Save Some Coin With The Right Product Development Team
Product Development is a process that when followed properly results in a tangible product that can be sold to customers, thus generating revenue and hopefully profit. In order to get quickly into the revenue stage, it is important to develop a process that results in fast product time to market, high quality, and minimal development costs. In short, achieving Product Development Efficiency. So how does a team go about achieving this? Below are three suggestions that if implemented will result in an efficient product development system.
Learn while minimizing cash spend
The product development lifecycle is essentially a learning process where the team progresses and continuously improves their level of knowledge about the product. During the progression, the team should be using the proof-of-concept, design, and production prototypes as the learning devices to determine the optimal function and failure modes under all operational conditions. Acceleration of this learning through a speedy design-build-test-fix cycle is absolutely necessary to get the team closer to the manufacturing stage and hence to revenue. Unfortunately, many small/medium and start-up companies do not have a never ending amount of cash to keep the learning progressing at a breakneck pace. Therefore, the teams need to be very smart about how they spend their money to properly continue learning and saving cash for later in the product development game.
Here are some great tips on how to spend the least amount of money and continue fast learning throughout the lifecycle:
• Pick The Right Team - Work with an engineering services company that has flexible billing arrangements such as amortization of engineering cost into product manufacturing or fixed total engineering costs. Avoid the hourly engineering rate which requires you hand over a blank check to an engineering services team.
• Do More With Less - Use the early proof-of-concept and design prototypes for as much qualification testing as possible. Many times, there is no need to use production parts off of expensive production tools for early qualification tests. Map out a test and qualification strategy that allows you to test as much as possible on early prototypes.
• Don’t Bite Off Too Much At Once – Once you enter into the production qualification phase, try not to lock up cash in expensive inventory by purchasing large quantities of your product. Work with a supplier who is happy to provide you with a smaller volume, say 1000 production products, that will allow you to test out the market prior to ordering more. This will also prevent expensive inventory reworks.
Most entrepreneurial, start-up, or small/medium companies do not have large internal staffs to handle all stages of the product development life cycle. These companies typically nearsource or outsource much of the work in an attempt to minimize product development costs and maximize development speed. While nearsourcing and outsourcing can improve your costs and speed, it unfortunately can create a costly and slow system if not managed properly.
The One Stop Shop Could Be Your Answer: Many service providers and suppliers do not provide an end-to-end product development solution from product conceptualization to manufacturing, forcing companies to hire multiple service providers throughout the product development lifecycle. When companies piece together a product development team by hiring these outside firms, they sometimes create an inefficient system and lose sight of the tradeoffs between cost, schedule, and scope and the impact on the total quality solution. To create an efficient system, the company must minimize the number of hand-offs throughout the cycle by hiring an end-to-end engineering, prototype, and manufacturing firm that internally handles all the hands-offs without dropping or losing any of the knowledge gained in the last phase.
Here are some tips to improve continuity and product knowledge levels:
• Have one internal program manager for the complete project that responsible for product/project cost, schedule, and scope.
• Minimize the number of hand-offs required between program phases. Try to hire one company that can take the project from design concept to manufacturing.
• Eliminate any supplier agents, go-betweens, or representatives that don’t allow you to work directly with the supplier members doing the work.
Competent and Committed team
A successful product development team consists of internal members, service providers, and external supplier that are not only competent but also extremely committed to delivering the product to the market. Achieving the proper level of commitment and competency takes many years but if you focus on improving these two dimensions of a successful relationship, you can ensure an extremely productive relationship which will result in successful programs and projects.
In order to quickly assemble a committed and capable team, focus on the following:
• Make Friends: Develop a network of world-class service providers and suppliers that have experience working with the best product development companies. Assemble a team selected from this network based on your product development needs and requirements.
• Maintain an extremely close relationship with the internal and external team and create an environment with respect for people and their opinions. Provide open and honest communications regarding performance, both good and bad.
• Help your supplier improve their capabilities by helping them grow and develop with training and an active development plan.
• Expect co-accountability for the success of your product and don’t “point fingers.” A successful product will require teamwork and collaboration of all the members.
Here are a few other helpful links with tid bits of great information regarding lean manufacturing which greatly helps with product development efficiency:
Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com