New Product Development – One Size Does Not Fit All
Over the years, commercial businesses have discovered the benefits of involving multiple teams within the company (manufacturing, engineering, production, quality, purchasing, sales, marketing, etc.) in the new product development process. This integrated approach has replaced the “over the wall” mentality used in the past. Most companies achieve this by using some type of structured product development process such as the stage-gate process or agile product development. Each of these product development processes has advantages and disadvantages. Choosing which one is best for your company not only depends on the type of product you are producing, but also on your company’s philosophy, its tolerance to risk and market driven factors.
Today, some variation of the stage-gate process seems to be the most common. In this process, engineering product development is conducted in stages with gates established at critical points to evaluate the work completed before additional funds are released. Companies tend to like this approach because it gives the design team creative freedom during each development stage, while also enabling critical evaluation of the design and control of costs between stages. The process is best explained using an example. During the detailed design stage, considerable engineering time is spent on developing each aspect of the design, predicting performance, and ensuring proper integration of individual components into a functional system. This stage is followed by the prototype building and testing stage. Prototype tooling can be expensive to produce, and product testing takes a great deal of time. Between these two stages is Gate 3. This gate is a formal design review in which engineers from other parts of the company, managers, and salespeople meet to evaluate the design and look for potential problems. Using this process improves the quality of the design by involving more people with diverse experiences and also requiring the team to self-evaluate their design in preparation for the review. If problems are found at this stage, these must be resolved before moving to the next stage. Having this gate increases the likelihood that the product design will pass product testing in the next stage. If a product were to fail testing, it will often require reworking or replacing tooling and the testing must be performed again, costing both additional time and money. In addition, the stage gate process helps with project cost control by requiring teams to show a certain level of success prior to moving to the next development stage.
Recently, some companies have become interested in using new product development processes that remove many of the formal constraints with the potential benefit of decreasing product development time, enhancing innovation, and streamlining the process. Agile product development has been adopted by many in the software development industry to enable software developers to respond more quickly to customer needs and better integrate customer feedback. This process consists of a series of “sprints” during which one or more components of the overall product are developed. After each sprint, the different components are integrated into the next iterations of the product which is then presented to the customer for feedback. Iteration loops are quick, ranging from one day to a few weeks for most projects. This iterative process is repeated until the product development is completed.
Both processes have advantages. Agile product development enables the design to change rapidly based on customer feedback. This can be very useful when the customer does not clearly know what product features are desired from the onset. In addition, less preliminary planning is required so initial results can be obtained quicker. Moreover, each iteration can be completed quickly providing may opportunities to receive feedback on the partially develop product. This increases the likelihood of meeting the customer needs and provides opportunities to shift the direction of product development, if necessary. Finally, because the customer is providing regular feedback, there is less need for documentation during the development process. This makes Agile ideal for products with minimal investment cost and short lead times such as software products. With Agile, the main idea is to get started quickly and converge toward a final product with each iteration.
In contrast, the stage gate process shines when developing products that require high investments in production tooling and equipment. Gates within the process intentionally halt the development at critical stages to ensure that development work was done properly prior to committing resources for the next stage of development. Stage gates can save the company a significant amount of money and lost time by avoiding mistakes. The idea with stage gate is to “get it right the first time”.
However, like most things in life, the ideal solution is often somewhere between the two extremes. Products that require substantial, but not large investments in tooling and equipment, may benefit from a looser stage gate process that removes some of the barriers and required documentation while retaining a critical review prior to making a large tooling and equipment investment. Aspects of Agile can also be integrated into this hybrid process by including the construction of partially functional prototypes for customer review and feedback. As with any rule, there are also exceptions. Because Agile tends to be faster, it can be employed by companies who are racing to release their next generation of a product. The potential gain of an earlier market release is great enough to assume the additional risk that expensive tooling and equipment may not work properly and need to be redesigned or purchased again.
Although most successful companies use some type of structured product development process, the process used may not be optimized for their products or their company. For many, the process may have been initiated years ago, as the stage gate process was gaining wide acceptance among commercial businesses. Few of these companies have stopped to reconsider if it is, or ever was, optimal for their business. Over the years, the type of products the company produces may have changed. Furthermore, engineering development times are now expected to be much faster. Considering these factors, it may be time to give your product development process a “tune-up” to optimize your company’s operational performance. These enhancements could save money, reduce risk, and shorten product development times.
About the Author: Martin Tanaka is an Associate Professor at Western Carolina University who specializes in product design and development. He has eleven years of experience designing commercial products in industry and nine years of experience assisting local companies with product innovation. Dr. Tanaka has a Ph.D. in engineering and is a licensed professional engineer in the state of North Carolina. Martin also supports the local community as a technical consultant for Open Door Innovations LLC.
Copyright 2019 Martin Tanaka