In their march towards the twenty-first century, most firms have the same single mission: to help their products make the transition from "concept to cash" faster and at a lower cost than their competition. To do so, they must give every employee the opportunity to maximize his or her contribution towards achieving the vision or goals of the organization.
This cannot be accomplished using typical, old-world linear processes where each functional discipline, such as development, design, production and marketing, keeps its hands off the others. The new mission requires that participating companies use the new-world concept of project teams, which removes the barriers between these functional silos.
Project team approaches. Teams are usually established using one of three approaches:
Type 1: Ad hoc teams that are short term with the purpose of investigating a situation and making their recommendations to someone higher up in the firm. This is based on old-world thinking.
Type 2: Cross-functional teams whose members represent their functional disciplines and coordinate with the other representatives on the team. Many project teams operate in this manner. However, this is still basically an old world-linear process with some overlap amongst the tasks performed by the various disciplines.
Type 3: Integrated, self-managed, cross-functional teams that work closely together to accomplish a common goal. They are characterized by intense, up front, and continual collaborative interactions. This interaction is concurrent throughout the project. Since the team and its leadership are responsible for the entire project from "concept to cash," there are no hand-offs between functional groups, and as a result of such actions, downstream changes are held to a minimum.
The best team approach. All three team types are useful. However, Type 3--the self-managed, integrated, cross-functional form--is the best choice. Type 3 provides the best environment to:
1. Maximize individual contributions to the group.
2. Achieve better commitment.
3. Improve the participant's preparation for greater responsibility.
4. Enhance morale.
5. Assure that better decisions are made, because the team members identify closely with the end product.
Perhaps most important, Type 3 teams should not be dismissed as just another fad; the changes they bring represent the wave of the future. They will be used at all levels in the organization, because they enable firms to make the best use of their critical human resources.
Unfortunately, the Type 3 team is not a natural progression from the old-world (pre-1990s) command-and-control approach. The Type 3 must be viewed as a business entity operating within broad guidelines approved or provided by upper management, which also operates in a Type 3 team mode.
Considerable effort, including planning, must be expended to change most corporate cultures (which are defined as "the way we do things here") from old-world to new-world project teams. The way I see it, there is no other choice in today's world!
Ask the Manager Most product development cycles include five groups of tasks. The tasks in each group should be performed as early, and as concurrently, as possible in the product development cycle.
Q How does "design cost incurred" and "product cost committed" relate to the steps in a product development cycle?
Percentages are approximate.
1. Conception tasks commit about 4% of the development cost, to 55% of product cost.
2. Design engineering tasks: 4% development cost to 25% product cost.
3. Prototype testing tasks: 2% development cost, 10% product cost.
4. Process planning tasks: 5% development cost, 5% product cost.
5. Production tasks: 85% development cost, 5% product cost.
Numbers will differ between projects, but the relationship is realistic. The early groups of tasks will determine a very large percentage of product cost and a small percentage of the development cost.
The key to rapid product development and low product cost is the early creation of an integrated, self-managed, cross-functional product development team. This reduces subsequent costly downstream changes.
For example, an ECO (engineering change order) early in the development process may cost no more than $50; the same ECO later might cost $200 to $500; after production begins, it might cost several thousand dollars.
Management often pays little attention to the early groups of tasks which have the most influence on product cost and delivery times, although they require minimal financial resources.
As some say, "we never have the time or resources to do it right the first time, but we always find time and resources to do it over."