Over the last decade, businesses have focused attention on documenting, improving and even reengineering business and manufacturing processes. Focusing this type of attention on repetitive, high-volume business and manufacturing processes provides a great deal of leverage from any improvement efforts. New product development (NPD) is often one of the least repetitive, lowest-volume processes in most companies or business units. The typical frequency of performing this process ranges from one to 100 projects per year in the vast majority of companies or business units. As a result, management frequently looks at NPD as 1.) more of an art than a defined business process, 2.) involving highly-paid knowledge workers who don’t need a well-defined business process, and/or 3.) not as worthy of the effort to characterize and improve as are other business processes.
In addition, the typical duration of NPD projects ranges from six months to six years. As a result, development personnel don’t have the opportunity to learn from and to refine the development process through repeated use on an individual basis. With the rapid pace of technology evolution, the hiring of many young engineers in some industries, high turn-over rates, it is not unusual to see development personnel with keys roles in a development project, but who have not gone through a full development cycle on a prior project within their companies. In short, many development personnel have little understanding of or practical experience with any standard NPD process in their companies.
Contrary to this situation, the development process is critical to achieving time-to-market, development cost and risk, and the product’s cost, quality, and performance on a consistent basis. The Capability Maturity Model describes five stages of evolution or levels of capability or process maturity. This serves as a framework for discussing requirements for the NPD process. The first stage, ad-hoc, represents the conditions described above.
The process must be characterized and documented. Unless it is, it will be difficult to assure understanding and agreement on what the process in fact is, difficult for all development personnel to understand the process in a consistent manner, and difficult to communicate that process to new personnel. We have found the following to be useful elements for completely characterizing and documenting an NPD development process:
The process must be repeatable. If the process is characterized and documented, it must then be 1.) effectively communicated to development personnel for them to understand and 2.) an emphasis placed on consistent use of the defined process. The advantages of having a repeatable process must be communicated. It is easier to plan and initiate a new project because development personnel understand what must be done and how to go about it. A common process provides greater personnel flexibility and facilitates moving people into and out of a project as the need arises. It increases personnel’s overall understanding of a project, the requirements they must meet and their interfaces with other development personnel.
The process must be flexible to tailor to the needs of different type of development projects. The process steps and outputs (as well as the cost, schedule and risk) of developing a totally new product with new processes and new markets should be more extensive than the process steps and outputs for a product upgrade or enhancement. These differences need to be understood and an approach established to allow tailoring of the standard NPD process to the needs of a development program.
The process must be managed. There are two aspects to “being managed”. First, the development process is monitored to assure an adequate level of performance through establishment of appropriate product development metrics. Second, there are appropriate management controls in place to help assure the desired results. These controls are in the form of design reviews and stage-gate reviews. Design reviews focus on addressing the technical requirements of the development program and the stage-gate reviews focus on addressing the business requirements. These reviews need to be balanced with empowering the teams and preventing delays in the development process (e.g., “hard” vs. “soft” gates).
While product development may not be a highly repetitive process, the investment in characterizing, improving and managing this process is significant because of the leverage that new product development has on the enterprise and its profitability.
The key points for managing the NPD process is as follows