A Team Approach
Column
By James Richmond and Scott Miller   
Tuesday, 14 March 2006
Which drives the most value in the product development process: time, cost or quality? Usually, companies view product development within the limitations of their annual budgets, which means cost becomes the driving factor. However, time is actually the most critical of the three and can work for or against an organization. By shortening development time, a product can be brought to market quicker, which generally results in a larger marketshare and higher direct profit for the company.

On the other hand, if the schedule is contracted too tightly, it can seriously impact quality, leading to defects, recalls and even harm to consumers or an adverse environmental impact - none of which is good business. The challenge then is to find the right balance of time, cost and quality.

Pride of Development
If new product development is viewed in terms of total cost of ownership, rather than within the limits of the annual budget, cost can be taken out of the equation, which leaves only time and quality to consider. But this approach brings other challenges. One is that engineers prefer to design new products from scratch rather than researching previous designs of similar products with known quality metrics that could be modified easily to create a new product. This preference for reinventing the wheel raises costs, lowers quality and extends the development timeline.

One way to encourage a leaner process is to assign engineering to core teams with members who focus on driving the development of a specific product.

The essential difference to current product development processes is that the team is created around a product, rather than having a number of departments building various products among them. In other words, the team becomes the primary resource responsible for managing time, cost and quality in the development of a product.

This type of team approach creates a more focused effort and eliminates much of the time-consuming transfer of information between departments. The team works together closely on a daily basis, which makes for much more efficient and effective communication. Team members also determine what type of work can be outsourced for optimum resource utilization.

The process minimizes costs and raises quality because teams are assigned according to the core skill sets required for a specific product development project, yet the teams also can obtain additional skill sets through outsourcing as necessary. Perhaps the biggest benefit of a core team is that it actually drives the product development process by setting high quality expectations and applying pressure as necessary to get things done on time and on budget.

Unless someone is responsible for driving the process in this manner every minute of every day, at least some factors related to time, cost and quality will fall by the wayside. Finally, the team approach puts an end to department empires. Pride of department (“we have the most reliable department in the Fortune 500”) then becomes pride of development (“our products are the highest quality” or “our products go to market faster than anyone else's”).

Team Approach Do's and Don'ts
Is it realistic to expect time-to-market to be short, cost to be low and quality to be high? Yes, it is, but not with current processes as practiced by most manufacturers.

Research results show that engineers spend only about 25 percent of their time engineering, which means that large efficiencies can be captured by teams who focus on nothing but engineering. However, a team's success in completing a project on a tight schedule with the best cost and highest possible quality depends on a number of other factors:

• Start with homework - Excited by a new development project, engineers usually can't wait to get started. They prefer to start designing right away rather than doing some planning up front. But without a plan that assigns roles and responsibilities, moving ahead is wasteful and inefficient. This could be compared to a football game where every single player plays all the positions. In the same way, product development targets can only be met if positions are assigned ahead of time, each to a different player who has just the right skill set for the role.

• Communicate, communicate, communicate - The more miscommunication of information, the longer it takes to correct a problem later and the greater the chance for failure. Address any problem the moment it arises; don't put it off until tomorrow.

• Exchange information efficiently - Be proactive in gathering information; don't wait around for it. Utilize instant messaging or text messaging to exchange intelligence. E-mail has become a huge problem in organizations today because people use it as a way to pass the buck. It is not uncommon in many organizations to hear 15-minute arguments in design review or failure modes and effects analysis meetings regarding e-mails that supposedly were sent and should have been acted on by someone on the team. Text messaging and instant messaging are much better tools than e-mail because they enable instantaneous confirmation, information and feedback. They get to the heart of the matter very quickly because their communication strings tend to be much shorter - 25 words or less - than those of e-mails. They are even more efficient than phone calls because time is not spent playing phone tag or exchanging pleasantries.

• If tools are available, then use them - The best repository of information is useless if people don't know how to access it. Some organizations spend millions of dollars on collaboration tools and electronic data management systems, but only a small minority of their product development staff knows how to use these tools.

Their colleagues depend heavily on those few people, which means people waste time waiting for each other to complete tasks, rather than speeding up the process with the tools designed for this purpose.

Many companies have engineering change notice systems, but only a few people utilize them. Others in the group log in under their names and usually don't know how to enter information correctly.

This makes it next to impossible to track the source of an entry later if a question or problem arises. It is critical in the product development process that the people involved know where the information is and how to access and use it.

Have It All
The old maxim was: Time, cost and quality - pick any two. Today, it is possible to achieve all three metrics by changing the product development model to a team approach. The new model focuses specifically on product development rather than being built to accommodate the departmentalization of companies.

It does away with an amorphous engineering population distributed over numerous departmental entities, each of which has its own platform and management structure. The new model assigns teams of specialists who can work together efficiently on product-development projects.

If such a team approach is not feasible internally, an alternative is to outsource product engineering to specialty firms that have proven success with the team approach. The new maxim is: If someone else can do a better job of achieving all three metrics - time, cost and quality - don't do it internally.  

James Richmond is CEO and Scott Miller is COO of eServ LLC. Headquartered in Peoria, Ill., eServ is a product engineering company that teams with manufacturers worldwide to provide business process outsourced engineering services from concept through production. For more information, call 309-691-4920 or visit www.eserv.biz.     
 
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