GMAN509 Strategic Management of Technology and Innovation: New Product Development at Canon (The Contact Sensor Project)

Tariq M. Haniff

Session 8 Writing Assignment

Summary of Readings:

Chapter 11 covers the concepts and processes involved in new product development. It lays out very clearly that there are three objectives in developing new products: 1) maximizing the products ft with customer requirements, 2) minimizing the development cycle time and 3) controlling development costs.

Sequential and Parallel development are discusses with the latter turning out to be the more time saving and cost effective approach. The benefits of involving both customers AND suppliers in the development process is also discussed.

As reflected in the Canon case, the importance of “go/kill decision points” and project “gates”. Interestingly, the concept of quality function deployment (QFD) was also developed in Japan. I found the organization method to be sophisticated and complex.

The chapter concludes with other techniques which reduce the product development cycle. These include design for manufacturing, failure mode and effect analysis, and developing new product evaluation metrics.

Chapter 12 takes us one level deeper and teaches us how to actually manage product development teams. As a former coach I found many of the concepts apply to managing any team and not just a high tech team of engineers.

We learn about effectiveness of team size and team structure as well as discuss the classification of different types of teams (Heavyweight, lightweight, etc). The roles of leadership and administration are discussed and the chapter concludes by discussing how to effectively manage a “virtual” team

Case Questions:

1. What are the elements of Canon’s approach which contribute most to its success?

I would say their commitment to the general philosophy of “the greater good,” rather than profit, has enabled much of their innovative success. I was surprised to learn that Canon does not produce any products for the military. Here in the USA, much of R&D is funded by Defense Research Agencies (eg DARPA). The ongoing joke is “If we make a new discovery we have to learn how to kill people with it first!”I believe the commitment to its core principles attracts people who are passionate about their work and research in that these employees feel they are positively contributing to society.

2. How should Canon think about developing businesses for its new and emerging technologies?

I believe it was a good decision (both financial and strategic) to go ahead with the contact sensor 2 (CS-2). Although it was quite dramatically different from the CS-1 in many aspects the investment in the manufacturing equipment and general expertise in thin film technology has allowed them to apply these new assets to further integrate canon products.

3. How can Canon continue to encourage innovative thinking among its engineers?

As I mentioned earlier, one way would be to uphold their integrity of their core values. The case mentioned that Canon is an atypical Japanese company in that it does encourage individuality in certain situations. Further collaboration with outside researchers would keep new ideas flowing into the company.

Menelaos Zotos

GMAN 509

06/06/13

New Product Development at Cannon

· The contact sensor project begun in 1977

· CS-I was a key component of the first on the desk fax machine

· CS-I key issues

o More expensive than competing fax machines

o There was not a lot of value placed by customers on the compactness of the contact sensor

· At the end of 1985 the ultimatum came that if the cost can’t be lowered the project development should be stopped.

· In April 1986 a concept for the second generation contact sensor was proposed. That would require a significant investment for a new production line

· Canon’s history can be characterized by 4 words (growth, Diversification, vertical integration & innovation)

· Canon conducts R&D in many places in Japan as well as in 5 centers overseas

· Manufacturing plants in 13 countries

· Canon’s slogan was “Beat Leica”- create superior technology at a lower cost

· Their basic philosophy was that the company will be there forever. Only way to do that is by diversify your business

· The way they were diversifying is by moving from established position into related technologies

· In 1980 Canon started to focus on key component devices

· Looked to create new capabilities and to produce quality components

· In 1987 announced the vision for the new Canon

· The new philosophy “living and working together for the common good”

· Focus on making positive contribution to the communities through growth and reinvestment

· Product development has 3 stages

o Application oriented basic research

o A single product target is selected and a lot of the resources go to that target

o Diversification. How do you take the existing technology to other products

· Product development guidelines

o Conceptual planning

o Elemental prototyping

o Functional prototyping

o Product prototyping

o Product trial

o Mass production trial

o Follow up after production

· New products are developed by cross functional teams selected from various research organizations

· First a task force is formed. If successful it becomes a task or a project(task has longer time frame, Project start on a new business area

· Development teams contain members with different skills and experience

· Looking at the decision that Canon made, they stack with what they believe in and what made the successful. They took a risk with moving on and heavily fund a project that had no guarantees. But they believed in their process and their team and at the end they were successful.

Noor Patel The Contact Sensor Project

· ‘Kwanon’ a.k.a. Canon camera was first advertised in June 1934 in an issue of Asahi Camera, Japanese magazine, which was Japan’s first 35 mm focal plane shutter camera

· Since its inception, Canon can be characterized in four words: growth, driven by diversification, supported by vertical integration and made possible by innovation

· The Contact Sensor project is the component of a fax machine that reads image of a document as scanned through the machine. This project spanned from 1977 – 1993, following the sequential development process.

· Canon’s development of contact sensor technology can be described in six phases:

o Phase-1: Application-Oriented Basic Research – In 1977, Mr. Toshiyuki Komatsu did research on Amorphous-Silicon (a-Si), and identified three potential application for the technology – (i) contact sensor for digital copiers, fax machines & other imaging equipment, (ii) thin-film transistor & (iii) drum.

o Phase-2: Development of CS-I Product Concept – Komatsu’s cross-functional research team produced concept for Canon’s first contact sensor, CS-I and functional prototype for technical feasibility.

o Phase-3: Production of the CS-I – The executive committee decided to invest in building a new production line at Component development center at Hiratsuka which resulted in developing Canofax 110 in 1985, which was the world’s first compact fax machine.

o Phase-4: CS-II Product Concept – CS-II was drastically different technology in comparison to CS-I. There were issues with organization, cost & financial issues due to limitation of existing production line.

o Phase-5: Investment in CS-II – In 1987, the Sensor team produced a radical technology called CS-II, which had the original and superior technology, driven by innovation.

o Phase-6: CS-III and Continuous Improvement – In 1993 Contact Sensor team produced CS-III M-1, a component in the Canofax M-1 the smallest and lightest portable fax machine; and during the same year Canofax M-1 set a new standard for size and portability.

· Canon’s contact sensor project team made great success in using a-Si, to produce SI which was a novel and disruptive technology, followed by CS-II which was also a disruptive technology and finally developed CS-III as continuous improvement. In retrospect it is seems that the team could have achieved faster success in shortening the development timelines by adopting parallel developing process versus the continuous process. Although the risk factor may have been higher with parallel process but the team would have achieved faster feedback on usability of the technology in various vertical products by achieving greater efficiency and economies of scale.

------------------------------------------------------------------------------------------------------------

Susan Walsh

· Contact Sensor project started in Canon 1977 and in 1985 the CS-I product was launched. It was more expensive than competitors fax machines which had less functionality but were cheaper to produce. The compactness of the fax machine was not valued highly by customers.

· In 1985, the development team was challenged to produce a technology breakthrough which would provide superior functionality and to reduce the cost of the contact sensor.

· 1986 the team developed a new concept for the CS-II which could be produced at lower cost but Canon had never manufactured a thin film component of this type before and this would require a new production line and 2.5 billion Yen investment.

· It is interesting that Canon chose to develop the CS-II when at the time of the decision they knew that the new functionality it offered where not characteristic customers valued. This goes against most of the teachings in chapter 11 but in reality the CS-II was very successful.

· R&D strategy is set by the Executive committee which comprised of 15-20 senior managers, including president, vice president and directors. They set strategy, set business targets and lays out the direction of technology.

· Middle managers are the head of the Research Centers and senior engineers lead the research teams. Development teams select their own team leads and junior engineers are given the freedom to get on with technical problem solving.

· Canon separates product support and new product development into different organizations. Once a new product is developed and released to the market, the technology will be applied to other products.

· New products are developed by cross functional teams selected from various research organizations. These teams are flexible and operate informally.

· Task force of 5-20 members formed at beginning of development program. They are brought together for a short period to develop product concept. This team can grow into a task if project is initiated. 2 to 3 years and staffed by full time members and has budget. Does not appear on organization chart.

· Projects are long term, normally new business area, and staffed by full time members. Has budget and appears on organization chart.

· The development teams are cross functional and diverse. They encourage innovation from all levels and this contact sensor is a good example as it was a junior engineer that developed the various uses of amorphous-Silicon.

· The middle managers are the team leads of the various research centers and coordinate and communicate between executive committee and project team.

· The development teams as the project evolves move through different type of development teams. There is a functional team structure created during the task force stage. There is a heavyweight structure during the task phase and once a project is implemented it moves into the autonomous team structure as a new group is formed and appears on the organizational chart.

· Canon is a global company with over 70% of sales outside of Japan which has made it hard to create flexible teams and coordinate development activities. They could incorporate more virtual teams within the R&D process which would bring with it increased diversification and encourage more innovation. Instead of having all the project team located in same area, they could utilize all of their global resources.

_________________________________________________________________________________

Chapter 11 and 12 and Canon- Kelly Bostwick

Product Development:

Maximize Fit with Customer Requirements
Minimize Time to Market
Control Development Costs

This chapter was particularly interesting as it related very much to the development processes I see at work. The discussion in the chapter on stage-gate processes in particular. This is the method used by most of our game teams to keep the project on track and aligned with the ship date of a given video game. There are multiple project leads that are assigned to different disciplines, for example design, art, cell engine, animation, etc. Deliverables, metrics, and art asset progress are set within each Gate. There are typically gate review meetings at a team level based on a certain time cadence and again at the executive level, typically where funding and green lighting conversations occur. (Green lighting within EA is an executive sign off on continuation with a direction or sub-component of a project).

Managing New Product Development Teams:

Bringing people together- can be positive as there are many facets of expertise, however that has to be balanced with cost and the ability to remain agile and communicative
Managing diversity/cross-functionalism, skillsets, viewpoints
Team structure has an impact on product outcomes
The team leader must have a style that aligns with the team and its objectives

New Product Development at Canon:

Innovation and Collaboration has been a key to Canon's success:

The case categorizes Canon’s successful history in four words, growth diversification, vertical integration, and innovation.
Diversification was a huge part of Canon’s success; they recognized that to grow and sustain their business one product market wasn’t enough. They also recognized the risk associated with diversification and went about it in a thoughtful way by using their current positioning in market to branch into similar technologies and other markets.
Kyosei-“living and working together for the common good.” Canon supported collaboration and respect as part of their culture, business approach, and globalization strategy.
The company conducts R&D in five centers internationally (UK, US, France and Australia) as well as several locations in Japan and operates with 5 R&D principles that center around innovation, ethics, respect, and globalization. R&D Strategy comes from the top down and middle managers are tasked with interpreting and implementing strategy through technological goals. Consensus is reached on how to approach technology by arriving at a “common dream.”
Team design and size is a valuable aspect of new product launch at Canon: starting with small task forces that think conceptually about product ideas, the focus is not on budget and logistics but on establishing a new technology, these task forces are diverse and bring different skillsets to the table.
High risk product development decisions equal high rewards for Canon, such as integrating a lot of new people onto a large project that required agility and time consideration.
A focus on continuous improvement- Canon does a good job at reevaluating projects, managing milestone, surveying competition, evaluating costs.

-----------------------------------------------------------------------------------------------------
Jason Au

Chapters 11-12; Canon Case

Chapter 11 – Managing the New Product Development Process:

· More than 95% of new product developments fail to provide an economic return

· 3 Objectives of new product development: (1) maximizing the products fit with customer’s requirements by bringing more features, greater quality, or more attractive pricing than competitors; (2) minimizing the product development time; (3) controlling development costs efficiently

· Partly parallel development processes yields closer coordination between stages and reduces production time compared to a sequential process..but could be more costly

· Customers and suppliers can provide valuable feedback in the development process

Chapter 12 – Managing New Product Development Teams:

· Effectiveness of a team largely depends on its size and composition (diversity being a key component)

· 4 Types of team structure: functional, lightweight, heavyweight, autonomous

· Virtual teams enables individuals with unique skills to work on a project, regardless of their location

Canon Case:

· CS-I was the key component to the Canofax 110, the world’s first compact fax machine.

· Challenges of CS-I: more expensive than competitors, compactness was not seen as a value add because fax machines were still considered as office machines and not personal technology

· If functionality was the same, customers favored cost savings over form factor

· Canon needed to reduce the cost of the CS-I, or abandon the project

· CS-II was created that had superior functionality, could be produced at a lower cost, but would require a significant investment (2.5B Yen - $15M) to create a new production line

· Challenges of CS-II: technology wasn’t proven yet, Canon lacked the skills to manufacture, costs were uncertain

· Cannon culture – based on growth, diversification, vertical integration, innovation. Founded on the concept of creating superior technology at a lower cost than competitors. Wanted to create a company that would last 1000 years, which needed diversification in its product line.

Possible Recommendations:

· Following in the spirit of Kyosei, Cannon may want to collaborate with another company to help further develop CS-II technology and help reduce it’s cost

· Assign senior management to head new product development projects

· Continue to invest in the development in CS-II and create go/kill gates for that and future innovation products
___________________________________________________________________________
Vicky Fernandez- Case Analysis: New Product Development at Canon

I. Case

· Canon’s contact sensor (CS) project had started in 1977 in which its CS-I component helped to launch the Canofax 110, the world’s first compact fax machine.

· CS-I issues were that it was 1) more expensive than competing fax machines and 2) its compact feature was not valued highly by customers preference over bulkier machines.

· Challenge for Canon was whether they should take the risk and move forward to invest in producing new manufacturing around next generation components for the CS technology.

· Was Canon ultimately successful in producing future CS technology-based products at lower cost so that they could continue to produce this breakthrough technology and to reduce the cost of the contact sensor? If so, how?

II. Data/Evidence

Canon’s corporate mission vs. its risky investment make the decision to proceed with the CS project because of the following:

· CS-II was a significant investment worth 2.5 billion Yen; with already 50 billion Yen going to overall R&D. CS sales increased from 1989-1994; introduced new product to market to gain acceptance from consumers.

· Record of innovation from 1976- 1993: Exhibit 7- Above 50 new products developed every year and Exhibit 4- One of the Top 10 companies receiving U.S. patents (‘89-‘93)

· Company philosophy: 1) ‘Kyosei’- living and working together for the common good, 2) 5 R&D Principles and3) “common dream” internal R&D strategy across global groups.

· New strategy to complement diversification= backward integration to integration forward into software and networked systems linked to Canon office products.

III. Logical Framework- Applying Theory

· Sequential: guidelines widely used by all development projects; projects are evaluated at each stage and team passes to the next stage when milestones completed.

· They have project champions; and expertise from outside organizations (Lead user Method) to help with provided ideas and approaches for product-focused development.

· Heavyweight teams with collocated project managers to help steer/oversee the project; Autonomous teams to help make key decisions

· Team leadership (e.g. Toshayuki Konatsu= Team leader of CS project)

· Cross-Functional global teams from various research organizations.

· Use of benchmarking from CS-I to provide cost estimates for CS-II, CS-III.

· First movers/pioneers: Canon was the first to achieve the CS technology and they should continue to move forward with it as they have re-developed products around it.

· Investment in basic research: Canon’s investment in basic research is what the led them to the CS technology (e.g. scientists at the University of Dundee in Scotland). They should continue with basic research to support other areas of business within their portfolio.

IV. Conclusion

· From 1985, when first produced the Canofax 110 to 1993 when the third generation product (CanofaxM-1) was produced as the new standard for size and portability, Canon’s line of contact sensor technology has come into full circle. In retrospect, Canon’s strive for innovation and management of their NPD and teams on the CS technology/project attributed to the achievement of the project’s goals to to improve component reliability and reduced cost around the production process.

V. Recommendations

· Use CS technology/project business model across new projects within the organization.

· Retire the development of next generation CS components, but continue to use CS technology for suppliers.

· Continue to license technology to niche segments, might open up doors to other industries and/or products.

· Pursue radical diversification into new technologies for long-term creation of new businesses within their environmental products and programs across ecological and bio-engineering businesses- Go Green/Recycle (e.g. design products for low power consumption/long life, copier cartridge recycling, develop lead-free glass for optical lenses). This expands their portfolio for the 21^st century.

· Continue to invest in basic research from building off of current/new technology (e.g. solar cell energy, built off of a-Si technology)

-----------------------------------------------------------------------------------------------

Chance Durham

GMAN 509, Cohort 15, SR

Professor Dr. Jyoti Bachani

Session 8

Chapter 11: Managing the New Product Development Process

Chapter 12: Managing New Product Development Teams

Case: New Product Development at Canon: The Contact Sensor Project

Chp 11 & 12 Overview

The reading covered technology product development process from a managerial view. The management of the components in development including discovery, design, and delivery can be managed differently to be most effective. Customers can be used to optimize product development by precisely finding out product requirements and then engineering those results into all phases of the process. “Lead customers” can be identified to add insightful design information into the design development planning. The reduction of development times can reduce cost while bring products to market faster, leading to a competitive advantage. Shortened development times also serve to tune the company for faster model changes, and product upgrades, again furthering the competiveness of the product and corporation. Overlapping parallel development can be used to speed the product design, but adds increased risk if changes are needed that negate the overlapped effort. Product development can be championed, and the champions can come from all levels of the company, be cross disciplined, or from senior leadership. Stage-gate processes are used to manage, control, and track the development of technology at most companies. Each point in a stage-gate represents a go/kill decision in the projects development path. Quality Function Deployment (QFD) is a process that bases product development on the requirements of customer correlated to technical specifications that are weighted by importance in order to manage trade-off decisions in the design. Failure Mode and Effect Analysis (FMEA) is used to building design around risk priority calculations. The FMEA is put to good use in the development of mission critical systems. Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM) have greatly reduced the cost of rapid prototyping of new designs. With CAD/CAM new designs can be evaluated without having to build an actual model or prototype. Postmortem project analysis is an important approach towards continuous improvement. Completion of a project is an opportunity to evaluate ways to improve the next project.

Case Questions

What is it about Cannon’s innovation that leads to the company to development new products?

Canon has an expansive philosophy that cross leverages each technology that it develops into each other. The mission of the company is to continue to expand in order to survive eternally (1000 years). The awareness of the added risk this has is well thought out and mitigated for the gain of staying competitive through continued introduction new products to market.

Why did Dr. Mitarai proceed with the costly new Contact Sensor project?

Dr. Mitarai, carefully weighed the risk and reward proposition of the CS innovation and likely made the tough decision to continue the development because it was in line with the company’s philosophy to grow through continuous innovation. And, becuase the challenge served to sharpen the skills of the employees in many areas including management, engineering, and competitiveness.

How can Cannon continue to get the highest level of innovation from all of its engineers in spite of the growth and global distribution the company has?

Through technology like CAD/CAM global collaboration can take place through virtual modeling. The phase gate approach should continue to offer the technology management control that will allow management to strategically make go no decisions throughout the product development life-cycle.

What future technology might build upon Canon’s current brand strength and competency?

Canon might enter into the 3d printer market, and consider the development of a 3d scanner to allow the replication of 3d objects, including sending digital 3 dimensional copies to be rendered with 3d printers at another location. This way people can electronically scan and send a 3d objects for global collaborative prototyping etc. This might be a stretch goal, but would be strategic, and could build from both their printer and photography competency.

===============================================

Diane K. Reyes, GMAN 509 – Professor Bachani, June 4, 2013

Chapter 11: Managing the New Product Development Process, Chapter 12: Managing New Product Development Teams, Case: New Product Development at Cannon

Cannon is a leader in technology and innovation for many decades. Their strength in diversification explains its growth from Cannon’s philosophy of having external existence. As they developed technologies within optical and precision instruments, they were able to bring in new product lines such as semi-conductor manufacturing equipment, floppy disk drives, video equipment, and the bubble jet printer from 1970 to 1984. Another piece of their diversification went to building onto parallel technologies such as taking their BAsic Stored Image Sensor which they initially developed for autofocus cameras and applied it to high-end copiers.

Cannon’s 5 R&D Principles help them remain on track and consistent: aims for unexplored technologies, won’t go into military R&D, believes in environmental sustainability, respects original technologies from other companies, and also respects other countries where new technologies are found and conducts their R&D in those countries.

The hierarchy at Cannon is very apparent especially with their product development decision-making process. Everything passes through layers starting from the top; the Executive Committee, Senior Managers, Middle Managers, down to the individual groups of teams to do R&D, design, engineering, product development, etc. Each level of management has their own role for approvals as well as restrictions governed by the next level above them - with full authority within the Executive Team. This process is similar to a stage-gate process as a design or idea goes through certain stages before moving onto the next level only by getting approval from the team / stage above it. Because Cannon finds technology to be abstract, when teams are created for a purpose, ideas and creativity is encouraged as Cannon drives to create exceptional people with entrepreneurial-type ideas. The down-side to this is the credit given is to the team and little recognition is given to the engineer or individual.

Development trams were composed of members with different skills and experience from members within original basic technology, research, development experience, process and production specialists, and to speed up market entry teammates from marketing and business group will also be part of the team. This mixture of teammates made it possible to get input from many different standpoints to speed up market entry. Cannon’s culture of creating and fostering cross-functional teams has been one of their strong points for success. One recommendation with organizing teams at Cannon would be to include customers and suppliers within their development teams so that they can receive continuous feedback on what components are important to customers and what designs are most cost effective from a supplier’s perspective. On the research side, Cannon may want to think about introducing Project Champions which can come from the Executive Team to help drive results to help remove barriers and advocate for research team needs that would have had a longer lead time for help and resources had a Project Champion not have been involved.

The challenges with CS-II was the technology was not yet proven, and with Cannon not currently having skills to manufacture the new component, process yields were unknown and costs were uncertain. Because manufacturing was a big concern for Cannon, I recommend that they look at using Computer-Aided Manufacturing with their CS designs. Since the decision was already made to spend the $2B on manufacturing and producing the CS-II, by having CAM they can streamline the process by having computers and machines which can easily be modified to correct a process than manual labor. This can also help with enabling faster changes with production set ups and being change-ready for product variations.

==================================================================

New Product Development at Canon The Contact Sensor Project

Nory Goyes

· Canon’s company has been in business for about 80 years leading in innovation technology, their main motto has been growth, driven by diversification supported by vertical integration.

· The firm innovative vision and high technology develop products for business information, cameras, optical and other products. It has been successfully in the production of consumer and professional imaging solutions

· Between 1989 and 1993, Canon was on the top 6 companies to receive the highest number of patents annually in the United States of America.

· Their five R&D facilities are located globally, UK, US, France and Australia besides their multiple centers in Japan. All of them very well structured, managed in a globalization manner that allows them an almost perfect coordination.

· The Japanese Kyosei philosophy has help their global integration to stay focus towards a common goal: “Living and working together for the common good”

· Canon prides to be an innovator producing radical products that has allowed them to be the first movers of a number of consumer and personal products in different industries.

· The firm’s innovation management of ideas from basic science to the development of new products and how this help in the evolution of new technologies maintaining their diversification is what has helped the company be successful and prolific.

· However in 1985 the company was phasing the challenge of reducing costs in the development of their CS (contact sensor, the component of a fax machine that reads the image of a document that is scanned through it) for their compact fax machine.

· Canon R&D team, lead by Mr. Toshiyuki Komatsu, developed a disruptive technology to produce the second generation contact sensor (CS-II) that could be totally lens less and all functionality would be integrated on the same circuit; leading later to the CS-III.

· With the new CS-II and CS-III Canon just needs to focus on implementing a heavyweight team to manage the project development with core team members dedicated full time to the project.

· To optimize productivity for the new product is convenient to use designing for manufacturing methods (DFM) that would help structuring the new product development process, this will be achieve by applying design rules that will impact the expected performance.

· Canon has been using sequential development process and to reduce the timeline in production is recommended the parallel one. Even though it could involve higher risk in rework of the production, being managed by a heavyweight team with high decision power and in combination with the established rules to optimize the designing for manufacturing method these risks will be diminished.

New product development at Canon

Meher Venigalla

Professor Bachani

Strategic Management of Technology and Innovation – GMAN509

6^th June 2013

New product development at Canon - Case Analysis

· Canon’s new product development is multi-staged with specific goals/aims at each stage and an approval process at the end of each stage to move the project to the next stage. Similar to a ‘stage-gate’ product development process

· Product development is based on the corporate strategy designed and delivered by the global executive committee. Strategy is then translated into tangible goals based on the analysis of the market conditions and technology requirements by the R&D leaders.

· Customers seem to be involved only in the latter part of product development during limited production trials which seems to be an expensive solution.

· Engineering support and product development are managed as separate functions with no communications amongst them.

· Development is product focused and teams are formed based on individual competencies specifically for each project. This flexibility allows Canon to utilize resources from their decentralized R&D centers in a unique way.

· New products are thoroughly tested in a single line of business before they are leveraged in other segments of business.

· Market analysis and cost analysis is conducted at the latter stage of product development (Phase 4) rather than at earlier stages.

· Have highly influential champions to encourage new product development.

Recommendations:

· Cannon should not restrict innovation by strategy. They should allow their structured product development to filter innovation rather than restricting organizational creativity.

· Market analysis, cost analysis and customer feedback should be part of conceptual testing rather than after prototyping phases. This will reduce the cost of product development and reduce the new product development cycle.

· Canon can improve its focus on future needs of customers by improving communications between the engineering support for current products and new product development teams rather than separating them.

· Canon should overlay their second stage of single product target and the third stage diversifications so that they get better amortization information for new product development costs. If the contact sensor technology can be introduced in multiple portfolios like scanners, copiers etc. it will have higher impacts on sales and profitability than initial reports with introduction in a single product line. Sometimes breakthrough technologies are expensive to develop and will only be profitable when clubbed with economies of scale across various platforms. Canon should use its diverse business to its advantage.

George Fuentealba
GMAN 509
June 6, 2013

Chapter 11 Insights and Key Learnings

· 3 key objectives for NPD:

o (1) Maximizing profit’s fit w/customer requirements – must offer compelling features and quality, matching customer demands and needs

o (2) Minimizing the development cycle time – shorter, better

o (3) Controlling development costs – be effective and efficient

· Involve customers and suppliers in development process. Customers via focus groups and beta testing can help identify the maximum performance capabilities and minimum service requirements and get initial bug fixed before general availability launch. Suppliers can help to expand a firm’s information resources by offering alternative methods and components with same functionality at lower costs

· Stage-Gate process is very common in new product developments. Having Go/Kill (no-go) gates with critical success metrics will better ensure a product’s successful launch

Chapter 12 Insights and Key Learnings

· The smaller the team, the easier to manage. The larger the team, the harder it is to foster sense of identity amongst team members and management

· Larger teams may experience more social loafing – others relying others to do their work

· Team composition: Cross-functional teams are “essential” for success. Members drawn from multiple disciplines, divisions and with different backgrounds offer more diverse ideas such as broader knowledge and specialties in key areas.

· Team Structure: 4 types of teams include (1) functional, (2) lightweight, (3) heavyweight and (4) autonomous. Depending on firm, one may work better over another.

· At Cisco, the heavyweight team structure is used more with a central project/program manager leading the cross-functional team.

Canon

· 1977: Mr. Toshiyuki Komatsu started Canon’s basic research in contact sensor technology. Contact sensor is component in fax machines that reads images of a document as it is scanned.

· 1985: Canon development first contact sensor, CS-I

· December 1985: Canon launched world’s first compact ‘on the desk’ fax machine, Canofax 110 with CS-I

· April 1986: Team created concept for 2^nd generation contact sensor, CS-II. CS-II had superior functionality and “could potentially” be produced at a reduced cost

· CS-II would require a 2.5 billion Yen investment in a new production line

· Canon’s development efforts reflected 5 R&D principles.

· Canon strategy focused on teams establishing a “common dream” and were allowed to select their own team leaders. This had worked extremely well for Canon in the past.

· Canon Product development was focused into 3 main stages: (1) applications-oriented basic research, (2) single product target and (3) diversification. Canon always developed a single product target that could be applied to and the foundation for future products.

· CS-I:

o Canon invested 830 million Yen in a new production line at their Component Development Center

o Canofax 110 was received reasonably in the market but experienced a number of problems.

o Costs of CS-I were extremely high.

· CS-II dilemma:

o Big technological leap through lensless contact sensor

o CS-II required new manufacturing skills

o Better project management needed to support existing CS-I install base and to develop new CS-II

o Difficult market penetration into Japanese market for CCD system fax machines. Most customers were still willing to substitute size for cost.

· Recommendations

o Canon should get customers and suppliers involved early in their development process to iron out issues and reduce components costs.

o Continue to utilize 3 stage development process of building a foundation component and product for future developments

o Collaborate with other competitors in the market to create better products that are introduced faster to market.

GMAN509 Strategic Management of Technology and Innovation

Thursday, June 6, 2013

New Product Development at Canon (The Contact Sensor Project)

No comments:

Post a Comment