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Product Development Process Murray MacDonald, P.Eng. Copyright © 2010 Murray MacDonald.

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Presentation on theme: "Product Development Process Murray MacDonald, P.Eng. Copyright © 2010 Murray MacDonald."— Presentation transcript:

1 Product Development Process Murray MacDonald, P.Eng. Copyright © 2010 Murray MacDonald

2 Necessity of Product Development New products are typically highly profitable – study 1 indicates median ROI of 33%, avg of 96% Product life cycles are shrinking – study 2 indicates 4 x reduction in 50 years Competitive pressures Customer expectations New Products is War 1 Cooper & Kleinschmidt 2 A.D. Little

3 Product Development Performance One in 7 concepts are a commerial success 1 One in 4 developed products are successful 1 The Best companies have ~50% of sales 2 from new products (<5 years old) – The rest have 25% new products Estimated 46% of resources spent on failures 3 How to be more successful? 1 A.L. Page 2 A. Griffin 3 PDMA survey

4 Product Development Performance Product Development Performance (Reasons for New Product Failures) Poor Market Analysis Technical Problems or Cost Insufficient Marketing Effort Poor Timing

5 Successful Product Development Doing the project right Doing the right projects dies Based on numerous historical studies Stanford Innovation Project Booz-Allen & Hamilton Song, Montoya-Weiss & Schmidt Cooper & Kleinschmidt

6 New Product Process Goals Quality of Execution Sharper Focus, Better Prioritization Management of Risk Fast-Paced Parallel Processing Cross Functional Team Approach Strong Market Orientation (voice of the customer) Better Homework Up-Front Products with Competitive Advantage

7 Stage-Gate TM Process TM RG Cooper & Associates Stage 1 Scoping Gate 2 Stage 2 Bus. Case Stage 3 Development Stage 4 Testing Stage 5 Launch Gate 3 Gate 4 Gate 5 Post Launch Review(s) Gate 1 Stage 1 Scoping Gate 2 Stage 2 Bus. Case Stage 3 Development Stage 4 Testing Stage 5 Launch Gate 3 Gate 4 Gate 5 Kill Annual?

8 Stage-Gate TM – Gating Defined Gate Keepers (variable per gate?) – with criteria for decision making Concise and visible Deliverables – focus on information for decision making Outputs: 1) Decision – Go/Recycle/Hold/Kill 2) Approved plan for next stage 3) Agreed deliverables for next stage

9 Stage-Gate TM – Risk Mgmt Rule # 1 If uncertainty is high, keep stakes low Rule # 2 Raise stakes as uncertainty reduces Idea Launch Idea Launch Give conditional approvals – additional reviews, more planning Uncertainty Stakes Uncertainty Stakes ?

10 Stage-Gate TM - Implementation Senior management commitment Team for design and implementation – audit exiting, benchmark others Training & communication Metrics – visible, score card IT support Process Manager

11 Stage-Gate TM – Picking Winners Recognize prioritization is a weak area – avoid favourites, be objective Tough decisions based on consistent measures – benefits, portfolio management, financial model – Use scoring or checklist – formal record Project ABC - XYZ Criteria A Criteria B Criteria C Criteria D Criteria E Criteria F

12 Stage 3 – Development & Validation Clear project definition, expectations Quality of execution, records for verification Prioritize and focus Plan work, then work the plan Parallel activities - concurrent engineering – involving Marketing, Manufacturing, Quality,... Customer testing or involvement - prototype vs production

13 Feature Updates Product Development Portfolio Product Development Portfolio (Product/Technology Strategy) Need project mix of risk/resoucre/complexity Need long term strategy or road map – with reviews (annual?) New Existing SimplerComplex Derivatives Technology or Risk New Platforms Restructuring

14 Fuzzy Stage-Gate TM Variations Evolution to 3 rd and 4 th generation S-G Scaling process to match risks – Express/Lite Fuzzy Gates – conditional decisions – with planned follow up(s) – facilitates Concurrent Engineering Incorporate Technology Development

15 Stage-Gate TM Variations TM RG Cooper & Associates Gate 1 Express Stage-Gate Express Stage 1/2 Bus. Case Gate 3 Stage 3/4 Dev.&Test Stage 5 Launch Gate 5 Post Launch Review(s) Stage 1/2 Bus. Case Gate 3 Stage 3/4/5 Dev.&Launch Post Launch Review(s) Lite Stage-Gate Lite Full Stage-Gate

16 Stage-Gate TM Variations Technology Development – fundamental science or technology platform Criteria more strategic than financial Typically spawns multiple commercial projects Gate 1 Stage 1 Scoping Gate 2 Stage 2 Assessment Stage 3 Detailed Investigation Gate 3 Gate 4 To New Product Gate 2 (sometimes Gate 1 or 3)

17 Concurrent Engineering Paralleling activities Multidisciplinary teams Requires:-Stable requirements -Communications -Planning Better Products in Shorter Cycletimes More New Products

18 Concurrent Engineering - Changes Cost of Changes (%) 1 Hawtal Whiting Inc.

19 Concurrent Engineering Activity Product Planning Engg – Feasibility Engineering – Design Testing – New Testing - Validation Manufg – Feasibility Manufg - Tooling Activity Product Planning Engg – Feasibility Engineering – Design Testing – New Testing - Validation Manufg – Feasibility Manufg - Tooling Historical Western Concurrent or Japanese

20 Risk Assessment – formal document/checklist Failure Modes & Effect Analysis (FMEA) Quality Function Deployment (QFD) Planning - MS Project Tolerance Analysis Test Plans – Functional & Stress Failure Analysis Training Required Product Development Tools

21 Risk Assessment Risk is inevitable - the price of innovation Identify Measure Assess Mitigate Manage through the Stage-Gate process – use an assessment tool – reassess at each gate – looking for reductions Part of Process Reporting

22 Risk Assessment Risk ElementValueConfidenceRiskPlan?Mitigation Plan Comments Availability of Technology1....101....4 V x CY/N Supply Issues Time Scales Manufacturing Capability Capital Requirement Market/Customers Competitive Conditions Customer Commitment Pipeline (#,type) Patents/Legal Issues Total Weighted RiskSum (VxC) from RELTEC Corporation

23 Failure Mode & Effect Analysis-FMEA Identify potential sources of failure Assess Probability, Severity and Detection Calculate Criticality or RPN (Risk Priority Number) = P x S x D (each with value 1 to 10) Determine Action Plan as needed Follow up on impact of Actions (if any) – as part of Gating decisions

24 Failure Mode & Effect Analysis- FMEA Failure Mode and Effects Analysis Worksheet Facility:LLS Team Members: x x Document #: CAN00524P - FMEA-R01 Prod. Description/PN: TR1 Cabinet F787720 x x x Date(Orig): FMEA:Design/Process x x x Date(Rev): Facilities Affected:LLS Design Responsibility: Existing Conditions: 0 Resulting Conditions: 0 Item and Function Potential Failure Mode Potential Effect(s) of Failure Severity Potential Cause of Failure Occurrence Design Verification (Control) Detection Recommended Actions/Status Person Responsible Action Taken Severity Occurrence Detection 0 0 0 0 0 0 0 0 0 0 0 0 0 0 from Emerson Network Power

25 Project Planning Project Planning (MS Project) Five Ps – Planning Prevents P... Poor Performance! Using shared tool – across departments – possibly customers and suppliers – MS Project or other PDM Early focus on high level and flesh out later – Add detail at each gate for next stage Tracking and reporting (for Gates)

26 Tolerance Analysis Review of tolerance accumulation/buildup Using one of: - critical only - sub system levels - computerized – statistical Remedial - tighter tolerances - refined process - design change

27 Tolerance Analysis 2 x 4.00 d +/-0.05 +/-0.10 +/-0.35 Total tolerances ~ +/- 1.25

28 Tolerance Analysis ViVi V com R1a +/- %err R1b R2a R2b V o = R1/R2 V i + ~4 x %err V com Differential Amplifier 1 mV ~ 1V ~ V o = 100mV + 40mV 4mV 0.4mV for R1/R2 = 100, Rerr = 1% 0.1% 0.01%

29 Testing Plans Need a Plan – detailed – Reflecting FMEA and Design Reviews input Stress - Abnormal operation - Temperature (accelerated life) - Vibration - Stability Failure Analysis

30 Quality Systems – ISO 9004 Document what you do – formal system Do what you document - auditable Focus on deliverables and records from Gates Reflect Continuous Improvement Retain flexibility (using Express/Lite & Gates) Document retention system

31 Continuous Improvement On agenda of an effective Post Launch Review Create a knowledgebase – and foster design reuse Add teeth to Gates and design reviews Refine process and deliverables Plan Do Review Adjust

32 Summary Formal Stage-Gate New Product Process Effective Gates – with teeth Flexible – process variations, Fuzzy gates Shared tools – using IT Evolve process – continuous improvement Winning at New Products - Accelerating the Process from Idea to Launch by Robert G. Cooper (

33 Product Development Process Murray MacDonald, P.Eng. Q & A

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