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(ELECTIVE II)
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culture change. That change, however, unleashes benchmarkings full potential to generate
large paybacks and strategic advantage.
The benchmarking process involves comparing ones firm performance on a set of
measurable parameters of strategic importance against that of firms known to have achieved
best performance on those indicators. Development of benchmarks is an iterative and ongoing
process that is likely to involve sharing information with other organizations working with
them towards an agreeable metrology.
Benchmarking should be looked upon as a tool for improvement within a wider scope of
customer focused improvement activities and should be driven by customer and internal
organization needs. Benchmarking is the practice of being humble enough to admit that
someone else is better at something and wise enough to learn how to match and even surpass
them at it.
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2. INTERNAL BENCHMARKING
This process could be applied in organizations having multiple units (for e.g.
multinationals, companies with sale offices around the country, with multiple factory
locations within the same country).
3. PROCESS BENCHMARKING
Here we look at processes, which may be similar, but in different organizations,
producing different products, for e.g. airline industry & hospital industry looking at
the process of catering their clients.
4. GENERIC BENCHMARKING
We would look here at the technological aspects, the implementation and deployment
of technology. How else other organizations do it? Hence the source organizations may be of
same industry or from another industry.
Processes 1, 3 and 4 are all external benchmarking activities. However, locating an
external benchmarking partner and setting up a benchmarking arrangement requires a
significant investment in time and effort. An alternative to external benchmarking might
be intra-company, or internal benchmarking which is less costly in terms of time and
money. Two additional benefits may result from internal benchmarking:
(a) the improvement program will receive wide recognition within the company and
other divisions may benefit and
(b) the team performing benchmarking will be better prepared for pursuing external
benchmarking partners. If there is a high degree of uniformity within the company or
the process in question is already a company wide practice, external benchmarking
may be pursued to identify additional improvements.
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7. TREND ANALYSIS
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The product design specification (PDS) is a document created during the problem
definition activity very early in the design process. It details the requirements that must be met
in order for the product or process to be successful. The document lays the groundwork for all
engineering design activities and ensures that all relevant factors are accounted for and all
stakeholders are heard from. A typical PDS includes the following information:
A. Product design & performance issues...
1. Expected product size and weight customer requirement
2. Expected product performance requirements -- the voice of the customer!
Operational requirements.
o Speed (How fast? How slow? How often?)
o Continuous or discontinuous
o Loadings likely encountered
Product power requirements.
Product shelf life.
Product service life.
3. Expected product service environment.
What is the operating temperature range for this product?
What is the operating humidity range for this product?
Subject to shock loading?
Will the product be exposed to dirt or other contaminants (corrosive fluids,
etc.)?
Will there be any anomalies in power/fuel available for this product?
How will the product be treated in service?
What impact will the product have on its environment?
4. Expected product safety requirements.
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B. Market issues...
1. Potential customer base
Who will buy this product? Why?
Have you listed all potential classes of customers?
Can we tap into a new segment of the market? How?
2. Market constraints on product.
Who is buying this type product? (customer base)
What is currently selling?
What is currently not selling?
3. Expected product competition (These will be benchmarked)
What are the strengths of each competing product? Can we incorporate them?
What are the weaknesses of each competing product? Can we improve?
What are the market shares of competing products?
4. Target product price -- OEM and MSRP
5. Target production volume and market share.
Is there a market for this product? How do you know?
Is the potential market sufficiently large to justify investment in a new
product?
Is the new product sufficiently better than the competition?
6. Expected product distribution environment.
How will the packaged product be treated in shipping, storage, and on the
shelf?
Are adequate shipping facilities available?
Will installation require a professional?
C. Capability issues....
1. Company constraints on product design, manufacture, and distribution.
What are our manufacturing capabilities?
Should we manufacture ourselves or outsource?
2. Schedule requirements -- time to market.
When should we have this product to market to capture maximum market
share?
How much time should we allocate to design?
How much time do we need to implement a manufacturing process?
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PDS Example
Umbrella Drying Device
Performance under Specified Conditions
The umbrella dryer must be able to dry a maximum of four umbrellas at any one time (two
small and two large umbrellas).
The drying system must leave any umbrella at least 80% dryer.
Interior domestic use within correct temperature range (average room temperature 22c)
Users of the umbrella dryer should only use it in the correct manner specified.
Design
Drying System
Drying time of no more than 2 minute.
Must leave umbrella at least 80% dryer.
Must remove initial water run-off from umbrella before beginning the drying process.
Minimal noise emission while drying process is in operation.
Power
Power system shall be constructed to operate safely and conform to applicable standards.
Simple operation system with visual warning to alert users of product operation.
Power will be supplied using a common and mature technology
The power system shall be able to withstand small operational vibrations, heat, and
moisture.
External Body
The external body will be constructed from a hard-wearing material which can withstand
general usage and small operational heat and vibration.
Provide a secure enclosure for internal mechanisms and devices.
Must provide ventilation
Must be appropriately sized to accommodate at least two small umbrellas and two large
umbrellas, of standard size.
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Or
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A product portfolio is a group of two or more products that represent a family of items
produced by a company. Each family group uses a basic platform for multiple products; in some
cases, multiple parts may comprise a few different types of products within the same portfolio.
An example of basic platforms in use by a product portfolio is auto manufacturing. A
manufacturer may use the same chassis for several different types of cars, resulting in a product
family. Computer manufacturing often requires the same materials to produce products that
have specific variations, creating a family group.
When creating a product portfolio, companies often use multiple business segments to get
the products from the production facility to the end user. These segments can include
distribution channels, promotional strategies, pricing methods and other elements common to
all stages of business production. Using the same elements in a repeated manner can save the
company money. Instead of reinventing the wheel for every new product, companies will divide
the segment among each item in the product portfolio to use the same core competencies to
make the product a success.
Companies may also create an entire product line for an individual item in their product
portfolio. Product lines often represent the strongest items in the portfolio. These can become
the backbone of the company and may lead to a competitive advantage in the economic
marketplace. For example, a cell phone manufacturer may create a smart phone that uses
leading technology to create an advanced personal digital product. While the smart phone is part
of the companys cell phone product portfolio, the popularity of the phone may result in the
creation of an entire product line of smart phones. The phone will essentially be its own product
line, including phones with different colours, memory capacities, functions or other features.
Companies may also create what is known as a product pipeline. This represents new
products that the company hopes to introduce into its current portfolio. Technology and
pharmaceutical companies typically have these pipelines because their products take longer to
develop and bring to the marketplace. Investors often review the product pipeline of companies
to determine how well the company is measuring the current market demand for goods. New
products that do not seem to have the desired product features requested by consumers can
result in a company losing market share. This ultimately weakens the company's product
portfolio and can lead to a disadvantage in the competitive market in terms of product offerings.
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Each requires a different strategy and level of investment. For example, companies will
invest more in high-growth products, even though this might mean minimizing profits in the
short term, in the hopes that these products will become cash cows, which generate more cash
for a lower level of investment compared to other products in the portfolio. Companies might
also decide to sell their dogs/pets, which dont generate a profit beyond the investment required
to maintain them.
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