Global new product development (NPD): whether you want to chase emerging markets, source leading-edge technology or just achieve economies of scale, the world-view of new products looms as one of the top challenges for most manufacturing companies today.
The Rochester Institute of Technology's New Product Development Forum recently hosted three case study practitioners and researchers of global new product development. One speaker was Brendan Casey from Xerox Corp., who discussed the global development of Xerox DocuColor 2060/2045. Casey emphasized how common goals are central to any multinational team. In this case, members included representatives from Israel; Webster, New York; Xerox in California, and Fuji Xerox in Japan. This first vital step—of achieving consensus on goals of the program and goals stated a sufficient generality to allow flexibility in achieving these goals by team members—was essential to the success of this project. This is not always easy. This global product had to be developed for use in Japan, where lightweight paper for printing is typical. The product also had to take into account use in North America, where heavy paper is typical and in Europe, where A4 size paper is used. "Nationalization" kits were used to tailor this product to regional needs. Other methodologies enabled a very successful introduction of this product in 28 months total time from start to end of project.
In order to implement coordination between marketing and product development teams, modular design was used. This allowed delegation of technical tasks, but maintained focus on goals. Reuse was another key guideline on the project. Finally, using a small, tightly knit team was essential. The team operated on the philosophy that it was O.K. to try solutions and make mistakes as long as these were shared with the team so they could be corrected. Better to find out problems during development and not in customer service. This project will be used as the model for Xerox's new TTM (Time to Market) strategy.
Prof. Donald Lessard, Deputy Dean of the MIT Sloan School of Management, provided a framing exercise on globalization of new products that sets the stage for making a business case in the new product development arena. When and where and how should a company globalize new product development? He noted four important global forces, based on Michael Porter's work, are essential to consider: economies of scale, market similarity, comparative advantage, and absence of regulatory restraints. A fifth force, the dispersion of technology in the new economy, has forced a rethinking of traditional globalization framing exercises.
Prof. Lessard presented some of the work he has done with another MIT professor, Elenor Westney. Globalization can take on many forms, ranging from a centralized home-base model, like that used by Boeing, to regional bases, to regional headquarters, to integrated networks. Many companies are now developing technology at a distance from markets, like ABB and Corning. This model gradually drives greater understanding of customers and markets, and product evolve. For example, new product entries into the global, emerging automotive market are now moving upscale in most regions of the world like India and China. New automobile products need to be tailored for emerging markets, but still use the latest technology.
Steve Dudra, chief engineer for International Truck and Engine Div. of Navistar, gave a detailed case history of the new 4000, 7000 and 8000 truck development and launch programs at Navistar, which involved a key Japanese supply partner. The challenge of truck development, of course, is that there is very high variation in customer requirements and very low-volume production. This is an extreme context in the new product development landscape, and it is not surprising that mass customization in this industry continues to be the general manufacturing strategy used. The heavy truck business is also challenged by high complexity in products.
Using concurrent engineering methodologies, these new trucks (on two platforms) were launched in March 2001 with improved ride, better handling and performance, greater comfort and visibility as well as higher reliability and serviceability. This $1-billion program involved all new plants and manufacturing processes, and a new product development process. Nissan, and Fuju Technica in Japan were development partners, along with Modicon in Mexico. Uncertainty management was a key hurdle the project team had to overcome. Some partners were eager to solve all problems, some were very conservative and took a long time to achieve consensus. In this case, the majority of engineering change requests came from the cab-in-white body build-up supplier, Nissan. A simple but large Excel spreadsheet was used to track product tool development. Quality Function Deployment and prototype control plans were also essential parts of the development effort. The prototyping methodology was critical because this is the only phase of the effort in the company where complete integration of the product and manufacturing process development segments were reconciled. QS 9000 was used for quality planning and control. Several, in-process metrics were used to track and predict program outcomes on this new effort:
- Rate of growth of effort, releases, and issues were an indication of maturity.
- Number of open issues and estimated hours to resolve issues can be used to forecast ultimate cost of a program.
- Tooling maturity indicates potential delays to the program.
What's next for International Truck? Moving from three CAD protocols to web-based, CAD-neutral technology is one of the goals.