product development process murray macdonald, p.eng. copyright © 2010 murray macdonald
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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
URRAY ACDONALD CONSULTING
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
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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
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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
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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
URRAY ACDONALD CONSULTING
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?
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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
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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 ?
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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
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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
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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
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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
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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
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Stage-GateTM Variations
TM RG Cooper & Associates
Gate1
Stage-Gate Express
Stage 1/2Bus. Case
Gate3
Stage 3/4Dev.&Test
Stage 5Launch
Gate5
Post LaunchReview(s)
Stage 1/2Bus. Case
Gate3
Stage 3/4/5Dev.&Launch
Post LaunchReview(s)
Stage-Gate Lite
Full Stage-Gate
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Stage-GateTM Variations
• 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)
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Concurrent Engineering
• Paralleling activities• Multidisciplinary teams• Requires: -Stable requirements
-Communications -Planning• Better Products in Shorter Cycletimes More New Products
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Concurrent Engineering - Changes
Concept Development Validation Production
Cost of Changes (%)
1 Hawtal Whiting Inc.
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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
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• 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
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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
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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
URRAY ACDONALD CONSULTING
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
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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
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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)
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Tolerance Analysis
• Review of tolerance accumulation/buildup• Using one of: - critical only
- sub system levels- computerized – statistical
• Remedial - tighter tolerances- refined process- design change
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Tolerance Analysis
2 x 4.00 d +/-0.05+/-0.10
+/-0.35
+/-0.35
Total tolerances ~ +/- 1.25
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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%
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Testing Plans
• Need a Plan – detailed– Reflecting FMEA and Design Reviews input
• Stress - Abnormal operation- Temperature (accelerated life)- Vibration- Stability
• Failure Analysis
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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
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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
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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
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