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ISQA 510 New Product Introduction (NPI) Lecture 4

ISQA 510 New Product Introduction (NPI) Lecture 4. Agenda. -Thoughts on Tyco? -Intro to NPI -DFX -Cisco Case Questions -TQRDC – Kropf Article: Best Practices -Tour Converse / Nike. NPI. New Product Introduction (NPI) – Why care? Risks & Concerns without it? 60% cost in design phase

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ISQA 510 New Product Introduction (NPI) Lecture 4

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  1. ISQA 510 New Product Introduction (NPI) Lecture 4

  2. Agenda • -Thoughts on Tyco? • -Intro to NPI • -DFX • -Cisco Case Questions • -TQRDC – Kropf Article: Best Practices • -Tour Converse / Nike

  3. NPI • New Product Introduction (NPI) – Why care? • Risks & Concerns without it? 60% cost in design phase • SCM Strategy – Single / multi-sourced • Design for “X” • AVL • Packaging • Postponement • Service strategies

  4. A Word on Technology Science • Engineering • Can the Technology be manufactured with • known manufacturing processes? • Are the critical parameters that control the • new Technology’s functions identified? • Are the safe operating ranges known? • Have the failure modes been evaluated? • Have the life cycle effects been evaluated? • Are the environmental effects known? If yes, engineering. If no, science

  5. Why design for manufacturability matters Management involvement 100% Total life cycle costs Cumulative percent of cost Ability to control costs 0% Production Product development Support 60% to 80% of total life cycle costs are largely determined during development

  6. Strategy needs to consider the impact of globalization and pitfalls: The Goal: Maximize GM% early & Ethically

  7. NPI Summary – All Affect Cost • Purchasing (RFQ / SOW) • Engineering (ERP / AVL) • Logistics (Packaging) • Quality (Yield / Touches) • Marketing (PRD) • Warranty / Service • Most Important – “The Crossover”

  8. Sourcing and new product development • Involving sourcing decisions in development processes at an early stage can result in contribution of new knowledge and better understanding of: • Construction • Suitable materials • Suppliers • Supplier knowledge • Involving the supplier in new product development can also result in considerable savings

  9. Linear to Concurrent

  10. Design for…. • Manufacture • Environment • End-of-life • Disassembly • Recycling • Quality • Maintainability • Reliability • Cost

  11. Design For “X” (DFX) • Manufacturing and Producability • Make/buy • Supplier alignment • Integration of new manufacturing into previous manufacturing process with minimum disruption and capitalization costs • Maximum responsiveness to surges (and declines!) in demand • Ease of Assembly/Manufacturability /Modularity • Parts minimization • Testability • Inspectability • Standardization

  12. Design For “X” (DFX) • Sales and marketing (Customer alignment) • Meets Customers’ needs • Design to Cost to allow Target pricing • Time to market • Product Price/Volume/Feature mix • Packaging and Labels • Advertising strategy, plan and literature • Catalogues

  13. Design For “X” (DFX) • After market Support and Servicing • Training of factory personnel, sales force, customers. Manuals and Documentation • Maintainability • Spare Parts availability • Customer assembly • Logistics • Upgradability • Shelf life and Storage • Installability • Warranties

  14. Cisco NPI – 6 Questions • What are the risks in NPI overall? • Why Foxconn or any new supplier? • What are the challenges and risks with China directly. • What are the benefits of going to China directly. • Why Foxconn given reputation? (you may need a little outside research) • How do you mitigate the risks of going direct to China?

  15. Cisco Case What do we know? Please add to this list important factors Viking Product has transitioned to a faster model, surpassing the competition (Juniper & Alcatel). Now want to go from US-based NPI & China transition to Foxconn out of the gate in Shenzen. Foxconn had never made this complex a box, especially from the start, but now level – 3. 45% of employees and sales from outside US. Proud of their “adaptive supply chain,” cut its number of outsourced partners from 13 to 4 (is this good & why?) 2001 Cisco went from 1,500 suppliers to 600, of which 200 had 80% of the spend. Cisco Lean was the mantra, pull system & predictable lead-times and on-time shipments.

  16. Negotiation game…….

  17. Negotiation Game Rules • Two buyers versus two sellers • There is a relationship, so not a single transaction • Winners are both “best deal” AND best relational outcome • Feel free to negotiate between now and Friday, but details subject to change

  18. Converse Tour

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