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Roadmap
Portfolio Management A recent best practices study by the PMDA (Product Development & Management Association) indicates that companies with the most successful new product development programs:
Every company has finite resources to devote to new products. Over time, the company that selects its new product ideas systematically to further its corporate strategy will dominate competitors that use a random and disorganized process. The mix of new product ideas in the portfolio is constantly changing. Also, competition, technology, pricing, costing, and the economy continually alter the relative potential of new product ideas in the portfolio. So, a well organized effort is required to stay on top of this never ending, but vitally important, task of managing new product ideas entering the funnel's mouth to your product development pipeline. Pipeline Companies successful in new product development have a carefully crafted, formal process for regular review of products at all phases of development. They realize that poor products consume as many resources as good products. They realize that product ideas that seemed good at an early stage of development can deteriorate due to changes in the marketplace or hurdles in technology or cost. They also realize that the cost of developing and launching a new product escalates dramatically as it proceeds through the development phases. The typical costs of correcting an error are:  These successful companies are dogmatic about performing a careful review of a project as it exits each phase of the development process. They have established criteria to apply against the written contract created for the project in an early phase. If the product falls short on market potential, cost, timing, features, etc., it is killed or held back until the shortcoming is corrected. Because the resources required and dollars committed are so much greater in later phases of development, successful companies involve increasingly senior management to sign off on exiting the later phases. Phased Review Development Process The recent PDMA study also indicates that companies most successful in new product development use more sophisticated processes. The graphic below is a generic phased review development process. Most successful product development organizations have something similar - in writing - customized to their specific needs. Each phase has written deliverables and exit criteria.  Use of computer technology and/or web-based techniques can be very helpful in standardizing your development process. More than one template can be developed to serve different classes of projects. A formal process change procedure can be instituted to guard against a team's relaxing some deliverable to allow a product weakness to squeak through unnoticed. All data relating to each project can be posted to be seen real-time by all with a need to know.
Project Management The phase review process described above should require the use of a project management tool. Schedule documentation should exist very early in the project defining all the key tasks, their interdependencies, and their planned completion dates. A project manager should head each team, providing leadership to ensure completion with all the internal project contract provisions including schedule, cost, and product features. None of these aspects of project management need be time consuming or bureaucratic, aspects that creative people will resist. On the contrary, team morale will be enhanced by a sure-footed and organized management of the project that everyone can sense will lead to a successful product. Cross-Functional Teams New product development is one of the most difficult tasks for companies to manage well. Why is this? First, virtually every project proceeds over a period of some months from an ephemeral idea requiring creative marketing and engineering ideas to a product going into mass production and requiring infinite care and detail to ensure that quality and cost targets are met. Second, collaboration with and careful listening to the needs of customers, marketing, engineers, suppliers, quality, and manufacturing must happen throughout the project, not just before launch. Third, as we have seen above, costs and risks escalate rapidly during the project. It has been increasingly accepted that new product development projects almost have to be run by a cross-functional team to ensure that all viewpoints are heard and given proper weight throughout the life of the project. The team is composed of people that represent the various functional areas important to the success of the product. The team is empowered to make the decisions necessary to move the project forward, subject to the higher-level reviews held at the end of each phase. If the team is fulfilling the contract signed by all at the beginning of the project, and if it produces the deliverables required at the end of each phase, it will deliver a winning product.
Real-Time Collaboration Timely sharing of information and collaboration by those involved in the development of a new product has always been one of the biggest challenges for organizations. The problem is two-fold. First, marketing, engineering, procurement, and manufacturing usually will march to their own tunes - fulfill their own agendas - if not closely coordinated; the cross-functional team organizational approach above generally solves most of this problem. Second, it has been very difficult to make data and information available real-time to all those that need them; technology now exists to handle this aspect of collaboration. Extranets or other information technology can be used to provide a place for posting of all drawings, marketing data, project contract, deliverables, project status, meetings, action item lists, memos, test data, procurement information, costs, etc. This dramatically increases team efficiency, cuts the project development cycle times, and reduces duplication and fumbles. It can allow you to develop more products with the same people. Resource Management Development resources may consist of personnel doing mechanical, electrical, software, manufacturing, quality, and other engineering work as well marketing, project management, and other specialties. Resources may also include test lab time, prototype creation, piloting, and outside suppliers. Planning and scheduling these scarce resources is one of the more challenging tasks for organizations simultaneously developing many products. Functional managers generally control the resources of their specialty, and project managers request resource capacity needed to complete their products on schedule. The creative and somewhat unpredictable nature of new product development makes scheduling the demands to the available capacity more complex in many ways than scheduling a large job shop manufacturing facility. The mechanisms used to plan and allocate development resources must be fair, flexible, and visible. Project managers and teams need to have confidence that their needs will be met or they cannot be held responsible for results. Functional managers need to have current data comparing short term and longer term requirements with the resources available. Commitments must be made and kept. Partners Customers are partners in new product development. Their input is especially important in the early stages of a project when the product is defined and the business case made. They also should be kept in the loop throughout the project to ensure that the finished product will still be satisfactory when it goes into production. Suppliers also are very important partners in development. With increasing outsourcing, contract manufacturing, and specialization, much manufacturing and often some of the development is done by supplier partners. Your company is just as responsible for the work they do as if you were doing it yourself; after all, your customer does not know who did the work. So, procedures and communication methods should be powerful enough to keep these suppliers as up-to-date as your own developers; conversely, you need to be current on what is happening at the suppliers. This is the same as the real-time collaboration mentioned above for your internal team members, and it can be based on extranets or other technology. Relying on telephones and faxes does not make the information available to everyone who needs to know.
See our Lean Product Development Services for ways we can show you how to establish a world-class product development activity in your company. |
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