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Product Cost, Scope, Schedule: Prioritize or Fail

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product DevelopmentProduct development and commercialization can be summarized as a balancing act between the competing constraints of product cost, scope, and schedule. Thousands of decisions are made while a product is under development and the end result is typically a sub-optimal result of these decisions. A consistent theme exists as a team moves through the process of bringing a product to the customer: it is virtually impossible to optimize all the requirements of the program/product.

Since optimization is impossible, it is necessary to prioritize the objectives of the project in order to ensure success. Without prioritization, the individuals working on programs will be pulled in opposing directions and will be continually redirected during the project, resulting in failure. Proper prioritization of product cost, scope, and schedule will result in success.

The three objectives of a program are product cost, product scope, and program schedule.

Product Cost refers to the many financial metrics, including total budget, cost of goods sold, gross margins, or any other financial metrics used on the project.

Product Scope refers to the product features that will be designed into in the final product.

Program Schedule refers to the amount of time available to complete the project.

Unfortunately, it is impossible to change one of these objectives without affecting the others. The cost, scope, and schedule each act as constraints and therefore movement of one affects the others. This is typically referred to as the project management triangle by program managers.

How do you manage a project knowing that everything cannot be optimized? The management team at Leardon Solutions has managed hundreds of programs using a simple method of prioritization which requires that the team takes away the constraints that will cause failure. This method requires thinking of the cost, scope, and schedule in terms of three levels of priority.

a) Determine which of the three program objectives is the most important. This chosen objective will be the first program priority that must be constrained and cannot change under any circumstance. For example, if the product being developed is for the snowboard market and must be available two months prior to the skiing season, the program schedule should be chosen as the highest priority. The team must make changes to the product scope or product cost in order to meet the program schedule.

b) Choose one of the two remaining program objectives that can change but must be held within a range. After the top program priority that cannot change under any circumstance is chosen, there are only two objectives left. The second priority should be thought of as an objective that can be modified but should always be kept as close to the goal as possible. In the snowboard example, program schedule is the top priority and everything else must adapt to meet the program schedule. If all similar products in this snowboard product category have a retail price around US$50, this product might also need to be close to this retail price. It might not be possible to hit this price exactly because of the rigid schedule constraint, but the product cost should be optimized by minimizing the product manufacturing cost or modifying the gross margins.

c) The outcome of the last program objectives will be accepted as is. Unfortunately, since the first program priority was constrained and the second program priority was optimized, there is no ability to control the third program priority. The program manager must accept whatever results from the actions of constraining and optimizing. For the snowboard product example, the product scope is considered the third program priority. The product designer might have wanted to include a small injection molded plastic toe bumper on the front of the product to improve the looks of the product and prevent wear of the toe. But due to the schedule constraint (injection molding tool has a six week lead time) and the product cost optimization (this additional part adds cost), the design engineer should not include the toe bumper in the design.

Some hard tradeoffs need to be made when prioritizing the program cost, scope, and schedule. By performing this exercise and communicating the priorities, the product development team will be given very clear objectives that allow the members to make their own tradeoffs knowing the overall program priorities. This will result in successful programs for both large and small projects at companies of all sizes.

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Form, Fit, and Function Prototype

The last prototyping post titled Why a Proof-of-Concept Prototype? reviewed the reasons for designing, fabricating, and testing a Proof-of-Concept Prototype of your innovative product idea. If you followed this advice, you now have shown that your concept functions properly and there is a feasible technical path to develop your product. With this accomplished, what should you do next?

Leardon Solutions Form Fit Function Prototype

Intubation Design Prototype by Leardon Solutions

Leardon Solutions designs, engineers, prototypes, and manufactures products for the medical devices and diagnostic, health and lifestyle, commercial, consumer electronics, and active sports industries. Every project, no matter how simple or complex, follows the rigorous Leardon Solutions Product Development Lifecycle.  This ensures that all the program objectives and project requirements are satisfied. The third phase of this lifecycle, referred to as the Design Prototype Phase, requires the completion of a prototype that meets the form, fit, and functionality requirments.

You might be asking yourself “What is the difference between this so-called Design Prototype and the Proof-of-Concept prototype mentioned in the last blog posting?” The Proof-of-Concept Prototype was developed in order to prove that the product idea was technically feasible and functioned as expected. There was no work done to make the prototype look aesthetically pleasing or to meet any of the human factors (feel) or industrial design (look) requirements. This next stage of prototype requires that the functional requirements are implemented into an engineered prototype that is looks, feels, and operates the same as the final product. The only difference between this prototype and the final manufactured product is that this Design Prototype is fabricated utilizes low-volume prototyping techniques.

A Design Prototype requires more engineering and design skill than required for the Proof-of-Concept Prototype. The reason for this is the fact that the prototype needs to look and feel like the final product. Therefore, the engineer designing the prototype must have some knowledge of the final production methods so that it can be designed with the intention of using these fabrication methods when finally going into production. The engineer also needs to generate the proper engineering documentation such as 3D models, 2D drawings, and electrical schematics so that the manufacturer can properly fabricate the parts to the proper engineering specifications. While it isn’t absolutely necessary, it is recommended to hire a design engineer during this prototype phase.

The Design Prototype usually requires more manufacturing and fabrication skill than what was used to produce the Proof-of-Concept Prototype. This is due to the fact that this prototype is fully integrated with all the proper features. This integration usually results in more complex parts which are more difficult to fabricate using prototype methods. Due to schedule and financial constraints, this prototype will not be fabricated using high-volume production techniques such as injection molding or progressive die metal stamping. Instead, the prototype will be made of parts that are fabricated with low-volume prototype techniques such as machining, resin molding, laser cut metal parts, and quick turn printed circuit boards.

Leardon Solutions Form Fit Function Prototype for APT Innovations

Apt Innovations Floe Design Prototype by Leardon Solutions

Once this prototype is complete, there are many important uses for this prototype, all of which are equally important. First, since this Design Prototype was made to have the look, feel, and function of the final product, this is an excellent prototype to show to potential investors for raising money. A functioning and aesthetically pleasing prototype will have a much better impact in an investor presentation than showing a business plan.

Even though this prototype will look as if the product is complete and ready for manufacturing, there is still a long way to go before reaching the production stage. The second use of this prototype is for working out the design and manufacturing details. As the prototype is assembled and operated, important feedback will be gathered which will be fed forward into the future design revisions.

A third use for this Design Prototype is as a tool in getting valuable feedback from customers. Prepare a set of questions for target customers and let them use your prototype. This feedback is important to verify that your product satisfies the customer needs and will have commercial success when introduced.

Finally, this prototype will be very useful when pitching your product to potential distributors, buyers, and retailers. Since the product meets all the functional requirements and has the final look and feel, these meetings will be much more valuable as the intent of the product will be easy to communicate.

The Design Prototype is an necessary step in the development and commercialization of a product. The design and fabrication of this prototype will allow you to validate your customer segment, determine if the product has an acceptable look and feel to customers, and will prevent expensive production and manufacturing changes down the road.

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