Utilization of Stage Gate Product Innovation System in the New Product Development Process

Utilizationof Stage Gate Product Innovation System in the New ProductDevelopment Process

Table of Contents

Utilization of Stage Gate Product Innovation System in the New Product Development Process 2

Introduction 3

NPD and Product Ideas 4

Components of NPD 4

Background information and analysis 4

Structured Product Development 6

Opportunity identification and concept definition 7

Planning and designing 8

Prototype development 8

Manufacturing development 8

Distribution and marketing 9

Market testing and launch 9

Product retirement 10

Review Boards 10

Realization teams 10

Phase Review 11

Benefits of Stage-Gate System in NPD Process 11

Reflective Log 12

Bibliography 15

Utilizationof Stage Gate Product Innovation System in the New ProductDevelopment ProcessIntroduction

NewProduct Development Process (NPD) denotes a knowledge concentratedprocedure where the cultivation and development of ideas and conceptsrequires thorough knowledge of clients and products. Thus, NPD hasbecome an imperative aspect especially in sustainability. Today, theworld has become a very competitive place and companies haveendeavored to cultivate products that keep them on the edge of theirfields. In New Product Development Process (NPD), most companies havefound the leverage needed to build differentiation and stay aheadover rivalries. In this regards, it is essential for policymakers tofocus on the various components and stages of NPD to advice companieson the cultivation of the best business success factors. In fact,focusing on the business analysis process is a predominant andcomprehensive process, which requires careful consideration and care.As such, companies need to develop new models and use existingstudies to provide innovative products. In fact, Slater, Mohr, andSengupta (2014) suggest that more than 45% of all sales come from newproducts thus, product development is an imperative medium incultivating and enhancing a dynamic position in an increasinglycompetitive business environment (p.557). In addition, productinnovation and new goods or products in the market intensifyreduction in prices and market competition thus, clients obtain highquality products at cheap prices. In addition, product innovationallows firms to develop innovative and more products in less costsand time.

However,NPD is a multifaceted process, which requires careful considerationand application. Furthermore, the process requires sector-specificinformation or knowledge to produce commercially realistic solutions.In fact, it is this specialist information that facilitatescollaboration to develop competitive advantage in the marketplace. Inthis regards, Slater et al. (2014) suggest that firms need NPD todesign and create new products and firms must follow the variousstages in NPD if they desire to produce products that will appeal toclients (p.555).

NPDand Product Ideas

Firmsdo not need new product because it is new, but because it provideswhat the clients and the firms need. Decision-making process on a newproduct approach has imperative implications for influencing orshaping the future of business (Cooper, 2014, p. 24). As such, NPDhas become the most predominant company’s rejuvenation activator.However, the creation of NPD requires industry-specific informationas stated earlier, development of knowledge and the pursuit forinformation. The process of NPD thus, the idea generation is hardlya true commencement set on a blank situation. Before, generatingideas, companies provide new product strategies and objectives in thecontext of their strategy plans, which means idea generation is aperipheral aspect, but the most imperative aspect of any NPD. Infact, innovators or companies inspire ideas with prospects andconstraints that define what they can credibly attain. As suggestedearlier, the highest number of sales comes from new products, butresearch has also shown that new products face an average of 35%failure rate (Bruce and Birchall, 2012, p.31). In addition, mostcompanies spend more than 30% of their resources to productdevelopment and innovation on killed projects and failures and morethan 50% of managers are disappointed with the results of their NPD.In this regards, to understand the evolution of NPD and construe thenumerous stages that have occurred to intensify NPD.

Componentsof NPDBackgroundinformation and analysis

Janáková(2012) proposes a model that explains the stage of NPD (p.96). Infact, Janáková (2012) defines the stage of NPD in terms ofsignificant facets such as identification of an opportunity, businessanalysis or design, marketing trial or testing, commercialization,and life-cycle management (p.96). “Researchers and companies haveattempted numerous approaches to manage innovation commencing withundeveloped efforts to cope with technology to refined andencapsulating composite systems of management,” (Cooper and Edgett,2012, p.48). Hence, it is essential to categorize these strategies toNPD into comparatively distinct patterns and evolutionary phases ofdevelopment.

In1994, Rothwell proposed some phases of evolutionary development ofinnovation structures, which have been adapted and extended today assix phases of development. In fact, the phases help to delineate theprobable course for future advancement in the management ofinvention. Cooper and Edgett (2012) suggest that the first phase inRothwell’s system developed in 1950s as a technology-push approachwhere firms believed that doing more R&ampD would help them developsuccessful products (p.44). However, these firms did not highlightthe importance of internal transformation or the role of themarketplace. Today, the phase still exists in companies withacknowledged technological leadership. The second-generation phase ofthe 1960s, on the other hand, was a market-pull innovation process,which incorporated a market focus into the innovation process (Cooperand Edgett, 2012, p.45). “In this model, the market acts as theprimary source of information and ideas for directing R&ampD, butunfortunately the model produces a propensity to neglect long-termR&ampD programs,” (Cooper, 2008, p.220). Such a tendency may makefirms become locked into a system of technological incrementalismeasily.

In1970s, firms began to suffer from a weakening of R&ampD thus,produced radical breakthroughs to counter the weaknesses of themarket-pull model (Henry, 2008, p.46). As such, most companies tooksteps to combine the technology-push and market-pull models to formpush-pull model or the third generation phase. Since this model is asequential process with feedback loops, most researchers regard it asone of the models that present good practices. However, in mid 1980s,globalization led the internalization of markets and intensificationof competition thus, Japanese firms developed a process thatdirected activities concurrently rather than in sequence. This phase,popularly known as the interactive parallel process allowed companiesto enhance their productivity and performance. However, the model iscomplex to emulate thus, its application is usually by Japanesecompanies. Most companies that had problems trying to emulate theJapanese model especially those from the West pioneered the fifthphase or e-integrated innovation process. The fifth generation iscoupled by electronification of systems. The sixth generation or theopen innovation system is the most widely and successful model as itbrings speed to market and allows the development of competence. Inthis model, companies do not evolve from technology approaches butthey develop innovation ecosystems.

Sketchingthe evolutionary trajectories of developing new products is essentialto understand all components within the NPD generic model. NPDcontexts encompass various components such as use of SDP (structureddevelopment process), review board, realization teams, and stage gatereviews (Durmuşoğlu and Barczak, 2011, p.321). During each phase, aseries of product development activities occur and the managementreviews them at predominant gates or checkpoints.

StructuredProduct Development

Thedevelopment of new products in most companies is completelyamorphous. In fact, most firms lack dependable terminology and eachproject team outlines its activities uniquely but unfortunately theseactivities are mostly similar across different project teams.“Unstructured development processes are unable to estimateschedules and resource requirements, have excessive taskindependence, and have inconsistent definitions,” (Henry, 2008,p.45). In this regards, SPD provides a sequence of stages toconceive, design, and commercialize products. It proffers a contextconsisting of terms that outline what a firm need to do indevelopment as well as permits the company to apply these termsacross all projects continually. Extensive compliance in thedevelopment of SDP allows firms to apply it in the organizationalculture. “The most widely used model in SDP is the stage-gateactivities model, in which the framework is organized as a linearsequence of activities, but firms can structure and organizeactivities in parallel to reflect concurrent rather than linear,”(Cooper, 2008, p.223).

Thestage-gate activitiesmodel

Opportunityidentification and concept definition

Thefirst stage in this model started the procedure by describing theprospect to advance a merchandise and then advancing numerousconceivable explanations to meet the requirements such that theyfulfill client needs. After developing the probable solutions, a firmthen selects the best concept. As such, this stage mostly deals withprospect screening and executing feasibility studies. The stage hasnumerous tasks and activities associated with it such asidentification of client needs and market opportunity, description ofthe problem, executing market intelligence, generation of concepts,and the evaluation of the generated concepts.

Planningand designing

Thesecond stage of the model encompasses planning and designing. Infact, the structured development of the generated concept occurs atthis stage. In addition, firms develop the functional attributesrequired by clients as well as define the best configuration to meetthe needs of clients. Several tasks and activities occur during thisstage: breakdown of the problem, collection of information,assessment of design, assessment and refinement of product designspecification, assessment of competitiveness and market, and creationof supporting contracts.

Prototypedevelopment

Onthe other hand, the third stage (prototype development), offers acomprehensive engineering sketch of a product through a procedure offormulating thorough engineering sketches and procuringspecifications (Durmuşoğlu and Barczak, 2011, p.328). Computeraided 3D modelling and sketches form an important part during thisstage to allow firms complete tasks such as thorough sketching andspecifications, assessment to reconsider implications of the design,product architecture description, configuration of components,sourcing of components, and parametric design of components.

Manufacturingdevelopment

Thefourth stage or the manufacture evaluation and development stageencompasses evaluating manufacturing capacities to manufacture andassemble each of the sourced and designed components. Firms capturethe assemblage of components in a process map that specifies thesequence of operations, materials, tooling, and arrangement ofmachines utilized. Tasks in this phase include engineering test andproduct certification, early market testing and controlleddeployment, specification of production plant, equipment, and toolsthat the company wishes to use, planning production arrangement andlayout, and planning work schedules. Other tasks include planningquality assurance, establishing cost production, and planninginformation flow to facilitate production.

Distributionand marketing

Distributionand marketing is an important phase during the advancement of a newproduct. The provision of products to clients requires technical andbusiness decisions. In addition, firms need to provide marketingplans and make marketing decisions that offer sustainability. Duringthis stage, firms may configure supply channels, develop marketplans, design packaging of products, plan the shelf life of aproduct, design the transport and shipping aspects, and provide thesupport material.

Markettesting and launch

Afterthe development of marketing and distribution process, firms need totest and launch the product. This stage is overly essential as itdetermines whether a product will become successful or not(Durmuşoğlu and Barczak, 2011, p.328). The quality, reliability,ease of use, serviceability, overall performance, safety, andaesthetic are the most important dimensions that clients considerwhen buying a product. Thus, it is very important for companies toensure that the products they launch comply extensively with theneeds of clients. As such, firms should plan the launch effectively,test the market, test the focus group, and simulate market strategythrough communications, advertisements, and pricing reporting.

Productretirement

Thefinal stage is the post-launch and product retirement stage. Thesuccess of any product requires firms to make modifications to aproduct, propose recycle and disposal plan, monitor the market andthe competition, provide product phase-in and phase-out plans, andpropose cost reduction tasks.

ReviewBoards

Seniormanagement observes and regulates the NPD process by using formallydesignated Review Boards. Boards such as Product Approval Committees(PAC), New-Product Executive Group, and Resource Boards areresponsible for approving and prioritizing new product ventures. “Theboards initiate new product development projects, cancel andre-prioritize projects, ensure that new products fit the company’sstrategic plan, and allocate resources for the development of the newproduct,” (Cooper and Edgett, 2012, p.47). In addition, the membersof the board establish the vision of the board, make decisionsregarding projects, generate NPD process, provide leadership, andrecruit the best development staff.

Realizationteams

Fora product to become successful, firms must assign the tasks relatedto product development to a specific team, usually called therealization team. During the development of a product, knowledgemanagement is an important aspect thus, firms need to organize therealization teams effectively to ensure effective communication,decision-making, and coordination. Studies conducted on the bestapproach to formulating teams suggest that firms may employ differentstrategies (Marion, Friar, and Simpson, 2012, p.640 Cooper, 2011,p.33). However, Bruce and Birchall (2012) contend that autonomous orcore teams are the most applicable and most successful among allchoices (p.16). As such, prosperous NPD realization teams are usuallyempowered, cross-functional, led by a dynamic product champion, haveclear goals supported well by resources, and have a visionary leader.In fact, such teams are the foundation to an effective organizationadept at running and strengthening competitive pressures.

PhaseReview

Theabsence of a formal decision-making procedure often leads tounpredictable and undependable decisions, which often cause delays inthe development of products thus, firms an overcome suchinconsistencies and delays by implementing a definite stage. Thisprocedure drives the NPD course and the work of review boards is veryessential in this process since they allocate resources, empower therealization teams to develop programs, and provide directions toproject teams. “During this process, firms should cover all productefforts and opportunities such as development of minor enhancements,”(Gratton, 2007, p.112).

Benefitsof Stage-Gate System in NPD Process

TheStage-Gate process Model is an operational and abstract map thatallows the development of innovation plans from ideas to inaugurationand post-launch (Cooper, 2008, p. 213). The model has five stages orphases and in each phase, a firm needs to execute a set of endorsedinterdisciplinary and corresponding tasks to progress projects. Thesystem has become the most vital and successful finding in productinnovation and has empowered over 80% of all American companies toattain enhanced returns as well as achieve sustainability and newgrowth. In fact, the system has numerous benefits to an NPD processmost importantly, it allows companies to achieve success by ensuringthat they do not omit any critical phase in the development of newproduct. “Since product innovation begins with the development ofideas or information and ends with the efficacious launch of newproducts, it is imperative to follow all steps involved,” (Marion,2012, p.642). In fact, product innovation follows various stages suchas planning, designing, launching, and market planning thus, thestage-gate system is important in ensuring that the NPD processfollows all the stages necessary for product development. The systemdivides the product development process into a classification ofevents or phases and gates or decision points. As such, the divisionof the process into stages and gates allows firms to advance theproject successfully.

Inaddition, the use of gates enhances focus and kills pitiableprojects. The gates formulated in the model encompass deliverables,criteria, and outputs thus, it allows firms to focus on the mosteffective project and disregard poor projects. Since gates must haveevidently articulated outputs such as decisions, plans, anddeliverables, it is possible for firms to focus on the most importantand successful projects. In addition, the stage-gate systemintroduces discipline into a normally disordered process hence, itorganizes the various stages and aspects in a formal and structuredmanner. As such, the utilization of the stage-gate system in thedevelopment of products allows firms to structure all stages in aneffective manner, which ensures success. Henry (2008) asserts, “Thestage-gate system is the most viable process to ensure that theReview Boards allocate resources effectively in the productdevelopment,” (p. 16). In addition, it allows firms to achieveefficiency and produce quality products. After attaining efficiency,firms using the system have increased advancement in the developmentof products. As such, the use of stage-gate system increases thelikelihood of product success as it allows firms to identify the mosteffective alternative as well as formulate the most comprehensiveprocess.

ReflectiveLog

Thecourse module has presented numerous challenges and benefitsespecially in the development of the research. The research conductedhas encompassed on the New Product Development Process and thebenefits of employing Stage-Gate Innovation System in the process.The research has also allowed the identification of the mosteffective approaches and process that firms can cultivate in thedevelopment and launching of new products. The use of journals andtexts especially those dealing with the Stage-Gate system haveimparted great knowledge on the development and advancement of NPDprocesses. In this regards, it is essential to define the benefitsaccrued during the research. The most important benefit accruedduring the completion of the Innovation and Risk Management Module isthe instillation of information and knowledge regarding thesustainability within companies. The module has generated knowledgerequired for advancement especially in developing innovations. Infact, during the course of the module, I managed to understand allaspects involved in NPD process thus, I can use the informationduring generation of products in future. I have understood thatcommunication and the formulation of an effective team is key tosuccess in an organization, which has really given me insight on theadministration of organizations. It is essential to understand thevarious aspects of NPD and since I have understood the variouselements involved, I have more detailed in development of process. Inaddition, I have acquired insights as to the importance of planningand design as well as follow-ups since the success of any productdepends clear guidelines and planning.

Onthe other hand, I have experienced numerous challenges in the periodof implementing the research strategy. Most texts and journals Iperused dealt with the description of the stage-gate system hence, Ihad difficulties in identifying the possible benefits of the system.In addition, some of the applied models in the system did not provideenough definition, which greatly hampered my knowledge on theexisting alternatives to NPD processes. Identifying all possibleaspects of NPD is a complex task, and I found it hard to understandall aspects of the process since the existing models of NPD differespecially from one country to another. However, these challengesalso gave me insight on the various approaches of expanding myknowledge of NPD and stage-gate systems thus, I took to researchmore. I also engaged in various conferences and seminars as well astook part in activities leading to product launch to have a greatunderstanding of the various activities that occur during productdevelopment. In addition, I managed to relate the teaching toreal-life situations as well watched videos on product launching.Such understandings have imparted a lot of knowledge on productdevelopment thus, the module and the research undertaken have beenhelpful.

Bibliography

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