1. WEEK 4 PURCHASING’S ROLE IN NEW PRODUCT DEVELOPMENT

2. EARLY PURCHASING & SUPPLIER INVOLVEMENT The design of new product is conducted by a team representing a number of functional areas. Product planning, design engineering, reliability engineering, purchasing, manufacturing engineering, quality finance, field support, marketing and carefully selected supplier and customer.

3. EARLY PURCHASING & SUPPLIER INVOLVEMENT 3 KEY ISSUES IN DEVELOPMENT OF NEW PRODUCT TIME QUALITY COST

4. 3 KEY ISSUES IN DEVELOPMENT OF NEW PRODUCT TIME QUALITY COST The lack of effective, cooperative teamwork among the groups noted frequently has been accompanied by quality problems, cost overruns, forgone all in cost saving, major scheduling problems and new products which are late to enter the market place.

5. THE DESIGN PROCESS Design is the progression of an abstract notion to something having function and fixed form. The desired levels of quality and reliability must be “engineered in” during the design phase of the new product.

6. THE DESIGN PROCESS (cont) Suppliers must have access to product design as early as humanly possible in the design process to ensure optimum use of any special skills . The design stage is also the optimum point at which the vast majority of the cost of making an item can be reduced or controlled.

7. THE DESIGN PROCESS (cont) The changing competitive environment forces much on planning, coordination, and review to take place during the design and development process than previously was the case.

8. Table 8.1 Differences between innovation and kaizen Kaizen Innovation Characteristics Small, frequent, gradual improvements over a long time Large, short-term, radical changes in products Focus Conventional know-how Leading edge breakthrough Expertise Design, production and marketing Scientific or technological discovery or invention Sources Relatively modest investment Substantial investment in equipment and technology Capital requirements Small incremental steps Dramatic breakthroughs Progress Continuous Spontaneous Results Low High Risks Individual or small team Corporate activity Involvement Effort process Results Recognition THE DIFFERENCES BETWEEN INNOVATION AND KAIZEN

9. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

10. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

11. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

12. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

13. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

14. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

15. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

16. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

17. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

18. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

19. Purchasing – product innovation, supplier involvement and development Stages of New Product Development Initial concept Feasibility studies Preliminary design Prototype testing Finalised product Piloting of product and production Release for commercial manufacturing

20. Purchasing – product innovation, supplier involvement and development DESIGN OF PRODUCTS Design of Products – Special Consideration Given to: Increased efficiency and economy in use of materials, energy and other resources 1 5 Take full account of end disposal 2 6 Minimisation of pollution Recycled packaging 3 7 Reducing long-term harm to environment Minimising nuisances such as noise or odour 4 8 Ensuring planned life of product is appropriate Safety hazards

22. Minimum acceptable margin of quality, safety and performance

23. Use of ideal materials

24. Use of adequate materials

25. Limited concern for cost

26. Lowest ultimate cost

27. Limited regard for availability

28. High regard for availability

29. Close or near perfect parameters, specifications, features and tolerances

30. Practical and economical parameters, specification, features and tolerances

31. Conceptual abstraction of product quality

32. General view of product

33. Selection of materials

34. Cost elimination of materials

35. Concern for overall product design

36. Concern for JIT delivery and supplier relationshipTHE DESIGN PROCESS (cont)

37. Purchasing – product innovation, supplier involvement and development THE DESIGN PROCESS (cont) Purchasing in the Future Problems Advantages Release of confidential business information Reduced development time Technology sharing Improved specifications Cost and pricing sharing Enhanced quality Decision making Lower development costs Ownership of IPRS Access to new technology Teamwork Joint problem solving Accountability Interchange of Knowledge

38. THE DESIGN PROCESS (cont) The Kaizen method of continuous incremental improvements is an originally Japanese management concept for incremental (gradual, continuous) change (improvement). K. is actually a way of life philosophy, assuming that every aspect of our life deserves to be constantly improved. The Kaizen philosophy lies behind many Japanese management concepts such as Total Quality Control, Quality Control circles, small group activities, labor relations. Key elements of Kaizen are quality, effort, involvement of all employees, willingness to change, and communication.