Today’s Time to Market
Although new product development is a key competitive capability for manufacturers worldwide, many companies are unable to launch a new product on a timely basis — consistently. Our book, Developing Products in Half the Time, has helped management, over the past decade, cut its new product development cycle times dramatically. Leading new product development and project managers are now pursuing two routes to even higher effectiveness:
Some are using our more advanced new product development and project management tools to obtain larger gains or cope with a more complex environment, such as dispersed project teams.
Some are recognizing that uncertainty in their development cycle times is more damaging than a longer but predictable cycle time.
Toward Project Risk Management
Predictability has led to our new book on project risk management, Proactive Risk Management. Consider a company that has cut its average cycle time in half — from 24 months to 12 months:
This is a remarkable achievement, obtained by employing effective cross-functional teams, an established but flexible process, voice of the customer input, multigenerational designs, and similar means. However, this firm still has the same development cycle-time variation as before.
Although a project is faster to market on average, it remains just as uncertain as to project completion date. This uncertainty (illustrated in light blue above) is due to unexposed risk in the project, and it requires a new set of tools, namely effective project risk management.
Schedule risk is most harmful when you are serving a seasonal market, when many of your sales result from an annual trade show, or when you are supplying new components designed or built into your customer’s new product.
However, making schedules more reliable (applying risk management to the schedule) is only one possible objective of project risk management. You could also apply risk management techniques to tame project budgets, cost of goods sold (COGS), product quality, or another project objective of your choice.