This document discusses three levels of product innovation: linear innovation, customer-driven innovation, and radical innovation. For linear innovation, the challenges are expensive physical prototypes, feedback too late for changes, and integration issues. For customer-driven innovation, challenges include missing sales from long quote times and difficulty meeting customer requirements. For radical innovation, challenges include mapping ideas to opportunities, bringing together relevant information for decisions, and conducting "what-if" analysis to understand trade-offs.

1. Product Innovation
MTECH Engineering Co.Ltd.
2004

2. Drivers of Product Development

3. The Seed corn of Innovation
• Leading innovators
generate 2X the raw
ideas, 3X the number
of products, and
enjoy a 2X new
product success rate
• It takes 3000 raw
ideas for the average
company lead to one
product success

4. Knowledge
Drive Design
Collaborative
Engineering
Traditional
Engineering
ExtentofProcess
Change
Extent of Product Change
Derivatives of
Improvement
Product
Family
Additions
Build to
Order
New
Breakthrough
Products
Linear
Innovation
Customer
Driven
Innovation
Radical
Innovation
Levels of Innovation
The ability to develop and introduce standard products that
meet or exceed the industry average cycle-time and
incorporate innovations that follow the industry’s trends.
The ability to dynamically recombine, modify, or
tailor parts and assemblies into new or custom
products based on customer demands
The ability to develop and
introduce breakthrough or
“category-killer” products that
appeal to entirely new user
markets or dramatically expand
existing market opportunities

5. Linear Innovation
• Linear Innovation
– Eighty percent of a product's lifecycle costs are
determined during the critical concept phase. At each
stage of this phase, manufacturers must complete a
total functional product definition, synchronize supplier
product developments, and validate the product's
performance.
• Challenges Faced:
– Expensive, time-consuming physical prototypes that
require multiple revisions
– Not enough time to explore other product design
possibilities
– Finding problems late in the cycle, which are in turn
expensive to fix
– Feedback too late to make product changes
– Integration challenges for specialist components from
different design groups, even within the same
enterprise
– Insufficient insight into total product functionality
– Stifled creativity due to time pressures
– Dispersed teams working in "silos" who rarely
communicate during development and do not work on
the "same page"

6. Customer Driven Innovation
• Customer-Driven Innovation
– As customers make more and more specific product design requests,
manufacturers and their design chain need to be able to respond rapidly and
accurately to customer requests for proposals (RFPs), and then in turn execute
flawlessly. This typically requires bringing together information from different
applications, integrating with downstream manufacturing systems, and being
able to include the customer throughout the process.
• Challenges faced:
– Missed sales opportunities due to lack of resources needed to quote/fulfill
orders
– Customers want to be actively engaged throughout product development
– Need to integrate several bills of material (BOM's) from multiple departments
– Customers' requirements not met
– Too expensive to accurately validate product
– Difficult to coordinate/allocate resources and track projects
– Waste resources and time trying to identify assets scattered throughout the
enterprise (or worse, not find them, and recreate)
– Minimal economies of scale with numerous "one-off" designs that are never
reused
– Lengthy RFP review system due to dissimilar processes and programs used by
suppliers

7. Radical Innovation
• Radical Innovation
– The competitive landscape has changed to product
differentiation. A successful product program typically
requires up to 3,000 raw ideas. Executives must constantly
look at their research programs and mapping these to new
product possibilities as well as evaluating marketplace
opportunities and time to market constraints. Companies
must also partner to innovate, but face incredible hurdles;
different processes, different tools, and different locations,
which all inhibit achieving a "right to market" product.
During this concept phase an incredible amount of
collaborative interaction and "what-if" scenarios are needed
to quickly iterate to a category-killer product definition. Yet
it is difficult to bring together the people necessary to make
the major decisions; connecting the right people, having
the context to understanding trade-offs, and following
through on decisions made.
• Challenges faced:
– Complexity of mapping research ideas to profitable
program opportunities
– Difficulty in bringing together all relevant information -
business and technical - for new product concepts to make
informed decisions
– Inability to interactively conduct program-level "what-if"
analysis and understand trade-off decisions
– Communicating the total product picture to suppliers
– Complexity of providing customers with insight of the new
product's performance and usability
– Inadequate insight or integration of late-breaking supplier
innovations