New York University, Spring 2003

Developing New Product and Services

Final assignment

Lucia Franchi

Reckitt Benckiser R&D Manager

My Objective

Get Senior Management agreement to my proposal of improvement to the current

Stage Gate process used by Reckitt Benckiser

Agenda

– Reckitt Benckiser background

– Review of the current process

– Weakness of current process

– New process description

– Next steps

"Passionately delivering better solutions

in household cleaning and health & personal care

for the ultimate purpose of creating shareholder value.”

Reckitt BenckiserCompany Vision

•Above average Net Revenue Growth by focusing on high growth brands

•Innovation - % NPD vs. Line extensions

•Speed to Market & quality of execution

Key points of the strategy

Current process

Second screen

First screen

Feasibility LaunchDevelopment Post launch evaluation

Weaknesses of current process

• Pre-development activities– only low amount of resources are allowed

for those activities

• No criteria for idea screening before the development phase– there is no process in place to

screen/evaluate ideas

If we improved the process

• Increasing our success rate for NPD of 10% = $40M

• Increasing speed to profitability 1 Mo for a single NPD = $ 2M

• Reducing quality issues on the market– Priceless!

New Product Development process

• The “New! Improved” Product Development process will allow us to:– Focus on “The right projects” and

streamline our Project Portfolio– Improve our profitability by enancing our

chances of success with NPD– Improve our Speed to Market

Strategydefinition

Second screen

Third screen

Idea screen Scoping

Discovery stage

How to improve product development process

Launch

Building the business case

Development Post launch evaluation

Fourth screen

Description of stage gate process

What is a Gate? – Decision points: the project moves forward,

gets killed or put on hold (I.e. moves back one stage in the process)

– If the criteria to be met/key deliverables for each stage are specified upfront, no involvement from senior management is required.

Strategy definition

Industry analysis

Companyanalysis

Areas of strategic focus

Scenario generation

Opportunities

- unmet needs

- expansion plans

- voids

Strategy Definition

• This stage should include the definition of key deliverables and minimum criteria from Senior management– Financial objectives for the project

Discovery Stage

• This stage is a defined, proactive idea generation and capture system.

• Ideas can come from several sources– fundamental research, contract research organization and consultants– technical publications, universities, inventors– competitors– consumer intimacy (unarticulated consumer needs)– internal creativity potential (innovation session, unsolicited ideas)

Idea collector(CMM)

Idea screen

Idea handling process in the Discovery stage

Ideas

Idea bank (intranet)

Other categories

Periodic review

Next Stage

Idea screen gate

Fit with business strategy Degree of product advantage Ability to leverage core

competencies (tech., mktg) Market attractiveness Company policies (regulatory, legal)

With a poorly defined product and

project, R&D engineering and design

people waste considerable time seeking definition, often recycling back several times as the project parameters change

(R. Cooper, “Winning at new Products”)

“What’s in” for RB?

• The new process will allow for better focus of the R&D resources

– a 2M NR project requires on average 120 mandays

– a 50M NR project requires 400 mandays

Which one has the better ROI?

“What’s in” for RB?

Scoping stage

• Preliminary market assessment– Internet, library search, focus groups, concept test

• Preliminary technical assessment– development and manufacturing feasibility– timings, costs– legal, regulatory restrictions– expected roadblocks

Second screen

Fit with business strategy Degree of product advantage Technical and marketing feasibility Market attractiveness/early

financials Company policies(regulatory, legal)

Quality of execution of the predevelopment steps is closely tied to product financial performance. Successful products have about 75% more person days devoted to the predevelopment activities than do failures (R. Cooper, “Winning at new Products”)

“What’s in” for RB?

Building the business case

• Market research– consumer needs, wants and preferences

• Technical appraisal– lab work (first formulation effort)– manufacturing, sourcing, capex assessment– legal, patent, regulatory assessment

• Business and financial analysis

• “Post Mortem” analysis:– Project “john smith”. Lack of proper

predevelopment work (market analysis) caused a + 8 Mo slippage of the project ($ 50M loss)

“What’s in” for RB?

Third screen

Product/packaging definition, key deliverables (consumer data)

Manufacturing and sourcing strategy Regulatory/legal strategy Qualification plan Financial analysis (“must meet” criteria) Project milestone plan Global Roll out plans

Development Stage

• Formula, Packaging development

• Manufacturing process (including QC)

• Consumer qualification (BASES II test)

• Marketing plan (including sales and distribution)

Development Stage

Development activities are handled in parallel(rugby model)

Forth screen*

Project financials (including volumes) Marketing plan Good for sale (R&D, manufacturing) Regulatory, legal clearance

*This stage can be conditional

Post launch review

• Performance vs. marketing plan

• On going quality, production quality data (includes consumer complaints)

• Quality of planning and execution of the project

Next Steps

• Get agreement from top management to test the process: finetune model if needed

• Use Project “John Smith” as pilot for the new process

• Additional “food for thoughts”:– Stage Gate process can be used as tool

for technology platforms– impact of parallel dev. on speed to profit