new product development process
TRANSCRIPT
New Product Development Workshop
Dr. Iain Sanders – Sustainable Innovative Solutions LtdSome of the material contained in this presentation is copyright © to: Sustainable Innovative Solutions Ltd.
Delivered in conjunction withCanterbury Development Corporation
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How the Problems Feed Each Other – A Downward Spiral
A LACK OFRESOURCES
FOR NEWPRODUCTS
A LACK OFFOCUS
NO NEWPRODUCTPROCESS
TOO MANYSMALL, LOW
IMPACTPROJECTS
POOR PROJECTPRIORITIZATION & FAILURE TO
KILL PROJECTS
TOO MANYPROJECTS FOR
THE LIMITEDRESOURCESAVAILABLE
POOR DATAON PROJECTS
POOR JOB DONE ON
PROJECTS
weak marketstudies, poor
launch,inadequate
testing
NO ROADMAPFOR PROJECTS
LOWIMPACT
ONSALES,
PROFITS
POOR CYCLE TIMES
HIGHFAILURERATES
Ref: R.G. Cooper
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Doing the Right PD Project the Right Way
Salestargetsnot met
GoodGoodbusinessbusinesspracticepractice
Going bankrupt
fast
Projectcosts
overrun
Doing the Wrong Projects
Doing the Right Projects
Doing projects
badly
Doing projects
right
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The Right PD Process: Key Activities in the NPD ProcessInitial Screen The idea screen – the first decision to go ahead with the project; the initial commitment of resources (people
and money).
Preliminary Market Assessment
The initial market study: a “quick and dirty” assessment of the marketplace, customer requirements, possible market acceptance, and competitive situation; largely nonscientific and relying on in-house sources.
Preliminary Technical Assessment
An initial technical appraisal, addressing questions such as “can the product be developed? How? Can it be manufactured? Etc.”; based largely on discussions, in-house sources, and some literature search.
Detailed Market Study Marketing research: detailed market studies such as user needs-and-wants studies, concept tests, positioning studies and competitive analyses; involves considerable field work and in-depth interviews with customers.
Predevelopment Business and Financial Analysis
The decision to go to a full development program; involves, for example, a financial analysis, risk assessment, and a qualitative business assessment, looking at market attractiveness, competitive advantage, etc.
Product Development The actual development of the physical product.
In-house Product Tests
Testing the product in-house under controlled or laboratory conditions; alpha tests.
Customer Product Tests
Testing the product with the customer; field trials, beta tests, or preference tests: giving the product to customers and letting them try it under live field conditions.
Trial Sell A trial sell or test market of the product: an attempt to sell the product to a limited number of customers or in a limited geographical area; a “soft launch”.
Precommercialization Business Analysis
The decision to commercialize: final business and financial analysis prior to launch.
Production / Operations Start-up
Start-up of full-scale or commercial production or operations.
Market Launch The full market launch of the product: the implementation of the marketing plan. 4
PD-Trak Coverage
What is Phase-Gate Product Development & Portfolio Mgt.?
A complete solution for managing your product development initiatives
Phase-Gate Process (go/kill, guidance)
New Product Development (NPD) Process
Portfolio Management (Which projects)
Pipeline Management (Resource assignment)
Product Development Strategy (Business Plan)
DevelopmentPhase
FeasibilityPhase
LaunchPhase
InvestigationPhase
Manufacturing/Deployment
Phase
Pilot/TestPhaseDF P L M R
Management Process
Product Development Process
DFM/AQFD Target costing FMEARef: DRM Asscs.
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Tools Configured To Your Phase-Gate Process
Project Brief/
Proposal
Budget & Schedule
Financial Justification
QFD Product Planning
Matrix
Project Brief
Project Plan
ProductDefinition
Test Plan & Results
Test Plan
Marketing Launch
Plan
Customer Support
Plan
IdeasList
Metrics Tracking
Voice of the
Customer Plan
Market Defn &
Forecast
Task Plans: Standard Project Tasks By Phase
Lessons Learned
Ref: DRM Asscs.
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Managing Risk With A Phase-Gate Process
The fundamental objectives of an effective Phase-Gate Process are to reduce project risk as rapidly as possible:
With the minimum possible expense With the lowest possible administrative effort
Ref: DRM Asscs.
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Phase-Gate Process
NPD Process defined at three levels:
1. Phases & gates
2. Tasks & deliverables
3. Document templates
Ref: DRM Asscs.
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“New Product” Process – Phase Descriptions
Investigation Phase
Develop the idea by gathering readily available data; preliminary identification of target market, application and product concept. Determine plan for feasibility phase focusing on voice of the customer and competitive data collection, concept identification, assessment and selection and data needed to develop a comprehensive business case.
DevelopmentPhase
FeasibilityPhase
InvestigationPhase
ManufacturingPhase
Pilot/LaunchPhase
F
D
P
M
R
I
Ref: DRM Asscs.
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Investigation Phase
DevelopmentStage
FeasibilityStage
LaunchStage
InvestigationStage
Manufacturing/Deployment
Stage
Pilot/TestStageDF P L M R
Voice of the Customer
Secondary Market Research
Project Brief
Budget & Schedule
Co AProd 2
Co B
UsNew
UsProd 1
Co AProd 1
Market Analysis & Definition
Target Price & Target Cost Calculation
Market Definition
& Forecast
Financial Justification
Voice of the
Customer Plan
Idea List
Project Brief
Project Plan (Feasibility
Phase)Task Plan
Ref: DRM Asscs.
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“New Product” Process – Phase Descriptions
Feasibility Phase
Complete customer needs and competitive assessment; develop product requirements and identify the target cost; assess several alternative concepts and select the one that best satisfies the project targets; demonstrate the feasibility of the selected technical approach, assess manufacturing process implications and finalize the business case.
DevelopmentPhase
FeasibilityPhase
InvestigationPhase
ManufacturingPhase
Pilot/LaunchPhase
F
D
P
M
R
I
Ref: DRM Asscs.
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Feasibility Phase
Voice of the Customer Product/
Project Brief
Customer Needs Data Dictionary
QFD Product Planning
Matrix
QFDSubsystem Deployment
Matrix
ProductSpecification
Concept Development
ConceptSelection
Matrix
Target Cost Evaluation Worksheet
DevelopmentStage
FeasibilityStage
LaunchStage
InvestigationStage
Manufacturing/Deployment
Stage
Pilot/TestStageDF P L M R
Market Definition
& Forecast
Voice of the
Customer Plan
Target Price & Target Cost Calculation
Ref: DRM Asscs.
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Feasibility Phase (Continued)
DevelopmentStage
FeasibilityStage
LaunchStage
InvestigationStage
Manufacturing/Deployment
Stage
Pilot/TestStageDF P L M R
Concept Development
QFDConceptSelection
Matrix
Target Cost Evaluation Worksheet
SelectedConcept Project
Brief
Project Plan
Financial Justification
Budget & Schedule
Task Plan
Mfg. Plan
Marketing Plan
Program Plan This section completed during the Feasibility stage and updated as required in later stages to reflect changes in the overall program plan..
Program Objectives and Success Criteria What are the program objectives and the success criteria th at the program will be measured against.
Program Strategy Describe the general program strategy that the plan is based on.
Key Program Milestones and Dates List key program milestones dates and schedule constraints, e.g., complete development to support a specific trade-show date or OEM customer launch date.
Key Assumptions What are the key assumptions that the program plan and approach are predicated on.
Program Trade-Off’s Describe the priorities for program trade -offs.
Least Flexible Medium Flexible Most Flexible
Schedule
Scope/Features
Resources
Summary of Major Program Risks Summarize major program risks based on the Risk Mana gement Plan and identify prevention and mitigation actions to take. Identify issues that require management action to resolve or mitigate.
Program Plan
Risk Management
Plan
Market Definition
& Forecast
Target Price & Target Cost Calculation
Ref: DRM Asscs.
13
“New Product” Process – Phase Descriptions
Development Phase
Complete the design of the product, demonstrate specification conformance by building and evaluating a number of prototype units, design the manufacturing processes, create and release a full manufacturing documentation package.
DevelopmentPhase
FeasibilityPhase
InvestigationPhase
ManufacturingPhase
Pilot/LaunchPhase
F
D
P
M
R
I
Ref: DRM Asscs.
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Development Phase
Mfg. Plan
QFDAssy/Part
DeploymentMatrix
ProductDesign
Assy/PartConceptSelection
Matrix
ProductSpecification
DFM/AAssessment
DFMGuidelines
Failure Modes & Effects Analysis
Process Planning
Matrix
Drawings Bill of Material
Design Verification
Plan & Results
Supplier Plan
DevelopmentStage
FeasibilityStage
LaunchStage
InvestigationStage
Manufacturing/Deployment
Stage
Pilot/TestStageDF P L M R
Marketing Plan
Ref: DRM Asscs.
15
“New Product” Process – Phase Descriptions
Pilot/Launch Phase
Prove out the manufacturing processes and documentation. Introduce the product to the market, train the sales and technical support teams, prepare for first shipments.
DevelopmentPhase
FeasibilityPhase
InvestigationPhase
ManufacturingPhase
Pilot/LaunchPhase
F
D
P
M
R
I
Ref: DRM Asscs.
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Pilot / Test (Launch) Phase
Customer Support
Plan
DevelopmentStage
FeasibilityStage
LaunchStage
InvestigationStage
Manufacturing/Deployment
Stage
Pilot/TestStageDF P L M R
Process Planning
Matrix
Quality Control Matrix
Control Plan
Design & Process
Verification Plan
Design & Process
Verification Results
Product Build
BuildReport
RefineDesign
DrawingsBill of
Material
Marketing Plan
Supplier Plan
Service & Repair Plan
Ref: DRM Asscs.
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“New Product” Process – Phase Descriptions
Manufacturing Phase
Ramp up production. Demonstrate the ability to manufacture the product at the projected volume and cost.
DevelopmentPhase
FeasibilityPhase
InvestigationPhase
ManufacturingPhase
Pilot/LaunchPhase
F
D
P
M
R
I
Ref: DRM Asscs.
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“New Product” Process – Gate Descriptions
I Gate – Product managers screen ideas/opportunities and select potential projects for initial investigation
F Gate – Based on preliminary investigation, management reviews product proposal and commits to funding Feasibility Phase
D Gate – Management reviews comprehensive product definition, product plan and business case and decides whether to commit funds to development (most critical gate)
P Gate – Management reviews development and verifies that the product is ready for pilot and launch
M Gate – Management reviews product is ready for production ramp up
R Gate – Reviews conducted to determine results relative to project objectives and collect lessons learned
DevelopmentPhase
FeasibilityPhase
InvestigationPhase
ManufacturingPhase
Pilot/LaunchPhase
F
D
P
M
R
I
Ref: DRM Asscs.
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Gate Review Objectives
Ensure that:
• A valid business case for the development project exists – project will provide adequate return with acceptable risks
• Program is still aligned with company strategy
• Continued investment in the product development or R&D project is warranted– Significant issues are being addressed– The project plan & request for resources is sound
• The project has a high priority relative to other project portfolio opportunities
Ref: DRM Asscs.
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3 Decisions to Pass a Stage-Gate Review
Ref: DRM Asscs.
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Decisions to Define Gate Review Process
1. Where and when in the process should gate reviews occur?
2. What information is needed for the gate review?
3. Who makes the gate review decisions?
4. What is the process for conducting gate reviews?
5. How do we make gate reviews more effective?
Ref: DRM Asscs.
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Gate Criteria
• Gates must have clear criteria so that senior managers can make Go/Kill & prioritization decisions objectively
• Criteria must be:– Easy to use– Realistic (make use of available information)– Discriminating (differentiate the good projects from the mediocre
ones)
• Ideally, criteria are scored and summarized into an overall rating
• Project killed if it falls below minimum acceptable level
• Scoring also supports project prioritization for portfolio management
Ref: DRM Asscs.
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SOFT versus HARD Gates
Ref: DRM Asscs.
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Gate Review Meeting – a Two-Step Process
• The gatekeepers/approvers may cover both decisions in the gate review meeting or may make the second step decision subsequent to the gate review meeting.
• In the case of the latter, the decision should be made within one business day to avoid potential waste.
Ref: DRM Asscs.
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Portfolio Management
Technology Development
New Products
Enhancements & Line Exten. TOTAL
Business Unit A 7% 24% 4% 35%Business Unit B 2% 16% 7% 25%Business Unit C 0% 6% 11% 17%Business Unit D 2% 14% 6% 22%
TOTAL 11% 60% 28% 99%
Annual/5 Year
BusinessPlan
Strategic AllocationCorporate or BU Level
Corporate or BUPortfolio Mgt. Review to
Ensure Balance
Review to ConsiderRoadmap Relationships(Technology & Platforms)
R&D BudgetR&D Headcount
Scorecard MethodDevelopment Productivity Index
Portfolio Bubble Chart
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
0 10 20 30 40 50 60 70 80
NPV
Prob
abili
ty o
f suc
cess
GeminiAquariusAriesCapricornTaurusVirgoLeo
Done outside of PD-Trak
Ref: DRM Asscs.
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What Happens When You Lack Effective Portfolio Management
A reluctance to kill projectsMany projects added to list
A total lack of focus
Too many projects - resources thinly spread. Projects in a queue.
Quality of execution suffers.
Increased time to marketHigher failure rates
Weak decision pointsPoor Go / Kill decisions
Too many low value projects:-Tweaks and modifications-Good projects are starved
Too few stellar product winnersMany ho hum launches
No rigorous selection criteriaProjects selected on emotion,
politicsWrong projects are selected Many failures
No Strategic criteria for project selection
Projects lack strategic directionProjects not strategically aligned
Scatter gun effortDoes not support strategy
No Portfolio Management Means…
Immediate Result End Result: Poor New Product Performance
Ref: R.G. Cooper
27
Portfolio Management – Resource Impact
Flexible modeling of resource requirements and potential actions - add resources, contract labor, suspend projects, cancel projects,
adjust schedule
Proposed Portfolio (Master Project
Schedule)
Resource Plan
ResourcesAvailable?
Ref: DRM Asscs.
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Project Scoring
A structured method for determining relative strategic importance of projects
Ref: DRM Asscs.
29
Proposed Portfolio Projects - 1
Product manager(s) screen ideas in Ideas List & selects projects to investigate
Ref: DRM Asscs.
30
Proposed Portfolio Projects - 2
Project file created, investigation phase conducted & key documents created (Project Brief, Budget & Schedule, and Financial Justification)
Ref: DRM Asscs.
31
Proposed Portfolio Projects - 3
Proposed project added to the Master Project Schedule
Ref: DRM Asscs.
32
Master Project Schedule
Master project schedule lists all active and proposed (sponsored) projects and key portfolio and financial information for portfolio prioritization and decision-making
Ref: DRM Asscs.
33
Portfolio Management – Balance / Mix
• Portfolio bubble chart provides a way to graph projects on two axes to assess balance and mix of projects
• A common bubble chart is risk-reward (high risk-reward vs. low risk-reward)
Ref: DRM Asscs.
34
Portfolio Management – Balance / Mix
• Pie chart provides a breakdown of active projects as a basis to check allocation by type of project
• Uses process type as a basis for the breakdown – requires process template to be established for each type used
Ref: DRM Asscs.
35
Portfolio Management – Strategic Alignment
Product maps can be checked against portfolio plan to assure that needed technology or platform projects are not overlooked (otherwise revise roadmap)
Product maps are maintained in the
Project File
Ref: DRM Asscs.
36
Other Portfolio Management Reports
Ref: DRM Asscs.
37
Resource Analysis
Central Resource Pool Resources Added To Project
Resource Analysis
Ref: DRM Asscs.
38
Additional Resources and Information
•Websites:– General NPD Informationhttp://www.npd-solutions.com
(especially the Product Development Forum)
– Specific Product Information
http://www.pd-trak.com
•Sustainable Innovative Solutions:
Dr. Iain SandersSustainable Innovative SolutionsP.O. Box 20-452BishopdaleChristchurch 8543New Zealand
Email: [email protected]
Mob: +64 (0)273 566 401
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