Developing Products in Half the Time: New Rules, New Tools

366 Pages·1997·5.253 MB·English

by  Preston G. Smith, Donald G. Reinertsen

Table of Contents

Title Page
Copyright Page
Biographies
Foreword
Preface
CHAPTER 1 - Faster and Still Faster

WHY DEVELOP PRODUCTS FASTER?
WHAT IS THE PRICE OF A SHORT CYCLE?
TIME-TO-MARKET IS NOT A UNIVERSAL SOLUTION
BUILDING A HOLISTIC APPROACH
SUGGESTED READING

CHAPTER 2 - Putting a Price Tag on Time

THE FOUR KEY OBJECTIVES
THE BASIC MODELING PROCESS
ADVANCED MODELING
TIPS ON MODELING
SUGGESTED READING

CHAPTER 3 - The Fuzzy Front End

WHY THE FUZZY FRONT END IS IMPORTANT
DRAWING ATTENTION TO THE FUZZY FRONT END
IMPROVING FRONT-END PROCESSES
A SAMPLE FRONT-END PROCESS
SUGGESTED READING

CHAPTER 4 - The Power and Pitfalls of Incremental Innovation

ADVANTAGES OF INCREMENTAL INNOVATION
DISADVANTAGES OF INCREMENTAL INNOVATION
REQUIRED INFRASTRUCTURE
SUGGESTED READING

CHAPTER 5 - Capturing Customer Needs

PRODUCT SPECIFICATIONS: A VITAL COMMUNICATION LINK
DIFFICULTIES IN WRITING SPECIFICATIONS
KEEPING THE CUSTOMER IN THE FOREGROUND
FOCUSING ON WHAT COUNTS
WRITING SPECIFICATIONS JOINTLY
SUGGESTED READING

CHAPTER 6 - Using System Design to Compress Schedules

THE KEY ARCHITECTURAL DECISIONS
MANAGING RISK
WHO SHOULD DO ARCHITECTURE?
SUGGESTED READING

CHAPTER 7 - Forming and Energizing the Team

THE TEAM LEADER
THE TEAM MEMBERS
TEAM FORMATION
MOTIVATING THE TEAM
SUGGESTED READING

CHAPTER 8 - Organizing for Communication

ORGANIZATIONAL OPTIONS
DEVELOPMENT TEAM ISSUES
FITTING FAST DEVELOPMENT TEAMS INTO EXISTING ORGANIZATIONS
CO-LOCATION
TEAM TRAINING
SUGGESTED READING

CHAPTER 9 - Designing Fast Development Processes

MOVING BEYOND THE “PHASES” MENTALITY
THE KEY ROLE OF PARTIAL INFORMATION
OVERLAPPING HARDWARE AND SOFTWARE DEVELOPMENT
CREATING OPPORTUNITIES FOR OVERLAPPING
THE ROLE OF TECHNOLOGY TOOLS
SUGGESTED READING

CHAPTER 10 - Controlling the Process

THE LOGIC OF PROCESS CONTROL
DECENTRALIZING PROJECT CONTROL
KEY CONTROL TOOLS
SUGGESTED READING

CHAPTER 11 - Preventing Overloads

PROJECT DILUTION
BECOMING SENSITIVE TO OVERLOAD
THE BASIC RULES
TRAPS TO AVOID
SUGGESTED READING

CHAPTER 12 - Managing Risk Proactively

KINDS OF RISK
PROACTIVE RISK MANAGEMENT
OTHER RISK CONTROL TECHNIQUES
STREAMLINING THE TRANSITION TO MANUFACTURING
SUGGESTED READING

CHAPTER 13 - Bridging the R&D-Manufacturing Gap

WHY WE NEED CONCURRENT DEVELOPMENT
A BROADER CONTEXT
SUGGESTED READING

CHAPTER 14 - The Role of Top Management

TOP-MANAGEMENT LEADERSHIP
OTHER WAYS OF SUPPORTING AN ACCELERATED PROJECT
SOLIDIFYING AGREEMENTS
THREE ESSENTIAL THINGS AN EXECUTIVE MUST DO
SUGGESTED READING

CHAPTER 15 - Making Changes Faster

THREE PATHS TO ORGANIZATIONAL CHANGE
USING PILOT PROJECTS TO INITIATE CULTURAL CHANGE
USING CONTINUOUS IMPROVEMENT TO BUILD A DYNAMIC CAPABILITY
GET GOING
SUGGESTED READING

Index

This text is printed on acid-free paper.

Copyright © 1998 by Preston G. Smith and Donald G. Reinertsen

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or
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Library of Congress Cataloging-in-Publication Data
Smith, Preston G., 1941―
Developing products in half the time / Preston G. Smith, Donald G. Reinertsen.—2nd ed.
p. cm.
Includes bibliographical references and index.
ISBN 0471-292524
1. New products.2. Product management. I. Reinertsen, Donald G.,
1950―II. Title.
HF5415.153.S65 1998
658.5′75―dc20 95-35634
CIP

Printed in the United States of America.

10 9 8 7
Biographies

PRESTON G. SMITH
For over a decade, as the head of New Product Dynamics, Preston Smith has specialized in assisting companies to make the technical and
cultural shifts to shorter product development cycle times. Previously, he spent three years as a corporate staff consultant responsible for
accelerating development over a range of businesses.
A Certified Management Consultant, he has helped many clients to improve their time to market. His consultation includes both focused
diagnostic assessments and hands-on assistance in putting acceleration techniques into action. Client companies span the motor vehicle, power
tool, medical electronics, food packaging, chemical, sports equipment, computer, telecommunications, semiconductor, and industrial equipment
industries.
Preston speaks at numerous corporate meetings and professional conferences. He has given seminars and workshops in 16 countries, and he
teaches product development at several universities. In addition to over a dozen published articles on rapid development, he regularly writes
columns on product development and reviews books in the field.
Prior to concentrating on rapid development, Preston spent nearly 20 years in engineering and management positions with Bell Laboratories,
IBM, General Motors, and companies as small as 100 employees. He holds a Ph.D. in engineering from Stanford, is a member of the Product
Development and Management Association and ASME, and is listed in Who’s Who in Finance and Industry and Who’s Who in the West.
In off hours, Preston pursues his penchant for speed through alpine skiing and windsurfing.

DONALD G. REINERTSEN
Don Reinertsen is President of Reinertsen & Associates, a consulting firm specializing in the management of the product development process.
Before starting his own firm, he had extensive consulting experience at McKinsey & Co., an international management consulting firm, and
operating experience as Senior Vice President of Operations at Zimmerman Holdings, a private diversified manufacturing company.
His contributions in the field of product development have been recognized internationally. In 1983, while a consultant at McKinsey & Co., he
wrote a landmark article in Electronic Business magazine which first quantified the value of development speed. This article has been cited as the
McKinsey study that indicated “six months delay can be worth 33 percent of life cycle profits.”
In the past fourteen years, he has gone considerably beyond this early work. He has worked with companies ranging from Fortune 500 Baldrige
Award winners to small venture capital backed start-ups. He has developed a number of innovative analytical techniques for assessing, and
changing, the product development process.
Don holds a B.S. from Cornell University in Electrical Engineering and an M.B.A. with distinction from Harvard Business School. He is a member
of the IEEE, SME, and ASQC. He is also author of the book Managing the Design Factory. He writes and speaks frequently on techniques for
shortening development cycles, and teaches a popular executive course at California Institute of Technology on streamlining the product
development process.
Foreword

Most of the readers of this book probably associate Motorola with quality. We have worked hard to achieve leadership in this area and are very
proud of our accomplishments. However, customer expectations have increased and have never been higher. Our customers expect us to
demonstrate flawless quality and provide leadership products with value-added features, at lower prices, in shorter and shorter cycle times. The
companies that can respond to quickly changing needs will flourish and those that can’t, will be left behind. Time to market is a crucial element in
being successful in the global marketplace.
For readers who are about to embark on the journey to faster development, let me offer a few observations. First, in my more than 30 years of
product development experience, working with some of the best product developers in the world, I have yet to find a single magic tool for
transforming a development process. Other companies may jump from fad to fad hoping there is a fast, easy way to accelerate product
development. At Motorola we achieve rapid development the same way we achieved breakthroughs in quality—with old-fashioned hard work and
constant management attention.
Second, many readers may wonder if pursuing development speed requires a company to compromise quality. At Motorola we have firmly
rejected this option. There are abundant opportunities to improve the development process without taking the sloppy and dangerous approach of
sacrificing quality. If you find yourself considering such options, you have not thought deeply enough about your choices. In fast-moving markets we
often find that faster development actually provides higher quality to our customers, resulting in products delivered before customer needs begin to
change.
Third, I would encourage you to question many of the deeply entrenched methods that you use for product development. Some of our greatest
successes at Motorola have been a result of our engineers questioning the fundamental design of the entire process. This willingness to question
the status quo proved vital to transforming quality and appears equally vital in transforming development speed.
Finally, I would encourage you to stay the course on this effort. The benefits of faster development can be substantial but they cannot be achieved
instantly. Fundamental changes in your development process require careful analysis, broad involvement, and extensive effort. Not everything that is
worth changing can be changed quickly. If you approach this as a short, quick journey you will not get very far.
On your journey I think you will find that Developing Products in Half the Time is an excellent companion. I am excited to see this new edition
because at Motorola we found the original edition to be far and away the most useful book of its kind. The state-of-the-art in product development
has continued to progress in the last six years and this new edition is very welcome. This book remains a vital resource for those of us interested in
rapid development. I have read it more than once and I think you will too.

Neil Hagglund
Corporate VP and Director of Corporate Technology Planning
Motorola, Inc.
Preface

In this new edition of Developing Products in Half the Time we have replaced half the original contents with material that we consider to be more
useful to our readers. The 60,000 readers of the original edition will find more and newer tools for cutting their cycle time, stemming from what we
have learned in the last six years of work with our clients. New readers will find a book that makes the basics ever clearer than they were originally.
While there has been no change in the basic organization of the book or its overall message, the details have changed substantially. We have
made major changes in four areas:
Increasing the emphasis on economic analysis as a tool for guiding all decisions and expanding this key material in Chapter 2.
Placing more emphasis in almost every chapter on the practical tools required to accelerate the development process, showing how actual
companies have adapted these tools to their needs.
Broadening and refining the treatment of many topics like incremental innovation (Chapter 4), product specifications (Chapter 5), and risk
management (Chapter 12).
Illustrating the additional power of combining the tools, such as in the case studies in Chapter 9.

Despite the new material, we have resisted the temptation to lengthen the book. We believe that a book of more than 300 pages becomes more
time-consuming to read and harder to use. To keep the book at its original size we have deleted and compressed the less valuable sections and
raised the density of useful material. Icons in the margin draw your attention to three types of particularly useful information in the book:

(Wrench) A tool, something concrete that you do to shorten development cycle times.

(Magnifier) An example of actions taken by a specific company.

(Caution) A pitfall to watch out for as you apply a technique.

In the past several years rapid product development has become increasingly popular throughout industry. With this rise in popularity we find
some companies that are pursuing rapid development simply because they believe that fast time to market is universally good. We must strongly
reemphasize the message of the original book. Fast time to market is worth money—sometimes a great deal of money—but it is not universally
good. The only way to determine which actions are appropriate in pursuing development speed is to know what cycle time is worth in financial
terms. Since your competitors are getting faster, a sloppy approach to pursuing rapid development will become more and more expensive. In the
future, the race is likely to go to those who buy cycle time at the right price. Throughout this book we stress the need to make careful choices based
on the objectives of the project in question, and not to just follow the crowd.
This more deliberate approach to shortening cycle time within an organization does not come easily or automatically. For this reason we
encourage you to begin now. To help you, we have expanded the tools for organizational change in Chapter 15. We find that such changes are
necessary to make the other tools achieve their full potential.
We suggest that you read Chapters 1 and 2 first. Chapter 1 sets the stage, and Chapter 2, on economic analysis, is the book’s logical
foundation. After this, you can approach the other sections in any order. We find many cases where implementing an individual tool has had a big
impact on performance. However, we are noting the increasing synergistic value of implementing supporting changes in several areas at once. For
example, a more incremental approach to product introduction reduces team size and makes it easier to forecast customer needs. This reduces
risk and improves accountability, making it practical to delegate more authority to the project team. We believe that in the future the synergistic
integration of these tools will become mandatory to gain competitive advantage. Your competition will not be standing still.
As suggested earlier, these techniques are powerful because they are not theories, but instead tools that have been tried and proven by product
developers. We are sincerely interested in how these techniques work for you and what enhancements you add to them. This edition has benefited
from the experiences of readers of the first edition, and we would welcome the chance to add some of your experiences to the next edition. Feel
free to contact us:

Preston G. Smith
New Product Dynamics
3493 NW Thurman Street
Portland, OR 97210
Telephone: [phone]
Fax: [phone]
[email protected]

Donald G. Reinertsen
Reinertsen & Associates
600 Via Monte D’Oro
Redondo Beach, CA 90277
Telephone: [phone]
Fax: [phone]
[email protected]
CHAPTER 1

Faster and Still Faster

When the first edition of this book appeared in 1991, many companies were aspiring to cut their product development times in half, but only a few
were doing it. Today this goal seems rather modest. Many companies now develop products in half of the time they did just a few years ago. What
may have seemed like a fad just a few years ago is now a marketplace necessity in many industries. However, some managers now see that
doubling development speed may still not put them in the competitive position they desire. They want more—and they are getting it.
This book provides the tools being used to achieve large reductions in cycle time and shows not only how these tools are applied but also when
they should be applied. After working with many companies to apply these tools, we firmly believe that cycle-time reduction should be applied with
business discretion only when it will offer a real competitive advantage, not just because others are doing it. First we will indicate the potential time
savings available and then we will address the question of when these tools are appropriate.