Developing Viable Products: The Role of Resource Management

Originally Published MDDI September/October 2003PRODUCT DEVELOPMENT INSIGHT Alice Shepherd

September 1, 2003

11 Min Read
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Originally Published MDDI September/October 2003

PRODUCT DEVELOPMENT INSIGHT

Alice Shepherd

Without good management of resources, a product development process may never reach completion. The sunken investment can affect a company's bottom line. Or, if a poorly managed process is completed, product launch can be delayed or return on investment (ROI) diminished. In the worst case, the resulting product may be as faulty as the process that created it, which, in healthcare, can have life-threatening results. Following common-sense guidelines for managing resources will keep the development process on track and produce safe, ergonomic, and viable products.

Proper Planning Pays

External components and resources must be managed successfully in order to produce a positive outcome for any development project. These include financial resources, time, market and user research, regulatory support and requirements, and a wide range of human resources from leadership to external expertise.

FDA's quality system regulation (QSR) dictates a product development protocol (PDP) that applies to both new products and product improvements. "FDA and ISO have done a good job of providing guidance for managing a project," says Bob Taylor, president of Alliant Enterprises (Kalamazoo, MI), a full-service medical design, development, manufacturing, and distribution company. "However, that does not minimize a company's responsibility in developing a solid plan. If you underestimate the project scope, do a poor job of understanding your customers' needs, or try to shortcut the process, it will jeopardize the outcome or delay the launch."

A well-written development plan schedules reviews and establishes milestones critical to meeting customer requirements while meeting budgets and delivery dates. A good plan keeps uncertainties to a minimum. "Engineers have a reputation for being too detail-oriented," says Jim Medsker, Alliant's vice president of R&D, "but the more detail you have up front, the more accurate your outcome will be." Any uncertainties that remain must be managed as a risk.

Vinny Rossitto, director of product development for Medrad (Indianola, PA), a worldwide producer of medical devices that enable and enhance the clarity of medical images in the human body, agrees. He says, "When we decide to carry a 'TBD' specification forward, it is always accounted for as part of our risk management process." Finally, it's critical that plan development be team-based. "Only a team effort can ensure that the project is coordinated in time and on time," declares Craig Wilhelm, president of Safety 1st Medical (Santa Ana, CA), a company that develops safety-based designs of disposable syringes and related medical products. He adds, "All companies, regardless of size, are judged by the quality of their products. There's only one way to get there: dot all the i's and cross all the t's."

The Voice of the Customer

Every product development project begins with a customer's unmet need or idea for creating a better product. That information becomes the first resource in the development process. Some companies, such as Medrad, undertake continuous marketing research regardless of the current project cycle. "We have resources assigned to gather data in clinical settings and through our networks of doctors, clinicians, and technicians," says Rossitto.

Alliant, on the other hand, networks with group purchasing organizations. "Some market research firms have misjudged market size by as much as 25%," says Taylor. "We prefer to focus on real market data in real hospitals."

Customer and user data remain a valuable resource throughout the project. "We hear the voice of the customer throughout the project. In addition, we continue to visit prospective customers and users, validating that our requirements are correct," says Rossitto.

Wilhelm agrees. He notes, "When we developed our Safe-1 safety syringe, we continually went back and refined the design based on customer input gathered through market research, focus groups, and clinical trials." Sometimes the customer may be the manufacturer. "On occasion, we do an internal development project based on our own idea," says Alliant's Taylor. "We'll treat ourselves as a customer."

Heeding the customer's voice throughout the project culminates in successful FDA-required design validation, which means establishing by objective evidence that device specifications conform to user needs and intended use(s).

Schedules and Budgets

While the latest software tools can facilitate management of time resources, much of scheduling is based on experience. It's best to make scheduling a team-based effort since project teams can contribute a wealth of experience. This also ensures everyone's ownership of the timeline.

The best timeline is one that is stretched but doable. "I call it realistically optimistic or realistically aggressive," says Safety 1st's engineering manager, Bob Gremel. He explains that if a manager always meets the schedule, it's not aggressive enough. On the other hand, when a vice president always cuts a realistic schedule in half, managers will build in that extra time to begin with. "That's not a successful relationship. You need honesty in the team, honesty with management, and realistic expectations from all," says Gremel.

Unless the customer specifies certain budgetary constraints, manufacturers also rely on prior experience in developing a bid and a budget. While an enterprise resource-planning system can be an important tool in the budgeting process, the dynamic nature of the resources makes anticipating instances of Murphy's Law a necessity. "You need to budget to allow for the unforeseen, while being realistically aggressive to ensure ROI," says Safety 1st's Wilhelm.

"One key factor that may cause budgets to grow is the effort needed to recover from underestimated project challenges, often entailing additional resources and unplanned schedule increases," says Medrad's Rossitto. Medrad's annual budgeting process determines resource needs and expenses based on the project portfolio objectives for the year, but that does not remain static. "Over the course of the year, we have resource allocation meetings where program managers and resource managers gain alignment on needs and performance. Typically, there's some fine-tuning each month," says Rossitto. "Recently, we have deployed some simple software tools to further streamline this process."

In cases where customers do not pay up front for development efforts, risk assessment and extremely careful management of financial resources are critical. The experience at Alliant is that many new products sound exciting, but they don't always pan out. Taylor explains that early in the process the company test-markets the ideas to see if they're widely accepted. That information becomes part of the project's financial risk assessment.

Champions and Project Managers

The most-dynamic resources to manage are the human kind. Constant change, a fact of life in corporate America, can be extremely disruptive to a project. Every project needs stable stakeholders and decision makers. Their number, however, should be limited for agility. For leadership, every project needs a champion and a project manager who are available and have time to fulfill their roles. Medrad, for example, has a new products strategic team that champions and oversees projects. "They're the corporate connection in the product development process," says Rossitto.

Project manager assignments are made on the basis of project size and importance. "Typically, one dedicated project manager is assigned to lead a project of significant scope, complexity, and criticality. Some project managers may manage multiple smaller projects, although we try to keep the number of smaller projects assigned to a manager to two, whenever possible," says Rossitto.

"A project manager has to be capable of handling more than one project and has to be given the tools to do so," says Safety 1st's Wilhelm. "The project manager's main task is not to play every instrument in the orchestra, but to act as the conductor. This means the individual has to be good at delegating." At Alliant, an overall project manager for a complex project is supported by team leaders who head groups in such areas as testing, sterility assurance, or development of certain components.

The Right Team

The precise makeup of a project management team is specific to each company and project. Usually, it is the project manager's responsibility to select qualified team members to address the following areas.

Qualifications. The planning process identifies the skill sets team members need to bring the appropriate resources to bear. Medrad ensures that the individuals assigned to product development projects have the right qualifications by using its functional managers as resource managers. "They have responsibility for functional performance excellence in general. In development projects," says Rossitto, "they recruit and develop needed talent, allocate resources, provide functional oversight, and are directly involved in design reviews and document reviews."

"A strong team needs a diverse skill set that can handle all the aspects of a project," says Alliant's Medsker. "But the number-one attribute we look for in any team member is communication skills. If a project engineer cannot communicate, the project won't become a reality."

Buy-in. While effective team members don't hesitate to challenge each other, they work together to accomplish goals. Buy-in at the outset prevents stoppages and delays later. "A team member who does not buy into the project schedule and budget will hinder the project's success," says Safety 1st's Gremel.

Availability and stability. While stable teams are essential for continuity and efficiency, they should remain a living group. For example, at Safety 1st, a package testing expert is not involved from the outset, but he or she contributes expertise later in the process.

Resources. Team members must also have accountability and authority. To expedite the development cycle, team members need to have the authority to make and enforce decisions for their respective departments. They also need resources to function effectively.

Size. Teams vary in size depending on the company, the project, and the stage of development. Medrad keeps the team small and senior-level at the exploratory stage of a project. When the company progresses into system design and planning, multiple, larger teams are assigned. Alliant's Medsker concurs. He believes that when a team is too big, it takes too much time to reach consensus. He acknowledges, however, that team members need leverage below them.

Besides ensuring a smooth process, a well-balanced and informed team easily overcomes the loss of a team member. "When one person leaves the orchestra," says Safety 1st's Wilhelm, "the remaining team members still know how to make music."

External Resources

Many companies rely on a variety of outside resources in the management of projects. These include temporary employees, consultants, and firms providing a variety of services, such as design, engineering, prototyping, and user-interaction research. Medrad, for example, utilizes temporary workers to adjust for special skills or capacity or rigorous needs. These make up about 10% of a typical project's staffing complement. "Contractor temps are subjected to similarly rigorous hiring processes as full-time employees. Quality employees mean quality products," says Rossitto.

Alliant finds that it derives substantial benefits from on-demand engineering. "Alliant Engineering and Design is a separate business unit providing the design and development portion of our business," says Alliant's Taylor. "We can tap into its wide array of capabilities and resources on an as-needed basis. A company does not need to have internal engineering resources to be a successful development company."

Alliant also benefits from strategic alliances with other companies. "We've negotiated advantageous pricing strategies with sole-source key suppliers in several areas, and we're integrated with their tooling development. This shortens our development cycle and lowers costs. Furthermore, they bring additional opportunities in terms of referrals."

Alliant has also formed a relationship with a minority-owned medical company of which it is part owner. "The company provides us with significant market access and facilitates the procurement of government contracts," says Taylor.

When selecting outside resources, it pays to make the time for a thorough evaluation of capabilities and costs. Once the outside companies are chosen, the manufacturer should include them as part of the team for the duration of the project. There's little sense in hiring a partner one is not comfortable with and then tying its hands with a lack of information.

Achieving Alignment

Finally, successful resource management means bringing all the resources together. Medrad, for example, aligns its resource management with its performance management. "Corporate objectives for the year flow down into departments and into individuals' performance objectives and projects for the year," says Rossitto. "This closely aligns project direction and individual direction for greater efficiency." "Furthermore," he says, "project managers and functional managers work hard on a day-to-day basis to remain in sync on annual objectives and priorities in a relatively dynamic product-development environment."

Because success ultimately depends on people getting along, a regular communication process is critical to achieving alignment. Whether it's established through a weekly teleconference or a written status report, the relationship among constituents has to be managed with clear communication. "In addition to old-fashioned meetings," says Alliant's Medsker, "we utilize a Web teleconferencing program and a centrally located, Web-based team site that allows people to store, retrieve, and manage data for their projects."

A design history file is another invaluable tool for alignment and communication. "Every input, every step of the process is documented," says Taylor. "If a key individual leaves the company, no technical information is lost."

Succeeding in a Global Market

When quality stretches across the entire development process, from resources to management, high-quality products result. A competent product-development process begins and ends with good management of internal and external resources.

Recently, design firms have become valuable instruments in the toolkits of medical device and diagnostic imaging companies. When selecting a design firm or any other outside resource, companies should take the time to do the necessary homework. They should look for a company with integrity, creativity, substantial industry experience, trustworthy people, and a solid process. As part of a development team, the right design resource can enhance product success in the global marketplace.

Alice Shepherd is a Southern California–based business-to-business journalist who specializes in technology- and management-related topics.

Copyright ©2003 Medical Device & Diagnostic Industry

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