Most product development teams fail to meet their full potential. They consume more resources than is necessary to test, evaluate, refine their products and struggle to maximize customer and shareholder value. Typical projects take too long and deliver business results that are less than expected. At the same time, many lean organizations are seeing great results on the manufacturing floor. Lean Manufacturing is becoming widely adopted. Some organizations are dabbling with Lean Product Development, but it isn’t certain what the right approach is for improving product development.

A study by the Product Development and Management Association (PDMA) found failure rates varied among industries, ranging from 35 percent for healthcare to 49 percent for consumer goods. According to Harvard Business School professor Clayton Christensen, each year more than 30,000 new consumer products are launched and 80% of them fail.

Business leaders often don’t know how to transform their traditional product development practices or are too intimidated to upset the apple cart and try something new. There is widespread variation in product development and project management process maturity across traditional hardware manufacturing. Maybe less so in software application development.

Small and frequent product development iterations seems counter intuitive.  Just as one piece flow does in the manufacturing world. Yet time and again we see faster, better, less wasteful production with small batch. Product Development leaders are often comfortable with their current PD management process. They don’t recognize that it’s the process that’s the problem.

In our experience software developers have widely embraced Design Thinking, Lean Start Up and Agile techniques which are better able to get consumer feedback earlier in the development cycle than with traditional waterfall stage gate methods. While hardware developers seem to be reluctant or slower to embrace lean development techniques.

Companies large and small must continually innovate otherwise they will become isolated from their customers and the markets in which they operate. To be successful, a company can’t allow their  Product Development practices to stagnate.

Lessons learned from software development can be applied to hardware.  Agile is about being flexible and responding rapidly to changes in feedback, requirements, and market needs. In order to do that, Lean Thinking is necessary, as its principles help promote the mentality (conditions, culture, insights) needed to successfully bring new products, soft and hard, to market

The lean principles can be applied to almost any
process:

1. Specify value as defined by the ultimate customer
2. Identify the Value Stream and eliminate waste
3. Make value flow at the pull of the customer
4. Involve and empower the people
5. Continuously pursue perfection

The software community seems to have figured out small batch, short interval, value creating processes.  The hardware community might take a few lessons from some of the contemporary software best practices. Small batch with frequent iteration allows for ‘reality checks’ and fast knowledge capture early in the development cycle where it’s easier and less wasteful to adjust the product design. Agile uses incremental, iterative work sequences known as sprints. Workload is managed with work-in-process kanban boards. Priorities are set in periodic team scrums. Many small learning cycles allow the developers to converge on better solutions. Traditional product development on the other hand is a series of gate reviews, redesign and rework

 Agile Principles:

• Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
• Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.
• Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
• Business people and developers must work together daily throughout the project.
• Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
• The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
• Working software is the primary measure of progress.
• Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
• Continuous attention to technical excellence and good design enhances agility.
• Simplicity, the art of maximizing the amount of work not done, is essential.
• The best architectures, requirements, and designs emerge from self-organizing teams.
• At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Applying contemporary lean agile software principles and techniques to hardware development will make product development faster, better, more valuable. As a leader you can begin by having a vision of what your product development can become and then admit to the gaps you have. Then take the next step and add some agile principles and techniques to your product development toolbox.