Product development is define the creation of products with new or different characteristics that offer new or additional benefits to the customer. Product development may involve modification of an existing product or its presentation, or formulation of an entirely new product that satisfies a newly defined customer want or market niche. (BusinessDictionery.com)
Product Development System
An effective product strategy links product decision with cash flow, market dynamics, product life cycle, and the organization’s capabilities. A firm must have the cash for product development, understand the changes constantly taking place in the marketplaces and have the necessary talents and resources available. The product development system may well determine not only product success but also the firm’s future. In this system, product options go through a series of steps, each having its own screening and evaluation criteria, but providing a continuing flow of information to prior steps. The screening process extends to the operation function. Optimum product development depends not only on support from other parts of the firm but also on the successful integration of all 10 of the OM decision, from product design to maintenance. Identifying products that appear likely to capture market share, be cost effective and profitable but are in fact difficult to produce, may lead to failure rather than success. Here are the 13 Management Principles of Toyota's Product Development System (Jul. 13, 2006 By James M. Morgan and Jeffrey K. Liker):
Excerpts from "The Toyota Product Development System: Integrating People, Process and Technology," (2006, Productivity Press)
1. Establish customer-defined value to separate value-added activity from waste. 2. Front-load the product development process while there is maximum design space to explore alternate solutions thoroughly. 3. Create a leveled product development process flow. 4.