Holistic Customer Requirements and the Design-Select Decision

Abstract

W A Then confronted with the task of developing a new product, a firm chooses either to design new components, unique to the product application, or to select components from those offered in the catalogs of suppliers or from those already in use in its other products. We call this the design-select decision. The benefits of selecting an existing component include minimizing investment, exploiting economies of scale, and preserving organizational focus. On the other hand, designing product-specific components allows a firm to (a) maximize product performance with respect to holistic customer requirements-those requirements that arise in a complex way from most of the components of a product; (b) minimize the size and mass of a product; and (c) minimize the true variable costs of production. When these benefits exceed those from selecting existing components, firms will tend to design product-specific components. Our approach is to develop this theory by linking concepts from marketing, technological innovation, and engineering design. This theory yields four testable hypotheses. A cross-sectional analysis of 225 products finds substantial support for the theory.

Buyer perceptions of supply disruption risk: A behavioral view and empirical assessment

“…This serves to create an artificially thin market because buyers cannot readily find another supplier with the same capability (Cannon and Perreault, 1999;Stump et al, 2002). Customized items take on an increased importance because of both their functional attributes (Ulrich and Ellison, 1999) and their value to the final product (Clark and Fujimoto, 1990). Accordingly, we include exogenous correlations in our model between item customization-market thinness and item customization-item importance to account for the shared mechanisms affecting perceptions of supply disruption probability and magnitude.…”

Innovation Contests, Open Innovation, and Multiagent Problem Solving

“…Innocentive's business model of innovation has been praised in the business 1 To use an innovation contest as studied in this paper, the seeker has to be able to provide a clear description of the problem. If the problem is highly complex with ill-dened interfaces, it is not suitable for an innovation contest as the resulting coordination costs would be too high (e.g., Ulrich and Ellison 1999, Novak and Eppinger 2001, Mihm et al 2003.…”

Partitioning Tasks to Product Development Teams

“…Examples include the ability to resist gravity loads, convert electrical energy into translational energy, deliver powder, control temperature, run software, etc. Goal attributes are aggregate design properties [23] or 'holistic' requirements [20] that emerge in a complex way based on the components of a product, and satisfy the intended needs of the design. Examples include system level performance objectives, costs, aesthetics and ergonomics, size, weight, mass, or external constraints.…”

“…Such undesired attributes can have a harmful effect and should be reduced. Other attributes that may be identified are attributes that are associated with 'global' or 'holistic' requirements that a task may fulfill; e.g., total product weight, size, efficiency, or reliability [20].…”