Statistical Analysis of New Product Development (NPD) Cycle-time Data Including Applications of Results

Transcription

1 ASQ Vancouver 25th Anniversary Quality and Business Excellence Celebration Statistical Analysis of New Product Development (NPD) Cycle-time Data Including Applications of Results Steve Pratt, MEng., PE, CSSBB Director of Engineering, Alpha Technologies

2 Alpha Technologies Company Background Alpha is a Full Service Power Systems Provider to Multiple Markets Pratt Slide 1

3 Alpha s Power Solutions Products Power Modules Indoor Power Systems Outdoor Power Systems Pratt Slide 2

4 Phase-Gate New Product Development (NPD) Process Deliverables: Product Concept Business Case Preliminary Plan Deliverables: High-Level Design Requirements Complete Project Plan Deliverables: Design Outputs DFx Reviews Preliminary Test Reports Deliverables: Pilot Doc Pack Pilot Build Sales Forecasts Deliverables: Compliance Certifications Training MarCom docs Deliverables: Sustaining Eng Repair/Support Cost Reduction Phase 1 Concept Phase 2 Planning Phase 3 Development Phase 4 Qualification and Pre- Production Phase 5 LA and Production Ramp-up Phase 6 GA and MOL Pratt Slide 3

5 Concurrent Engineering via Cross- Functional Core Teams Supply Chain Quality Service Program Manager Manufacturing Product Management Engineering Pratt Slide 4

6 Motivation for Study Continuous Improvement: general perception that NPD takes too long lack of proper management of resources desire to establish performance benchmarks Pratt Slide 5

7 NPD Data Collected and Analyzed Schedule Data Recorded Dates: Start, Gate 1, Gate 2, Gate 3, Gate 4 (LA) & Gate 5 (GA) Program Plans: estimated time to LA, estimated time to GA Calculated: total time, time per phase, actual vs. plan Cost Data Timecard System: actual total effort (man-hours) Program Plans: estimated total effort Calculated: effort by function, effort by phase, remaining effort, actual vs. plan Pratt Slide 6

8 Tools Used in the Study Microsoft Excel and PowerPoint JMP Statistical Discovery Software Analyze-Distribution Platform: Calculations: Quantiles, Moments Plots: Histogram, Quantile Box, Normal Quantile Fit Distribution: Normal, Beta, Goodness of Fit Tests Fit Y by X Platform: Bivariate Analysis Fit Line, Fit Polynomial, Summary of Fit Fit Y by X Platform: One-way Analysis Calculations: Means and Standard Deviations Plots: Mean Diamonds Analysis of Variance (ANOVA) Fit Model Platform Calculations: Standard Least Squares, Summary of Fit, Effect Tests Plots: Actual by Predicted, Effect Leverage, Residual by Predicted Two-way ANOVA with interactions Pratt Slide 7

9 External Benchmarking Data PDMA Best Practices Research Provides industry-average NPD Cycle-Time based on complexity of programs: new-to-the world new-to-the firm next-gen improvements incremental improvements Pratt Slide 8

10 Average NPD Cycle-Time Benchmarking Source: Griffin A., Product development cycle time for business-to-business products, Industrial Marketing Management 2002;31: Pratt Slide 9

11 Planned vs. Actual NPD Cycle-Time Pratt Slide 10

12 ANOVA to Identify Significant Factors for Schedule Data Pratt Slide 11

13 ANOVA to Identify Significant Factors for Effort Data Pratt Slide 12

14 Categorizing NPD Programs into 9 Buckets Product Types: Modules Indoor Systems OSP (power modules, shelves, controllers) (rack-based systems, racks, distribution) (outside plant power/battery systems) Program Complexities: A major program requiring advanced development B completely new, but no advanced development C new with incremental development Pratt Slide 13

15 NPD Summary Data Schedule (Gate 2 to LA) Pratt Slide 14

16 NPD Summary Data Schedule (Gate 2 to GA) Pratt Slide 15

17 NPD Summary Data Effort (Total Development Hours) Pratt Slide 16

18 NPD Schedule & Effort Continuous Probability Distributions Pratt Slide 17

19 Additional Analyses plan vs. actual schedule and effort schedule and effort variance by phase time spent per phase total effort by function and phase default team size and composition Pratt Slide 18

20 Applications Better Estimating Pratt Slide 19

21 More Accurate Gate 2 Point Estimates of Schedule and Effort Previous estimates were: - subject to negotiation - overly optimistic and aggressive - rose-colored recollections of past Pratt Slide 20

22 Alpha s Historical Schedule Estimation Accuracy Median MRE = 44% Pratt Slide 21

23 NPD Schedule Point-Estimation via Historical Mean Values Median MRE = 19% Pratt Slide 22

24 Basic Schedule Equation Using Historical Mean Effort Values Median MRE = 21% Pratt Slide 23

25 Informal Comparisons Equation Using NPD Mean Values Median MRE = 20% Pratt Slide 24

26 Mean Magnitude of Relative Error Schedule Estimates Pratt Slide 25

27 Alpha s Historical Effort Estimation Accuracy Median MRE = 36% Pratt Slide 26

28 NPD Effort Point-Estimation via Historical Mean Values Median MRE = 18% Pratt Slide 27

29 Mean Magnitude of Relative Error Effort Estimates Pratt Slide 28

30 Determine the Cone of Uncertainty Pratt Slide 29

31 Cone of Uncertainty for NPD Project Estimates Pratt Slide 30

32 Cone of Uncertainty for NPD Project Schedule Data Pratt Slide 31

33 Cone of Uncertainty Applied to the 9 NPD Project Buckets Pratt Slide 32

34 Schedule Cone of Uncertainty Quantified by Program Phase Pratt Slide 33

35 Effort Cone of Uncertainty Quantified by Program Phase Pratt Slide 34

36 Effort Estimate Ranges by Program Phase Pratt Slide 35

37 Applications Top-Down Project Planning Pratt Slide 36

38 Creation of Top-Down Program Schedules Pratt Slide 37

39 NPD Time Spent per Phase Pratt Slide 38

40 How Much Time Should Be Spent on Planning? Pratt Slide 39

41 Applications Performance Goal Setting Pratt Slide 40

42 SMART Performance Improvement Goals An ideal performance improvement measure is: fact-based and statistically valid objective and quantifiable deterministic at the start of a program consistent across all types of programs an enabler of continuous improvement unambiguous and easy to calculate Pratt Slide 41

43 RSD: a Normalized Measure of Dispersion Pratt Slide 42

44 Program Scoring: RSD as Performance Unit-of-Measure Pratt Slide 43

45 2013 NPD Cycle-Time Performance Pratt Slide 44

46 Earned-Value Milestones to Score WIP NPD Programs Pratt Slide 45

47 Applications Better Project Selection Pratt Slide 46

48 Deterministic Business Case Analysis Figures of Merit Pratt Slide 47

49 Probabilistic Business Case Analysis Beta Distribution Pratt Slide 48

50 Monte Carlo Simulation of Cash Flows ($000) Trial #1 Trial #2 Trial #3 Trial #4 Trial #5000 NRE GM$ year GM$ year GM$ year NPV $556 $461 $681 $447 $621 Pratt Slide 49

51 Probability-Based Figures of Merit Pratt Slide 50

52 Applications Resource Management Pratt Slide 51

53 Default Team Size and Composition Effort divided by Schedule represents number of individuals Pratt Slide 52

54 Roadmap and Budget Planning Pratt Slide 53

55 Program Resource Management Engineering Pokémon board visual resource management tool 9 program type/complexity buckets default team size/composition Pratt Slide 54

56 NPD Programs are Represented by a Series of Magnetic Trays Pratt Slide 55

57 Program Trays Incorporate Default Team Size/Composition Pratt Slide 56

58 NPD Team Members are Represented by a Series of Cards Pratt Slide 57

59 Engineering Pokémon Additional Pieces Bonus Targets Add-on Resource Trays Ghost Cards Program Status Indicators Important Date Indicators Clear Plastic Overlays Pratt Slide 58

60 The Board in Action Pratt Slide 59

61 Resulting Improvements Pratt Slide 60

62 Improved New Product Development Better planning and management of resources more stability and focus / less chaos increased efficiency enhanced organizational understanding faster NPD cycle-time Pratt Slide 61

63 In Conclusion: It is never too late to start recording data! - even simple data such as key dates and time spent on activities can facilitate powerful analyses - capture data in real-time; don t rely on memory or post mortem activities Pratt Slide 62

64 Questions??? Pratt Slide 63

65 Thank You! STEVEN PRATT, MEng., PE Director of Engineering Pratt Slide 64