Intelligent Manufacturing € April € 1996 € Vol. 2 € No. 4

How To Be Best-In-Class

What distinguishes the best companies from all the rest? The leaders are more apt to define the product with suppliers, to creatively align development efforts with strategic goals, and to define various aspects of the product in multiple ways, according to a survey of product development practices conducted by Product Development Consulting Inc. (PDC) (Boston, Mass.) and the Management Roundtable.

Best-in-class companies collaborate with suppliers on product development more frequently and consistently than other companies, according to PDC's survey. Specifically, the best-in-class companies are more than twice as likely to:

have a supplier permanently on-site for product development collaboration;
share strategic and product planning with suppliers; and
solicit suppliers' input on product plans.

"Best-in-class companies are moving beyond traditional internal boundaries, actually bringing suppliers into the definition process," reported John Carter, a PDC principal. "But even though these companies are far ahead in supplier partnering practices, there's still ample room for improvement."

The survey also indicated that aligning development efforts with strategic goals is well worth the investment in time, effort and dollars. "Companies are under increasing pressure to provide greater return on fewer R&D dollars," said Sheila Mello, another PDC principal. "To maximize investment, they need to take a hard look at their objectives, competition, market and current technology offerings before moving ahead with development."

Furthermore, how companies deal with such issues as project endorsement by upper management, user requirements, product positioning and strategic alignment significantly influence the chances of product success. "Understanding customer needs is a good starting point for any development organization looking to improve," Mello observed.

Best-in-class companies cancel markedly fewer projects in full-scale development, according to PDC. They accomplish this in part by doing their homework up front. Those companies that cancel projects typically do so because they failed to identify customer requirements at the outset. Unanticipated technical difficulties also are a prime contributor to failed projects. Best-in-class companies understand the value of being prepared, which more often than not translates into successful product launches.

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