Case Study: Work-Out, New Product Development
This Case Study illustrates how Gagnon Associates used the GE Work-Out process to help a client optimize their new-product-development process:
The Company
A formerly high-flying, enviably profitable surgical products division of a major health care company. Makers of state-of-the-art, reusable and disposable devices for the rapidly-growing, least-invasive surgery market.
The Problem
Declining profits due to increased costs associated with a lack of discipline and lack of customer focus in screening new product ideas, initiating new-product development projects and managing the new-product life cycle in the post-introduction phase.
The Approach
Management enlists Gagnon Associates consulting support to lead the change effort to: a) assess new-product screening, new-product development, and post-product introduction processes and related issues, and b) reengineer these interrelated processes for improved efficiency/effectiveness.
Using the GE Work-Out methodology, four “boundaryless,” client teams are created, including representatives from finance, R&D, marketing, sales, purchasing and other functions. Three teams focus on one each of three previously mentioned processes. The fourth team analyzes a recent unsatisfactory surgical pump introduction for additional insights into deficiencies in the new-product introduction process.
Over four days of intense, highly-interactive, Work-Out sessions, parallel teams work both independently and in close coordination, as needed, to: a) define existing process deficiencies, b) reengineer processes, and c) address key process interrelationships. Throughout, Gagnon Associates catalyzes and facilitates the process by providing online, work-group leadership as well as “just-in-time” training and coaching on underlying process reengineering tools and techniques.
The Results
Teams completely reengineer new-product screening and new-product development processes and develop a more formal process for managing the post-introduction phases of the product life-cycle. On the fourth day of the Work-Out, the division’s management team reviews and approves the newly reengineered processes at the “Town Meeting” forum of the Work-Out, attended by all team members and moderated by Gagnon Associates consulting staff.
Management is so aligned with the newly-redesigned processes that it commits to testing approximately 120 new product-development projects currently in the pipeline against the new model and estimates that, as a result, some 40 to 50 resource-draining projects of questionable value to the customer will be eliminated.