"Necessity is the mother of invention."
A quote attributed to the Greek philosopher Plato, the words continue to ring true nearly 2,400 years after his death in a vast array of situations and provide impetus for the development of myriad new products. Interestingly enough, it is providing impetus for new concepts in the new product development process itself.
How so? Successfully introducing new products into the marketplace remains a challenging proposition for many, if not most, manufacturers. A 2008 survey showed that companies were meeting their product launch dates just 45% of the time, on average. More recently, a survey of senior executives by Boston Consulting reported that only 52% of them were satisfied with their companies' return on investment in innovation.
"I will have a meeting this very afternoon with literally half a dozen folks around the world who are working on a project for Xerox where this [concern] is our exact topic: How are we going to speed this up and make sure we get a better result?" George Gibson told
IndustryWeek. Gibson is a chapter president for the Product Development and Management Association (PDMA). He also is a manager of Next PIJ Platforms in the Xerox Innovation Group. "At every company I know, that very conversation is going on as well. Getting better in a way that confers competitive advantage is the primary question facing new product development professionals."
For some manufacturers, getting better may be as simple as actually instituting a product development process (although there also exists a school of thought that says process is overrated.) It is not a school attended by Dantar P. Oosterwal, author of "The Lean Machine: How Harley-Davidson Drove Top-Line Growth and Profitability with Revolutionary Lean Product Development." Oosterwal, who worked for nine years at Harley-Davidson and followed that with a stint at Sara Lee, says having a formal or standardized product development process is enormously important. Without one, it becomes very difficult to improve upon the process. Moreover, he says,
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"Getting better in a way that confers competitive advantage is the primary question facing new product development professionals."
-- George Gibson, chapter president, Product Development and Management Association (PDMA). |
"It provides a mechanism for communicating. By having a standard protocol, everybody knows what they need to get done, how they need to get it done, and how you interact with each other. Without that you have tremendous waste."
Easily the most prevalent of product development processes among manufacturing companies is some sort of staged process. Staged processes are characterized by the concepts of stages or phases, intersected by toll gates. The number of stages can vary and incorporates processes such as concept exploration, system exploration, business analysis and ultimately a ramp-up to production. Between each stage are the toll gates, which effectively serve to give management the opportunity to review the output of the prior stage or phase. The decision to proceed with the project, cancel the project or repeat a previous stage is made at each gate. Various estimates put 60% to 80% of companies in manufacturing using some sort of staged process in their product development.
For good reason. It organizes the product development process in a better-than-average way, and it has the advantage of operating along the line of how business investments are made, Gibson says. Most companies won't commit to large investments at the start of a process, and staged development offers a means of continually addressing risk. Third, the review process gives senior management control, notes Steven Eppinger, professor of management science and engineering systems at the Massachusetts Institute of Technology's Sloan School of Management. "Senior managers want for control. It's one of the big reasons senior managers like it," Eppinger says.
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