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Product Strategy Provides Competitive Advantage at Regal Marine

Product Design at Regal Marine Case Background Regal Marine boat manufacturing company is a luxury boat that was founded by Paul Kuck. In 25 years, Regal Marine has become the largest company in the industry to three in sales. Regal Marine lot do export to more than 30 countries including China, and Russia. Regal Marine boat boat manufacturing company is a luxurious stylish and competitive. Regal also has joined with other independent boat makers score in American Boat Builders Association. Through economies of scale in procurement, Regal was able to navigate to the billion-dollar competitor Brunswick (makers of Sea Ray and Bayliner brand). Luxury boat ship industry face challenges which developments in materials used to make the boat very fast and customer tastes are also very quick to change. According to Paul Kuck, Regal Marine always involves a customer in the design process and launch a new model is about 6 per year. This causes function design of Regal Marine in a very big pressure to move quickly so that it can meresponse change a change in the ship's boat luxury market. This pressure coupled with the price issue which should be considered to keep products Regal Marine remain competitive. Typically, the life cycle of a product ships boat is about 3 years, so Regal Marine have continued to release new models models to stay competitive. A few years ago, the newest products are three passengers $ 11,000 Rush, a small but powerful boat ship capable of pulling jet skis. Then, followed by a 20-foot long boat boat inboard-outboard with many innovations that won numerous awards from industry. The new design is 40 feet long boat ship Commodore which has 6 spacious rooms. On the basis of reasons reasons above, Regal Marine utilizing Computer-Aided Design (CAD) software. With the help of CAD, design function of Regal Marine can make very realistic 3D models. By utilizing CAD, manufacturing process design, prototyping, and production could be accelerated because of the ease of CAD. The architects from Regal Marine no longer has to be hard hard to design the ships boat manually and avoid problems with the tooling and production, so that it could better focus on product design. Regal Marine also invites suppliers in the design phase to improve innovation and quality as well as speed up the production process of the product. According to the Regal, the

Product Strategy Provides Competitive Advantage at Regal Marine


initial design phase of a suppliers involved in, the faster the Regal Marine could put out new products to the market. After going through the process of creating the concept and style, CAD design released the specifications of the product. The first step of the production process is the establishment of a "plug" made of stereofoam and used to make moulds for the manufacture of Hulls and Bows of ships. The specifications of the CAD is used to form a mold. Manufacture of mold takes 4 to 8 weeks and the manufacturing process is manual. This mold prints will be used for making boat boat Regal Marine. All products from Regal Marine through the production process of the same/similar. Hulls and Bows produced separately by pouring a mold with fiberglass laminate as much as three to five layers. Once hardened, Hulls and Bows removed and be part of the bottom and top of the boat. Later, Hulls and Bows will be taken to another workstation and combined with other sections follow the assembly line. Workstation-workstation follow the concept of Just in Time (JIT) so everything is fast and effective.

Problem Identification Regal Marine have always wanted competitive and provide the latest model to the customer with a good quality and competitive price. Due to the technological developments in terms of material and entertainment in a ship that is growing very rapidly, Regal Marine should be able to make the design process more effective so that the boat ship can provide products that can follow the development of the industry. In the luxury boat ship industry, product life cycle is relatively short that is 3 years old. Manufacturers are required to be able to create new products when there are new technological developments or new materials. If you missed it, the company could lose a customer. Therefore, Regal Marine design process requires up to production can be done quickly in order to immediately issue a new product to market. Design is a very important Step was done because the product life cycle of a model ship boat for only 3 years. If time runs out too long in the design phase, the development of new technologies would make the company a loss because it was downloading ghabiskan the money and time to develop a model but once ready market trend turned out to be marketed has changed. The design must also be made in accordance with the wishes of the customer so that it could be accepted by the market. Of course it is not easy to know

Product Strategy Provides Competitive Advantage at Regal Marine


exactly what is desired by the customer. Prototyping is very helpful so that architects could display the form from the design to the customer. But of course the process of prototyping is expensive and if you don't get the proper design will lead to the process of prototyping is done over and over and time consuming. Price competition is also very important in industrial ships boat. Regal Marine would like to provide products at competitive rates to customernya. Of course, to achieve this, one solution is to make savings in the design process. But, Regal Marine also wanted to keep the quality of the resulting design to deliver a better product to customernya. Formulation of Problem Solving Regal Marine require solutions to accelerate the design process of their products so that they can always be competitive against market. Luxury boat ship industry is an industry that has a very fast technological development both in terms of features and materials used. This causes the product life cycle from the boat is very short which is 3 years. Plus more, the price given is for a ship's boat was also charged for always competitive so that it can compete with other products in the market. To fix this all, Regal Marine design process needs to make them effective for not too much money and time spent to make a product. SWOT Analysis In the company of Regal Marine boat-making enterprise or high-quality certainly has the power, the weakness of business in developing or implementing conduct of business, opportunities, and threats-specific threats. The following SWOT analysis against Regal Marine: Strength : have a great branding in the market of luxury boat so that its products known in the foreign countries Overrun Weakness : too specialized to ship a luxury boat market and has no market in the country is strong enough Opportunities : market in the country and a cheaper boat ship can be developed by Regal Marine. Regal Marine boat boats can make the boat that targeting the middle-class market and make products with longer life cycle and produce with lower costs by reducing the time design, production time, improve processes and use of alternative materials and products.

Product Strategy Provides Competitive Advantage at Regal Marine


Threats : Regal Marine boat vessel continued making fancy every year so that if the economic crisis occurred could be just the customernya don't want to buy again and will cause the Regal Marine suffered severe losses Product Life Cycle Product life cycle describes the birth of a new product up to the end of a product that it says are long. The picture below shows the four stages of the life cycle and their relationship denganpenjualan products, cash flow and profit, along the life cycle of sebuahproduk. Note that usually a company have a current kasnegatif when companies develop products. When a product successfully, makakerugian can be resolved. Even a successful product can produce life cycle keuntungansebelum the decline. Nevertheless, the advantages of rapid berlaludengan. Therefore, there is a continual demand for new products. As a manager of operations should be ready for new mengembangkan produk, they should also be prepared to develop a strategy for produkbaru and existing products. Periodic testing products are needed to be done, because the strategy changed along with the change of the product through its life cycle. A successful product strategy requires that the best strategy for setiapproduk assignment based on its position in the life cycle. The following review several options strategies as walking across the product life cycle.

Product life cycle can be divided into four, namely: 1. Introductory Phase (Introduction) The initial phase is of a product where the product still has high manufacturing costs and also sales of his not too high because not many people get to know the new products released. This lead to a phase in the introduction of this product its

Product Strategy Provides Competitive Advantage at Regal Marine


products have yet to produce a profit for the company. This phase is the most appropriate moment to raise the market share to make penetration so that sales can be increased. The process the process in the production of very important and often change due to adjustment-adjustment. In this introductory phase, the quality of the product and must be kept so that it could take care of customer. 2. Phase Growth (Growth) Is the phase where the product begins to evolve and start having sales. In this phase, the product began to be known by the people as well as the production process of the product have already begun steady so that sales can be increased and production costs could start to decline. This led to the forecasting of sales becomes very important to be done properly so that the inventory level can be adjusted to ensure the demand of the product can always be met. In this phase, too, manufacturers faced the challenge to innovate with respect to its products and also prepare to increase its production capacity. The distribution process should also begin to be prepared in this phase to make sure its products could be distributed to the customer. 3. A Phase Of Maturity (Maturity) In this phase, the product has been very well known by people so it becomes important to continue to keep the price and quality of the product. In doing so, the market share of any product can be preserved. At this phase the product is drastic changes will not occur. The capacity of production of the product has reached the maximum. The Sales volume of the product in this phase to achieve maximum dank arena production processes have been stabilized, the company began cutting costs could do to make the process more effective. 4. Phase Loss (Decline) Is the last phase of the product life cycle where the product begins to decline in terms of sales. In this phase, the budget control becomes important to ensure that costs stay awake so that companies can still get the profit. In this phase, the company should focus in order to keep the cost of the produki products because in this sales downturn phase of products will also be decreased. Production capacity should be reduced to avoid starting over supply which resulted in excess stock.

Product Strategy Provides Competitive Advantage at Regal Marine


Each year, Regal Marine launch up to 6 new models to the market with an estimated threeyear life cycle. This led to the design process becomes extremely important because if blocked will cause stunted growth and maturity phases so Regal Marine will continue to suffer losses. With the help of CAD, Regal Marine can accelerate the design process prototyping production because the design process can be done digitally. With the help of CAD, there are several advantages to be had by Regal Marine: 1. The time it takes to create a design to be shorter because no longer have to manually create a design 2. Design becomes more easily understood by others as a 3D model be established so that designers can be more innovative 3. Revisions revisions can be quickly carried out and no cost 4. The quality of the product can be enhanced due to the design of more understandable by the supplier 5. The availability of data in softcopy and hardcopy so easy if you want to reuse 6. Reduce the dependency of designer tools problem stationery to design because it's all done via CAD 7. Lower the stress from the designers With these advantages, advantages Regal Marine can make the process of product design to be more effective in terms of cost and time. Expected by using CAD, Regal Marine could put out products faster and cheaper costs so it can give more satisfaction to the customer. Another Strategy from Regal Marine in the production process is involving customer and supplier in the design of the product. Engaging the customer make Regal Marine understands what is wanted by the customer. Suppliers also involved to help in the design process so that designers and suppliers understand the description of the products is to be achieved. This is according to the experience of Regal Marine to make them able to produce products with better quality and faster in the manufacturing process of design to production.

Product Strategy Provides Competitive Advantage at Regal Marine


Case Problem How the concept of the Product Life Cycle are applied on products Regal Marine? Product Life Cycle concept is applied by Regal Marine introduces innovative new products and high-quality each year.with the emphasis on speedproduct life cycleas a product strategy diferentiation. By utilizing CAD, Regal Marine strives to continue to cut the time and cost it takes to make the design prototype production so that it can continue to compete with other competitors and keep abreast of technological developments in the industry ships boat. Why at this stage of introduction of products Regal Marine experienced negative cashflow? Regal Marine experienced negative cashflow due to high and tekhnology involves product innovation in a major way, but if the product is successful then the negative cashflow will be covered. This is normal experienced by products in the phase of introduction because of the cost of the design and manufacture of prototype that can not be replaced by higher sales because the product has just entered the market and not a lot of people who know the product. Furthermore, the production process of the manufacture of the product are still not efficient and a lot of changes and adjustments because it is still in the early stages of production. In this phase of the cash flow became negative because sales are still low but cost for design and production is still high. Whether the method of Regal in doing product design using CAD technology will further save costs compared to using traditional techniques drawing method? The CAD will be more efficient because assumptions with such technology will result inpicturesmould3Dthat can be used for the next production.By using the mtraditional design etodeneed a design processit usually takes a few days toadesign. From there the prototype will be created based on images that are usually made of paper so prone to errors. This causes a little unnecessary expense in re-creating your prototype and also create design manually by using the equipment. What benefits may be obtained from the CAD technology? Regal Marine technology uses Computer Aided Design (CAD) in the process of design and development of its products. This is because CAD has many advantages as follows:

Product Strategy Provides Competitive Advantage at Regal Marine


1. Shorter design Times (shorter design times) 2. Save on production costs (reduction of product cost) 3. Improved product quality (improved product quality) 4. The availability of the database (availability of databases) 5. Innovative Ability (innovative capabilities)

Twenty-five years after its founding by potato farmer Paul Kuck, Regal Marine has become a powerful force on the waters of the world. The world's third-largest boat manufacturer (by global sales), Regal exports to 30 countries, including Russia and China. Almost one-third of its sales are overseas.

Product design is cr itical in the highly competitive pleasure boat business: " We keep in touch with our customers and we respond to the marketplace," says Kuck. "We're introducing six new models this year alone, l'd say we're definitely on the aggressive end of the spectrum."

With changing consumer tastes, compounded by mater ial changes and everimproving marine engineering, the design function is under constant pressure. Added to these pressures is the constant issue of cost competitiveness combined with the need to provide good value for customers.

Consequently, Regal Marine is a frequent user of computer-aided design (CAD). New designs come to life via Regal's three-dimensional CAD system, borrowed from automot ive technology. Regal's naval architects' goal is to cont inue to reduce the time from concept to prototype to production.

The sophisticated CAD system not only has reduced product development time but also has reduced problems with tooling and product ion, result ing in a superior product.

Product Strategy Provides Competitive Advantage at Regal Marine


All of Regal's products, from the $11,000 14-foot Rush to the $250,000 40-foot Commodore yacht, follow a similar production process. Hulls and bows are separately hand-produced by spraying preformed molds with three to five layers of a fiberglass laminate. The hulls and bows harden and are removed to become the lower and upper structure of the boat. As they move to the assembly line, they are joined and components added at each workstation.

Wooden decks, precut in-house by computer-driven routers, are delivered on a just-in-time basis for installat ion at one station. Engines one of the few purchased componentsare installed at another.

Racks of electrical wir ing harnesses, engineered and rigged in-house, are then installed. An in-house upholstery department delivers customized seats, beds, dashboards, or other cushioned components. Finally, chrome fixtures are put in place, and the boat is sent to Regal's test tank for watertight, gauge, and system inspect ion.

CD-Rom Video Case 2 Product Design at Regal Marine

With hundreds of competitors in the boat business, Regal Marine must work to differentiate itself from the flock. As we saw in the Global Company Profile that opened this chapter, Regal continuously introduces innovative, high-quality new boats. Its differentiation strategy is reflected in a product line consisting of 22 models.

To maintain this stream of innovation, and with so many boats at varying stages of their life cycles, Regal constantly seeks design input from customers, dealers, and consultants, Design ideas rapidly find themselves in the styling studio, where they are placed onto CAD machines in order to speed the development process.

Existing boat designs are always evolving as the company tries to stay stylish and competitive. Moreover, with life cycles as short as 3 years, a steady stream of new products is required. A few years ago, the new product was the three-passenger $ 11,000 Rush, a small but powerful boat capable of pulling a water-skier. This was followed with a 20-foot inboard-outboard performance boat with so many innovations that it won prize after prize in the industry. Another new boat is a redesigned 40-foot Commodore that sleeps six in luxury staterooms. With all these models and innovations, Regal designers and production personnel are under pressure to respond quickly.

By getting key suppliers on board early and urging them to participate at the design stage, Regal improves both innovations and quality while speeding product development. Regal finds that the sooner it brings suppliers on board, the faster it can bring new boats to the market. After a development stage that constitutes concept and styling, CAD designs yield product specifications. The first stage in actual production is the creation of the "plug," a foam-based carving used to make the molds for fiberglass hulls and decks. Specifications from the CAD system drive the carving process. Once the plug is carved, the permanent molds for each new hull and deck design are formed. Molds take about 4 to 8 weeks to make and are all handmade. Similar molds are made for many of the other features in Regal boatsfrom galley and stateroom components to lavatories and steps. Finished molds can be joined and used to make thousands of boats.

Discussion Questions

1. How does the concept of product life cycle apply lo Regal Marine products?

Company has estimated that a life cycle of their products is 3 years. Their product line consisting of 22 models so they need new products as a steady stream.

To maintain this stream of innovation and with so many boats at varying stages of their life cycles, Regal constantly seeks design input from customers, dealers, and consultants. They try to design, develop and produce ideas rapidly and launch new products on the markets as soon as possible.

2. What strategy does Regal use to stay competitive?

Paul Kuck is said that: "We keep in touch with our customers and we respond to the marketplace. We're introducing six new models this year alone, l'd say we're definitely on the aggressive end of the spectrum." As the saying goes that customer is always right. Company listens to customers opinions and produce quickly products which there is demand.

With changing consumer tastes, compounded by mater ial changes and everimproving marine engineering, the design function is under constant pressure. Added to these pressures is the constant issue of cost competitiveness combined with the need to provide good value for customers.

3. What kind of engineering savings is Regal achieving by using CAD technology rather than traditional drafting techniques?

Regal's naval architects' goal is to cont inue to reduce the time from concept to prototype to production. As the saying goes that time is money. The sophisticated CAD system not only has reduced product development time but also has reduced problems with tooling and production, result ing in a superior product.

4. What are the likely benefits of the CAD design technology?

There are number of benefits of using CAD software. Some of the benefits are tangible for they are visible in the design process, which rooted in among others that design time is shorter. Other benefits are intangible which may not be visible directly but result in improvement in the quality of product, database availability, reduction of stress on the designers, better control over designing and production process as well as production cost are reduced. Source: Richard Bothom, 08.03.2010 and Design of Goods and Services, 2008

3D Design Software has developed no end of 2D-method. Key benefits of using 3D CAD design in mechanical and architectural industry are simplicity, automation and interactive analysis. Various problems have also left and design quality has received a major improvement. Source: 3D Cadcea Ltd, 08.03.2010

Sources:

- Richard Bothom, 08.03.2010, http://fi.articlesnatch.com/Article/Benefits-Of-Using-3dCad-Design---3d-Modeling-Compared-To-2d-Method/890633

- 3D Cadcea Ltd, 08.03.2010, www.3d-cadcea.co.uk/html/benefits.htm

- Prentice Hall, Inc, 2008, Operations Management presentation, chapter 5 Design of Goods and Services,