Stage Gate Systems

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Stage Gate Systems

• Exxon- PIP Product Innovation Process
• HP- Phased Review Process
• Guiness- NaviGate
• others 3M, Polaroid, Kodak,Rohm and
  Haas,ICI,Mobil,Dow Chemical, Asahi Chemical, PG,
  SC JOhnson

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Typical 2nd Generation Stage-Gate Process
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Stages

• Set of parallel activities
• undertaken by a cross-functional team
• gathers information for the next gate

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Gates

• A go/kill decision point with
• a set of required deliverables
• pre defined evaluation criteria
• defined outputs go/kill/recycle

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Stage 1 Discovery

• RD
• lead user analysis
• strategic planning exercises
• gaps and opportunities in the market
• disruptions

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Gate 1 Idea screen- Gentle screen

• handful of must-meet and should-meet criteria
• strategic alignment
• project feasibility
• opportunity size and attractiveness
• product advantage
• fit to resources and skills and policies

• Exxons PIP
• Strategic fit
• Market attractiveness
• Technical feasibility
• Killer variables

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Stage 2 Scoping

• Preliminary market assessment
• Preliminary technical assessment

• lt 1 month
• 10-20 person-days of effort

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Gate 2 Second Screen

• Original set of must-meet and should-meet
  criteria
• new criteria
• sales force
• customer reaction
• killer variable presence
• simple financial assessment- payback period

• Reckitt Colman now Reckitt-Benckiser
• Does the initial evidence suggest that the
  concept can win in the marketplace?

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3rd Generation Stage-Gate Process
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Stage 2 Building the Business Case or the
critical homework stage

• Market investigations and research studies
• Detailed technical analysis
• Detailed financial analysis
• Outcome a business case for the project
• Product definition
• Project justification
• Detailed project plan

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Gate 3 Go to development

• Last point before heavy spending
• Process audit of Stage 2
• Project evaluation on established criteria
• Financial emphasis
• Review and approval of
• Development plan
• Preliminary operations and marketing plan
• Designation of full team with authority

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Stage 3 Development

• Lab tests, in-house tests, alpha tests
• Deliverables lab-tested product prototype

• In parallel marketing and operations
• Deliverables
• detailed test plans, launch plans
• Production/operations plans including facilities
  requirements

Deliverables Updated financial analysis
resolution of regulatory, legal and patent issues
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Gate 4 Go to testing

• Review of development work and process
• Match to original definition is checked
• Review financial data
• Approval of test or validation plans
• Review of detailed marketing and operations plans
  for executability

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Stage 4 Testing and Validation

• Validity of
• Product
• Production process
• Customer acceptance
• Project economics

• In-house product tests
• User or field product trials
• Trial, limited production or pilot production
• Pre-test market, test market or trial sell
• Revised business and financial analysis

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Gate 5 Go to launch

• Final kill point
• Audit of process in stage 4
• Review operations and marketing plans for
  implementation at the next stage

• Criteria expected financial return and
  appropriateness of launch and start-up operations
  plans

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Stage 5 Launch

• Implementation, fine tuning, success

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Post-launch review

• 6-19 months from launch
• Change status from new product to regular product
• Disband NP team
• Review project and product performance
• Revenues
• Costs
• Expenditures
• Profits
• Timing
• Learning

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What the Stage Gate Process is not

• Functional, phased review
• Rigid
• Bureaucratic
• Project management

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3rd Generation Stage-Gate systems
Flexibility RCBs triage system change, fast-track, major
Fuzzy gates Conditional go-ahead subject to new information
Fluidity Overlapping activities
Focus Portfolio thinking on focus
Facilitation Key master,process manager, gate meister, process keeper
Forever green- adaptive International Papers web based gates RCBs suck-in externally developed new ideas
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The first stages
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Summary of Stage 1 Actions
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Gate 3 Deliverables
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Stage Gates 1,2,3 Must-Meet Criteria
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Stage Gate 3 Should-Meet Criteria