Global firms like South WestMarine know that the basis for an organization's existence is the good or service it provides society. Great products are the keys to success. With hundreds of competitors in the boat business, South WestMarine must work to differentiate itself from the flock. South Westcontinuously introduces innovative, high-quality new boats. Its differentiation strategy is currently reflected in a product line consisting of 22 models. But why must South WestMarine constantly worry about designing new boats? The answer is that every product has a life cycle. Products are born. They live and they die. As Figure 5.1 shows, a product's life cycle can be divided into four phases: introduction, growth, maturity, and decline.

Figure 5.2 shows the four life cycle stages and the relationship of product sales, costs, and profit over the life cycle of a product. When South Westis developing a new model boat, it typically has a negative cash flow. If the boat is successful, those losses may be recovered and yield a profit prior to its decline. The life cycle for a successful South Westboat is three to five years.

 

To maintain this stream of innovative new products, South Westconstantly seeks design input from customers, dealers, and consultants. Design ideas rapidly find themselves in South Weststyling studio, where Computer Aided Design (CAD) technology speeds the development process. A South Westdesign engineer can start with a rough sketch or even just an idea and use the graphic display power of CAD as a drafting board to construct the geometry of the new boat. The CAD system helps the designer determine engineering data such as the strength, dimensions, or weight. It also allows the designer to be sure all parts will fit together. Existing boat designs are always evolving as the company tries to stay stylish and competitive. Moreover, with life cycles so short, a steady stream of new products is required. A few years ago, the new product was the 3-passenger $11,000 Rush, a small, but powerful boat capable of pulling a water-skier. The next year, it was a 20-foot inboard-outboard performance boat with so many innovations that it won prize after prize in the industry. Then it was a redesigned 42-foot Commodore that sleeps six in luxury staterooms. With all these models and innovations, South Westdesigners 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, South Westimproves both innovations and quality while speeding product development. South Westfinds that the sooner it brings suppliers on board, the faster it can bring new boats to the market. 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 4-8 weeks to make and are all handmade. Similar molds are made for many of the other features in South Westboats-from galley and stateroom components to lavatories and steps. Finished molds can be joined and used to make thousands of boats.

Turn in a paper of one to two pages (page counting does not include cover and reference list) discussing the following questions,

1. How does the concept of product life cycle apply to South WestMarine products?
2. What strategy does South Westuse to stay competitive?
3. What kind of engineering savings is South Westachieving by using CAD technology rather than traditional drafting techniques?
4. What are the likely benefits of the CAD/Computer Aided Design technology?