Perspective: ten years of experience teaching a multi-disciplinary product development course☆ ★

The Journal of Product Innovation Management 19 (2002) 32– 45

PERSPECTIVE: Ten Years Of Experience Teaching A MultiDisciplinary Product Development Course夞多 William S. Lovejoya, V. Srinivasanb,* a

School of Business Administration, University of Michigan, Michigan, USA b Graduate School of Business, Stanford University, Stanford, CA, USA Accepted 17 August 2001

Abstract Integrated Design for Marketability and Manufacturing (IDMM at Stanford) is an Integrated Product Development course (IPD at Michigan) that is distinguished by hands-on manufacture of customer-ready prototypes executed by cross-disciplinary teams of students (MBAs and graduate Engineering and Design students) in a simulated economic competition against benchmark products and against each other. The course design is such that teams can succeed only by performing well in each of the marketing, manufacturing, engineering, and design dimensions. Student failure modes include adopting the wrong product strategy, failure to execute a sound strategy of producing a product that meets market needs, failure to drive costs down, poor product positioning and/or communication, poor forecasting and inventory management, and poor team dynamics. Instructors adopting this course model will face challenges that derive from its definitively cross-functional nature. The course involves faculty from Business, Engineering, and Design in a world where teaching load, compensation and infrastructural support is most often tallied on a unit-specific basis. The course requires faculty with broad interests in a world in which narrow academic depth is often more highly valued. Other challenges the course presents include maintaining a sense of fairness in the final product competition, so that students can move beyond the anger of a potential failure to learn from their experience. Also, in its current manifestations on the Stanford and Michigan campuses the course requires expensive general-purpose machine tools and instruction for students to build fully functional (customer-ready) product prototypes. We provide our current resolutions to these challenges, and the rewards for making the effort. In the end, the course’s survivability can be traced to the benefits it provides to all stakeholders: students, faculty, and administrators. These benefits include a course that integrates disciplines in a way that students believe will increase their integrative skills and marketability, a course that faculty can embrace as a vehicle for their own development in teaching and research, and that administrators find sufficiently novel and engaging to attract the attention of outside constituencies and the press. © 2002 Elsevier Science Inc. All rights reserved.

1. Introduction Integrated Design for Marketability and Manufacturing (IDMM) is a new product development course distinguished

夞 The authors thank Professor David Beach, Department of Mechanical Engineering and Ms. Sara Little Turnbull of the Graduate School of Business, Stanford University; Professors James Bean and Yavuz Bozer of Industrial and Operations Engineering, and Shaun Jackson of the School of Art and Design, University of Michigan for their outstanding contributions to the teaching of this course. We also thank the Alliance for Innovative Manufacturing (AIM) at Stanford University and the Tauber Manufacturing Institute (TMI) at the University of Michigan for financial support. 多 Visit http://webuser.bus.umich.edu/Departments/om/Lovejoy/JPIM.html for additional details regarding the Michigan and the Stanford courses. * Corresponding author. Tel.: ⫹1-650-723-8505; fax: ⫹1-650-7256152. E-mail address: [email protected] (V. Srinivasan).

by hands-on manufacture of customer-ready prototypes (rather than appearance models or basic functional models) executed by cross-disciplinary teams of students in a simulated economic competition (rather than competing via design jury or engineering performance metrics, or different teams working on different product domains). This course has run continuously for ten years at Stanford and five years at the University of Michigan. The course is called Integrated Product Development (IPD) at Michigan, and the IDMM/IPD moniker will be used here. This article, coauthored by instructors at Michigan and Stanford, reviews the course design, the critical success factors for the course, and the challenges and current resolutions for launching this or similar cross-functional ventures. The course’s survivability can be traced to the fact that all direct stakeholders (students, faculty, and administrators) derive benefits from it. These will be discussed in more

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detail later. Still, the course must face the same problems that confront new product development efforts in industry: it is essentially a row activity living in a column world. That is, the course is definitively cross-disciplinary and requires knowledge and involvement of faculty from several academic units. This is not easily accommodated in a world where teaching load, promotion/compensation, and support for resources are tallied on a unit-specific basis. In the next sections of this article we describe the course, its content and critical success factors. We then describe the course’s benefits to its stakeholders, and the challenges the course has faced (and continues to face), and our current resolutions. Concluding remarks appear in the final section. 1.1. Course description The objective of IDMM/IPD is to provide an experience in integrated (marketing, engineering, manufacturing, and design) customer-focused product development in a competitive context, and to enhance students’ ability to work well in teams of combined business, engineering and design expertise. The unique feature of IDMM/IPD is the evaluation of customer-ready prototypes on economic grounds involving large numbers of potential customers. In contrast, it is common in Engineering schools to hold design competitions in which student entries compete on some direct measure of performance (drop an egg three stories without it breaking, make a vehicle from cardboard that will carry you a designated distance, etc.). Such courses do not consider how valuable the products are to customers (that is, how much people are willing to pay to have them) or how much they would cost to produce. It is common in Art and Design schools to have design competitions in which student entries compete with appearance models. Such courses do not force the students to design products that can be easily and economically manufactured, that are guaranteed to work, or that will sell to real potential customers. Indeed, Art and Design faculty (like all faculty) may judge products based on different criteria than those used by typical consumers. It is common in Business Schools to hold competitions in which students make business decisions that are processed by a computer for their simulated economic consequences. These competitions are along economic grounds, but the complexities of product development and actual manufacture are rarely included, and there is little scope for including the emotional aspects of consumer responses to products (e.g., esthetics) and marketing communication, or to think outside the box (as defined by the computer program) in product design. There are also cross-disciplinary courses where different teams work on different product domains, in which case there is no common metric for direct comparison of effectiveness of different teams. Each of these alternative course designs provides valuable educational experiences, and is easier to deliver than the IDMM/IPD model. This partially explains their ubiq-

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uity. The IDMM/IPD model provides a richer product development experience, but is more difficult (and more expensive) to deliver. This partially explains its lack of ubiquity. Still, for a course design to survive for ten years in rapidly changing educational contexts with intense competition for resources, it must offer something of perceived value. The purpose of this article is to review our decade’s experience with the IDMM/IPD model and assess its strengths and weaknesses. IDMM was originally (in 1991) developed and delivered jointly by faculty from the Graduate School of Business and the School of Engineering at Stanford University, with the financial support of the Alliance for Innovative Manufacturing (AIM) at Stanford University (formerly known as SIMA, Stanford Integrated Manufacturing Association). At Stanford, the Product (Industrial) Design department resides within the Mechanical Engineering Department. In 1995 one of the principal instructors moved to the University of Michigan, where he recreated the IPD course model. At Michigan the course involves faculty from the Business School, College of Engineering, and College of Art and Design, and is supported by the Tauber Manufacturing Institute (TMI). Thus, in both institutions the course involves faculty from Business, Engineering, and Design and is financially supported by an organization dedicated to manufacturing education. The course does not utilize any sponsoring firms to avoid coordination delays and difficulties. However, commercial firms have purchased the rights for two of the new products developed by student teams, one in the wake-up systems category and the other in the camping lights category. Despite some differentiated evolution at Michigan and Stanford, the unifying themes outweigh the contrasts between the course models at the two campuses. Up to forty students enrolled in the course are divided up into teams of four (sometimes five at Michigan) students each with balanced representation among the participating disciplines, namely, second year MBAs; graduate engineering students (mostly mechanical, product design, and industrial engineering); and graduate students from the school of art and design at Michigan. Each team acts as an independent firm in a common prespecified product market, competing with other teams in an integrated exercise of market research, product design and development, product manufacture, marketing communication, and market competition. At the beginning of the course the teaching staff announces a product category (for example, bicycle lighting systems or automobile “clutter butler” organizers), a market size (for example, one million units/year will be purchased industry-wide), and two benchmark products from the current market, one on the high price/high features end of the spectrum and the other on the low price/low features end of the spectrum. The teaching staff chooses the product category (rather than the students) in order to provide a levelplaying field for all teams, to keep down the time needed to develop customer-ready prototypes (students tend to sug-

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gest exciting product categories without realizing the implied time commitment), to ensure that machinery for prototyping is available, and to speed up the front end of the course. This tactic leaves intact much of the market needs assessment, concept generation and selection tasks in the “fuzzy front end” of product development. For example, with “bicycle lighting systems” student teams still have to decide if they will launch a “to see” product or a “to be seen by others” product, or try for both. These choices need to be made by considering what problems people face with existing products, what functionality will be valued (by how many?), and what technological and time constraints will allow. The trick is to provide a product category definition (supplied by the teaching staff) broad enough to allow such flexibility, but narrow enough to enable meaningful market research. For instance, “portable water filter” is defined as “a device for filtering water when camping in places where the water quality may threaten your health.” The product category definition includes both water filters (that filter out giardia and bacteria) and water purifiers (that eliminate viruses in addition to giardia and bacteria). The product category is chosen by the teaching staff based on the following considerations: (1) relevance for the customer population (for the most part, university graduate/ undergraduate students) within a reasonable price range, (2) ability to represent the product (in large part) by features or attributes, (3) ability to manufacture, for the most part, by the prototyping machinery available, (4) opportunities for design in functionality as well as esthetics, (5) potential for excitement to students, and (6) expected time to build customer-ready prototypes. The following product categories have been used in the past: can crushers, citrus juicers, bicycle lighting systems, travel mugs, portable camera mounts, bicycle pumps, camping lights, wakeup systems, automobile ski-racks, portable water filters, CD storage units, automobile clutter butlers, and laptop hard copy holders. Students begin with qualitative consumer research, that is, one-on-one interviews with potential customers and retail salespersons, and product domain research by examining alternative product offerings and available technologies. As a result of these investigations, the class as a whole decides which five or so product features are most important in driving consumer choice, and designs a full-profile conjoint analysis [5] market research survey instrument to assess the importance individual customers attach to different features. Each team is charged with interviewing 30 or so respondents and turning their analyzed data in to the instructors. The results from all teams, which include several hundred respondents, are pooled to identify market segments and the relative values of alternative features to each segment. The data are also used to calibrate a market simulator that can predict the market share response to alternative designs (attribute specifications) and pricing decisions. In parallel with these activities, the students receive instruction on marketing basics (e.g., market research, positioning,

marketing communication), design methods (e.g., need finding, brainstorming, user testing), manufacturing (e.g., structured methods, design for manufacturing), team dynamics, and general purpose prototyping tools (e.g., CAD, CNC, manual lathes and mills, plastic vacuum forming, fused deposition modeling). After qualification for safe operation, students have access to these machine tools to prototype their products. We mostly follow a “just-in-time” teaching method where lectures are immediately relevant to completing some aspect of the product development project. The choice of “just-in-time” content delivery was motivated by the instructors’ intuition (verified by our experience since) that students under extreme time pressure will focus great attention on things for which they have an immediate need, but invest less in techniques promising more remote returns. Students see lecture/discussion not as just “academic,” but immediately relevant to the project. We believe this enhances student learning. Student teams must brainstorm for potential concept ideas, choose which market segment(s) they wish to appeal to, choose their feature set and price point, and design and manufacture their customer-ready prototype. Teams must source their own materials and document the manufacturing process for their product in detail. A costing model connects student design and manufacturing decisions to the anticipated cost of the product in mass production. The cost models are sufficiently detailed to induce appropriate design behaviors (e.g., use standard parts to avoid special costs, minimize part count, avoid unnecessary complexity, make judicious trade-offs on material cost and performance, etc.). The cost of each product along with an inventory stocking (volume) decision are sufficient to determine each team’s total cost of goods sold. To determine revenues, a large number (over one hundred) of the respondents originally surveyed in the course are invited back to a “trade show” in which students promote their products alongside the two benchmark products. (Employees of firms selling the benchmark products promote those products at the tradeshow.) The trade show incorporates aspects such as marketing communication, esthetics, usability, product integrity, craftsmanship, design semantics (how easily the product communicates its use), and other features/functionality not incorporated in the earlier product attribute-based conjoint exercise. Other members of the community are also invited, but the participation of original respondents encourages consistency between the market survey data and the assessment of the final products by the trade show attendees. Teams choose their retail price and design a presentation to effectively communicate the differentiating features of their product to the trade show attendees. Attendees are asked to listen to the marketing communication of each team, visit each student table, and then list their purchase preferences. The fraction of first place votes garnered by a team is its sales potential, which is awarded providing inventory is available. (In the Stanford version, 60% of the market share is based on tradeshow

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results, and the remaining 40% is based on the earlier product-feature based conjoint simulation.) If a team “stocks out” of inventory then its lost sales are diverted to the second place preferences of attendees who listed the stocked out product as their first choice. The known price and the eventual sales earned by each team, after potential reallocations due to stockouts, generate the team’s revenues. Student teams are evaluated and graded based, in part, on the profits they generate. There are some differences between the courses as they are delivered at Michigan and Stanford. At Michigan, the students compete in a parallel web channel (new since 1999) and have to design a web site for their product (this is in addition to the physical trade show). The customer base for the web channel is composed of Tauber Manufacturing Institute program alumni, who are invited to log in and vote. The profits generated via the web channel are combined with those generated through the physical trade show to determine final team profits. At Stanford, students present their products in two parts, first by a 3-min video or skit, and second in a booth format. At Stanford a detailed activitybased costing model is used to connect process designs to product costs, whereas Michigan relies more on commercial “design for manufacturing” software (from Boothroyd-Dewhurst, Inc.) for some processes (injection molding, die casting, and forming). Finally, the Stanford course runs across two quarters (20 weeks), but the Michigan course is 14 weeks in length. However, in both cases, the total course credit is twice that of a normal course. Overall, the similarities outweigh the differences between the Michigan and Stanford models, confirming the transportability of the course. The above differences are the result of different faculty teams evolving their course(s) over many years on two campuses, but starting from a common course framework and philosophy. The result is a course that has a surprising chemistry, unleashing strong passions, allegiances and great energy among students and faculty alike. As the IDMM and IPD differences show, there are many potential variations on the common thematic underpinnings for this course. 1.2. Course content The primary learning in the IDMM/IPD course occurs in an experiential mode through the new product development project. As remarked earlier, all teams develop products in the same product category. The primary advantage of this approach is that the class as a whole (not any one team) can generate a large amount of customer level data to provide a reliable metric to measure team sales. Likewise the cost model is common across all teams. Consequently, we are able to obtain common metrics by which teams’ performances can be objectively judged on customer acceptance, costs and profits. Another advantage of this approach is that it engenders competition across teams, giving students a

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dose of the reality that they will face when they leave school, and increasing the energy level for the whole class. The Stanford course outline in a graphic form is shown in Fig. 1. The arrows on top display the deadlines and interim presentations built around deliverables to ensure steady team progress. Lectures/class discussions and labs take place, for the most part, in the early part of the course. The course does not use a text book, but several readings are included. Course content delivered in the form of lecture/ discussion consists of (i) marketing and customer research, (ii) manufacturing, (iii) design, and (iv) teams. These broad areas are interspersed in the early part of the course to drive home the point that in order to succeed in a new product development project, all these areas are essential. The entire teaching staff is present for all the class sessions, so that they can comment on a topic from the other areas’ point of view. 1.3. Marketing and customer research The basics of marketing in terms of the 3 C’s (customer, competitor, and company), and the 4 P’s (product, price, promotion, and place, i.e., distribution) are discussed first. We follow this with a detailed discussion of the importance of market segmentation, with special emphasis on benefit segmentation (different customer segments desiring different benefits). Product positioning in terms of what the product’s unique selling proposition is and for which consumers, and the importance of communicating it succinctly are emphasized. In terms of customer research, we start with qualitative market research (focus groups and one-on-one interviews) with an assignment to conduct one-on-one interviews with customers in the product category chosen for the year. Conjoint analysis [5] is discussed in detail. Students learn how to design a full-profile conjoint study with a commercially available software, Conjoint Designer [1]. They collect data from customers regarding preferences for hypothetical product options, analyze the data using Conjoint Linmap [2], and conduct computer simulations to predict customer reactions to hypothetical new products vis a vis competitive products. The simulations also permit the students to price the product for profit-maximization. The use of conjoint analysis with products described in terms of features or attributes runs the risk of incremental thinking. However, students understand that the ultimate sales for their product in the tradeshow would be decided by the overall appeal of their product including unique features, esthetics, their marketing communication and so forth. It has been our experience that products very different from existing products in the market are commonly chosen by the teams. We are often impressed by the variety of new products introduced in the same product category. It is interesting that equal-sized teams that start with the same data, the same cost model, and the same set of tools end up with a considerable variety of new products.

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Fig. 1. Integrated designs for marketability & manufacturing 2000.

Some important aspects such as product launch strategies, securing retail distribution, and financing the new venture are not included in the course for the sake of keeping the focus on product development, and to keep the course scope manageable. 1.4. Manufacturing Structured design methods such as the Pugh Concept selection method, value analysis, quality function deployment, and design for manufacture and assembly are discussed. The teams tend to use the concept selection method for selecting the one or two finalists from a list of ideas brainstormed by the team. An introduction to manufacturing processes is conveyed through five lab sessions at the machine shop with students (both MBAs and engineers) working on lathes, milling machines and CAD/CAM. (It turns out that a majority of (even mechanical) engineers had not worked on such machines prior to the course!) We hold a class session on costs and their importance for profitability. The lecture on production planning and inventory control (using the “news vendor model”) is delayed until the students need to make production/inventory decisions.

1.5. Design The importance of observing (and videotaping) the use of the product in its natural setting is emphasized as a method for “need finding.” We hold a session on brainstorming as a formal method and emphasize the rules needed to make it productive. We conduct a lab session on building rough prototypes with simple tools. As the teams iterate through the product design with more functional models, we discuss the relevance of design semantics (the product readily communicating its method of use) and user testing of prototypes in the environment where the product would be used. 1.6. Teams The IDMM/IPD model uses self-selected teams with the constraint that each team should have a balanced representation of the cross-functional fields (e.g., two MBAs and two engineers at Stanford). The teaching staff could have assigned team memberships, but we believe that would encourage students to attribute relative team performance more to the assignment of team memberships rather than their own decisions regarding product development. We also believe that team dynamics issues would be more often

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Fig. 2. These images are on the homepage for the web channel competition in IPD 2000. They show five different team entries into the “automobile clutter butler” product class. These products are designed to hold and/or organize some or all of those items that typically lie around loose in the front seat of a car, and are difficult to find and/or access easily as needed. Potential consumers could click on each image and link to the team’s web site, which describes the product’s features. When customers have viewed each site, they would register their “buying preferences” by linking to a ranking form.

resolved within the team (rather than percolate up to the teaching staff) if the team is self-selected rather than assigned. To aid the team formation process, we hold two student mixers at the very beginning of the course with structured exercises that allow students to observe and get to know each other. We also use a structured questionnaire (see Appendix) asking each student to list their skills, experiences, and goals, and the resulting questionnaires are distributed to the whole class. At Michigan, students post their relevant data to the web and interactions are initiated from there. After the teams are formed, we hold a class session on team dynamics issues. Later in the course, we hold another session on team dynamics issues where each member of a team first expresses their opinions of how the team is functioning, and how each member of the team contributes to it. The whole team then discusses how the contributions of individual team members, and the performance of the team as a whole can be enhanced. At Michigan, these later sessions are not formally required, but an anonymous questionnaire is used so that the instructors can detect potential problems. 1.7. Integration The product development exercise integrates the consumer research, marketing, manufacturing, design and team aspects of the course. To measure progress, we schedule interim presentations with an expectations document for each presentation. These presentations to the teaching staff are not open to other teams, although we believe, based on a limited amount of experience, that the later interim presentations (not the initial concept/prototype presentation) can be opened up to the whole class with some positive benefits. Integration also takes place at Stanford (not at Michigan) through the guidance of the design consultant of the course and through each team’s product development advisor (volunteers from product development firms in the nearby area). The final class periods in the course are for

team presentations on lessons learned in product development and team development. 1.8. Grades For the Stanford version of the course, 30% of the grade is based on the profits in the market competition, 20% on considerations other than profit (e.g., creativity, risk-taking, commitment and energy, product integrity), and 20% on the product development process as judged by the four interim presentations. The above 70% is a team grade, common to all members of a team. An additional 20% is a team participation grade, that is based on each team member grading confidentially all other members of his/her team. The final 10% is based on homework assignments, prototyping lab exercises and participation in class discussions. Although the Michigan version of the course grade differs in detail, it is philosophically similar.

2. Achieving cross-functionality IDMM/IPD is definitively cross-functional by building in at least one critical failure mode in each of the underlying disciplines. No single discipline, no matter how arduously applied, can lead to success for an IDMM/IPD team. Teams can fail by: 2.1. Choosing the wrong product strategy Fig. 2 shows the web channel home page with five “automobile clutter butler” products launched in the fall of 2000. Each team could have targeted any set of potential clutter problems (CD’s, cell phones and PDA’s, trash, fast food, sunglasses and garage door remotes, etc.). The Stylo product focused on just one usage, cell phones, while the others targeted multiple clutter problems. The remainder of the Stylo effort was exemplary, including its design integrity, low manufacturing cost using extrusions, and an out-

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standing trade show display. However, the feature set was simply not competitive relative to other more fully featured products. The Stylo team doomed themselves far upstream in the design process with an uncompetitive product strategy. 2.2. Failure to execute an otherwise good product strategy and generate a perception of quality/ durability/reliability In one year teams competed with “portable camera mounts” for use while hiking or camping. One team’s design was based on a repeated theme of triangular crosssections. The product folded up into a light and compact form, yet opened into a mount capable of holding something as heavy as a video camera 12” in the air. Unfortunately, the team did not count on the very tight tolerances needed to prevent wobbling in telescoping sections. Despite the fact that the user’s camera was quite safe on this product, the slight wobble gave the perception of lack of precision and quality, and lost ground with customers. This sort of reaction is commonplace as students find that crudeness in design integrity or manufacturing execution will compromise the impression they leave on consumers at the trade show. 2.3. Failure to drive down costs Teams often focus too much on revenues and not enough on costs. Market research and consumers’ willingness-topay come first in the investigative process, and time constraints sometimes force teams to launch “something” with the desired feature set without the benefit of design iterations to drive costs down without compromising customer preference. This phenomenon is not unknown in industry. Students learn the hard way something that should be obvious, a dollar of reduced cost goes right to the bottom line whereas only a fraction (gross margin) of a dollar increase in revenue goes to the bottom line. It is commonplace for products to win on market share and revenues but lose on profits. Teams help themselves greatly by coming to early closure on major design details, leaving time for multiple iterations to refine the product concept and attend to the details of material selection and manufacturing.

on laptop computers in airplanes or other locations lacking horizontal surfaces. One team designed a beautifully polished, precision product but for some reason chose a comical presentation on the web and at the trade show (the team even wore fake plastic black glasses at the show). The product came in second, but most observers agreed that it would have dominated had it presented a more professional, high-end image. A second failure mode is that well-functioning products suffer in the market because the marketing communication is so muddled that consumers can’t figure out what exactly the product does well. By the time student teams launch their product, they are so invested in it that they want to tell the world about every detail, and they expect the world to listen with rapt attention. Students have to learn what not to say, which is most of the story they are dying to tell. Consumers need to know quickly and succinctly why they should buy a product. Teams need to focus on the two or three most important things to say, and make that statement in an engaging way quickly and clearly. Finally, a campaign should anticipate and respond to customers’ doubts about the product’s functionality. In the “clutter butler” product category (Michigan IPD 2000), the winning team did not have the slickest presentation, but they arguably had the most effective one. The product was a free-standing box with partitions (the Versacube in Fig. 2), and the doubt they laid to rest was the product’s stability while driving. The team had a “crash test” in which customers could roll the product on a small trolley into a solid wall. Customers could also throw the product onto an uneven surface, and team members danced with the product on their heads. This presentation reflected a solid grasp of the market, because it responded to the major reservations raised in many one-on-one interviews conducted by the team: will the product remain stable in a fast moving car? 2.5. Poor esthetics Some teams delay esthetic considerations to the end hoping to wrap the product in an esthetic shell, but such efforts often do not succeed. On the other hand, almost every year, there are one or more products which succeed, in part, because of their esthetic appeal.

2.4. Poor product positioning and communication campaign

2.6. Poor usability

A great product that solves problems for consumers will fail if nobody knows how great it is. The communication strategy used on the web or at the trade show needs to be effective for the team to succeed. There are at least two failure modes here. The first is positioning the product in the minds of consumers. One year teams designed “laptop hard copy holders” to hold paper copy for road warriors working

A team that designed a product knows how to work the product. When the user gets the impression in the tradeshow that the product is difficult to use, its ratings suffer. Teams that have iterated through the design process, with real users testing earlier versions of the product in the environment where the product would be used, have often performed better.

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2.7. Poor inventory management A team that could have come in first sometimes falls to second place or below based on poor inventory stocking decisions. Teams must pay for all of their inventory, and are granted no salvage value for inventory remaining. (In the Stanford version, salvage value is one half of the cost.) This, and the fact that teams lose sales by understocking, places great emphasis on knowing a product’s potential sales and stocking accordingly. In some years, a team loses first place because they either understocked and gave away millions of dollars in sales or overstocked and ate millions of dollars in extra costs. 2.8. Poor team dynamics The above are all “task-oriented” activities. That is, they are things that need to be done to launch and sell a product. In parallel with this task-oriented process is the process of interaction among team members. Managing team dynamics among people with varied backgrounds and perspectives is an important part of the course. A team with an alienated member basically runs on three cylinders (rather than four) and is less likely to succeed. Not getting along well with each other is not necessarily a “failure mode” because, interestingly, it is not always the team with the smoothest dynamics that wins, or even does well. People are too complex to succumb to simplistic prescriptions like “the best team wins.” Some teams that agree on everything and like each other immensely fail to develop the tensions needed to critically question their decisions. Some teams that do not get along very well do quite well in the competition (but they do not enjoy the experience). On the other hand, teams with major interpersonal problems fail to provide the constructive energy needed to succeed. This IDMM/IPD reality reflects the current state of academic understanding, where the correlation between positive team dynamics and member satisfaction is clearer than that between positive team dynamics and performance.

3. Key ingredients of the IDMM/IPD model It is apparent that critical failure modes occur in each of the marketing, manufacturing, engineering, design, and team dimensions of IDMM/IPD. This is not very common in modern college coursework. Many college courses strive for a cross-functional perspective, but it is very difficult for one instructor to bring all of the needed expertise to the table. The critical question to ask is, can any one discipline, if applied very diligently, lead to success? If the answer is yes, then the course is not really cross-disciplinary. In IDMM/IPD teams cannot succeed by being outstanding in any one of the disciplines in isolation, all are needed. In addition to the definitively multidisciplinary nature elaborated above, other critical features of the IDMM/IPD

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course model are the actual manufacture of customer-ready prototypes, and economic competition. 3.1. Hands-on manufacture In IDMM/IPD student teams must produce “customerready prototypes,” a term coined to refer to a prototype product (that is, there may be just one in existence) that is ready for the retail shelf and accurate in its materials, form, functionality and durability. The only compromises allowed are those that derive from the limitations of the prototyping tool set, but the prototype (in relation to the ultimate massmanufactured product) should be similar in customer perception and product performance. For example, teams may machine two plastic parts and glue them together, but incorporate in their costing analysis (Michigan model) that a single more complex plastic part will be injection molded. This is because we include milling machine tools in the prototyping tool set, but not injection molding. Threaded fasteners and other commodity items can be outsourced, but teams must manufacture the heart and soul of their product. Shop instructors are available for consultation. This is an expensive dimension to the course. Lathes and mills are more costly than foam core and glue, but are needed to shape the metals and plastics that teams use in their customer-ready products. Meeting this expense is one of the administrative challenges the course faces (more on this later). We consistently ask students how important this dimension of the course is, and consistently are told that it is essential. Some students tell us that they are “designing while machining” (i.e., ideas for improving design arise during fabrication). For many students this is the first time that they have manufactured anything, and the experience builds an appreciation of how hard it is to actually make something. It is not uncommon for teams to brainstorm grandiose product schemes. However, after one week in the shop simplicity emerges as a virtue. It is not the case that these students will ever be skilled machinists or make their living in that fashion. However, developing an appreciation for the processes of manufacture and a respect for the shop floor personnel who execute the plans of managers is an important feature of the course. Both IDMM and IPD are sponsored by programs dedicated to developing manufacturing managers, and general purpose machine tools are at the roots of manufacturing industrialization. Students do not, in general, leave the course with polished skills. Rather, they leave with an enhanced comfort level in the root environment essential to what a manufacturing firm does. This is one of their most valued take-aways. For students who are not focused on manufacturing careers, the use of general-purpose machine tools (and their attendant costs) may not be essential. What would a course look like that focused on software design, or services? The essential ingredient in the IDMM/IPD model may not be the

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use of lathes and mills, but rather forcing students to personally manage the translation of their ideas into a fully functional reality. The devil really is in the details, and dealing with the details of making an idea manifest is an essential feature at the heart of the course concept. The course has been referred to as “a dinghy sailing experience in preparation for a trans-pac race.” 3.2. Economic competition IDMM/IPD teams compete on profits. This is essential to force the kind of tradeoffs (design, features, cost, price, quality) that professionals must make in practice. Profit competition forces teams to go beyond a determination of which features consumers might appreciate in comparison to competition, to assess how much consumers are willing to pay for those features and how costly it will be to provide them. Products that do not provide valued functionality, cannot be efficiently manufactured or launched at an affordable price, or do not perform as designed are destined to lose. These are the core issues in the success or failure of new products in any business venture, and are core ingredients of the course. The difficulty is in making this operational in a course environment where no actual money changes hands. In IDMM/IPD students design their own manufacturing processes and we use detailed costing models to connect those designs to the presumed costs of manufacture. To assess the revenue side of the equation, early iterations of the course used panels of experts (for example, designers, faculty, and buyers for retail stores were tried) to judge products, but with limited success. Students, all of whom were convinced that their product was the best, discounted the idiosyncratic musings of individual judges, regardless of their pedigree. This prevented students from moving beyond the anger generated if their product “lost,” and hence muted a significant opportunity for them to admit and learn from their mistakes. The instructors eventually adopted the trade show format. In this, large numbers of potential consumers are invited to review and rank the products as if they intended to purchase one that evening. If 100 individuals tell a team that their product is not as desirable as the competitors’ products or benchmark products, the team has to admit that they might have a point, thereby beginning the learning process. Failures remain painful, but the instructors cannot become too involved in advising teams about their choices. Teams that learn lessons the hard way are less likely to forget them. Also, the environment is relatively benign. The only things at risk in the course are pride and a part of the course grade. Students who learn hard lessons in IDMM/ IPD may avoid similar pitfalls later, when real jobs and large sums of money are on the line. These, then, are the essential ingredients at the heart of the IDMM/IPD model for new product development: essential multidisciplinary nature, hands-on manufacture and

economic competition. In the next section we describe the keys to the course’s survival.

4. Survivability and benefits to stakeholders No course will survive for long unless all direct stakeholders (students, faculty, administration) benefit. These benefits, in turn, can derive from the advantages the course offers for secondary stakeholders (alumni, industrial sponsors, employers of the student graduates). Below we discuss these benefits from the IDMM/IPD course. 4.1. Deans and administrators The IDMM/IPD course concept is sufficiently novel and engaging to attract the attention of external constituencies. Deans and administrators benefit from the external visibility that the course can give their programs and schools. CNN, The New York Times, The Economist, and The Wall Street Journal as well as local TV in San Francisco and press in both Palo Alto and Ann Arbor have covered the course. Industrial advisory boards to both AIM and TMI have been very strong supporters of the course, for both philosophical and practical reasons, and the course is used to cultivate additional potential sponsors. One TMI industrial advisor told the program directors that the course saves his firm six months of training for new hires in new product management. At Michigan, TMI also uses the web channel competition to keep alumni involved in the program. By logging in and voting in the web channel, alumni of the course can revisit their experience and at the same time reinforce a connection to TMI. 4.2. Students Students in the course benefit both practically in the integrative and interdisciplinary skills they develop, and by gaining a differentiating discussion point in job interviews. The course concept and outline is easily communicated and is naturally exciting to most business-savvy recruiters. Students have resisted moving the course out of the fall semester because they want to benefit from it in job interviews. It is difficult to quantify the marketability and job performance advantages of the course, but anecdotal evidence is abundant. The professional advantages for taking the course are real enough to be supported by rich word-ofmouth among students. This is necessary, because the course is very time-intensive (approximately 50% more time commitment for the same number of course credits) and without student confidence in the returns for their invested time the course would lack enrollment. Students who are interested in entrepreneurial careers tell us that they also value the course for providing them the experience of a start-up company.

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At Michigan, the faculty liaison in Art and Design sees the course as one of the very few opportunities his students get to face the full range of design challenges (including business and engineering) before taking jobs with design firms. In fact, design firms (e.g., IDEO at Stanford and Sundberg-Ferar at Michigan) have participated in the course on a volunteer basis in part to find good graduates and in part because the professional designers enjoy the holistic approach of the course, which reflects their reality. The teaching assistants for the course are mostly from the engineering side of the university. Many of them have benefited from exposure to the business side and the learning of market research tools. On one occasion, we had a business doctoral student as a teaching assistant; the experience influenced him in a significant enough way to write a dissertation on product development with IDMM-based insights [3].

academics and product designers now appreciate the value of both types of research. With the emergence of the world wide web as an alternative sales channel, the question naturally arises of the relative strengths and weaknesses of virtual representations versus the “touch and feel” of physical artifacts. IDMM/IPD provides a natural setting in which to investigate that question. Dahan and Srinivasan [4] make such an empirical comparison using data from IDMM designed products. Because many parallel teams compete within the same broad guidelines, the course provides a natural quasi-experiment within which to generate and test team dynamics hypotheses. Student responses to team dynamics survey forms are currently being analyzed for their team dynamics content [6].

4.3. Faculty

5. Challenges and current solutions

Participating faculty benefit from IDMM/IPD in both teaching and research. Effort invested in mastering all aspects of the course pays dividends in teaching confidence and personal breadth. Again, it is difficult to quantify these advantages, but this has been the experience of involved faculty to date. Both authors are significantly more confident in their (many) presentations to MBAs/Executive Education audiences as a result of mastering the teaching of this course. This confidence comes not from a more detailed understanding of a specific technique, which can derive from traditional study, but from a more comprehensive understanding of the place for that technique and its relative importance in the overall product design effort. Also, observing many student teams struggling with this holistic process calibrates one’s research agenda by identifying the important choke points for better product design and development. Since product strategy is the first potential failure mode, students are naturally anxious to know how credible the formal market surveys are in predicting actual consumer responses downstream. Since all teams conduct early conjoint analyses and then, later, achieve market shares bestowed by potential consumers, the course provides a natural experimental context to address that question. The results, that attribute-based conjoint simulations can explain roughly half of the variation in downstream consumer response, were published in the Journal of Marketing Research [7]. IDMM/IPD has also helped to make clear the distinction between market research and user research; whereas the former is more survey-oriented (such as conjoint analysis) to predict customer reaction, the latter is observation based. Studying the customer’s use of the product in his/her usage environment suggests ideas for modifying the product to enhance the usage experience. The result is that marketing

Like its cross-disciplinary counterparts in industry, IDMM/IPD faces challenges on a departmentally divided campus. Some of the key challenges and our current resolutions are listed below. 5.1. Too high a cost The IDMM/IPD course is very costly in several ways. Students end up spending approximately 50% more time on this course than other courses with the same number of credits. The result is that their other courses and other aspects of life tend to suffer. Fees to cover the instruction and a part of the machine shop overhead (borne, in part, by the student and, in part, by the school) are approximately $400 per student. The cost of building prototypes and preparing the tradeshow materials is exclusively borne by the students and this, on average, amounts to $125-$250 per student depending on the product category. (On the other hand, there is no need to buy textbooks for this course.) Likewise the faculty’s workload on this course including the many teaching staff meetings to coordinate the course is significantly higher than a singly taught course. We estimate that the time commitment per faculty member is 50% greater for this course compared to other courses with the same amount of teaching credit. The teaching staff at Stanford consists of two faculty members, a design consultant and two TAs. (In addition, each team has a professional product designer from the nearby area to serve as a volunteer product design consultant and mentor for the team.) At Michigan, the teaching staff has two faculty members, and one TA (but no additional product design consultants). Both students and faculty believe that IDMM/IPD is a high benefit, high cost course.

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5.2. Teaching load Team teaching is a problem when contractual teaching load is measured by the number of courses taught. It is well-known among faculty teaching cross-functional courses that coordinating with another faculty member incurs considerably more overhead than managing a course single-handedly. Two faculty that cooperate on course delivery, each getting credit for teaching half a course, essentially double their workload for the same pay. On the other hand, deans’ offices facing escalating costs for faculty resources will not, long-term, support a course model that requires that full credit be granted to each instructor. That would, essentially, halve their available teaching capacity without reducing cost. There are several potential resolutions to this problem. First, if the course is intensive enough to warrant higher credits for students then there are more available teaching credits to distribute. Second, straddling disciplines can finesse the teaching credit issue if each department perceives sufficient benefit for their students to contribute a full faculty member, despite the fact that this may be politically difficult within any one unit. IDMM/IPD partially benefits from both of these mitigating circumstances, but still requires more work per credit of load from faculty than standard courses. Another potential resolution was almost implemented at Michigan. This was a new university accounting system in which a student’s tuition money went to the courses he/she took and not necessarily to his/her home academic unit. Hence, a course that incurred higher costs could still justify itself if it attracted a sufficient number of students (from any discipline). That accounting system was discussed but not implemented at Michigan, for a variety of reasons. The instructors have also considered a “hub and spoke” course design in which a core, hands-on activity (such as designing, building and costing the prototype) is surrounded by individual course modules (e.g., market research, engineering design, industrial design, process economics, or team dynamics) that are run as regular courses with regular instructors. Students use the core activity as a hands-on, integrating laboratory for the module courses. This can involve more than a few instructors in a manner compatible with conventional teaching contracts and accounting systems. This model has not been fully explored, but a trial balloon at Michigan did not fare well. In 1999, the course added graphic design students who took the course as a hands-on addendum to a regular web-design and industrial image course in the Art school. Some of the graphic designers integrated well with the IPD teams, but a sufficient number did not, to disrupt the flow of the course. The graphic designers were focusing on different ends (creating a flashy product for their portfolios) than the IPD teams (straightforward communication to maximize sales). Several graphic designers reported that their “part time” status prevented them from being fully integrated into the IPD

team. This stood in contrast to the industrial design students, also from the Art school, who were taking the IPD course as an end unto itself and integrated naturally and constructively with their teammates. It is possible that the IDMM/ IPD experience is sufficiently intense that an “in group/out group” phenomenon arises, in which part time involvement compromises the essential chemistry of the course. 5.3. Faculty time investment and vulnerability to turnover Any truly cross-disciplinary course will likely require knowledge that is not resident (at the start) in any one faculty member. Hence, teaching the course effectively requires practice and study, even for faculty. The first problem with this is getting faculty to accept the additional burden. We know of no better resolution to this than finding faculty who get intrinsic rewards from learning new material, and volunteer out of interest. The second problem with the learning curve is that an entirely new faculty team cannot easily handle the course without start-up problems. There is a great deal of tacit knowledge from teaching previous iterations of the course. The best resolution to this is to always have at least two faculty members who are willing to invest fully in the course and whose windows of commitment to the course do not expire simultaneously. Unfortunately it is easy, given the demands of the course, to neglect to invest in this “insurance” until it is too late. As with most endeavors, it is easy to get so involved in the near term that longer range planning suffers. Planning beyond the start-up phase to the steady state and an exit strategy would yield great dividends. The entire faculty team that initiated the course at Stanford became fully conversant in its content and delivery, so that the departure of one of the principals to Michigan did not disrupt the course. However, further backup bench strength has not been cultivated on either campus, leaving the course vulnerable. Both coauthors are senior faculty who are increasingly relied upon for leadership in many aspects of their departments, and their diversion by those alternative obligations (or anything else) is both increasingly likely and would put the course at risk. It is prudent for instructors, early on, to inform the primary administrative stakeholder (e.g., TMI and AIM) of a window of time over which they are committed to the course and to anticipate an exit strategy after that time. This makes it a joint obligation of the faculty and the administrative stakeholder to find new faculty willing to take over the reigns of the course. The situation at Michigan is illustrative. The impending sabbatical of the Michigan coauthor will require that the course be shelved for one year. This was a foreseeable situation, and yet it has initiated a minicrisis and the (belated) investment of real energy to find new faculty for the course. With forethought this could have been done earlier, but was not. Forward planning for the potential departure of

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principal faculty is especially important for a course such as IDMM/IPD, in which experience with the course can make the difference between a troublesome or smooth delivery. 5.4. Expensive machine tools Business school deans are not used to courses that require capital-intensive laboratory equipment. Engineering, and to some extent Art, schools are more accustomed to such courses, but generic machine tools are not easy sales to potential donors who tend to prefer flashier investments. Consequently these resources are often in short supply, with barely enough capacity to serve the required courses for existing students (undergraduate Mechanical Engineering courses, for example). Hence, these are scarce resources, so that time on these machines is valuable and must be paid for. At Stanford the course must help support the Mechanical Engineering shop at a computed fair rate in return for time and instruction on the machine tools. At Michigan, the ME shop is severely capacitated and the IDMM/IPD instruction is outsourced to a local community college that has an extensive machine shop and instructional staff, at a cost of approximately $400 per student. In both cases, the course must pay for the resources it uses. Hence, deans and/or administrators will perceive abovenormal costs for an IDMM/IPD course in the form of lab fees and shared overhead. At Michigan, this additional cost is borne by the TMI program for TMI students. Most art students are not members of TMI, and every year the instructors have to seek dean’s office support or ask the students to pay for themselves. So far, there have been ready takers. It would be better, however, if there were a sustaining fund that could support the hardware needed for the course. At Stanford, the Alliance for Innovative Manufacturing (AIM) provides a significant part of the funding for the lab part of the course. This problem would be greatly reduced if the course required less expensive tools. Already there are times when less than half the student teams use the heavy machinery. Vacuum forming, sewing, and hand manufacture play a significant role in prototype production, and do not require expensive tools. The required tool set can be controlled to some extent by the choice of problem class (for example, laptop computer carrying cases would suggest fabric/sewing solutions). A course in which students design software or services, or other products not requiring expensive manufacturing tools, can be envisioned. Such a course would reduce the cost of IDMM/IPD in their current forms, yet could retain the essential ingredient of forcing teams to bring ideas to fully functional reality. The Michigan and Stanford courses have not gone this route, yet, because of their dedication to manufacturing education. Alternative models, however, can be considered without sacrificing the course’s core philosophy. A software-based IDMM-like joint business/computer science course was offered for the first time at Stanford in 2001.

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5.5. Selling the course to academic councils While the students get instruction in some formal market research methods and the economics of manufacturing processes, the course does not pretend to substitute for full semester courses on each of these topics. Rather, it is the integrated use of these and other methods in a hands-on design environment that is the hallmark of the course. In many ways, the real take-aways from the course are the integrative, tacit knowledge that students develop as they try to put all of the academic pieces together into a successful whole. This can be difficult to defend to academic curriculum councils who are used to more traditional measures of content. It is apparent to participants that the course experience provides benefits for most aspects of their jobs, whether in industry or academics. This requires explaining to nonparticipants charged with the important task of defending academic rigor in the curriculum. The course would probably not have survived on either campus if it were just marginally successful. The devout allegiance of students, faculty, administrators, and external stakeholders bought the course time to establish itself. The course outline is an important communication device in managing the course’s perception by faculty charged with curriculum oversight. Since faculty not involved in this course may not fully understand its benefits, some compromises may be required to satisfy their interpretation of academic content. For example, at Michigan the students tell us that the Quality Function Deployment module does not add a lot of value in their small-team environment, and the students would prefer another more task-oriented topic. The module is there more to have a critical mass of “academic content” than because it is, as currently delivered, valued and remembered by the students. Such compromises are the consequence of operating in an environment with multiple perspectives on excellence, and are to be expected. We opted for conservatism, expecting that traditional value systems may prompt criticism. As the course is getting off the ground, erring on the side of too much traditional content instead of too little is prudent. Once the course is on its feet, it sells itself and erstwhile detractors begin to understand what it is and does. That is, time itself reduces the significance of this hurdle. 5.6. Economic reality in a fair and credible manner Attaching costs to a customer-ready prototype, sufficient to achieve the goals of the course, is not very difficult. The costs have to be credible enough to generate student buy-in and teach them robust design trade-offs, but need not be accurate in every detail. Because teams compete with the same cost guidelines, there is an “IDMM/IPD reality” that all teams need to deal with. Choosing materials and manufacturing processes in the face of that reality is key. This key ingredient is the same at Stanford and Michigan, although the details of execution differ. At Stanford, “Accounting Guidelines” are used that connect levels of complexity in

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prototyping to predicted costs in mass production. At Michigan, a combination of simple models and commercial designfor-manufacturing software (from Boothroyd-Dewhurst, Inc.) is used for this purpose. On both campuses, all teams are alerted to the costing rules, and all attempt to choose processes and materials to satisfy customer needs at minimum cost. Evaluating revenues is more difficult, because it is akin to predicting sales of new products. This is known to be difficult in practice, and there is no better way than to survey potential customers. IDMM/IPD adopts this method to predict market share for each product, as described in an earlier section. Inviting hundreds of potential customers and staging a trade show costs approximately $1,000/year. However, as explained earlier, we have found this to be essential to the success of the course. 5.7. Competition or cooperation? Business students and faculty naturally embrace the reality of market-based competition with teams trying to keep essential design ideas confidential. In design circles, however, cooperation is embraced as a way of producing products that combine aspects from several teams’ ideas. This is a natural tension in the course, and recently we have provided the option where a team may choose to make some of

its interim presentations public to other teams. Likewise, the connection of grades to profits is naturally accepted by business students and faculty while resisted by design students and faculty. Cross-functional product development, not surprisingly, is cross-cultural as well. 6. Conclusions The IDMM/IPD course is one example of a visible and successful cross-disciplinary course that has been taught for ten years. Administrators, faculty and students all perceive themselves to be better off with the course than without it. This fundamental fact allows the course to succeed, despite the many challenges that face cross-disciplinary education on departmentally divided campuses. The purpose of this paper is to review those features most critical to the success of the course, and to describe how the instructors currently manage the challenges it has faced. It is our hope that this experience helps others faced with similar problems and opportunities to succeed. Appendix: team formation information Please use this form to share some information about yourself with your classmates. Your information will be available to all IDMM students in order to help with team formation.

Appendix: team formation information Please use this form to share some information about yourself with your classmates. Your information will be available to all IDMM students in order to help with team formation. Name: Dept/Program: Hometown: How many hours a week do you plan to spend on IDMM per week? List some of your strengths. Choose form the following list, or think of other strengths. Facilitating, Motivating, Morale Building, Organizing, Analyzing, leading, Doing, Presenting, Strategizing . . . I consider myself to be a: ______ Jump Starter

______ Time-Management Guru

______Crunch-Time Wizard

Your education (including schools, degrees earned, years, and majors): Work/Professional and Related Experience: With respect to the following areas of the IDMM course, where is your experience and what are your interests? Engineering design experience: Engineering design interest: Esthetic design experience: Esthetic design interest:

______ little ______ little ______ little ______ little

______ average ______ average ______ average ______ average

______ lots ______ lots ______ lots ______ lots

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Shop work experience: Shop work interest: Cad/cam experience: Cad/cam interest: Purchasing experience: Purchasing interest: Cost accounting experience: Cost accounting interest: Market research experience: Market research interest: Marketing/sales experience: Marketing/sales interest: Team leading experience: Team leading interest:

______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little ______ little

______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average ______ average

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______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots ______ lots

Other things I would like my classmates to know about me (goals in taking IDMM, how you work under pressure, style within a team, etc.)

References [1] Conjoint Designer, Version 3, New York (NY): Bretton-Clark, 1990. [2] Conjoint Linmap, New York (NY): Bretton-Clark, 1989. [3] Dahan, Ely. Essays on Parallel, and Sequential Prototyping in New Product Development. Unpublished Ph.D. dissertation, Graduate School of Business, Stanford University, March, 1999. [4] Dahan E, Srinivasan. V. The predictive power of internet-based product concept testing using visual depiction and animation. Journal of Product Innovation Management 2000;17:99 –109.

[5] Green, PE, Srinivasan V. Conjoint analysis in marketing: new developments with implications for research and practice. Journal of Marketing 1990;54:3–19. [6] Lovejoy WS, Anderson S. Dynamics and structure in new product development teams. university of Michigan business school, working paper (in preparation), 2001. [7] Srinivasan V, Lovejoy WS, Beach D. Integrated product design for marketability and manufacturing. Journal of Marketing Research 1997;34:154 – 63.