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News Release from: PTC - Parametric Technology (UK) | Subject: The way to product first
Edited by the Engineeringtalk Editorial Team on 05 November 2002

Roadmap shows the way to product first

PTC has published a detailed product development strategy roadmap that enables manufacturing companies to create sustainable value through revenue growth and improved profitability.

PTC has published the industry's first detailed product development strategy roadmap that enables manufacturing companies to dramatically improve their use of the product development process to create sustainable value through revenue growth and improved profitability "Manufacturing companies are under relentless pressure today", said C Richard Harrison, president and CEO of PTC

"Whether it is stimulating top line growth or managing bottom line profitability, we are seeing a growing number of companies taking a new approach to driving value: they are getting back to basics and focusing on the products.

They are following a strategy that we call product first.

That is why PTC created this roadmap, to help more companies create more great products and reap the benefits.

"Let's face it, we're not going to cost-cut our way out of this global economic recession", Harrison stressed, noting that companies have already slashed budgets and squeezed spending.

"What's needed is a clear actionable way for businesses to get back to what matters most - developing great products - and capturing the value they create.

That is exactly what this roadmap is designed to do".

Based on extensive research, work with current customers and partners, and 17 years of experience helping more than 33,000 companies worldwide, PTC developed "The way to product first: a roadmap for creating and capturing value".

It is a vital framework for companies looking to significantly improve their business with a centralised focus around creating better products through specific product development strategies, initiatives and competencies.

"For the first time, nonengineering executives can gain a solid understanding of the product development process and how it can be used at the strategic level", said James Heppelmann, PTC chief technology officer and executive vice president of Software Solutions.

"Our approach enables everyone in a company's extended value chain to easily comprehend and participate in the product development process to achieve strategic results".

"The same forces putting companies under tremendous pressure to operate efficiently also offer new solutions and exciting new ways to create value", Heppelmann continued.

"Research reveals that 80% of a product's cost is locked in during the design cycle.

During the 1990s, manufacturers focused on strategic enterprise infrastructure initiatives to drive efficiency and reduce cost.

Companies are now looking to product development to extend and compound those gains.

With new product lifecycle management (PLM) solutions and the expertise of our roadmap, those achievements are now within reach".

"The way to product first" roadmap enables companies to evaluate value opportunities, review the business initiatives required to take advantage of those opportunities, determine what capabilities are required and what specific solutions and services are needed to achieve their goals.

PTC's point of view is that there are a number of ways a company can drive value.

The roadmap identifies nine major opportunities that companies can use to create value in the product development process.

Some are focused on generating top-line revenue.

These include: protecting product positioning; growing market share with customer-focused products; improving ability to fulfil demand; designing for ongoing revenue streams; developing and defining new markets.

Other value opportunities focus on strengthening profitability and include: lowering product costs; lowering development costs; and improving asset utilisation.

One, designing to realise a price premium, addresses both growth and profitability.

Based on its strategic direction, a company can choose to pursue any number of these value opportunities.

The roadmap guides them in determining which executing strategies and business initiatives they should follow.

Then, the roadmap details which specific business competencies and infrastructure requirements are required to best capture the desired results.

"Typically a company will focus on and select two or three of the value opportunities most closely aligned with its strategic goals", notes Tom Butta, chief marketing officer and executive vice president at PTC.

"The roadmap allows the Company to see all of the potential interdependencies and tradeoffs that exist between and among the various opportunities".

Some examples of how well known companies use product development opportunities to achieve value include: Steelcase, which better addresses customer demand by designing products that enable customers to create total workplace environments; Hewlett Packard, which designs multifunctional printers to meet numerous customer requirements while generating ongoing revenue streams from the sale of ink cartridges; Harley Davidson, whose breakthrough product designs and resulting brand strength allows for a price premium for its motorcycles; Cannondale, which uses product innovation to extend its markets with all terrain vehicles (ATVs) leveraging its design experience in high-performance bikes; Samsung, which follows a develop and define new markets value opportunity in order to fulfil its "world's best" corporate strategy; and Segway, which is using product development innovation to create a brand new market for human transporters.

"These companies, and many others, have successfully used the opportunities inherent in the product development process to gain competitive advantage and market share, create new revenue streams, reduce costs and create sustainable value for their customers and shareholders", noted Butta.

PTC is supporting "The way to product first" roadmap initiative with a broad product development ecosystem of strategic partners including system integrators Accenture, BearingPoint, Cap Gemini Ernst and Young, CSC, Deloitte Consulting, Hewlett-Packard Consulting, and Lockheed-Martin; leading technology vendors like Hewlett-Packard, Sun Microsystems, Intel, Siebel Systems and TIBCO Software, as well as numerous resellers.

PTC is also introducing "The way to product first" roadmap in multiple forms, a physical roadmap, a booklet series and, on its website, with an online tool that enables visitors to match their product development needs with specific value opportunities and business initiatives.

Users can also use the tool to link their objectives to specific PTC solution and service offerings.

"During the last few years, companies have been spending lots of money and resources on technology, but have been frustrated with the limited results", said Harrison.

""The way to product first" roadmap represents, for the first time, a proven method to extract meaningful and sustainable value from the very core of manufacturing businesses - great products".

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