Product development

What is the challenge?

Research and development processes around product development include market and target group analysis, creation of specifications and target cost and price definition, or implementation and testing phases. The challenge lies in the nature of product development itself, which can be characterized by many uncertain variables and high investment risk. However, increasing market dynamics require fast and successful product development. To align this as optimally as possible with the customer, co-creation with (industrial) customers is also playing an increasingly important role in product development. This brings its own challenges in knowledge transfer and interpretative uncertainty (e.g. different expertise, culturally induced misunderstandings, local distribution of partners).

What data can help?

• Customer data and market data on demand for products at specific prices or with specific characteristics
• Experimental and survey data 

How can companies use their data?

Market, usage, and customer data can provide clues to new customer needs and thus guide product development. Digital prototyping using software programs is used to develop digital twins of future products and simulate their behaviors in specific application contexts and make adjustments. The benefit here is faster and more cost-effective anticipation of product behavior and identification of potential errors. In the area of joint product development between manufacturing companies and (industrial) customers, digital solutions (e.g. applications with augmented and virtual reality) offer new potential for optimizing co-creation in order to develop products that are as relevant to the market as possible.

Where is this use of data already being applied?

In the research area “Advanced Materials & System Research” the chemical group BASF develops new structural materials, dispersions and functions. For this purpose, experimental data are created and linked with customer data. This makes it possible, for example, to create tailor-made coatings. 

Car manufacturer Jaguar is using survey data to involve its customers more closely in the development process for its cars. To this end, they are questioned verbally and in writing before and after purchase. This survey data is incorporated into the product development of new car models and the further development of existing ones.

The software company Autodesk offers solutions for all phases of data-supported product development. For example, “Autodesk 3d Max” can be used to integrate images and interactive videos, or the “Autodesk Simulation 360” software module can be used to create simulations of digital product twins.

Automation solutions company AH Automation AB relies on collaboration with its industrial customers to shape product development using digital solutions. VR applications are used to jointly design and optimize new automation products.

The vehicles of the automotive manufacturer Daimler AG actively collect data (e.g. on distances and speeds) while driving and evaluate it in real time. This data basis is used to develop new driving assistants and product modules such as the DISTRONIC distance assistant.

How does this use of data contribute to value creation?

The use of data in the sub-steps of product development provides increased transparency and an improved basis for decision-making. Uncertainties and investment risk can be compensated and the probability of success of the new product launch on the market can be increased. This strengthens existing value creation and can generate or optimize new value creation around the new product. By using digital solutions or data sharing with customers, the customer relationship is also strengthened.  

Sources: BASF (2017), Niessing, J. & Henry, B., Harvard Business Review (2018), Autodesk GmbH (2020), Kostis, A. & Ritala, P., California Management Review (2020), Daimler AG (2017)