The NPD process within Beta is formalised into five phases, indicated as follows:
Concept, Feasibility and Planning, Design, Qualification, and Pre-production. Figure
7.1 illustrates the phases of the NPD process at Beta. A requirement for the NPD process is that passage from one phase of the NPD process to the next requires the completion of a “check” and is controlled by a group of senior managers, called ‘gatekeepers’, who rely upon checklists to monitor all progress. The checklists indicate the mandatory deliverables (e.g. tasks or documents) that have to be accomplished or completed in each phase prior to the advancement of the new product to the next phase. The checklist for each phase ensures that any unique requirement or condition is captured and managed within that process. The gatekeepers of the process are senior managers of the main functions involved in the NPD process, such as Engineering and R&D (hereafter simply referred to as Engineering), Marketing, Operations, Finance, and Sourcing. They are in charge of verifying the deliverables that are expected during the process (established at the beginning of the process and updated throughout it when needed) and approving, as a team, the closure of each phase before moving to the next. Over the whole five phases of the NPD process, the project manager is committed to ensuring that the checklists are unanimously signed before closing each phase and moving the process forward. The formalised NPD process is contained in a document which outlines the main activities, inputs-outputs and deliverables expected throughout the five phases. In the remainder of this section the phases of the formalised NPD process are illustrated.
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Figure 7.1: The phases of the New Product Development process in Beta
Source: The NPD process. Internal Company Documents (adapted)
Phase 1 – The concept
Phase 1 of the NPD process is called Concept. This phase starts with a preliminary draft of the Product Description Document, hereafter PDD, prepared by the marketing product manager (hereafter simply referred to as product manager) by drawing up and describing the new product to be developed for the market. In the PDD details of the new product’s specifications – the product’s expected technical requirements and functions are included. Also accounting targets are delineated here, e.g. the expected cost of goods sold for the new product, with details of the expected cost of the bill of material – BOM, and labour cost, as well as the expected selling price and the expected gross margin. The PDD also includes the expected completion date of the new product.
By drafting the PDD, the product manager builds a sort of authorization request to start a new product development project for the market. This request is delivered to the gatekeepers of Phase 1, who analyze the PDD and verify whether the project can be started. These individuals analyze the product’s specifications and broadly figure out whether there are enough resources to achieve the technical and accounting targets outlined within the PDD. At this point, the gatekeepers might require some changes to the requirements within the PDD in line with the interests and resources constraints stemming from the functional areas they are responsible for. In these circumstances, practices of negotiation (with the product manager and the senior manager of Marketing, the boss of the product manager) to amend the PDD are likely to emerge in order to make the product and the project feasible. The requests to amend the PDD may
Concept and PlanningFeasibility Design Qualification Pre- production
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or may not be accepted by the senior manager of Marketing. These requests generate discussions that contribute to finally producing the first formal version of the PDD, the output required at the end of the first NPD phase to pass to stage two. If the gatekeepers give their approval to start a new product development project, a project manager is then appointed. The project manager is responsible for the new product development project.
“The project manager is in charge of activating, coordinating and controlling the activities during the following phases of the NPD process. He arranges and channels these activities to be in line with the objectives of cost, technical requirements, and timeliness of the project – as outlined within the PDD” (Manager PMO).
At the end of Phase 1, a second manager with technical expertise – the project leader is identified by the senior manager of Engineering and is responsible for the innovativeness, the technical choices and functionality of the new product. At this point, the product manager gives the PDD to the project manager and the project leader.
Phase 2 – Feasibility and Planning
A fundamental input of Phase 2 is the PDD, including relevant information on the product’s technical requirements, its cost targets, and the expected end date of the project. Importantly, during this phase, the project development team (hereafter simply referred to as the team) is formed. The team is a multi-disciplinary group composed of members belonging to the different functions required for the development of the new product: Marketing, Engineering and Operations. The team is responsible for carrying out the activities for the development of the new product throughout the NPD process. The project manager is in charge of forming the team. In practice, the project manager builds the team by negotiating, and “obtaining”, human resources from the front-line functional managers within the company (of Engineering, Marketing and Operations).
Phase 2 is a crucial phase. It is the phase in which the project manager, the project leader and the team analyze in detail the feasibility of the project for the new product, as outlined in the PDD. In Phase 2, the project manager and the project leader may also negotiate requests for changes in the specifications with the product manager (along with the senior manager of Marketing) to increase the feasibility of the project. “If
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Phase 2 is performed with attention and diligence, it is less likely for the team to run into big issues during the following phases” (Senior Manager of Engineering). Once the team is complete, it is responsible for the activities necessary for executing the project.
The feasibility study consists of producing a preliminary layout of the product (by the project leader and the electronic engineers), a draft of the mechanical design (by the mechanical designer/engineer), a sketch of the software scheme and functions (by the software engineers), and a preliminary design for manufacturing (by the manufacturing engineer) and testing (by the testing engineer) of the new product. This study allows the team to assess whether the technical requirements and expected specifications outlined within the PDD can be fulfilled and met. During this feasibility study in Phase 2, the project manager is responsible for coordinating the team. The project leader also leads the team as well as participates in the technical activities of the team. After the feasibility study is complete, a planning activity is carried out during Phase 2. It consists of outlining the time necessary for the project, namely a timeline estimating the times and durations of the relevant tasks that make up the activities for the project. It is the project manager’s responsibility to create, maintain, control and update this project timeline, called a schedule, as the project evolves through the remaining phases.
An important activity of the Feasibility and Planning phase consists of doing a preliminary product cost analysis. In light of the feasibility study conducted by the project leader in collaboration with the team, the project manager estimates the BOM and labour cost of the new product with the aim of assessing whether the target reported in the PDD is achievable. After this analysis, the project manager and the project leader may require the product manager to review the product’s cost target in the PDD to favour the feasibility of the project.
Phase 3 - Design
Phase 3 is called Design and is usually the longest phase of the NPD process. This phase is crucial, as it represents the heart of the project, where the product is designed in light of the previous feasibility study. The main tasks of this phase are the formal design of the electronics, the design of the mechanics and the product’s packaging, the software development, the BOM creation, the design for manufacturability, the design for testing, the material procurement for the prototypes, the design of manufacturing
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tooling and the update and production of the product’s documentation. As a result of the outputs produced by these tasks, the prototypes of the new product are assembled. To do so, the BOM of the new product is created and gradually updated within the database used by the company. The composition of the new product’s BOM is an activity that has to be continuously monitored and updated in real-time. The BOM has to be recorded in the company’s database because all the activities linked to the prototype production, including the material procurement and the assembly arrangements, as well as the materials cost estimate, rely on the updated information in the BOM.
During the design phase, at least two or more versions of the new product prototype are typically assembled. Each team member needs the availability of physical prototypes to carry out their own tasks during the project. For instance, the electronic engineers (from Engineering) need samples to verify the product’s electronic features and hardware; the software engineers (from Engineering) need to test the product’s software; and the testing engineers (from Engineering) need to perform their preliminary tests. The manufacturing engineer and quality engineer (from Operations) ask for prototypes to study the product and to arrange the production phase, to write the documentation, such as the assembly and testing procedures, to design the equipment and the tooling for testing and production and, finally, to train the production department’s technicians. Having gathered all the requests for prototypes by the team members, the project manager organizes their physical assembly.
Phase 4 – Qualification
Phase 4 is the Qualification stage. During this phase, the testing engineers on the team verify that all the product’s functionalities outlined within the PDD perform in the required different circumstances and contexts. The activities of this phase also deal with the technical certification of the new product. Obviously, if some issues occur during the activities for the product’s certification or because of a lack of compliance with some PDD requirements, a review of the design has to take place. Importantly, during this phase the project manager also organizes and coordinates the material procurement for the assembly of the pre-production units. In Phase 4 the manufacturing, quality, and testing engineers prepare and arrange in scrupulous detail the equipment and documentation needed for production.
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Phase 5 – Pre-production
Phase 5, Pre-production, starts with the manufacturing of the new product units with the aim of verifying that the production process runs without any problem. Once this phase is approved by the gatekeepers, the project can be considered closed and mass- production of the new product can take place.