Abstract– The relevance of collaborative Product Development (PD) is rising with the decrease of product life cycles combined with growing customer demands. Industrial manufacturers now experience competition in the global market where differentiation is necessary for survival. Hence, in order to differentiate from low-cost competitors and increase PD performance, some industrial manufacturers now seek competitive advantage by experimenting with new ways for collaborative PD. This includes integrating customer-focused agile process models like Scrum from the software industry into their existing PD models. Thus, instead of replacing traditional stage-gate models, agile methods are currently integrated in existing PD models generating hybrid solution for collaborative PD. This paper includes a study of three industrial cases that have successfully integrated Scrum into the stage-gate process model for collaborative PD. The paper introduces the three functional hybrid models, including the impact on PD performance, PD roles and customer collaboration.

Keywords – Collaborative product development, Scrum

implementation, Stage-gate model, performance.

I. INTRODUCTION

Collaborative Product Development (PD) is a competitive advantage for differentiation in the global marketplace [1]. Traditionally, in industrial manufacturing companies collaborative PD is conducted using a linear stage-gate process model [2]. However, research studies indicate that product development is an iterative process that requires iterative project models [3]. Information systems research has found agile project management methods including Scrum, to be positively related to PD performance in software development [4]. Recently, similar research studies have been made in the implementation of agile PD models at industrial manufacturers, finding similar performance results. The implementation of Scrum in the software industry implies that Scrum replaces the former PD model and methods. However, in the industrial setting researchers find that Scrum is integrated into an existing linear stage-gate process for product development [5]. This paper seeks to explore how the integration of Scrum in a linear stage-gate process affects the activity process and the consequences on performance, PD roles, planning levels, and external collaboration during the PD process. In the following discussion, the relevant theory on PD process models is introduced including collaborative PD and Scrum. Based on the theoretical background, research questions are provided followed by presentation of the

case study method, results, discussion, and finally the conclusion. A. Stage-Gate Product Development Models, Roles, and Planning Levels The dominating process model for PD is the activity-based type, which is a visual representation of the activities and the connection between them [3]. This particular class of process models view a project as a process, decomposed into a network of activities [3]. The models are based on a macro-level structure often including a series of phases and gates [6]. Most of these are based on the linear stage-gate model first introduced by Cooper in 1979 [7, 8], and have a linear structure consisting of a number of sequential stages with gates in between. To pass a gate, the tasks of the activity must first be completed [3]. A dominating model for industrial PD in Europe is the stage-gate model provided by PRINCE2 [9, 10]. Stage-gate models can be subdivided in three hierarchical planning levels: strategic, tactical, and operational PD planning [11], which originates from hierarchical production planning [12]. The purpose of planning levels is to structure the organizational design, identifying information flows and to decompose large problems into manageable components and decisions in a hierarchical order [11]. Employee roles are a central element determined through the PD model [13]. The roles determine responsibilities of activities of the involved stakeholders [13]. In PRINCE2, employee roles include three main roles; project board executives, the project manager and a project team [9]. Project board executives (senior user, senior supplier and executive) are responsible for approving the project startup, major project plans and any major deviations from scope. The project manager is responsible for project management on a daily basis including project planning and ensuring project deliveries, whereas the project team is responsible for execution of assigned tasks with no influence on activity management [9]. This is a major difference to Scrum, where the development team is responsible for joint activity management, as described in subsection B. Managing PD is increasingly considered to be a cross-organizational challenge, which is why collaborative PD is a research area of increasing interest [1]. The collaborative PD process is defined as “a virtual process where one or more activities of the PD process are performed by different enterprises or the result of one

Scrum Integration in Stage-gate Models for Collaborative Product Development - A Case Study of Three Industrial Manufacturers

Anita Friis Sommer1, Andreas Slavensky2, Vivi Thuy Nguyen 1, Kenn Steger-Jensen1, and Iskra Dukovska-Popovska1

1Department of Mechanical Production and Engineering, Aalborg University, Aalborg, Denmark (sommer@m-tech.aau.dk)

2AN-Group A/S, Aarhus, Denmark

978-1-4799-0986-5/13/$31.00 ©2013 IEEE

or more activities of the PD process come from different enterprises’ [14], and more broadly as a “cooperative relationship between firms aimed at innovation and the development of new products”[15]. Collaborative PD process models have been proposed using a stage-gate approach [1, 16]. Collaboration is proposed at each stage [16] as presented in figure 1, and as joint collaboration throughout the process [17]. We consider collaboration especially in the first stages, since collaboration at an early stage has the biggest impact on PD performance and customer value [18, 19].

Fig. 1. Activity-based CPD process.[1]

B. Agile Collaborative Product Development with Scrum Various researchers have criticized the use of stage-gate models for PD [20, 21] arguing that the models require a simplistic context uncommon for PD projects. Alternatively, PD models with iterative activity flows are proposed, for instance the spiral model by [22], and circular models for product innovation [23] and PD interfaces [24]. However, these models have been found difficult to implement in practice [25], and many industrial companies still struggle with well known PD challenges related to the stage-gate model constraints [2]. Scrum is a software development method that has gained increasing interest in agile PD due to the positive impact on PD performance [5, 26]. Scrum includes a toolbox of interconnected project management methods [26]. The Scrum process model, presented in figure 2, is the keystone on which the methods are coupled [27].

Fig. 2. Scrum process model by [27].

Scrum has three iterative stages: Product backlog development, main sprint, and daily sprints. The model has an iterative nature and all three stages are repeated throughout the PD process. Initially, the product backlog

is developed in collaboration with the external and internal stakeholders. In the product backlog the PD process is decomposed into a number of sprints varying between 2-4 weeks based on the product description and estimated time and resources. When the product backlog is developed it is fixed, the activities of the first main sprint are determined, and then the first sprint is initiated. The main sprint consists of a number of activities lasting no more than 2 days each. The team is responsible for activity management during the main sprints. During each daily sprint activities are fixed, however there is a short meeting of 15 minutes every 24 hours, where activities are evaluated, coordinated and corrected if necessary. When the main sprint is finalized, it is evaluated and the product backlog is corrected accordingly. Then activities for the next sprint are determined and then the second sprint is initiated. This iterative process continues until the product requirements in the product backlog are fulfilled. A similar approach to change management, that might explain the success of Scrum, was provided by Kurt Lewin in 1947. He proposed an iterative three-step model with the steps; unfreeze, change, and freeze [28]. Freezing the change process enables high productivity, whereas unfreezing, and changing according to new knowledge, ensures high flexibility [28]. Scrum includes 3 PD roles: Product owner, scrum master, and scrum team. In collaborative PD there is an internal and an external product owner determining product specifications, resource constraints, time frames and prioritizes activities between each sprint in collaboration. The scrum master is responsible for managing the scrum team, coordinating with the product owners, and enabling productivity in each sprint. The scrum team is responsible for carrying out the tasks in cross-organizational collaboration including activity management within each sprint [26]. A recent case study of 7 Danish industrial manufacturers [5] finds that Scrum was integrated into existing stage-gate models but with different degrees of integration. However, the integrated process models are not investigated further, and the collaborative perspective is also omitted from focus even though this is essential in agile PD [29]. Hence, this leads us to formulate the following research question: What are the impacts of Scrum implementation in industrial product development on product development performance, process model, roles and external collaboration?

II. METHODOLOGY

A multiple case study was found suitable since the aim is to explore an empirical phenomenon within its context [30, 31]. This method provides the opportunity for developing an in-depth understanding, and analysis of complex structures with the objective of theory development rather than theory testing [32]. The unit of analysis is an activity-based process for collaborative PD subjected to implementation of Scrum. The three selected cases, presented in table 1, are large Danish industrial

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manufacturers that have implemented Scrum in their existing PRINCE2 stage-gate model for PD.

Case A and C include retrospective interviews with two senior project managers from each case company. In total four interviews were recorded, transcribed, and analyzed in relation to the presented theory. The interviews were triangulated through a document analysis of substantial and detailed company documentation of each implementation project [31]. Case B includes group interviews with each of the eight development teams both before and after implementation giving a total of 16 group interviews. Each group interview lasted about 2 hours and was documented by notes taken during sessions. Furthermore, visual process models for each team were photo documented for data triangulation in case B. Interviews are based on a semi-structured interview guide including open-ended questions [30] aiming at a detailed description of performance, process model, roles, and external collaboration.

III. RESULTS A. Case A Scrum is integrated in new PD by all eight teams, supporting the overall stage-gate project model in the company. The applied process model is presented in figure 3.

Fig. 3. Product development model Case A

The development process is structured around three planning levels; 1) Overall stages and gates in the company process model for PD projects, 2) Work packages, which have to be completed to fulfill the requirements for the individual stages, and 3) the Scrum process, which is used to operationalize and complete the work packages. Activity management in level 3 is supported by an electronic Scrum-board based on a

software system for agile project management. The software includes Scrum artifacts, methods and planning tools as well as an electronic storage of deliveries. The teams are self-organized and include a project manager, a scrum master, and at least one product owner, where more than one is needed for cross-organizational projects. The product owners and scrum masters focus on the actual PD process, whereas the project manager is the political and coordinating linkage to the rest of the company. Some of the most tangible results achieved after the Scrum implementation was a closer interaction with the customer through direct contact between the PD team and customers. The increased customer collaboration has led to more accuracy and higher quality in the PD process. Furthermore, the team have stated and showed more ownership for the projects through the self-organized approach. The impact of Scrum also includes better-defined goals and re-use of previous projects findings. B. Case B The PD process of case B is structured around a stage-gate model at the strategic planning level, incorporating Scrum as an integrated approach in the projects. Planning is performed on three levels as shown in figure 4, where the stages are mandatory and estimated very general in regards to deadlines.

Fig. 4. Product development model Case B

Second level planning is at a departmental level as PD projects must consist of at least one representative for each of the four areas; project management, market, product and supply to ensure an integrated PD process. The four areas use Scrum both when working cross-organizationally as well as individually within areas whenever more than 3 persons are involved from the same area and/or location. The market representative is typically a key account manager who is directly in contact with the customers through regular meetings, exhibitions and surveys, transforming these inputs into a product backlog together with the Scrum team. Product representatives are from development and production; project management representatives serve as coordinators and political filters whereas the supply representative ensures resources, material and information for the project. The PD teams are positioned across several different locations in Denmark, which is why daily Scrums are omitted. To compensate for this, the team meets for a whole day every week in an allocated project

TABLE 1 OVERVIEW OF CASES

Company Type PD process

A Large manufacturer of plastic toys

Digital solutions development

B

Large manufacturer of windows

Window development

C Large manufacturer of electronics

Scrum implementation in linear process model for amplifier development

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room, which included a physical Scrum board, proto-types, overall plans and temporary workstations. Customer collaboration has increased after implementation due to the appointment of a market representative responsible for customer collaboration throughout the process. Team effectiveness has increased through improved cross-organizational communication and coordination. Furthermore, rework both on physical and informational deliveries was reduced by at least 20%. In the future it is planned to implement a Scrum software to support the long distance collaboration. C. Case C

In this case, Scrum implementation included re-organization from a matrix organization to a dedicated team organization. The new organization included one dedicated PD team for each of four business areas and the traditional project manager is substituted with product owners and Scrum masters. As presented in figure 5, Scrum is integrated at the lower planning level as a mean to reach goals within each stage, keeping the stage-gate process at a high planning level, i.e. months and high level assignments, where each gate is a steering committee meeting.

Fig. 5. Product development model Case B

Dedicated project rooms for each team facilitated the Scrum process. The scrum model was followed including the prescribed methods. Customers collaborate with an internal business manager throughout the process and team members involve customers through participation in exhibitions and workshops in early PD stages. However, some of the teams deviated from the initial Scrum approach, using traditional electronic PD tools to support the process e.g. excel-sheets, variants of Scrum board designs, and slightly different ways of using the product backlog. Even so, PD performance has improved beyond expectations. While the new product introduction rate has remained constant, the number of PD employees was reduced by 25%, the product quality was improved, product maintenance and number of customer complaints have decreased, and engineering change orders in late process stages are eliminated. Additionally, the company experienced improved team morale, with higher motivation and efficiency.

IV. DISCUSSION

The results highlight both similarities as well as differences in the impact of Scrum implementation. To provide an overview, the affected artifacts in the cases are presented in table 2. If the PD artifact is only partially

present this is marked with ‘(x)’ instead of ‘X’. For instance, customer collaboration in case C is marked with ‘(x)’ since the PD team collaborates with customers through an internal business manager and does not include direct interaction, whereas case A and B have customer collaboration with the PD team, and are marked by ‘X’.

Here we have chosen to elaborate further on PD performance, process model, roles, and external collaboration. PD performance as well as employee motivation and morale, has improved in all three cases. This indicates that hybrid models of linear stage-gate models and Scrum have a positive impact on PD performance for industrial manufacturers. This is possibly related to the flexibility provided by the Scrum model combined with increased team productivity [26]. Even so, the case solutions differ in practical application and industrial context to such an extent that correlation between performance and specific elements are unclear. The positive results could be contextually related or caused by other factors than the ones examined here. Therefore, we recommend future research identifying significant relations between Scrum artifacts and industrial PD performance. Furthermore, we call for future research on the impact of hybrid PD models to support our empirical findings. Scrum integration includes project role changes which may require extensive re-organization, however our results supports that the increased team empowerment is positively related to PD performance and employee motivation [26]. Interestingly, neither of the companies involve suppliers, which is contradictory to recent research indicating a positive relation between supplier collaboration and PD performance [33]. On the other hand, customer collaboration was established in all three cases primarily through a PD role responsible for direct customer contact. However, in two of the cases customers are mostly indirectly involved in PD, and not collaborating with the team during sprints, even though this is recommended [26]. Hence, it appears that some industrial manufacturers still have an arms-length

TABLE 2 PD and Scrum artifacts in three cases

Changed PD artifacts

Cases

A B C

Linear activity flow X (x) X

Iterative activity Flow X X X

Improved Performance X X X

Re-organization (x) (x) X

New PD roles X X X

Supplier collaboration

Customer collaboration X (x) (x)

Self-organized teams X (x) X

Daily Scrum X (x)

Project Room X X

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approach to customer collaboration in PD projects. Therefore, we recommended future research on the differences in PD performance for Scrum integration depending on degree of customer collaboration.

V. CONCLUSION This paper contributes to existing research with new insights into agile activity-based models for collaborative PD. The case study examined included three examples of Danish industrial manufacturers, and investigated the impact of integrating Scrum in stage-gate PD models. The case companies all show increased PD performance on several parameters, including presentations of three hybrid PD models, with PD roles and customer collaboration. Practitioners can benefit from the findings as inspiration for Scrum integration in existing PD models.

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