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PDMA Process StageGate


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PDMA Process StageGate

  1. 1. New Product Process Portfolio Management & Stage-Gate Model STAGE-GATE MODEL Business Strategy and New Product Gate Strategy Portfolio Review: Stage This meeting • identifies strategic imperatives Gate • checks project priorities Stage • checks for portfolio List of projects: Active and On-Hold balance Total Project Scores from Gates • makes adjustments Gate to the gating model Stage Strategic Imperatives(Must Do Now) Prioritization Adjustments Gate Adjustments Review
  3. 3. Goals #1 Quality of Execution  focus on completeness: key activities central to success are carried out  focus on quality: execution of activities is proficient  focus on the important: devote attention & resources to pivotal and potentially weak steps (up-front and market-oriented activities)
  4. 4. Goals #2 Sharper Focus, Project Prioritization  focus on funnels, not tunnels: strong gates weed out weak projects  focus on using resources efficiently: resources are directed toward the truly meritorious projects
  5. 5. Goals #3 A Strong Market Orientation Key marketing activities:  Preliminary market assessment  Market research to determine user needs and wants  Competitive analysis  Value-in-use analysis  Concept testing  Customer reaction & feedback  User tests & field trials  Test market or trial sell  Market Launch based on marketing plan
  6. 6. Goals #4 Fact-Based Product Definition  up-front homework: defines the product and builds the business case for Development  fully defined products: lead to strong first steps into becoming full-fledged development projects  strategic product platforms: creates comprehensive product links to insure long-term idea pipelines
  7. 7. Goals #5 Fast-Paced Parallel Processing  relay race approach ends: the series approach moves to the rugby match style of concurrently occurring activities  benefits of team work: • more work gets done in an elapsed time period • less chance of an activity being overlooked • activities are designed to feed each other • process becomes cross-functional and multidisciplinary
  8. 8. Goals #6 True Cross-Functional Team Approach Key ingredients:  Committed team players  Team leader accountable for the project  Leader w/formal authority  Fluid team structure, w/new members added or dropped as work requirements demand-some may not be involved in all  Small, core group of responsible and accountable team players from beginning to end
  9. 9. Goals #7 Products with Competitive Advantage Defined as:  Differentiated products  Unique benefits  Superior value for the customer  Product superiority should be built in at every opportunity, questioned at every Gate, and a key deliverable for Go/Kill reviews
  10. 10. Goals #8 A Fast-Paced and Flexible Process  elimination of time wasters: work that adds no value to the new product process only slows it down  different projects have different needs: the risks and nature of different projects should be considered - some will move faster than others
  11. 11. Definitions Stage  consists of a set of parallel activities by people from different functional groups  designed to gather information needed to advance project to next gate  each is cross-functional and owned by no single functional group  designed to help manage risk by driving uncertainties down at each successive stage  in general, each stage costs more than the preceding one due to successive commitment to launch
  12. 12. Definitions Gate  have a set of required “deliverables” the project leader must present to the gate  have a set of “criteria or hurdles” that each project is judged on  have a decision or “output” - Go/Kill/Hold/Recycle DELIVERABLES OUTPUTS CRITERIA
  13. 13. Definitions Gatekeepers  management team of decision makers and resource owners responsible for facilitating the rapid commercialization of selected projects  TI - Managers; Newspaper - Directors after Gate 2 or 3 forward Deliverables  a prescribed list of items - results of completed actions - the Project leader must present to the gate  based on a standard menu for each gate & are decided at the output of the previous gate
  14. 14. Definitions Criteria/Hurdles  a predetermined set of hurdles or questions that the project is judged on to make Go/Kill and prioritization decisions  can include a list of must-meet or knockout questions to weed out misfit projects quickly  e.g., Does the project fit the corporate strategy? Is there consumer appeal - that is, clear consumer need and expectation of consumer benefit? Is manufacturing or procurement feasible?
  15. 15. Definitions Outputs  a decision (Go/Kill/Hold/Recycle)  an approved action plan for the next stage  a list of deliverables  date for the next gate Action plan  estimate of people required  estimated money and person-days  budget  time schedule
  16. 16. Idea Generation Keys to success  focal point for new ideas: assign the responsibility of generating and handling ideas to a single person  identify the sources: where do good ideas come from - make a list of possible sources and follow up  grease the path: create events or opportunities for idea generation - kits, contests, conversations  capture & handling system: allow for easy submission points and forms, with a repository for ideas not accepted
  18. 18. Idea Capture & Handling Idea Generation SUBMISSION DATABASE (Excel Spreadsheet online) - NEW IDEAS
  19. 19. Gate 1 Initial Screen Characteristics  project is born: first decision to commit resources to the project  “gentle screen”: project is subjected to key must- meet and should-meet criteria  financials: financial criteria are typically not part of this first screen  checklists & scoring: Yes/No criteria for the must- meet, and a weighted rating scale for should-meet criteria INITIAL SCREEN STAGE 1 1 GATE PRELIMINARY INVESTIGATION
  20. 20. Gate 1 Initial Screen Criteria/Hurdles  A single “NO” kills the project: • Strategic fit - does it fit w/in a market or functionality area that’s one of strategic focus? • Market attractiveness - are the market size, growth, and opportunities attractive? • Technical feasibility - is there the likelihood that the product can be made & produced? • Killer variables - do no known killer variables exist (e.g., legislative action) INITIAL SCREEN STAGE 1 1 GATE PRELIMINARY INVESTIGATION
  21. 21. Stage 1 Preliminary Investigation Objective - Determine the project’s technical and marketplace merits  Activities (primarily secondary research) • Preliminary market assessment - scoping of the marketplace to assess the existence of a market, probable size, and market acceptance • Preliminary technical assessment - appraisal to propose a solution, a probable route, and assess costs, time and risk • Preliminary business assessment - quick financial assessment based on estimates of sales, costs, and investment required (payback calculation) INITIAL SECOND SCREEN SCREEN STAGE 1 1 2 GATE GATE PRELIMINARY INVESTIGATION
  22. 22. Gate 2 “Feasibility” Characteristics  repeat of Gate 1: project is reevaluated in light of the “deliverables” from Stage 1  hurdles using Hoeschst’s scoring model: the addition of more complex metrics can help evaluate projects in Gates 2 & 3  financial return assessed: this is quick and simple financial calculation meant only to give a general understanding of payback period, costs, etc. SECOND SCREEN STAGE STAGE 1 2 2 GATE PRELIMINARY DETAILED INVESTIGATION INVESTIGATION
  23. 23. Gate 2 “Feasibility” Criteria/Hurdles  Strategy & Priorities • Does the project fit the corporate strategy? (M) • Does the project fit the category strategy? (M) • Does the project fit the operating unit strategy? (M)  The Consumer • Is there consumer appeal (that is, clear consumer need and expectation of consumer benefit)? (S) • Is the market/category of an attractive size and with growth potential? (M) • Does the concept have competitive advantage? (M) • Is there a clear and viable marketing proposition? (S) SECOND SCREEN STAGE STAGE 1 2 2 GATE PRELIMINARY DETAILED INVESTIGATION INVESTIGATION
  24. 24. Gate 2 “Feasibility” Criteria/Hurdles (cont’d)  The Sale • Are there existing company sales channels? (M) • Does the product have advertiser appeal and fit? (S)  Technical • Is development or procurement feasible? (S)  Editorial • Are there any serious issues - legal? (M) • Issues - ethics? (M) SECOND SCREEN STAGE STAGE 1 2 2 GATE PRELIMINARY DETAILED INVESTIGATION INVESTIGATION
  25. 25. Gate 2 “Feasibility” Criteria/Hurdles (cont’d)  Financial • Does this project have a PMA/DMA/national potential? (S) • Are financial projections in line with financial criteria? (S)  Other • Does the product have multi-market expansion potential? (S) M= must-meet S = should-meet (Hoescht scale) SECOND SCREEN STAGE STAGE 1 2 2 GATE PRELIMINARY DETAILED INVESTIGATION INVESTIGATION
  26. 26. Stage 2 Detailed Investigation Objective - Build the business case  Activities • User needs-and-wants studies help develop a new product definition • Value-in-use studies determine what economic value the product will bring to the advertiser/customer (customer use system, current solution, cost drivers, etc.) • Competitive analysis that includes direct and indirect competitors: their products, strengths & weaknesses, business performance, etc. • Concept testing in prototype form • Detailed technical assessment • Operations appraisal • Financial analysis SECOND DECISION ON SCREEN STAGE BUSINESS CASE 2 2 3 GATE DETAILED INVESTIGATION
  27. 27. Stage 2 Detailed Investigation Deliverables - Business Case should answer:  Product definition - what is the product, who will use it and who will it be sold to? • Specification of the target market • Description of the product concept and benefits • Positioning strategy including price point • Product features, attributes, requirements, and high-level specs (“must have” and “would like”)  Project justification - why invest in this project? • Strategic rationale, financial analysis, and business risk assessment  Project plan - how and how long? SECOND DECISION ON SCREEN STAGE BUSINESS CASE 2 2 3 GATE DETAILED INVESTIGATION
  28. 28. Stage 2 Detailed Investigation Sample Deliverables to Gate 3  Strategic fit confirmed  Detailed market assessment  Detailed operations/technical assessment  Resource constraints  Detailed financial assessment  Detailed legal and ethical issues assessment  Potential killer variables addressed  Critical success factors are understood and feasible to achieve  Recommendation to proceed, hold or kill  Detailed biz & project plans  High-level plan for remaining stages A complete Deliverables List for each Gate can be found at: Choose: DeliverablesList.doc SECOND DECISION ON SCREEN STAGE BUSINESS CASE 2 2 3 GATE DETAILED INVESTIGATION
  29. 29. Gate 3 “Go-to-Development” Characteristics  money gate: final gate prior to the Development stage - the last point at which the project can be killed before entering heavy spending  product definition sign-off: what the product is to become and how it fits into the product portfolio are finalized  gatekeepers: top-level management DECISION ON STAGE BUSINESS CASE STAGE 2 3 3 DETAILED DEVELOPMENT INVESTIGATION
  30. 30. Gate 3 “Go-to-Development” Criteria/Hurdles  Similar to Gate 2, however, are more rigorously applied, using more quantitative methods if necessary in addition to “must- meet” and “should-meet” standards outlined in Gate 2  The list of hurdles for this gate should be determined by the business unit based on a criteria that allows the gatekeepers to make an informed allocation of funds to Stage 3 (Development) DECISION ON STAGE BUSINESS CASE STAGE 2 3 3 DETAILED DEVELOPMENT INVESTIGATION
  31. 31. Stage 3 Development Characteristics  Deliverable is a “lab-tested” product, w/full production & marketing plans being developed here  Development plan includes • chronological list of activities, actions, and tasks (project management) • a timeline or schedule showing beginning & end points, and milestones • resources required for each task and assigned responsibility POST DECISION ON DEVELOPMENT BUSINESS CASE STAGE REVIEW 3 3 4 DEVELOPMENT
  32. 32. Gate 4 Post Development Review Characteristics  A check on the progress and continued attractiveness of the product and project  Question switches from “Should we invest in the project?” to “How well is the project unfolding - is it on track?”  Go/Kill criteria/hurdles in both Gates 4 & 5 should reflect this shift  Test or validation plans and capital expenditures should be approved here  Marketing and operations plans are reviewed for future execution POST DEVELOPMENT STAGE REVIEW STAGE 3 4 4 DEVELOPMENT TESTING & VALIDATION
  33. 33. Stage 4 Testing and Validation Characteristics  Tests and validates the entire commercial viability of the project: the product itself, the production process, customer acceptance, and the economics • in-house prototype testing • user tests or field trials • limited pilot production • financial revisions • mini-launch PRE- POST COMMERCIALIZAT DEVELOPMENT ION BUSINESS REVIEW STAGE ANALYSIS 4 4 5 TESTING & VALIDATION
  34. 34. Gate 5 Pre-launch Business Analysis Characteristics  Scrutinizes the quality of the activities at the testing and validation stage and their results  Criteria/hurdles tend to focus on expected financial returns and appropriateness of launch and operations start-up plans  Operations and marketing plans reviewed and approved  Life Cycle plan anticipated PRE- COMMERCIALIZATION BUSINESS ANALYSIS STAGE STAGE 4 5 5 POST DEVELOPMENT FULL PRODUCTION REVIEW & LAUNCH
  35. 35. Stage 5 Full Production & Market Launch Characteristics  Implementation of both the marketing launch plan and production or operations plans  Post-Launch monitoring plan kicks in with performance on key metrics being tracked  Elements of the long-term Life Cycle Plan begin to be implemented (e.g., improvements and variations) POST PRE- IMPLEMENTATION COMMERCIALIZATION BUSINESS ANALYSIS REVIEW STAGE 5 5 Production & Market Launch
  36. 36. Post Implementation Review Characteristics  After about 6 to 18 months the product project must be terminated - product becomes part of the company’s portfolio  Product’s performance is tracked, analyzed, and assessed - in terms of costs, revenue against projections, profits, timing against other products, etc.  Project team and the leader remain accountable for the success of the project through this post-Launch period POST IMPLEMENTATION REVIEW STAGE 5 TESTING & VALIDATION