Project Management and the New Product Development

Coming up with the next big thing is always a challenge. As discussed before, New Product Development (NPD) becomes a core competency for many industries. Historically, there are four types of NPD which are (Ulrich & Eppinger 2008, p.35):

  • New product platforms;
  • Derivatives of existing product platforms;
  • Incremental improvements to existing products;
  • Fundamentally new products.

Regardless of the type of the NPD, every effort requires a cross functional team, working on achieving certain objectives using a set of tasks, within a certain budget and under limited time frame (Ulrich & Eppinger 2008, p.353). In addition, every new product is aiming at fulfilling the needs of different stakeholders (Ulrich & Eppinger 2008, p.3; Project Management Institute 2008, p.30), therefore, the success of NPD process is enhanced by a structured project management approach.

What does Project Management Mean?

According to Project Management Institute PMI, project management is defined as:

 “The application of knowledge, skills, tools, and techniques to project activities to meet the project requirements” (Project Management Institute 2008, p.5).  

PMI addresses the project management using 47 processes under five process groups which are: initiating, planning, executing, monitoring and controlling and finally closing (Project Management Institute 2008, p.5). These process groups are not discrete. In reality they are interacting with each other and overlapped during the project life cycle. A generic project life cycle and process groups’ interaction is shown in the below figure.

pic-2

The Application of Project Management in New Product Development

The project manager and the project team shall implement set of activities in order to move the project from the starting point up to the closing point. Doing that means employing different tools and techniques to balance the project’s constraints, i.e. time, cost, scope, quality, resource and risks in order to achieve project’s objectives (Project Management Institute 2008, p.6,39).

The fundamental question here: is that generic structure applicable to all projects? PMI recommends that the project manager shall adjust it according to the nature of the project itself and use Agile (Adaptive) Life Cycle, Incremental Life Cycle and Iterative Life Cycle when needed (Project Management Institute 2008, p.45).

For new product development projects in specific, Pons argued that the high uncertainty in NPD leads to unsuccessful outcomes, where costs and time estimates cannot be precisely determined in advance as imposed by the PMI standards. Therefore, he concluded that such project management approach is not comprehensive (Pons 2008).

Barkley confirmed that fact, however, he still recommends using a structured project management practices to ensure the right selection of projects, the best management of shared resource and the appropriate integration between the different NPD projects (Barkley 2008, p.57). Barkley argued that the ultimate purpose of project management in NPD is to ensure the right trade-offs between time, cost and value, therefore, he proposed seven principles for a successful NPD’s project management which are (Barkley 2008, p.326):

  1. Develop project management and NPD processes and integrate the two
  2. Open the company to new ideas and new partners
  3. Define measures for choosing new product projects
  4. Create a way through project reviews to stop bad products
  5. Choose project managers who understand technology
  6. Build cross- functional teamwork and accountability
  7. Ad hoc it when necessary to succeed

In another importance of using project management in NPD, Smulders et al. (2003) discussed the interaction between NPD and the operations when moving the new product to the implementation stage. They argued about the importance of including soft theories such as change management alongside with the hard theories that project management provides (Smulders et al. 2003).

As addressed earlier, the traditional approach of project management in NPD has been criticized (Pons 2008), therefore, other alternatives are found in the literature.

Non-Traditional Project Management Approaches

One of the alternatives to the traditional project management approach is the phase-gate approach (Ellis 2016, p.364). Verworn & Herstatt (2002) addressed different approaches to NPD which are:

  • ‘First-gate generation innovation’ process; in this way, the project is divided into phases that are linked sequentially and the project’s team can move on after a formal Go/No Go decision.
  • ‘Second- gate generation innovation’ process which is more flexible because the sequential relationship is not a must and the Go/Kill decision is done by a multi-functional team.
  • ‘Third- gate generation innovation’ process which provides guidelines for the project team in order to adapt to the changes and responds to risks effectively (Verworn & Herstatt 2002).

Another approach is the agile approach which focuses on the results rather than the activities that should be done to achieve the results, hence resources’ commitment is not as much important as how these resources are responding to changes and progressing in delivering their activities (Barkley 2008, p.286).

According to Project Management Institute, Agile or what is called Adaptive Life Cycle is defined as:

“A project life cycle … that is intended to facilitate change and require a high degree of ongoing stakeholder involvement. Adaptive life cycles are also iterative and incremental, but differ in that iterations are very rapid (usually 2–4 weeks in length) and are fixed in time and resources” (Project Management Institute 2008, p.527).

Ellis (2016) addressed the use of three types of agile project management, mostly for the devolvement of software tools, which are ‘Scrum’, ‘Scrumban’ and ‘eXtreme Programming (XP)’ (Ellis 2016, p.223).

Finally, Concurrent engineering or integrated product development in which the design and the development are done simultaneously. In this way, the time and the costs needed in the early stages of the NPD process are reduced (Verworn & Herstatt 2002; Barkley 2008, p.292).

These three approaches can be used as a remedy for the limitations of the traditional project management tools and techniques.

References

Barkley, B.T., 2008. Project Management in New Product Development 1st ed., New York: McGraw-Hill.

Ellis, G., 2016. Project Management in Product Development: Leadership Skills and Management [E -Book] 1st ed., Amsterdam: Elsevier Ltd. Available at: Online resource; title from PDF title page (EBSCO, viewed September 30, 2015).

Pons, D., 2008. Project Management for New Product Development. Project Management Journal, 39(2), pp.82–97.

Project Management Institute, 2008. A Guide to Project Management Body of Knowledge: PMBOK® Guide 5th ed., Project Management Institute.

Smulders, F. et al., 2003. The Last Stage of Product Development: Interventions in Existing Operational Processes. Creativity and Innovation Management, 12(2), pp.109–120.

Ulrich, K. & Eppinger, S., 2008. Product Design and Development 1st ed., Boston,Mass: McGraw-Hill.

Verworn, B. & Herstatt, C., 2002. The Innovation Process: An Introduction to Process Models. Working Papers / Technologie- und Innovationsmanagement, Technische Universität Hamburg-Harburg, (12). Available at: http: //hdl.handle.net/10419/55466.

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