Industry Market Trends

Tips for Improving Product Development

Apr 14, 2009

When it comes to having a properly managed product development process, every business can benefit from inspection of its methods and continuous improvement.

There are many steps between concept and completed product. It is within this timeframe that companies struggle to develop the idea into a finished piece. Here we look at some best practices and principles for successful product development.

A recent report from Aberdeen Group reiterates the importance of having a well-managed product development process by showing the differences in gains earned by those who were classified as best-in-class (top 20 percent), industry average (50 percent) and laggard (bottom 30 percent) when it came to managing product development.

The companies considered "best in class" showed a revenue increase of 4 percent or more in the past year whereas their peers in the other groups had no growth or suffered from a revenue decline of 5 percent or more. Best-in-class companies were also 57 percent more likely to meet their target launch/delivery dates and were 62 percent more likely to develop products that meet or exceed revenue targets.

The report, titled The Top Five Principles for Successful Product Development, notes three product development characteristics that "industry-average" organizations lacked but best-in-class companies held, which helped the latter to get a step ahead of the competition.

Best-in-class companies were 89 percent more likely to provide centralized access to product information to the design teams, 57 percent more likely to support a standardized process for reporting product releases to manufacturing, and 44 percent more likely to assess the impact of an engineering change across all departments involved, not just engineering.

For companies that currently aren't "best in class," Aberdeen Group and other product-development resource organizations offer guidelines for improving such practices. However, before the product development process can even be addressed, there must be a product or product improvement idea to begin with.

Guy BelletĂȘte, general manager of the Institut de Developpement de Produits (Institute of Product Development), tells Value to Wood, a Canadian forestry solutions initiative, that to create a competitive advantage and develop a value-added product, manufacturers should gather ideas from customers.

"Create a feedback loop with your customers to capture ideas for improvements," BelletĂȘte suggests. "Involve customers early and often throughout the development process. Analyze market trends and get to know the strengths and weaknesses of the competition before you start developing a new product."

Once there is a product in mind, the next step is to manage the project to make the idea a reality. For "laggards," Aberdeen Group suggests taking the following actions.

Centralize access to product design data — including standard components. Doing so helps minimize design errors, improve efficiency and avoid duplication of effort. This approach helps reduce the time spent searching for data and capitalize on parts reuse, where possible.

Product development consultancy Parametric Technology Corp. (PTC) echoes this recommendation, adding that the information should be shared with cross-function teams like engineering, manufacturing, sales, sourcing and other relevant parties. Says PTC, "When all stakeholders in the product development process have instant access to the most current product definition data" manufacturers can reduce time-to-market by 37 percent, lower costs by reducing the number of errors and change requests, optimize quality by 19 percent and drive innovation through idea exchanges and design iterations.

Standardize the process for approving and releasing product designs to manufacturing. According to Aberdeen Group, having a standard process for delivering engineering information to the manufacturer can save time and money by avoiding errors such as missing, incorrect or incomplete engineering data.

Engage all project stakeholders in the change approval process. By engaging representatives from multiple groups — not just engineering — in the change process, companies can avoid costly decisions made as a result of poor information or lack of information, Aberdeen Group says.

This collaboration also helps to minimize the reworking of ideas each time a change is viewed by a different department such as marketing, manufacturing, engineering or finance, BelletĂȘte notes. "Using multifunctional teams ensures that you don't put your resources into ideas that, when looked at from all company perspectives, are not promising."

Companies that are considered industry average or best in class can also benefit from the advice for laggards, perhaps tweaking some of these recommendations to suit their individual needs.

For industry-average companies, Aberdeen Group suggests extending centralized access beyond internal stakeholders to distributed design teams and digitally tracking changes to the engineering bill of materials (BOM). "Managing such changes digitally not only helps ensure access to the most up-to-date BOM information, but avoids the inherent delays and errors involved in tracking changes manually," Aberdeen Group explains. Lastly, industry-average companies are advised to store all documentation associated with a change request in a centralized system.

As with the laggard companies, best-in-class companies are reminded to share access to product data with non-engineering groups like procurement, marketing and manufacturing to ensure everyone involved is on the same page. Aberdeen Group also suggests transitioning manufacturing from paper-based drawings to digital design data. "By shifting to a fully digital environment," Aberdeen Group says, manufacturers can get all their engineering design data from one place.

Resources

The Top Five Principles for Successful Product Development

by Amy Rowell

Aberdeen Group, February 2009

Best Practices in Product Development

Value to Wood, Feb. 16, 2009

Building Winning Product Development Teams

Parametric Technology Corp., 2005