Decision Gate 6

Primary findings

Secondary findings

Primary findings

Carriers

One company established an NPD process with carefully staged decision-making, rigorous process reviews, and strict timelines. Yet, skillful project champions would maneuver to win continued support at each level of project review. The company then reassigned project managers so that the more empirically included truth seekers were in charge of early stage reviews, and more commercially included success seekers managed the later stages. That simple change improved NPD productivity.
Private sector experience in pharmaceutical industry.
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Methods

A formal product portfolio process is useful in identifying corporate consequences of adopting a new technology, and in assessing corporate fit for any new product line considered.
Conclusions drawn from case studies and experience.
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Anticipating and meeting customer demands requires more teamwork and participation of project personnel in decision-making. This requires an overall understanding of NPD business by team members and their leaders.
Survey of 87 manufacturers.
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Corporate management commitment influences the outcomes of NPD processes directly by resource allocation and sponsorship, or indirectly by structuring the organizational context in which the project occurs. High level commitment should be sought at each Decision gate.
Three case studies supported by 18 interviews.
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Effective control is required for new product success. To achieve this, new product development projects should be regularly monitored and should enjoy grace periods.
Survey with significant findings.
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Exxon/Mobil lists a key lesson as: Ensure that top management values and provides appropriate resources for on-going work, as well as process support for units doing NPD.
Industry experience.
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Four Best Practices in the NPD process are: 3) Metrics on how well the NPD process is working — These metrics focus on if projects are following the process and if effective gates are being held.
A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
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Four Best Practices in the NPD process are: 4) Tough and demanding Go/No-Go decision points, where projects really do get killed. Some businesses claim to have gates but a closer inspection reveals that these are largely project review points with the result that projects rarely get terminated.
A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
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Gate Reviews are scheduled for certain dates at which the NPD team either presents or explains why they need more time. For those projects experiencing delays, the Gate Review managers listen to the reasons for being late and help the NPD team to brainstorm solutions. Most Gate Review managers have some technical experience so they are generally helpful to the NPD team. In many cases, the Gate Review managers are one level up from the NPD technical community, so the decisions are made at a relatively low level for smaller projects. Larger projects are reviewed several levels higher and the gate review deadlines are firm.
Industry experience.
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Screens should focus in with more precision and should address financial hurdles after a concept has been fully tested and a business brief has been developed. If quantitative screens are used too early in the process, few innovations will survive.
Author experience
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Senior and Project Team management turnover issues are common in industry, and the effects on NPD are difficult to control. Good NPD protocols to manage Decision Gates mitigate these issues by verifying management match to project, supported by a plan of succession.
Conclusions drawn from case studies and experience.
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Senior management and the product development team review the work periodically at "review" points, when key managerial decisions are made. Such decisions include whether to finalize the specifications now or in a future review, and even whether to redirect or cancel the project because of the product's low profit potential.
Case Study. Researcher identified themes of the product development processes of three different firms.
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The decision to proceed with commercialization includes the ability to acquire necessary materials, conduct manufacturing, gain entry to the market, and ensure customer acceptance through awareness, acceptance and use.
Conclusions drawn from case studies and experience.
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To ensure compliance with the FDA's Quality System Regulation, medical device manufacturers should use a structured product development process to instill discipline in the product life cycle. A hierarchical approach arranges activity from Stages (phases) to Steps to Activities and finally to Tasks. Each Stage has a unique theme and set of deliverables. For example: Stage 3 — Verification & Validation. Demonstrate that the entire product offering and its supporting processes are robust and comply with the design requirement specifications and the customer's specifications prior to market introduction. All regulation, code, standards and product safety approvals must be obtained by the end of this stage. Demand building activities may be initiated in anticipation of commercial release.
Summary of the U.S. Food and Drug Administration's regulations for the research and development process underlying Medical Device manufacturing.
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Measures

Customer acceptance criteria is primarily sought for go/ no-go decisions later in the process, and may includeproduct quality, sales volument, availabiity of resources, and customer satisfaction.
Survey of 77 manufacturing companies
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Results from Process Quality Assessment Instrument and the Output Quality Assessment Instrument can provide essential informaiton to support risk-based go/no-go decisions during NPD product lifecycles.
Single subject case study
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Technical feasibility criteria are typically employed for go/ no-go decisions during the development stages of activity. Criteria may include project total cost, product quality, availability of resources, and customer satisfaction.
Survey of 77 manufacturing companies
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Tips

Designing appropriate screening and evaluation “gates” to help prioritise projects and select winners for advancement. Preliminary up-front homework may include such activities as broad screening based on key market and technical capabilities and a broad financial assessment. At a second stage this may include refining product concepts and specifications ensuring stronger customer input and assessment, improved technical evaluation, and financial analysis.
Survey. Manager implications drawn from results of study.
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Emphasizing financial criteria have a positive impact on new product success from the go-to-development gate to the first post-launch review; yet it is shown that the relative effect of financial criteria on new product success is significantly bigger in the latter evaluations.
Survey. Importance given to financial dimension is positively associated with new product success at the go-to-development decision (δGate2 = 0.18, p < 0.10), go-to-market decision (δGate3 = 0.30, p < 0.05) and post-launch review (δGate4 = 0.42, p < 0.01).
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Equivocality — the presence of multiple and conflicting interpretations about a phenomenon, with higher levels of equivocality representing confusion and a poor understanding of the referenced context. In situations of high equivocality seek to integrate information about both supplier products and about customer requirements. In situations of low equivocality, seek to integrate information about supplier processes.
Survey.
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Fuzzy Gate approach — Permit the project team to decide when to stop Stage level work and proceed to the next Decision Gate, particularly when NPD cycle time is considered critical to market success.
Survey. Author conclusions drawn from analysis of Project Manager self-reports (n = 392).
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Managers should clearly evaluate their firm's strategic orientation towards product innovation, and consider different information use strategies to benefit project outcomes: Managers in prospector firms — aggressive approach to innovation — should focus on conceptual information use. Managers in defender firms — incremental changes in narrow markets — should focus on instrumental use of information. Managers in analyzer firms — those on a middle path — should apply conceptual use of information to enhance new product performance, and apply instrumental use of information to enhance their new product creativity.
Survey of 150 software development firms.
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Results show that placing importance on customer acceptance criteria correlates positively with project success at every stage of the process.
Survey. Customer acceptance dimension is positively associated with new product success at each and every of the review points (γGate1 = 0.26, p < 0.05; γGate2 = 0.30, p < 0.05; γGate3 = 0.24,p < 0.05; γGate4 = 0.26,p < 0.05).
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To maximize a product's expected performance at launch, any information deemed important input for downstream activities, should be frozen early in the development process — not permitted to change as the process progresses.
Mathematical model creation and analysis.
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Use information regarding customer acceptance and product performance when making decisions at gate 6 and 7. Customer satisfaction and quality are also important criteria to consider at these gates.
Survey of 166 managers from Dutch and UK companies. Seventy-three to fifty-nine percent of companies used these criteria at this point in the NPD process.
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Secondary findings

Carriers

Organizations can deal with the tensions inherent in decision-making by focusing on meaning — the GOAL. The purpose or meaning of what the organization intends to accomplish can crate a vision that sets into motion the process through which multiple organizational interests become aligned.
Source: McGee, JV & Prusak, L (1993). In: Ho, K., Bloch, R.; Gondocz, T., Laprise, R., Perrier, L., Ryan, D., & et al. (2004)

Models

A long list of typical decision gates within the context of product development including: information about customer needs; available technology, production costs, all used in the product concept phase to establish specifications.
Source: Krishnan & Ulrich (2001). In: Yassine, A.A., Sreenivas, R.S., & Zhu, J. (2008)

Tips

Customer acceptance criteria are important at all gates, particularly after launch.
Source: Hart, et al., 2003. In: Carbonell-Foulquie, P., Munuera-Aleman, J. L., & Rodriguez-Escudero, A. I. (2004)

Use market criteria during the concept screening gate 2, product related criteria during product testing gates 5 & 6, financial criteria during gates 8 & 9 (post production assessment and terminate production).
Source: Ronkainen (1992). In: Hart, S., Jan Hultink, E., Tzokas, N., & Commandeur, H. R. (2003)

Utilize financial criteria in go/ no-go decisions, including payback period and discounted cash flow.
Source: Cooper, 2001, Hart et al., 2003, & Ronkainen, 1985. In: Carbonell-Foulquie, P., Munuera-Aleman, J. L., & Rodriguez-Escudero, A. I. (2004)