3.1 Background
The commissioner of this thesis is a Southwestern Finnish food company. The company has decades of experience in producing and developing new products for the domestic markets, but also for the Nordic and European markets. Company has recognized recurring problems in their product development process which cause challenges for achieving the project goals and keeping the timelines. Challenges for the project management are caused by diversity, simultaneity and complexity of the projects. It is typical that product development projects are different from each other. Totally new Business to Customer (B2C) brand product’s development, private label (PL) products development, Business to Business (B2B) products development and partial changes in recipe and/or packaging design projects are different processes to each other. That is one of the reasons why the case company have found it difficult to depict the processes.
On an annual basis the case company launches 2 to 3 totally new brand products for the B2C-markets, but at the same time working with several smaller projects for PL, B2B and recipe/design change. All of these projects employ most of the departments in the company including sales, marketing, R&D, procurement, supply chain, production, quality, finance and logistics.
Since the project tasks and dependencies between them, tasks durations, responsibilities and information flows were not fully recognized, creating working environment with seamless cooperation between functions was found more than difficult.
Missing and uncentralized information combined with unclear roles and responsibilities in projects, where amount of handovers is measured in dozens, can cause missed deadlines and deliverables.
Above described problems increase unnecessary costs in product development projects, but may also decrease customer satisfaction due to delays in launch schedule and problems in quality management. Well-being of employees may also decline under unclear working environment.
Before initiating this thesis, company was already two years ago started a development project to recognize and depict the NPD-process, developing new better project management tools to gather and share information, and manage the execution of the project tasks. When starting with this thesis project, company’s development group (process development manager, marketing manager and procurement manager) had already depicted the product development process tasks and responsibilities. There was still demand for more accurate information about task dependencies, durations, information flow, and over-all validation for the process.
3.2 Research objectives
Commissioner company’s process development manager introduced the NPD-development project in January 2021 for the author of this thesis. The author of this thesis expressed the interest in applying lean methods for this project. Process development manager has years of experience in lean and continuous improvement projects and he agreed that lean methods could offer great insights for improving the process efficiency and information flow. Like Bradley (2015) highlighted, lean is ultimately a method to reduce process lead time, value stream map and waste identification are great tools for this. Initial assumption was that the most significant waste in the company’s NPD-process is waiting, and mapping the value stream to a visual form would reveal the bottle necks of the process and the clearest areas for development.
The objective of this research was to gather data to draw a value stream map for NPD-process and also study how well the information is flowing through the NPD-process tasks and functions. Another objective was to compile a task-specific communication plan to foster effective cross-functional communication to prevent idle time between tasks. Focus of this thesis was in new B2C brand product development process.
3.3 Research methods
The case study of this thesis was executed with semistructured interviews.
Semistructured interview method was selected because author of this thesis and company’s development group knew what kind of information was needed.
structured interview is based on predefined open-ended questions. Semi-structured interviews are used when there is some knowledge about the topics or issues under investigation, but more accurate details are still needed. This kind of interview works best when researcher needs to gather facts, attitudes or opinions, gather data on topics where interviewer is relatively certain that relevant issues have been identified, but still wants to provide an opportunity for interviewee to raise new issues that are important to them through open-ended questions. Semi-structured interviews are good way to gather data also when it is not possible to observe behaviour directly because of timing, hazards, privacy, or other factors. Information can be gathered about tasks, task flows, and workflow diagrams specially when data is complex and probing, and clarification of answers is required. (Wilson 2014, p. 24−25.)
The interview was used to gather qualitative and quantitative information of the NPD-process. Interview questions are listed in appendix 1, and all questions were asked repeatedly for all participant’s responsible tasks.
Interview questions were conducted from SIPOC analysis and RACI-matrix methods.
SIPOC (supplier-input-process-output-customer) analysis can be used to develop the important points in the value stream. By completing this type of analysis in as much detail as possible, it will help to provide a clearer understanding of the various interctions as the value stream maps (VSM) are created. SIPOC analysis is good when information of the process owner, start and finish of the process, key inputs and requirements for the process, key outputs and requirements for the customer are needed. SIPOC also distinguishes boundaries (process inputs and process ouputs) of the process. (Smart 2013, p. 16-17; Taghizadegan 2014, p. 148.)
RACI (Responsible, Accountable, Consulted, Informed) matrix is used for defining individuals or groups that must be involved with given activity or task.
Responsible is the individual or group that is considered responsible doing the actual work of the activity or task.
Accountable should be one individual directing everything that must happen within the given activity or task.
Consulted are people or departments who usually provide data and information to the activity or task in question. They may also be subject matter experts possessing
spezialized knowledge or skills that are essential to the activity or task’s execution. For some activities or tasks, execution cannot be completed without consultation.
Informed are individuals or departments that will typically be affected by the activity or task, but whose input is not required. One-way communication, usually from the accountable individual is assumed and understood.
The RACI matrix is an invaluable tool for clearly laying out who need to be involved for each activity and task, and specifying that person’s level of involvement. At least high-level activities across the enterprise must first be defined to build and implement RACI matrix. (Esposito, Rogers 2013, p. 127−130.)
Project managers or functions itself have not allocated hours in different projects, which caused challenge for getting the information how projects have proceeded in the past, and how long it takes to complete single tasks. According to companys process development group, new brand product development process takes averegaly 12 months from initiation to launch, so it was also considered that observational study was not reasonable method for this study.
Most of the interview research questions were very specific, so wanted to give interviewees the opportunity to highlight their own ideas of task-specific areas of development and problems. Answers to the last interview question “Would you like to bring up some problems or development ideas in connection with this task?” were grouped with affinity diagram method. Affinity diagram is a tool to gather large amounts of data in the form of ideas, opinions or issues and organize them into groupings based on their relationships. Affinity diagram is performed by a group or team. The idea is to combine collected opinions and insights of group of people with knowledge about certain issue. First step in creating affinity diagram is to state the problem to be solved clearly.
Second step is to generate and collect ideas that are related to the problem. Collected ideas should be displayed so that all the team members have access to the information.
After that the team members physically sort the idea cards into groups by grouping into similar ideas or themes. The process stops when all the ideas are grouped and no more cards are circulated. If there are some ideas wich do not fit into any group, those should be left alone under separate headers. Next step is to create header cards for the groups using sentence that clearly explains the mening to everyone. Last step is to draw the finished affinity diagram. The diagram is created by writing the problem statement at the
top of the diagram and placing headercards at the top of the groups. (Sahay 2017, p.
87−90.)
3.4 Results
The objective of this thesis was to gather information about the commissioner companys product development process, to validate and visualize the process description, and gather data about the process efficiency for value stream map. Another objective was to study how the information flows through the activities and functional departments in the product development process.
The first interviewee was product development manager, who was interviewed in March 10 and 25 in 2021 for tasks related to R&D activities. The tasks were R&D resource assessment, legislation and patent clearance, risk assessment, scheduling, recipe development and pilot trials, material- and ingredient order for factory trial, factory trial, self life monitoring test, product information documentation, approval of packaging material print, delivery of recipe for production manager, and updating recipe and quality documents. Product development manager brought up some issues in the first phase of NPD process considering prioritization of the projects, and variables in project briefs comprehensiveness. Factory trial results were not reviewed systematically, but it was considered to be important to go through the result with production, quality, procurement and project management departments.
Project manager was interviewed in April 9 and 16, 2021 with following tasks: project folder creation, brief for R&D team, Project schedule plan, kick-off meeting, risk assessment, preliminary sales forecasts, feasilbility assessment, transition to development-phase, decision to factory trial, acceptance of final recipe, updating project documentation, and transition to launch-phase. Project manager raised a challenge that different functions may not have enough time or resources for risk assessment in the initiation phase of a project. It was also considerer that maintenance department should be informed and involved much earlier in complex projects.
Brand managers interview was on April 16, 2021. Brand manager was interviewed from following tasks: consumer test, recipe and packaging approval, design brief for advertising agency, finished packaging design, delivering final product information data for design agency. Brand managers tasks were relatively straightforward and
independent work. In the interview there did not raise any significant problems or development areas.
Supply Chain Coordinator was interviewed in April 23, 2021. Supply Chain Coordinator’s tasks were: material inventory, entry of item numbers for packaging material and design system, informing procurement about approved packaging materials, and item numbers, material orders, and confirmation of delivery schedule and inspection of existing stock.
Supply Chain Coordinator highlighted the tight schedule and problems in receiving needed inputs.
Production assistant was interviewed in April 23, 2021. Production assistant has an important role right before the first production of a new product. Production assistant was interviewed for following tasks: delivering pictures of new packaging materials to packaging machines, packaging line’s scale programming, informing maintenance department of new product, and updating recipe and self life time documentations.
Production assistant experienced that her role was sometimes forgot, and she had to collect information from here and there in several projects. Information reached production assistant sometimes too late. Production assistant’s tasks could be performed in 2 hours, but if the information was inadequate, tasks could take even 5 days until ready.
Supply chain specialist’s interview was on April 26, 2021 with following tasks: creation of pallet stacking pattern, approval of packaging material print, and establishing material item numbers to ERP (enterprise resource planning)-system. Typical problem with his tasks were that he did not receive all needed information and inputs. Some product information documents were inadequate, and he needed to find out the information from different sources.
Production Manager was interviewed in April 28, 2021. Production Manager’s tasks were: assessment of production investment needs, confirmed investments, recipe and raw material update for manufacturing system, recipe and raw material update for ERP system, updating work instructions, and first production. Production Manager raised issues with too rigid production systems, but also problems in receiving necessary inputs for the tasks.
Product information specialist was interviewed in April 29, 2021 with following tasks:
Creating product information file, entering product informations to grocery trades information system, health claim label applications, and creating end product item
number to the ERP- system. Some of product information specialists tasks delayed due to missing inputs or approval round in Europe. One raised problem concerned an old product information Excel-form which did not fully serve its purpose.
Production planner was interviewed on April 30, 2021. He’s tasks in NPD process were:
route updates in ERP-system, reception of incoming new materials and checking the certificates of authenticity, first production order and production plan. He experienced that product item number was typically established too late, which caused unnecessary delay for the projects. He also raised the issue with new incoming materials, which often arrive too late in relation to the 1st production.
Procurement manager was interviewed in April 22, May 5 and June 5, 2021 with following tasks: risk assessment, sourcing, material order for factory trial, supplier documents approval, new materials delivery contract and entering contract prices into the ERP-system. Procurement manager wished more co-operation between the procurement departments of different countries, in particularly with market data. Also more attention should be paid to information sharing between internal stakeholders. Procurement manager missed more efficient working hours. Some routine tasks were considered as a waste of resource.
Discussion with quality assurance specialist took place in May 5, 2021. Interview considered following tasks: review and approval of new materials, material sample delivery for marketing/sales departments, taking counter-sample from the received material, releasing material in production system and releasing risk raw material in production system. The raised problems considered the procedure of new incoming material’s acceptance. Warehouse employees delivered new materials in indefinable bags to quality department’s work tables. This caused unnecessary workload and delays for material approvement, because quality department did not have any information about the delivered materials. There was not any tracking or schedule list for new or changing packaging material projects.
Product- and promotion manager was interviewed on May 4 and 17, 2021 with following tasks: New project folder to the design bank, uploading materials to the design bank, label check, delivery of design material for printing house and approval of new materials.
Product- and promotion manager was missing a tracking matrix for incoming new materials, and immediate information of delivered materials.
Logistics manager’s interview was performed on May 7, 2021. Logistics manager’s task was: transportation test execution. Logistics manager missed systematicity in this task, and more accurate description about the test objectives.
Quality manager’s interviews were performed on May 18 and 28, 2021. Quality manager’s tasks in NPD process are: risk assessment, pre-HACCP, new supplier documents approval, raw material/supplier/packaging material/process HACCP, final product HACCP, approval of packaging material print, label check and updating quality documents. Quality manager missed more systematicity for the NPD process, but also improvement in schedule and information flow. Quality manager also expressed concern that employees do not have enough time to engage in risk assessment. There were also ambiguities about task interdependencies, like what tasks and information should be confirmed before HACCP-meetings.
Senior controller was interviewed on June 28, 2021 with following tasks: profitability calculation, product valuation, and item number release in ERP-system. In senior controller’s view, target pricing should also be included in R&D-departments work.
Controller also raised an issues with monitoring progress of NPD projects, information flow and responsibilities.
All of the NPD-process tasks were listed into Excel matrix in choronological order with the information about the department and the responsible employee. Task specific value-added ratios (VAR-%) were calculated by dividing active working time with total duration of the task. Interdependencies of the tasks were validated with supplier/customer and input/output data from the interview. Gantt chart was used to illustrate the project schedule, phases and task dependency relationships. In the Gantt chart, colours represents different departments. The commissioner company’s new product development process follows the general funnel framework with phase and gate-model.
Phases are: concept, feasibility, development, implementation and launch. The gates of these phases are visualized to the Gantt chart with orange columns, exerpt of the value stream map in figure 9.
Figure 9. Exerpt of the value stream map.
Total task durations and active working hours were based on estimates provided by the respondents. Based on the responses, the duration of the whole process was 663 days.
The feasibility phase takes 138 days, development phase 378 days, implementation phase 139 days, and launch phase 8 days. Estimated active working time for the whole process was 430 hours. Task specific VAR-% varied from 0,4 % to 50,0 %, the mean was 7,0 %. The VAR-% for the whole process was 8,1 %. These results indicate that non value-added (NVA) -time is major in most tasks. The average task duration was 14 days, and average active working time only 5 hours.
The reasons for NVA-times were categorised in eleven types, the category distribution in the whole process is in figure 10.
Figure 10. Distribution of reasons for NVA-times in the whole process.
Major NVA-time consist of waiting for the inputs from an external or internal stakeholders, but also R&D related pilot trials and self life monitoring. Current Covid-19-pandemic situation and telecommuting does not appear to cause a significant delay in the overall process. In figure 11. the NVA time is distributed by different departments. R&D department causes third of the NVA-time in the whole process. Marketing, procurement and production departments causes delays too, but the share of other departments is not significant.
Figure 11. Distribution of departmental NVA-times in the whole process.
The critical path
The critical path of the process was also defined to the Gantt chart by colouring the critical path tasks with white lattice pattern. Critical path is the absolute shortest time that a project can be completed, and the longest interrelated set of tasks from finish to start.
It is unlikely to stay on top of every task during the course of the project, but focusing on keeping the critical path tasks on schedule the project will meet the scheduled dead lines.
(Tomczyk 2005, p. 108−109.)
When looking only the critical path value stream map results in figure 12, the overall situation looks quite different. R&D related pilot test cycles and self monitoring tests take 51,3 % of the critical paths NVA-time. It is also important to notice that the share of
When looking only the critical path value stream map results in figure 12, the overall situation looks quite different. R&D related pilot test cycles and self monitoring tests take 51,3 % of the critical paths NVA-time. It is also important to notice that the share of