Unclogging a Product Development Pipeline

Client: Food and beverage manufacturer

Situation: A large food and beverage manufacturer was experiencing long product development timelines. They were missing the window of opportunity on many new products because they could not get into the market before the competition. In addition to their opportunity costs, key stakeholders involved with innovation were highly stressed and placed blame on other functional areas, creating a less than ideal environment for innovation.

Strategy: Conduct a system-wide product development audit, compare formal and informal practices and procedures to the industry’s best practices, and develop an action plan for each area requiring intervention.

Tactics: The innovation audit identified high frustration levels across the organization.
• A voice from Marketing: “We have lots of ideas and opportunities, but we just can’t seem to get anything out of R&D!”
• A voice from R&D: “They just don’t seem to understand what we have to do when they keep on making design changes that send us back to the lab. And besides, who has time to work in the lab? I spend all my time in meetings!”
• A voice from Operations: “They keep interfering with our plant, costing us downtime. And then we never go forward with the new product.”
The audit identified issues around innovation decision making, particularly around project chartering and the criteria for continuing projects. R&D was balancing over 300 projects with the staff and resources to handle fewer than 100.

Solution: Three primary interventions were recommended and cross-functional teams were created to design and implement them. The interventions included:
• A phased review process that clearly established criteria for entry into each phase and set standards for killing projects.
• A project portfolio planning system that aligned the R&D project mix with overall corporate strategy and assigned separate resources for projects intended for lifecycle management, new product development, and technology exploration.
• A fuzzy front end process that identified and refined opportunities before the phased review process, reducing design changes and the need for rework.

Results: The R&D project load decreased from 300 projects to about 90. This reduced projects per development scientist to a manageable level. Project rationalization and the reduced rework of projects substantially reduced development time. The average cycle time on key projects was reduced from 2 years to 9 months.

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