Rapid time-to-market is important for the competitive success of many companies
for the following reasons.
- Competitive advantage of getting to market sooner;
- Premium prices early in life cycle;
- Faster breakeven on development investment and lower financial risk;
- Longer market life cycle; and
- Greater overall profits and higher return on
The key process requirements for rapid time-to-market are:
- Clear understanding of customer needs at the start of the project and
stability in product requirements or specifications;
- A characterized, optimized product development process;
- A realistic project plan based on this process;
- Availability of needed resources to support the project and use of
full-time, dedicated personnel;
- Early involvement and rapid staffing build-up to support the parallel
design of product and process;
- Virtual product development including digital assembly modeling and
early analysis and simulation to minimize time consuming physical mock-ups
and testing; and
- Design re-use and standardization to minimize
the design content of a project.
Recent studies as well as our own experience have identified that in
many companies, development projects are often started at the beginning
of a fiscal year or based on Marketing needs without regard to priorities
or resources. Further, there is often little or no project planning and
little or no consideration of risks or project uncertainty. This has resulted
in development personnel being over committed on average by 75%. Further,
over 75% of development project cost and schedule estimates are inaccurate
by 10% or more. Finally, less than 25% of companies have adequate resources
to undertake all their planned development projects.
Benchmarking best practices has enabled us to identify a number of key issues
related to project and resource planning and management that have a major
affect on rapid time-to-market. These best practices and an approach to
benchmarking and assessing an organization's product development process
in order to develop an action plan for improvement will be covered in the
balance of this paper.
There are two types of product development environments. The first is a
company that undertakes a relatively small number of major projects involving
complex products. In this type of environment, product planning involves
the consideration of each product development project, to a large extent,
independently of other development projects. The decision to go ahead with
the project implies that it is the highest priority program for investment
by the company and that whatever resources are required, will be obtained
to support the development effort.
The second situation involves companies with small- or moderate-sized development
projects (e.g., less than 50 people). In many of these organizations, development
budgets and headcounts are planned on a fiscal year basis at a nominal and
relatively constant level. There are often a number of product lines and
many competing needs for development projects. In this situation, a product
plan is critical to:
- Define an overall strategy for products to guide selection of development
- Define customers, markets and competitive strengths;
- Rationalize these competing development projects and establish priorities
for development projects;
- Estimate development resources;
- Provide a high-level schedule of various development projects; and
- Balance project resource requirements with a
budget in the overall business plan.
In the simplest terms, the product plan can be viewed as the equivalent
of the production plan used to used to guide manufacturing activities. While
a product plan is generally prepared on an annual basis, it should be reviewed
and updated at least quarterly, if not monthly. Market conditions will change,
new product opportunities will be identified, new product technology will
emerge, all causing a potential impact on the product plan. These opportunities
need to be evaluated and the product plan changed if needed. This changes
may result in re-prioritizing development projects or making a decision
to hire additional development personnel to undertake a new development
PLANNING & EXECUTION STRATEGY
The product plan embodies an overall strategy and the critical success
factors of the business. As a general rule, integrated product development
practices (IPD) suggest concentrating resources at any one point in time
on fewer projects in order to get those projects done as quickly as possible.
As these projects are more rapidly finished, resources are assigned to the
next highest priority project.
A second strategy issue involves the level of development resources. If
the company's objective is time-to-market, this would imply that development
activities are a high priority and that the organization must maintain a
sufficient level of resources to support requirements, even though the resources
may not be highly utilized at all times. The benefits of time-to-market
in this case can outweigh the cost impact of having a higher level of development
resources. If the organization's objectives are to develop a low cost product
(where the per unit development cost is a relatively large portion of product
cost) or to develop a product within a tight development budget, this would
imply that development resources be staffed at a minimum level to insure
high utilization and little downtime, even if it delays performing a development
As an organization establishes a more mature product development process,
one of the steps in this evolution will be to fully characterize and understand
the process. This would include defining and understanding the process steps
including the inputs (information & resources) and outputs. Of course,
this process should be as standardized as possible. Defining the development
process is important in order to have a basis for planning a development
With a standard development process, it becomes possible to establish a
standard project plan template (including resource estimates, task precedence,
and task duration) which further eases the effort in developing a project
plan. Even with a standard process, it is appropriate to tailor the process
to the unique requirements of the development project. For example, a product
upgrade is a less complex project than developing an entirely new product
for a new market. Therefore, this standard planning template will need to
be tailored to address these unique project requirements.
TEAM INVOLVEMENT IN PLANNING
Who develops the project plan? Often, this was done by a program manager
or a product line manager and then given to the team. This approach resulted
in the team members not developing a good understanding of the plan, not
clearly understanding the critical path and task interactions, and not being
fully committed to the plan.
Empowering development personnel to create a project plan enhances their
understanding of the plan and increases their commitment to the plan. When
all disciplines are involved in the project early and included in the planning
process, a sounder, more comprehensive, better integrated plan results.
The plan should be reviewed in a team meeting so that each product development
team member clearly understands his or her responsibilities. Since project
conditions change and performance doesn't always go according to plan, the
plan needs to be periodically maintained and revisions reviewed with team
There are several key staffing strategies to facilitate rapid time-to-market.
- Plan based on early involvement of functional disciplines to support
the parallel design of the product and the process.
- Use full-time, dedicated personnel where possible. Part-time personnel
and task-switching affect productivity and slow down development activities.
- Support rapid staffing build-up to insure the project gets off to a
- Consider delaying the start of the project if needed personnel and
resources are not available.
- Maintain the core integrated product team into
production to resolve transition problems until stable production is
achieved. This provides resources to quickly solve problems and it
provides direct feedback to development personnel on lessons learned.
RESOURCE PLANNING AND MANAGEMENT
The timely development of a new product requires that all required personnel
resources to support the development effort are available when needed. This
requires planning resource requirements by developing a realistic development
plan which includes a time-phased schedule of manpower requirements (by
discipline and position/skill level). Other indirect activities need to
be included in the resource planning to properly project all requirements.
The earlier this resource planning occurs prior to the start of a development
project, the greater the flexibility to respond to resource constraints.
Since development projects can be affected by unanticipated issues and tasks
that take longer than planned, this resource plan needs to be maintained
on a regular basis. While an earned value system will recognize potential
task overruns, most commercial organizations with small and moderate-size
projects do not have earned value systems in place and rely on feedback
from product development teams to adjust project resource requirements.
The resource plan is the basis for obtaining personnel commitments to support
the product development effort and extending or changing personnel commitments.
It is a basis, along with other departmental requirements, to plan overall
manpower requirements (see
resource planning example)
With a product development team's need for resources from different departments,
it is likely that resources from one or more departments will be constrained
and unable to respond to the project's requirements in a timely way. While
resource planning should provide some higher level visibility to take action
to alleviate significant resource constraints (bottlenecks), it is difficult
for an organization to always balance its resource requirements with its
available personnel in the short term.
There are a number of actions that can mitigate these resource conflicts
in an integrated product development environment. One action to alleviate
these likely resource constraints is to maximize the flexibility of development
personnel so that they can perform tasks that are not normally their responsibility.
As people become broader generalists through exposure to other disciplines
on teams, through training, and through team member collaboration, a balancing
of work loads will occur naturally. When a "can-do" environment
is created, people understand the importance of stepping in to perform tasks
normally outside their responsibility. By allowing engineers and designers
to operate equipment in a lab, this avoids having to wait for a lab technician
who is backlogged with work. When flexible, easy-to-use design and analytic
tools (e.g., FEA) are provided, this may mitigate the need for an analyst
or specialist who may not be available. It is important to emphasize training
and personnel development to create this type of broadly skilled workforce.
However, when the development projects planned or underway create a significant
overload on development resources, all projects are stretched out, affecting
time to market. Further, individual development personnel make decisions
on project priorities which are not necessarily in line with enterprise
priorities. Finally, this overload causes development personnel to take
shortcuts, undermining the desired process. When this overload situation
is indicated, the organization must take one of two actions: add resources,
whether permanent hires, contract labor, or subcontracting; or change the
resource requirements by deferring project starts.
Another common issue is consideration of project risks in project planning.
Human nature being what it is, most projects are planned assuming everything
will happen as intended. Except for large projects with sophisticated program
management processes, most companies do no adequately consider or address
project risks. As a result, projects are often unprepared for risks that
arise, delaying development, increasing costs, and impacting customer satisfaction.
Development processes needs to include process steps to identify, track,
and manage risks. This is a product development team's responsibility. As
the team is involved in planning the project and includes the needed functional
disciplines to support an IPD approach, it will be in a better position
to assess and monitor these risks. In addition to identifying these risks,
the team needs to take steps to mitigate these risks. This is an area that
management may be needed to support the teams efforts. When risk tracking
and risk reduction are subjects of phase gate and design reviews, it will
force the team to pay attention to these factors. This risk management process
need not be cumbersome nor complicated (see
risk managment plan example).
From a project planning and resource management perspective, it is important
to recognize that higher risk projects increase volatility of planning and
the potential need for additional resources and additional schedule. This
should be factored into the project plan and a risk reserve provided in
the form of budget and the resources to address risk issues.
Another factor affecting the project plan, the resource requirements
and time-to-market is the ability to manage customer requirements and the
product specification. It is important to establish a complete set of requirements
at the start of the project and avoid proceeding into development before
requirements are completely defined. Further, requirements need to be tightly
managed to avoid creeping elegance and its impact on time-to-market. While
rapidly evolving market needs may cause consideration of changes to requirements
after the project is underway, these changes need to be carefully evaluated
with a formal process to fully assess the impact on the development project's
cost and the impact on time-to-market before a change is made.
BENCHMARKING AND IMPROVING THE PROCESS
In its effort to improve time-to-market, there are many potential steps
for a company to consider. Where should it start? What are the most important
actions for a company to take to improve its development process? What best
practices should be adopted? To answer these questions, a company should
start by assessing its strengths and weaknesses. Next it needs to consider
its critical success factors - what is important to be successful in its
market. Then by focusing on the "gap" between where a company
is and where it needs to be, priorities can be set for making improvements.
The Product Development Assessment methodology
and the supporting Product Development Best
Practices and Assessment (PDBPA) software developed by DRM Associates
provides a thorough review of the development process based on approximately
250 best practices that have been identified from studying companies' product
development activities around the world. This level of detail allows identification
of specific strategy, organizational, process, methodology and technology
issues to address as part of an improvement program. These best practices
are organized into categories for summarization and reporting purposes.
Associated with each of these best practices is a set of questions to aid
in this assessment process. A company's product development activities are
evaluated with respect to each of these best practices, and a quantitative
rating is developed. This evaluation is supported by a verbal description
of the characteristics of the organization's product development approach
as it evolves toward a world class approach to IPD.
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.
This gap analysis becomes the basis for identifying implementation actions
and priorities. The concept is to pick a manageable number of improvement
initiatives to focus your attention on. 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. This
then becomes the basis for developing priorities and, eventually, an improvement
or implementation plan.
While formal project and resource planning and management processes may
be in place for larger product development projects, many companies do not
adequately use these tools and suffer the consequences. Even when formal
project and resource planning and management systems are in place, management
often avoids the hard decisions regarding overloaded resources. Significant
opportunities exist to reduce time-to-market by a better focus on product
planning, project planning and resource management. Specific steps and strategies
- Align project requirements with budgets and establish priorities in
a product plan
- Focus on fewer projects at any point and concentrate resources on these
- Realistically plan projects based on the tailored development process
- Involve team members in project planning to enhance their understanding
- Assign people full-time to the project and build-up staffing rapidly
- Plan and manage resources; don't overload personnel
- Address risks and recognize the potential need
for additional resources
ABOUT THE AUTHOR
Kenneth A. Crow is President of DRM Associates,
a management consulting and training firm focusing on lean product
development practices and time-to-market. He has thirty-five 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 as well as assisted product development teams
defining product requirements, planning and managing projects, and applying
IPD, design-to-cost, DFM, and QFD practices. He has helped reengineer clients'
product development processes, assisted with the implementation of product
data management systems, and helped with the development of team-based organizations.
He led a consortium to identify 250 best practices of product development
and has developed a software assessment tool based on this.
He has written papers, contributed to books, conducted training, and spoken
at many conferences on integrated product development and manufacturing.
He is the past President and 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 firstname.lastname@example.org.
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