Glossary
- Accidental Discovery
- New designs, ideas, and developments resulting
from unexpected insight, which can be obtained either internal or external
to the organization.
- Adoption Curve
- The phases through which consumers or a market proceed in
deciding to adopt a new product or technology. At the individual level,
each consumer must move from a cognitive state (becoming aware of and
knowledgeable about), to an emotional state (liking and then preferring
the product) and into a behavioral state (deciding and then
purchasing the product). At the market level, the new product is first
purchased by the innovators in the marketplace, which are generally thought
to constitute about 2.5% of the market. Early adopters (13.5% of the market)
are the next to purchase, followed by the early majority (34%), late majority
(34%) and finally, the laggards (16%).
- Advanced Product Quality Planning (APQP)
- It is a quality framework of procedures and techniques used for developing
new products in industry, particularly the automotive industry. Its purpose
is "to produce a product quality plan which will support development of
a product or service that will satisfy the customer."
- Affinity Charting
- A bottom-up technique for discovering
connections between pieces of data. An individual or group starts with
one piece of data (say, a customer need). They then look through the rest
of the data they have (say, statements of other customer needs) to find
other data (needs) similar to the first, and place it in the same group.
As they come across pieces of data that differ from those in the first
group, they create a new category. The end result is a set of groups where
the data contained within a category is similar, and the groups all differ
in some way. (See also Qualitative Cluster Analysis.)
- Alliance
- Formal arrangement with a separate company for purposes of
development, and involving exchange of information, hardware, intellectual
property, or enabling technology. Alliances involve shared risk and reward
(e.g., co-development projects).
- Alpha Test
- Pre-production product testing to find and eliminate the
most obvious design defects or deficiencies, usually in a laboratory setting
or in some part of the developing firm's regular operations, although
in some cases it may be done in controlled settings with lead customers.
(See also Beta Test and Gamma Test.)
- Alpha Testing
- A crucial initial look at the initial design, usually done in-house.
The results of Alpha testing either confirm the product performs according
to its specifications or uncovers areas where the product is deficient.
The testing environment should try to simulate the conditions under which
the product will actually be used as closely as possible. Alpha testing
should not be performed by the same people who are doing the development work.
Since this is the first flight for the new product, basic questions of fit
and function should be evaluated. Any suggested modifications or revisions
to the specifications should be solicited from all parties involved in the
evaluation and considered for inclusion. Since the testing is done in-house,
special care must be taken to remain as objective as possible.
- Analytical Hierarchy Process (AHP)
- A decision-making tool for complex,
multi-criteria problems where both qualitative and quantitative aspects
of a problem need to be incorporated. AHP clusters decision elements according
to their common characteristics into a hierarchical structure similar
to a family tree or affinity chart.
- Analyzer
- A firm that follows an imitative innovation strategy, where
the goal is to get to market with an equivalent or slightly better product
very quickly once someone else opens up the market, rather than to be
first to market with new products or technologies. Sometimes called an
imitator or a "fast follower."
- Anticipatory Failure Determination (AFD)
- A failure analysis method.
In this process, developers start from a particular failure of interest
as the intended consequence and try to devise ways to assure that the
failure always happens reliably. Then the developers use that information
to develop ways to better identify steps to avoid the failure.
- Applications Development
- The iterative process through which software
is designed and written to meet the needs and requirements of the user
base or the process of enhancing or developing new products.
- As-Is-Map
- A version of a process map depicting how an existing process actually operates.
This may differ substantially from documented guidelines.
- Asynchronous Groupware
- Software used to help people work as groups,
but not requiring those people to work at the same time.
- Attribute Testing
- A quantitative market research technique in which respondents are asked
to rate a detailed list of product or category attributes on one or more
types of scales such as relative importance, current performance, current
satisfaction with a particular product or service, for the purpose of
ascertaining customer preferences for some attributes over others, to
help guide the design and development process. Great care and rigor
should be taken in the development of the list of attributes, and it
must be neither too long for the respondent to answer comfortably or
too short such that it lumps too many ideas together at too high a level.
- Audit
- When applied to new product development, an audit is an appraisal
of the effectiveness of the processes by which the new product was developed
and brought to market.
- Augmented Product
- The Core Product, plus all other sources of product
benefits, such as service, warranty, and image.
- Autonomous Team
- A completely self-sufficient project team with very
little, if any, link to the funding organization. Frequently used as an
organizational model to bring a radical innovation to the marketplace.
Sometimes called a "tiger" team.
- Awareness
- A measure of the percent of target customers who are aware
that the new product exists. Awareness is variously defined, including
recall of brand, recognition of brand, recall of key features or positioning.
- Back-up
- A project that moves forward, either in synchrony or with a
moderate time-lag, and for the same marketplace, as the lead project to
provide an alternative asset should the lead project fail in development.
A back-up has essentially the same mechanism of action performance as
the lead project. Normally a company would not advance both the lead and
the back-up project through to the market place, since they would compete
directly with each other.
- Balanced Scorecard
- A comprehensive performance measurement technique
that balances four performance dimensions:
- Customer perceptions of how we are performing;
- Internal perceptions of how we are doing at what we must excel;
- Innovation and learning performance;
- Financial performance.
- Benchmarking
- A process of collecting process performance data, generally
in a confidential, blinded fashion, from a number of organizations to
allow them to assess their performance individually and as a whole.
- Benefit
- A product attribute expressed in terms of what the user gets
from the product rather than its physical characteristics or features.
Benefits are often paired with specific features, but they need not be.
- Best Practice
- Methods, tools or techniques that are associated with
improved performance. In new product development, no one tool or technique
assures success; however a number of them are associated with higher probabilities
of achieving success. Best practices likely are at least somewhat context
specific. Sometimes called "effective practice."
- Best Practice Study
- A process of studying successful organizations
and selecting the best of their actions or processes for emulation. In
new product development it means finding the best process practices, adapting
them and adopting them for internal use.
- Beta Test
- An external test of pre-production products. The purpose
is to test the product for all functions in a breadth of field situations
to find those system faults that are more likely to show in actual use
than in the firm's more controlled in-house tests before sale to the general
market.
- Beta Testing
- A more extensive test than the Alpha test, performed by real
users and customers. The purpose of Beta testing is to determine how the product
performs in an actual user environment. It is critical that real customers perform
this evaluation, not the firm developing the product or a contracted testing company.
As with the Alpha test, results of the Beta Test
should be carefully evaluated with an eye toward any needed modifications or
corrections.
- Bill of Materials (BOM)
- A listing of all subassemblies, intermediate parts, and raw materials
that go into a parent assembly, showing the quantity of each required
to make an assembly.
- Bowling Alley
- An early growth stage strategy which emphasizes focusing on specific niche markets,
building a strong position in those markets by delivering clearly differentiated
whole products and using that niche market strength as
leverage point for conquering conceptually neighboring niche markets. Success
in the bowling alley is predicated on building product leadership via customer
intimacy.
- Brainstorming
- A group method of creative problem solving frequently
used in product concept generation. There are many modifications in format,
each variation with its own name. The basis of all of these methods uses
a group of people to creatively generate a list of ideas related to a
particular topic. As many ideas as possible are listed before any critical
evaluation is performed.
- Brand
- A name, term, design, symbol, or any other feature that identifies
one seller's good or service as distinct from those of other sellers.
The legal term for brand is trademark. A brand may identify one
item, a family of items, or all items of that seller.
- Brand Development Index (BDI)
- A measure of the relative strength of
a brand's sales in a geographic area. Computationally, BDI is the percent
of total national brand sales that occur in an area divided by the percent
of American households that reside in that area.
- Brand Personality
- How people feel about the brand. People may have a sense of friendship toward
the brand or some notion about its "character".
- Breadboard
- A proof of concept modeling technique that represents how
a product will work, but not how a product will look.
- Break-even Point
- The point in the commercial life of a product when
cumulative development costs are recovered through accrued profits from
sales.
- Business Analysis
- An analysis of the business situation surrounding a proposed
project. Usually includes financial forecasts in terms of discounted
cash flows, net present values or internal rates of returns.
- Business Case
- The results of the market, technical and financial analysis. Ideally
it is defined just prior to the "go to development"
decision gate, the case defines the product and project,
including the project justification and the action or business plan.
- Business Management Team
- Top functional managers and business unit head who work together
throughout the design of the decision-flow component of a
Stage Gate process.
- Business-to-Business
- Transactions with non-consumer purchasers such as
manufacturers, resellers (distributors, wholesalers, jobbers and retailers,
for example) institutional, professional and governmental organizations.
Frequently referred to as "industrial" businesses in the past.
- Buyer
- The purchaser of a product, whether or not they will be the ultimate
user. Especially in business-to-business markets, a
purchasing agent may contract for the actual purchase of a good or service,
yet never benefit from the functions purchased.
- Buyer Concentration
- The degree to which purchasing power is held by a
relatively small percentage of the total number of buyers in the market.
- Cannibalization
- That portion of the demand for a new product that comes from the
erosion of the demand for, and sales of, a current product the firm
markets.
- Capacity Planning
- A forward looking activity that monitors the skill sets and
effective resource capacity of the organization. For product development,
the objective is to manage the flow of projects through development
such that none of the functions (skill sets) creates a bottleneck to timely
completion. Necessary in optimizing the project portfolio.
- Category Development Index (CDI)
- A measure of the relative strength of a category's sales in a geographic area.
Computationally, it is the percent of total national category sales that occur
in an area divided by the percent of American households in that area.
- Centers of Excellence
- A geographic or organizational group with an
acknowledged technical, business, or competitive competency.
- Champion
- A person who takes a passionate interest in seeing that a
particular process or product is fully developed and marketed. This informal
role varies from situations calling for little more than stimulating awareness
of the opportunity to extreme cases where the champion tries to force
a project past the strongly entrenched internal resistance of company
policy or that of objecting parties.
- Change Equilibrium
- A balance of organizational forces that either drives or impedes change.
- Charter
- A project team document defining the context, specific details,
and plans of a project. It includes the initial business case, problem
and goal statements, constraints and assumptions, and preliminary plan
and scope. Periodic reviews with the sponsor ensure alignment with business
strategies. (See also Product Innovation Charter.)
- Checklist
- A list of items used to remind an analyst to think of all
relevant aspects. It finds frequent use as a tool of creativity in concept
generation, as a factor consideration list in concept screening, and to
ensure that all appropriate tasks have been completed in any stage of
the product development process.
- Chunks
- The building blocks of product architecture.
They are made up of inseparable physical elements. Other terms for
chunks may be modules or major subassemblies.
- Classification
- A systematic arrangement into groups or classes based on natural relationships.
- Clockspeed
- The evolution rate of different industries. High clockspeed
industries, like electronics, see multiple generations of products within
short time periods, perhaps even within 12 months. In low clockspeed industries,
like the chemical industry, a generation of products may last as long
as 5 or even 10 years. It is believed that high clockspeed industries
can be used to understand the dynamics of change that will in the long
run affect all industries, much like fruit flies are used to understand
the dynamics of genetic change in an accelerated genetic environment, due
to their short life spans.
- Cognitive Modeling
- A method for producing a computational model for how individuals
solve problems and perform tasks, which is based on psychological
principles. The modeling process outlines the steps a person goes through
in solving a particular problem or completing a task, which allows one
to predict the time it will take or the types of errors an individual
may make. Cognitive models are frequently used to determine ways to improve
a user interface to minimize interaction errors or time by anticipating
user behavior.
- Cognitive Walk Through
- A model of the steps or tasks a person must go
through to complete a task is constructed, an expert can role play
the part of a user to cognitively "walk through" the user's
expected experience. Results from this walk through can help make human product
interfaces more intuitive and increase product useability.
- Collaborative Product Development
- When two firms work together to develop
and commercialize a specialized product. The smaller firm may contribute
technical or creative expertise, while the larger firm may be more likely
to contribute capital, marketing, and distribution capabilities. When
two firms of more equal size collaborate, they may each bring some specialized
technology capability to the table in developing some highly complex product
or system requiring expertise in both technologies. Collaborative product
development has several variations. In customer collaboration, a supplier
reaches out and partners with a key or lead customer. In supplier collaboration,
a company partners with the provider(s) of technologies, components, or
services to create an integrated solution. In collaborative contract manufacturing,
a company contracts with a manufacturing partner to produce the intended
product. Collaborative development, also known as co-development, differs
from simple outsourcing in its levels of depth of partnership in that
the collaborative firms are linked in the process of delivering the final
solution to the intended customer.
- Co-location
- Physically locating project personnel in one area, enabling
more rapid and frequent decision-making and communication among them.
- Commercialization
- The process of taking a new product from development
to market. It generally includes production launch and ramp up, marketing
materials and program development, supply chain development, sales channel
development, training development, training, and service and support development.
- Competitive Intelligence
- Methods and activities for transforming disaggregated
public competitor information into relevant and strategic knowledge about
competitors' position, size, efforts and trends. The term refers to the
broad practice of collecting, analyzing, and communicating the best available
information on competitive trends occurring outside one's own company.
- Computer-Aided Engineering (CAE)
- Using computers in designing,
analyzing and manufacturing a product or process. Sometimes refers more narrowly
to using computers just at the engineering analysis stage.
- Computer-Aided Design (CAD)
- A technology that allows designers and engineers to use computers for their design work.
Early programs enabled two-dimensional design. Current programs allow designers to work
in three dimensions, and in either wire or solid models.
- Computer-Enhanced Creativity
- Using specially designed computer software
that aids in the process of recording, recalling and reconstructing ideas
to speed up the new product development process.
- Concept
- A clearly written and possibly visual description of the new
product idea that includes its primary features and consumer benefits,
combined with a broad understanding of the technology needed.
- Concept Generation
- The processes by which new concepts, or product ideas, are
generated. Sometimes also called idea generation or ideation.
- Concept Optimization
- A research approach that evaluates how specific
product benefits or features contribute to a concept's overall appeal
to consumers. Results are used to select from the options investigated
to construct the most appealing concept from the consumer's perspective.
- Concept Screening
- The evaluation of potential new product concepts during the discovery phase
of a product development project. Potential concepts are evaluated for their
fit with business strategy, technical feasibility, manufacturability, and
potential for financial success.
- Concept Statement
- A verbal or pictorial statement of a concept that
is prepared for presentation to consumers to get their reaction prior
to development.
- Concept Study Activity
- The set of product development tasks in which
a concept is given enough examination to determine if there are substantial
unknowns about the market, technology or production process.
- Concept Testing
- The process by which a concept statement is presented
to consumers for their reactions. These reactions can either be used to
permit the developer to estimate the sales value of the concept or to
make changes to the concept to enhance its potential sales value.
- Concurrency
- Carrying out separate activities of the product development
process at the same time rather than sequentially.
- Concurrent Engineering
- When product design and manufacturing process
development occur concurrently in an integrated fashion, using a cross-functional
team, rather than sequentially by separate functions. Concurrent Engineering is
intended to cause the development team to consider all elements of the product life
cycle from conception through disposal, including quality, cost, and maintenance,
from the project's outset.
- Conjoint Analysis
- Conjoint analysis is a market research technique in which respondents are
systematically presented with a rotating set of product descriptions, each
of which contains a rotating set of attributes and levels of those attributes.
By asking respondents to choose their preferred product and/or to indicate
their degree of preference from within each set of options, conjoint analysis
can determine the relative contribution to overall preference of each variable
and each level. The two key advantages of conjoint analysis over other methods
of determining importance are:
- the variables and levels can be either
continuous (e.g. weight) or discreet (e.g. color),
- it is just about
the only valid market research method for evaluating the role of price,
i.e. how much someone would pay for a given feature.
- Consumer
- The most generic and all-encompassing term for a firm's targets.
The term is used in either the business-to-business or household context
and may refer to the firm's current customers, competitors' customers,
or current non-purchasers with similar needs or demographic characteristics.
The term does not differentiate between whether the person is a buyer
or a user target. Only a fraction of consumers will become customers.
- Consumer Market
- The purchasing of goods and services by individuals
and for household use. Consumer purchases are generally made by
individual decision makers, either for
themselves or others in the family.
- Consumer Need
- A problem the consumer would like to have solved. What
a consumer would like a product to do for them.
- Consumer Panels
- Specially recruited groups of consumers whose longitudinal
category purchases are recorded via the scanner systems at stores.
- Contextual Inquiry
- A structured qualitative market research method
that uses a combination of techniques from anthropology and journalism.
Contextual inquiry is a customer needs discovery process that observes
and interviews users of products in their actual environment.
- Contingency Plan
- A plan to cope with events whose occurrence, timing
and severity cannot be predicted.
- Continuous Improvement
- The review, analysis and rework directed at incrementally
improving practices and processes. Also called Kaizen.
- Continuous Innovation
- A product alteration that allows improved performance
and benefits without changing either consumption patterns or behavior.
The product's general appearance and basic performance do not functionally
change. Examples include fluoride toothpaste and higher computer speeds.
- Continuous Learning Activity
- The set of activities involving an objective
examination of how a product development project is progressing or how
it was carried out to permit process changes to simplify its remaining
steps or improve the product being developed or its schedule. (See also
Learning Organization.)
- Contract Developer
- An external provider of product development services.
- Controlled Store Testing
- A method of test marketing where specialized
companies are employed to handle product distribution and auditing rather
than using the company's normal sales force.
- Convergent Thinking
- A technique generally performed late in the initial
phase of idea generation to help funnel the high volume of ideas created
through divergent thinking into a small group or single idea on which
more effort and analysis will be focused.
- Cooperation (Team Cooperation)
- The extent to which team members actively
work together in reaching team level objectives.
- Coordination Matrix
- A summary chart that identifies the key stages
of a development project, the goals, and key activities within each stage,
and who (what function) is responsible for each.
- Core Benefit Proposition (CBP)
- The central benefit or purpose for which a consumer buys a product.
The Core Benefit Proposition may come either from the physical good
or service, or it may come from augmented dimensions of the product.
(See also Value Proposition.)
- Core Competence
- That capability at which a company does better than
other firms, which provides them with a distinctive competitive advantage
and contributes to acquiring and retaining customers. Something that a
firm does better than other firms. The purest definition adds "and
is also the lowest cost provider."
- Corporate Culture
- The "feel" of an organization. Culture
arises from the belief system through which an organization operates.
Corporate cultures are variously described as being authoritative, bureaucratic,
and entrepreneurial. The firm's culture frequently impacts the organizational
appropriateness for getting things done.
- Cost of Goods Sold (COGS)
- The direct costs (labor and materials) associated with producing a
product and delivering it to the marketplace.
- Creativity
- The ability to produce work that is both novel and
appropriate.
- Criteria
- Statements of standards used by decision-makers at decision
gates. The dimensions of performance necessary to achieve or surpass for
product development projects to continue in development. In the aggregate,
these criteria reflect a business unit's new product strategy.
- Critical Assumption
- An explicit or implicit assumption in the new product business case
that, if wrong, could undermine the viability of the opportunity.
- Critical Path
- The set of interrelated activities that must be completed
for the project to be finished successfully can be mapped into a chart
showing how long each task takes, and which tasks cannot be started before
which other tasks are completed. The critical path is the set of linkages
through the chart that is the longest. It determines how long a project
will take.
- Critical Path Scheduling
- A project management technique, frequently
incorporated into various software programs, which puts all important
steps of a given new product project into a sequential network based on
task interdependencies.
- Critical Success Factors
- Those critical few factors that are necessary
for, but do not guarantee, commercial success.
- Cross-Functional Team
- A team consisting of representatives from the
various functions involved in product development, usually including members
from all key functions required to deliver a successful product, typically
including marketing, engineering, manufacturing/operations, finance, purchasing,
customer support, and quality. The team is empowered by the departments
to represent each function's perspective in the development process.
- Cross Sections
- An explanation of a part that is referenced by slicing through the area
that needs to be explained.
- Crossed the Chasm
- Having made the transition to a mainstream market from
an early market dominated by a few visionary customers (sometimes also
called innovators or lead adopters). This concept typically applies to
the adoption of new, market creating technology-based products and services.
- Customer
- One who purchases or uses the firm's products or services.
- Customer-based Success
- The extent to which a new product is accepted
by customers and the trade.
- Customer Needs
- Problems to be solved. These needs, either expressed
or yet-to-be articulated, provide new product development opportunities
for the firm.
- Customer Perceived Value (CPV)
- The result of the customer's evaluation
of all the benefits and all the costs of an offering as compared to that
customer's perceived alternative. It is the basis on which customers decide
to buy things.
- Customer Site Visits
- A qualitative market research technique for uncovering
customer needs. The method involves going to a customer's work site, watching
as a person performs functions associated with the customer needs the
firm wants to solve, and then debriefing that person about what they did,
why they did those things, the problems encountered as they were trying
to perform the function, and what worked well.
- Customer Value Added Ratio
- The ratio of worth what paid for
for the products to worth what paid for for
the competitors' products. A ratio above one
indicates superior value compared to your competitors.
- Cycle Time
- The length of time for any operation, from start to completion.
In the new product development sense, it is the length of time to develop
a new product from an early initial idea for a new product to initial
market sales. Precise definitions of the start and end point vary from
one company to another, and may vary from one project to another within
the company.
- Dashboard
- A typically colored graphical presentation of a project's
status or a portfolio's status by project resembling a vehicle's dashboard.
Typically, red is used to flag urgent problems, yellow to flag impending
problems, and green to signal on projects on track.
- Data
- Measurements taken at the source of a business process.
- Database
- An electronic gathering of information organized in some way
to make it easy to search, discover, analyze, and manipulate.
- Decision Screens
- Sets of criteria that are applied as checklists or
screens at new product decision points. The criteria may vary by stage
in the process.
- Decision Tree
- A diagram used for making decisions in business or computer
programming. The "branches" of the tree diagram represent choices
with associated risks, costs, results, and outcome probabilities. By calculating
outcomes (profits) for each of the branches, the best decision for the
firm can be determined.
- Decline Stage
- The fourth and last stage of the product life cycle.
Entry into this stage is generally caused by technology advancements,
consumer or user preference changes, global competition or environmental
or regulatory changes.
- Defenders
- Firms that stake out a product turf and protect it by whatever
means, not necessarily through developing new products.
- Deliverable
- The output (such as test reports, regulatory approvals,
working prototypes or marketing research reports) that shows a project
has achieved a result. Deliverables may be specified for the commercial
launch of the product or at the end of a development stage.
- Delphi Processes
- A technique that uses iterative rounds of consensus development
across a group of experts to arrive at a forecast of the most
probable outcome for some future state.
- Demographic
- The statistical description of a human population. Characteristics
included in the description may include gender, age, education level,
and marital status, as well as various behavioral and psychological
characteristics.
- Derivative Product
- A new product based on changes to an existing product that modifies,
refines, or improves some product features without affecting the
basic product architecture or platform.
- Design for the Environment (DFE)
- The systematic consideration of environmental
safety and health issues over the product's projected life cycle in the
design and development process.
- Design for Excellence (DFX)
- The systematic consideration of all relevant life cycle factors, such as
manufacturability, reliability, maintainability, affordability, testability,
etc., in the design and development process.
- Design for Maintainability (DFMt)
- The systematic consideration of maintainability issues over the product's
projected life cycle in the design and development process.
- Design for Manufacturability (DFM)
- The systematic consideration of
manufacturing issues in the design and development process, facilitating
the fabrication of the product's components and their assembly into the
overall product.
- Design of Experiments (DOE)
- A statistical method for evaluating multiple
product and process design parameters simultaneously rather than one parameter
at a time.
- Design to Cost
- A development methodology that treats costs as an independent
design parameter, rather than an outcome. Cost objectives are established
based on customer affordability and competitive constraints.
- Design Validation
- Product tests to ensure that the product or service
conforms to defined user needs and requirements. These may be performed
on working prototypes or using computer simulations of the finished product.
- Development
- The functional part of the organization responsible for
converting product requirements into a working product. Also, a phrase
in the overall concept to market cycle where the new product or service
is developed for the first time.
- Development Change Order (DCO)
- A document used to implement changes
during product development. It spells out the desired change, the reason
for the change and the consequences to time to market, development cost,
and to the cost of producing the final product. It gets attached to the
project's charter as an addendum.
- Development Teams
- Teams that take one or more new products from concept through development,
testing and product launch.
- Digital Mock-Up
- An electronic model of the product created with a solids modeling program.
Mock-ups can be used to check for interface interferences and
component incompatibilities. Using a digital mock-up can be less expensive
than building physical prototypes.
- Discontinuous Innovation
- Previously unknown products that establish new consumption
patterns and behavior changes. Examples include microwave
ovens and cellular telephones.
- Discounted Cash-Flow (DCF) Analysis
- One method for providing an estimate
of the current value of future incomes and expenses projected for a project.
Future cash flows for a number of years are estimated for the project,
and then discounted back to the present using forecast interest rates.
- Discrete Choice Experiment
- A quantitative market research tool used
to model and predict customer buying decisions.
- Dispersed Teams
- Product development teams that have members working
at different locations, across time zones, and perhaps even in different
countries.
- Distribution
- The method and partners used to get the product or service
from where it is produced to where the end user can buy it.
- Divergent Thinking
- Technique performed early in the initial phase of
idea generation that
expands thinking processes to generate, record and
recall a high volume of new or interesting ideas.
- Dynamically Continuous Innovation
- A new product that changes behavior, but not
necessarily consumption patterns. For example:
electric toothbrush.
- Early Adopters
- For new products, these are customers who, relying on
their own intuition and vision, buy into new product concepts very early
in the life cycle. For new processes, these are organizational entities
that were willing to try out new processes rather than just maintaining
the old.
- Economic Value Added (EVA)
- The value added to or subtracted from shareholder
value during the life of a project.
- Empathic Design
- A five-step method for uncovering customer needs and sparking ideas for new
concepts. The method involves going to a customer's work site, watching as
they perform functions associated with the customer needs your firm wants to
solve, and then debriefing the customer about what they did, why they did those
things, the problems they encountered as they were trying to perform the function,
and what worked well. By spending time with customers, the team develops empathy
for the problems customers encounter trying to perform their daily tasks.
- Engineering Design
- A function in the product creation process where a good or
service is configured and specific form is decided.
- Engineering Model
- The combination of hardware and software intended
to demonstrate the simulated functioning of the intended product as currently
designed.
- Enhanced New Product
- A form of derivative product. Enhanced products
include additional features not previously found on the base platform,
which provide increased value to consumers.
- Entrance Requirement
- The documents and reviews required before any
phase of a stages and gates development process can be started.
- Entrepreneur
- A person who initiates, organizes, operates, assumes the
risk and reaps the potential reward for a new business venture.
- Ethnography
- A descriptive, qualitative market research methodology for
studying the customer in relation to his or her environment. Researchers
spend time in the field observing customers and their environment to acquire
a deep understanding of the lifestyles or cultures as a basis for better
understanding their needs and problems. (See Customer Site Visits.)
- Event
- The point in time when a task is completed.
- Event Map
- A chart showing important events in the future that is used
to map out potential responses to probable or certain future events.
- Excursion
- An idea generation technique to force discontinuities into
the idea set. Excursions consist of three generic steps:
- Step away from the task;
- Generate disconnected or irrelevant material;
- Force a connection back to the task.
- Exit Requirement
- The documents and reviews required to complete a
stage of a stages and gates development process.
- Exit Strategy
- A pre-planned process for deleting a product or product
line from the firm's portfolio. At a minimum it includes plans for clearing
inventory out of the supply chain pipeline at a minimum of losses, continuing
to provide for after-sales parts supply and maintenance support, and converting
customers of the deleted product line to a different one.
- Explicit Customer Requirement
- What the customer asks for in a product.
- Extrusion
- A manufacturing process that utilizes a softened billet
of material that is forced through a shape (or die) to allow
for a continuous form, much like spaghetti.
- Factory Cost
- The cost of producing the product in the production location
including materials, labor and overhead.
- Failure Mode Effects Analysis (FMEA)
- A technique used at the
development stage to determine the different ways in which a product may
fail, and evaluating the consequences of each type of failure.
- Failure Rate
- The percentage of a firm's new products that make it to
full market commercialization, but which fail to achieve the objectives
set for them.
- Feasibility Activity
- The set of product development tasks in which major unknowns are
examined to produce knowledge about how to resolve or overcome them
or to clarify the nature of any limitations. Sometimes called
exploratory investigations.
- Feasibility Determination
- The set of product development tasks in which
major unknowns (technical or market) are examined to produce knowledge
about how to resolve or overcome them or to clarify the nature of any
limitations. Sometimes called exploratory investigation.
- Feature
- The solution to a consumer need or problem. Features provide
benefits to consumers. The handle (feature) allows a laptop computer to
be carried easily (benefit). Usually any one of several different features
will be chosen to meet a customer need. For example, a carrying case with
shoulder straps is another feature that allows a laptop computer to be
carried easily.
- Feature Creep
- The tendency for designers or engineers to add more capability,
functions and features to a product as development proceeds than were
originally intended. These additions frequently cause schedule slip, development
cost increases, and product cost increases.
- Feature Road Map
- The evolution over time of the performance attributes associated with a product.
Defines the specific features associated with each iteration/generation of a
product over its lifetime, grouped into releases (sets of features that are
commercialized). (See also Product Life Cycle Management).
- Field Testing
- Product use testing with users from the target market
in the actual context in which the product will be used.
- Financial Success
- The extent to which a new product meets its profit,
margin, and return on investment goals.
- Firefighting
- An unplanned diversion of scarce resources, and the reassignment
of some of them to fix problems discovered late in a product's development
cycle.
- Firm-Level Success
- The aggregate impact of the firm's proficiency at
developing and commercializing new products. Several different specific
measures may be used to estimate performance.
- First-to-Market
- The first product to create a new product category
or a substantial subdivision of a category.
- Flexible Gate
- A permissive or permeable gate in a Stage Gate
process that is less rigid than the traditional "go-stop-recycle"
gate. Flexible gates are useful in shortening time-to-market. A permissive
gate is one where the next stage is authorized although some work in the
almost-completed stage has not yet been finished. A permeable gate is
one where some work in a subsequent stage is authorized before a substantial
amount of work in the prior stage is completed.
- Focus Groups
- A qualitative market research technique where 8 to 12
market participants are gathered in one room for a discussion under the
leadership of a trained moderator. Discussion focuses on a consumer problem,
product, or potential solution to a problem.
- Forecast
- A prediction, over some defined time, of the success or failure
of implementing a business plan's decisions derived from an existing strategy.
- Function
- (1) An abstracted description of work that a product must
perform to meet customer needs. A function is something the product or
service must do. (2) Term describing an internal group within which resides
a basic business capability such as engineering.
- Functional Elements
- The individual operations that a product performs.
These elements are often used to describe a product schematically.
- Functional Pipeline Management
- Optimizing the flow of projects through
all functional areas in the context of the company's priorities.
- Functional Reviews
- A technical evaluation of the product and the development process from a
functional perspective (such as mechanical engineering or manufacturing),
in which a group of experts and peers review the product design in detail
to identify weaknesses, incorporate lessons learned from past products,
and make decisions about the direction of the design going forward. The
technical community may perform a single review that evaluates the design
from all perspectives, or individual functional departments may conduct
independent reviews.
- Functional Schematic
- A schematic drawing that is made up of all of
the functional elements in a product. It shows the product's functions
as well as how material, energy, and signal flow through the product.
- Functional Testing
- Testing either an element of or the complete product
to determine whether it will function as planned and as actually used
when sold.
- Fuzzy Front End
- The messy "getting started" period of product development,
when the product concept is still very fuzzy. Preceding the more formal
product development process, it generally consists of three tasks: strategic
planning, concept generation, and, especially, technical
evaluation. These activities are often chaotic, unpredictable, and unstructured.
In comparison, the subsequent new product development process is typically
structured, predictable, and formal, with prescribed sets of activities,
questions to be answered, and decisions to be made.
- Fuzzy Gates
- Fuzzy gates are conditional or situational, rather than
full "go" decisions. Their purpose is to try to balance timely
decisions and risk management. Conditional go decisions are "go,"
subject to a task being successfully completed by a future, but specified,
date. Situational gates have some criteria that must be met for all projects,
and others that are only required for some projects. For example, a
new-to-the-world product may have distribution
feasibility criteria that a line extension will not have. (See also
Flexible Gate.)
- Gamma Test
- A product use test in which the developers measure the extent
to which the item meets the needs of the target customers, solves the
problems(s) targeted during development, and leaves the customer satisfied.
- Gamma / In-Market Testing
- Not to be confused with Test Marketing (which is an overall determination of
marketability and financial viability), the In-Market Test is an evaluation
of the product itself and its marketing plan through placement of the product
in a field setting. Another way of thinking about this is to view it as an
in-market test using a real distribution channel in a constrained geographic
area or two, for a specific period of time, with advertising, promotion and
all associated elements of the marketing plan working. In addition to an
evaluation of the features and benefits of the product, the components of
the marketing plan are tested in a real world environment to make sure they
deliver the desired results. The key element being evaluated is the synergy
of the product and the marketing plan, not the individual components. The
Market test should deliver a more accurate forecast of dollar and unit sales
volume, as opposed to the approximate range estimates produced earlier in the
Discovery phase. It should also produce diagnostic information on any facet
of the proposed launch that may need adjustment, be it product, communications,
packaging, positioning, or any other element of the launch plan.
- Gantt Chart
- A horizontal bar chart used in project scheduling and management
that shows the start date, end date and duration of tasks within the
project.
- Gap Analysis
- The difference between projected outcomes and desired
outcomes. In product development, the gap is frequently measured as the
difference between expected and desired revenues or profits from currently
planned new products if the corporation is to meet its objectives.
- Garage Bill Scheduling
- A scheduling tool that details every task,
no matter how small, that must be completed to achieve a deliverable.
- Gate
- The point at which a management decision is made to allow the
product development project to proceed to the next stage, to recycle back
into the current stage to better complete some of the tasks, or to terminate.
The number of gates varies by company.
- Gatekeepers
- The group of managers who serve as advisors, decision makers
and investors in a Stage Gate process. Using established business
criteria, this multifunctional group reviews new product opportunities
and project progress, and allocates resources accordingly at each gate.
This group is also commonly called a Product Approval Committee or Portfolio
Management Team.
- Graceful Degradation
- When a product, system or design slides into defective
operation a little at a time, while providing ample opportunity to take
corrective preventative action or protect against the worst consequences
of failure before it happens. The opposite is catastrophic failure.
- Gross Rating Points (GRPs)
- A measure of the overall media exposure
of consumer households (reach times frequency).
- Groupware
- Software designed to facilitate group efforts such as communication,
workflow coordination, and collaborative problem solving. The term generally
refers to technologies relying on modern computer networks (external or
internal).
- Growth Stage
- The second stage of the product life cycle. This stage
is marked by a rapid surge in sales and market acceptance for the good
or service. Products that reach the growth stage have successfully
crossed the chasm.
- Heavyweight Team
- An empowered project team with adequate resourcing
to complete the project. Personnel report to the team leader and are co-located
as practical.
- Hunting for Hunting Grounds
- A structured methodology for completing
the Fuzzy Front End of new product development.
- Hunting Ground
- A discontinuity in technology or the market that opens
up a new product development opportunity.
- Hurdle Rate
- The minimum return on investment or internal rate of return
percentage a new product must meet or exceed as it goes through development.
- Idea
- The most embryonic form of a new product or service. It often
consists of a high-level view of the envisioned solution needed to solve
the problem identified by a person, team or firm.
- Idea Generation (Ideation)
- All of those activities and processes that
lead to creating broad sets of solutions to consumer problems. These techniques
may be used in the early stages of product development to generate initial
product concepts, in the intermediate stages for overcoming implementation
issues, in the later stages for planning launch and in the post-mortem
stage to better understand success and failure in the marketplace.
- Idea Exchange
- A divergent thinking technique that provides a structure
for building on different ideas in a quiet, non-judgmental setting that
encourages reflection.
- Idea Merit Index
- An internal metric used to impartially rank new product
ideas.
- Implementation Team
- A team that converts the concepts and good intentions
of the "should-be" process into practical reality.
- Implicit Product Requirement
- What the customer expects in a product,
but does not ask for, and may not even be able to articulate.
- Importance Surveys
- A particular type of attribute testing in which respondents are asked to
evaluate how important each of the product attributes are in their choice
of products or services.
- Incremental Improvement
- A small change made to an existing product
that serves to keep the product fresh in the eyes of customers.
- Incremental Innovation
- An innovation that improves the conveyance of
a currently delivered benefit, but produces neither a behavior change
nor a change in consumption.
- Individual Depth Interviews (IDI)
- A qualitative market research technique in which a skilled moderator
conducts an open-ended, in-depth, guided conversation with an individual
respondent, as opposed to a focus group format. Such an interview
can be used to better understand the respondent's thought processes,
motivations, current behaviors, preferences, opinions, and desires.
- Industrial Design (ID)
- The professional service of creating and developing concepts and
specifications that optimize the function, value, and appearance of
products and systems for the mutual benefit of both user and manufacturer.
- Information
- Knowledge and insight, often gained by examining data.
- Information Acceleration
- A concept testing method employing virtual
reality. In it, a virtual buying environment is created that simulates
the information available (product, societal, political, and technological)
in a real purchase situation at some time several years or more into the
future.
- Informed Intuition
- Using the gathered experiences and knowledge of
the team in a structured manner.
- Initial Screening
- The first decision to spend resources (time or money)
on a project. The project is born at this point. Sometimes called "idea
screening."
- Injection Molding
- A process that utilizes melted plastics injected into steel or
aluminum molds which ultimately result in finished production parts.
- In-licensed
- The acquisition from external sources of novel product
concepts or technologies for inclusion in the aggregate new product
development portfolio.
- Innovation
- A new idea, method, or device. The act of creating a new
product or process. The act includes invention as well as the work required
to bring an idea or concept into final form.
- Innovation-Based Culture
- A corporate culture where senior management teams and employees
work habitually to reinforce best practices that systematically
and continuously churn out valued new products to customers.
- Innovation Engine
- The creative activities and people that actually think of new
ideas. It represents the synthesis phase when someone first
recognizes that customer and market opportunities can be translated
into new product ideas.
- Innovation Steering Committee
- The senior management team or a subset of it responsible for gaining
alignment on the strategic and financial goals for new product development,
as well as setting expectations for
Portfolio and Development Teams.
- Innovation Strategy
- The company's positioning for developing new technologies and
products. One categorization divides firms into Prospectors (those
who lead in technology, product and market development, and
commercialization, even though an individual product may not lead
to profits), Analyzers (fast followers, or imitators, who let the
prospectors lead, but have a product development process organized
to imitate and commercialize quickly any new product a Prospector has
put on the market), Defenders (those who stake
out a product turf and protect it by whatever means, not necessarily
through developing new products), and Reactors (those who have no coherent
innovation strategy).
- Innovative Problem Solving
- Methods that combine rigorous problem definition,
pattern-breaking generation of ideas, and action planning that results
in new, unique, and unexpected solutions.
- Integrated Architecture
- A product architecture in which most or all
of the functional elements map into a single or very small number of
chunks. It is difficult to subdivide an
integrally designed product into partially functioning components.
- Integrated Product Development (IPD)
- A philosophy that systematically
employs an integrated team effort from multiple functional disciplines
to develop effectively and efficiently new products that satisfy customer
needs.
- Intellectual Property (IP)
- Information, including proprietary knowledge, technical
competencies, and design information, which provides commercially
exploitable competitive benefit to an organization.
- Internal Rate of Return (IRR)
- The discount rate at which the present
value of the future cash flows of an investment equals the cost of the
investment. The discount rate with a net present value of 0.
- Intrapreneur
- The large-firm equivalent of an entrepreneur. Someone
who develops new enterprises within the confines of a large corporation.
- Introduction Stage
- The first stage of a product's commercial launch and the
product life cycle. This stage is generally seen as
the point of market entry, user trial, and product adoption.
- ISO-9000
- A set of five auditable standards of the International
Standards Organization that establishes the role of a quality system in a company
and which is used to assess whether the company can be certified as compliant
to the standards. ISO-9001 deals specifically with new products.
- Issue
- A certainty that will affect the outcome of a project, either
negatively or positively. Issues require investigation as to their potential
impacts, and decisions about how to deal with them. Open issues are those
for which the appropriate actions have not been resolved, while closed
issues are ones that the team has dealt with successfully.
- Kaizen
- A Japanese term describing a process or philosophy of continuous,
incremental improvement.
- Launch
- The process by which a new product is introduced into the market
for initial sale.
- Lead Users
- Users for whom finding a solution to one of their consumer
needs is so important that they have modified a current product or invented
a new product to solve the need themselves because they have not found
a supplier who can solve it for them. When these consumers' needs are
portents of needs that the center of the market will have in the future,
their solutions are new product opportunities.
- Learning Organization
- An organization that continuously tests and updates
the experience of those in the organization, and transforms that experience
into improved work processes and knowledge that is accessible to the whole
organization and relevant to its core purpose. (See also
Continuous Learning Activity.)
- Life Cycle Cost
- The total cost of acquiring, owning, and operating
a product over its useful life. Associated costs may include: purchase
price, training expenses, maintenance expenses, warranty costs, support,
disposal, and profit loss due to repair downtime.
- Lightweight Team
- New product team charged with successfully developing
a product concept and delivering to the marketplace. Resources are, for
the most part, not dedicated and the team depends on the technical functions
for resources necessary to get the work accomplished.
- Line Extension
- A form of derivative product that adds or modifies features
without significantly changing the product functionality.
- Long-term Success
- The new product's performance in the long run or
at some large fraction of the product's life cycle.
- "M" Curve
- An illustration of the volume of ideas generated over a given
amount of time. The illustration often looks like two arches
from the letter M.
- Maintenance Activity
- That set of product development tasks aimed at solving initial
market and user problems with the new product or service.
- Mating Part
- A general reference to one of two parts that join together.
- Manufacturability
- The extent to which a new product can be easily and effectively
manufactured at minimum cost and with maximum reliability.
- Manufacturing Assembly Procedure
- Procedural documents normally prepared
by manufacturing personnel that describe how a component, subassembly,
or system will be put together to create a final product.
- Manufacturing Design
- The process of determining the manufacturing process
that will be used to make a new product.
- Manufacturing Test Specification and Procedure
- Documents prepared by
development and manufacturing personnel that describe the performance
specifications of a component, subassembly, or system that will be met
during the manufacturing process, and that describe the procedure by which
the specifications will be assessed.
- Market Conditions
- The characteristics of the market into which a new product will
be placed, including the number of competing products, level
of competitiveness, and growth rate.
- Market Development
- Taking current products to new consumers or users.
This effort may involve making some product modifications.
- Market Driven
- Allowing the marketplace to direct a firm's product innovation
efforts.
- Market Research
- Information about the firm's customers, competitors,
or markets. Information may be from secondary sources (already published
and publicly available) or primary sources (from customers themselves).
Market research may be qualitative in nature, or quantitative.
- Market Segmentation
- Market segmentation is defined as a framework by which to
divide a larger heterogeneous market into smaller, more
homogeneous parts. These segments can be defined in many
different ways: demographic (men vs. women, young vs. old, or richer vs. poorer),
behavioral (those who buy on the telephone vs. the Internet vs. retail,
or those who pay with cash vs. credit cards), or attitudinal
(those who believe that store brands are just as good as
national brands vs. those who do not). There are many analytical
techniques used to identify segments such as cluster analysis,
factor analysis, or discriminate analysis. The most common method
is simply to hypothesize a potential segmentation definition and
then to test whether any differences that are observed are statistically
significant.
- Market Share
- A company's sales in a product area as a percent of the
total market sales in that area.
- Market Testing
- The new product development stage when the new product and its marketing
plan are tested together. A market test simulates the eventual
marketing mix and takes many different forms, only one of which bears
the name "test market".
- Matrix Converger
- A convergent thinking tool that uses a matrix to help synthesize data
into key concepts with numbered ratings.
- Maturity Stage
- The third stage of the product life cycle. This
stage is where sales begin to level off due to market saturation. It is a
time when heavy competition, alternative product options, and (possibly)
changing buyer or user preferences start to make it difficult to achieve
profitability.
- Metrics
- A set of measurements to track product development and allow
a firm to measure the impact of process improvements over time. These
measures generally vary by firm but may include measures characterizing
both aspects of the process, such as time to market, and duration of particular
process stages, as well as outcomes from product development such as the
number of products commercialized per year and percentage of sales due
to new products.
- Modular Architecture
- A product architecture in which each functional
element maps into its own physical chunk. Different chunks
perform different functions, the interactions between the chunks
are minimal, and they are generally well defined.
- Monitoring Frequency
- How often performance indicators are measured.
- Morphological Analysis
- A matrix tool that breaks a product down by
needs met and technology components, allowing for targeted analysis and
idea creation.
- Multifunctional Team
- A group of individuals brought together from the
different functional areas of a business to work on a problem or process
that requires the knowledge, training and capabilities across the areas
to successfully complete the work. (See also
Cross-Functional Team.)
- Needs Statement
- Summary of consumer needs and wants, described in customer
terms, to be addressed by a new product.
- Net Present Value (NPV)
- Method to evaluate comparable investments in
very dissimilar projects by discounting the current and projected future
cash inflows and outflows back to the present value based on the discount
rate, or cost of capital, of the firm.
- Network Diagram
- A graphical diagram with boxes connected by lines that
shows the sequence of development activities and the interrelationship
of each task with another. Often used in conjunction with a
Gantt Chart.
- New Concept Development Model
- A theoretical construct that provides
for a common terminology and vocabulary for the Fuzzy Front End. The model
consists of three parts: the uncontrollable influencing factors, the controllable
engine that drives the activities in the Fuzzy Front End and
five activity elements: Opportunity Identification, Opportunity Analysis,
Idea Generation and Enrichment, Idea Selection, and Concept Definition.
- New Product
- A term of many opinions and practices, but most generally
defined as a product (either a good or service) new to the firm marketing
it. Excludes products that are only changed in promotion.
- New Product Development (NPD)
- The complete process of strategy, organization,
concept generation, product and marketing plan creation and evaluation,
and commercialization of a new product. Also frequently referred to just
as "product development."
- New Product Introduction (NPI)
- The launch or commercialization of a
new product into the marketplace. Takes place at the end of a successful
product development project.
- New Product Development Process
- A disciplined and defined set of tasks and steps that
describe the normal means by which a company repetitively
converts embryonic ideas into salable products or services.
- New Product Idea
- A preliminary plan or purpose of action for formulating
new products or services.
- New-to-the-world Product
- A good or service that has never before been available to either
consumers or producers. The automobile was new-to-the-world
when it was introduced, as were microwave ovens and pet rocks.
- Nominal Group Process
- A brainstorming process in which members of a group first
write their ideas out individually, and then participate in
group discussion about each idea.
- Non-Destructive Test
- A test of the product that retains the product's
physical and operational integrity.
- Non Product Advantage
- Elements of the marketing mix that create competitive advantage
other than the product itself. These elements can include marketing
communications, distribution, company reputation, technical support,
and associated services.
- Operational Strategy
- Operational Strategy is an activity that determines the best way
to develop a new product while minimizing costs, ensuring adherence
to schedule, and delivering a quality product. For product development,
the objective is to maximize the return on investment and deliver a high
quality product in the optimal market window of opportunity.
- Operations
- A term that includes manufacturing, but is much broader. It
usually includes procurement, physical distribution, and, for services,
management of the offices or other areas where the services are provided.
- Operator's Manual
- The written instructions to the users of a product
or process. These may be intended for the ultimate customer or for the
use of the manufacturing operation.
- Opportunity
- A business or technology gap that a company or individual
realizes, by design or accident, that exists between the current situation
and an envisioned future in order to capture competitive advantage, respond
to a threat, solve a problem or ameliorate a difficulty.
- Original Equipment Manufacturer (OEM)
- A term that refers to containment-based re-branding, where a company uses
a component of another company in its product, or sells the product of another
company under its own brand. OEM refers to the company that originally
manufactured the product.
- Outsourcing
- The process of procuring a good or service from someone
else, rather than the firm producing it themselves.
- Pareto Chart
- A bar graph with the bars sorted in descending order used
to identify the largest opportunity for improvement. Pareto charts distinguish
the "vital few" from the "useful many."
- Participatory Design
- A democratic approach to design that does not
simply make potential users the subjects of user testing, but empowers
them to be a part of the design and decision-making process.
- Payback
- The time, usually in years, from some point in the development
process until the commercialized product or service has recovered its
costs of development and marketing. While some firms take the point of
full scale market introduction of a new product as the starting point,
others begin the clock at the start of development expense.
- Payout
- The amount of profits and their timing expected from commercializing
a new product.
- Perceptual Mapping
- A quantitative market research tool used to understand
how customers think of current and future products. Perceptual maps are
visual representations of the positions that sets of products hold in
consumers' minds.
- Performance Indicators
- Criteria on which the performance of a new product
in the market are evaluated.
- Performance Measurement System
- The system that enables the firm to monitor the relevant performance
indicators of new products in the appropriate time frame.
- Performance/Satisfaction Surveys
- A particular type of market research tool in which respondents are asked
to evaluate how well a particular product or service is performing and/or
how satisfied they are with that product or service on a specific list of
attributes. It is often useful to ask respondents to evaluate more than
one product or service on these attributes in order to be able to compare
them and to better understand what they like and dislike about one versus
the other. In this way, this information can become a key input to the
development process for next generation product modifications.
- PERT (Program Evaluation and Review Technique)
- An event oriented network analysis technique used to estimate project duration
when there is a high degree of uncertainty in estimates of duration times for
individual activities.
- Phase Review Process
- A staged product development process in which
first one function completes a set of tasks, then passes the information
they generated sequentially to another function which in turn completes
the next set of tasks and then passes everything along to the next function.
Multifunctional teamwork is largely absent in these types of product development
processes, which may also be called baton-passing processes. Most firms
have moved from these processes to Stage Gate
processes using multifunctional teams.
- Physical Elements
- The components that make up a product. These can be both components
or individual parts in addition to minor subassemblies
of components.
- Pilot Gate Meeting
- A trial, informal gate meeting usually held at the
launch of a Stage Gate process to test the design of the process
and familiarize participants with the Stage Gate process.
- Pipeline (product pipeline)
- The scheduled stream of products in development
for release to the market.
- Pipeline Alignment
- The balancing of project demand with resource supply.
- Pipeline Inventory
- Production of a new product that has not yet been
sold to end consumers, but which exists within the distribution chain.
- Pipeline Loading
- The volume and time phasing of new products in various stages of
development within an organization.
- Pipeline Management
- A process that integrates product strategy, project
management, and functional management to continually optimize the cross-project
management of all development-related activities.
- Pipeline Management Enabling Tools
- The decision-assistance and data-handling
tools that aid managing the pipeline. The decision-assistance tools allow
the pipeline team to systematically perform trade-offs without losing
sight of priorities. The data-handling tools deal with the vast amount
of information needed to analyze project priorities, understand resource
and skill set loads, and perform pipeline analysis.
- Pipeline Management Process
- Consists of three elements; pipeline management
teams, a structured methodology and enabling tools.
- Pipeline Management Teams
- The teams of people at the strategic, project
and functional levels responsible for resolving pipeline issues.
- Platform Product
- The design and components that are shared by a set of products in a
product family. From this platform, numerous derivative products
can be designed. (See also Product Platform.)
- Platform Road Map
- A graphical representation of the current and planned evolution of
products developed by the organization, showing the relationship between
the architecture and features of different generations of products.
- Portfolio
- Commonly referred to as a set of projects or products that a
company is investing in and making strategic trade-offs against.
(See also Project Portfolio and
Product Portfolio.)
- Portfolio Criteria
- The set of criteria against which the business judges both
proposed and currently active product development projects to create
a balanced and diverse mix of ongoing efforts.
- Portfolio Management
- A business process by which a business unit decides
on the mix of active projects, staffing and dollar budget
allocated to each project currently being undertaken.
(See also Pipeline Management.)
- Portfolio Map
- A chart or graph which graphically displays the relative scalar strength
and weakness of a portfolio of products, or competitors in two orthogonal
dimensions of customer value or other parameters. Typical portfolio maps
include price vs. performance, newness to company vs. newness to market;
risk vs. return.
- Portfolio Rollout Scenarios
- Hypothetical illustrations of the number and magnitude of new products
that would need to be launched over a certain time frame to reach the
desired financial goals; accounts for success/failure rates and considers
company and competitive benchmarks.
- Portfolio Team
- A cross-functional team focused on shaping the concepts
and business cases for a portfolio of new product concepts within a market,
category, brand or business to be launched over a period of years, depending.
- Pre-Production Unit
- A product that looks like and acts like the intended
final product, but is made either by hand or in pilot facilities rather
than by the final production process.
- Preliminary Bill of Materials (PBOM)
- A forecasted listing of all the subassemblies, intermediate parts,
raw materials, and engineering design, tool design, and customer inputs
that are expected to go into a parent assembly showing the quantity of
each required to make an assembly.
- Process Champion
- The person responsible for the daily promotion of
and encouragement to use a formal business process throughout the organization.
They are also responsible for the ongoing training, innovation input and
continuous improvement of the process.
- Process Managers
- The operational managers responsible for ensuring the orderly
and timely flow of ideas and projects through the process.
- Process Map
- A workflow diagram that uses an x-axis for process time
and a y-axis that shows participants and tasks.
- Process Mapping
- The act of identifying and defining all of the steps,
participants, inputs, outputs, and decisions associated with completing
any particular process.
- Process Maturity Level
- The amount of movement of a reengineered process
from the "as-is" map, which describes how the process operated
initially, to the "should-be" map of the desired future state
of the operation.
- Process Owner
- The executive manager responsible for the strategic results
of the new product development process.
This includes process throughput, quality of output,
and participation within the organization.
- Process Re-engineering
- A discipline to measure and modify organizational
effectiveness by documenting, analyzing, and comparing an existing process
to "best-in-class" practice, and then implementing significant
process improvements or installing a whole new process.
- Product
- Term used to describe all goods, services, and knowledge sold.
Products are bundles of attributes (features, functions, benefits, and
uses) and can be either tangible, as in the case of physical goods, or
intangible, as in the case of those associated with service benefits,
or can be a combination of the two.
- Product and Process Performance Success
- The extent to which a new product
meets its technical performance and product development process performance
criteria.
- Product Approval Committee (PAC)
- The group of managers who serve as
advisors, decision makers and investors in a Stage Gate process:
a company's NPD executive committee. Using established business criteria,
this multifunctional group reviews new product opportunities and project
progress, and allocates resources accordingly at each gate.
- Product Architecture
- The way in which the functional elements are assigned to the
physical chunks of a product and the way in which those physical
chunks interact to perform the overall function of the product.
- Project Decision Making & Reviews
- A series of Go/Kill decisions about the viability of a product that ensure the
completion of the product provides a product that meets the marketing and financial
objectives of the company. This includes a systematic review of the viability of
a product as it moves through the various phase stage gates in the development process.
These periodic checks validate that the
is still close enough to the original plan to deliver against the business case.
- Product Definition
- Defines the product, including the target market,
product concept, benefits to be delivered, positioning strategy, price
point, and even product requirements and design specifications.
- Product Development
- The overall process of strategy, organization,
concept generation, product and marketing plan creation and evaluation,
and commercialization of a new product.
- Product Development Check List
- A pre-determined list of activities and disciplines responsible
for completing those activities used as a guideline to ensure that
all the tasks of product development are considered
prior to commercialization.
- Product Development Engine
- The systematic set of corporate competencies, principles, processes, practices,
tools, methods and skills which combine to define the "how" of an
organization's ability to drive high value products to the market in a competitive
timely manner.
- Product Development Portfolio
- The collection of new product concepts
and products that are within the firm's ability to develop, are most attractive
to the firm's customers and deliver short term and long term corporate objectives,
spreading risk and diversifying investments.
- Product Development Process
- A disciplined and defined set of tasks,
steps, and phases that describe the normal means by which a company repetitively
converts embryonic ideas into salable products or services.
- Product Development Strategy
- The strategy that guides the product innovation
program.
- Product Development Team
- A multifunctional group of individuals chartered to plan
and execute a new product development project.
- Product Discontinuation
- A product or service that is withdrawn or removed
from the market because it no longer provides an economic, strategic,
or competitive advantage in the firm's portfolio of offerings.
- Product Discontinuation Timeline
- The process and time frame in
which a product is carefully withdrawn from the marketplace. The product
may be discontinued immediately after the decision is made, or it may
take a year or more to implement the discontinuation timeline, depending
on the nature and conditions of the market and product.
- Product Failure
- A product development project that does not meet the
objective of its charter or marketplace.
- Product Family
- The set of products that have been derived from a common
product platform. Members of a product family normally have many common
parts and assemblies.
- Product Innovation Charter (PIC)
- A critical strategic document, the Product Innovation Charter (PIC) is the heart of
any organized effort to commercialize a new product. It contains the reasons the
project has been started, the goals, objectives, guidelines, and boundaries of
the project. It is the "who, what, where, when, and why" of the product
development project. In the Discovery phase, the charter may contain assumptions
about market preferences, customer needs, and sales and profit potential. As the
project enters the Development phase, these assumptions are challenged through
prototype development and in-market
testing. While business needs and market conditions can and will change as the
project progresses, one must resist the strong tendency for projects to wander off
as the development work takes place. The PIC must be constantly referenced during
the Development phase to make sure it is still valid, that the project is still
within the defined arena, and that the opportunity envisioned in the Discovery phase
still exists.
- Product Interfaces
- Internal and external interfaces impacting the product
development effort, including the nature of the interface, action required,
and timing.
- Product Life Cycle
- The four stages that a new product is thought to
go through from birth to death: introduction, growth, maturity, and decline.
Controversy surrounds whether products go through this cycle in any predictable
way.
- Product Life Cycle Management
- Changing the features and benefits of the product, the
elements of the marketing mix, and manufacturing operations
over time to maximize the obtainable profits from the product
over its life cycle.
- Product Line
- A group of products marketed by an organization to one general
market. The products have many characteristics, customers, and
uses in common and may also share technologies, distribution channels,
prices, services, and other elements of the marketing mix.
- Product Management
- Ensuring over time that a product or service profitably
meets the needs of customers by continually monitoring and modifying the
elements of the marketing mix, including: the product and its features,
the communications strategy, distribution channels and price.
- Product Manager
- The person assigned responsibility for overseeing all
of the various activities that concern a particular product. Sometimes
called a brand manager in consumer packaged goods firms.
- Product Plan
- Detailed summary of all the key elements involved in a
new product development effort such as product description, schedule,
resources, financial estimations and interface management plan.
- Product Platform
- The underlying structure or basic architecture common across a group of
products or that will be the basis of a series
of products commercialized over a long period of time.
- Product Portfolio
- The set of products and product lines the firm has
placed in the market.
- Product Positioning
- How a product will be marketed to customers. The product positioning refers
to the set of features and value that is valued by (and therefore defined by)
the target customer audience, relative to competing products.
- Product Rejuvenation
- The process by which a mature or declining product
is altered, updated, repackaged or redesigned to lengthen the product
life cycle and in turn extend sales demand.
- Product Requirements Document
- The contract between, at a minimum, marketing
and development, describing completely and unambiguously the necessary
attributes (functional performance requirements) of the product to be
developed, as well as information about how achievement of the attributes
will be verified (i.e. through testing).
- Product Superiority
- Differentiation of a firm's products from those
of competitors, achieved by providing consumers with greater benefits
and value. This is one of the critical success factors in commercializing
new products.
- Program Manager
- The organizational leader charged with responsibility
of executing a portfolio of new product development projects.
- Project Leader
- The person responsible for managing an individual new
product development project through to completion. They are responsible
for ensuring that milestones and deliverables are achieved and that resources
are utilized effectively. (See also Team Leader.)
- Project Management
- The set of people, tools, techniques, and processes
used to define the project's goal, plan all the work necessary to reach
that goal, lead the project and support teams, monitor progress, and ensure
that the project is completed in a satisfactory way.
- Project Pipeline Management
- Fine tuning resource deployment smoothly
for projects during ramp-up, ramp-down, and mid-course adjustments.
- Project Plan
- A formal, approved document used to guide both project execution and
control. Documents planning assumptions and decisions, facilitates
communication among stakeholders, and documents approved scope, cost,
and schedule deadlines.
- Project Portfolio
- The set of projects in development at any point in
time. These will vary in the extent of newness or innovativeness.
- Project Resource Estimation
- This activity provides one of the major contributions to the project cost
calculation. Turning functional requirements into a realistic cost estimate
is a key factor in the success of a product delivering against the business plan.
- Project Sponsor
- The authorization and funding source of the project.
The person who defines the project goals and to whom the final results
are presented. Typically a senior manager.
- Project Strategy
- The goals and objectives for an individual product
development project. It includes how that project fits into the firm's
product portfolio, who the target market is, and what problems the product
will solve for those customers.
- Project Team
- A group of individuals entrusted to plan
and execute a new product development project.
- Prospectors
- Firms that lead in technology, product and market development
and commercialization, even though an individual product may not lead
to profits. Their general goal is to be first to market with a particular
innovation.
- Protocol
- A statement of the attributes (mainly benefits; features only
when required) that a new product is expected to have. A protocol is prepared
prior to assigning the project to the technical development team. The
benefits statement is agreed to by all parties involved in the project.
- Prototype
- A physical model of the new product concept. Depending upon
the purpose, prototypes may be non-working, functionally working, or both
functionally and aesthetically complete.
- Psychographics
- Characteristics of consumers that, rather than being
purely demographic, measure their attitudes, interests, opinions, and
lifestyles.
- Pull Through
- The revenue created when a new product or service positively
impacts the sales of other, existing products or services. The obverse
of cannibalization.
- Q-Sorts
- A process for sorting and ranking complex issues.
- Qualitative Cluster Analysis
- An individual-based or group-based process
using Informed Intuition for clustering and connecting data points.
- Qualitative Marketing Research
- Research conducted with a very small
number of respondents, either in groups or individually, to gain an impression
of their beliefs, motivations, perceptions and opinions. Frequently used
to gather initial consumer needs and obtain initial reactions to ideas
and concepts. Qualitative marketing research is used to show why people
buy a particular product, whereas quantitative marketing research reveals
how many people buy it.
- Quality
- The collection of attributes, which when present in a product,
means a product has conformed to or exceeded customer expectations.
- Quality Assurance
- Function responsible for monitoring and evaluating development policies and
practices, to ensure they meet company and applicable regulatory standards.
- Quality-by-Design
- The process used to design quality into the product, service, or
process from the inception of product development.
- Quality Control Specification and Procedure
- Documents that describe
the specifications and the procedures by which they will be measured which
a finished subassembly or system must meet before judged ready for shipment.
- Quality Function Deployment (QFD)
- A structured method employing matrix
analysis for linking what the market requires to how it will be accomplished
in the development effort. This method is most frequently used during
the stage of development when a multifunctional team agrees on how customer
needs relate to product specifications and the features that deliver those
needs. By explicitly linking these aspects of product design, QFD minimizes
the possibility of omitting important design characteristics or interactions
across design characteristics. QFD is also an important mechanism in promoting
multifunctional teamwork. Developed and introduced by Japanese auto manufacturers,
QFD is widely used in the automotive industry.
- Quantitative Market Research
- Consumer research, often surveys, conducted
with a large enough sample of consumers to produce statistically reliable
results that can be used to project outcomes to the general consumer population.
Used to determine importance levels of different customer needs, performance
ratings of and satisfaction with current products, probability of trial,
repurchase rate, and product preferences. These techniques are used to
reduce the uncertainty associated with many other aspects of
product development.
- Radical Innovation
- A new product, generally containing new technologies,
that significantly changes behaviors and consumption patterns in the marketplace.
- Rapid Prototyping
- Any of a variety of processes that avoid tooling
time in producing prototypes or prototype parts and therefore allow (generally
non-functioning) prototypes to be produced within hours or days rather
than weeks. These prototypes are frequently used to test quickly the product
product's technical feasibility or consumer interest.
- Reactors
- Firms that have no coherent innovation strategy. They only develop new
products when absolutely forced to by the competitive situation.
- Realization Gap
- The time between first perception of a need and the
launch of a product that fills that need.
- Relay-Race Process
- A staged product development process in which first one function completes a set
of tasks, then passes the information they generates sequentially to another
function, which in turn completes the next set of tasks and then passes everything
along to the next function. Multifunctional teamwork is largely absent in these
types of product development processes, which may also be called phase review or
baton-passing processes.
- Render
- Process that industrial designers use to visualize their ideas
by putting their thoughts on paper with any number of combinations of
color markers, pencils and highlighters, or computer visualization
software.
- Reposition
- To change the position of the product in the minds of customers,
either on failure of the original positioning or to react to changes in
the marketplace. Most frequently accomplished through changing the marketing
mix rather than redeveloping the product.
- Resource Matrix
- An array that shows the percentage of each non-managerial
person's time that is to be devoted to each of the current projects in
the firm's portfolio.
- Resource Plan
- Detailed summary of all forms of resources required to
complete a product development project, including personnel, equipment,
time, and finances.
- Responsibility Matrix
- This matrix indicates the specific involvement
of each functional department or individual in each task or activity in
each stage.
- Return on Ideas
- Reflects the potential value of an idea.
- Return on Investment (ROI)
- A standard measure of project profitability,
this is the discounted profits over the life of the project expressed
as a percentage of initial investment.
- Rigid Gate
- A review point in a Stage Gate process at which all
the prior stage's work and deliverables must be complete before work in
the next stage can commence.
- Risk
- An event or condition that may or may not occur, but if it does
occur will impact the ability to achieve a project's objectives. In new
product development, risks may take the form of market, technical, or
organizational issues.
- Risk Acceptance
- An uncertain event or condition for which the project
team has decided not to change the project plan. A team may be forced
to accept an identified risk when they are unable to identify any other
suitable response to the risk.
- Risk Avoidance
- Changing the project plan to eliminate a risk or to protect the
project objectives from any potential impact due to the risk.
- Risk Management
- The process of identifying, measuring, and mitigating
the business risk in a product development project.
- Risk Mitigation
- Actions taken to reduce the probability and/or impact
of a risk to below some threshold of acceptability.
- Risk Tolerance
- The level of risk that a project stakeholder is willing
to accept. Tolerance levels are context specific. Stakeholders
may be willing to accept different levels of risk for different types
of risk, such as risks of project delay, price realization, and technical
potential.
- Risk Transference
- Actions taken to shift the impact of a risk and the
ownership of the risk response actions to a third party.
- Road Mapping
- A graphical multi-step process to forecast future market
and/or technology changes, and then plan the products to address these
changes.
- Robust Design
- The design of products to be less sensitive to variations,
including manufacturing variation and misuse, increasing the probability
that they will perform as intended.
- Rugby Process
- A product development process in which stages
are partially or heavily overlapped rather than sequential with crisp
demarcations between one stage and its successor.
- S-Curve (Technology S-Curve)
- Technology performance improvements tend
to progress over time in the form of an "S" curve. When first
invented, technology performance improves slowly and incrementally. Then,
as experience with a new technology accrues, the rate of performance increase
grows and technology performance increases by leaps and bounds. Finally,
some of the performance limits of a new technology start to be reached
and performance growth slows. At some point, the limits of the technology
may be reached and further improvements are not made. Frequently, the
technology then becomes vulnerable to a substitute technology that is
capable of making additional performance improvements. The substitute
technology is usually on the lower, slower portion of its own "S"
curve and quickly overtakes the original technology when performance accelerates
during the middle (vertical) portion of the "S".
- Scanner Test Markets
- Special test markets that provide retail point-of-sale
scanner data from panels of consumers to help assess the product's performance.
First widely applied in the supermarket industry.
- Scenario Analysis
- A tool for envisioning alternate futures so that a strategy
can be formulated to respond to future opportunities and challenges.
- Screening
- The process of evaluating and selecting new ideas or concepts
to put into the project portfolio. Most firms now use a formal screening
process with evaluation criteria that span customer, strategy, market,
profitability and feasibility dimensions.
- Segmentation
- The process of dividing a large and heterogeneous market
into more homogeneous subgroups. Each subgroup, or segment, holds similar
views about the product, and values, purchases, and uses the product in
similar ways.
- Senior Management
- That level of executive or operational management above the
product development team that has approval authority or controls
resources important to the development effort.
- Sensitivity Analysis
- A calculation of the impact that an uncertainty
might have on the new product business case. It is conducted by setting
upper and lower ranges on the assumptions involved and calculating the
expected outcomes.
- Services
- Products, such as an airline flight or insurance policy, which
are intangible or at least substantially so. If totally intangible, they
are exchanged directly from producer to user, cannot be transported or
stored and are instantly perishable. Service delivery usually involves
customer participation in some important way. Services cannot be sold
in the sense of ownership transfer, and they have no title of ownership.
- Short Term Success
- The new product's performance shortly after launch,
well within the first year of commercial sales.
- Should Be Map
- A version of a process map depicting how a process will
work in the future. A revised "as-is" process map. The result
of the team's re-engineering work.
- Simulated Test Market
- A form of quantitative market research and pre-test
marketing in which consumers are exposed to new products and to their
claims in a staged advertising and purchase situation. Output of the test
is an early forecast of expected sales or market share, based on mathematical
forecasting models, management assumptions, and input of specific measurements
from the simulation.
- Six Sigma
- A level of process performance that produces only 3.4 defects
for every one million operations.
- Slip Rate
- Measures the accuracy of the planned project schedule according
to the formula: Slip Rate = ([actual schedule/planned schedule] -1) * 100%.
- Specification
- A detailed description of the features and performance
characteristics of a product. For example, a laptop computer's specification
may read as a 900 MHz Pentium III, with 256 Mbyes of RAM and 20 Gbytes
of hard disk space, 6.5 hours of battery life, weight of 2.1 kilograms,
with an active matrix 256 color screen.
- Speed to Market
- The length of time it takes to develop a new product
from an early initial idea for a new product to initial market sales.
Precise definitions of the start and end point vary from one company to
another, and may vary from one project to another within a company.
- Sponsor
- An informal role in a product development project, usually
performed by a higher-ranking person in the firm who is not directly involved
in the project, but who is ready to extend a helping hand if needed, or
provide a barrier to interference by others.
- Stage
- One group of concurrently accomplished tasks, with specified
outcomes and deliverables, of the overall product development process.
- Stage Gate Process
- A widely used product development process that divides the effort into
distinct time-sequenced stages separated by management decision gates.
Multifunctional teams must successfully complete a prescribed set of related
cross-functional tasks
in each stage prior to obtaining management approval to proceed to the
next stage of product development. The framework of the Stage Gate
process includes work-flow and decision-flow paths and defines the supporting
systems and practices necessary to ensure the process's ongoing smooth
operation.
- Staged Product Development Activity
- The set of product development
tasks commencing when it is believed there are no major unknowns and that
result in initial production of salable product, carried out in stages.
- Stoplight Voting
- A convergent thinking technique by which participants
vote their idea preferences using colored adhesive dots. Also called preference
voting.
- Strategic Balance
- Balancing the portfolio of development projects along
one or more of many dimensions such as focus versus diversification, short
versus long term, high versus low risk, extending platforms versus development
of new platforms.
- Strategic New Product Development (SNPD)
- The process that ties new
product strategy to new product portfolio planning.
- Strategic Partnering
- An alliance or partnership between two firms (frequently
one large corporation and one smaller, entrepreneurial firm) to create
a specialized new product. Typically, the large firm supplies capital,
and the necessary product development, marketing, manufacturing, and distribution
capabilities, while the small firm supplies specialized technical or creative
expertise.
- Strategic Pipeline Management
- Strategic balancing, which entails setting
priorities among the numerous opportunities and adjusting the organization's
skill sets to deliver products.
- Strategic Plan
- Establishes the vision, mission, values, objectives,
goals, and strategies of the organization's future state.
- Strategy
- The organization's vision, mission, and values. One subset
of the firm's overall strategy is its Innovation Strategy.
- Subassembly
- A collection of components that can be put together as
a single assembly to be inserted into a larger assembly or final product.
Often the subassembly is tested for its ability to meet some set of explicit
specifications before inclusion in the larger product.
- Success
- A product that meet's its goals and performance expectations.
Product development success has four dimensions. At the project level,
there are three dimensions: financial, customer-based, and product technical
performance. The fourth dimension is new product contribution to overall
firm success.
- Success Dimensions
- Product development success has four dimensions. At the project level,
there are three dimensions: financial, customer-based, and product and
process performance. The fourth dimension of product development success
is measured at the firm level.
- Support Service
- Any organizational function whose primary purpose
is not product development but whose input is necessary to the successful
completion of product development projects.
- SWOT Analysis
- "Strengths, Weaknesses, Opportunities, and Threats" Analysis.
A SWOT analysis evaluates a company in terms of its advantages and
disadvantages versus competitors, customer requirements, and market/economic
environmental conditions.
- System Hierarchy Diagram
- The diagram used to represent product architectures. This diagram
illustrates how the product is broken into its chunks.
- Systems and Practices
- Established methods, procedures, and activities
that either drive or hinder product development. These may relate to the
firm's day-to-day business or may be specific to product development.
- Systems and Practices Team
- Senior managers representing all functions
who work together to identify and change those systems and practices hindering
product development and who establish new tools, systems, and practices
for improving product development.
- Task
- The smallest describable unit of accomplishment in completing
a deliverable.
- Target Cost
- A cost objective established for a new product based on
consideration of customer affordability. Target cost is treated as an
independent variable that must be satisfied along with other customer
requirements.
- Target Market
- The group of consumers or potential customers selected
for marketing. This market segment is most likely to buy the products within a
given category. These are sometimes called "prime prospects."
- Team
- That group of persons who participate in the product development
project. Frequently each team member represents a function, department,
or specialty. Together they represent the full set of capabilities needed
to complete the project.
- Team Leader
- The person leading the new product team. Responsible for
ensuring that milestones and deliverables are achieved, but may not have
any authority over project participants.
- Team Spotter's Guide
- A questionnaire used by a team leader (or team members)
to diagnose the quality of the team's functioning.
- Technology Driven
- A new product or new product strategy based on the strength of
a technical capability. Sometimes called "solutions in
search of problems."
- Technology Road Map
- A graphic representation of technology evolution
or technology plans mapped against time. It is used to guide new technology
development for or technology selection in developing new products.
- Technology Stage Gate (TSG)
- A process for managing the technology development
efforts when there is high uncertainty and risk. The process brings a
structured methodology for managing new technology development without
thwarting the creativity needed in this early stage of product development.
It is specifically intended to manage high-risk technology development
projects when there is uncertainty and risk that the technology discovery
may never occur and therefore the ultimate desired product characteristics
might never be achieved.
- Technology Transfer
- The process of converting scientific findings
from research laboratories into useful products by the commercial sector.
May also be referred to as the process of transferring technology between
alliance partners.
- Test Markets
- The launching of a new product into one or more limited
geographic regions in a very controlled manner, and measuring consumer
response to the product and its launch. When multiple geographies are
used in the test, different advertising or pricing policies may be tested
and the results compared.
- Think Links
- Stimuli used in divergent thinking to help participants
make new connections using seemingly unrelated concepts from a list of
people, places, or things.
- Think Tank
- Environments, frequently isolated from normal organizational
activities, created by management to generate new ideas or approaches
to solving organizational problems.
- Thought Organizers
- Tools that help categorize information associated
with ideas such that the ideas can be placed into groups that can be more
easily compared or evaluated.
- Three R's
- The fundamental steps of Record, Recall, and Reconstruct
which most creative minds go through when generating new product ideas.
- Threshold Criteria
- The minimum acceptable performance targets for any
proposed product development project.
- Thumbnail
- The most minimal form of sketching, usually using pencils,
to represent a product idea.
- Time to Market
- The length of time it takes to develop a new product
from an early initial idea for a new product to initial market sales.
Precise definitions of the start and end point vary from one company to
another, and may vary from one project to another within the company.
- Tone
- The feeling, emotion, or attitude most associated with using a
product. The appropriate tone is important to include in consumer new
product concepts and advertising.
- Tornado
- A mid to late growth stage strategy that follows the bowling alley
and which describes an often frenzied period of rapid growth and acceptance for a
product category. Activities of the tornado phase include making the product
become an industry standard, competitive pricing to maximize share and low
cost volume distribution channels. Success in the tornado is related to
maintaining previously established product leadership and complementing it
with operational excellence in a variety of strategic areas.
- Total Quality Management (TQM)
- A business improvement philosophy that
comprehensively and continuously involves all of an organization's functions
in improvement activities.
- Tracking Studies
- Surveys of consumers (usually conducted by telephone)
following the product's launch to measure consumer awareness, attitudes,
trial, adoption and repurchase rates.
- TRIZ
- The acronym for the Theory of Inventive Problem Solving, which
is a Russian, systematic method of solving problems and creating multiple-alternative
solutions. It is based on an analysis and codification of technology solutions
from millions of patents. The method enhances creativity by getting individuals
to think beyond their own experience and to reach across disciplines to
solve problems using solutions from other areas of science.
- Uncertainty Range
- The spread between the high (best case) and low (worst
case) values in a business assumption.
- User
- Any person who uses a product or service to solve a problem or
obtain a benefit, whether or not they purchase it. Users may consume a
product, as in the case of a person using shampoo to clean their hair
or eating a potato chip to assuage hunger between meals. Users may not
directly consume a product, but may interact with it over a longer period
of time, like a family owning a car, with multiple family members using
it for many purposes over a number of years. Products also are employed
in the production of other products or services, where the users may be
the manufacturing personnel who operate the equipment.
- Utilities
- The weights derived from conjoint analysis that measure how
much a product feature contributes to purchase interest or preference.
- Value
- Any principle to which a person or company adheres with some
degree of emotion. It is one of the elements that enter into formulating
a strategy.
- Value-added
- The act or process by which tangible product features or
intangible service attributes are bundled, combined or packaged with other
features and attributes to create a competitive advantage, reposition
a product or increase sales.
- Value-added Reseller (VAR)
- A value-added reseller (VAR) is a company that adds features to an
existing product, then resells it (usually to end-users) as an integrated
product or complete turn-key solution. This practice is common in the
electronics industry, where, for example, a software application might be
added to existing hardware. This value can come from professional services
such as integrating, customizing, consulting, training and implementation.
The value can also be added by developing a specific application for the
product designed for the customer's needs which is then resold as a new
package.
- Value Analysis
- A technique for analyzing systems and designs.
Its purpose is to help develop a design that satisfies users by providing the
needed user requirements in sufficient quality at an optimum (minimum) cost.
- Value Chain
- As a product moves from raw material to finished good delivered
to the customer, value is added at each step in the manufacturing and
delivery process. The value chain indicates the relative amount of value
added at each of these steps.
- Value Proposition
- A short, clear, and simple statement of how and
on what dimensions a product concept will deliver value to prospective customers.
The essence of "value" is embedded in the trade off between the
benefits a customer receives from a new product and the price a customer
pays for it.
- Vertical Integration
- A firm's operation across multiple levels of
the value chain. In the early 1900's, Ford Motor Company was extremely vertically
integrated, as it owned forests and operated logging and wood finishing
and glass-making businesses. They made all of the components that went into
automobiles, as well as most of the raw materials used in those components.
- Virtual Customer
- A set of Web based market research methods for gathering
voice-of-the-customer data in all phases of product development.
- Virtual Product Development
- Paperless product development. All design and analysis is computer-based.
- Virtual Reality
- Technology that enables a designer or user to "enter"
and navigate a computer-generated 3-D environment. Users can change their
viewpoint and interact with the objects in the scene in a way that simulates
real-world experiences.
- Virtual Team
- Dispersed teams that communicate and work primarily electronically
may be called virtual teams.
- Vision
- An act of imagining, guided by both foresight and informed discernment,
that reveals the possibilities as well as the practical limits in new
product development. It depicts the most desirable, future state of a
product or organization.
- Visionary Companies
- Leading innovators in their industries, they rank
first or second in market share, profitability, growth, and shareholder
performance. A substantial portion (e.g., 25% or more) of their sales
are from products introduced in the last three years. Many firms want
to benchmark these firms.
- Voice-of-the-customer (VOC)
- A process for eliciting needs from consumers
that uses structured in-depth interviews to lead interviewees through
a series of situations in which they have experienced and found solutions
to the set of problems being investigated. Needs are obtained through
indirect questioning by coming to understand how the consumers found ways
to meet their needs, and, more important, why they chose the particular
solutions they found.
- Waste
- Any activity that utilizes equipment, materials, parts, space, employee time,
or other corporate resource beyond minimum amount required for
value-added operations to ensure
manufacturability. These activities could include waiting,
accumulating semi-processed parts, reloading, passing materials from one hand
to the other, and other nonproductive processes. The seven basic categories
of waste a business should strive to eliminate are: overproduction, waiting
for machines, transportation time, process time, excess inventory, excess motion,
and defects.
- Whole Product
- A product definition concept that emphasizes delivering
all aspects of a product which are required for it to deliver its full value.
This includes training materials, support systems, cables, how to recipes,
additional hardware and software, standards and procedures, implementation,
applications consulting, and any constitutive elements necessary to
assure the customer will have a successful experience and achieve at
least minimum required value from the product. Often elements of the
whole product are provided via alliances with others. This term is
often used in the context of planning high technology products.
- Workflow Design Team
- Functional contributors who work together
to create and execute the work-flow component of a Stage Gate system.
They decide how the company's Stage Gate process will be structured,
what tasks it will include, what decision points will be included and
who is involved at all points.
- Workplan
- Detailed plan for executing the project, identifying each phase of the project,
the major steps associated with them, and the specific tasks to be performed along
the way. Best practice workplans identify the specific functional resources assigned
to each task, the planned task duration, and the dependencies between tasks.
(See also Gantt Chart.)
- Worth What Paid For (WWPF)
- The quantitative evaluation by a person in the
customer segment of the question: "Considering the products
and services that your vendor offers, are they worth what you paid for
them?"
© 2008 John Michael Pierobon
Notes