Clarity on PLM

What I learned this week … is that manufacturers (and others) are as passionate and focused on new product development and innovation as ever. I had the opportunity to act as master of ceremonies (emcee JB in the house!) for Aberdeen Group‘s Leadership in Product Development Summit. We had a great lineup of speakers from some great companies that shared their experience in developing new products.

The Discussion

The topic ranged from how to generate new product ideas to how companies can use simulation to validate designs in the digital stages before product development and engineering decisions are locked in. Cindy Jutras, perhaps the most senior analyst at Aberdeen being one of only two research fellows, kicked it off. Cindy gave great insight from Aberdeen’s research that helped companies understand the urgency and priority of improving product development. The research showed that developing new products is a top-of-mind concern for companies across industries.

I followed Cindy’s talk by explaining that in addition to innovative products, early findings from my new upcoming research on NPD (I am publishing the report as an adjunct research fellow of Aberdeen) indicate that companies are aiming to improve the timeliness of product launch and addressing increased price competition. The research I presented turned the corner from the challenges to the actions companies are taking to address them. The early findings from my upcoming Aberdeen benchmark indicate that Best-in-Class companies are targeting improvements to product development across the product development cycle. Leading companies are planning to improve processes starting from generating new ideas, through detailed design and regulatory compliance, all the way to releasing products to manufacturing. The presentations from manufacturers such as Ingersoll Rand, Pratt & Whitney Rocketdyne, iRobot and service companies including Nielson and Wachovia (on product development focus, interestingly enough) reinforced the breadth of product development areas that can be improved, and gave practical examples of how to improve them.

The Group – Diverse and Engaged

One of the things that I enjoyed most was that although the conference was focused primarily on manufacturing companies (who develop physical products), we had speakers and attendees from software and service companies as well. It was great to see the ideas crossing back and forth between industries! The conference was kicked off by Doug Williams of zipcar. For those that don’t know, zipcar is an innovative company that provides cars on demand for their members. Just like Apple, zipcar’s business includes a service component (the cars), a software component (the website and reservation systems), and hardware (the devices in the car). Doug is the executive responsible for engineering for the company, and discussed how they had transitioned from traditional “waterfall” development processes to an agile product development process. What I found fascinating is that even manufacturers that don’t have software in their products (those are getting fewer by the day, it seems with the level of “smart” products with embedded software) could relate to the concept of agile. In fact, the concepts are similar and can help promote a lean product development process. In the same way, Doug Post (it was also the conference of the “three Dougs”) from the DoD talk about validating products early in the lifecycle using simulation technology had the attention of many that had much simpler products than jet fighters or naval vessels.

Implications for Manufacturers

What are my takeaways for manufacturers? First, focus on improving product development across all phases of the lifecycle. Second, take the time to learn from others. It was great to see people getting new ideas and insights from their peers across industries. Thank you to Aberdeen Group for including me in your event! And thank you to sponsors Accept, Ansys, Brightidea, Microsoft, PTC, Adobe, Cognistreamer, and Kalypso for your support of the event (and your participation, too).

So those are some of my thoughts from the conference, I hope you found them interesting. It is clearly not a summary of the whole conference, but instead a couple of my key takeaways. There will be a more comprehensive webcast to wrap things up, keep an eye on the Tech-Clarity events page for new product development, innovation, and PLM-related topics.

What I learned this week … came from Bill Poston at Kalypso in his reply to a Business Week article titled “Innovation Interrupted – The Failed Promise of Innovation in the U.S.”

BusinessWeek June Cover

Bill’s commentary really got me thinking about a really fundamental question. Do companies have too few product innovation ideas, or are we just not good at turning those ideas into profitable products? It also made me ask a separate question, “is this really a U.S. -centric issue or is this a global issue?”

Overview

The original article, written by economist Michael Mandel, appeared in BusinessWeek in June. In the article, Michael makes some strong assertions that  the U.S. has not been as innovative over the last decade as it has been in the past, and goes further to point to this lack of innovation is a contributor to the current U.S. financial trouble. He points out a number of areas that held promise in the late 1990′s that failed to live up to market expectations, including:

• Biotech
• Alternative energy
• MEMS (microelectromechanical systems)

Michael explains that “the commercial impact of most of those breakthroughs fell far short of expectations,” and points out the information technology (IT) market as the shining star of innovation over the last decade. What Bill picked up on was what I believe is the story within the story. In Bill’s words, “the problem is more often in the basic fundamentals of new product development and commercialization.” Mr. Mandel supports this as well by saying “Many of the technological high hope of 1998, it turns out, were simply delayed” and “if the current rate of commercialization picks up” the U.S. Economy may recover more quickly. Bill comes down clearly on his viewpoint, saying that “We do not believe that we lack the ability to deliver innovation nor that success is necessarily dependent on brilliant insights or strategies” but that companies “need to focus on the fundamentals and make better business decisions.”

My Perspective

Is this an innovation problem, or a product pipeline problem? Or am I just splitting hairs, and the definition of “innovation” should end with “to make a profit?” I think if I looked through my archives I would find that I define profitability as a core part of my definition of innovation. To me, this story (and Bill’s response) is what I hear from manufacturers everywhere I turn:

• We have enough ideas, we just don’t know how to sort through them to find the valuable ones
• We don’t have a process to effectively take innovation and turn it into profitable, commercial products

Digging deeper, we would probably hear:

• We have too much junk in our portfolio / product pipeline
• Our product pipeline is overloaded
• We can’t move new product development projects through the pipeline fast enough
• We don’t kill projects soon enough

What does all of this mean? Like Bill says, most companies are missing the fundamentals. There are very good, proven best practices that a lot of manufacturers have not adopted. Many companies face the same problems. They are solvable. A process for innovation is important, but a process to commercialize that innovation is a fundamental requirement for a commercial business.

Implications for Manufacturers?

The implications? I will keep this brief. Focus on innovation, but don’t just focus on coming up with great ideas. Focus on new product development and (like the tagline of my old company Sequencia) turning product innovation into profits! Sounds simple, but there is a lot of work to do and it is time to get started.

So that is what I learned this week, I hope you found it interesting. Let me know what you think.