New York University, Spring 2003
Developing New Product and Services
Final assignment
Lucia Franchi
Reckitt Benckiser R&D Manager
My Objective
Get Senior Management agreement to my proposal of improvement to the current
Stage Gate process used by Reckitt Benckiser
Agenda
– Reckitt Benckiser background
– Review of the current process
– Weakness of current process
– New process description
– Next steps
"Passionately delivering better solutions
in household cleaning and health & personal care
for the ultimate purpose of creating shareholder value.”
Reckitt BenckiserCompany Vision
•Above average Net Revenue Growth by focusing on high growth brands
•Innovation - % NPD vs. Line extensions
•Speed to Market & quality of execution
Key points of the strategy
Current process
Second screen
First screen
Feasibility LaunchDevelopment Post launch evaluation
Weaknesses of current process
• Pre-development activities– only low amount of resources are allowed
for those activities
• No criteria for idea screening before the development phase– there is no process in place to
screen/evaluate ideas
If we improved the process
• Increasing our success rate for NPD of 10% = $40M
• Increasing speed to profitability 1 Mo for a single NPD = $ 2M
• Reducing quality issues on the market– Priceless!
New Product Development process
• The “New! Improved” Product Development process will allow us to:– Focus on “The right projects” and
streamline our Project Portfolio– Improve our profitability by enancing our
chances of success with NPD– Improve our Speed to Market
Strategydefinition
Second screen
Third screen
Idea screen Scoping
Discovery stage
How to improve product development process
Launch
Building the business case
Development Post launch evaluation
Fourth screen
Description of stage gate process
What is a Gate? – Decision points: the project moves forward,
gets killed or put on hold (I.e. moves back one stage in the process)
– If the criteria to be met/key deliverables for each stage are specified upfront, no involvement from senior management is required.
Strategy definition
Industry analysis
Companyanalysis
Areas of strategic focus
Scenario generation
Opportunities
- unmet needs
- expansion plans
- voids
Strategy Definition
• This stage should include the definition of key deliverables and minimum criteria from Senior management– Financial objectives for the project
Discovery Stage
• This stage is a defined, proactive idea generation and capture system.
• Ideas can come from several sources– fundamental research, contract research organization and consultants– technical publications, universities, inventors– competitors– consumer intimacy (unarticulated consumer needs)– internal creativity potential (innovation session, unsolicited ideas)
Idea collector(CMM)
Idea screen
Idea handling process in the Discovery stage
Ideas
Idea bank (intranet)
Other categories
Periodic review
Next Stage
Idea screen gate
Fit with business strategy Degree of product advantage Ability to leverage core
competencies (tech., mktg) Market attractiveness Company policies (regulatory, legal)
With a poorly defined product and
project, R&D engineering and design
people waste considerable time seeking definition, often recycling back several times as the project parameters change
(R. Cooper, “Winning at new Products”)
“What’s in” for RB?
• The new process will allow for better focus of the R&D resources
– a 2M NR project requires on average 120 mandays
– a 50M NR project requires 400 mandays
Which one has the better ROI?
“What’s in” for RB?
Scoping stage
• Preliminary market assessment– Internet, library search, focus groups, concept test
• Preliminary technical assessment– development and manufacturing feasibility– timings, costs– legal, regulatory restrictions– expected roadblocks
Second screen
Fit with business strategy Degree of product advantage Technical and marketing feasibility Market attractiveness/early
financials Company policies(regulatory, legal)
Quality of execution of the predevelopment steps is closely tied to product financial performance. Successful products have about 75% more person days devoted to the predevelopment activities than do failures (R. Cooper, “Winning at new Products”)
“What’s in” for RB?
Building the business case
• Market research– consumer needs, wants and preferences
• Technical appraisal– lab work (first formulation effort)– manufacturing, sourcing, capex assessment– legal, patent, regulatory assessment
• Business and financial analysis
• “Post Mortem” analysis:– Project “john smith”. Lack of proper
predevelopment work (market analysis) caused a + 8 Mo slippage of the project ($ 50M loss)
“What’s in” for RB?
Third screen
Product/packaging definition, key deliverables (consumer data)
Manufacturing and sourcing strategy Regulatory/legal strategy Qualification plan Financial analysis (“must meet” criteria) Project milestone plan Global Roll out plans
Development Stage
• Formula, Packaging development
• Manufacturing process (including QC)
• Consumer qualification (BASES II test)
• Marketing plan (including sales and distribution)
Development Stage
Development activities are handled in parallel(rugby model)
Forth screen*
Project financials (including volumes) Marketing plan Good for sale (R&D, manufacturing) Regulatory, legal clearance
*This stage can be conditional
Post launch review
• Performance vs. marketing plan
• On going quality, production quality data (includes consumer complaints)
• Quality of planning and execution of the project
Next Steps
• Get agreement from top management to test the process: finetune model if needed
• Use Project “John Smith” as pilot for the new process
• Additional “food for thoughts”:– Stage Gate process can be used as tool
for technology platforms– impact of parallel dev. on speed to profit