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PMI Bluegrass Chapter

Project Management in New Product Development

Chuck Bast, PMP, NPDP Business Processes Consumer Printer Division

AGENDA

· PMI New Product Development Specific Interest Group · Product Development & Mgmt Association (PDMA) · Terminology, Teams, Process, & Techniques used in New Product Development

PMI'S NEW PRODUCT DEVELOPMENT SIG

Website: www.pminpdsig.org

NPD SIG NEWSLETTER

NPD SIG WEBINARS

PRODUCT DEVELOPMENT & MANAGEMENT ASSOCIATION

The Product Development and Management Association (PDMA) is the premier global advocate for product development and management professionals. Their mission is to improve the effectiveness of individuals and organizations in product development and management. ·Website: www.pdma.org ·Local Chapter: Cincinnati/Tri-State www.tristatepdma.org ·Certification: New Product Development Professional (NPDP) ·Conferences: Annual International Conference, Co-Sponsored Events, Chapter Events ·Publications: VISIONS Magazine, JPIM, Handbook, Toolbooks ·PDMA-BOK: On-line Body of Knowledge

PDMA-BOK ARCHITECTURE

Only on-line at: www.pdmabok.org/

PRODUCT & PRODUCT DEVELOPMENT

What is a product?

PMI: An artifact that is produced, is quantifiable, and can be either an end item in itself or a component item. Additional words are material and goods. See deliverable. PDMA: Term used to describe all goods, services, and knowledge sold.

What is product development?

PDMA: The overall process of strategy, organization , concept generation, product creation & evaluation, marketing plan creation & evaluation, and commercialization of a new product. Also know as New Product Development (NPD), New Product Introduction (NPI), New Product Development & Introduction (NPDI), etc.

PROJECT LIFECYCLE VS PRODUCT LIFECYCLE

A Guide to the PM-BOK, 3rd Ed., 2004, PMI

Products

Product Design

Technology Development Projects Market Research Projects

Product Development Project Manufacturing Construction Projects Product Launch Project

Six Sigma Projects

Customers

"FUZZY FRONT END"

PRODUCT MGMT & PRODUCT MGR

What is product management?

PDMA: Ensuring over time that a product or service profitably meets the needs of customers by continually monitoring and modifying the elements of the marketing mix, including: the product and its features, the communications strategy, distribution channels, and price.

What is a Product Manager?

PDMA: The person assigned responsibility for overseeing all the various activities that concern a particular product. Sometimes called the brand manager in consumer packaged goods firms. Sometimes described as "mini-business" owners. They usually reside in the Marketing function.

PROJECT MGMT VS PRODUCT MGMT

"All the projects performed on behalf of the product such as development projects, research projects, launch projects, et. al. and are the responsibility of a product team........ However, in the final analysis, the product team, led by the product manager, is responsible for the financial and market performance of the product. "

"Product VS Project Management in NPD", VISIONS magazine, January 2005, Steve Haines www.pdma.org/visions/jan05/project.html

PROGRAM & PROGRAM MGMT

The Standard for Program Management, 2006, PMI

What is a Program?

PMI: A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside of the scope of the discrete projects in the program.

What is Program Management?

PMI: The centralized coordinated management of a program to achieve the program's strategic objectives and benefits.

PROGRAM & PROGRAM MGMT

The Standard for Program Management, 2006, PMI

PDMA 2006 INTERNATIONAL CONFERENCE

Program Management: "The coordinated management of interdependent projects over a finite period of time to achieve a set of business goals."

Program Management for Improved Business Results

Dragan Z. Milosevic, Russ Martinelli, James M. Waddell ISBN: 0471783544, 2007, Wiley & Sons publisher, Hoboken, NJ

DELIVERING THE "WHOLE PRODUCT"

Project Management Program Management

Mechanical & Electrical Design

Manufacturing Capability

Firmware

Host Software

Packaging & Publications

Based on Milosevic, Martinelli, & Waddell

PRODUCT MGMT VS PROGRAM MGMT

·If the innovation in a new product is predominately the market characteristics, then having the Product Manager in overall control during product development seems to be best. ·If the new product is technically complex and contains significant technical innovation, then having a Program Manager in overall control during development may be best. ·Some companies "Pass the Baton" from a Product Planner during product discovery, to a Program Manager or a Project Manager during product development, and then to a Product Manager during product commercialization. ·Another technique used is called "Two in a Box" in which a Program Manager & Product Manager will co-manage the product development effort.

NPD ORGANIZATIONAL STRUCTURE

A Guide to the PM-BOK, 3rd Ed., 2004, PMI

Revolutionizing Product Development 1992, Steven C. Wheelwright & Kim B. Clark

NPD CORE TEAM STRUCTURE

Setting the PACE in Product Development, 1996, Michael McGrath

A Guide to the PM-BOK, 3rd Ed., 2004, PMI

RISK MANAGEMENT IN NPD

· Innovation, both technical & market, is necessary to NPD. · NPD is mostly about acquiring knowledge. · Trick is to avoid non-value risk; i.e. re-use or standard parts, use known contractors, etc. · Just because there are many unknowns is not a reason to ignore what you do know. · Stay flexible on unresolved issues using parallel efforts or redundancy. · Address risky items early. · Start with many product ideas and progressively eliminate the poorest prospects.

NPD TRADE-OFFS

e op Sc Tim e

Development Speed Product Cost

Cost

e op Sc

Tim e

Product

Development Program Expense

Features and Performance

PDMA Handbook 2005, Chapter 12, Preston Smith Developing Products in Half the Time 1998, Preston Smith & Donald Reinertsen

Cost

PORTFOLIO & PORTFOLIO MGMT

What is a Portfolio?

PMI: A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. The Standard for Portfolio Management, 2006, PMI PDMA: Commonly referred to as a set of projects or products that a company is investing in and making strategic trade-offs against.

What is Portfolio Management?

PMI: The centralized management of one or more portfolios, which includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work, to achieve specific strategic business objectives. PDMA: A business process by which a business unit decides on the mix of active projects, staffing, and dollar budget allocated to each project currently being undertaken.

PORTFOLIO MANAGEMENT

High Risk Bets GOOD BETS

Financial Opportunity

HIGH

Main Purpose of Portfolio Management: Resource Allocation Goals: Maximize Value Achieve Balance Align with Strategy

"Oysters"

A

"Pearls"

B

C D I

E F G K

J H

No BETS "White Elephants"

LOW

LOW

L

Conservative Bets "Bread & Butter"

HIGH

Portfolio Management for New Products 2001, Cooper, Edgett, & Kleinschmidt

Business Strength

NEW PRODUCT DEVELOPMENT PROCESS

Many companies use a Stage-GateTM type process based on the work by Dr. Robert Cooper. A similar process is "PACE" based on the work by Michael E. McGrath at PRTM consulting.

Stage 0 Discovery Stage 1 Scoping Stage 2 Build Business Gate 1 Gate 2 Case Gate 3 Stage 3 Development Gate 4 Stage 4 Testing & Validation Gate 5 Stage 5 Launch

Gates act as filters to eliminate poor business concepts.

LEXMARK'S PROCESS IN CPD

COMMERCIALIZATION STAGE

Mkt / Sell Learn

DISCOVERY STAGE

Portfolio

(x2)

DEVELOPMENT STAGE

Improve

Product Plan

Charter

Commit

Manuf

Portfolio Phase

Tradeoff Phase

Formation Phase

Feasibility Phase

Verification Phase

Transition Phase

Monitor Phase

Voice of the Customer

Customer Validation

Customer Use

SUMMARY

· PMI continues to expand its focus in fields such as NPD where project management is used. · PDMA is the leading organization for all aspects of knowledge in NPD. · There is overlap between PMI & PDMA for NPD. In general, they are in agreement; but terminology, tools, and techniques differ somewhat. · Projects are used in all phases of a new product's lifecycle; from discovery through development, and on to commercialization.

THANK YOU! Questions?

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