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

URRAY ACDONALD CONSULTINGURRAY ACDONALD CONSULTING

Product Development

ProcessMurray MacDonald, P.Eng.

Copyright © 2010 Murray MacDonald

URRAY ACDONALD CONSULTING

Necessity of Product Development

• New products are typically highly profitable– study1 indicates median ROI of 33%, avg of 96%

• Product life cycles are shrinking– study2 indicates 4 x reduction in 50 years

• Competitive pressures • Customer expectations “New Products is War”

1 Cooper & Kleinschmidt

2 A.D. Little


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. Page2 A. Griffin3 PDMA survey


Product Development Performance(Reasons for New Product Failures)

• Poor Market Analysis• Technical Problems or Cost• Insufficient Marketing Effort• Poor Timing

Timing

Marketing Effort

Technical or Cost

Market Analysis

0 5 10 15 20 25 30 35

% of Failures


Successful Product Development

• Doing the project right• Doing the right projects• Based on numerous historical studies

Stanford Innovation ProjectBooz-Allen & HamiltonSong, Montoya-Weiss & SchmidtCooper & Kleinschmidt


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


Stage-GateTM Process

TM RG Cooper & Associates

Stage 1Scoping

Gate2

Stage 2Bus. Case

Stage 3Development

Stage 4Testing

Stage 5Launch

Gate3

Gate4

Gate5

Post LaunchReview(s)

Gate1

Stage 1Scoping

Gate2

Stage 2Bus. Case

Stage 3Development

Stage 4Testing

Stage 5Launch

Gate3

Gate4

Gate5

Kill

Annual?


Stage-GateTM – 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


Stage-GateTM – 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 ?


Stage-GateTM - Implementation

• Senior management commitment• Team for design and implementation

– audit exiting, benchmark others• Training & communication• Metrics – visible, score card

• IT support• Process Manager


Stage-GateTM – 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 ACriteria BCriteria CCriteria D Criteria ECriteria F


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


Feature Updates

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

Simpler Complex

Derivatives

Technology or Risk

New Platforms

Restructuring


Fuzzy

Stage-GateTM Variations

• Evolution to 3rd and 4th 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



TM RG Cooper & Associates

Gate1

Stage-Gate Express

Stage 1/2Bus. Case

Gate3

Stage 3/4Dev.&Test

Stage 5Launch

Gate5


Stage 1/2Bus. Case

Gate3

Stage 3/4/5Dev.&Launch


Stage-Gate Lite

Full Stage-Gate



• Technology Development – fundamental science or technology platform

• Criteria more strategic than financial• Typically spawns multiple commercial projects

Gate1

Stage 1Scoping

Gate2

Stage 2Assessment

Stage 3Detailed

InvestigationGate

3

Gate 4

To New Product Gate 2 (sometimes Gate 1 or 3)


Concurrent Engineering

• Paralleling activities• Multidisciplinary teams• Requires: -Stable requirements

-Communications -Planning• Better Products in Shorter Cycletimes More New Products


Concurrent Engineering - Changes

Concept Development Validation Production

Cost of Changes (%)

1 Hawtal Whiting Inc.


Concurrent Engineering

Activity

Product Planning

Eng’g – Feasibility

Engineering – Design

Testing – New

Testing - Validation

Manuf’g – Feasibility

Manuf’g - Tooling

Activity

Product Planning

Eng’g – Feasibility

Engineering – Design

Testing – New

Testing - Validation

Manuf’g – Feasibility

Manuf’g - Tooling

Historical Western

Concurrent or Japanese


• 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 Tr

aini

ng R

equi

red

Product Development Tools


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


Risk AssessmentRisk Element Value Confidence Risk Plan? Mitigation Plan Comments

Availability of Technology 1....10 1....4 V x C Y/N

Supply Issues

Time Scales

Manufacturing Capability

Capital Requirement

Market/Customers

Competitive Conditions

Customer Commitment

Pipeline (#,type)

Patents/Legal Issues

Total Weighted Risk Sum (VxC)

from RELTEC Corporation


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


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

Itemand

Function

Potential Failure Mode

Potential Effect(s)

ofFailure

Severity

Potential Cause

ofFailure

Occurrence

Design Verification (Control)

Detection

RPN

Recommended Actions/Status

Person Responsible

ActionTaken

Severity

Occurrence

Detection

RPN

0 0

0 0

0 0

0 0

0 0

0 0

0 0

from Emerson Network Power


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)


Tolerance Analysis

• Review of tolerance accumulation/buildup• Using one of: - critical only

- sub system levels- computerized – statistical

• Remedial - tighter tolerances- refined process- design change


Tolerance Analysis

2 x 4.00 d +/-0.05+/-0.10

+/-0.35

+/-0.35

Total tolerances ~ +/- 1.25


Tolerance Analysis

Vi

Vcom

R1a +/- %err

R1b

R2a

R2b

Vo = R1/R2 Vi

+ ~4 x %err Vcom

Differential Amplifier

1 mV ~

1V ~

Vo = 100mV + 40mV 4mV 0.4mV

for R1/R2 = 100 , Rerr = 1% 0.1% 0.01%


Testing Plans

• Need a Plan – detailed– Reflecting FMEA and Design Reviews input

• Stress - Abnormal operation- Temperature (accelerated life)- Vibration- Stability

• Failure Analysis


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


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


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 (www.stage-gate.com)

URRAY ACDONALD CONSULTINGURRAY ACDONALD CONSULTING

Product Development Process

Murray MacDonald, P.Eng.

Q & A

Documents

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