Transcript Tools for Improving the NPD Process(Stage-Gate)

Chapter 11
Managing the New Product
Development Process
Copyright © 2013 by Prof. D. J. Lee, Kyung Hee University All rights reserved.
Overview
• Despite the intense attention paid to
innovation, failure rates are still very
high.
• More than 95% of new product
development projects fail to earn an
economic return.
• This chapter summarizes research on
how to make new product development
more effective and efficient.
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Objectives of the New Product
Development Process
• Maximizing fit with customer requirements
• requires knowing which features are most important to
customers, what a customer is willing to pay, and how to
resolve competing customer desires.
 Technologically advanced
- Highly advanced chip
- Object oriented OS
- Openly licensed the architecture
- Better weight, size, battery life
 However,
- Too large to kept in a pocket
- Too small screen
- Problems with handwriting recognition
Apple’s Newton MessagePad
11-3
Objectives of the New Product
Development Process
• Minimizing development cycle time
• can afford a firm the opportunity to be first to market
with a new product (i.e. better opportunity to build brand
loyalty, capture scarce assets, build customer switching
costs, and develop complementary goods).
• Development costs are directly related to time
• High chance to fully amortize the fixed initial cost of
NPD before obsolete (critical when short life cycle)
• Can quickly revise or upgrade design flaws
• Controlling development costs
• important because even if products are a good fit with
customer requirements and are brought to market quickly,
if development costs are uncontrolled the firm will have a
difficult time recouping its expenses.
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Sequential versus Partly Parallel
Development Processes
• Sequential NPD
process: working this
way often resulted in
multiple product
revisions and lengthy
cycle times.
• Partly parallel process
(Concurrent Eng.):
shortening overall cycle
and enabling developers
to communicate
requirements in the next
phase.
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Sequential versus Party Parallel
Development Processes
• Parallel processes are not universally endorsed
• If variants in product design require significant
changes to the process design, beginning process
design before the end of product design can result in
costly rework of the production process
• Highly risky especially in markets with rapid change
and uncertainty
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Project Champions
• As of 2001, 68% of North American firms, 58% of
European firms, and 48% of Japanese firms reported
using senior executives to champion their NPD projects.
• Benefits of Championing
• Senior execs have power to fight for project
• They can gain access to resources
• They can communicate with multiple areas of firm
• Risks of Championing
• Role as champion may cloud judgment about project
• May suffer from escalating commitment
• Others may fear challenging senior executive
• To counteract these risks, firms may create the role of
“anti-champion” and encourage expression of dissenting
opinion.
11-7
Theory In Action
The Development of Zantac
• In the 1970s, David Jack of Glaxo Holdings began working
on an ulcer drug. Unfortunately, SmithKline Beecham beat
Glaxo to market, introducing Tagamet in 1977.
• Jack decided to introduce an improved product, and
implemented the first parallel process in pharmaceuticals to
beat Merck and Eli Lilly to market.The compressed
development process would shorten development time, but
was also expensive and risky.
• Fortunately, Paul Girolami, Glaxo’s director of finance,
chose to champion the project, and encouraged Jack to
develop improvements to the product which would
differentiate it.
• By 1987, Glaxo’s Zantac was outselling Tagamet. Jack and
Girolami were knighted, and Girolami became Glaxo’s
chairman.
11-8
Involving Customers and Suppliers
in the Development Process
• Involving Customers
• Customer is often best able to identify the maximum
performance capabilities and minimum service
requirements of new product.
• Customers may be involved on NPD team.
• Firms may also use beta testing to get customer input
early in the development process.
• Enabling customers to “cocreate” the end product
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Involving Customers and Suppliers
in the Development Process
• Involving Customers
• Some studies suggest that it is more valuable to use
“lead users” than a random sample of customers.
• Lead users: Customers who face the same general needs of
marketplace but experience them earlier than rest of market and
benefit disproportionately from solutions.
• In 2003, firms reported using lead user method for 38% of the
projects they undertook, on average.
• Involving Suppliers
• Involving suppliers on NPD team or consulting as an
alliance partner can improve product design and
development efficiency.
• Suppliers can suggest alternative inputs that reduce
cost or improve functionality.
• Ex) Chrysler’s SCORE, Boeing’s development of 777
11-10
Research Brief
•
•
•
•
•
The Lead User Method of Product Concept
Development
Hilti AG used the lead user method to develop a new
pipe hanger.
First customers with lead user characteristics were
identified through phone interviews.
Lead users participated in a three-day product concept
generation workshop. At end of workshop, a single
design was selected as best.
Hilti then presented this design to 12 long-term
customers; 10 of the 12 preferred the new design and 9
of the 10 were willing to pay a 20% price premium for it.
The lead user method reduced the cost and time of the
project by almost half.
11-11
Tools for Improving the NPD
Process(Stage-Gate)
• Stage-Gate Processes
• Utilize tough go/kill decision points in the
development process help filter out bad projects.
11-12
Tools for Improving the NPD
Process(Stage-Gate)
• Each gate has three components
• Deliverables
• Criteria
• outputs
• The time and cost of projects escalates with each stage,
thus stage-gate processes only permit a project to proceed
if all assessments indicate success.
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Tools for Improving the NPD
Process(Stage-Gate)
• The stage-gate process can be modified
to better fit a firm’s particular
development needs.
• E.g., Exxon Research and Engineering’s stage-gate
system
• Nearly 60% of firms use some type of stage-gate
process to manage their NPD process.
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15
S Elec. Co. Case
개발 단계별 Go/No-Go의사결정 체계 강화
최신 시장 분석 자료 및 프로젝트 현황 자료 근거의 제품개발 단계별 의사결정 체계 운영
As-Is
To-Be
 단계별 승인권자 변경 및 마일스톤 간의 의사결정 기준의 일관성
 일관성있는 의사결정 체계확립 (DCP 회의)
미흡 (마케팅팀장→개발팀장→CS팀장 →제조팀장)
 프로젝트 착수로부터 개발완료까지 문서가 간소하고 일관성 있음
 명확한 의사결정 없이 개발 프로젝트 착수
 경영성과 중심으로 착수에서 단종까지 목표대비 성과를 평가
 先 개발에 대한 의사결정과 현행의사결정 마일스톤 간의 차이
승인자
마케팅팀장
단계별 승인권자 변경으로 ROI
의사결정의 일관성 미흡
공식 마일스톤
DIA
PIA
Go
Project
Charter
(=PPA)
개발팀장
Data 근거
의사결정
QCD
Plan
개발실행에 대한 의사결정과
마케팅의 승인간의 Gap 존재
DIA
DIA
DVR
PIA
Plan
PIA
통합 PRA
ELA
PVR
PRA SRA
Decision?
Concept
Prod.
Develop
실제 제품개발
투자의사결정 이전에 개발 착수
Decision?
Dev.
Plan
No-Go
Redirect
PRA SRA
Concept
Concept
의사
결정
Develop
Business
Potential 확인
및 Plan 단계
착수 승인
적기완료 및
수익성 확인
개발단계 투자
승인
IPMT와 POT 간
Pjt목표계약
시장상황과QCD
확인
Resource 재배치
의사결정
양산단계 Action
Plan 점검
생산,판매,서비스
중단의사결정
프로젝트 비즈니스
목표달성여부
평가
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16
S Elec. Co. Case
 과제관리 추진 방향
- PLC/RLC 기반의 과제관리 프로세스에 8대 기능별 기준 수립 및 규정화
- 시스템은 자율적으로 운영하되 각 과제관리 시스템에 8대 기능 구현
→ 전사 Data Hub에 과제관리 필요 항목을 전송
- 필수관리항목 및 KPI를 통한 전사 과제의 실시간 분석 및 의사결정 정보 제공
실시간
개발관
리
시스템
Data Hub
(DW)
과제별
성과관리
실시간
Checking
& Control
핵심지표
관리
전략적 개발관리
…
What-if
Simulation 및 예측
개발과제관리
제안
계획과제관리
이관
과제관리
수익성 분석
경영기여 및 RISK정보
상품화
기획
GBM/법인
개발계획
개발구현
CRM
양산
일정
산출물
개발비
일정
산출물
개발비
인력
재료비
과제계획
인력
재료비
과제계획
문제점
지표/현황
문제점
지표/현황
SPDM
MS-PJT Server
PHIS
MS-PJT …
개발비 및
원가분석
SPDM
eCADIS
PHIS
SPDM_LCD …
기준정보
ERP
APS
…
특허
다차원
데이터 분석
연구소
신재무
과제관
리
시스템
Forecasting/
Simulation
Data Hub
과제단위의 Q,C,D정보
신원가
분석전용
Apps(OLAP)
SRM
11-16
Tools for Improving the NPD
Process(QFD)
• QFD improves communication and
coordination between engineering, marketing,
and manufacturing.
11-17
Tools for Improving the NPD
Process(QFD)
• Steps for QFD
1.
2.
3.
4.
5.
6.
7.
8.
9.
Team identifies customer requirements.
Team weights requirements in terms of relative importance.
Team identifies engineering attributes that drive performance.
Team enters correlations between different engineering
attributes.
Team indicates relationship between engineering attributes
and customer requirements.
Team multiplies customer importance rating by relationship
to engineering attribute and then sums for each attribute.
Team evaluates competition.
Using relative importance ratings for engineering attributes
and scores for competing products, team determines design
targets.
Team evaluates the new design based on the design targets.
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Tools for Improving the NPD
Process(DFM)
• Design for Manufacturing often involves a set
of design rules that reduce cost and
development time, while boosting quality.
11-19
Tools for Improving the NPD
Process(FMEA)
• FMEA(Failure Modes and Effects
Analysis) is a method by which firms
identify potential failures in a system,
classify them according to their severity,
and create a plan to prevent them.
• Potential failure modes are evaluated on three
criteria of risk: severity, likelihood, and inability of
controls to detect the failure.
• Each criteria is given a score (1-lowest, 5-highest)
• Composite score is used to prioritize development
efforts
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Tools for Improving the NPD
Process(CAD/CAM)
• Computer-Aided Design (CAD) is the use of
computers to build and test designs.
• Enables rapid and inexpensive prototyping.
• Computer-Aided Manufacturing (CAM) is
the use of machine-controlled processes in
manufacturing.
• Increases flexibility by enabling faster changes in
production set ups. More product variations can be
offered at a reasonable cost.
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Tools for Measuring New Product
Development Performance
• Measuring performance of NPD process
can help company improve its innovation
strategy and process.
• Measures of NPD performance can help
management:
• identify which projects met their goals and why,
• benchmark the organization’s performance compared to
that of competitors, or to the organization’s own prior
performance,
• improve resource allocation and employee compensation,
and
• refine future innovation strategies
• Important to use multiple measures to provide fair
representation
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Tools for Measuring New Product
Development Performance
• New Product Development Process Metrics
include:
1. What was the average cycle time (time-to-market)
for development projects? How did this cycle time
vary for projects characterized as breakthrough,
platform, or derivative projects?
2. What percentage of development projects
undertaken within the last five years met all or most
of the deadlines set for the project?
3. What percentage of development projects
undertaken within the last five years stayed within
budget?
4. What percentage of development projects
undertaken within the last five years resulted in a
completed product?
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Tools for Measuring New Product
Development Performance
• Overall Innovation Performance
measures include:
1. What is the firm’s return on innovation? (This
measure assesses the ratio of the firm’s total profits
from new products to its total expeditures, including
research and development costs, the costs of
retooling and staffing production facilities, and
initial commercialization and marketing costs.)
2. What is the percentage of projects that achieve their
sales goals?
3. What percentage of revenues are generated by
products developed within the last five years?
4. What is the firm’s ratio of successful projects to its
total project portfolio?
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