CHAPTER 7

SUCCESSFUL PRODUCT REALIZATION STRATEGIES

John Peeples
William R. Boulton

Product realization is the process of defining, designing, developing, and delivering products to the market. While the main thrust of this JTEC panel was to conduct a complete investigation of the state of Japanese low-cost electronic packaging technologies, it is very difficult to totally separate the development of technology and products from the product realization process. Japan's electronics firms adhere to a product realization strategy based on a strong customer focus, a consistent commitment to excellence in design, and a cost-effective approach to technology commercialization. The Japanese product-pull strategy has been a successful driver and influencing factor in every aspect of the product development cycle.

REQUIREMENTS DEFINITION

Defining product requirements is critical to the product realization process. Incomplete or incorrect requirements nearly guarantee a noncompetitive product offering. In a market-driven environment, the establishment of product requirements is clearly a job demanding a customer focus. The JTEC panel's site visits provided evidence of an extremely tight coupling between Japanese companies' product realization activities and their targeting of customers' needs. This tight coupling enables the complete and accurate definition of future product requirements. Panelists observed the following examples of Japan's customer focus:

Matsushita's published mission statement provides a clear example of the kind of customer and societal focus found in Japanese electronic firms:

Since its founding in 1918, Matsushita has adhered to the same basic philosophy of product development: contribute to society and improve living standards by providing products of superior quality and functionality. ...In line with this move toward creating a more organic, affluent society, Matsushita is entering new fields and developing the electronic products that will satisfy customer needs in the 21st century.

Japan's Focus on the Customer

Among the JTEC panel's most important observations was the tight focus in Japanese companies on the market and the customer. No matter what material, component, or product companies are developing, they are all trying to meet their customers' needs. Suppliers are developing material and component technologies that meet the future miniaturization needs of the end-product companies. Consumer electronics firms are searching for products that will generate new markets or stimulate existing markets with lower prices or more features. This focus affects all levels of Japan's electronics industry. Providing lower prices and improved quality requires better designs and manufacturing systems; improved features require new or improved components and technologies.

Every Japanese electronics firm is looking downstream to meet its customers' future needs; at the same time, many companies are also using their upstream technologies to integrate into component technologies. Murata, for example, is building on its miniaturization strengths in capacitors to develop complete functional radio frequency (RF) modules. Murata is building a gallium-arsenide integrated circuit pilot plant to protect its intellectual property and to improve its competitive position in the microwave and RF module business, with a focus on future personal communication products. By building on its core technologies, the company is following the strategy of other electronics firms in finding new applications or intermediate products whose markets it can dominate. On the consumer side, Sharp is the most creative firm in finding and using what it calls "sense leaders" to supply product direction. A whole industry of suppliers is ready to supply whatever electronic packaging technologies and equipment are needed to meet their customers' miniaturization and next-generation product development needs. Supplier support and availability of components and equipment reduce development and commercialization time.

Murata demonstrates one of the strongest commitments to its customers by providing daily contact with customers. The company so values its customers that it encourages both its sales personnel and its application engineers to live within walking distance of key customers. The JTEC panel's hosts at Murata pointed out that accounts are often visited several times daily and/or called as often as six times per day. It would be difficult for another company to penetrate Murata's customer accounts without providing equivalent levels of service and contact. Murata's people are extremely close to their customers.

Customer involvement in defining product requirements is clearly a part of product planning activities. At every phase, customers have input. The customer is involved much earlier than is typical in U.S. firms, participating even at the conceptual phase of the project. Sony and TDK have both dropped their efforts to develop superconductor technologies due to present lack of customer interest. TDK, the firm whose founders invented ferrites, canceled its high-temperature superconduction work after realizing that its target customers would only develop products that operate at normal temperatures. Sony is keeping only a minimal effort in this area for similar reasons. It is important not to confuse the cancellation of work in absence of a customer need with an unwillingness to invest strategically. The JTEC team observed a clear willingness to invest heavily and with great perseverance in technologies where results were not expected for five or even ten years. For example, Sony's investment in the compact disc took thirteen years to matriculate. Long-term investments occur only when customers' needs are clearly understood.

The use of problem-solving committees showed the JTEC team a different approach to customer support than what some U.S. companies use. Where a team may be formed in the United States to address and resolve a particular customer problem, several Japanese companies reported having specific standing committees devoted to helping customers overcome novel application problems. The intent of these committees seems to be heavily biased in favor of collecting requirements for future products as opposed to just resolving current problems. By having such close communications, these companies are able to define the requirements for next-generation products.


Published: February 1995; WTEC Hyper-Librarian