Product Development Theory Comparison - Essay Example

Product Development Theory Comparison In the highly competitive business environment in which we operate it is increasing important to for a company to have a firm grasp on its product development (PD) processes. In order to be competitive a company must strive to get new products to the consumer as quickly as possible. In order to achieve this businesses have, over the years, incorporated many different theories in their practices in an attempt to meet customer demands, stay competitive, and prosper. Among the developments in the business sector have been various models to improve the quality and timeliness of new product development. Examination of Product Development Processes In order to better understand the PD process, three of the implementation theories will be examined for functionality and to further access how theory is put into action. After discussing each model, their strengths and weaknesses will be discussed. The three theories are: Stage-Gate Process, Concurrent Engineering Approach, and Third Generation Process Stage-Gate Process Stage-Gate (SG) is a PD theory that focuses on bridging the traditional boundaries found within tradition hierarchal models. This models divides the PD process into manageable stages with each divided by a management decision point. Each stage flows into the next utilizing multifunctional teams designed to complete each of the stages in a cost effective, timely fashion. At each stage members of the cross-functional team complete various tasks and information gathering. Once all the steps are completed within a stage, there is a natural hold point built in. “In this model it is imperative that data gathering of pertinent technical, marketing, financial and operations functions are incorporated into the appropriate stage to reduce the risk that could be associated with completing parallel tasks simultaneously.1 The stages after inception of an idea include: 1.) Scoping where a cost-efficient, effective evaluation of the viability and market potential is completed; 2.) Building the Business Case where critical information gathering occurs and contains three areas “project and product definition, project justification and project plan”2; 3.) Development where the plan is transcribed into concrete steps with specific manufacturing processes, marketing plans, and a testing phase; 4.) Testing and Validation where final validation of the entire project is completed; and 6.) Launch production runs are made and the new product in launched. At each gate or hold point, three quality areas are examined: “quality of execution, business rationale and quality of the action plan.3 One of four things will occur at each gate, the project: moves forward, is scrapped, is recycled or is put on hold. A few of the benefits of the SG method include: Increases order/control of key processes Gates provide focus Leaves little room for error – projects are launched successfully The process is simple to understand, visible and easy to communicate. The process saves time and money. Provides for faster time to market Concurrent Engineering Approach The main premise of Concurrent Engineering (CE) is to consider all aspects of product life cycle of the component from initially conceiving of the idea through its disposal once its usefulness is over. Throughout the process consideration is given to four main items: quality, expense, the customer requirements and scheduling. CE is not a quick fix solution, rather a long term strategy to utilize multi functional teams work together and in tandem to realize a project from start to finish with the intent of completing the project as quickly as possible correctly. In CE the members of a team are determined by the scope and needs of each individual project but could include engineering, production, quality, testing, and program management. The main theory behind CE is to get as much input from as many of the various functional areas as need before the project specifications are completed. “This results in the PD team clearly understanding what the product requires in terms of mission performance, environmental conditions during operation, budget, and scheduling.”4 By utilizing this method changes needed by downstream departments are noted early in the design process thereby reducing time and cost. By having a multifunctional team, all departments involved have input in the early stages and eliminate much of the rework which resulted from traditional design methods. CE addresses three main elements: people, processes and technology. It requires a major cultural shift in an organization. Department barriers come down; team building occurs with collaboration versus individual effort mindset. The key to the success of CE is tied to the free sharing of information across departmental boundaries. This communication is central to the success of each project. “Team members must commit to working cross-functionally, be collaborative, and constantly think and learn. The role of the leader is to supply the basic foundation and support for change, rather than to tell the other team members what to do.”5 As working in teams requires major changes in the way most companies traditionally function, extensive team training is required for success of the program. Additionally, upper management as well as all level of the organization need to ‘buy into’ the program for it to be successful. It requires a metric based approach that is data driven and relies on all member of the team to work together with open lines of communication and information sharing. Some of the main benefits of CE include: A reduction in product development time Reduced design reworks Reduced costs Overall improved communication and teamwork An example of the benefits of CE was exhibited by the success Boeing had using this model. In 1988, using CE in the development of a “mobile launcher for the MX missile, design time was reduced by 40% and cost by 10% in building the prototype” (Stark 1999). Third Generation Process Third Generation Process (3GP) is a PD model that improves the Stage-Gate theory in two major ways. First, a Discovery Stage is added to the beginning of the process which taps into the creativity at all levels of the business and extends to the end-user, the customer. A good example of this comes from a best practice developed by Guinness Breweries. In order to tap into the creativity of all employees they initiated a proactive idea handling process. All ideas are fed into one person, in their case the New Product Process Manager who takes each idea to gate 1 (entry to the process). There is a cross-functional team in place made up of mid level managers who review each suggestion received and decide if there is merit in it to proceed through the subsequent stages. Feedback is important to keep the ideas following. If an idea is killed the person who submitted the suggestion receives written feedback as to why. If an idea bears merit but placed on hold it is entered into a database which is accessible by all employees. Ideas are not ‘lost’ this way and other employees can view suggestions and add comments or suggestions to them. The second part of Guinness’ strategy involved input from customers – not just cursory “How are we doing?”; rather in-depth analysis into customer’s ideas, problems and concerns. Often there is a wealth of untapped ideas by the end-user. The second major difference involves the gate stopping points. The five “F’s” as added at these stop points include: “flexibility, focus, fluid stages, fuzzy gates and facilitation.”6 More flexibility and team authority has been given at each gate to decrease wait time, increase decision making authority by the teams and reduce wait time for management approval. Additionally the exact gate locations can become more fluid and fuzzy allowing for shorter tasks to proceed instead of waiting at a gate for longer tasks. The model is also flexible in that not all stages may be necessary for all projects. Lastly, focus is given to a wide range of projects occurring at the same time to mark one against the other in regard to set norms and company practice. Some of the benefits of the Third Generation Model include: Decreased wait time at gates Increased authority by teams Tapping into employee and customer creativity Comparison of Models Upon reviewing the three models discussed above several similarities emerged. All three models share the following similar traits. All involve cross functional teams All require an organizational change of company culture All focus on cost reduction and reducing development time There were, however, differences noted amongst the models as well. CE appears to be a more long range model that addresses not just PD issues but focuses on company culture as well. Emphasis was placed on management ‘buy in’ for success as well as the need for ongoing training of team members to give them the necessary skills for success. Although SG and 3GP acknowledged the need for cross functional teams and as they are a key component in the success of each project it should have followed that they address the importance of training teams. In reading the available literature neither model addressed that issue. Another major difference was that both SG and 3GP appeared, at least on the surface, to be more quick fixes to the PD process than long term solutions to organizational problems. As the models were discussed they did not account for the amount of time required to achieve the shift of thinking from an individual based hierarchy to a free flowing information sharing culture. That does not happen overnight. Some of the delay problems of the SG method were addressed in the 3GP model. The gates in the earlier model seemed a management hold out to maintaining control even at the risk of causing major delays in PD. The 3GP method in installing the 5 Fs into the process addressed many of these issues and appears to reduce wait time and give increased decision making ability to team members. However, it was noted that these go ahead points are still conditional. One of the most important parts I saw to all three models was the inclusion in the 3GP to employee input. Allowing every employee to have a voice, whether it is acted upon or not, is crucial in changing the climate of an organization; feeling a part, even if in a limited manner, of expanding the business and making a contribution is important for a company’s success. It fosters loyalty by the employees and shows them that the company views them as a valued, important part of the success of the company. The review of CE did not explore the steps within the design process other than to say it was cross-functional in nature and occurred simultaneously. For a model that emphasized the importance of long term implementation, training and cultural change, not much emphasis was given to how the internal process of the team functions. There appears to be a need for each company implementing such a process to develop their own strategies for this as a model did not appear to be given. It also did not fully explain the start and stop process in practical terms only in theory. Conclusion Each of the three models of PD looked at had strengths and weaknesses. No one model seemed to have identified and explained all the steps necessary for an effective, consistent PD program. However, there were many important components within each that demonstrated that each model could be an effective tool in the PD process. Perhaps, the answer lies somewhere in between the three models. There is no set ‘right way’ to accomplish something. Each company is unique and should draw from the best parts of each and develop a PD program that will address all the specific needs of the company. References Cooper, R. G., Edgett, S. J., and Kleinschmidt, E. J. (2002). “Optimizing the stage-gate process: what best practice companies are doing.” Research Technology Management, 45:5, 1-14. “Stage-gate process.” (2006). Product Development Institute Cooper-Edgett Website. Accessed 6 Jan. 2006. http://www.prod-dev.com/index.shtml Stark, J. (1999). “A few words about concurrent engineering.” John Stark Associates Website. 5 Jan. 2006. http://www.johnstark.com/fwcce.html Read More