Allows us to win both internally and in the external market.
In the ever competitive market place we need to strive to offer value to our stakeholder both internally and externally in an effort to reducing our time to market. By effectively managing our Product Development cycle we can reduce operational costs internally and deliver a value proposition to customers through effectively listening and meeting customer needs. To achieve this organisations need to introduce a concurrent development approach, rather than the traditional series approach of product development. Lets assign the over the fence approach to the past and work cross functionally to deliver products that are valuable to both the organisation and the customer.
This concurrent approach to Product development is a systematic approach to integrated product development that emphasises the response to customer expectations. It embodies team values of co-operation, trust and sharing in such a manner that decision making is by consensus, involving all perspectives in parallel, from the beginning of the product life cycle
The basic problem that Product development through concurrent means solves is that projects are too complex and too long for traditional serial development, where each phase of the project is lead by a different group of people. The importance of product development has grown, thus, rapid introduction of new products along with shorter life cycles increase uncertainly and equivocality for many firms.
Uncertainty is the difference between the amount of information required to perform the task and the amount of information already possessed by the organisation. This uncertainty is reduced through integration in the design of the organisation.
Equivocality is depicted as ambiguity or the existence of multiple and conflicting interpretations about an organisation situation. The lack of understanding is reduced by open debate which generates clarification and enactment, thus facilitating the process of rich information. As a result the CE approach uses a project team consisting of representatives from all parts of the organisation.
In the hyper competitive market place of today there is a need for organisations to reorganise their product development process from a sequential process to a concurrent process so that:
- Activities are overlaps to include marketing, sales, technology, communications and operations. These important constituents are involved early in the product development effort so that a cross-functional team is formed from these constituents.
These Concurrent practices are based on the following elements.
- Concurrent workflow: In which parallel activities are stimulated so that early release of information to the different groups occurs. This ensures that time consuming rework is avoided. This promotes early detection of problems so that the design doesn’t veer off target. Redesign can occur early in the process thus reducing costs.
- Product development teams: It is suggested that cross-functional teams are conducive in a high change environment because they enhance communication and organizational learning. Experts support the notion that a logical answer to overcoming barriers to communication and information sharing comes from the lateral decision processes which cut across the traditional vertical lines of functional authority. This allows teams to produce more creative solutions and make better decisions.
- Early involvement of constituents: Early involvement of many (operations, sales, marketing) constituencies is essential for cycle time reduction and improvements in product innovation capabilities. The benefits of early involvement are reduced mismatches between product characteristics and existing process capabilities.
- Product Innovation: This is the capability of the organization introduce new products and new features. The continuing efforts in innovation improves organizational learning and enables time to market to be shortened and enables products to closely match current customer demands and expectations and can adopt technological advancements as they become available. Any Design or quality deficiencies are overcome faster resulting in more satisfied customers. Innovation can produce a product that is perceived by the customer as superior to competitor’s offerings. The largest profit margins are gains by being the first to market of the new product.
- Quality: Quality gauges the capability of the firm to produce products that would satisfy customer needs for quality and performance. Eight dimensions of quality: performance, features, reliability, conformance, durability, serviceability, aesthetics and perceived quality. A differentiation strategy based on superior products is based on the firm’s ability to maintain those inherent differences in the ace of competitive imitation. Loyalty is then built around customer quality requirements.
- Premium Pricing: Suggestion that firms with a high level of product innovation capability can charge premium prices. This is because the first product to reach a particular market segment will capture market share and provide higher profitability for some length of time.
Introducing this concurrent approach is not a quick fix to sort out an organisation or department, but a strategic goal that requires buy in from top management in order to be successful. The approach of concurrent development is intended to cause the developers, from the outset, to consider all the elements of the product life cycle from conception through disposal, including quality, cost, schedule and user requirements. The major objective is to improve product development performance. It is a long term strategy that should be only considered by organisations that are willing to make up front investments and then wait several years for long term benefits. It involves both organisational and cultural change.
In the traditional approach the product is first completed by marketing teams, after which the sales team define a process to deliver the product to the mass market. This is usually a slow, costly and low quality approach, leading to many changes, product problems, delays and finally a product that is less competitive than desired.
Concurrent development brings together cross functional team who focus of getting things right as quickly as possible. This creates a sense of community around the project with all the stakeholders involved, thus having a holistic type view of the project. They can make trade offs between design features, assembly and material needs to name but a few. Getting this right at the start of the process reduces downstream difficulties with rework and reengineering. Thus reducing the number of iterations needed and ensuring reduction in product cost.
The implementation of concurrent development addresses three main areas: people, process and technology. It can involve major organisation changes because it requires the integration of people, business methods and technology and is dependent on cross functional working and teamwork rather than the traditional approach offered by a hierarchical organisation. But the formation of teams can be a problem. Team members must commit to working cross functionally, collaboratively and constantly be learning and thinking. To be successful with concurrent development companies should initially compare themselves with their best competitors using benchmarking. Then from here develop metrics, identify potential performance improvements and targets.