Decision Gate 1

Primary findings

Secondary findings

Primary findings

Barriers

Uneven workloads cause backlogs in product development.
Case Study. Example provided by a large manufacturer of electronic components.
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Carriers

One company established an NPD process with carefully staged decision-making, rigorous process reviews, and strict timelines. Yet, skillful project champions would maneuver to win continued support at each level of project review. The company then reassigned project managers so that the more empirically included truth seekers were in charge of early stage reviews, and more commercially included success seekers managed the later stages. That simple change improved NPD productivity.
Private sector experience in pharmaceutical industry.
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Methods

By setting up clear-cut screens or hurdles, new product cross-functional teams as well as management will know the ground rules during any step of the process.
Author experience
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Corporate management commitment influences the outcomes of NPD processes directly by resource allocation and sponsorship, or indirectly by structuring the organizational context in which the project occurs. High level commitment should be sought at each Decision gate.
Three case studies supported by 18 interviews.
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Effective control is required for new product success. To achieve this, new product development projects should be regularly monitored and should enjoy grace periods.
Survey with significant findings.
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Experiential. During the first three or four stages of the NPD process, management is relying primarily on one person to make a recommendation about whether to proceed.
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Senior management and the product development team review the work periodically at "review" points, when key managerial decisions are made. Such decisions include whether to finalize the specifications now or in a future review, and even whether to redirect or cancel the project because of the product's low profit potential.
Case Study. Researcher identified themes of the product development processes of three different firms.
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To ensure compliance with the FDA's Quality System Regulation, medical device manufacturers should use a structured product development process to instill discipline in the product life cycle. A hierarchical approach arranges activity from Stages (phases) to Steps to Activities and finally to Tasks. Each Stage has a unique theme and set of deliverables. For example: Stage 0 — Concept Research. This stage identifies new market opportunities, determines customer needs and conducts high-level evaluations of the opportunity and its strategic fit. This activity concludes with the management approval of an integrated business plan for the project, which is then updated at the conclusion of each subsequent stage.
Summary of the U.S. Food and Drug Administration's regulations for the research and development process underlying Medical Device manufacturing.
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Measures

Employ analogies of previous products to determine the potential success of new products. Must have similar market conditions to ensure accuracy. Also helpful in forecasting resource needs for development and production activities.
Literature Review
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Market opportunity criteria are typically employed for go/no-go decisions early in the process and again after launch. Criteria may include customer satisfaction, market acceptance, product quality and sales volume.
Survey of 77 manufacturing companies
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Obtain expert opinions to inform early go/ no-go decisions. Experts can provide insight regarding changing market conditions and potential consumer acceptance of products. However, managers must be aware of the potential for biases.
Literature Review
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Results from Process Quality Assessment Instrument and the Output Quality Assessment Instrument can provide essential information to support risk-based go/no-go decisions during NPD product life cycles.
Single subject case study
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Strategic fit criteria are primarily employed for go/no-go decisions at the concept definition stage. Criteria may include product quality, sales volume, project total cost, alignment with the firm's strategy, and window of opportunity.
Survey of 77 manufacturing companies
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Tips

An emphasis on generating information on customers’ existing and latent needs and the activities of competitors, and employ this in both idea generation and screening of ideas and concepts.
Survey. Manager implications drawn from results of study.
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Consider technical feasibility as the most important criteria when making the no go decision at this gate. Market potential and product uniqueness should also be evaluated at this point.
Survey of 166 managers from Dutch and UK companies. Seventy to seventy-five percent of companies surveyed used this criteria at the Idea Screening gate.
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Designing appropriate screening and evaluation “gates” to help prioritize projects and select winners for advancement. Preliminary up-front homework may include such activities as broad screening based on key market and technical capabilities and a broad financial assessment. At a second stage this may include refining product concepts and specifications ensuring stronger customer input and assessment, improved technical evaluation, and financial analysis.
Survey. Manager implications drawn from results of study.
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Equivocality — the presence of multiple and conflicting interpretations about a phenomenon, with higher levels of equivocality representing confusion and a poor understanding of the referenced context. In situations of high equivocality seek to integrate information about both supplier products and about customer requirements. In situations of low equivocality, seek to integrate information about supplier processes.
Survey.
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Identify internal individuals who have strong links to external information as they can play a key role in the screening of ideas as well as acquiring and sharing external information relevant to new product development.
Both the case study respondents and the literature suggest that gatekeepers are important sources of external information.
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Market opportunity criteria relate positively with project success at the initial screening, the market launch gate, and the post-launch review.
Survey. The relative importance of market opportunity correlates positively with the new product success at the initial screening(εGate1 = 0.40, p < 0.01), go-to-market decision (εGate3 = 0.23, p < 0.05), and post-launch review (εGate4 = 0.18,p < 0.10).
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Results show that placing importance on customer acceptance criteria correlates positively with project success at every stage of the process.
Survey. Customer acceptance dimension is positively associated with new product success at each and every of the review points (γGate1 = 0.26, p < 0.05; γGate2 = 0.30, p < 0.05; γGate3 = 0.24,p < 0.05; γGate4 = 0.26,p < 0.05).
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Strategic fit dimension stands out as a vital determinant of success in approving the new product idea.
Survey. Strategic fit dimension is positively associated with new product success at the initial screening (βGate1 = 0.33, p < 0.01).
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The initial screen should be coarse enough to allow potentially attractive ideas the chance to move on to the next stage of the process. Later screens are then used to eliminate ideas with poor chances of success prior to investments in development.
Survey of 314 new product projects.
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Secondary findings

Carriers

Organizations can deal with the tensions inherent in decision-making by focusing on meaning — the GOAL. The purpose or meaning of what the organization intends to accomplish can crate a vision that sets into motion the process through which multiple organizational interests become aligned.
Source: McGee, JV & Prusak, L (1993). In: Ho, K., Bloch, R.; Gondocz, T., Laprise, R., Perrier, L., Ryan, D., & et al. (2004)

Tips

Customer acceptance criteria are important at all gates, particularly after launch.
Source: Hart, et al., 2003. In: Carbonell-Foulquie, P., Munuera-Aleman, J. L., & Rodriguez-Escudero, A. I. (2004)

Utilize data envelopment analysis (DEA) to categorize R&D projects into subgroups (accept, consider further, and reject) for assisting managers in identifying potential projects for selection and execution.
Source: Linton et al. (2002). In: Swink, M., Talluri, S., & Pandejpong, T. (2006)