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Gaining Competitive Advantage Through Global Product Development
| Content Provider | Semantic Scholar |
|---|---|
| Author | Takeuchi, Hirotaka |
| Copyright Year | 1988 |
| Abstract | For a manufacturing company, product development is a mission-critical process. It can also be a very expensive process. In fact, in many manufacturing sectors, companies are reinvesting between 3% and 8% of their total revenues back into product development each year. This large investment is primarily spent on human resources, and if all resources are concentrated in a single high-cost region, most companies simply overpay for their respective level of productivity. While some companies may spend less across the board by mandate, they are just compromising on value-add and therefore achieving correspondingly lower returns as well. Thanks to the power of modern computer-aided design (CAD), computer-aided engineering (CAE), computer-aided manufacturing (CAM), and Product Lifecycle Management (PLM) technologies, many manufacturing companies now have the tools that allow for resource portability and better alignment of cost and value-add. This global rearrangement of product development activities and personnel is what many industry experts refer to as “Global Product Development”. This paper is designed to help CEOs, CFOs, and senior Engineering executives understand how and where to leverage Global Product Development as a means to gain a dramatic increase in productivity within their product development operation. For companies pursuing growth opportunities, this productivity increase can materialize into increased capacity and capability within a constant cost structure. For companies pursuing increased profitability levels, the same productivity increase can be monetized as reduced costs and improved profits within a constant capacity. Either way, the benefit to a company and its shareholders is significant. White Paper Global Product Development Page 2 of 13 What Is Global Product Development? . . . . . . . 3 Domino Theory . . . . . . . . . . . . . . . . . . . . . . . 3 The Basics of Global Product Development. . . . 3 Offshoring Versus Outsourcing. . . . . . . . . . . . . . 3 A Global Development Maturity Model . . . . . . . . . 4 Value Proposition. . . . . . . . . . . . . . . . . . . . . . 5 Financial Benefits. . . . . . . . . . . . . . . . . . . . . . 5 Operational Benefits . . . . . . . . . . . . . . . . . . . . 5 Global Product Development – Is It Real?. . . . . 6 Manufacturing Leaders Deploy Global Product Development . . . . . . . . . . . . . . . . . . . . 6 Global Product Development at PTC . . . . . . . . . . . 6 Operational Considerations. . . . . . . . . . . . . . . 7 What To Offshore? . . . . . . . . . . . . . . . . . . . . . 7 Where to Offshore? . . . . . . . . . . . . . . . . . . . . . 9 How to Offshore? . . . . . . . . . . . . . . . . . . . . . . 9 The Outsourcing Option . . . . . . . . . . . . . . . . . 10 Risks and Challenges. . . . . . . . . . . . . . . . . . . 11 Political Concerns . . . . . . . . . . . . . . . . . . . . . 11 Business Concerns . . . . . . . . . . . . . . . . . . . . 12 Technical Concerns . . . . . . . . . . . . . . . . . . . . 12 Organizational Concerns. . . . . . . . . . . . . . . . . 13 PTC–Your Global Product Development Partner 13 What Is Global Product Development? Simply put, Global Product Development means maximizing the financial and operational productivity of the product development process by spreading product development activities across multiple regions of the world in order to better match value-add to cost. In this context, the definition of “product development” ranges from marketing activities that identify and document customer needs; to engineering activities that conceptualize, design, analyze and refine new product ideas; to activities that plan and document manufacturing, operation, and maintenance processes; to sustaining activities that make ongoing product changes and refinements. Regions with high costs include industrialized countries like the United States, United Kingdom, Germany, France, Italy, and Japan. The list of lower–cost regions is long, but major nations include India, China, Russia and various other Eastern European and Asian countries. |
| Starting Page | 21 |
| Ending Page | 52 |
| Page Count | 32 |
| File Format | PDF HTM / HTML |
| Volume Number | 23 |
| Alternate Webpage(s) | http://www.prodone.com/sites/default/files/downloads/Gaining_Competitive_Advantage.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
