Academic journal article Research-Technology Management

Agile-Stage-Gate for Manufacturers: Changing the Way New Products Are Developed: Integrating Agile Project Management Methods into a Stage-Gate System Offers Both Opportunities and Challenges

Academic journal article Research-Technology Management

Agile-Stage-Gate for Manufacturers: Changing the Way New Products Are Developed: Integrating Agile Project Management Methods into a Stage-Gate System Offers Both Opportunities and Challenges

Article excerpt

The pace of change in many markets and technologies has reached a critical point--product cycles have accelerated to the point where traditional new-product development methods no longer work. Today's gating processes are too linear and rigid, inhibiting proactive response to change during the development process. As a result, a handful of leading manufacturers in North America and in Europe, among them Honeywell, LEGO Group, Tetra Pak, GE, Chamberlain, and Danfoss, have begun to experiment with integrating elements of Agile development processes into their existing gating systems. The result is a hybrid model--Agile-Stage-Gate--that promises to yield the best of both systems. This new model has the advantage of providing the company's existing stage-and-gate system, which provides focus, structure, and control, with the benefits of an Agile approach and mindset, namely speed, agility, and productivity.

The benefits of Agile development methods in the software world--flexibility, productivity, speed--have been widely studied and documented (see, for example, Begel and Nagappan 2007). Software development firms were the first to combine Agile with Stage-Gate, beginning in the early 2000s (Boehm and Turner 2004; Karlstrom and Runeson 2005). Those successes attracted the attention of physical product manufacturers seeking ways to accelerate their product development processes; Sommer and colleagues (2015) describe the new model and some early, mostly positive experiments with it.

These early adopters now have sufficient experience to offer some insights, not only on the results that might be achieved but also--and perhaps most importantly--on the challenges that must be addressed in integrating Agile into a Stage-Gate system. A case study looking at the experience of six major firms provides perspective on how the Agile-Stage-Gate model works, what challenges and opportunities it presents, and how others might proceed in adopting (or adapting) the model.

Evolving from Stage-Gate to Agile-Stage-Gate

Stage-Gate describes a system in which the product development process--from idea generation to market launch--is broken into discrete stages, each with defined tasks and prescribed deliverables (Cooper 1988, 2017). Gates that precede each stage mark Go/Kill or investment decision points. The method has been widely adopted by manufacturing firms to drive new-product projects to market.

Traditional gating systems, however, are no longer suitable for many of today's businesses--from food to construction equipment (Cooper 2014; Ettlie and Elsenbach 2007; Karlstrom and Runeson 2005; Lenfle and Loch 2010; Leon, Farris, and Letens 2013). In traditional Stage-Gate systems, when a project is approved to begin heavy development work, the proposed product is clearly defined and a plan of action with associated costs is approved. But in many projects, important elements of that product definition and action plan change as development work proceeds: customers' needs evolve, market requirements change, and plans must change with them. The traditional gating model does not allow for this change--the product definition and development plan are locked in--creating change management issues downstream. Gating systems are simply too linear and too rigid to adapt effectively to the unstable and rapidly changing markets and customer needs that drive today's new products.

To address the need for a more fluid, adaptable system, some leading-edge manufacturing companies are looking to Agile, a development process that emerged from the software industry, where it has delivered positive results since the 1990s (Rigby, Sutherland, and Takeuchi 2016). The Agile Manifesto, the impetus for Agile product development practices, calls for a development process that values collaboration, response to change, and a working product (Beck et al. 2001). Agile development addresses these values by supporting adaptive planning and evolutionary delivery through a time-boxed, iterative approach that emphasizes rapid delivery of incremental components of a product and frequent communication among team members and with stakeholders (see "Agile Basics," right). …

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