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PEECKER VALUE CREATION |
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Product definition is a difficult and risky yet strategically key activity. It is the main process underpinning value creation thanks to the participation and involvement of all the "value-adding" Peecker Sound company departments.
The chart below illustrates the functional process and the flow of information between the various divisions of the Peecker Sound business unit - the long-standing subsidiary of the Sound Corporation group - and the market.
Analysis of the business model
The Marketing Department, in agreement with the Sales Department, studies the audio market (External analysis), interprets its requirements and drafts a preliminary document as a first step in system design.
It then analyzes the skills available in the Peecker Sound business unit (Internal Analysis) and, if an existing product passes the S.W.O.T. Analysis, it formalises the product concept (step 2) and the subsequent Marketing Plan (step 3) which defines the 4 Ps (Product, Promotion, Placement and Price) of the Peecker Sound Marketing strategy. The Marketing plan is then submitted for approval to the group's executive management, which, on granting approval, goes on to determine the overall budget for the development as well as the promotional launch of the product.
The R&D Department is made up of two well-defined areas, namely Applied Research, which focuses specifically on applying innovation to new Peecker Sound products and thus has clear commercial purposes, and Development, which is the logical continuation of the research process and focuses on the possible implementation of production through feasibility studies and by planning the necessary know-how. In particular, Development activities are subdivided in Product Experimentation (Prototyping, based on, among other things, Rapid Testing techniques) and Product adaptation to innovation, whether such innovation is generated internally by the Sound Corporation group or externally. The R&D Department thus works daily on the company's future product: it generates new know-how, develops it and experiments with it, and finally draws up a Detailed Design which is passed on to the technical staff of the Production Department who define the production processes and set up the relevant equipment (make the necessary adjustments for the plant to generate the new product).
The Production Department thus receives all the specifications of the new product to be made from R&D and, through preproduction verification and validation cycles, works out the "best" production process, i.e. the quickest and most effective (Engineering) process to mass produce the item. The relationship between the Production Department and the other company departments is strategically important from the point of view not only of the operational feasibility of the processes, but also of the time saved by pre-empting possible problems related to equipment, implementation and logistics.
To sum up, the output of the product definition phase (system design) consists of the following five essential components:
1. Design (final 3D drawing using CAD);
2. Material;
3. Intrinsic Quality (see below);
4. Reliability (estimated through FMEA analysis);
5. Cost (assessed in advance, based on estimates of production volume).
This crucial exercise in value creation is essentially grounded in the following two success factors:
1) the company's solid experience in concurrent engineering techniques and procedures, which ensure that the virtuous feedback loop of definition-prototyping-setup of production and validation is consistently successful;
2) a strong and efficient company IT system consisting of a distributed database accessible to all company departments (the company has made ongoing long-term investments in Information Technology since the early 90s when modern ERP systems were still rudimentary).
Note: the term Quality in this context means that "product characteristics match the product specifications" defined at the end of the system design process.
Learn more about Peecker Sound Quality |
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