Production Management II (Prof.

Schuh) Lecture 10

Production Management II
- Lecture 10 -
Product Lifecycle Management III
Simultaneous Engineering
Prof. Dr.-Ing. R. Noppen

Supervisor (for this lecture):

Dipl.-Ing. Dipl.-Wirt. Ing. A. Kubosch
a.kubosch@wzl.rwth-aachen.de
WZL 53b R. 504
Tel.: 80-28203

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Notes:

Product Lifecycle Management III - Simultaneous Engineering L10 Page 1

Production Management II (Prof. Schuh) Lecture 10

Classification of the Lecture Product Lifecycle Management (PLM) III

PLM I PLM II PLM III

(CAD) (EDM/PDM) (SE)

PLM I

PLM II PLM III

Legend: CAD Computer Aided Design

EDM/PDM Engineering Data Management/Product Data Management
SE Simultaneous Engineering
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Classification of the Lecture Product Lifecycle Management (PLM) III

The lecture Product Lifecycle Management III deals with the topic of Simultaneous Engineering.
Its contents are connected to the previous lectures (PLM I and PLM II) and partly overlapping.

The lecture PLM III covers so-called management aspects of the PLM. Therefore the aspects
treated by the lectures PLM I and PLM II are arranged to fit an overall context.

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Production Management II (Prof. Schuh) Lecture 10

The Change of the Economic Conditions

change of structures and values growing demands concerning

in society products and services
_
20 +0.01

_
20 +1

acceleration of technologic change of market structures improvement of communication

progress and transportation technologies

time

time

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The Change of the Economic Conditions

Compared to former times, the economic conditions have changed fundamentally. About 150
years ago, the economic success of a company was almost entirely determined by the design of
its production processes. Today a company faces a multitude of new challenges and its fast
reaction to cope with these is essential for success. Essentially, there are five fields to be taken
into account.

The change of structures and values in society, also called change of paradigms, manifests itself
in the fact that today the mere function of a product is taken for granted. Instead the quality, cost
and image of the product are decisive for its success.

The acceleration of the technologic progress causes a shortening of the life-cycle time of a
product. Companies have to identify influencing factors and to differentiate between those which
are constant and those which are changing rapidly. Cycles must be properly identified and
utilized. For example in the automotive industry the product life-cycle time of an engine is three
times as long as that of a car body. If both are developed simultaneously, existential trouble can
be expected due to the resulting problems.

The change of market structures caused by globalisation becomes apparent in the switch from
national to international markets. In consequence to this the choice of an adequate production
location becomes a highly complex task. The production in global networks must be supplied by
enormous trade and huge exchange of information. Only the continuous improvement of
communication- and logistic technologies is covering this requirement.

The demands of products and services are also increasing continuously. In the sixties, the fuel
consumption of a low power Volkswagen beetle was about 12l/100km. Today most luxury class
cars do not need more fuel.

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Production Management II (Prof. Schuh) Lecture 10

Innovation Strength

create discomfort by
arguments
analysis:
basic equipment sun roof
in country XY
BMW Mercedes
innovation strength 20% 15%
stimulate customers
interest, enthusiasm and
desire through innovation
and performance why different?
differences in marketing?
...?

carry out key projects

(e.g. lamella roof)

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Innovation Strength
For todays companies it is vital to powerfully design changes and thus to be innovative. Yet there
are only few companies which manage to generate actively innovations as there is a lack of
innovation strength.

The most common understanding of the term innovation is the replacement of an old technology
with a new one. For example products with a high innovation rate are mobile phones or
computers. Here, new technologies are introduced to the market every 1-2 years (product
innovation).

Another type of innovation deals with the redesign of the production process of an existing
product in order to be faster, cheaper and more steady in terms of quality (process innovation).
An example is the replacement of drawing boards by CAD systems.

Redesigning and improving the communication with the customer is a third possibility of
innovation. Only companies, which are capable to point out there technical potentials, are able to
capitalise economic profit on their product innovation. For example, when Mannesmann, a
mechanical engineering company, entered the mobile communication market new and no typical
marketing instruments had to be developed.

The aim of marketing strategies are stimulating the customers desire to buy a product by using
innovation, performance and competence. For example Webasto managed to develop a new
lamella roof for the Mercedes A-Class which enabled the space-saving installation of sun roofs in
this car for the first time. This development made Webasto market and technology leader in the
field of lamella roofs.

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Production Management II (Prof. Schuh) Lecture 10

Acquisition of Feedback from End Customers

Questionnaire to 1000 car owners Public check: display of 10 cars equipped with
questionnaire different folding fabric sun roofs
comfort demands? questionnaire
questionnaire
Webasto?
...?

Survey at motorway feedback Sales trainings

service areas
at big car sellers

satisfaction with:
- parking heater
- sun roof
-... .........
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Acquisition of Feedback from End Customers

Processing the question of how to improve a product is the aim of feedback acquisition. A second
aim is to check the accordance with self-perception of products and the customer's perception.

It is reasonable to begin with the design of a questionnaire which is not only product-specific but
also deals with the buyers and users habits. The questionnaire should not be distributed via mail
but filled out during a direct conversation with the customer (e.g. at motorway service areas). It is
helpful to create a comfortable atmosphere by offering beverages etc.. The motto is here:
listening is the best marketing. A carefully controlled conversation is the best opportunity to get
the customers' opinion about products, e.g. sun roofs.

Another way of benchmarking products is the so called "customer check". Passing people are
encouraged to test different variants of a specific product, for example lamella roofs, at location.
The customers' statements enable the enterprise to draw conclusions on fields of improvement of
specific features, e.g. handling the lamella roof.

In general, a good rule for feedback acquisition is make it simple. Simple but sophisticated
dialogs will best show the needs of the customers.

Finally the results of feedback acquisition must be transformed into measurable profit. This
contains for example the consequent training of the salesmen in accordance with the extracted
acknowledge. All efforts will be in vain if the elaborated results are not used during the direct
contact with the customer.

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Production Management II (Prof. Schuh) Lecture 10

Derivation of a Market Strategy

competitive dynamics
de-
(basis of competition) formation growth maturity generation

market
key factors leader e
iv
ns n
ff e io
strong
o sit
benchmarking: po
nd
relative strengths and xpa s
e he
medium d c
weaknesses regarding the an ni
key success factors relative in on
nta t e
market ai ra ion
position maintain- m e nt i d at
able nc ol
market shares co o ns al
c aw
dr
weak th
wi
competitive structure
range of possible market strategies

The range of possible market strategies is a result of the dimensions life-cycle

phase and relative market position.
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Derivation of a Market Strategy

The difficulty in finding the proper market strategy is the correct judgement of relative market
position and life cycle phase of corresponding products. Agreeable to the above matrix different
market strategies are resulting from this judgement. During the maturity phase of a product a
completely different marketing strategy is required than during the formation phase. For example
in the automotive industry it is reasonable to promote technologic innovations during the
formation phase, but to stress the reliability of a car during the maturity phase.

A concrete example of the false estimation of a product life-cycle was Porsches decision to
cancel the production of the 911 at the begin of the 80ies and to replace it with the front engine
types 924 and 928. As we all know, the 911 survived them both and today sells better than ever.

From this problem following demand is resulting: A company always has to be sensitive to
changes, especially changes of the economic conditions. As four eyes can see more than just
two, teamwork makes a lot of sense.

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Production Management II (Prof. Schuh) Lecture 10

Defining the Position: Own Company vs. Competitors

Product program individual

Competitive strategies:
strategies: niche program "pioneer"
defensive vs. offen-

competitive strategies
narrow vs. broad

product program
sive competitive
service range

strategies
behaviour
standardized vs. X
imitation vs. innovation
individual services
X
standardized conformist
mass program

autarkic
deterministic
internal
resource assignment
resource strategies

activity strategies
synergy potential

Resource strategies: Activity strategies:

fix vs. flexible X STABILISING cost minimization vs.
range of use STRATEGIES optimization of
X
customers benefit
specialized vs. univer-
sal applications flexible MODIFYING external autarchy vs. cooperation
resource supply STRATEGIES synergy potential

Legend: : company A
X : company B
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Defining the Position: Own Company vs. Competitors

Defining the position is a necessary task to every company because of investigating the own
development and the relative market position in comparison to the competitors. A company has to
know about its own strengths and the competitors' ones. For example, the product price is not the
only aspect which determines the market position. In doing so the evaluation must be carried out
as objectively as possible (team work). At the same time, it has to be considered that the market
position is never fix. If the own strengths are cultivated and the others are kept in view, there is a
good chance to maintain or keep the position.

A useful aid is the "strategic profile" (see figure above, also PM I, lecture 11). At first the company
evaluates its own market position in the four quadrants in accordance to the criteria which are
mentioned in the grey fields. Afterwards the "fit" has to be checked, that means, where are the
own positions in comparison to the perfection. Perfection: company's positions are located on the
bisecting line in each quadrant and on a cycle around the origin. If the "fit" doesn't match the
perfection, the strategic position of the company must be corrected adequately. Finally there will
be a check between the evaluated position and the long-ranging planned strategic position of the
company. Moreover the positions can be compared with the competitors' ones. (Let's assume a
company plans following a modifying strategy, but by using the strategic profile it detects that its
current strategy is a stabilising one. As consequence the company has to make changes in
different fields.)

To work for the companys future does not only mean to react, but to take action.

additional literature: Das Konzept integriertes Management, Kap. 2.5 Stokraft durch
strategisches Management

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Production Management II (Prof. Schuh) Lecture 10

Strategic Company Repositioning

1 new profiles:
financing
development of new service
core tasks
vertically integrated processes:
cu prefabrication range
efforts for core tasks

rre
n t logistic services
total efforts

...

fo r tre
me nd
r tr
en
d
concentration on
core tasks integrated auxiliary services:
by outsourcing
legal affairs
PR
0 ...

low intra-corporate service range high

Advantages: Disadvantages:
know-how focusing loss of know-how
profile improvement communication and coordination efforts
cost optimization irreversible dependence on suppliers
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Strategic Company Repositioning

In the past companies often executed strategic repositioning by concentration on the enlargement
of the scope of services. In contrast to this, today importance is attached to the core competences
and on all capabilities and processes of the company, which are relevant to supporting core
competences. By judging processes in accordance to their relevance decisions about
enlargement or reducing of the scope of services can be taken. Enlargement to enter new
markets and reducing to safe costs.

An example of the strategic repositioning of a company is reducing the manufacturing range.

Internal sensors have to report on which tasks are relevant resp. irrelevant. Outsourcing the
canteen or the own license department can be a sensible option and save fixed costs, whereas
outsourcing the IT is rather controversial.

When repositioning a company it is often reasonable not to think in a product-specific manner. In

many cases the customer does not want a specific product but the corresponding benefit. For
example a forwarding agent is not interested in a specific truck but in the corresponding transport
capacity. Mercedes-Benz recognized this trend and hardly sells trucks; they have concentrated
on supplying the effective transport capacity. The elevator manufacturer Kone also usually sells
transportation capacity instead of elevators, which contains service and granted function, etc.

By offering auxiliary services connected to the product such as service and financing, new
markets can be developed. In Eastern Europe the demand is high but the financial means are
low, so a product can only be sold when applying an appropriate financing concept.

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Production Management II (Prof. Schuh) Lecture 10

Module and System Procurement of the OEMs

purchase range (%) reasons

80 * estimated reduction of the manufacture range

reduction of investments for new production lines

60 transfer of market risks to suppliers

use of pay scale advantages by suppliers
reduction of internal complexity
40
77* reduction of logistic efforts
65
reduction of the development range
20
40
reduction of development coordination efforts
cutback of supplier redundancies regarding R&D-
0
resources
1993 2002 2015 use of external specialized development capacities
sources: Bossard, Mercer (2002)
Attention: realization of OEM-spanning scale effects
How important is the service element to be acceleration of development dates

! outsourced for the own company?

How capable are the suppliers?
concentration on core competencies

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Module and System Procurement of the OEMs

Topical studies forecast a continuing trend of an increasing proportion of purchased parts and
component groups up to estimated 77% in 2015. But today there already exists OEMs whose
purchase range is about 80%, e.g. Porsche.

The main reason is the increasing technologic capabilities of the suppliers and the willingness of
the OEMs to outsource their technical competences.

Nevertheless the estimation for 2015 as shown above must be handled with care. The OEMs
have to ensure to stand independent of the suppliers. The current situation emphasizes the
importance of this problem. Because of the increasing purchase range some so-called mega
suppliers like Bosch or Magna evolved over the years. At the beginning of this development
primarily the OEMs pressurized their suppliers (especially with respect to costs and quality). But
nowadays the mega suppliers turned the table and due to their dominant market position they are
able to pressurize the OEMs.

In consequence the competences of the OEMs are reduced to the range of the "customer
relationship management" (see also lecture 2). Although some suppliers almost manufacture the
entire product, they just lack the image and the customer base. At the moment, it would hardly be
possible to sell a car named Bosch.

The danger by technical dependence appeared shortly, when in February 2005 defective diesel
fuel injectors by Bosch caused call-backs and production stops by among others Mercedes and
BMW.

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Production Management II (Prof. Schuh) Lecture 10

Risk Classification for New Activities

techno- portfolio to support the risk

logy
known new classification for the development
market/
customer of new activity areas
known

legend:
new

risk for activity rises

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Risk Classification for New Activities

When developing new activity areas, a company has to identify which parts of the existing
business can be transformed into innovation, which parts are the tree to hold on to.

For example it would be a high risk adventure if the sun roof manufacturer Webasto would be
mad enough to take over the coffee roaster Tchibo. It is more common to hold on to at least one
area, either the customers or the technology. At present Webasto conquers the bus door market
as bus doors are in some respects comparable to sun roofs. In addition Webasto is world market
leader in the field of auxiliary heating systems for busses and thus has excellent connections to
the bus manufacturers. Therefore the risk is manageable.

It is always important to probe options systematically and then design innovations in a well
ordered manner.

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Production Management II (Prof. Schuh) Lecture 10

The Quality of the Product Development

60
failure ratio with respect to cost shares [%]

trouble shooting actions

failure occurrence

0
planning design scheduling manufacturing testing implementation
source: VDI 2247

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The Quality of the Product Formation

Examinations regarding the quality in the product development process have shown that most
failures (75%) are generated during the early planning phases, but they are often not detected
before the production, the quality inspection or in the worst case not before the use of the
customer. As costs of failure correction increase exponentially in the time a high quality level
during the planning phases is very important to reduces costs.

The correction of failures during later phases is not only much more expensive, but can also
damage the image, for example by call-backs. The consumer pays attention to such things!

So action has to be taken in order to recognize and avoid failures already in the early phases (in
which product costs and function are influenced).

additional literature: Betriebshtte Kap13.15 Qualittsmanagement in der Produktion

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Production Management II (Prof. Schuh) Lecture 10

Systematic and Definition of Simultaneous Engineering (S.E.)

product planning

production planning
Definition:
Simultaneous Engineering is the integrated and time-parallel processing of product
and process design aiming at:
shortening the time-to-market from the product idea to its implementation,
reducing the development and production costs and
improving the product quality according to the comprehensive sense of
Total Quality Management
Guidelines:

1 utilization of big improvement potentials by coordinated decisions

In the early phases
2 avoidance of modifications causing high costs during later phases

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Systematic and Definition of Simultaneous Engineering (S.E.)

Due to the division of labour and the complex interconnections of todays world, processes and
products must be designed at the same time in order to be faster and better than the competitors.

SE deals with the problem of lacking coordination during the early phases of the product
development process (see page 11).The basic idea of SE is parallelization. It means that even
fuzzy, i.e. not confirmed information, is exchanged with the aim of enabling all involved experts
to check approaches and ideas at an early stage. Product and process design are processed at
the same time.

Thus it becomes possible to reach the generally contrary aims of better quality, cheaper costs
and shorter (cycle-)times at the same time. Yet SE needs to be well organized, which is not trivial.

additional literature: Simultaneous Engineering, Kap.1 Ziele und Potentiale des SE

Betriebshtte, Kap 7.5 Integrierte Produkt- und Prozessgestaltung

handout of the lecture 4, PM I

Product Lifecycle Management III - Simultaneous Engineering L10 Page 12

Production Management II (Prof. Schuh) Lecture 10

Relationships between Manufacturers and Suppliers in the Automotive Industry

original equipment
OEM
manufacturer (OEM) 50 500 system
suppliers at 1st level
system integrator,
1st tier
module supplier

2nd tier system specialist

3rd tier parts/component supplier

Industry-wide cooperation because of: the technological complexity

the economical risk
the need for capacity
the innovation demands
ask too much of a single supplier.
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Relationships between Manufacturers and Suppliers in the Automotive

Industry
As shown in the chart above there are different levels of suppliers. The OEM primarily keeps in
touch with the first level supplier, who then deals with the lower level suppliers.

At the same time industry-wide cooperation is necessary as the technological complexity of the
product, the corresponding economical risk, the need for capacity and the innovation demands
cannot be performed by a single supplier.

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Production Management II (Prof. Schuh) Lecture 10

Characteristics of Development Processes

Preliminary development System development

Strategic tasks system platform development
Result: Result:
system analysis and design
maturity prototypes
technology monitoring for product and customer neutral
process technologies phase of which are
fulfilment of demands specific to the
product/ ready for
long-term product planning (5-10 years) automotive industry (designed space,

Tasks
Tasks

process tech- power, reliability, number of units) production

trend analyses (effect analyses,
license analyses) nologies, adaptation to own existing and non-
concept manufacturing resources (DFx) specific to
Operative tasks studies, defined interfaces for customer customers
technology assessment for certain functional characteristics (e.g. data links)
product and process technologies or types
prototypes
elaboration of design rules for the
application of technology (Design for Dfx: Design For x (assembly, manufacturing, ...)
Manufacturing, standardization)

Problem solving
Development at customers
customization of system platforms in order to get
customer/model specific products
use of system platforms
adaptation to customer/type specific demands (design,
quality, connections, integration into vehicle)

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Characteristics of Development Processes

When designing development processes the fact has to be taken into account that these
processes can be fundamentally different. So different design approaches are required.

During the preliminary development it is the aim to study functional concepts. Details such as
squeaking hinges are not important in this phase. An example for a typical question is: Does the
engine work at -40C at all?

Afterwards the functional concepts of the preliminary development are detailed and handled
during the system development. For example the details such as the surface finish.

Finally the development at the customer adjusts the solution of the system development to the
demands of specific orders (e.g. extra-features).

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Production Management II (Prof. Schuh) Lecture 10

Structuring the Extent of Development Phases

project frontend

development
phase
service range

objects, services

bumper module mounting structure front hood lock radiator module radiator cowling

start request
milestone plan of

rough concept rough concept rough concept

system supplier

target catalogue
concept elaboration concept elaboration concept elaboration check documents concept elaboration
provide concept elaboration
specification sheet

styling model
schedule/costs projection, performance indicators

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Structuring the Extent of Development Phases

One method of shortening the development time possible is to divide the whole product into
different modules, so that they can be developed simultaneously. The development process
should be structured in order to run smoothly. Unnecessary loops should be avoided. The
transparency of data is of essential importance.

Milestone plans help to coordinate parallel activities within the development process.

additional literature: Betriebshtte, Kap 6.4.1 Ablauforganisation

Betriebshtte, 7-132, Absatz PNEP

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Production Management II (Prof. Schuh) Lecture 10

SE Team

team leader purchase team leader

quality management
representative OEM R&D module team
preparation of production development OEM
decision
additional module team if required makers
jour fixe
module teams OEM OEM
responsible
team leader system
project staff supplier
module team
office system suppliers
methods team leader
coaching sales
R&D responsible system supplier
IT quality management
team leader
module team
module team decision system
purchase
makers suppliers
module assembly planning
system supplier
CPL
representative (if required)
component
coordination if required supplier
(if required)
Legend: CPL CPL CPL
R&D Research and Development
CPL Component Project Leader compo- compo-
IT Information Technology nent ... nent
OEM Original Equipment Manufacturer A B
communication
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SE Team
When performing SE, complex tasks such as the development of a new car body comprising
design and techniques must be processed with regard to the time and with the aim of finally
achieving a product. The large number of co-workers involved causes highly complex
coordination processes.

This is why today companies provide resources to SE-teams, e.g. they erect own houses used by
SE teams, where whole project teams stay in close contact during the course of a project, which
affects the communication very positively .

Regarding the complexity there two vital preconditions for SE:

Clear decision structures must be created on the basis of responsibility, power and
competence. The decision makers should be able as well as allowed to decide!

Access to the complete range of data must be granted to the whole team. 100% of
transparency in terms of data and results must be assured by means of accurate data
preparation.

additional literature: Simultaneous Engineering, Kap. 2.4 Organisationsstrukturen

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Production Management II (Prof. Schuh) Lecture 10

Customer-oriented Sales Organization through Key-Account-Management

customer 1

product 1 product 2 product n

key account 1
key account 2 customer 2
key account n

Tasks of the key account manger:

 scout for his company customer X

 problem solver for the customer

 elaboration of solutions in an interdisciplinary team (from product developer to controller)
 recognize and disarm weak points in the manufacturer-customer-relationship
 determine not only product, but also service quality

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Customer-oriented Sales Organization through Key-Account-Management

So-called Key-Account-Managers provide great advantages for the decision management of a
company. They project their own technical abilities onto the customer, acting as intermediaries
between manufacturer and customer.

Advantage of the customer: He requires only one contact person, who receipts his orders and
desires, directed them to the right person within the company and informs the customer about the
progresses.

Advantage of the company: Better coordination of communication to the customer and reduction
of redundancies.

The bundling of customer-related activities at a Key-Account-Manager is a precondition for clear

decision structures. It provides the required flexibility, which means nothing else but well-ordered
quickness.

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Production Management II (Prof. Schuh) Lecture 10

Customer Relation Matrix

development sales dept.

Instrument for the evaluation

Herr Reinhartz
supplier

Herr Schmidt

Frau Maisen
Herr Kramer

Frau Becker

Herr Jansen
Herr Kpper

Frau Weber
of staff-level inter-company

Herr Meyer
Herr Mller

Herr Frank
Frau Holle
relationships
customer
(OEM)
Herr Aalto
development

Herr Niehaus Legend:

Herr Classen
Herr Dick never seen
Herr Ebert he knows him but
Herr Walter not both-ways
sales dept.

Frau Blitz they know each other

Frau Donner they work together
Herr Zorn they sometimes have
a beer together

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Customer-Relation-Matrix
Cultivation of relationships is another part of a companys activities. The analysis of Who was
involved in the awarding of a contract on the customers side? as well as Who knows the
involved persons how well on the manufacturers side? is a good opportunity to learn from the
loss of a contract. By listing these relationships, you get the Customer-Relation-Matrix.

The relationships to the decision-makers of the customer during all phases of the awarding
process can be analysed and identified. If there are none or few, efforts have to be made to install
them.

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Production Management II (Prof. Schuh) Lecture 10

Use of Virtual Engineering in the Automotive Industry

Vision:
The first car is sold!*
t
Strategy:

degree of freedom for development

physical prototypes only
on the basis of digital
prototypes!
Benefits:
reduction of the number Virtual
of physical prototypes Engineering

reduction of development
times and costs
control of changes time
concept product and tool making
design process manufacturing
development and assembly
* source: Audi
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Notes:

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Production Management II (Prof. Schuh) Lecture 10

Recommendations: Human Being

white-collar workers also

self-inspection have to work in the production
for 1-2 days per year

motivation
responsibility
training
guidance

financial bonus for successful

flexible contributions to the
working hours suggestion box
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Recommendations: Human Being

SE does not only involve machines but primarily human beings!

In order to make people work well, it is important to motivate them, to place the responsibility for
actions on them, to train them well and to guide them properly. Innovation only evolves if the
possibility to innovate, the ability to innovate and the willingness to innovate occur at the same
time. It must not be forgotten that consultancy and discussion are important aspects of
leadership.

For example, responsibility is placed on the workers by self-inspection. Flexible working hours
help the workers to maintain a certain scope for developments in their lives.

It can be a good idea to make white-collar workers work in production in order to facilitate their
understanding of external problems and to find completely new solution approaches.

Product Lifecycle Management III - Simultaneous Engineering L10 Page 20

Production Management II (Prof. Schuh)

Glossary of the lecture (I/III)

Simultaneous Engineering Simultaneous Engineering deals with an integrated and time-parallelised

execution of the product and process design with a view to:
(SE)
- shortening the period from the product idea up to the introduction into the
(synonymic: Concurrent market (time-to-market),
engineering (CE))
- reducing of the development and manufacturing cost and
- an improvement of the product quality.
The optimisation of organisational interfaces is reached by an horizontal and a
vertical task integration..
- horizontal: Combination of task along the process chain
- vertical: Completion of planning acknowledge by using operators know-how.

Innovation Technological product and process (TPP) innovations comprise implemented

technologically new products and processes and significant technological
improvements in products and processes. A TPP innovation has been
implemented if it has been introduced on the market (product innovation) or used
within a production process (process innovation). TPP innovations involve a series
of scientific, technological, organisational, financial and commercial activities. The
TPP innovating firm is one that has implemented technologically new or
significantly technologically improved products or processes during the period
under review.
(source: Oslo Manual, second edition, 1997, www.oecd.org)
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Product Lifecycle Management III - Simultaneous Engineering

Production Management II (Prof. Schuh)

Glossary of the lecture (II/III)

Product innovation A technologically new product is a product whose technological

characteristics or intended uses differ significantly from those of previously
produced products. Such innovations can involve radically new technologies,
can be based on combining existing technologies in new uses, or can be
derived from the use of new knowledge.
A technologically improved product is an existing product whose
performance has been significantly enhanced or upgraded. A simple product
may be improved (in terms of better performance or lower cost) through use of
higher-performance components or materials, or a complex product which
consists of a number of integrated technical sub-systems may be improved by
partial changes to one of the sub-systems.
(source: Oslo Manual, second edition, 1997, www.oecd.org)

Process innovation Technological process innovation is the adoption of technologically new or

significantly improved production methods, including methods of product
delivery. These methods may involve changes in equipment, or production
organisation, or a combination of these changes, and may be derived from the
use of new knowledge. The methods may be intended to produce or deliver
technologically new or improved products, which cannot be produced or
delivered using conventional production methods, or essentially to increase the
production or delivery efficiency of existing products.
(source: Oslo Manual, second edition, 1997, www.oecd.org)

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Production Management II (Prof. Schuh)

Glossary of the lecture (III/III)

Key-account-management sub-range of customer marketing handling the care of major

customers predominantly. Attributes of this care are a customer
related attitude, a sophisticated way of processing, special form of
organisation and special work methods/techniques. The primary
reason of installation is creating a platform which affords growth in
the markets. This contains the long-termed extension of business
connections to "familiar customers", the acquisition of prospects and
securing of local marketability.

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Production Management II (Prof. Schuh)

Additional literature to the lecture

Betriebshtte, Produktion Eversheim, W.; Schuh, G.: Betriebshtte, Produktion und

und Management Management, 7. Auflage. Springer-Verlag, 1996

Simultaneous Engineering Eversheim, W.; Bochtler, W.; Laufenberg, L.: Simultaneous

Engineering. Springer-Verlag,1995.

Prozessorientierte Eversheim, W.: Prozessorientierte

Unternehmensorganisation Unternehmensorganisation, 2. Auflage. Springer-Verlag,
1996.

VDI-Richtlinie 2247 VDI-Richtlinie 2247, Qualittsmanagement in der

Produktentwicklung. VDI Gesellschaft Entwicklung,
Konstruktion, Vertrieb, 1994

Das Konzept integriertes Bleicher, K.: Das Konzept integriertes Management aus St.
Management Galler Management Konzept, Band 1. Campus-Verlag,
2001

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