Improving the product development process Best practice in product development is a dynamic target. Not only are new practices being developed and refined but the differences in organisations demand the tailored application of these practices. There are eight basic principles and four basic stages in product development which are true for all companies, all projects and at all times. But the company philosophy, knowledge, skills and assets change: and these changes cause changes in the pes of produ Successful companies recognise that product development is an important strategic issue that demands constant attention. There is a need to evaluate the product development performance and the product development success rate (product development efficiency and effectiveness), and then combine this evaluation with the companys strategic direction to determine and organise improvements in both the effectiveness and efficiency in the future. This is not simple because creativity and criticism are two opposing thought processes Creativity, vital to product innovation, goes into the unknown and makes mistakes, the product development evaluation looks for mistakes and criticises them. Emphasis on mistakes leads to conservative product development emphasis on creativity leads to wild product development; the successful ompanies intertwine the creativity and the evaluation in the project Product development is unique to the company and is related to the company's history, philosophy and knowledge, but the companys position relative to the best practice in the related industry and market is an indicator of the companys past and present product development effectiveness and efficiency. From this evaluation can be built up strategic plans for improving product development. As shown in Fig. 8.1, product development effectiveness and efficiency are improved together to give the strategic product success
Best practice in product development is a dynamic target. Not only are new practices being developed and refined but the differences in organisations demand the tailored application of these practices. There are eight basic principles and four basic stages in product development which are true for all companies, all projects and at all times. But the company philosophy, knowledge, skills and assets change; and these changes cause changes in the types of product innovations and the activities in product development. Successful companies recognise that product development is an important strategic issue that demands constant attention. There is a need to evaluate the product development performance and the product development success rate (product development efficiency and effectiveness), and then combine this evaluation with the company’s strategic direction to determine and organise improvements in both the effectiveness and efficiency in the future. This is not simple because creativity and criticism are two opposing thought processes. Creativity, vital to product innovation, goes into the unknown and makes mistakes; the product development evaluation looks for mistakes and criticises them. Emphasis on mistakes leads to conservative product development; emphasis on creativity leads to wild product development; the successful companies intertwine the creativity and the evaluation in the project. Product development is unique to the company and is related to the company’s history, philosophy and knowledge, but the company’s position relative to the best practice in the related industry and market is an indicator of the company’s past and present product development effectiveness and efficiency. From this evaluation can be built up strategic plans for improving product development. As shown in Fig. 8.1, product development effectiveness and efficiency are improved together to give the strategic product success 8 Improving the product development process
Improving the product development process 349 Company history, philosophy, knowledge development efficiency Product development effectiveness Product development evaluation Product development improvement Fig 8.1 Evaluating and improving product development. indicated by the company top management Product development effectiveness nd efficiency are inextricably linked 8.1 Key messages There is no single recipe for successful product development. During the previous chapters, a number of basic principles were identified which are common to all successful product development as shown in Table 8.1 8.1.1 Link to overall business strategy Doing the right things must always be central to any product development effort. The product development strategy must be in harmony with the overall business strategy. It should both receive and provide direction to the business strategy. The balance of reactivity to proactivity will depend on the nature of the organisation and its overall goals Table 8.1 Basic principles of product development Link to overall business strategy Balanced product development portfolio learly defined product development strategy Appropriate systems rocesses for project management and physical resources Committed and rive organisational climate Understanding the consumer, customer, market and society
indicated by the company top management. Product development effectiveness and efficiency are inextricably linked. 8.1 Key messages There is no single recipe for successful product development. During the previous chapters, a number of basic principles were identified which are common to all successful product development as shown in Table 8.1. 8.1.1 Link to overall business strategy ‘Doing the right things’ must always be central to any product development effort. The product development strategy must be in harmony with the overall business strategy. It should both receive and provide direction to the business strategy. The balance of reactivity to proactivity will depend on the nature of the organisation and its overall goals. Fig. 8.1 Evaluating and improving product development. Table 8.1 Basic principles of product development Link to overall business strategy Balanced product development portfolio Clearly defined product development strategy Appropriate systems and processes for project management Appropriate human and physical resources Committed and supportive organisational climate Understanding the consumer, customer, market and society Improving the product development process 349
350 Food product development 8.1.2 Balanced product development portfolio The business goals and strategy should define the key criteria to be used preparing the product development portfolio. These include degree of novelty or newness level of technology target market level of risk. desired return on investment time frame Preparing a balanced portfolio of new product development, consistent with business aims, is a critical part of product development manageme 8.1.3 Clearly defined product development strategy The product development strategy should provide total clarity about the relationship between the portfolio of product levelopment projects and the overall business strategy clear definition of the portfolio of new product development projects relative to business selection criteria indication of the costs and timeframes involved to achieve the desired outcomes of the portfolio indication of the resources required to achieve the desired outcomes- what esources are required internally and what should be out-sourced The product development strategy is linked to, and indeed is the basis for, the tactical strategy that organises the product development programme and the individual product development projects. In a number of companies there is often a communication blockage between the product development strategy and the tactical strategy that determines the work of the designers, engineers marketers, production and other personnel involved in the project. This can reduce both the effectiveness and efficiency 8.1.4 Appropriate systems and processes for project management Having decided on what things to do(the portfolio), it is important to have the appropriate systems and processes to support individual projects-'doing things right. There are four clearly identified basic stages in the PD Process-product strategy development, product design and process development, product commercialisation, product launch and evaluation. But there are differences in the activities, decisions and outcomes in the different projects, although there are significant ones that occur in many projects Although the PD Process is important to the successful completion of projects on time, in budget and in line with the initial target, it would be wrong to force all projects into a standard process. The PD Process is unique to the company
8.1.2 Balanced product development portfolio The business goals and strategy should define the key criteria to be used in preparing the product development portfolio. These include: • degree of novelty or newness; • level of technology; • target market; • level of risk; • desired return on investment; • time frame. Preparing a balanced portfolio of new product development, consistent with business aims, is a critical part of product development management. 8.1.3 Clearly defined product development strategy The product development strategy should provide: • total clarity about the relationship between the portfolio of product development projects and the overall business strategy; • clear definition of the portfolio of new product development projects relative to business selection criteria; • indication of the costs and timeframes involved to achieve the desired outcomes of the portfolio; • indication of the resources required to achieve the desired outcomes – what resources are required internally and what should be out-sourced. The product development strategy is linked to, and indeed is the basis for, the tactical strategy that organises the product development programme and the individual product development projects. In a number of companies there is often a communication blockage between the product development strategy and the tactical strategy that determines the work of the designers, engineers, marketers, production and other personnel involved in the project. This can reduce both the effectiveness and efficiency. 8.1.4 Appropriate systems and processes for project management Having decided on what things to do (the portfolio), it is important to have the appropriate systems and processes to support individual projects – ‘doing things right’. There are four clearly identified basic stages in the PD Process – product strategy development, product design and process development, product commercialisation, product launch and evaluation. But there are differences in the activities, decisions and outcomes in the different projects, although there are significant ones that occur in many projects. Although the PD Process is important to the successful completion of projects on time, in budget and in line with the initial target, it would be wrong to force all projects into a standard process. The PD Process is unique to the company, 350 Food product development
mproving the product development process 351 level of innovation, and the level of technological knowledge. The company can design different PD Processes for product improvements and major innovations for consumer products and industrial products, and also make some changes between product development projects(de Brentani, 2001). The chance and costs of product failure can also cause the company to make changes in activities, for example, the low cost of project failure may lead to significant short cuts in market analysis and business analysis. The choice of activities also lepends on the company's level of risk. If the compar ot afraid to live with oroduct failures, it may omit many activities; if the company does not want to risk product failure, it will include activities that increase its knowledge of the echnology and the market. In creating both new products and new services, a platform-based approach can be used, which relates directly to the design of systems and PD Processes(Meyer and De Tore, 2001) 8.1.5 Appropriate human and physical resources All the best systems and processes can be worthless without the right resources People, above everything else, make product development successful. Know/ dge of technology, market, consumer, product development activities and decision making, and the skills to use this knowledge in practice are the basis of successful product development. Capable and committed people, who are able to work in teams, across functional boundaries, will make systems and processes work for them. Systems and processes will rarely change people. There is a need to recognise the tacit knowledge of individuals and teams, as well as the knowledge bases both within and outside the company. Most important is the ability of the individual and the team to create new knowledge during the project 8.1.6 Committed and supportive organisational climate Perhaps the most important aspect of all in determining successful product development is the organisational climate. Historically, this has received relatively little attention in the product development literature and yet it has the otential to have the greatest impact on product development outcomes. Climate larity of direction management commitment. · flexibility tandards The decision making by top management at the beginning and throughout the roject must be timely and based on knowledge, from this the project anagement and the team need to see clear directions which are not changed without further knowledge and discussion
level of innovation, and the level of technological knowledge. The company can design different PD Processes for product improvements and major innovations, for consumer products and industrial products, and also make some changes between product development projects (de Brentani, 2001). The chance and costs of product failure can also cause the company to make changes in activities; for example, the low cost of project failure may lead to significant short cuts in market analysis and business analysis. The choice of activities also depends on the company’s level of risk. If the company is not afraid to live with product failures, it may omit many activities; if the company does not want to risk product failure, it will include activities that increase its knowledge of the technology and the market. In creating both new products and new services, a platform-based approach can be used, which relates directly to the design of systems and PD Processes (Meyer and DeTore, 2001). 8.1.5 Appropriate human and physical resources All the best systems and processes can be worthless without the right resources. People, above everything else, make product development successful. Knowledge of technology, market, consumer, product development activities and decision making, and the skills to use this knowledge in practice are the basis of successful product development. Capable and committed people, who are able to work in teams, across functional boundaries, will make systems and processes work for them. Systems and processes will rarely change people. There is a need to recognise the tacit knowledge of individuals and teams, as well as the knowledge bases both within and outside the company. Most important is the ability of the individual and the team to create new knowledge during the project. 8.1.6 Committed and supportive organisational climate Perhaps the most important aspect of all in determining successful product development is the organisational climate. Historically, this has received relatively little attention in the product development literature and yet it has the potential to have the greatest impact on product development outcomes. Climate includes: • clarity of direction; • management commitment; • team commitment; • flexibility; • standards; • rewards. The decision making by top management at the beginning and throughout the project must be timely and based on knowledge; from this the project management and the team need to see clear directions which are not changed without further knowledge and discussion. Improving the product development process 351
352 Food product development 8.1.7 Understanding the consumer customer, market and societ If the needs, wants, attitudes and behaviour in the target market and in the ociety in general are not identified and understood, and then interwoven into product development practice, then product failure can occur either in the short or long term. The food industry has a history of introducing innovations over the years that cause suspicion by the general public and the consumers, so that food regulations are used to control the product. The immediate customer, whether industrial user or retailer, needs to be integrated into the PD Process from the initial stages of developing the product concept to the final evaluation after launch. In developing new consumer products and indeed in all food product development, the final consumer who buys and eats the food is an integral part of product development. Think break The authors have summarised what they identify as the basic principles of product development from the preceding seven chapters 1. Do you agree with their list? Have you identified any other basic principles? Would you drop some of their basic principle 2. Compare with other principles in the literature, e.g. Cooper and Kleinschmidt's (1995)factors found to drive new product success 3. For your own company, list the basic principles for product development at the present time 4. How have these principles changed in the past and how do you predict they will change in the future? 5. List the basic principles for product development for your company for the next decade 8.2 Evaluating product development Conducting a post-development review of a specific product development project and a regular review of the product development programme, is a very good way of learning what is excellent, all right and bad in the companys product development. For the product development project, the initial product strategy needs to be compared with the final total product in the market; the final product characteristics with the consumer needs and wants; the efficiency of the product development project with the overall implementation of the launch. For the product development programme, some important measures are ratio of major innovations to incremental products key differentiating factors in products and services number of new products in a time period
8.1.7 Understanding the consumer, customer, market and society If the needs, wants, attitudes and behaviour in the target market and in the society in general are not identified and understood, and then interwoven into product development practice, then product failure can occur either in the short or long term. The food industry has a history of introducing innovations over the years that cause suspicion by the general public and the consumers, so that food regulations are used to control the product. The immediate customer, whether industrial user or retailer, needs to be integrated into the PD Process from the initial stages of developing the product concept to the final evaluation after launch. In developing new consumer products and indeed in all food product development, the final consumer who buys and eats the food is an integral part of product development. 8.2 Evaluating product development Conducting a post-development review of a specific product development project and a regular review of the product development programme, is a very good way of learning what is excellent, all right and bad in the company’s product development. For the product development project, the initial product strategy needs to be compared with the final total product in the market; the final product characteristics with the consumer needs and wants; the efficiency of the product development project with the overall implementation of the launch. For the product development programme, some important measures are: • ratio of major innovations to incremental products; • key differentiating factors in products and services; • number of new products in a time period; Think break The authors have summarised what they identify as the basic principles of product development from the preceding seven chapters. 1. Do you agree with their list? Have you identified any other basic principles? Would you drop some of their basic principles? 2. Compare with other principles in the literature, e.g. Cooper and Kleinschmidt’s (1995) factors found to drive new product success. 3. For your own company, list the basic principles for product development at the present time. 4. How have these principles changed in the past and how do you predict they will change in the future? 5. List the basic principles for product development for your company for the next decade. 352 Food product development
mproving the product development process 353 programme complexity-the size of the programme and the interrelationships between projects; commercial constraints on the programme company pressures on the programme In recent years there has been an increasing interest in developing methods for evaluating product development. For example, the assessment tool and methodology(ATM) of Barclay et al(2001) measures the complexities and newness of a product and relates them to the PD integrating activities and process Clark and Wheelwright(1993)developed a method for auditing the individual project. Cooper and Kleinschmidt(1995)developed a tool aimed at identifying the firm's critical success factors in product development. It had two sets of measures for the product development programme: programme profitability and programme impact on the company. They separated companies using these measures into high-impact technical winners with highest product success rate and sales from new products, but not so high profitability dogs with poorest performance on all measures · solid perfo st profitability and second highest product success rate, lower sales from new products than high-impact technical low-impact performers with mediocre product success rates and low impact of new products on company sales There have been the general industry comparisons described in Chapter 1, for example Griffin(1997), which have useful measures and results to compare with your companys results This comparison of the company's product development effectiveness and efficiency with those of other companies or of the industry in general is known as'benchmarking. Benchmarking the companys current practices against the latest findings in the literature and through comparison with other companies is an essential part of overall product development management. The application of best practices to our specific situations and the on-going measurement of erformance ensure a basis for continuous improvement. 8.2.1 What is benchmarking? enchmarking is a process of continuous evaluation to achieve a competitive advantage. It measures a company's products, services and practices against those of its best competitors or other acknowledged leaders in their fields. It can be a specific area such as the benchmarking of the new product concept against the competing products(Rudolph, 2000), the company's technology against the most technically advanced company, the companys innovation strategy against technology predictions But mostly there are multiple measures in benchmarking Benchmarking can be at different stages of the product development project for the overall product development project and the product development
• programme complexity – the size of the programme and the interrelationships between projects; • commercial constraints on the programme; • company pressures on the programme. In recent years there has been an increasing interest in developing methods for evaluating product development. For example, the assessment tool and methodology (ATM) of Barclay et al. (2001) measures the complexities and newness of a product and relates them to the PD integrating activities and process. Clark and Wheelwright (1993) developed a method for auditing the individual project. Cooper and Kleinschmidt (1995) developed a tool aimed at identifying the firm’s critical success factors in product development. It had two sets of measures for the product development programme: programme profitability and programme impact on the company. They separated companies using these measures into: • high-impact technical winners with highest product success rate and % sales from new products, but not so high profitability • dogs with poorest performance on all measures • solid performers with highest profitability and second highest product success rate, lower % sales from new products than high-impact technical winners • low-impact performers with mediocre product success rates and low impact of new products on company sales. There have been the general industry comparisons described in Chapter 1, for example Griffin (1997), which have useful measures and results to compare with your company’s results. This comparison of the company’s product development effectiveness and efficiency with those of other companies or of the industry in general is known as ‘benchmarking’. Benchmarking the company’s current practices against the latest findings in the literature and through comparison with other companies is an essential part of overall product development management. The application of best practices to our specific situations and the on-going measurement of performance ensure a basis for continuous improvement. 8.2.1 What is benchmarking? Benchmarking is a process of continuous evaluation to achieve a competitive advantage. It measures a company’s products, services and practices against those of its best competitors or other acknowledged leaders in their fields. It can be a specific area such as the benchmarking of the new product concept against the competing products (Rudolph, 2000), the company’s technology against the most technically advanced company, the company’s innovation strategy against technology predictions. But mostly there are multiple measures in benchmarking. Benchmarking can be at different stages of the product development project, for the overall product development project and the product development Improving the product development process 353
354 Food product development programme. There can be short-term and long-term benchmarking; for the short term, Hultink and Robben(1995) identified product-level measures such as speed-to-market, launched on time, development cost; in the long term customer acceptance (met revenue goals, market share goals and unit sales goals, percentage of sales by new products)and financial performance(attaining goals for profitability, margins, return on investment). Four factors were equally important for short-term and long-term success: customer satisfaction, customer acceptance, meeting quality guidelines and product performance level. Finally benchmarking must be related to possible improvements; there is no point in extensive benchmarking in areas where the company or personnel cannot make improvements because of lack of people, knowledge and assets. Benchmarking and continuous improvement need to be linked. Zairi's(1998)comment is worth remembering when benchmarking the impact of its application is more for changing attitudes and behaviours and raising commitment through better education, awareness Ind inspiration from model companies. Benchmarking is perhaps the best means for servicing the human asset by continuously supplying new ideas to sustain superior performance levels Over recent years benchmarking has become a fashionable tool for many organisations. Like many such tools, one has to question the rigour and objectivity with which many benchmarking exercises are carried out and,in turn, the value that is captured from these exercises. Benchmarking is not a tool (the many methods suggested for benchmarking are tools), but it is a method of increasing knowledge and skills of all people involved in product development from the top management to the junior team member, so that product development is more effective and efficient 8.2.2 Basic steps for benchmarking product development There are some basic steps in benchmarking, shown in Fig. 8.2, which need to be followed to maximise the return on any investment in benchmarking(Zairi 1998: Czarnecki, 1999; Barclay et al, 2001) Clearly define the benchmarking objectives Before beginning a benchmarking study, the organisation should be clear on what the subject is to be; what are the desired outcomes; who will use the results, and how will the results be used to benefit the organisation in the future. It is all too easy to embark on wide-ranging data collection, which, in the end, provides very little useful information for the organisation and its specific requirements Determine the sources of benchmarking data The benchmarking can be internal and using internal data sources, but usually the comparison is with companies within the specific industry or in industry in eneral. Sources include the following
programme. There can be short-term and long-term benchmarking; for the short term, Hultink and Robben (1995) identified product-level measures such as speed-to-market, launched on time, development cost; in the long term, customer acceptance (met revenue goals, market share goals and unit sales goals, percentage of sales by new products) and financial performance (attaining goals for profitability, margins, return on investment). Four factors were equally important for short-term and long-term success: customer satisfaction, customer acceptance, meeting quality guidelines and product performance level. Finally benchmarking must be related to possible improvements; there is no point in extensive benchmarking in areas where the company or personnel cannot make improvements because of lack of people, knowledge and assets. Benchmarking and continuous improvement need to be linked. Zairi’s (1998) comment is worth remembering when benchmarking the impact of its application is more for changing attitudes and behaviours and raising commitment through better education, awareness and inspiration from model companies. Benchmarking is perhaps the best means for servicing the human asset by continuously supplying new ideas to sustain superior performance levels. Over recent years benchmarking has become a fashionable tool for many organisations. Like many such tools, one has to question the rigour and objectivity with which many benchmarking exercises are carried out and, in turn, the value that is captured from these exercises. Benchmarking is not a tool (the many methods suggested for benchmarking are tools), but it is a method of increasing knowledge and skills of all people involved in product development from the top management to the junior team member, so that product development is more effective and efficient. 8.2.2 Basic steps for benchmarking product development There are some basic steps in benchmarking, shown in Fig. 8.2, which need to be followed to maximise the return on any investment in benchmarking (Zairi, 1998; Czarnecki, 1999; Barclay et al., 2001). Clearly define the benchmarking objectives Before beginning a benchmarking study, the organisation should be clear on what the subject is to be; what are the desired outcomes; who will use the results; and how will the results be used to benefit the organisation in the future. It is all too easy to embark on wide-ranging data collection, which, in the end, provides very little useful information for the organisation and its specific requirements. Determine the sources of benchmarking data The benchmarking can be internal and using internal data sources, but usually the comparison is with companies within the specific industry or in industry in general. Sources include the following: 354 Food product development
Improving the product development process 355 Clearly define Benchmarking objectives dentify Companies and individuals that can act as execute Data collection Analyse and impleme Fig 8.2 Basic steps in benchmarking Published materials. Case studies, industry surveys and research into R&D methodology and practie primary data. These materials can also be used to prepare a list of potential benchmarking part Databases. For example those prepared by the Industrial Research Institute (IRD)in the USA, provide an excellent source of information on level of spending on R&D, number of r&D employees, number of patents granted etc. Regular summaries of these data are presented in the Journal of research Technology Management
• Published materials. Case studies, industry surveys and research into R&D management methodology and practices provide an excellent source of primary data. These materials can also be used to prepare a list of potential benchmarking partners. • Databases. For example those prepared by the Industrial Research Institute (IRI) in the USA, provide an excellent source of information on level of spending on R&D, number of R&D employees, number of patents granted, etc. Regular summaries of these data are presented in the Journal of Research – Technology Management. Fig. 8.2 Basic steps in benchmarking. Improving the product development process 355
356 Food product development Identify companies and individuals that can act as benchmarking partners This partnership can range from an infrequent exchange of general information about company operations and practices to regular meetings where details relating to company practices are shared with a common aim of improving the overall practices of both partners. It is important not to be limited to similar companies in the selection of partners. Look to the best practices, wherever they occur. The object is to learn from the leaders, those with world-class operations and techniques Form a benchmarking team Although an individual can conduct a benchmarking study, a team effort will usually get a better return. Involving a cross-section of people with different skills and organisational responsibilities will provide benefits not only in the capture of the information but it will also enable greater acceptance and more rapid assimilation of best practices into the organisation Determine, design and execute the data collection process There are various ways of collecting benchmarking information, including telephone interviews, postal surveys, face-to-face meetings and desk-top research. Clearly, the type of information required, the level of detail and the available budget will determine the methodology. The best approach is probabl to start with the relatively simple desk research to provide the background material and further clarify the critical information required from surveying or from face-to-face meetings Analyse and implement the findings Very often there will be a number of valuable findings from the study. It is mportant to prioritise these and to focus on the implementation of a manageable few Commitment and support from senior management is an important starting point. It is also essential that besides showing that these are 'best practice initiatives' there must also be clear evidence to all who are involved in the implementation that there is real benefit to their business It is important in setting up a benchmarking or assessment system that it should be(Barclay et al, 2001) relevant to the users'needs fairly comprehensive capable of a variety of approaches both educational and action-oriented capable of being used in total or selectively tble toforce the development and implementation of action plar In other words, set up a system that does not overwhelm with information, but gives the knowledge needed to lead to product development improvement. In Box 8.1 is shown the development of benchmarking in the New Zealand dairy Board which shows some methods that can be used in benchmarking the total
Identify companies and individuals that can act as benchmarking partners This partnership can range from an infrequent exchange of general information about company operations and practices to regular meetings where details relating to company practices are shared with a common aim of improving the overall practices of both partners. It is important not to be limited to similar companies in the selection of partners. Look to the best practices, wherever they occur. The object is to learn from the leaders, those with world-class operations and techniques. Form a benchmarking team Although an individual can conduct a benchmarking study, a team effort will usually get a better return. Involving a cross-section of people with different skills and organisational responsibilities will provide benefits not only in the capture of the information but it will also enable greater acceptance and more rapid assimilation of best practices into the organisation. Determine, design and execute the data collection process There are various ways of collecting benchmarking information, including telephone interviews, postal surveys, face-to-face meetings and desk-top research. Clearly, the type of information required, the level of detail and the available budget will determine the methodology. The best approach is probably to start with the relatively simple desk research to provide the background material and further clarify the critical information required from surveying or from face-to-face meetings. Analyse and implement the findings Very often there will be a number of valuable findings from the study. It is important to prioritise these and to focus on the implementation of a manageable few. Commitment and support from senior management is an important starting point. It is also essential that besides showing that these are ‘best practice initiatives’ there must also be clear evidence to all who are involved in the implementation that there is real benefit to their business. It is important in setting up a benchmarking or assessment system that it should be (Barclay et al., 2001): • relevant to the users’ needs; • fairly comprehensive; • capable of a variety of approaches; • both educational and action-oriented; • capable of being used in total or selectively; • able to ‘force’ the development and implementation of action plans. In other words, set up a system that does not overwhelm with information, but gives the knowledge needed to lead to product development improvement. In Box 8.1 is shown the development of benchmarking in the New Zealand Dairy Board, which shows some methods that can be used in benchmarking the total 356 Food product development
Improving the product development process 357 Box 8.1 The New Zealand Dairy board (NZDB) experience 1993 An audit of the NZDB by the Boston Consulting Group(BCG) equired for statutory reasons and covering all parts of the business The major recommendations for R&D focused on the improvement of the product development process in achieving greater speed to market nd greater success rates 1994 Development of a phase-gate process for product development and implementation across all parts of the organisation 1995 Consolidation of PD Processes with increased emphasis on 'doing things right 1996 Recognition that future gains in R&D effectiveness would most likely come from 'doing the right things in addition to doing things right 1997 A small cross-functional benchmarking team was formed initiating a three-pronged approach Decision practices. An internal survey of the performance and areas for improvement against key decision practices required for best practice. The decision practice framework was defined by the Strategic Decision Group(SDG)in California(see Matheson Matheson, 1998). Analysis of the survey data by SDG pointed to a number of specific areas for improving the decision practices that lead to 'doing the right thing ProBE survey. Developed by Robert Cooper and Scott Edgett at the Product Development Institute Inc.(Ontario, Canada).An internal survey designed to evaluate product development perform ance against Il critical success factors was used to identify areas of strength and weakness relative to industry average results and those of the top 20% of firms in the Product Development Institute database Secondary data. A range of published materials including annual reports,management journals, the Industrial Research Institute (IRD R&d database were used to provide background information on industry and individual company performance A set of prioritised initiatives, centred around doing the right ings was recommended. These focused on linking r&D to business strategy including technology planning and portfolio Implementation of these initiatives was begun 1998 A Second BCG audit of the NZDb confirmed most of the recommendations of the internal benchmarking team and endorsed their implementation
Box 8.1 The New Zealand Dairy Board (NZDB) experience 1993 An audit of the NZDB by the Boston Consulting Group (BCG) required for statutory reasons and covering all parts of the business. The major recommendations for R&D focused on the improvement of the product development process in achieving greater speed to market and greater success rates. 1994 Development of a phase-gate process for product development and implementation across all parts of the organisation. 1995 Consolidation of PD Processes with increased emphasis on ‘doing things right’. 1996 Recognition that future gains in R&D effectiveness would most likely come from ‘doing the right things’ in addition to ‘doing things right’. 1997 A small cross-functional benchmarking team was formed initiating a three-pronged approach: • Decision practices. An internal survey of the performance and areas for improvement against key decision practices required for ‘best practice’. The decision practice framework was defined by the Strategic Decision Group (SDG) in California (see Matheson & Matheson, 1998). Analysis of the survey data by SDG pointed to a number of specific areas for improving the decision practices that lead to ‘doing the right things’. • ProBE survey. Developed by Robert Cooper and Scott Edgett at the Product Development Institute Inc. (Ontario, Canada). An internal survey designed to evaluate product development performance against 11 critical success factors was used to identify areas of strength and weakness relative to industry average results and those of the top 20% of firms in the Product Development Institute database. • Secondary data. A range of published materials including annual reports, management journals, the Industrial Research Institute (IRI) R&D database were used to provide background information on industry and individual company performance. • A set of prioritised initiatives, centred around ‘doing the right things’ was recommended. These focused on linking R&D to business strategy including technology planning and portfolio management. • Implementation of these initiatives was begun. 1998 A second BCG audit of the NZDB confirmed most of the recommendations of the internal benchmarking team and endorsed their implementation. Improving the product development process 357
