|A methodology for assessing and improving new product development through benchmarking 270 best practices||
BENCHMARKING BEST PRACTICES
In this era of "faster, cheaper and better", companies are focusing on improving the product development process. New business strategies, new organizational approaches, new business processes and new enabling technology are being used by many forward-thinking companies to continually improve their product development process. How does a company keep up with these fast-paced changes? Some of the improvement opportunities are obvious to personnel within an organization. Other opportunities may not be obvious, or there are so many things to do that it becomes a question of where to start. Management will typically have a number of questions on the their minds: How do we compare with the rest of industry? With the best in industry? What are our strengths and weaknesses? Is our development process aligned with our strategic objectives? What improvements need to be made? Where do we start? What are our priorities given the resources that we have available? What benefits can we expect? How can we figure this out quickly so that we can get started?
No organization can improve all aspects of product development at once.
The implementation of product development best practices can best be viewed
as a journey (continuing process improvement) rather than a destination.
Priorities need to be developed for implementing the best practices of product
development. The organization must start by understanding what practices
should be adopted (what is possible). Next it must consider its strategic
direction (e.g., time-to-market, being the low cost producer, the most innovative
producer, the highest quality/reliability producer, flexibility to respond
to new products and markets) given its market, its objectives, and its competitors.
Next, the organization must assess its strengths and weaknesses. By focusing
on the "gap" between where a company is and where it needs to
be, priorities can be set for making improvements. This is represented in
Several years ago, we led a consortium to identify product development and time-to-market best practices. These practices were derived from: corporate visits, consulting assignments, conferences, workshops and meetings, literature review, telephone discussions, technology vendors, the Navy Best Manufacturing Program, the Software Engineering Institute's (SEI) Capability Maturity Models (CMM), the AT&T Handbook series, and other corporate handbooks. This practices are continually being updated as new best practices emerge and are identified and as current best practices become standard practice and are no longer noteworthy.
These practices were organized into a framework with five major dimensions:
strategy, organization, process, design optimization and technology and
twenty-eight best practice categories (equivalent to Process Areas in CMM
Terminology). In excess of 270 best practices have been identified (see
Integrated Product Development Body of Knowledge).
These are described in a commercially-available benchmarking tool, the Product
Development Best Practices and Assessment (PDBPA) software. This software
tool is used to provide an understanding of these best practices, to enable
rapid and inexpensive benchmarking, and to support business process improvement.
These best practices are organized into the following categories for summarization
and reporting purposes:
Most of these best practices are universal - they apply to the development
of any kind of product in any type and size of company. Some of these best
practices are relevant to only certain types of products or business environments.
For example, maintainability/serviceability practices don't apply to consummable
products, design for manufacturability isn't as important with one-off product
such as a satellite, practices related to electrical design or embedded
software are not relevant to a purely mechanical product, etc. Therefore,
an importance weighting is used to tailor the importance of the best practice
to each company's products and business environment.
To be successful, an organization must have a a basis for competitive advantage. While an organization needs to do a reasonable job in various competitive dimensions, it can not be all things to all people. The enterprise must focus on one or two dimensions of competition to truly excel and be successful. The following are the competitve dimensions typically associated with product development:
Many best practices are related to one or more of these competive dimensions or strategies. If the practice is strongly related to one of these strategies, it can be described as a strategic lever. For example, strategic levers related to time-to-market include:
By looking at the level of performance related to these strategic levers, a competitive strategy is implied. The question becomes whether this implied strategy is in agreement with the intended strategy.
One way to view the overall implied strategy is to look at the weighted average of the performance ratings for the best practices that are strategic levers associated with each of six competitive dimensions or strategies. A high weighted average performance rating for a particular strategic dimension compared with the weighted average performance ratings in other strategic dimensions suggests that the product development process has been strategically aligned to that strategic dimension. Ideally, the rankings of these weighted average performance ratings should be aligned with the intended strategy priorities. If not, the product development process needs to be improved by applying the best practices that are strategic levers for the desired strategy.
ANALYSIS AND IMPROVEMENT
In addition to the performance rating against each best practice and for each higher level category, an overall performance rating is developed by again assigning a weighting factor to each category based on their importance given the nature of the business and the product. This performance rating, when compared to that of other companies, gives an indication of the urgency of improving the development process.
Gap analysis is then employed to focus attention on the improvement opportunities that will yield the highest payoff. The categories with high weighting factors (indicating their importance to your product development success) and relatively low performance ratings yield the largest gaps between what is important to the organization and what it does well. These are the areas that require the highest priority in improving the development process and will likely have the largest payoff. On the other hand, categories with low importance ratings and relatively high performance ratings indicate low priority areas not deserving as much attention.
The strategic alignment analysis and gap analysis become the basis for identifying implementation actions and priorities. The concept is to pick a manageable number of improvement initiatives to focus your attention on. An example of this performance summary and gap analysis is shown:
Once the large gap categories are identified, an examination of the individual best practices with lower performance ratings will help identify the specific areas that require attention. In addition, identify and focus on the strategic levers that have low performance ratings and that are associated with the organization's intended strategy. Therefore, as a prerequisite, executive management must define a vision for product development and determine the competitive strategy as a basis for for aligning product development practices and developing implementation priorities. This analysis becomes the basis for developing priorities and, eventually, an improvement or implementation plan.
In addition, the expertise of an internal manager or outside consultant very knowledgeable in integrated product development concepts and improvement strategies can aid in identifying priorities. This expertise is important because of natural relationships and sequences with the implementation and use of these best practices. For example, moving to a digital product model as a replacement for paper drawings is not realistic until there is a certain level of CAD capability, workstation access to the model, product data management system, and network infrastructure in place. Experience and good project planning is needed to translate these high priority improvement needs into specific actions, responsibilities, schedules and assignments.
Personnel resources to support implementation or improvement activities are required. If the overall performance rating is low, a critical mass of personnel within the organization needs to develop an understanding of the concepts of IPD. These people can then refine the implementation plan, perform various implementation activities, be involved in defining the desired way to develop new products based on IPD approaches, and assist in communicating the desired approach to the rest of the organization.
The implementation plan should begin with the low cost activities that yield high payoffs. In the absence of any other indications of strengths and weaknesses, we believe these initial actions should include forming product development teams as the basis for product development, establishing effective product/project planning and resource management, and utilizing the quality function deployment (QFD) methodology as a method for capturing and understanding the voice of the customer. As these steps begin to generate savings, the organization can move on to other IPD elements and self-fund the initiative.
There are two elements of implementation planning that must be addressed. The first one that has been described is the implementation plan for the enterprise activities. It covers all the activities to create the IPD environment for all development projects the activities that cannot cost effectively be done by an individual development project. This would include defining a streamlined product development process, developing manufacturability guidelines, installing appropriate CAD/CAE/CAM and product data management system tools, etc.
The second plan element, the project deployment plan, the IPD actions that will be taken to support an individual product development project. This plan would be developed with the participation of the member of management responsible for the development effort, e.g., engineering manager, program manager, product line manager, etc. This plan would address the team structure required to support the project, a staffing plan supporting early involvement, the training requirements, facilities and collocation implications, the technical resources required (workstations, software, etc.), the use of techniques such as quality function deployment, supplier/subcontractor involvement, the development methodology, establishment of project policies and strategies, etc.
Many organizations take totally different directions in the evolution of their product development process. While some of these differences are the result of legitimate differences in their business strategy, business environment, organization, and the nature of their products, a frequent problem is the lack of a common framework of the best practices of product development. With extensive investment of time, an organization could develop the broad, internal expertise necessary to produce an effective improvement plan for product development. This would require significant training, attendance at conferences, and extensive benchmarking. This structured Product Development Best Practices and Assessment methodology based on these 270 best practices of product development provides an inexpensive alternative to identifying strengths and weaknesses relative to a common framework of an extensive set of best practices. This enables an organization to more quickly develop an action plan for improving the development process
DRM Associates developed this assessment methodology and led the consortium that identified these best practices. The best practices resulted from numerous company visits and attendance at over 100 conferences and workshops on integrated product development. For further information on the Product Development Assessment and our Product Development Best Practices and Assessment Software, contact Kenneth Crow.
ABOUT THE AUTHOR
Kenneth A. Crow is President of DRM Associates, a management consulting and education firm focusing on integrated product development practices. He is a distinguished speaker and recognized expert in the field of integrated product development. He has over twenty years of experience consulting with major companies internationally in aerospace, capital equipment, defense, high technology, medical equipment, and transportation industries. He has provided guidance to executive management in formulating a integrated product development program and reengineering the development process as well as assisted product development teams applying IPD to specific development projects.
He has written papers, contributed to books, and given many presentations
and seminars for professional associations, conferences, and manufacturing
clients on integrated product development, design for manufacturability,
design to cost, product development teams, QFD, and team building. Among
many professional affiliations, he is past President and currently on the
Board of the Society of Concurrent Engineering and is a member of the Product
Development Management Association and the Engineering Management Society.
For further information, contact the author at DRM Associates, 2613 Via
Olivera, Palos Verdes, CA 90274, telephone (310) 377-5569, fax (310) 377-1315,
or email at email@example.com.