Managing and improving product development

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The effectiveness of product development in a company is determined by the people responsible for product development from the directors to the project managers; by firstly their basic philosophy and understanding, secondly their abilities and thirdly the clear recognition of their roles.

Product development combines people, their individual knowledge and skills. How they collaborate to produce the company's abilities in product development is the basis for product success or failure. Product development needs knowledge and skills in all areas of the company - R&D, marketing, production and finance, and in particular top management. This is why product development management is complex and often becomes swamped in the management for today. Companies appear to have great difficulty in deciding where to place product development management - in marketing, R&D, production or as a separate department; over the years product development management is apt to be reorganised several times because of problems that have been identified. This is no bad thing since product development, because of its nature, is always changing, going in different directions as technology and consumers change. But the core product development knowledge needs to be kept intact and allowed to grow through the product development projects.

It is important to recognise that there are different layers of product development management, layers that are interacting with the management of the functional departments and indeed are sometimes the management of the functional departments. The key issues are in two areas:

1. Management needs in the vertical responsibility from directors to project managers.

2. Interaction between these management people and the functional departments.

The product development activity in a large company can be very complex. In the small company, the director, chief executive, product development manager and project leader can be one person. But in all companies it is important that the product development strategy, product development programme, PD Process and the overall aims of the programme and the individual projects are clearly defined. Then everyone understands their place in the jigsaw, the outcomes expected from their work and the decision-making process.

The other key issue in management is the interrelationship between product development and the functional areas of R&D, marketing, production, distribution, and finance. In looking at the typical activities occurring throughout the product development process, it is clear that the support of these groups is essential. Both the inputs needed for product development and the outcomes from product development are related to the functional departments, which are very much involved in making and marketing today's products (Stockwell, 1985). There are inputs such as product mix strategy and sales forecasting from marketing, product trials and quality assurance development from production, predicted returns on investment from finance, and outputs such as market plan from marketing, production schedule from production and net profit forecast from finance.

In Chapter 6, the basic needs in product development management and the people who are responsible for making product development both effective and efficient - producing the optimum product at the right time and within budget -are outlined. The PD Process is the focus - design the PD Process; establish the key decision points and the decision makers; establish outcomes, budgets and constraints; organise and manage. The chapter ends with a discussion on managing and organising product development in the company, and collaborating with outside agencies.

Chapter 7 illustrates product development at different points in the food system in four case studies. Management of product development is different among primary production, processing of food ingredients, manufacturing and food service, because of the different scientific and technological bases, the different needs of the target markets and the time for development. It is important to understand that there is a common product development framework but the activities can be different.

Chapter 8 studies the searching for best practice in product development and in particular the improvement of R&D management by benchmarking. The changes that are occurring in food product development and what may happen in the future are discussed.

Reference

STOCKWELL, D. (1985) Managing product development as a business activity, an address to the ASEAN Food Conference, Manila, Philippines.

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