Capturing the Degree of Modularity Embedded in Product Architectures*

This article focuses on integrating various perspectives on product architecture modularity into a general framework and proposes a way to measure the degree of modularization embedded in product architectures. The article addresses trade‐offs between modular and integral product architectures and how components and interfaces influence the degree of modularization. The article identifies the following key elements of product architecture modularity: components (standard and new‐to‐the‐firm), interfaces (standardization and specification), degree of coupling, and substitutability. A mathematical model, termed the modularization function, is applied to measure the key elements and their combined effect on the degree of modularization embedded in product architectures. The application of the modularization function is illustrated by two distinct sets of product architectures: Chrysler Jeep's windshield wipers controllers and Schindler's hydraulic and traction‐pull transmission elevators. The analysis of the Chrysler case shows that the silent‐relay architecture produces more opportunities for modularization than the solid‐state architecture due to the higher substitutability factor and lower new‐to‐the‐firm component composition. The Schindler case captures the dynamics of modularity created by three types of components (standard, customizable, and new to the firm) and two types of interfaces (fundamental and optional). Based on the case studies, the article outlines testable propositions and discusses the managerial and theoretical implications for the modularization function.     

Transfer of System Knowledge Across Generations in New Product Development: Empirical Observations from Japanese Automobile Development

The objective of this article is to explore effective ways of retaining knowledge involved in new product development. Although human–based mechanisms, such as the direct transfer of project members, more effectively convey knowledge required in design integration at the higher level of product systems, the article shows that standardized mechanisms are more appropriate for retention of lower–component knowledge. However, it is also argued that product architecture affects these relationships through its impact on a locus of design change in a product system. Such argument is partially tested in the context of the Japanese automobile industry.     

Cost management and cross-functional communication through product architectures

Product architecture decisions regarding, for example, product modularity, component commonality, and design re-use, are important for balancing costs, responsiveness, quality, and other important business objectives. Firms are challenged with complex tradeoffs between competing design priorities, face the need to facilitate communication between functional silos, and want to learn from past experiences. In this paper, we present a qualitative approach for systematically evaluating the product architecture of a product family, comparing the original architecture objectives and actual experiences.
The intended contribution of our research is threefold: (1) to present a framework that brings together a diverse set of product architecture-related decisions and business performance; (2) to provide a set of metrics that operationalise the variables in the framework, and (3) to provide a workshop protocol that is based on the framework and the metrics. This workshop aims to improve cross-functional communication about the product architecture of an existing product family, and it results in practical improvement actions for future architecture design projects. Experiences with this approach are reported in pilots with Philips Domestic Appliances and Personal Care, and Philips Consumer Electronics.     

Sustainable Product and Market Development for Subsistence Marketplaces: Creating Educational Initiatives in Radically Different Contexts*

Developing products and business processes to serve subsistence marketplaces (or the roughly 4 billion poor around the world referred to as the bottom of the pyramid) is a significant challenge for businesses. Despite the importance of subsistence marketplaces, most product development educational curricula have been focused on relatively resource‐rich and literate consumers and markets. We teach an innovative year‐long product development course which includes an international immersion experience and which covers a broad spectrum of learning from understanding poverty, to consumer behavior, to product development and engineering design specifically for subsistence consumers. This unique course represents a pioneering effort to focus attention and create knowledge about product development, marketing, management, and engineering practices for subsistence marketplaces. Our two‐semester course sequence for graduate‐level students in a variety of business and engineering disciplines and industrial design combines in‐class pedagogy with experiential learning and results in useful and marketable product concepts and prototypes. Working on projects with multinational companies or startups, students identify an opportunity of general need, conduct field market research to better understand subsistence consumer needs and contexts through an international immersion experience, develop a product concept, convert the concept to a workable prototype, and develop a manufacturing plan, marketing strategy, and overall business plan for the product. Overlaying the content found in a typical new product development lab course we develop a contextual understanding of subsistence marketplaces, setting the stage for new product development. A central aspect of the learning experience is travel to subsistence markets for actual immersion in the context and to conduct market research. Our course is at the confluence of two of the most important issues facing humanity, subsistence and sustainability. Lessons learned here can also be extended to other radically different contexts, such as future scenarios involving severe energy shortages or climate change consequences. Such educational initiatives provide challenging learning experiences in preparing students for the unique demands of the 21st century.     

Large European manufacturers and the management of R&D

At the end of 1984, for the third consecutive year, a research team from INSEAD administered a survey of the largest manufacturers in Europe. This survey attempts to provide an insight into the technological and manufacturing strategy designed and implemented by these large manufacturers.
Each year since 1982 about 150 companies have completed the questionnaire, and of these 150 replies about one third are repeat answers. The database thus covers about 350 companies. As a consequence this allows us not only to analyse the static picture for a single year, but also to draw a dynamic picture of how thinking about technological and manufacturing strategy is changing within the European Manufacturing Industry.
An analysis of the questionnaire's results allows us to assert some hypotheses about:
a. Changes in the length of the product lifecycle.
b. The importance of process engineering and proprietary process know-how.
c. The interface between manufacturing and research and development as perceived by the manufacturing side.
Since a similar survey is conducted for North America and Japan at the same time, it is possible to posit the European manufacturers vis-à-vis their global competitors for some of these issues.     

产品内分工与产品建构陷阱:中国本土企业的困境与对策

本文在产品建构理论(Product Architecture Theory)的基础上,分析了本土企业陷入产品内分工陷阱的根本原因。通过建立包含产品内部界面约束度和产品价值网络紧密度的产品建构函数,提出本土企业在产品内分工体系内部谋求结构升级过程中将面临两类产品建构陷阱,第一类将导致本土企业的产品价值链低端锁定,第二类是引发本土企业系统创新瓶颈的重要诱因。本土企业要避免陷入产品建构陷阱,关键在于技术和组织双重层面的自主创新。在此基础上,给出本土企业摆脱产品建构陷阱和产品价值链低端锁定、提高系统创新能力的政策建议。     

Linking Marketing and Engineering Product Design Decisions via Analytical Target Cascading*

Firms design products that appeal to consumers and are feasible to produce. The resulting marketing and engineering design goals are driven by consumer preferences and engineering capabilities, two issues that conveniently are addressed in isolation from one another. This convenient isolation, however, typically will not result in optimal product decisions when the two problems are interrelated. A method new to the marketing community, analytical target cascading (ATC), is adopted here to explore such interrelationships and to formalize the process of coordinating marketing and engineering design problems in a way that is proven to yield the joint optimal solution. The ATC model is built atop well‐established marketing methodologies, such as conjoint, discrete choice modeling and demand forecasting. The method is demonstrated in the design of dial‐readout household scales, using real conjoint choice data and a parametric engineering product design model. Results indicate that the most profitable achievable product can fall short of predictions based on marketing alone but well ahead of what engineering may produce based on original marketing target specifications. A number of extensions can be accomplished readily using techniques from the extant marketing and design optimization literature.     

Nature of the R&D/Marketing co-operation in the design of technologically advanced new industrial products

Many studies have consistently reported that success in industrial new product innovation is linked with the degree of interfacing between R&D and Marketing in the early stages of the product development process. However, very little evidence of such an interface has been reported in advanced technology firms and the relevant literature provides little empirical material on the matter.
Based on a pilot study of 23 new product projects in ten firms in the U.K. it is argued that, in many instances, firms are missing a fundamental issue in the R&D/Marketing cooperation. Too often, the interface is limited to the identification of general market need for a particular new product idea.
The paper emphasises the fact that the interface should provide the means for an efficient product design procedure between R&D and Marketing. This design link should, in turn, profit both the engineering design of the product and its future marketability. The paper also outlines the advantages and the problems inherent in the exercise and proposes a framework for implementation.     

Validation of Expert Systems for Innovation Management: Issues, Methodology, and Empirical Assessment

Faced with the complexities of managing new product development, most of us would welcome the support of a computer-based system that captures the knowledge and the reasoning capabilities of experts in our field. Considerable effort has been focused on the design and development of expert systems for applications such as new product management. However, design and development are only two steps on the path to successful implementation of a useful expert system. A rigorous validation process is essential for ensuring that the expert system performs as intended. Using the INNOVATOR expert system as an example, Sundaresan Ram and Sudha Ram propose and test a framework for validating expert systems designed for new product management. The proposed validation framework considers three aspects of the expert system: its knowledge acquisition methodology, its performance, and its utility. Validation of an expert system's knowledge acquisition methodology involves assessment of the knowledge sources used, the criteria for selecting human experts, and the methods used for knowledge acquisition. Using multiple sources improves the likelihood that the expert system will capture the necessary core knowledge. Similarly, selection of the experts who are to supply the knowledge used by the expert system should be based on reliable measures of new product expertise rather than ad hoc measures. The system's performance is evaluated through formal tests of the accuracy and the completeness of the knowledge base, the consistency and the accuracy of the decisions made by the system, and the reasoning process by which the system reaches its decisions. Such tests may involve direct examination of the system by experts, and Turing tests, which compare both the recommendations and the reasoning process of the system with those of selected experts. Both types of tests may involve experts from whom knowledge was acquired during the development of the system as well as experts who were not involved in the design and development of the system. Assessment of an expert system's utility focuses on user perceptions of system performance and utility as well as the design of the user interface. First, end-users must evaluate the relevance of the chosen problem domain. In other words, the validation process must verify that the expert system addresses an important problem that requires decision support tools. Second, the expert system must provide a logical, systematic approach to solving the problem. Finally, the expert system must provide a consistent, intuitive user interface.     

Time-Driven Development of Software in Manufactured Goods

Microprocessors are being incorporated into an increasingly wide range of products. However, many of the companies that manufacture such products are not effectively managing software development for these embedded systems. Despite the current focus on concurrent engineering and cross-functional teams, software engineering is often poorly integrated with the rest of the product development effort. The result is usually a costly delay in the product's introduction to the market. Tomlinson G. Rauscher and Preston G. Smith describe several practices that have proved helpful for accelerating the development of products that incorporate embedded software. Managerial and economic opportunities for accelerating development of hardware-software systems involve planning for dramatic growth in products that include embedded software, cultivating in-house software knowledge, recognizing the financial effects of project decisions, and measuring project progress. Improving time to market requires hiring and developing software engineering staff and managers with the requisite knowledge of the application, ensuring that they understand the techniques for specifying requirements and design, and providing them with clear guidelines for evaluating the trade-offs between project duration, project cost, and product performance. Progress should be measured in terms of the number of components completed, rather than the number of lines of code that are written. During the development process, emphasis should be placed on managing the scheduling links between hardware and software development, obtaining user feedback about the system as early as possible, and using a flexible, ongoing review process. Development groups should establish software requirements and design parameters before they start coding, and testing should commence early in the system design process. By creating a working prototype of the user interface, developers can obtain user feedback and thereby sharpen the design specification. Effective, timely software development requires focusing greater energy and resources on development of the requirements specification. By expending this effort in the first phase of a project, the development team can minimize its use of the time-consuming code-and-debug approach to software development. In addition to breaking down a complex system into understandable pieces, a modular design supports efforts to accelerate product development. With a modular design, work on various modules can be assigned concurrently to relatively independent teams. A modular design facilitates testing of the product as well as reuse of software that was developed and deployed in previous projects.     

Design of Robust New Products under Variability: Marketing Meets Design*

In designing consumer durables such as appliances and power tools, it is important to account for variations in product performance across different usage situations and conditions. Since the specific usage of the product and the usage conditions can vary, the resultant variations in product performance also can impact consumer preferences for the product. Therefore, any new product that is designed should be robust to these variations—both in product performances and consumer preferences. This article refers to a robust product design as a design that has (1) the best possible (engineering and market) performance under the worst‐case variations and (2) the least possible sensitivity in its performance under the variations. Achieving these robustness criteria, however, implies consideration of a large number of design factors across multiple functions. This article's objectives are (1) to provide a tutorial on how variations in product performance and consumer preferences can be incorporated in the generation and comparison of design alternatives and (2) to apply a multi‐objective genetic algorithm (MOGA) that incorporates multifunction criteria in order to identify better designs while incorporating the robustness criteria in the selection process. Since the robustness criteria is based on variations in engineering performance as well as consumer preferences, the identified designs are robust and optimal from different functional perspectives, a significant advantage over extant approaches that do not consider robustness issues from multifunction perspectives. This study's approach is particularly useful for product managers and product development teams, who are charged with developing prototypes. They may find the approach helpful for obtaining customers' buy‐in as well as internal buy‐in early on in the product development cycle and thereby for reducing the cost and time involved in developing prototypes. This study's approach and its usefulness are illustrated using a case‐study application of prototype development for a handheld power tool.     

Coordinating dispersed product development processes: A contingency perspective of project design and modelling

Managing worldwide supply pipeline operations concerns coordination and control of every step of the chain process starting from raw material sourcing, production, finally to distribution of market-specific items in retail places, all the way from product value inception and engineering, through manufacturing design, to the worldwide logistic planning. From systems perspectives, their relationships and interactions determine the overall performance. Coordinating such systems is very human-inclusive, characterised by abstract, ill-structured information interchange among well-partitioned expert groups. In this paper we documented the experience and implications of managing and modelling product development activities from a contingent perspective of interdependence. In our investigations amongst six international fashion corporations, crucial activity tasks in different countries were analyzed and evaluated within the context of launching schedule-driven fashion products. At the outset, we present the problem context, the issues arising from coordinating product development systems, and the approach we use to deal with the issues, i.e. modelling and manipulating the process interaction. We put forth a dependency-based process performance simulation, the related approach of data capture and the attribute constructs to represent the interactivity relationship. Finally, we discuss the computation process and evaluation strategy, which is indeed inspired by today's simulation-based optimization concepts. An effective GA heuristics is duly implemented.     

The Influence of Digital Design and IT on Modular Product Architecture

The architecture of a product is the design and specification of inherent subsystems, components, and interfaces between subsystems. Well‐defined interfaces allow the development of standardized subsystems that may be shared across product lines, e.g., technology platforms. Past research shows the benefits of modular product architecture in terms of improving cost of goods through common components and materials as well as improving development time cycles for derivative products. Product architecture does not occur by accident; it must be engineered and implemented. This study explores the impact of digital design and information technology (IT) on the development of modular product architectures. Through an empirical study of 122 firms and follow‐up interviews with several respondents, we study the impact of digital design tools and IT infrastructure on the development of modular product architecture and overall project outcomes. The results indicate that a firm's IT infrastructure has a strong, significant relationship with the development of modular product architecture. The findings also show a strong, positive relationship between the development of modular product architecture and project outcomes. However, in contrast to the common perception that digital design tools enhance R&D productivity and effectiveness, we do not find a significant relationship between digital design tool usage and modular product architecture or overall project outcomes. The findings suggest that digital design tools and their organizational implementation need improvement in up‐front new product development phases.     

Demand-side reactive strategies for supply disruptions in a multiple-product system

This research examines demand-side reactive strategies for supply disruption in a multiple assemble-to-order system. We consider an assemble-to-order system with two substitute products where the demand is price-sensitive and disruption-sensitive. Two different supply disruption situations are examined: disruption of the low-value component and disruption of the high-value component. We propose and compare the performance of four reactive strategies for managing supply disruptions, namely, the backordering strategy, the upgrading/downgrading strategy, the compensation strategy, and the mixed strategy. We find that the compensation strategy and the mixed strategy can keep more customers than the backordering strategy and the upgrading strategy during the supply disruption of the low-value product. For the disruption of the high-value product, the total number of customers keeps constant. But it does lead to the reallocation of customers among the products. We find that the mixed strategy is the best reactive strategy and the backordering strategy is the worst one among the four reactive strategies.     

The Nature of Technology for Design

This paper reviews ideas from design and technology and science education and discusses knowledge, values and skills as aspects of technology in order to demonstrate that technology for design cannot be simply associated with a knowledge component of technology. The paper highlights the linguistic challenges in expressing issues in this area and the philosophical difficulty that the nature of cognitive modelling means that some aspects may be impossible to express using language. Values and a designerly way of knowing and the nature of technological skills are discussed in order to establish their relationship to technology for design. Prior studies concerning technology and designing have focused on engineering and science-based design areas. A research agenda in relation to the proposed broader interpretation of technology for design is discussed, which demonstrates that such research must ultimately be interdisciplinary. Nevertheless, initial steps which could be taken by design researchers are suggested.     

The role of space in interdisciplinary collaboration in design education

The growing interest in the collaborative design education for innovation has mainly been concerned with students and learning outcomes. We know less about the collaboration between the tutors who teach interdisciplinary design courses. Addressing this gap, this article explores the effect of space on the interdisciplinary collaboration between faculty members from the fields of industrial design, architecture, engineering and business administration, who come together to design and conduct an extra-curricular educational activity, Interdisciplinary Design Studio (IDS) at METU. The empirical basis of this study comes from the interviews with the faculty members and the participant observation notes generated during the IDS meetings. The findings show that the effect of space on collaboration becomes evident over three issues, (1) the participation of tutors, (2) the commonality of their expectations from a design project, and (3) the interaction not only between students and tutors, but also among tutors as an interdisciplinary team.     

Product Shape as a Design Innovation Strategy

Product design has become an effective competitive tool in the hands of a number of companies. Marvin Berkowitz discusses the impact of design variations on a proven winner in the marketplace. This article discusses the use of product shape as an element of innovation strategy in food processing. Can this particular design dimension be used to achieve differentiation from competitive products? The article explores how one company is attempting to capitalize on consumer trends for fitness and nutrition by designing its products with natural looking shapes. The research more generally probes how easy to spot design cues, like shape, are used by consumers to infer more important, but less readily accessible attributes like taste, softness, comfort and speed. Good design not only adds sales appeal, but encourages trading up, provides a basis for market segmentation, and for building a larger line from the same engineering investment.     

Organizational antecedents of environmental responsiveness in industrial new product development

The greening of new product development process has been under scrutiny by researchers, but the attention has been limited to consumer products. Based on a survey, this paper investigates the environmental responsiveness in industrial new product development in 82 industrial firms. In comparison to traditional NPD process in the extant literature, the findings revealed additional activities in the greening of industrial NPD. These activities fall under the broader scope of life cycle assessment (LCA) for environmental impact including supplier evaluation and design for environment issues. The paper also investigates the relative impact of organizational antecedents on greening of industrial NPD activities. Organizational antecedents include functional interface of environmental specialists with design and product managers, environmental product policy, and top management support.     

Developing Sustainable New Products in the Textile and Upholstered Furniture Industries: Role of External Integrative Capabilities

Environmental sustainability has become one of the key issues for strategy, marketing, and innovation. In particular, significant attention is being paid by companies, customers, media, and regulators to development and consumption of green products. It is argued that through the efficient use of resources, low carbon impacts, and risks to the environment, green products can be essential to help society toward the environmental sustainability targets. The number of green product introductions is rapidly increasing, as demonstrated by the growing number of companies obtaining eco‐labels or third party certifications for their environmentally friendly products. Hundreds of companies representing most of the industries, such as Intel, SC Johnson, Clorox, Wal‐Mart, and Hewlett–Packard, have recently introduced new green products, underlining the need to develop products that create both economic and environmental values for the firm and customers. A review of the literature shows that academic research on green product development has grown in interest. However, to date, only a few empirical studies have addressed the challenge of integrating environmental issues into new product development (NPD). Previous empirical works have mainly focused on a set of activities for the green product development process at the project level. After years of paying no or marginal attention to environmental sustainability issues, most of the companies now generally realize that it would require knowledge and competencies to develop green products on a regular basis. These knowledge and competencies can be varied, such as R&D, environmental know‐how, clean technology/manufacturing process, building knowledge on measuring environmental performance of products, etc., that may be developed internally or can be integrated through external networks. Adopting a resource‐based view of the firm, this article aims at (1) investigating the role of capabilities useful for companies to integrate knowledge and competencies from outside of the firm on green product development in terms of both manufacturing process and product design and (2) understanding whether green product development opens new product, market, and technology opportunities, as well as leads to better financial performance of NPD programs. To this end, a survey was conducted in two Italian manufacturing industries in which environmental issues are becoming increasingly important, namely textiles and upholstered furniture. A questionnaire was sent to 700 firms, and 102 useable questionnaires were returned. Results show that (1) companies engage in developing external integrative capabilities through the creation of collaborative networks with actors along the supply chain, the acquisition of technical know‐how, and the creation of external knowledge links with actors outside the supply chain; (2) external knowledge links play a key role in the integration of environmental sustainability issues into the manufacturing process, whereas capabilities such as the acquisition of technical know‐how and the creation of collaborative networks prove to be more important for integrating environmental issues into product design; and (3) the integration of environmental sustainability issues into NPD programs in terms of product design leads to the creation of new opportunities for firms, such as opening new markets, technologies, and product arenas, though not necessarily leading to improved financial performance of the NPD programs.     

Brand‐Specific Design Effects: Form and Function

Product design is inherently a key component of brand strategy. Accordingly, significant resources are invested to improve product and brand performance; however, foundations for understanding the role product design plays in influencing actual consumer opinions from the marketplace have not been fully explored in the literature. This paper develops a conceptual framework illustrating how two critical design factors—form and function—impact consumer opinion and delineate brand‐specific effects. Nonmonotonic effects are identified, as well as the interaction effects of the individual factors among the dimensions. A longitudinal model based on objective measures of form and function is tested with a data set developed from models available in the U.S. automotive market from 1999–2007; it includes 16 firms, 32 brands, and 137 products. The results indicate the relationships between factors of form and function are multifarious and complex, but clearly play a significant role in forming consumer opinions, although they do exhibit diminishing returns. The findings further indicate brand‐specific effects exist, and consumer opinions vary by brand. The findings provide foundations for understanding the interplay between product development and brand management. Overall, this research supports the notion that brand strategies can be supported through the management of design dimensions.