Principles of product development flow pdf download

USLegal fulfills industry-leading security and compliance standards. Ensures that a website is free of malware attacks. Highest customer reviews on one of the most highly-trusted product review platforms. TopTenReviews wrote "there is such an extensive range of documents covering so many topics that it is unlikely you would need to look anywhere else".

USLegal received the following as compared to 9 other form sites. How It Works. How to fill out and sign unmanaged online? The following tips can help you complete The Principles Of Product Development Flow Pdf Download easily and quickly: Open the template in our feature-rich online editing tool by clicking Get form. Fill out the requested fields that are yellow-colored. Hit the arrow with the inscription Next to jump from box to box.

Go to the e-signature solution to e-sign the document. Add the relevant date. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy. See our Privacy Policy and User Agreement for details. Create your free account to read unlimited documents. A brief overview about many aspects from Donald G.

Reinertsen's important book - The principles of product development flow. The SlideShare family just got bigger. Home Explore Login Signup. Successfully reported this slideshow.

We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime. The Principles of product development flow - a summary. Upcoming SlideShare. You are reading a preview. Create your free account to continue reading.

Sign Up. Like this presentation? Why not share! Introduction to product development Embed Size px. Start on. Show related SlideShares at end. WordPress Shortcode. Next SlideShares. Download Now Download to read offline and view in fullscreen. Download Now Download Download to read offline. The Principles of product development flow - a summary Download Now Download Download to read offline. Sebastian Radics Follow. Lead Agile Coach bei idealo internet GmbH.

Introduction to product development flow. Scrumban r Evolution. How to measure anything meetup Cost of Delay, measurements and parallel vs. The Primes - How any group can solve any problem. Dynamic Team Setups Manage Agile.

Dynamic Team Setups. What to Upload to SlideShare. Related Books Free with a 30 day trial from Scribd. And Everyone Else's Lindsey Stanberry. Once again, it is the fail- ure to correctly quantify economics. Although eiciency does have economic impact, it is only another proxy variable.

We must make decisions based on overall economics. Since high capacity utilization simultaneously raises eiciency and increases delay cost, we need to look at the combined impact of these two factors. We can only do so if we express both factors in the same unit of measure, life-cycle proits.

If we do this, we will always conclude that operating a product devel- opment process near full utilization is an economic disaster. Hostility to Variability he absence of clear economic thinking also leads to a profound mis- understanding of the role of variability in product development.

Today, most product developers assume that variability is bad, and they try to eliminate this variability. First, without variability, we cannot innovate. Product develop- ment produces the recipes for products, not the products themselves. Later in this book, we will use a more complete economic framework. But, when we change a design, we introduce uncertainty and variability in out- comes. We cannot eliminate all variability without eliminating all value-added.

Second, variability is only a proxy variable. We are actually inter- ested in inluencing the economic cost of this variability. As you shall see in Chapter 4, this economic cost depends on how variability is trans- formed by an economic payof-function. It is critical to pay attention to both the amount of variability and the nature of this payof-function.

When we start viewing variability this way, we usually discover it is much easier to alter the payof-function than it is to reduce the under- lying amount of variability. Developers build bufers into their schedules to reduce variability.

My surveys of product developers show that 65 percent of prod- uct developers consider it desirable to eliminate as much variability as possible in product development. Variability is viewed as the enemy. Minimizing the economic impact of variability is a profoundly diferent goal than minimizing variability. Such behavior makes no economic sense. We must recognize that our original plan was based on noisy data, viewed from a long time-horizon.

For example, we may have started development believing a feature would take 1 week of efort and it would be valued by 50 percent of our cus- tomers. As we progressed through development, we may have discov- ered that this feature will require 10 weeks of efort and it will only be valued by 5 percent of our customers. In such cases, blindly insisting on conformance to the original plan destroys economic value.

To manage product development efectively, we must recognize that valuable new information is constantly arriving throughout the development cycle. Rather than remaining frozen in time, locked to our original plan, we must learn to make good economic choices using this emerging information. Conformance to the original plan has become another obstacle blocking our ability to make good economic choices. Once again, we have a case of a proxy variable, conformance, obscuring the real issue, which is making good economic decisions.

Institutionalization of Large Batch Sizes Our blindness toward queues and our focus on eiciency lead us to institutionalize large batch sizes. Large batches seem attractive because they appear to have scale economies that increase eiciency. Furthermore, large batches appear to reduce variability because they pool many activities together.

However, this eiciency gain and vari- ability reduction is only an illusion. As you shall see later, in Chapter 5, there can be strong diseconomies associated with large batches. Furthermore, the modest reduction in variability due to the pool- ing of variances will be completely overwhelmed by the geometric increase in uncertainty caused by the longer planning horizons asso- ciated with large batches. My surveys of product developers show that only 3 percent of them are trying to reduce batch sizes in their development processes.

For example, the majority of product developers use phase-gate processes, which transfer percent of the work product in one large batch to the next phase.

We cannot make batch size any higher than percent. We will devote Chapter 5 to understanding the surprising beneits of smaller batch sizes and the methods we can use to achieve them. In particular, we will examine how we can enable small batch processes by systematically lowering transaction costs. It should come as no surprise that since the current orthodoxy ignores the efects of large batch size, it also places no emphasis on lowering transaction costs.

In fact, only 3 percent of developers have a formal program to reduce transaction costs. A low-based process delivers information on a regular cadence in small batches.

In fact, cadence helps lower transac- tion costs and makes small batches more economically feasible. In many companies, manufactur- ing wants to receive a complete design from engineering. Once all drawings are ready, they are reviewed in one large batch.

All drawings may be reviewed on a single day. Companies assume this makes reviewers more eicient because they can see the entire design at once. But these drawings were not completed in a single day. What happened during these 9 weeks? If an engineer makes a bad assumption in one of the irst 20 drawings, then that bad assumption will go unchallenged until the inal review. Without feedback from a review, this bad assumption can be incorporated into more draw- ings.

By breaking drawing review into small batches, we improve qual- ity, eiciency, and cycle time. But how do we prevent all these small review meetings from driv- ing up overhead? We conduct these review meetings on a regular time- based cadence. Every Wednesday aternoon at pm, we review all the drawings completed in the last week. Meetings that are synchronized to a regular and predictable cadence have very low set- up costs.

In Chapter 6, we will see why cadence and synchronization are surprisingly powerful tools for product development. We will discover how cadence helps to control the progressive accumulation of vari- ability in development processes.

Managing Timelines instead of Queues We have already pointed out that companies do not manage product development queues. What do they manage? We train our project managers how to create these timelines and how to manage them. We created detailed timelines using our manufacturing plan- ning systems. Misunderstanding variability is dangerous in the repetitive world of manufacturing, but is it even more dangerous in product development where variability is much higher.

Most product developers do not understand the statistics of granu- lar schedules. A granular timeline subdivides time intervals into very small buckets. When we do this, the coeicient of variation for each of these buckets becomes very high. Even worse, if we incentivize conformance, peo- ple will insert contingency reserves to prevent their tasks from missing the schedule. And these reserves aggregate into even longer timelines.

In contrast, when we emphasize low, we focus on queues rather than timelines. By controlling queue size, we automatically achieve control over timelines. Our blindness to queues and our misunderstanding of variabil- ity combine to hide this opportunity. Only 3 percent of developers use WIP constraints. In contrast, this method is widespread in modern manufacturing. One of the most prominent examples is the kanban system used by Toyota.

In Chapter 7, with the help of some queueing theory, we will exam- ine the power of WIP constraints and their efect on cycle time. WIP constraints are even more important in product development than manufacturing, because product development has higher inherent variability. If we limit ourselves to the relatively simple WIP constraints used in lean manufacturing, we will underexploit the power of WIP con- straints.

Instead, we will explore some of the more advanced ideas used in the world of telecommunications. We are now four generations beyond that method. As mentioned earlier, manufacturing has an advanced view on how to achieve low when four conditions are present: predictable and repetitive tasks, homogeneous delay costs, and homogeneous task durations. In product development, these four conditions are virtually never present.

In Chapter 7, I will expose you to the more advanced ideas that come from other domains. What is critically important is that these other domains do not achieve low by eliminating variability; they have developed methods that achieve low in the presence of high variability. As a result, these methods are extremely relevant to product developers.

Our current orthodoxy accepts inlexibility in return for eiciency. But what happens when this inlex- ibility encounters variability? We get delays. So what do we do? We can reduce this variability directly, or we can build bufers and reserves to mask the variability.

I have already explained why variability reduction is not the answer. Later in this book, you will see that bufers and reserves are also a dan- gerous approach. Flow-based Product Development suggests that our development processes can be both eicient and responsive in the presence of vari- ability. To do this, we must make resources, people, and processes lex- ible. We can learn some lessons on how to do this from our factories, and even more lessons from telecommunications networks.

In our fac- tories, we create lexibility by paying more to workers who can work at more stations on a production line. We value lexibility, and we pay for it. In contrast, most product development organizations exclusively reward specialization. In telecommunications networks, we use adaptive approaches that enable us to adjust to emerging congestion in less than a second.

In product development, we have not yet recognized the tremendous value of lexibility as an explicit strategy for exploiting the economic beneits of variability. Instead, we still try to eliminate or hide the variability. Some companies follow the approach of manufacturers, where jobs are handled in a FIFO sequence.

This makes sense in manufactur- ing, because jobs are typically homogeneous. They all place the same time demands on resources, and they have the same cost of delay. These two conditions are virtually never present in product development.

Other companies prioritize on the basis of project proitability measures like return on investment ROI. By prioritizing, we choose to service one project before another. In general, it is best to delay the project with a low cost of delay. Of course, this can only be done when we know the cost of delay, information that 85 percent of developers do not have. In classic scheduling theory, this method is called minimum slack time irst.

It can encourage you to apply resources to a low cost- of-delay job with a depleted bufer in preference to a high cost-of-delay job that is ahead of schedule. Today, there is no current orthodoxy for low control, unless we consider ignoring economics a method.

Again, we can trace this prob- lem back to lack of economic understanding. A good economic frame- work resolves many scheduling dilemmas. We create project management oices. We create centralized information systems. We centralize bufers to take advantage of the ei- ciency gains of this approach. Our focus on centralization arises because we value eiciency more than response time.

We shall see that this is a mistake in Chapter 8, when we examine the role of fast feedback. Product developers oten avoid decentralized control because they are afraid decentralization will lead to chaos. I hope to ofer a diferent view of decentralization.

One of the most interesting exam- ples of decentralizing control without losing alignment is the way the military deals with the uncertainty of warfare. We will examine their approach in Chapter 9 and consider how it can be applied in product development.

By this point, I hope I have convinced you to look at the current orthodoxy more critically. It has serious problems, and there are logical ways we can resolve them.

A Possible Solution 15 Major Themes 1. Economics 2. Queues 3. Variability 4. Batch Size 5. WIP Constraints 6. Cadence, Synchronization, and Flow Control 7. Fast Feedback 8. Decentralized Control Figure The eight major themes of this book. A Possible Solution he major chapters of this book will focus on how we can overcome the limitations of the current orthodoxy. We will explore eight major themes, shown in Figure Economics he irst key theme is economically-based decision making.

It is the ultimate foundation of this book. Our central premise is that we do product development to make money. It illuminates the grave problems with the current orthodoxy. Instead, it is, at best, based on observing cor- relations between pairs of proxy variables.

For example, it observes that late design changes have higher costs than early design changes and prescribes front-loading problem solving.

When we focus on observable phenomena, we can be biased by the fact that some characteristics are more observable than others. For example, when we benchmark other companies, certain aspects of the development process are very visible. Observers quickly conclude that these visible characteristics are the root cause of superior performance. It is easy to see that the development team wears red hats. It is hard to see the control rule they use for managing DIP.

As a result, we tend to focus on the easily visible characteristics that are oten the least important drivers of development process performance. Let me make a simple analogy. Suppose you want to learn how to design a radio. You ind a well-designed radio and are allowed to care- fully inspect it. You would see certain components, such as resistors, capacitors, transistors, and integrated circuits. If you duplicated exactly what you saw, you could create a functioning radio, but you would still know virtually nothing about radio design.

The essence of radio design is the logical process by which the components were selected. In fact, what you can observe visually tells you little about the way a radio functions.