Is the most recent new product idea worth developing?
Is your new product ready to ship to customers?
Is it time to retire your aging product?
Without a product life cycle process, it is hard to know. Recall that product management is defined as the coordination of all the activities required to ensure a product’s commercial success. It is the product life cycle process that describes those activities. A product life cycle process describes the phases of a product’s existence, from its beginnings as an idea to its final withdrawal from the market. The product development program must meet each phase’s success criteria before advancing to the next phase. This life-phase framework with gated decision-making improves productivity, reduces risk, lowers cost, and increases quality. All of these are critical ingredients in a recipe for successful products. The four-phase process shown in the figure below describes the product life cycle for capital equipment.
As a product manager, you will spend most of your energy in the product development, production, and end-of-life phases. Idea development may also command your attention when the idea falls within your market and product scope of responsibility. Ideas that represent completely new businesses or products typically land on the to-do list of a corporate or new-business development function.
The objective of the idea development phase is to create possibilities for new products. Sometimes this phase is referred to as the “fuzzy front end.” It is called that because there is a lot of uncertainty in this phase. While there may be a sense that a market opportunity exists, you may not know the exact market definition or product requirements. Similarly, the technical path is often unknown or unproven. In practice, many more new ideas fail to graduate to product development than succeed. This high failure rate reflects the stochastic nature of the new idea development process.
The idea development phase can be thought of as three sub-phases. See the figure below.
An idea is any suggestion for a new product line. Once an idea is deemed attractive enough for further investigation, it enters the market and technology assessment sub-phase. The market assessment seeks to answer questions like the following:
- Does a market exist that is worth investigating?
- Who are the potential buyers?
- What is the total available market?
- What is the growth rate?
- What is the competitive landscape?
- What are the barriers to entry?
- What are the opportunities to create competitive advantage and unique value?
- What are the potential financial returns?
Whereas the technology assessment seeks to answer questions like these:
- What is the product concept?
- What is the technical approach?
- Are inventions required?
- What are the technical risks?
- What is the intellectual property landscape?
- What is the development effort required?
If the assessment concludes that the idea remains attractive, but inventions are in the path of success, the process proceeds to the technical feasibility and viability demonstration sub-phase. Feasibility achievement means that key capabilities of the technology have been demonstrated. Viability achievement means that the key capabilities of the technology have been demonstrated against specific market needs.
Product development begins when a viable market opportunity is identified, and the technical path for capitalizing on it is largely known. You get to the product development starting line one of two ways. The first is from a new product idea that graduates from the idea development phase. The other is from an existing product line for which improvements are needed to meet customer needs and ensure competitiveness. The product development process is made up of five sub-phases. See the figure below.
It is in the definition sub-phase that the market requirements document and the product development plan are produced. In the design sub-phase, product design is completed. In verification, a complete system is built and tested for the first time. This subphase is often referred to as the “alpha phase.” The validation sub-phase is often referred to as the beta phase. Here, a pre-production system is shipped to a customer to validate its performance in the customer’s environment. A successful product performance validation leads to the new product’s launch into production. Launch deliverables include product specifications, pricing, final bill of materials, manufacturing procedures, and field service capability.
A product spends most of its life in the production phase. Here the product team’s focus is on creating and satisfying demand profitably. For product management, that means ensuring robust, responsive sales support capability. For engineering, that means staying on top of the sustaining engineering backlog. For manufacturing, it means securing sufficient production capacity and keeping costs low. And for service, it means ensuring customers’ equipment runs as advertised.
End of Life
All good things must come to an end. For products, life may end to make room for a replacement product, or it might come to an end because they can no longer be manufactured or serviced. A capital equipment product’s end of life typically occurs in two steps. See the figure below.
Ahead of the end of production, a capital equipment company will usually provide its customers an opportunity for a last-time buy. Similarly, ample advance notice is usually before the end of service and support to give customers time to adjust their operations as needed.