A framework for developing, manufacturing, and sourcing trucks & equipment in a global fluid management industry

Abstract

Selecting and executing the optimal strategy for developing new products is a non trivial task, especially for low volume, high complexity products in a highly volatile global industry such as Fluid Management. At Fluid Management Corporation (FMC), Trucks and Equipment (T&E) that are used to deliver services both onshore and offshore currently follow a single product development model: In-house design; Outsourced prototyping, testing, and manufacturing. The objective of this research work is to challenge the status quo and to provide FMC with a practical framework that helps to determine the optimal development strategy. Rather than following a single development strategy for the entire portfolio of trucks and equipment products, the new methodology recommends a development strategy at a product functionality level and product feature level. Product development strategy is defined here using three dimensions: Design strategy; Manufacturing strategy; and Supply Chain strategy. Each functionality or feature is evaluated using a set of six criteria which then maps that functionality or feature to a specific recommended location on a three dimensional strategy cube. The set of evaluation criteria were derived from exploring and analyzing the current product development process, and from benchmarking world class companies from a wide range of different industries. The results show that for functionalities and features that differentiate FMC from its competitors and are viewed as core competencies, FMC should consider in sourcing the design, prototyping, and testing processes.

(cont.) These functionalities include blending, pumping, software development, and system integration. Similarly, for functionalities and features that are not viewed as core competencies such as transport units, storage, and power generation, FMC should consider outsourcing the development process including design.