PD-Trak Blog for Project Portfolio Management
A typical stage / phase-gate product development process would start with an initial Investigation or Exploration phase where data is gathered about the market opportunity for a new product, the product and development project is defined, and an initial business case is prepared. When this is done, an initial gate review is typically conducted. This is where the development pipeline funnel significantly narrows as less opportune projects are not approved to move forward. So if 30% of projects are typically killed at this point or subsequent gates, projects representing 142% of the pipeline capacity need to be initiated for investigation.
When these projects are started and are then approved after the first gate review, resources may not be available to continue work on these projects in a subsequent Feasibility or Concept Development phase. A cardinal rule of pipeline management is to avoid overloading the pipeline because there are only three possibilities (or some combination of these possibilities):
- Shortcuts are taken with the development process
- Work takes longer to perform than planned and there are delays
- Significant overtime is required
The recommended approach is to place the approved projects “on hold” until resources are freed up from completing projects to begin work on an approved project. The Project Management Office or a project administrator needs to monitor the project pipeline and determine when resources become available to begin these approved projects. Further, lean product development practices suggest that a regular cadence be established with the release of projects. Unfortunately, this is a step that is often missing in many companies resulting in overloaded pipelines and “bunching” of projects causing rolling bottlenecks. A tool like PD-Trak is required to monitor resources and determine when resources are freeing up to move forward with approved projects.
Many of the clients we work with and companies that we talk to rank time-to-market or meeting development schedules highly important – often the second most important priority after developing a product that meets customer requirements. Yet we generally see product development pipelines that are overloaded. When people are overloaded there are only three possible results.
- Task completion and product schedules are delayed. The effects of this result are obvious – this undermines the time-to-market objective.
- Shortcuts are taken in the process and the intended level of effort with the task. The effects of this are often hidden or not fully understood by management. For example a design engineer may take a known and proven design approach rather than consider design alternatives, one of which might be more optimal. Or rigorous analysis of a design e.g., FEA/CFD/thermal analysis, FMEA, etc., may not be done. Design for manufacturability analysis and collaboration may not be done.
- Overtime is required. This seems like a no cost option to management, but are your personnel going to sustain this extra effort day in and day out? What happens when one of the risk contingencies is realized? Where are the resources to address these issues?
Further project planning often loads people in projects based on 40 hours per week. Even if this planning excludes holidays and vacation time, do your people perform productive project work 40 hours per week over the course of the year? What about sick time, administrative time, training, emails, support for issues that arise on past products, etc.? When you factor in holidays, vacations, sick time, administration time, etc., the effective availability to support projects is typically around 80% of the total time over the course of a year. Even further, queuing theory indicates that as utilization increases towards 100%, the time to perform tasks in a queue rises asymptotically.
So management, get realistic with your pipeline planning if time-to-market is important to your organization. Consider realistic planning factors and utilization levels. Avoid overloading your pipeline. And use tools like PD-Trak (Home) plan and manage your project pipeline and resources.