By now most CEOs, CFOs, and manufacturing executives have heard of 5S, Six Sigma, lean manufacturing and the mnemonics TIMWOOD and WORMPIT. Why are they important?
WASTE! The 5-letter word that haunts every business.
Why is waste harmful to an organization’s bottom line?
It’s something that adds costs to the business while providing no value to the customer. Studies have found waste can add up to being more than 75% of the labor, cycle time, materials, and/or energy involved.
In the December 2014, Industry Week article The Hardest Part of Lean is to See the Waste, William A. Levinson provided several examples of time, energy and material waste that people are “blind” to — and are sometimes reluctant to change.
As I read the article one example — an automated machine for making and serving hamburgers — struck a chord with me and got me to ask.
Do companies, manufacturing or otherwise, use any type of idea-to-launch process to develop these custom-purpose machines?
If they aren’t, they should be.
And, based on my over 15 years of experience in new product development, I can’t recommend using an idea-to-launch process enough. Here’s why.
Success instead of failure.
Failure leads to waste because as a study found approximately 46% of the resources a company devotes to the conception, development and launch of new products go to projects that do not succeed — they fail in the marketplace or never make it to market.1
Additionally, 82% of ideas get stuck in development, and 79% of new products miss the launch date leading to less time in the market and lost opportunity, revenue and profitability.2,3 In fact, research shows 50% of new products miss profit objectives.2
Why an idea-to-launch process and not just use a standard project management methodology alone?
The answer is simple. It doesn’t allow for a robust gating (go/no-go) system to make sure that end result is the best that it can be.
Before getting too deep into the details of how this type of strategy can help, let me provide an overview.
The strategy is to develop as many ideas as possible to “solve a business problem” and then use a series of strict gates to eliminate or prioritize the projects to release the best of the best solution.
The number of phases used to develop a solution depends on the project itself, and are directly proportional to the complexity of the solution or risk to the business. The phases include.
Phase 1: Idea discovery
This phase should be self-explanatory. Any and all methods of developing ideas are employed to solve the business problem.
Each idea is presented with a brief statement of the problem, a rough financial impact to the business, a competitive advantage analysis, risk evaluation, and the effort it will take to accomplish the project.
The evaluation team will include all of the necessary stakeholders that the project affects — C-level staff, finance, sales, marketing, operations and engineering to name a few.
This team throws out the obvious losers and selects all of those that meet the business’ needs.
Phase 2: Business case building
Those ideas that have made it through the discovery phase are then scrutinized further using actual data if at all possible.
History and multi-level forecasts are balanced against the needs of the business through the lens of each stakeholder up and down the value stream.
The deliverables explain the analysis and ultimately culminates in a functional specification of the idea.
These are presented to the same stakeholders from the Idea Discovery phase, and at the end of this process one or very few ideas should move forward.
Phase 3: Development
During this phase a lower level, cross-functional team is formed with a single project/program manager (PM) assigned.
Depending on the company’s structure or belief system, this team could be set aside to attack the problem full time, or could be part of each member’s daily work.
The PM orchestrates these resources to make sure the project survives.
The deliverable is basically the design for the solution, including the total cost of implementation, as well as all of the documentation for operating and servicing the product.
Phase 4: Test and validate
The product is manufactued/assembled and tested against the functional specification and the desired outcomes that were stated during Phase 2.
These results, including any modifications needed, are presented to the requesting group and to those that must maintain the product.
The product may not include all of the features that were stated in the specification, and are added to a roadmap.
Phase 5: Launch
During the launch phase all of the personnel that will use and/or maintain the product are given training, and are requested to work with the product for a period of time.
If problems arise they are reported back to the team for processing.
Documentation, including a maintenance schedule, is completed.
Phase 6: Evaluate
After the break-in period of the product a thorough evaluation of the product and the project is conducted.
- All of the operating results are weighed against the objectives.
- All issues are reviewed and plans developed for correction.
- All lessons learned during the process are captured for future use.
The phases can be done sequentially, but some can be done concurrently to speed up the process. However, users of any of the idea-to-launch processes have found that the time to launch their idea is affected by working on the phases concurrently versus sequentially.3
Within each phase project management principles and methodologies are used as a way to bring a cross-functional group together to tackle mostly singular issues.
Each phase, governed by a different group of managers of varying hierarchy level, has a set of deliverables that are used to decide the fate — go, kill, hold, recycle, or conditional go — of the project. A set of criteria — questions or metrics — is used to judge the deliverables and to develop the results. These results include: a decision, an action plan for the next gate, the list of deliverables and a date for the next gate.4
As with any project or process buy-in from all levels is essential to increasing the likelihood of success.
The end result, whether for product intended for customer release or for custom-purpose internal use, should be a product that is bound to succeed — but it’s not a guarantee.
Over the next six installments, we will discuss each design phase in detail. Some of the topics covered will include.
- A deeper description of the phase.
- Who should be team members and their responsibilities.
- Deliverables and decision-making process.
- Issues that can arise and the solutions.
1Stage-Gate® – Your Roadmap for New Product Development, http://www.prod-dev.com/stage-gate.php
2SGI Benchmarking Study, http://www.sopheon.com/new-product-development/
3CGT/Sopheon Survey, https://www.sopheon.com/new-product-time-to-market/
4Cooper, Robert G.; Edgett, Scott J. (1 March 2012). Best Practices in the Idea-to-Launch Process and Its Governance. Research-Technology Management 55 (2): 43–54
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When I learn something that would be relevant and educational to our customers and website visitors, I’ll write how-to, what to look for and other educational articles — along with company news.
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