not always clear yet and need to come into being during the project.
This means that during a NPD project much iteration has to be dealt with. This asks for a large amount of communication. When many parties are involved, communicating the right
information at the right moment can be a difficult matter.
To guide this communication the Product design specification is used. The Product design specification is a continuously updated description (mostly written) of a product concept that is
6 B.Yazdani, C.Holmes, “Four models of Design definition: Sequential, Design centered, concurrent and Dynamic”, Journal of engineering design, 1999, 10 (1), pages 25-37
7 G.Pahl and W.Beitz, Engineering design, a systematic approach, London, (1988)
8 S.Pugh, Total design, integrated methods for successful product engineering, Harlow, (1991)
9 A.Tokio and P.Star, “Teaching and writing the role of specifications via a structures teardown process”, Design studies, 2003, 24 (6), pages 475-489
generated to guide the development process of the product10. It is also called the Product specification. It acts as a bridge between all stages in new product development. It is the result of all product defining activities and the instrument for communication. These activities involve the communication of requirements, design, iteration, etc. The process of defining and communicating the Product specification is often called the specification process8.
The specification process
The specification process is the part of the NPD process that deals with all product definition and all product communication activities. Project definition describes the front end planning of new product development. Ballard and Zabelle11 (2000) define project definition as: “the first phase in project delivery consisting of three modules: determining purposes (stakeholder needs and values), translating those purposes in criteria for both product and process design, and generating design concepts against which requirements and criteria can be tested and developed”; Whelton12 (2001) states that project definition should be used to encompass all project activity prior to lean product development. It should provide an opportunity to deliver value to the customer through the creation of accurate problem definition and innovative project solutions. In order to achieve this goal, he argues that project definition is a knowledge intensive process requiring the services of many stakeholders. Summarizing, one could say that product definition is involved with an accurate determination of the all the needs of the product. This does not only include the needs of the customer but it also includes the needs of all the other involved stakeholders.
As said, besides product definition activities, the specification process also deals with many communication activities. The goal of these communication activities is to provide the phases of conceptual and detail design a complete overview of the product’s needs, criteria and purposes. For these communication activities it often uses different instruments such as documents, email, discussions etc.
One of the most important used instruments in the specification process is the design specification. Although, in figure 2, the design specification appears to be finished at the beginning of the specification process this is not the case. In reality, the final specification is the result of much iteration due to new or changed requirements that surface during the concept design phase. It is not until the end of the specification process that a complete Product specification is made.
2.4 Product specification problems
The Product specification can cause a number of different problems. These problems can emerge in all phases of new product development. Different problem areas, identified in different studies concerning the design specification, are displayed in table 213.
1 Specific requirements often lead to specific versions; there is not enough standardization in the design specification, which increases costs.
2 Sometimes the design specification is too general or incomplete and does not cover all necessary requirements for the part in question
3 There are problems in interpretation of the design specification
4 Over-specification, the information in the design specification is too detailed and appears to be unrealisable, which will increase total project time and thus increase cost
5 Requirements and the specification keep changing all the time and are even changed after Tooling and method of manufacturing have been decided.
Table 2: Product specification problems
10 P.G.Smith and D.G.Reinertsen, Developing products in half the time, NY, United states of America, (1995)
11 Ballard G. and Zabelle T, Project definition White paper #9, Lean construction institute 10pp, (Oct 2000)
12 M.Whelton, “A knowledge management framework for project definition”, ITcon, pages 197-212, (2001)
13 C.Karlsson, R.Nellore, K Söderquist, “Black box engineering: redefining the role of Product specifications”, Journal of product innovation management, 1998, 15 (6) pages 534-529
A general problem is that the used specification is very general and vague and does not cover all information to satisfy the requirements of the specific part or product in question.
If this is the case a lot of ‘extra’ communication is needed before a complete and accurate Product specification is generated. Without such a complete Product specification the
manufactured product will most likely not be able to satisfy the requirements of the customers.
It is also possible that information has been left out on purpose in the expression of the product requirements. In such a case the requirements were intended only as a guideline that the customer didn’t wish to specify further.
Another problem as seen in table 2 is over-specification. Very often the specification that is communicated to the production engineers is so detailed that it becomes impossible to satisfy it. If such is the case the specification needs to be changed until it also satisfies the production requirements. If the amount of constraints is too large, the extra time spent on adjusting the Product specification could delay the whole of the NPD project.
The last problem displayed in table 2 is one that can have a lot of consequences. It exists when new sources of, or changes in requirements appear late in the project. The reason for this is that requirements are either not discussed early enough in the project or are not communicated to all the involved parties. Because of this, much iteration is needed towards the end of the NPD process.
2.5 Specification process problems
Different problems often come into being during the specification process.
Whelton and Ballard14 name five different categories for inefficiencies in the specification process. They are displayed in table 312.
Management Quality Category Process inefficiency Instance
Lack of shared process model Undefined roles and responsibilities Poor constraints analysis
Unrealistic budget and schedules Poor use of phases and gates
Insufficient time for project definition Poor change management
Limited resource allocation to project definition processes
Management of the definition process
Lack of formal review and learning processes Lack of ‘ voice’ of the user group
Inadequate stakeholder involvement and participation Poor group dynamics
Misunderstanding of client organization and culture Stakeholder involvement
Lack of client education of process Poor traceability of requirements
Lack of/poor visibility of needs, criteria and concepts Collection and documentation of information
Ill structured project memory & poor transfer of information
Poor programming of needs Processing of information
Lack of/poor assessment of clients needs and project life cycle needs
Subjective negotiations in conflict resolution Lack of solution expansion and exploration Decision making
Lack of group decision support tools Table 3: specification process problems
14 M.Whelton, G.Ballard, “Developing decision agent frames in project definition: research in shared
understanding”, In CEC’02 3rd International Conference in Concurrent engineering in Construction, Berkeley, 2002
The problems stated in table 3 seem to describe a lot of problems that are also discussed in this research. The problems illustrate the complexity of structuring the specification process.
Over project time this complexity will increase. As the amount of stakeholders involved will also increase during a project, managing the knowledge involved will become more and more difficult.
2.6 NPD process problems at Longshore
In this paragraph the main problems experienced by Longshore will be presented. They represent the reason for this research. Then the central research question is defined.
2.6.1 Reason for the research
Longshore feels its NPD process is often too slow. Many projects are not finished on schedule and final shipping dates have to be postponed. Longshore feels that a large part of these delays can be prevented.
According to Longshore these delays are mainly caused by their current specification process. In Longshore’s current specification process many responsibilities and
communication flows are not well defined. As such, it is possible that during a project not all the necessary information is communicated to the right persons. If discovered late in the project this miscommunication can result in a large time losses. When such a time loss is experienced there can be different consequences. For instance, compensating an experienced NPD time loss by changing the method of transport from shipping to flight or having to take back an already sent shipment of incomplete products are horrific to the company.
Longshore feels that their specification process is the most important part of their NPD process that needs to be improved. Because of this, they have pointed out several problems that their specification process is experiencing and that need to be evaluated and solved:
- The lack of clear task descriptions within the specification process - The lack of clear task understandings within the specification process - The lack of a standard for communication during the specification process - The lack of traceability of project history
Furthermore they have also set a few goals that a new specification process should be able to deliver during NPD.
- Improving the communication of requirements in the specification process - Improving the predictability of late requirements
- Improving the management of product iteration - Maintaining quality in the NPD process
To be able to deal with these problems, one must first understand the NPD process within Longshore, its specification process and all their important aspects.
2.6.2 Research question
The problems and goals pointed out by Longshore have given the reason for this research.
As said, their main problem is that their NPD process if often delayed.
To be able to tackle this problem the following research question is defined:
What are the main factors that must be taken into account when designing a NPD system which will solve the preventable NPD process delays that are currently experienced by Longshore?
The goal of the defined research question is to provide input (mostly theoretical) for the design objective that is presented later in this thesis. Because of Longshore’s stated problems and
goals the focus of this input and eventually the design will be on important NPD and specification process aspects.
As such, this thesis has a designing character. What design method is used in this thesis is explained in the next paragraph.
2.7 Outline of this thesis
This research its focus is on the NPD and the specification process. It should result in an improved NPD system and specification process for Longshore and Richbo.
Design Approach
The design approach used in this thesis is based on the design process as defined by Pahl and Beitz7. Although normally used for product design, Paul and Beitz do not rule out the possibility for using their design process for organizational (re)design. In fact, as no phases specifically refer to product design, it could work just as effective when redesigning an organizational system.
According to Pahl and Beitz the design process, illustrated in figure 4, consists of four main phases: clarification of the task, conceptual design, embodiment design and detail design.
Embodiment design consists of two phases. Its first phase represents the process of developing a preliminary layout. The second phase represents the refinement of the
preliminary layout. The third (last) phase is finished if the design that it produces satisfies its main goal.
Figure 4: the design process
Clarification of the task: Clarify and specify the task/goal
Conceptual design: identify essential problems, establish important functions and sub functions, search for solutions, combine and firm up into concept variants
Problem specification
Concept
Embodiment design: Develop preliminary layout and form
Preliminary layout
Embodiment design: Evaluate, check for errors, refine and optimize
Definitive layout
Detail design: Finalize details
Complete detailed design
The design method used in this research slightly differs from the P&B model. The difference is that this research will not finalize the design. Instead it provides a system prototype that can be used to start the detail design phase. As the transformation of a prototype into a complete detailed design asks for a long period of testing, using and evaluating, designing a complete detailed design does not fit into this research its scope.
Clarification of the task
Chapters 3 through 5 represent the 1st phase of the P&B design process: the clarification of the task.
It involves the collection of the necessary information to clarify and understand the experienced problems and their aspects as described in chapter 2. Its outcome is the specified design objective of this research (chapter 5). The objective is clarified by the statement of its boundaries, assumptions and the measures that will be used to evaluate its outcome.
Conceptual design
Chapter six discusses the conceptual design phase. Based on the collected information and the gained knowledge and understanding of the design objective’s background, the actual experienced problems are identified and important functions and sub-functions are established. They lead to the essential prerequisites for a new system.
The embodiment phase
Chapter seven, eight and nine represent the embodiment phase. After a preliminary design is presented (chapter 7) it is evaluated and adjusted into its final form (Chapter 8&9). This final form will be supplemented by a system prototype. The prototype is an application of the developed system for Longshore and Richbo’s NPD process.
Finally, Chapter ten will reflect on this research, providing it with conclusions and recommendations.
3 Theoretical framework 3.1 Preface
This chapter provides the main input for the design process that is illustrated in the previous chapter. Its main focus is on important NPD aspects and the specification process.
A NPD process asks for a specification process that allows the transfer of information without any losses.
An information loss is experienced when the communicated information is incorrect. If such a loss is not noticed immediately and the information is passed on incorrect, incomplete or too detailed, a product will most likely not comply with the requirements of the customer or will take too long to develop.
A good summarization of important NPD aspects can be given through the following key features15. They have been well recognized in product development research (Cooper (1994), Crawford (1991), Johne and Snelson (1988), etc)
- Early involvement of all relevant functions
- Overlapping/parallel working
- Cross functional working
- Appropriate management structures
- A process for monitoring and evaluating progress
- Support tools
The first three aspects are very much alike. They are all major aspects of a well proven NPD method called concurrent engineering. Because concurrent engineering is the used NPD method in this thesis and because it can only be accomplished by having a structured specification process, both concurrent engineering and the important aspects of the specification process are explained in the next paragraph.
The remainder of the chapter discusses the other important NPD aspects: NPD management and NPD monitoring processes, structures and support tools.
3.2 New product development 3.2.1 NPD methods
The pressure on developing new products has intensified the last years. Rapid changes in manufacturing industries have caused many changes in how a product has to be developed and manufactured. These changes caused the development of new NPD methods.
Historically, a method for NPD called sequential engineering has been used. This system treats all different phases as independent entities which pass on information after their job is finished. Nowadays more and more companies make use of an overlapping system. In such a system different stages in NPD are performed at the same time.
Sequential engineering
The traditional NPD methodology is the sequential model. The sequential model for NPD discusses a process that is begun by designing the product and then all other functions add their input to the design in a sequence of activities6. Conceptual design, detailed design, process planning, prototype manufacturing, and testing were considered as sequential processes. This method has not proved to live up to today’s demands of new product
development. The problem that is experienced while using the Sequential model is the lack of
15 J.Bessant and D.Francis, “Implementing the new product development process”, Technovation, 1997, 17 (4), pages 189-197
integration6. Every stage is only involved with the accomplishment of their own function in the process and not with the whole of the process.
The sequential process is illustrated in figure 56.
Figure 5: sequential engineering
Resulting from the increasing pressure for shorter lead times, different models have been developed for the NPD process. The primary focus of all these models is on the application of concurrent engineering.
Concurrent engineering
An alternative approach to accelerate the NPD process is to overlap the activities through more frequent exchange of information. In contrast to the one-time transfer of finalized information in a sequential process, frequent exchange of design information enables the concurrent execution of coupled activities in a concurrent process16. When performed correctly concurrent engineering can shorten NPD time. This is illustrated in figure 66.
Figure 6: Sequential and concurrent engineering
In order to make the necessary changes to convert a sequential process into a concurrent process, the information flow will have to be evaluated and redesigned. A new communication flow should incorporate the requirements of latter stages early on in the process. For
designing such a new communication flow different aspects have to be considered.
16 V.Krishnan, S.Eppinger, D.Whitney, “A model based framework to overlap product development Activities”, Management science, 1997, 43 (4), pages 437-451
