Best manage your design risks

Manage your design risks

after China's accession to the WTO, multinational enterprises have stepped up the pace of occupying the Chinese market, developing new products for China, the emerging market with the greatest potential and the fastest development, and occupying the commanding height of profits and the high end of the industrial chain. As a result, Chinese enterprises are facing a worse market environment and more severe challenges. Once upon a time, Chinese local enterprises, which have not been established for a long time, were often criticized for their outstanding manufacturing capacity and low technology and design capacity. The disadvantages are insufficient core competitiveness, low product value content, low product profit, large resource consumption, and difficult to establish a brand. The current product innovation of Chinese enterprises is also undergoing a fundamental change. In the 2006 China enterprise product innovation survey report, the analysis clearly pointed out that the market demand has been diversified, and the competitive advantage comes from differentiation. Product innovation design is the way to shape the core competitiveness of enterprises. New products should be accepted and recognized by the target consumer groups, and achieve the predetermined sales goals, profit-making goals, market goals and brand building goals

statistics show that even in the United States, where the market economy is highly developed, the production of non-ferrous metal enterprises with successful new product development is generally stable and the normal rate is not high

design innovation decisive victory

both technology and design have one thing in common, that is innovation. In the view of hezhiqiang, senior vice president and chief technology officer of Lenovo Group, design is innovation and the constant pursuit of new possibilities. This concept is also one of the reasons why Lenovo has turned the industrial design center into an innovative design center. We define design as:

1. Identify the key points of interest that the product should provide to customers

2. Add great investment attraction and development efforts to position these interests for competitive products

3. Develop tangible products, marketing strategies and service policies to realize these key interests

enterprises attach importance to design, and the most direct purpose is to obtain greater market recognition through products and promote product sales. As for how much benefit a design can bring to the enterprise, yaoyingjia, general manager of Lenovo innovation design center, believes that it is difficult to quantify in detail, but foreign statistics show that every $1 invested in design will bring at least 10 times the value-added to the enterprise. Design brings not only tangible value-added of enterprises, but also intangible assets, including the promotion of brand value. After Lenovo Tianxi computer came into the market in 1999, it was very popular because it was an innovative product, and the design of one button flying shuttle made it easier for users to use it. Coupled with the innovative business model and service model, Tianxi has become a popular product. By 2000, Tianxi had created an output value of 3.75 billion yuan for Lenovo, which also helped Lenovo rank first in PC sales in the Asia Pacific market in 1999 and become one of the top ten in the world. At the same time, it increased Lenovo's share price in Hong Kong by 100% over the same period. Another innovative product, Tianjiao computer, received an order of 25000 units on the day of listing due to its novel design and unique functions. If one set is calculated at 10000 yuan, its sales revenue will reach 250million yuan

risks follow everywhere

it is undeniable that when everyone flocks to innovative design as the golden key, potential problems and threats are around us. Although successful innovative design brings rich returns to product manufacturers, when new products are often introduced to the market, it is bound to be accompanied by the risk of whether they can be recognized by the market. If design is an innovative activity and development for the future market, there are many uncertainties about the target consumer groups, competition and price changes in today's market. Innovation risks naturally remain high. Even the world's famous manufacturers may not be able to boast without breaking the golden body

the product promotion cost of American manufacturers is far greater than the product development cost, and the cost ratio is 1:6

according to the statistics of relevant institutions, even in the United States, where the market economy is highly developed, the success rate of new product development is not high: the success rate of new product design and development in consumer industry is 50%, the success rate of industrial trial production of new products is 45%, and the success rate of market consumption of new products is 70%. Finally, the overall success rate is only about 16%, and most of the new products in the United States are improved, and a few are brand-new products. Statistics show that new products that really fill the gap in the world account for 10%. In the cost of new product development in the United States, the cost of product promotion is far greater than the cost of product development, and the cost ratio is 1:6. It can be seen that the success of new products is not only a matter of investment in R & D costs, but also involves and determines greater investment in manufacturing, marketing and other links

therefore, strengthening the risk control of new product development, reducing the risk of new product development, improving the success rate of product development, and managing the product development process through effective means and process control are increasingly urgent and important topics for the rapidly changing market environment

focus on risk management

risk is the possibility of loss. This possibility and the resulting loss are called risks

risk is the probability of loss. The possibility of loss occurring within a certain time or range. The probability of loss can only fluctuate between 0 and 1. This meaning of risk indicates that we should strive to break through the qualitative analysis of the loss in a batch of key new materials within a certain range, while the probability of loss emphasizes the quantitative analysis of the possibility of loss

risk is a potential loss. Potential losses are losses that may occur but have not yet occurred or will never occur. This is an unintentional, unplanned and unexpected reduction in economic value

risk is the uncertainty that leads to loss. This includes two very important factors: loss and uncertainty. Due to the contradiction between the limitations of people's subjective cognitive ability and the complexity of objective environmental factors, people can't know exactly when, where, what kind of loss will occur and the degree of loss, which leads to risks. The meaning of risk is related to people's subjective psychological state. In the process of product development, due to the uncertainty of designers, decision makers and relevant personnel about the needs, understanding, cognition, preferences and product development trends of target customers in design activities and design decisions, as well as the decisions and design activities made on the basis of some uncertain information, new products are not accepted by target consumer groups after they are put on the market, resulting in financial, market The possibility of loss in terms of brand

design risk management is a series of procedures to reduce design risk at the least cost. To manage risks is the requirement of people's innate attitude of avoiding risks. Design risk management means that the project leading group can effectively control the risks involved in project activities through risk identification, risk estimation and risk evaluation, and reasonably use a variety of management methods, technologies and means on the basis of order, take initiatives, create conditions, maximize the favorable results of risk events, properly deal with the adverse consequences caused by risk accidents, and ensure safety at the least cost, Achieve the overall goal of the project reliably

design risk identification runs through the whole process of product design. From early design research and design positioning to design scheme selection and evaluation, it is inseparable from design risk identification. Every step in the risk management process is indispensable

in order to get rid of the dilemma of risk through effective risk management and reduce pure risk at the least cost, risk managers must follow certain steps in risk management. Risk management is a scientific method to deal with risks. A logical and progressive step is of great significance to its effect:

from the risk management flow chart, it can be seen that the design risk identification of new product development is the first step of design risk management. Design risk identification refers to the discovery and classification of uncertain factors that may cause market risks in specific design projects according to their own resources and experience and based on corresponding methods and procedures. Design risk identification runs through the whole process of product design. From the early design research and design positioning, to the selection and evaluation of design schemes, it is inseparable from the identification of design risks. Every step in the risk management process is indispensable

from the perspective of project management, risk control and management is one of the important functions of project management, so all efforts and work should be to ensure that the project successfully achieves its goals as the ultimate goal. Therefore, the risk control of the design project should be consistent with the progress of the design project. Even in the product planning stage, the relevant matters and links of risk control and management must be taken as an important part of the plan according to previous experience and information. The mainstream workflow, all kinds of decision-making methods, all kinds of creative methods and all kinds of research methods formed by years of practice are powerful guarantees and optimization procedures for preventing and managing risks. At the same time, we should also rely on the established process and system to ensure the completeness and scientific extension of risk management, and the deformation will also increase and be systematic. This is particularly beneficial to protecting our current enthusiasm for innovation. (end)