The Development Funnel
The aim of any product or process development project is to
take an idea from concept to reality by converging to a specific
product that can meet a market need in an economical, manufacturable
form.
The overall development process starts with a broad range
of inputs and gradually refines and selects from among them,
creating a handful of formal development projects that can be
pushed to rapid completion and introduction. This notion can
be illustrated as a converging funnel (above).
In its simplest form, the development funnel provides a graphic
structure for thinking about the generation and screening of
alternative development options, and combining a subset of these
into a product concept. A variety of different product and process
ideas enter the funnel for investigation, but only a fraction
become part of a full-fledged development project.
Managing the development funnel involves three very different
tasks or challenges. The first is to widen the mouth of the funnel
- the organisation must expand its knowledge base and access
to information in order to increase the number of new product
and new process ideas. The second challenge is to narrow the
funnel neck - ideas generated must be screened and resources
focused on the most attractive opportunities.
The goal is not just to apply limited resources to selected
projects with the highest expected payoff, but to create a portfolio
of projects that will meet the business objectives of the firm
while enhancing the firm's strategic ability to carry out future
projects. The third challenge is to ensure that the selected
projects deliver on the objectives anticipated when the project
was approved.
Two Dominant Models of the Development Funnel
These models are broad patterns showing the kinds of choices
firms have to make.
Model 1 (above) is common in larger , technology intensive
firms who rely primarily on their Research and Development group
to generate ideas for technologies, products and processes.
Encouragement is given to generate many more ideas than will
be applied, and these are then screened in various ways and at
various stages.
Model 2 (above) is a top down model common in small, entrepreneurial
start-ups, in which the firm bets on a single project. In both
illustrations the circles represent new products; shading indicates
the extent of development, and size the scale of the project.
Reference
- Wheelwright. S. C. and Clark. K. B., 1992, Revolutionizing
Product Development, The Free Press, New York.
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