Part III Managing and improving product development The effectiveness of product development in a company is determined people responsible for product development from the directors to the managers; by firstly their basic philosophy and understanding, secondl abilities and thirdly the clear recognition of their roles Product development combines people, their individual knowledge and skil How they collaborate to produce the company's abilities in product development is the basis for product success or failure. Product development needs knowledge and skills in all areas of the company -R&D, marketing, production and finance, and in particular top management. This is why product development management is complex and often becomes swamped in the management for today. Companies appear to have great difficulty in deciding where to place product development management in marketing, R&D, production or as a separate department; over the years product development management is apt to be reorganised several times because of problems that have been identified. This is no bad thing since product development, because of its nature, is always changing, going in different directions as technology and consumers change. But the core product development knowledge needs to be kept intact and allowed to grow through the product development projects It is important to recognise that there are different layers of product development management, layers that are interacting with the management of the functional departments and indeed are sometimes the management of the functional departments. The key issues are in two areas 1. Management needs in the vertical responsibility from directors to project 2. Interaction between these management people and the functional departments
The effectiveness of product development in a company is determined by the people responsible for product development from the directors to the project managers; by firstly their basic philosophy and understanding, secondly their abilities and thirdly the clear recognition of their roles. Product development combines people, their individual knowledge and skills. How they collaborate to produce the company’s abilities in product development is the basis for product success or failure. Product development needs knowledge and skills in all areas of the company – R&D, marketing, production and finance, and in particular top management. This is why product development management is complex and often becomes swamped in the management for today. Companies appear to have great difficulty in deciding where to place product development management – in marketing, R&D, production or as a separate department; over the years product development management is apt to be reorganised several times because of problems that have been identified. This is no bad thing since product development, because of its nature, is always changing, going in different directions as technology and consumers change. But the core product development knowledge needs to be kept intact and allowed to grow through the product development projects. It is important to recognise that there are different layers of product development management, layers that are interacting with the management of the functional departments and indeed are sometimes the management of the functional departments. The key issues are in two areas: 1. Management needs in the vertical responsibility from directors to project managers. 2. Interaction between these management people and the functional departments. Part III Managing and improving product development
258 Food product development The product development activity in a large company can be very complex. In the small company, the director, chief executive, product development manager and project leader can be one person. But in all companies it is important that the product development strategy, product development programme, PD Proces and the overall aims of the programme and the individual projects are clearly defined. Then everyone understands their place in the jigsaw, the outcomes expected from their work and the decision-making process The other key issue in management is the interrelationship between product development and the functional areas of R&D, marketing, production, distribution, and finance. In looking at the typical activities occurring throughout the product development process, it is clear that the support of these groups is essential. Both the inputs needed for product development and the outcomes from product development are related to the functional departments, which are very much involved in making and marketing todays products(Stockwell 1985). There are inputs such as product mix strategy and sales forecasting from marketing, product trials and quality assurance development from production, predicted returns on investment from finance, and outputs such as market plan from marketing, production schedule from production and net profit forecast In Chapter 6, the basic needs in product development management and the people who are responsible for making product development both effective and efficient- producing the optimum product at the right time and within budget are outlined. The Pd Process is the focus- design the pd process: establish the key decision points and the decision makers; establish outcomes, budgets and constraints, organise and manage. The chapter ends with a discussion on anaging and organising product development in the company, and collaborate ng with outside agencies Chapter 7 illustrates product development at different points in the food system in four case studies. Management of product development is different among primary production, processing of food ingredients, manufacturing and food service. because of the different scientific and technological bases the different needs of the target markets and the time for development. It is mportant to understand that there is a common product development framework but the activities can be different Chapter 8 studies the searching for best practice in product development and in particular the improvement of R&D management by benchmarking. The changes that are occurring in food product development and what may happen in the future are discussed Reference STOCKWELL, D (1985)Managing product development as a business activity, address to the AsEAn Food Conference, Manila, Philippines
The product development activity in a large company can be very complex. In the small company, the director, chief executive, product development manager and project leader can be one person. But in all companies it is important that the product development strategy, product development programme, PD Process and the overall aims of the programme and the individual projects are clearly defined. Then everyone understands their place in the jigsaw, the outcomes expected from their work and the decision-making process. The other key issue in management is the interrelationship between product development and the functional areas of R&D, marketing, production, distribution, and finance. In looking at the typical activities occurring throughout the product development process, it is clear that the support of these groups is essential. Both the inputs needed for product development and the outcomes from product development are related to the functional departments, which are very much involved in making and marketing today’s products (Stockwell, 1985). There are inputs such as product mix strategy and sales forecasting from marketing, product trials and quality assurance development from production, predicted returns on investment from finance, and outputs such as market plan from marketing, production schedule from production and net profit forecast from finance. In Chapter 6, the basic needs in product development management and the people who are responsible for making product development both effective and efficient – producing the optimum product at the right time and within budget – are outlined. The PD Process is the focus – design the PD Process; establish the key decision points and the decision makers; establish outcomes, budgets and constraints; organise and manage. The chapter ends with a discussion on managing and organising product development in the company, and collaborating with outside agencies. Chapter 7 illustrates product development at different points in the food system in four case studies. Management of product development is different among primary production, processing of food ingredients, manufacturing and food service, because of the different scientific and technological bases, the different needs of the target markets and the time for development. It is important to understand that there is a common product development framework but the activities can be different. Chapter 8 studies the searching for best practice in product development and in particular the improvement of R&D management by benchmarking. The changes that are occurring in food product development and what may happen in the future are discussed. Reference STOCKWELL, D. (1985) Managing product development as a business activity, an address to the ASEAN Food Conference, Manila, Philippines. 258 Food product development
Managing the product development process Product development management in the food system is complex, long term and capital intensive. It is total company management involving every function in the company -so it is managing either a microcosm of the company or an integration of the company functions. For a major innovation, the company may set up a new venture company or division; or a new group of people may form a new company. At this time when many new companies are being formed on the nnovations of information technology and biotechnology, it is interesting speculate on new venture companies in the food industry and the basis of ther new innovations. But at the present time, it is the large multinational food companies that dominate product development at all levels in the food industry and it is management of product development in these companies that is the main basis for innovation in the food industry. There are many small food companies that are also involved in product development on a small scale Management of product development in the food industry varies from a group in he small company sitting around a kitchen table to the multinational food company with large R&D laboratories, small-scale production development plants and product development teams in many countries. The basic principles of product development management are the same in large and small companies, but often more difficult to apply in the large company because of rigid The framework for management in the food industry is the PD Process, and he recognition of management at the different stages
Product development management in the food system is complex, long term and capital intensive. It is total company management involving every function in the company – so it is managing either a microcosm of the company or an integration of the company functions. For a major innovation, the company may set up a new venture company or division; or a new group of people may form a new company. At this time when many new companies are being formed on the innovations of information technology and biotechnology, it is interesting to speculate on new venture companies in the food industry and the basis of their new innovations. But at the present time, it is the large multinational food companies that dominate product development at all levels in the food industry, and it is management of product development in these companies that is the main basis for innovation in the food industry. There are many small food companies that are also involved in product development on a small scale. Management of product development in the food industry varies from a group in the small company sitting around a kitchen table to the multinational food company with large R&D laboratories, small-scale production development plants and product development teams in many countries. The basic principles of product development management are the same in large and small companies, but often more difficult to apply in the large company because of rigid hierarchies. The framework for management in the food industry is the PD Process, and the recognition of management at the different stages. 6 Managing the product development process
260 Food product development 6.1 Principles of product development management Several principles of development management have been identified ge principles are robust and are useful as a basis for product development management. They can be grouped under basic philosophy, understandin abilities and organisation of the company as shown in Fig. 6.1 6.1.1 Basic philosophy and understanding Belief in product development as a major business strategy Understanding emerging worldwide technologies, in-depth knowledge of technologies Understanding the transformation of technologies into want-satisfying products, intimate understanding of changing consumer needs eveloping a creative climate, creating spontaneous teamwork Patience, realising that innovations take time, going through cycles of success and failure, and that management has to aid and direct them to the end of product success. Recognising the need for skills in systematic decision making and risk takin These are still essential elements in product development that have conti demonstrate their significance over a great diversity of situations and tin to mention fashions! Unless management, especially top management, that product development needs knowledge of technology and consumer, and of their optimum relationship, then product development will stumble. Having recognised these basic knowledge needs, they have also to recognise that there needs to be a creative atmosphere and time to reach product success. Lastly they have to believe that the success of product development depends on their decision making, its quality and timeliness (lord, 2000) Management Abilities Philosophy Understanding Product development practice Fig. 6.1 Basic principles of product development management
6.1 Principles of product development management Several principles of product development management have been identified (Souder, 1987; Ganguly, 1999). Relative importance does change but the basic principles are robust and are useful as a basis for product development management. They can be grouped under basic philosophy, understanding, abilities and organisation of the company as shown in Fig. 6.1. 6.1.1 Basic philosophy and understanding • Belief in product development as a major business strategy. • Understanding emerging worldwide technologies, in-depth knowledge of technologies. • Understanding the transformation of technologies into want-satisfying products, intimate understanding of changing consumer needs. • Developing a creative climate, creating spontaneous teamwork. • Patience, realising that innovations take time, going through cycles of success and failure, and that management has to aid and direct them to the end of product success. • Recognising the need for skills in systematic decision making and risktaking. These are still essential elements in product development that have continued to demonstrate their significance over a great diversity of situations and times, not to mention fashions! Unless management, especially top management, believes that product development needs knowledge of technology and consumer, and of their optimum relationship, then product development will stumble. Having recognised these basic knowledge needs, they have also to recognise that there needs to be a creative atmosphere and time to reach product success. Lastly they have to believe that the success of product development depends on their decision making, its quality and timeliness (Lord, 2000). Fig. 6.1 Basic principles of product development management. 260 Food product development
Managing the product development process 261 6.1.2 Abilities Systematic selection of best projects, using information sharing and group decision making, creating idea generation and evaluation with all people involved in product development, setting decision processes based on the product development goals Careful analysis of the customer's level of sophistication and the product designers level of technical sophistication, creating collaborative roles between product design and consumer/market research, educating product designers on consumer needs and wants, educating marketing on technical possibilities and problems Finding and coordinating the resources and knowledge for product development, upgrading knowledge to make use of new technology, nurturing methods for new technologies, selection of technology with fit to present or planned future company technology, predicting costs of adoption of new technology in finances and company organisation Elimination of disharmony between R&D and marketing groups, making open communication an explicit responsibility of every employee, using joint &D/marketing task forces Reducing complexity and problems, breaking large projects into manageable stages,identifying and eliminating mild problems before they become major Management at all levels needs to have the abilities to recognise the path of the project and to coordinate the knowledge, resources and people to follow the path efficiently and effectively to product success. There is a great deal spoken about multidisciplinary, cross-functional, inter-functional, intra-functional, integrated product development, but basically product development needs to be recognised s a many-faceted process which can only be achieved by collaboration between people with different knowledge and skills. It cannot be enclosed in specialist or functional boxes such as marketing or production(Harris and McKay, 1996) Management needs to understand the meaning of company collaboration and to have the ability to put into action a multifaceted product development project based on collaboration 6.1.3 Organisation Design of product development organisation, ability to set the tone, posture nd prevailing attitudes towards product development, creating an organisa- ion to fit the needs of members and of customers, encouraging responsibility and creating multidirectional communication Cost-effective project management, selecting the method that relates to the problem, for example incremental innovation using commercial line management, technical innovation using technical management, major innovation using separate project management or a new product committee Flow management during the project, organising the timely transfer and flow of product prototypes and knowledge, encouraging the skills and knowledge
6.1.2 Abilities • Systematic selection of best projects, using information sharing and group decision making, creating idea generation and evaluation with all people involved in product development, setting decision processes based on the product development goals. • Careful analysis of the customer’s level of sophistication and the product designer’s level of technical sophistication, creating collaborative roles between product design and consumer/market research, educating product designers on consumer needs and wants, educating marketing on technical possibilities and problems. • Finding and coordinating the resources and knowledge for product development, upgrading knowledge to make use of new technology, nurturing methods for new technologies, selection of technology with fit to present or planned future company technology, predicting costs of adoption of new technology in finances and company organisation. • Elimination of disharmony between R&D and marketing groups, making open communication an explicit responsibility of every employee, using joint R&D/marketing task forces. • Reducing complexity and problems, breaking large projects into manageable stages, identifying and eliminating mild problems before they become major. Management at all levels needs to have the abilities to recognise the path of the project and to coordinate the knowledge, resources and people to follow the path efficiently and effectively to product success. There is a great deal spoken about multidisciplinary, cross-functional, inter-functional, intra-functional, integrated product development, but basically product development needs to be recognised as a many-faceted process which can only be achieved by collaboration between people with different knowledge and skills. It cannot be enclosed in specialist or functional boxes such as marketing or production (Harris and McKay, 1996). Management needs to understand the meaning of company collaboration and to have the ability to put into action a multifaceted product development project based on collaboration. 6.1.3 Organisation • Design of product development organisation, ability to set the tone, posture and prevailing attitudes towards product development, creating an organisation to fit the needs of members and of customers, encouraging responsibility and creating multidirectional communication. • Cost-effective project management, selecting the method that relates to the problem, for example incremental innovation using commercial line management, technical innovation using technical management, major innovation using separate project management or a new product committee. • Flow management during the project, organising the timely transfer and flow of product prototypes and knowledge, encouraging the skills and knowledge Managing the product development process 261