FST 650 REVIEW

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FST 650 REVIEW
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Companies Need to Address Strategic Planning on
Several Levels
Mission Objectives
Identity
Mission Objectives
Company Strategy
Business Units
PRODUCT STRATEGY
Business Strategy

• Technical Competencies
• Strategic Principles

• Organization
• Alliances

Categories
PRODUCT PORTFOLIO STRATEGY
Portfolio Strategy
Brands

• Project Mix
• Milestones

• Resource Levels

PRODUCT DEVELOPMENT STRATEGY
Project Strategy

• Resource Allocations
• Technical Approaches

• Timing
• Deliverables

Projects
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To assure success, you need good strategic
management and good product development execution
STRATEGIC MANAGEMENT
PRODUCT DEVELOPMENT EXECUTION
SDG 8/18/95
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PRODUCT DEVELOPMENT ADDS VAULE IN SEVERAL WAYS
PRODUCT DEVELOPMENT
GROWTH
PRODUCTIVITY
BRAND
QUALTITY
IMPROVEMENT
MAINTENANCE

• Conformance
• Special Situations
• Regulatory
• Environmental
• Specifications

• Quality of Design
• Leveragble
• Competitive
• Advantage

• Line Extensions
• New Products
• New Packages

• Reduce Cost
• Formulas
• Packages
• Manufacturing
• Procedures

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BOOZ ALLEN HAMILTON NEWNESS MAP
Product Introductions
from
HIGH
700 Frims
11
20
Newness
to
26
26
Company
7
11
LOW
LOW
Newness to Market
HIGH
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PHASES IN CONSUMER PRODUCT DEVELOPMENT
Consumer Need
Company Objectives
IDEAS
SCREENING
Feasibility
Financial
Consumer
Studies
Review
Research
DEVELOPMENT
PRODUCTION
CONSUMER TRIALS
TEST MARKET
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UNILEVERS STAGE-GATING PROCESS
Value Chain
IDEAS FEASIBILITY
IMPLEMENTATION LAUNCH
K. Clark, Harvard
GATE 1 GATE 2
GATE 3
Establish Commit Major
Approval for
Project Resources
Launch
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MARKET RESEARCH OPTIONS
Depth Interviews
Qualitative
Focus Groups
Expert Judgement
Surveys
Product Use Tests
Concept Tests
Lab Test Market
Perceptual Maps
Test Market
Quantitative
Conjoint Analysis
Pre-Prototype Post-Prototype
Stage
Stage
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A matrix helps classify projects
HIGH (Gain Strategic Advantage)
NET PRESENT VALUE GIVEN SUCCESS
LOW (Maintain Competitiveness)
HIGH
LOW
Terminology from Strategic Decisions Group,
Stanford Univ.
PROBABILITY OF SUCCESS
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PRODUCT ATTRACTIVENESS SCORECARD

• Technical Risk
• Commercial Risk
• Strategic Fit
• Reward

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ATTRIBUTES

• AN ATTRIBUTE IS A PROPERTY OF A FOOD THAT THE
  CUSTOMER DESIRES
• MOST CUSTOMERS ARE LOOKING FOR MULTIPLE
  ATTRIBUTES IN A FOOD PRODUCT
• ATTRIBUTES ARE EXPECTED TO REMAIN CONSTANT
  THROUGHOUT THE SHELF-LIFE OF THE PRODUCT

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ATTRIBUTE EXAMPLES

• FLAVOR
• TEXTURE
• COLOR
• MOUTHFEEL
• APPEARANCE
• HEALTHY
• NUTRITIOUS

• LOW COST
• LONG LASTING
• NATURAL
• ORGANIC
• LOW FAT
• LOW CALORIES
• LOW SUGAR

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ATTRIBUTE PROFILE

• All attributes that contribute to a products
  acceptance should be identified and ranked in
  order of importance.
• Examples Taste, texture, color, nutrition,
  appearance, serving size, preparation, package
  material, size of graphics, name, keeping quality.

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FACTORS AFFECTING ATTRIBUTES

• FOOD TYPE
• INGREDIENTS
• TYPE
• AMOUNT
• INTERACTION
• ENVIRONMENT
• PH
• OXYGEN

• PROCESSING HISTORY
• TEMPERATURE
• SHEAR
• PACKAGING
• STORAGE CONDITIONS

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ATTRIBUTES MAY BE IN CONFLICT WITH ONE ANOTHER

• FREQUENTLY OPTIMIZING FOR ONE ATTRIBUTE WILL
  ADVERSELY AFFECT ANOTHER
• RECOGNIZE TRADE-OFFS EARLY IN DEVELOPMENT PROCESS
  -- A TWO YEAR SHELF-LIFE GENERALLY COMPROMISES
  FRESH FLAVOR

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LEARN TO RECOGNIZE ATTRIBUTE EXPECTATIONS FROM -

• PRODUCT TYPE
• INGREDIENT LABELS
• PACKAGING
• PACKAGE INSTRUCTIONS
• LOCATION AT POINT OF SALE
• SELL BY DATE
• ADVERTISING PROMISES

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PROTOTYPE DEVELOPMENT

• OBJECTIVES
• PRODUCT ATTRIBUTES
• FORMULATION
• PROCESSING
• PRODUCT ASSESSMENT
• DESIGN TOOLS AND OPTIMIZATION
• CONSIDERATION OF REGULATION COMPLIANCE

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FORMULATION

• THE HEART OF ANY NEW PRODUCT IS IN ITS
  INGREDIENT COMPOSITION
• INITIAL SCREENING AND FEASIBILITY TESTING
  REQUIRED
• SELECT A STARTING RECIPE
• TRANSFER TO A PRODUCT FORMULA
• TEST COMPATIBILITY WITH PROCESS

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INGREDIENTS

• IN ALMOST ALL FORMULATED FOODS, EVERY INGREDIENT
  WILL HAVE AN INFLUENCE ON BOTH THE PROCESSING
  REQUIREMENTS AND ON THE FINAL CHARACTERISTICS OF
  THE FINISHED PRODUCT
• NEED TO UNDERSTAND INGREDIENT INTERACTIONS

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INGREDIENTS

• SELECTED TO PERFORM A SPECIFIC FUNCTION - WHAT IS
  NEEDED?
• QUALITY APPROPRIATE TO PRODUCT
• MEET PERFORMANCE SPECIFICATIONS
• MEET SAFETY SPECIFICATIONS
• LEAST COST FUNCTIONALITY
• PROCESS ABILITY
• AVAILABILITY - CONSIDER JUST IN TIME

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PROCESS

• USE HURDLE CONCEPTS IN DEVELOPING THE PROCESS
• CONSIDER THE EFFECTS OF SHEAR, TEMPERATURE AND
  TIME ON PRODCUT ATTRIBUTES
• IN MANY FOODS EVERY STEP IN THE PROCESS MAY
  AFFECT PRODUCT CHARACTERISTICS
• ROLL OF PROCESSING AIDS

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PROCESS FLOW SHEET

• DEVELOP A PROCESS FLOW SHEET THAT INDICATES EACH
  STEP IN THE PROCESS
• INDICATE CONDITIONS FOR EACH STEP IN THE PROCESS
• WHAT ARE THE TOLERANCES FOR THE CONDITIONS?
• CONSIDER MATERIALS BALANCE - YIELD
• PROCESS CONTROL? RECORDS?

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PROCESS - EQUIPMENT SELECTION

• DESIGN - CLEANING AND SANITIZING
• SIZING
• IDENTIFY CRITICAL CONTROL POINTS
• DETERMINATION OF PROCESS/PROCESS INTERACTIONS
• DETERMINATION OF PROCESS/PACKAGE INTERACTIONS
• ACCEPTABLE VARIANCE IN PROCESS CONDITION

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PROCESS - PRESERVATION STRATEGY

• FRESH
• FROZEN
• DRIED
• INTERMEDIATE MOISTURE
• PASTEURIZED/REFRIGERATED
• STERILIZED/CANNED
• CONTROL OF OXIDATION

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PRODUCT ASSESSMENT

• EVALUATION OF QUALITY ATTRIBUTES
• SAFETY ASSESSMENT
• SHELF-LIFE ASSESSMENT
• REGULATION COMPLIANCE
• DETERMINATION OF ACCEPTABLE VARIANCE - CONTROL
  LIMITS

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HOW WILL ASSESSMENT BE DONE?

• WHAT METHODS WILL BE USED TO EVALUATE THE
  PRODUCT?
• ATTRIBUTES?
• SAFETY?
• SHELF LIFE?

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QFD -QUALITY FUNCTION DEVELOPMENT

• WHAT DO CUSTOMERS WANT
• HOW TO MEASURE WANTS
• TARGET VALUES REQUIRED
• COMPETITIVE STANDING
• SHORT TERM/LONG TERM STRATEGIES
• RECALL STRATEGY

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SCALE-UP

• IS COMPLEX AND NOT INTUITIVE
• IS GENERALLY A STEP-WISE APPROACH FROM LAB TO
  PILOT PLANT TO INTERMEDIATE TO FULL PRODUCTION
  SCALE
• REQUIRES CAREFUL ATTENTION TO ENGINERRING DETAILS

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SCALE-UP

• REQIRES TECNOLOGY ASSESSMENT
• LEARN ON A SMALL SCALE BEFORE YOU TRY TO PRODUCE
  ON A LARGE SCALE
• THE LAB AND PILOT PLANT PROVIDE DESIGN DATA,
  ENGINEERING METHODS FIRST INDICATION OF
  FORMUATION PROCESSING INTERACTIONS

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SCALE-UP

• REQUIRES COMPLETE UNDERSTANDING OF FACTORS THAT
  INFLUENCE PRODUCT CHARACTERISTICS
• CAN NOT BE DONE ON PAPER
• INVOLVES TECHNOLOGY TRANSLATION AND TRANSFER FROM
  RD TO PRODUCTION

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ENGINEERING CONSIDERSTIONS

• ESSENTIAL UNIT OPERATIONS
• SEQUENCE OF OPERATIONS
• USE OF DIMENSIONLESS NUMBERS - REYNOLDS, NUSSELT,
  PRANDTL, ETC
• EQUIPMENT AVAILABLE
• NEW EQUIPMENT OR PROCESSES REQUIRED

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PROCESS DESIGN CRITERIA

• NEEDED 6-12 MONTHS BEFORE COMMERCIAL PRODUCTION
  STARTS
• INCLUDES ALL DEVELOPMENT DATA AND INTERPRETATIONS
• INCLUDES TEMPERATURES, RESIDENCE TIMES, TYPES OF
  HEATING, AIR FLOW, MATERIALS, PUMPS, FLOW RATES,
  VELOCITIES, ETC.

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COMMERCIALIZATION

• START-UP
• SHAKE-DOWN -- EXPLORE PROCESS AND EQUIPMENT
  LIMITS -- LOOK FOR SUPRISES!
• PROCESS OPTIMZATION--NECESSARY TO CONFIRM THAT
  PROCESS HAS SCALED-UP PROPERLY

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BEYOND FORMULATION AND PROCESSING

• LABELING
• PACKAGING
• PRODUCT PERFORMANCE
• NAMING
• PRICING
• MARKET POSITIONING

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CONSUMER TESTING

• KEY TO THE SUCCESS OF ANY FOOD PRODUCT IS
  CONSUMER REACTION BASED ON
• -SENSORY ACCEPTANCE
• -PACKAGE ACCEPTANCE
• -PRICE ACCEPTANCE
• -WILLINGNESS TO PURCHASE AND
• RE-PURCHASE

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PRODUCT PERFORMANCE TESTING

• BASED ON IDENTIFICATION OF MAJOR ATTRIBUTES
• BASED ON IDENTIFICATION OF SAFETY FACTORS
• BASED ON IDENTIFICTION OF SHELF-LIFE FACTORS

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SEQUENCE OF PRODUCT TESTING
Product Development
Employee Testing
Guidance Testing
Expert Evaluation
Test Market
Market Research
National Roll-out
Marketing
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PROJECT LIFE-CYCLE PHASES

• 
  The Total Project
• Terminate

Concept
Develop
Test
Consumer Trials
Launch
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FINAL STEP

• UPON SATISFACTORY REVIEW OF ALL ASPECTS OF
  PROJECT AND APPROVAL OF THE EXECUTIVE BRANCH --
• LAUNCH!