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DEFINITION OF PRODUCT PROFILE BASED ON INNOVATION MENAGMENT

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machine design, Vol.3(2011) No 1, ISSN 1821-1259 pp. 7-12
Preliminary note

DEFINITION OF PRODUCT PROFILE BASED ON INNOVATION MENAGMENT

Vojislav MILTENOVIĆ1, * - Jelena MILISAVLJEVIĆ2 - Aleksandar MILTENOVIĆ3 - Milan BANIĆ4
1,2,3,4
University of Niš, Mechanical Engineering Faculty, Niš, Republic of Serbia

Received (18.12.2011); Revised (01.02.2011); Accepted (28.03.2011)

Abstract: Due to globalization and increase of product complexity requirements, as well as with a customer tendency to
prefer more simple and profitable solutions, design engineers must use up to date management tools, methods and
systems in their practice in order to be competitive in the market. The education of design engineers has to react to
these new professional requirements and excellence in management competence must be generated. This is especially
important in area of innovations management as innovative products drive the company success. The education of
mechanical engineering students in machine design can make a decisive contribution in obtaining technique and
management skills necessary for later professional success.
This paper presents the definition of product profile based on innovation management, used in education process of
design engineers at Mechanical Engineering Faculty, University of Nis.

Key words: innovation management, new education model, industrial product development

1. INTRODUCTION therefore is an efficient and economical use of invention.

Innovation means successful new products, processes,
Nowadays, there are two tendencies in the world market services and organizational solutions. The study of Berth
[1]: domination of customers’ demands and market [3] (Fig.1) shows that the percent of success in
globalization. development of innovative products, processes and
Modern products must satisfy the customers’ expectations services, is actually very low.
and needs, down to the level of their individual
requirements, which raises product differentiation and
permanent innovation.
Increased competition in globalised market very
important to quickly launch various quality products.
In the last decade, product delivery time was reduced by
60%, demands regarding product quality and functionality
were increased by 50%, with a parallel increase of
competition in the market (by approximately 50%), which
in some cases radically reduced product cost. Within this
period, the products lifetime was reduced by around 20%
[2].
Nowadays, it is necessary to consider market needs,
customer wishes, competition, enterprise development
and manufacturing capabilities and draw conclusions
from these considerations in order to define the proper Fig.1. Less than 1% of ideas become innovation
product profile.
It is established that only 15% of product flops were Doctor Reinhold Bauer, historian of technology, found
caused by technical weak points of the product. The main that innovation fails due to technical problems, the
reason for market flop (85%) was lack of orientation specific competitive situation, a misunderstanding of the
towards the market (wrong target system) i.e. improperly potential users, and level of invention that is too high and
defined product profile. So it is clear that the proper unfavorable timing.
product profile definition has a decisive role on product The aim of innovation management is to achieve a better
success. understanding of product features, get successful products
In era when development and survival of an enterprise on fast, safe and economical way. New products
depends on productivity, quality, flexibility, monitoring guarantee a future benefit. Requirements presented to a
the speed of innovation and success of the project, there future product cause an increase of prices and risks,
should not be lack of understanding the terms such as challenging demands of development engineers and
"Invention and Innovation”. entrepreneurs.
Invention relates to the creation of a new product. On the Design engineers are not usually trained in innovations
other hand, innovation involves the use of knowledge and management, but due to reasons mentioned above it is
*Correspondence Author’s Address: University of Niš, Mechanical Engineering Faculty, Aleksandra Medvedeva 14, 18000 Niš,
Republic of Serbia, vojamiltenovic@yahoo.com
 Vojislav Miltenović, Jelena Milisavljević, Aleksandar Miltenović, Milan Banić: Definition of Product Profile Based on Innovation Menagment;
Machine Design, Vol.3(2011) No 1, ISSN 1821-1259; pp. 7-12

necessary to implement such education into current

curriculums. Paper presents innovation management
implemented into product development curriculum in
Mechanical Engineering Faculty, University of Nis and
summaries experiences of the education results.

2. SITUATION ANALYSIS

The introduction of innovative products, processes and

services is very complex and demands application of
integrated development approaches, which rely on up-to-
date development methods, processes and systems.
Implemented innovation management at Mechanical
Engineering Faculty, University of Nis focuses on
definition of product profile, as a critical point in product Fig.3. Competence star of the company
development process.
Beside the market analysis students are learnt to analyze 2.2. Product analysis
their own enterprise (capacity, division of labor and For successful realization of product it is necessary to
workflow), the product (features, supporting services and
analyze the product costs and its life cycle. Cost analysis
profits), project management, as well as entrepreneurs
includes cost estimate, which may be individual costs,
themselves (their experiences, intentions and goals).
overhead costs and special individual costs.
2.1. Company analysis
Each company should introduce various levels of
competence analysis, which includes targets (enterprises,
requirements and characteristics of the target market),
planning (guidelines and regulations, planning,
production and sales), process (flow work production
process and the administration flow work) and results
(circumstances, facts and situations).
The target level of company competence falls under
subjective assessment, while planning and process levels
can be assessed by objectivising methods. The results,
falls under objective assessment. Students are learned that
product planning starts with the target level. The direction
company analysis is from bottom to top (from results to
targets), while direction of operation of modifications is
performed from top to down (Fig. 2). Fig.4. Product lifecycle

Life cycle analysis (Fig. 4) allows the conclusion signs of

aging turnover rate of products. The course of the product
life cycle depends on many factors such as: investment
planning, development, production start, market
introduction, planning start, duration of development,
delays, market volume, market demands of the marketing
efforts, product, pricing, communication, distribution
behavior of competitors, market share, competitors'
products, etc.
Analysis of total turnover leads to the portfolio analysis.
Portfolio analysis is an instrument of strategic planning.
Results are displayed in a simple graphic representation of
Fig.2. Company competence levels
complex mutual relations. During the course in product
The company analysis is performed via the competence development students are trained in following analysing
star of the company (Fig. 3). Competence star is a tool for dimensions:
assessing tangible and intangible assets or chances of a  Market growth rate towards relative market share
company. Competence star is based on the principles of (Boston Consulting Group),
the competence level, competencies division in internal
and external issues, and subjective evaluation.  Market attractiveness towards relative competitive
The purpose of the stars competence is to have control advantage (McKinsey)
over the complex structure of the company and its  Competitive position towards phase of the product life
visualization features. cycle (Arthur D. Little)

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Vojislav Miltenović, Jelena Milisavljević, Aleksandar Miltenović, Milan Banić: Definition of Product Profile Based on Innovation Menagment;
Machine Design, Vol.3(2011) No 1, ISSN 1821-1259; pp. 7-12

lifecycle. As a matter of standard a product passes the

portfolio fields from Question marks over the Star and
Cash-Cows field to Poor Dogs. The company success
relies on Question marks and Stars because if there are
only cash-cows in portfolio matrix, the successors are
missing after these products have been discontinued.
Product analysis is performed not only the
abovementioned criterions, but product competences are
evaluated also. Again the competence star (Fig. 7) is used
again in order to locate the product strong and weak
points. The competence star of products is a “subset” of
the competence star of the company. As far as
Fig.5. Boston Consulting Group portfolio analysis emphasizing the product competences is concerned the
same is applicable as referring the company competences.
Portfolio analysis should define product position on the
market. Assess of the product status means to analyze the
appeal of applied technology, the position of the
competition, the appeal/market growth. The assessment is
based on objectivity, the reference for sale, reference
profit, a measure of objectification, a comparison of
product characteristics.
Visualization of product assessment is performed in
portfolio matrix (Fig. 6).

Fig.7. Product competence star

2.3. Planning of turnover and product

competence

Fig.6. Portfolio matrix

As it can be seen from Fig. 6 there are four fields in the

portfolio matrix:
1. Question-Marks: new products with weak position
and strongly growing activity
2. Stars: great market growth, important market share.
The revenues still must be re-invested for extending
the capacity
3. Cash-Cows: develop from stars in case of decreasing
market attractiveness. Growth investments are no
longer required; profits can be used for financing new
products
4. Poor Dogs: develop from unsuccessful question- Fig.8. The House of Quality
marks, failing stars or old cash-cows. Low market
share, low market attractiveness, low profits Î One of the most important thing students are learnt is that
strategy: withdraw! it is necessary to set innovative goals and strategies. From
Based on product position in the portfolio matrix there are the previous analysis stages they must be able to define
several possible strategies for determination of product what is to be achieved/ gained with a new product. Only
future, i.e. should it be withdrawn (Poor Dogs), kept the introduction of new products on has a market-
(Cash-Cows), promoted (Stars) or selected (Question medium-term effect on turnover. The long-term effect on
marks). Product portfolio matrix corresponds to product turnover is achieved by venturing in a new business area-

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 Vojislav Miltenović, Jelena Milisavljević, Aleksandar Miltenović, Milan Banić: Definition of Product Profile Based on Innovation Menagment;
Machine Design, Vol.3(2011) No 1, ISSN 1821-1259; pp. 7-12

In product planning One of the methods of product In definition of product profile it is uttermost important to
planning students are trained in is Conjoint analysis. The orientate the in regard to internal (technology) and
Conjoint Analysis shows, which combination of attributes external (market) factors.
a product must have in order to maximize the customers Orientation in planning at Mechanical Engineering
advantage. It enables the optimisation and modulation of Faculty, University of Nis is performed by Orientation
product profile even in saturated and new markets. matrix (Fig. 10).
A useful tool implemented at Mechanical Engineering Orientation matrix divides the „innovation world“ into 9
Faculty, University of Nis is Quality Function fields. The more distant the product profile from the
Deployment as it enables deduction of product origin is, the bigger are the risks.
requirements from the customers’ requirements. Incremental innovation occurs in adjacent areas of an
The House of Quality is the first matrix in a four-phase orientation and constitutes around 15% of all innovation.
QFD (Quality Function Deployment) process. It's called Radical innovations occur in remote areas of an
the House of Quality because of the correlation matrix orientation matrix on totally new market and a complete
that is roof shaped and sits on top of the main body of the new technology They include 5% of all innovation, but
matrix. The correlation matrix evaluates how the defined they are accompanied by total risk. Radical innovation
product specifications optimize or sub-optimize each can cause innovation/progress, meet the requirements of
other. customers who were not so far or have not been met
Target positions rival portfolio (Fig. 9) is used to position because of technical reasons.
own products compared to the ones of competitors and to
complete the actual presentation by expected future
positions.

Fig.10. Orientation matrix

Orientation decision for new product is not difficult as

Fig.9. Targeted portfolio matrix decision is already narrowed down by risk values in
orientation matrix. It is important to emphasis that in
Beside targeted portfolio matrix, students use the targeted product profile definition a technical solution is not yet
competence star in order to plan the targeted product required. Innovation strategy results from the decision for
competences. Target competences are abilities, one of the 9 fields in and depends on:
knowledge, means which are required for reaching the  innovation targets,
innovation targets. In that process it is neccessary to pay  innovation directives,
attention to how the competences are linked up, as they  innovation competences
usually depend on each other mutually. Competence mix Besides previously described tools and methods for
must be and stay in harmony; isolated improvement of successful definition of product profile, by innovation
single competence characteristics does not make sense. So management approach, students are trained in creativity
students than start with the weak product points when techniques, elaboration potential and social competences
making improvements, as those competences, which are in order to improve their competence profile prepare them
the most unpleasant, form the bottleneck. for realistic industrial environment.

3.1. New educational model implementation

3. DEFINITION OF PRODUCT PROFILE
experiences
Innovation directives are answering to main question in Since winter semester 2006/07, Mechanical Engineering
product profile definition - what directives does product Faculty in Nis implemented innovation management into
have to fulfill in order to secure the economic survival of design engineer’s education curriculum. An integral part
the company. They naturally include the target system of the course is a realistic development project defined by
definition, which in turn contains the requirements to a regional industry.
supplier and customer value. In addition, they also define One of the tasks of the project is to define the new
includes sales and profitability targets, investment and product profile, which was performed by application of
schedule as well as the innovation framework. tools and methods of innovation management.

10
Vojislav Miltenović, Jelena Milisavljević, Aleksandar Miltenović, Milan Banić: Definition of Product Profile Based on Innovation Menagment;
Machine Design, Vol.3(2011) No 1, ISSN 1821-1259; pp. 7-12

The project work, which is an integral part of education

model, produced patentable product developments, while
the product presentations were to a professional standard.

Fig.12. Student teams The Future Team and ABM

products

Fig.11. Student team WAFIPO and CFS prototype

It is observed that graduates of this subject, who carry out

their Diploma work in industrial companies, are able to
translate their knowledge directly and successfully as the
relevant feedback shows. Also the initial evaluation
discussions with Graduates of this module showed a very
good acceptance by all kinds of industrial companies. Fig.13. Student team The Innovators product

11
 Vojislav Miltenović, Jelena Milisavljević, Aleksandar Miltenović, Milan Banić: Definition of Product Profile Based on Innovation Menagment;
Machine Design, Vol.3(2011) No 1, ISSN 1821-1259; pp. 7-12

4. CONCLUSION [5] ALBERS, A., BURKARDT, N., MATTHIASEN, S.,

SCHWEINBERGER, D. “The Karlsruhe Model” - A
Based on previous it can be concluded that innovation Successful Approach to an Academic Education in
management provides a systematic approach to definition Industrial Product Development, Proceedings of
of product profile. Such approach decreases the risk of Engineering & Product Design Education
market flop as most of the market flops are related to Conference; University of Sussex, Brighton, UK;
poorly defined product profile. Such approach was also 2000.
implemented into education of design engineers at [6] ALBERS, A., BURKARDT, N., MATTHIASEN, S.
Mechanical Engineering Faculty, University of Nis. New education concepts for the training of creative
Integration of innovation management into curriculum engineers - The Karlsruhe education model for
increased the success rate of development projects industrial product development - KaLeP, Proceedings
performed by students in the course of Integrated Product of Engineering & Product Design Education
Development. Conference; University of Sussex, Brighton, UK;
2000.
[7] ALBERS, A., BURKARDT, N., OHMER, M. The
Constructivist Aspect of Design Education in the
Karlsruhe Education Model for Industrial Product
Development KALEP, Proceedings of International
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