1. NEW PRODUCT DEVELOPMENT:
IMPLICATIONS IF PRODUCT PERFORMANCE
AND SPECIFICATIONS ARE NOT MET
By: Lynn A. Coupal
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2. TABLE OF CONTENTS
1. Introduction
2. Product Performance
3. New Product Development Process
3.1 New Product Development Phases
3.1.1 Need, Conceptual/Preliminary Design
3.1.2 Detail Design
3.1.3 Development
 Component Development
 Prototype Development
3.1.4 Production
3.2 A Different Multilevel Arrangement
3.2.1 Evaluation and Iteration
3.2.2 Decision Making
4. Product Specification
4.1 Definitions and Interpretations
4.2 Relationship Between Objective and Performance
4.3 Relationship Between Performance and Specification
 Performance to Specification
 Specification to Performance
4.4 Linking Performance and Specification in NPD
5. Conclusion
 Higher Costs and Reduced Revenue
 Delay in Product Launch
6. References
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3. 1. Introduction
This research paper will deal with the product performance and specifications in
new product development (NPD). Since people are becoming more aware and
demanding with technology, technology is rapidly changing. With this is mind, there is a
need for manufacturers to step up their performance as well as ensure that the desired
performance is achieved within given timeframes and is cost effective. To understand the
link between product performance and specifications, we will look at the overall product
lifecycle.
When discussing new product development, I will first discuss the process and
then breakdown the process into 5 phases. Next, I will address product specifications.
Following, I will address the relationship between the objective of the company and
performance of the product. Last but not least, I will discuss the suggested implications
if product performance and specifications are not met.
2. Product Performance
In order to define product performance, I will first define product, then
performance, and finally come up with a formal definition for product performance.
According to American Heritage Dictionary, product is defined as:
“Something produced by human or mechanical effort or by a natural process”
and performance is defined as:
“The act of beginning and carrying through to completion: discharge, effectuation,
execution, prosecution; The way in which a machine or other thing performs or
functions: behavior, functioning, operation, reaction, working.”
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4. Thus it makes sense to define product performance as:
The act of how well a product performs.
With this said, some typical product performance characteristics are speed,
efficiency, life and accuracy. These definitions also seem to suggest that product
performance is measured in functional terms, but when considering performance other
properties must also be considered (ex. physical properties).
According to Hubka and Eder (1988), performance variables are related to three
categories: “design properties (e.g. function, form, tolerance, surface, materials, and
dimensions), internal properties (strength, stiffness, hardness, elasticity, corrosion,
resistance, etc.), and external properties (e.g. ergonomics, aesthetic, economy of
operation, reliability, maintainability, and safety).” The manufacturer is concerned with
all three, but the customer is mainly concerned with the external product properties.
According to Hubka and Eder (1988), performance is defined as “a vector of
performance variables”, where each variable is “a measurable property of a product or its
elements”.
Since a product can be seen as a system consisting of subsystems down to
component level, we can define the performance for the various subsystems and continue
down to the component level. The performance of a product can be defined through the
performance of its components. This is product specific. As an example, in the case of a
lawn tractor, the performance from a fuel consumption point of view is dependant on the
performance of the engine, which in turn is dependant on the performance of the air filter.
A dirty air filter will not allow the engine proper air and/or combustion. This in turn
affects the performance of the lawn tractor.
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5. There are many different views of product performance as far as the product
lifecycle is concerned. Since the performance of a product depends on the performance
of its components, let‟s define the performance for the product as a whole and also for its
subsystems and components. I will use the term “object” to represent the product or an
element of the product. For example, an object may be a riding lawnmower, or some
subsystem of the riding lawnmower, such as the engine or the carburetor.
The NPD (New Product Development) process consists of several phases. The
phases can be grouped into two main stages (stage I and stage II). Stage I is the pre-
development stage, which consists of the Statement of Need, Conceptual/Preliminary
Design and Detail Design. It is concerned with the development of “non-physical"
(conceptual) answers to problems about the product with greater detail. Stage II is the
Development and Production stage, which contains Component Development, Prototype
Development and Production. This deals with the turning the product into a “physical”
(concrete) representation. The three different ideas of product performance with regard
to product lifecycle are as follows:
Desired performance, which can be defined as the performance that is desired from an
object. For manufacturers, the desired performance forms the basis for a new product
development that will achieve their business goals. For customers, the desired
performance states the expectations in their purchasing decision. Manufacturers‟
biggest challenge is to interpret when a product will meet their customers‟ desired
performance as accurately as possible, as well as meet the manufacturers‟ business
goals (such as total sales and profits). How successful the manufacturer is at
fulfilling these expectations determines the customer satisfaction.
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6. Predicted performance can be defined as an estimate of an object‟s performance. It is
achieved through analyses, simulation, testing, etc. The manufacturer uses predicted
performance throughout design, development, and production in order to evaluate
whether or not a product will meet the desired performance. These measures form the
basis for his/her decisions during the different phases of the product lifecycle.
Actual performance may be defined as the observed performance of a prototype/
object during development or over its operating life. The actual performance will
differ from the desired performance. The more the actual performance differs from
both the manufacturers and customers desired performance, the greater the
probability is that the object will not satisfy the manufacturer and/or customers
expectations.
These three ideas are linked in the following manner.
Desired Predicted Actual field
performance performance performance
 Pre-launch  Post-launch 
3. New product development process
The US-based Product Development and Management Association (PDMA)
defines NPD as “a disciplined and defined set of tasks and steps that describe the normal
means by which a company repetitively converts embryonic ideas into saleable products
or services” (PDMA 2002, p.450)
Technology, Market, and Management drive the NPD process. Technological
advances provide an opportunity to improve existing products and/or create new
products. Feedback from customers, through actions or complaints, also provides an
opportunity for improvement. For example, lately there has been an ever increasing
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7. demand on creating razor, thin cell phones. Due to the technological advances, this has
become a reality. Lastly, resulting factors from within a business, such as the need to
reduce warranty cost, a need to reduce productions cost, or new legislation with regards
to product performance also drives the need for NPD. It drives the need because of the
fact that product recall is quite costly for stockholders.
3.1 New Product Development phases
There are several alternate NPD process models. Overall, it is possible to
recognize the similarities between the different models. What they all have in common is
that the NPD process begins with an idea to build a product that meets specific needs
defined by customers and/or manufacturer, and ends with a product that is launched in
the market. This is best described through the five-phase model following.
Stage I: Stage II:
Pre-development Development & Production
 
2: 3: 4: 5:
NEED Detail Component Prototype Production
1: Conceptual/Preliminary design design development development
(Construction) (Construction)
Now I will discuss each of these phases.
3.1.1 NEED, Conceptual/Preliminary Design (Phase 1).
The initial activity in this phase is to identify the need(s) of the customer. This
need can be either market driven or technologically driven. Based on the need for a new
product, the main objective needs to be established. Often the customer states these
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8. needs in an unclear manner and the objective is to turn them into specific product
characteristics. From the need statements, the manufacturer sets up the business
objective for the NDP process. The next step is to figure out the desired performance for
the product. The desired performance is generally more specific. The desired
performance is attained from the business objective (i.e. what you want to have happen –
for ex: increase market shares/profit) and states what is required of the product in order to
achieve the objective from the business perspective. Following, a feasibility analysis is
carried out. This involves evaluating whether or not it is possible to achieve the desired
performance within the specified constraints of time and/or cost. In order to achieve the
desired business performance, it must fit the business strategy. The final outcome of
phase 1 results in a “go/no-go” decision with regards to the product based on the
feasibility analysis (i.e. whether the business commits to the funding and launch of an
NPD project, or decides not to).
According to Blanchard and Fabrycky (2006), Conceptual design (cont. phase
1) is where an identified need is studied, requirements for possible solutions are defined,
possible solutions are evaluated and a System Specification is developed. The System
Specification provides “technical requirements” to follow in a system design. This
document controls all future development (System Baseline). However, this stage cannot
be completed until a Conceptual Design Review has determined that the System
Specification addresses the need correctly. The result is an outline or a model that can be
developed more during the detailed design phase. Therefore, it creates a way to perform
each major function and fixes the relationships of the main product components. The
focus should be attention on performance (as input) and specification (as output) in this
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9. phase. Determining the desired performance from the objective is an “iterative” process.
Management has to look at all options regarding different technologies and different
commercial aspects and then make trade-off decisions in order to arrive at the best
suitable solution. If the desired performance, from the stated objective is technologically
dependent, then management has to consider alternative technological principles when
defining the desired performance. The next step in phase 1 is to examine alternate
technologies (ranging from well developed, to new and evolving). This may be critical to
the success during the later development phases of the NPD process. An issue that is
complicated in the evaluation at the end of the phase 1, is the uncertainty associated with
the outcomes of any technology development. (i.e. If we are dealing with a technology
that is new and evolving, it is difficult to know how it will react over time.)
The alternative technologies that can be used to make sure that the desired
performance and the overall objective is met, need to be stated as part of the output in
specification. Thus, specification includes the performance for the product as a whole
(i.e. technical baseline), the identification of constraints, and the technological
implications. An evaluation of the specification takes place at the end of the phase 1.
This determines whether to proceed to the next phase (“go”) or to scrap the idea (“no
go”). This is done by building suitable models that take into account the different
technological and commercial issues.
Recapping, Phase 1 aims to establish the specifications based on a desired
performance. This involves the following steps:
Establish an overall business objective for the NPD process.
Develop the desired product performance from the overall objective.
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10. Consider alternative technologies that meet the desired performance.
Present the solutions that can meet the desired performance in specification.
Evaluate specification, and determine whether the project is “go” or if the project is a
“no-go”.
If the decision at this point is “go”, then the specification is transferred to the
design team involved with Detailed Design (pre-development stage) and becomes the
input. If not, one iterates back to see if the necessary changes can be made to satisfy the
specification, and if not, aborts the project.
3.1.2 Detail Design (Phase 2).
Detail Design is the process of developing a fully defined product design from a
clear set of requirements. In order to do this, the product that is created must be all that
was promised to the customer, both in time and content. It must also have the necessary
documentation needed for product manufacturing. It should explain the idea to the point
where all major decisions about the layout and forms of the product have been taken, and
tests of the product‟s functionality, operational use, appearance, consumer preference,
and so on, can be carried out. If the decision at this point is “go”, the same process is
repeated as far as the specification is concerned, but becomes the input to the
development and production stage, along with any new constraints. If not, we iterate
back to the conceptual design to make necessary changes. Once again, if corrections are
not possible and we have iterated back as far as we can, then the option of aborting the
project should be considered.
3.1.2 Development.
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11. Development consists of two phases that deal with bringing the physical design
into a final version of the product(i.e. “bringing the design into being”). It must meet the
stated needs so that the product can be produced without violating the constraints. The
two phases are as follows:
Component Development (Phase 3) can be interpreted as the production of
components that are needed in order to help the product‟s structural design. The
functions are summarized, organized, and then integrated with other components.
Components are physically developed and tested. The predicted performance is
determined based upon these results. The predicted performance is compared with
the desired performance to decide whether to proceed forward or make modifications.
According to Weibull.com, during both phases (3 & 4), when the design needs to be
changed to overcome the problem, common approaches are “Failure Identification,
Analysis and Fix (FIAAF), where the cause of failure is isolated, analyzed and then
fixed dedicated test-analyze-and-fix (TAAF) and/or test-analyze-and-redesign
(TAAR)”.
If the changes to the specifications still don‟t meet the desired performance, we iterate
back to conceptual design, or even preliminary design.
Prototype Development (Phase 4). The components from the previous phase of
the NPD process are put together to form a prototype of the product. As prototypes
are built, the predicted system level performance is compared with the desired system
level performance. At this point, we must decide to proceed forward or make
changes. If the components are found to perform satisfactorily but the system-level
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12. prototype does not, the problem is most likely a system-level problem and must be
resolved by iterating back to conceptual design. It is then that alternative concepts
should be considered. When the prototype testing indicates that the predicted
performance matches the desired performance, then specification is finished and the
product moves to the production phase.
3.1.3 Production (Phase 5).
Production starts with trials of a pre-production run. This is done to adjust the
manufacturing process and determine quality control procedures. Having quality control
will make sure that the products have the same performance as those of the prototype.
Until the production process is tweaked close to perfection, the actual product
performance of items produced may drop below the performance achieved in the
development process. Change to the production process is an iterative process that stops
once the production process has been stabilized and the actual performance meets the
desired performance. Total manufacturing then takes place, and the product is launched
to the market. Now the actual field performance of the product can be measured by
comparing the actual outcomes of the product performance against the desired business
objectives. Comparisons between desired performance and the actual performance are
made on a continuous basis to decide further minor changes to the product (or the
production process), or to remove it from the market. Throughout this period, customer
satisfaction and product performance are also measured on a regular basis to fix minor
product issues.
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13. 3.2 A Different Multilevel Arrangement
A necessary characteristic of the pre-development stage is the “non-physical”
(conceptual) model of the product. It establishes an increasing level of detail. This can
also be viewed as a multilevel process which involves the following three levels:
Level I (business level). Need.
Level II (system level). Conceptual/Preliminary design.
Level III (component level). Detail design.
Similarly, the development and production stage can also be viewed in terms of these
three levels indicated. However, parts and components are first developed, then product
prototypes are built, and finally the product is produced. As a result, we have the
following:
Level III (component level). Component development.
Level II (system level). Prototype development.
Level I (business level). Production.
This leads to a “matrix characterization” of the NPD process in terms of three levels
(business, system, and component) and two stages (pre-development and, development
and production) as illustrated below. This table may change according to different
products.
Level 1 Stage I Stage II
(Business Level) Pre-development ↔ Development and
↓ Production
Level 2 ↑
(System Level) Conceptual Design ↔ Prototype development
↓
Level 3 ↑
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14. (Component level) Detail design → Component development
↔
Matrix representation and performance comparisons of the NPD process.
↔ indicates the performance comparisons and the regular arrows represent the
NPD process flow.
3.2.1 Evaluation and Iteration.
Following each phase, the solution is evaluated to decide whether or not it meets
the desired performance and the stated constraints. Throughout stage I, the evaluation is
based on comparing the predicted performance (based on conceptual model used) with
the desired performance. In stage II, the physical object‟s performance is evaluated and
compared with the desired performance for the corresponding level in stage I. The
breakdown of specifications in stage I, followed by comparison/verification in stage II is
similar to the philosophy outlined in the “Vee” model by Blanchard and Fabrycky(2006).
The evaluation of product performance at each phase forms the basis for decision-
making in the NPD process. Each decision results in one of two outcomes: continue
forward if there is no problem, or iterate back in order to fix the problem. A problem
would be a difference between the predicted performance and the desired performance.
The iteration patterns are different for stages I and II. In stage I, if the evaluation
reveals an unacceptable difference from the desired performance, or the constraints are
not met, during detail design (component level), a solution to the problem is first
attempted through iterations at the component level. If the problem cannot be solved at
this level, the problem is examined at the system level (conceptual design) for a possible
solution. If the problem cannot be solved at the system level, it iterates back to the
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15. business level. If the problem is too large, project termination should be an option.
In stage II, if an unacceptable difference from the desired performance or if
constraints are not met, the iteration involves going back to the corresponding phase at
the same level in stage I. If a problem is detected during the component development
(phase 3), an iteration back to the detail design (phase 2) is made, as the detail design
phase is concerned with component level specifications. If the problem cannot be
resolved at this level, it iterates further back to the conceptual design (phase 1).
Similarly, if a problem is detected when evaluating the product prototype (phase 4), the
iteration is first to conceptual design (phase 1).
Iterations from phases in stage II tend to be more costly than from phases in stage
I. In the NPD process, iterations within a phase is normal. Examining and improving
solutions with respect to one or more of the product characteristics (such as reliability,
manufacturability, and ergonomics) is normal.
3.2.2 Decision making.
The iteration process involves decision-making. Decisions have to be made
throughout the entire process. We must either choose among alternative solutions or
deciding whether to continue development, iterate, or terminate the project. It involves a
balancing between project schedule, cost, and risk.
Decision-making involves making a choice among a set of alternatives. In the
NPD process, decisions often have to be based on multiple criteria. Further, in most
situations the performance of an object depends on factors outside the control of the
decision-maker. Also, there is often more than one decision-maker, each with possibly
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16. different preferences. This leads to multi-criteria group decision-making under
uncertainty. However, most engineering text on engineering design ignores the
uncertainty and group aspects of decision-making.
4. Product specification
After reading many articles and writings on product specification, there are many
different definitions. In this section I will discuss some alternate definitions, then come
up with a definition and discuss it in more detail.
4.1 Definitions and Interpretation
According to the Oxford Dictionary, a specification is:
“A detailed description of the particulars of some projected work in building,
engineering, or the like, giving the dimensions, materials, quantities, etc., of the
work, together with directions to be followed by the builder or constructor; the
document containing this.”
More technical definitions of specification are as follows:
British Standards Institution (1986, p.3): “A means of communicating in writing the
requirements or intentions of one party to another in relation to a product or service, a
material, a procedure or a test. A specification may define general characteristics or it
may be specific to the reliability and maintainability features of a product”.
Ulrich and Eppinger. (1995, p. 55): “A specification (singular) consists of a metric
and a value. The product specification (plural) are simply the set of the individual
specifications”.
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17. Blanchard and Fabrycky (2006): “The technical requirements for the system and its
elements or more subordinate specifications …, covering applicable subsystems,
configuration items, equipment, software, and other components of the system”.
Dieter (1991): „The Product Design Specification (PDS) is a detailed document that
describes what the design must be in terms of performance requirements… but it
should say as little as possible about how the requirements are met. Whenever
possible the specification should be in quantitative terms, and when appropriate it
should give limits within acceptable performance lies‟.
Zeng and Gu (1999, p. 32): “In a design process, design requirements are represented
by design specifications. Based on the specifications, candidate product descriptions
are generated. Design specifications are the formulation of design requirements,
which manifest themselves as a set of desired product descriptions or product
performances”.
As can be seen, these definitions are very different. They do, have much
commonality. Specification states the characteristics of a product at some stage in a
development process. The Oxford Dictionary defines a specification as a document
describing a process in detail, following process development. Others seem to view the
specification as a document that states the desired characteristics of a product or process
prior to its development. On the other hand, some have defined specifications as
documents that first serve as input to the design process, but become more developed as
the design proceeds through different design phases. According to Blanchard and
Fabrycky (2006), the initial specification is the system specification, and the final is the
product, process, and materials specification. I prefer to follow Blanchard and
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18. Fabrycky‟s definition on specification, which views specifications as documents that
become more developed throughout design and development. Much of the design studies
focus on customer needs as the starting point of a design process. However, Gershenson
and Stauffer (1999) place importance on “so-called corporate requirements stemming
from company internal sources such as marketing, finance, manufacturing, and service in
the specification”.
4.2 Relationship between objective and performance
The objective is the business-level statement that states what management expects
in a new product from the overall business perspective. The objective outlines a set of
statements, from a commercial and technical perspective, about the performance of the
product to be designed. The objective includes the following:
1. Statements about the performance of the new product and how the new product
relates to other similar products in the market.
2. Statements that show measureable expectations (market-share, return on
investment, and revenue) of the new product on business performance.
3. Statements related to various constraints, such as health and safety,
environmental, legal, and cost and time limits.
The desired performance of the product is justified from the business-level objective.
In creating the desired performance, we have to consider all the possible basic
assumptions of technology that might be used in the design and manufacture of the
product. The statements describing the desired performance will generally be more
specific than the statements in the objective. Therefore, the desired performance must be
understood so that if the desired performance is achieved, then the objective is fulfilled.
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19. 4.3 Relationship between performance and specification
Performance and specifications are strongly linked, and play a key role in the
NPD process. There are two kinds of relationships between performance and
specification.
Performance to Specification. The desired performance gives a rough idea of what
is to be achieved in the NPD process. The specification describes how this
performance can be achieved by testing all alternative solutions with the desired
performance as an input to the process and using a synthesis process. Thus,
specification becomes a function of the desired performance. Often there are several
alternative solutions that have the same desired performance. As a consequence, this
results in several specifications because of the different alternatives, and therefore
does not necessarily result in a one-to-one relationship.
Specification to Performance. If the actual performance of a product is built to
specific specifications, the actual performance can be viewed as a function of the
stated specification. This would be considered a one-to-one relationship. Each
specification leads to a single actual performance of the product.
According to Blanchard and Fabrycky (2006), “actual performance is affected by
several uncertain factors beyond the control of the manufacturer.” In this case, one
measures performance in a statistical sense. The expected (or average) actual
performance is related to the specification in a one-to-one relationship.
4.4 Performance and specification link in NPD
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20. In both phases of stage I, specifications come from the desired performance. In
the three phases of stage II, we have actual performances that are functions of the
specifications of the final phase of the pre-development stage.
5. Conclusion
In this paper, I have suggested a model for defining specification at component
level. This model would make certain that the desired objectives at the business level are
achieved in NPD. If not, a breakdown will occur and result in one or more of the
following: higher costs, delay in the product launch, reduced revenue and loss of
customers.
Higher Costs & Reduced Revenue
The most severe outcome of poor quality is product recall. The impact of recalling
thousands of products is huge. Warranty costs in the automotive industry alone exceed $9
billion per year. The short and long-term costs of a recall can be enormous and is
influenced by many factors. Some costs are directly related to recall activities, such as
investigation of the product failure, customer notification of the recall, transportation of
the recalled product, redesign and repair costs and the loss in value of the defective
product. Other costs are indirectly associated with the product recall, such as
poor quality, including the loss of sales due to negative publicity. The bottom line is that
poor quality can have a dramatic effect on a manufacturer‟s profits.
Delay in the Product Launch
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21. Clearly there is a tradeoff between the trying to minimize time-to-market and
maximize performance of a new product. Being the first to introduce a product into the
market can bring enormous benefits (higher price percentages or greater market share).
Equally, delaying the introduction of new products into the market can lead to dreadful
consequences such as lower market share, or the loss of consumer integrity. As an
example, recall the efforts of Macintosh development effort in the early 80s. The project
was supposed to make major increases in both product performance (hardware and
software) and manufacturing development. The delay (of a few quarters) in the
introduction of the product drove Apple‟s earnings down and caused the stock of the
company to fall to less than half its value (Rosario & Vokurka. 2000).
Note: The bottom line is that if product performance and specifications are not met,
the company (business) will lose massive amounts of money/revenue due to changes
in design after launch, recall, longer development times, poor sales and customer
dissatisfaction.
6.
References
Blanchard, B.S. and Fabricky, W.J., Systems Engineering and Analysis, 4th edition, 2006
(Pearson Prentice Hall: Upper Saddle River, NJ).
British Standards Institution, Reliability of Constructed or Manufactured Products,
Systems, Equipment and Components, BS 5760 Part 4, 1986 (British Standards
Institution).
21

22. Dieter, G.E., Engineering Design – A Materials and Processing Approach, 1991 (Mc
Graw Hill: NewYork).
Gershenson, J.K. and Stauffer, L.A., A taxonomy for design requirements from corporate
customers. Res. Eng. Design, 1999, 11, 103-115
Hubka, V. and Eder, W.E., Theory of Technical Systems, 1988 (Springer Verlag: Berlin).
John Simpson and Edmund Weiner, Oxford English Dictionary, 2nd edition, 1989
(Clarendon Press).
Pickett, Joseph P. et al., The American Heritage® Dictionary of the English
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PDMA, The PDMA Toolbook for New Product Development, edited by P. Belliveau, A.
Griffin and S. Somermeyer, 2002 (Wiley: New York).
Rosas-Vega, Rosario & Vokurka, Robert J., Industrial Management & Data Systems,
2000(MCB UP Ltd.)
Ulrich, Karl T. and Eppinger, Steven D., Product Design and Development: Third
Edition. 1995(McGraw-Hill).
Weibull.com. Article: “Introduction to Reliability Growth”, Reliability HotWire. Issue
39, May 2004
Zeng, Y. and Gu, P. Article: “A New Approach to Managing Product Requirements:
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Technology . May 16-17, 2005(London, Canada)
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