Product Development in industrial manufacturing includes the design, engineering and manufacturing of products according to the specific requirements of customers. This comprises either stand-alone products or parts of an assembly as in the OEM business. This type of business can be found in many industries, such as Automotive, Aerospace & Defense, Chemistry and others.
The development of products for the mass market is a different type of business, which is covered in our project management in R&D section.
The key topics in portfolio and project management for product development are:
Microsoft PPM and Planisware PPM are proven, commonly used solutions to centrally manage product development projects. Stage gate models can be implemented and supported by workflows and special gate milestones. In some cases, the entire schedule must be driven by the SOP milestone, which is supported nicely by these PPM solutions.
One key requirement of customers in product development is the integration of the acquisition and proposal phase with high-level schedules and cost forecasts, which are used for customer quotations and will be converted to operational plans once the customer's order is in.
Collaboration functionalities, e.g. based on Microsoft SharePoint, are becoming more and more important for this business area. They can facilitate information exchange between customers and the project teams in very effectively.
Planning and controlling project budgets is a key requirement in product development. Integrating the PPM solution with the ERP system enables a role-based approach: project managers calculate forecasts for costs and revenues in Project Server, which is subsequently transferred to the ERP system. This information can be used as an input for quotations during the proposal stage as well as for budget control and change requests along with budget amendments during project implementation.
Depending on the importance and the amount of internal costs to the total costs of the development of products, time tracking can be an important feature as well. The most common approach is to record time in Project Server / Project Online and post the costs of internal work to the ERP system.
For project managers in product development, it is important to manage and control the cost status of their projects. Thus, actual costs, commitments and budget availability must be imported from the ERP system to their PPM tool. In cases of product manufacturing, assembly or erection at the site of the customer, as for example in plant engineering or in aerospace & defense, materials management must also be considered in the PPM solution. The integration with the ERP system can help with the scheduling of the requisition dates of material components.
Middleware products can help integrate Microsoft PPM, SharePoint, Planisware and other systems with ERP systems seamlessly and at reasonable cost.
More about TPG PSLink®.
One of the biggest challenges in the product development line of business is to ensure the availability of resources when committing to new customer projects. This resource-oriented portfolio management exercise during the project selection and proposal stage is more important than portfolio selection by business drivers.
In the context or portfolio management, product development for customers is different from classic R&D business.
Microsoft Project Server / Project Online in combination with an add-on can help with resource-based portfolio decisions in a very transparent and convenient way.
More about TPG PortfolioManager.
One requirement that can be found quite often in product development is of organizational nature: in many cases, project teams are built around customers (very common in the OEM business).
While most of the project activities, including design and engineering, are managed in these customer-oriented project teams, some other work packages (e.g. prototype manufacturing) have to be managed by separate departments. The departments will receive requests by several projects, will plan activities for all these projects in detail and deliver results to each of them.
Another requirement is around program management: in many product development projects, the complexity and interdependence of the deliverables requires the creation of programs consisting of several projects. Top-down and bottom-up program communication will help to set the program targets for single projects, tracking the key milestones and deliverables of the single projects and gaining visibility.
Microsoft Project Server / Project Online along with proven add-ons can help with managing project-to-department communications in multi-project interactions as well as the management of programs.