DISCUSSION PAPER BENCHMARKING BEST PRACTICES TO IMPROVE PRODUCT DEVELOPMENT By Kenneth Crow DRM Associates

INTRODUCTION In this era of "faster, cheaper and better", companies are focusing on improving the product development process. New business strategies, new organizational approaches, new business processes and new enabling technology are being used by many forward-thinking companies to continually improve their product development process. How does a company keep up with these fastpaced changes? Some of the improvement opportunities are obvious to personnel within an organization. Other opportunities may not be obvious, or there are so many things to do that it becomes a question of where to start. Management will typically have a number of questions on the their minds: How do we compare with the rest of industry? With the best in industry? What are our strengths and weaknesses? Is our development process aligned with our strategic objectives? What improvements need to be made? Where do we start? What are our priorities given the resources that we have available? What benefits can we expect? How can we figure this out quickly so that we can get started? ASSESSMENT No organization can improve all aspects of product development at once. The implementation of product development best practices can best be viewed as a journey (continuing process improvement) rather than a destination. Priorities need to be developed for implementing the best practices of product development. The organization must start by understanding what practices should be adopted (what is possible). Next it must consider its strategic direction (e.g., time-to-market, being the low cost producer, the most innovative producer, the highest quality/reliability producer, flexibility to respond to new products and markets) given its market, its objectives, and its competitors. Next, the organization must assess its strengths and weaknesses. By focusing on the "gap" between where a company is and where it needs to be, priorities can be set for making improvements. This is represented in below.

Several years ago, we led a consortium to identify product development and time-to-market best practices. These practices were derived from: corporate visits, consulting assignments, conferences, workshops and meetings, literature review, telephone discussions, technology vendors, the Navy Best Manufacturing Program, the Software Engineering Institute's (SEI) Capability Maturity Models (CMM), the AT&T Handbook series, and other corporate handbooks. These practices are continually being

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updated as new best practices emerge and are identified and as current best practices become standard practice and are no longer noteworthy. These practices were organized into a framework with five major dimensions: strategy, organization, process, design optimization and technology and twenty-eight best practice categories (equivalent to Process Areas in CMM Terminology). In excess of 270 best practices have been identified (see Integrated Product Development Body of Knowledge). These are described in a commercially-available benchmarking tool, the Product Development Best Practices and Assessment (PDBPA) software. This software tool is used to provide an understanding of these best practices, to enable rapid and inexpensive benchmarking, and to support business process improvement. These best practices are organized into the following categories for summarization and reporting purposes:

Most of these best practices are universal - they apply to the development of any kind of product in any type and size of company. Some of these best practices are relevant to only certain types of products or business environments. For example, maintainability/serviceability practices don't apply to consumable products, design for manufacturability isn't as important with one-off product such as a satellite, practices related to electrical design or embedded software are not relevant to a purely mechanical product, etc. Therefore, an importance weighting is used to tailor the importance of the best practice to each company's products and business environment. Associated with each of these best practices is a set of questions to aid in this assessment process. A company's product development activities are evaluated with respect to each of these best practices, and a quantitative rating is developed. This evaluation is supported by a verbal description of the characteristics of the organization's product development approach as it evolves toward a world class approach to IPD. An example of a worksheet for this evaluation process is as follows:

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STRATEGIC ALIGNMENT To be successful, an organization must have a basis for competitive advantage. While an organization needs to do a reasonable job in various competitive dimensions, it can not be all things to all people. The enterprise must focus on one or two dimensions of competition to truly excel and be successful. The following are the competitive dimensions typically associated with product development: Time-to market Low development cost Low cost producer/low cost, high value products Innovation and product performance Qualities, reliability, ease of use, serviceability, etc. Agility(responsive, active, quick)

Many best practices are related to one or more of these competitive dimensions or strategies. If the practice is strongly related to one of these strategies, it can be described as a strategic lever. For example, strategic levers related to time-to-market include:

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2.7 Undertake a new development project only when resources are available. Overloading projects stretches out projects, delaying time-to-market. Resources can be focused on higher priority projects underway. The next highest priority project can be undertaken when the resources become available to support it as expeditiously as possible. 5.4 Fully commit to the project and rapidly staff to the plan to get off to a good start. 8.9 Emphasize design re-use of modules, parts, cores, cells, part models, requirements documents, plans, technical documentation, simulation models, fixtures, tooling, etc. to minimize development cost and schedule. 11.8 Tightly manage requirements to minimize changes that will require redesign cycles. Consider addressing new requirements in the next release or next generation product. 13.4 Get suppliers involved early to collaborate and utilize their ideas and suggestions and to develop a design that is compatible with their process capabilities. 23.7 Use product data management systems to both control product data and streamline the process through workflow capabilities. This speeds and controls the flow of information. 24.4 Use electronic mock-up and assembly modeling capabilities rather than building physical mock-ups. 25.1 Emphasize early analysis and simulation to minimize build and test cycles with physical hardware. By looking at the level of performance related to these strategic levers, a competitive strategy is implied. The question becomes whether this implied strategy is in agreement with the intended strategy. One way to view the overall implied strategy is to look at the weighted average of the performance ratings for the best practices that are strategic levers associated with each of six competitive dimensions or strategies. A high weighted average performance rating for a particular strategic dimension compared with the weighted average performance ratings in other strategic dimensions suggests that the product development process has been strategically aligned to that strategic dimension. Ideally, the rankings of these weighted average performance ratings should be aligned with the intended strategy priorities. If not, the product development process needs to be improved by applying the best practices that are strategic levers for the desired strategy. ANALYSIS AND IMPROVEMENT In addition to the performance rating against each best practice and for each higher level category, an overall performance rating is developed by again assigning a weighting factor to each category based on their importance given the nature of the business and the product. This performance rating, when compared to that of other companies, gives an indication of the urgency of improving the development process. Gap analysis is then employed to focus attention on the improvement opportunities that will yield the highest payoff. The categories with high weighting factors (indicating their importance to your product development success) and relatively low performance ratings yield the largest gaps between what is important to the organization and what it does well. These are the areas that require the highest priority in improving the development process and will likely have the largest payoff. On the other hand, categories with low importance ratings and relatively high performance ratings indicate low priority areas not deserving as much attention.

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The strategic alignment analysis and gap analysis become the basis for identifying implementation actions and priorities. The concept is to pick a manageable number of improvement initiatives to focus your attention on. Once the large gap categories are identified, an examination of the individual best practices with lower performance ratings will help identify the specific areas that require attention. In addition, identify and focus on the strategic levers that have low performance ratings and that are associated with the organization's intended strategy. Therefore, as a prerequisite, executive management must define a vision for product development and determine the competitive strategy as a basis for aligning product development practices and developing implementation priorities. This analysis becomes the basis for developing priorities and, eventually, an improvement or implementation plan. In addition, the expertise of an internal manager or outside consultant very knowledgeable in integrated product development concepts and improvement strategies can aid in identifying priorities. This expertise is important because of natural relationships and sequences with the implementation and use of these best practices. For example, moving to a digital product model as a replacement for paper drawings is not realistic until there is a certain level of CAD capability, workstation access to the model, product data management system, and network infrastructure in place. Experience and good project planning is needed to translate these high priority improvement needs into specific actions, responsibilities, schedules and assignments. Personnel resources to support implementation or improvement activities are required. If the overall performance rating is low, a critical mass of personnel within the organization needs to develop an understanding of the concepts of IPD. These people can then refine the implementation plan, perform various implementation activities, be involved in defining the desired way to develop new products based on IPD approaches, and assist in communicating the desired approach to the rest of the organization. The implementation plan should begin with the low cost activities that yield high payoffs. In the absence of any other indications of strengths and weaknesses, we believe these initial actions should include forming product development teams as the basis for product development, establishing effective product/project planning and resource management, and utilizing the quality function deployment (QFD) methodology as a method for capturing and understanding the voice of the customer. As these steps begin to generate savings, the organization can move on to other IPD elements and self-fund the initiative. There are two elements of implementation planning that must be addressed. The first one that has been described is the implementation plan for the enterprise activities. It covers all the activities to create the IPD environment for all development projects the activities that cannot cost effectively be done by an individual development project. This would include defining a streamlined product development process, developing manufacturability guidelines, installing appropriate CAD/CAE/CAM and product data management system tools, etc. The second plan element, the project deployment plan, the IPD actions that will be taken to support an individual product development project. This plan would be developed with the participation of the member of management responsible for the development effort, e.g., engineering manager, program manager, product line manager, etc. This plan would address the team structure required to support the project, a staffing plan supporting early involvement, the training requirements, facilities and collocation implications, the technical resources required (workstations, software, etc.), the use of techniques such as quality function deployment, supplier/subcontractor involvement, the development methodology, establishment of project policies and strategies, etc. SUMMARY Many organizations take totally different directions in the evolution of their product development process. While some of these differences are the result of legitimate differences in their business strategy, business environment, organization, and the nature of their products, a frequent problem is the lack of a

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common framework of the best practices of product development. With extensive investment of time, an organization could develop the broad, internal expertise necessary to produce an effective improvement plan for product development. This would require significant training, attendance at conferences, and extensive benchmarking. This structured Product Development Best Practices and Assessment methodology based on these 270 best practices of product development provides an inexpensive alternative to identifying strengths and weaknesses relative to a common framework of an extensive set of best practices. This enables an organization to more quickly develop an action plan for improving the development process DRM Associates developed this assessment methodology and led the consortium that identified these best practices. The best practices resulted from numerous company visits and attendance at over 100 conferences and workshops on integrated product development. For further information on the Product Development Assessment and our Product Development Best Practices and Assessment Software, contact Kenneth Crow. BENCHMARKING PRODUCT DEVELOPMENT Many companies develop an inward focus (that is, "not invented here", "we've always done it this way", etc.) that limits their opportunities to improve. Benchmarking is a technique to measure an organization against other organizations and identify opportunities and approaches to improve. David Kearns, the Chief Executive Officer of the Xerox Corporation, states that "Benchmarking is the continuous process of measuring products, services, and practices against the toughest competitors or those recognized as industry leaders." Benchmarking relates to product development by providing an external perspective on opportunities to improve products, technology, manufacturing and support processes, the product development process, and engineering practices. The starting point is to develop a willingness to scrutinize an organization operations and products and be willing to compare them with other organizations without being defensive. This straight-forward methodology consists of the following steps: Plan what to benchmark Understand the internal processes Determine companies to evaluate(both Products and Processes) Gather and analyze external data Identify performance gaps and reasons Communicate and gain concurrence Develop an action plan Implement improvements and monitor

The external information gathering phase has been approached in a variety of ways: product examination/reverse engineering to understand technology and manufacturing processes, in-depth assessment of a single benchmark partner, less in-depth data gathering/surveys of a larger number of partners. These comparative evaluations are not necessarily made with an organization in the company's same industry segment, but with an organization that performs a similar function. Benchmarking involves identifying relative performance differences and gaining an understanding of the reasons that contribute to a higher level of comparative performance. Once this understanding has been obtained, the organization needs to translate it into appropriate actions to improve its own performance. An organization does not necessarily want to copy approaches taken by other organizations, because they may not be appropriate for its business environment, products, market, or culture.

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PRODUCT DEVELOPMENT ASSESSMENT DRM Associate's Product Development Assessment (PDA) methodology is used benchmark and assess your organization's development process against 260 best practices for product development. This assessment serves as a benchmark and identifies the highest impact opportunities for further improvement. This overall methodology is described in Benchmarking Best Practices to Improve Product Development. The assessment would typically take one to three weeks depending upon the organization's size and the complexity of the development process. Prior to conducting the assessment, we would review your organization chart and any other descriptive material you provide and discuss your product development environment by phone. Based on this, we would typically conduct four to ten days of interviews, walk-through's, and process reviews. Twenty-eight product development dimensions are addressed: Business and Product Strategy Product and Pipeline Management Technology Management Management and Leadership Early Involvement Product Development Teams Organizational Environment Process Management Process Improvement Understanding the Customer Requirements and Specifications Management Development Process Integration Supplier/Subcontractor Integration Product Launch Configuration Management Design Assurance Project & Resource Management Design for Manufacturability Product Cost Management Robust Design Integrated Test Design and Program Design for Operation and Support Product Data Design Automation Simulation and Analysis Computer-Aided Manufacturing Support Technology Knowledge Management

At the conclusion of this review, we will sit down with you and other members of your management team to offer specific recommendations as well as debrief you using our assessment forms. Where necessary, we would explain certain IPD concepts to your management team so that they would understand why a recommended improvement was appropriate. We can discuss priorities based on gap analysis (weak rating versus a strong importance of the dimension), dimensions that seem out of balance, and our experience. We can then help develop a preliminary action plan to "close the gap" and improve in areas related to the company's critical success factors. We will leave a copy of our Product Development Best Practices and Assessment software with you so that you can perform on-going self-assessments in the future. Training in this benchmarking and assessment methodology is also available. This feedback can identify specific opportunities to improve the product development process and can

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result in significant reductions in development/modification costs, product costs, and engineering changes as well as improved product quality and time-to-market. This assessment and the subsequent improvement efforts can pay for themselves many times over. PRODUCT DEVELOPMENT BEST PRACTICES AND ASSESSMENT Product Development Best Practices and Assessment (PDBPA) software describes 270 best practices identified from researching and examining many companies' product development practices from around the world.

The PDBPA provides a structured benchmarking and assessment methodology for the product development process based on these best practices. While our experienced consultants have used and refined this assessment methodology for the last seven years (see Product Development Assessment services), we have now developed a software-based self-assessment that describes these best practices and guides company personnel through the assessment process. This provides an extremely cost-effective way to benchmark and improve product development performance. (see Benchmarking Best Practices to Improve Product Development) A companion product, the IPPD Best Practices and Assessment software, provides an assessment tool for an individual program developed under contract whereas the PDBPA provides an overall enterprise assessment. This assessment and improvement process is represented below.

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These best practices have been organized into twenty-eight categories covering strategy, organization, process, design optimization and technology.

In addition to describing the best practices, the assessment methodology contains questions to help probe at the use of these practices within a company (see Assessment Worksheet Example), an evaluation scale, and a weighting factor and performance rating. Performance is summarized to the

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category level, and, when compared to that of other companies, gives an indication of the urgency of improving the development process. Gap analysis (see Gap Analysis Example) is then employed to focus attention on the improvement opportunities that will yield the highest payoff. The software also relates the product development practices to six possible product development strategic orientations: Time-to-market (development schedule) Development cost Low product cost High product innovation and performance Quality, reliability and dependability (robustness) Service, responsiveness & flexibility to respond to new product opportunities & markets

Based on performance in the various related practices, the software assesses how well the development process is aligned to and supports the desired strategic orientation. CHARACTERIZING AND IMPROVING THE PRODUCT DEVELOPMENT PROCESS Over the last decade, businesses have focused attention on documenting, improving and even reengineering business and manufacturing processes. Focusing this type of attention on repetitive, highvolume business and manufacturing processes provides a great deal of leverage from any improvement efforts. New product development (NPD) is often one of the least repetitive, lowest-volume processes in most companies or business units. The typical frequency of performing this process ranges from one to 100 projects per year in the vast majority of companies or business units. As a result, management frequently looks at NPD as 1.) more of an art than a defined business process, 2.) involving highly-paid knowledge workers who don't need a well-defined business process, and/or 3.) not as worthy of the effort to characterize and improve as are other business processes. In addition, the typical duration of NPD projects ranges from six months to six years. As a result, development personnel don't have the opportunity to learn from and to refine the development process through repeated use on an individual basis. With the rapid pace of technology evolution, the hiring of many young engineers in some industries, high turn-over rates, it is not unusual to see development personnel with keys roles in a development project, but who have not gone through a full development cycle on a prior project within their companies. In short, many development personnel have little understanding of or practical experience with any standard NPD process in their companies. Contrary to this situation, the development process is critical to achieving time-to-market, development cost and risk, and the product's cost, quality, and performance on a consistent basis. The Capability Maturity Model describes five stages of evolution or levels of capability or process maturity. This serves as a framework for discussing requirements for the NPD process. The first stage, ad-hoc, represents the conditions described above. The process must be characterized and documented. Unless it is, it will be difficult to assure understanding and agreement on what the process in fact is, difficult for all development personnel to understand the process in a consistent manner, and difficult to communicate that process to new personnel. We have found the following to be useful elements for completely characterizing and documenting an NPD development process: Process flow diagram Process step description including required inputs, required outputs, responsibilities, and supporting tools Description of each process step output, minimum standards related to that output, or a good example of the process output

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Roles and responsibilities for performing each process step or producing each process step output Description of each design review and gate review including participants, required information (process step outputs), and agenda Criteria for prototype product builds

The process must be repeatable. If the process is characterized and documented, it must then be 1.) effectively communicated to development personnel for them to understand and 2.) an emphasis placed on consistent use of the defined process. The advantages of having a repeatable process must be communicated. It is easier to plan and initiate a new project because development personnel understand what must be done and how to go about it. A common process provides greater personnel flexibility and facilitates moving people into and out of a project as the need arises. It increases personnel's overall understanding of a project, the requirements they must meet and their interfaces with other development personnel. The process must be flexible to tailor to the needs of different type of development projects. The process steps and outputs (as well as the cost, schedule and risk) of developing a totally new product with new processes and new markets should be more extensive than the process steps and outputs for a product upgrade or enhancement. These differences need to be understood and an approach established to allow tailoring of the standard NPD process to the needs of a development program. The process must be managed. There are two aspects to "being managed". First, the development process is monitored to assure an adequate level of performance through establishment of appropriate product development metrics. Second, there are appropriate management controls in place to help assure the desired results. These controls are in the form of design reviews and stage-gate reviews. Design reviews focus on addressing the technical requirements of the development program and the stage-gate reviews focus on addressing the business requirements. These reviews need to be balanced with empowering the teams and preventing delays in the development process (e.g., "hard" vs. "soft" gates). While product development may not be a highly repetitive process, the investment in characterizing, improving and managing this process is significant because of the leverage that new product development has on the enterprise and its profitability. The key points for managing the NPD process is as follows New products are developed using processes that are explicitly documented. Development personnel understand and follow the NPD process Improving the NPD process is the responsibility of management as well as all product teams. Improvement of the NPD process occurs through accumulation and analysis of "Lessons Learned". Development process outcomes agree well with predicted expectations and results are repeatable. The development process addresses the complete product life cycle. Process metrics are aligned with management goals for the NPD process. Development process metrics are quantitative.

PROCESS FLOW DIAGRAM EXAMPLE

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PROCESS DESCRIPTION EXAMPLE 8. Develop Product Concept Based on the product requirements and specifications, multiple product concepts are developed that can potentially satisfy those requirements. Brainstorming and other creativity techniques are used to generate a range of concept alternatives. These concepts are analyzed with respect to the product requirements as well as the existing technology portfolio, company capabilities, and business strategy in order to select the most promising architecture. The architecture is refined and the best aspects of other concepts are synthesized into the concept. Tasks 1. Brainstorm and develop top-level product or system concepts to satisfy product requirements. 2. Analyze, evaluate and select a preferred product concept considering product requirements, company technology and capabilities, development risks, and business strategy. 3. Partition the system into subsystems or modules (and derive subsystem requirements 4. Brainstorm and develop subsystem concepts to satisfy lower-level requirements. 5. Analyze, evaluate and select subsystem concepts considering requirements, company technology and capabilities, development risks, and business strategy. 6. Identify need for risk-reduction development or investigation and launch effort. 7. Document the concept. Inputs 1. Product requirements document Outputs/Deliverables 1. Product concept block diagram 2. Layout drawing 3. Concept selection matrix Personnel Involved 1. 2. 3. 4. 5. 6. Marketing Project Manager Design Engineers Manufacturing Engineer Test Engineer Supply Management

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PROCESS OUTPUT RESPONSIBILITY MATRIX EXAMPLE

Example of Phase-Gate Review Definition Program Meeting Approval

Meeting Title Timing

Design Approval Meeting Pilot Approval Meeting At the end of Feasibility & Concept Phase Design Phase Successful Concept Design Review Quote Delivered to the Customer and Design Phase can begin System architecture At the end of the Prototype Phase Pilot Phase Successful Final Design Review Pilot Phase can begin and production tooling ordered

Prior to the Feasibility & Concept Phase The Program and the Feasibility & Concept Phase Project Definition Resources can be applied to program Program overview Basic customer requirements Key program milestone

Stage Approved Entry Criteria or Prerequisites Meeting Required Before: Agenda

Final Design Review issues and proposed Degree of new invention resolution & technical development Customer satisfaction &

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Manufacturing sourcing Concept Design Review issues & proposed resolution Cost targets vs. estimates dates Product and tooling cost targets Quality targets Program risk issues Proposed NPD process deviations Internal quality targets Program budget & preliminary investment requirements Program breakeven time Proposed customer quotation Updated program schedule Program staffing issues Program risk issues NPD process deviations

issues Cost targets vs. estimates Program budget Tooling & equipment investment and budget approval Program breakeven time Updated program schedule and status Program risk issues NPD process deviations

Product Build Criteria Example Build Criteria Development Phase Prerequisites P2 Build 4 Production readiness review Typical build quantity 2 10 20 Nature of parts Functionally similar (e.g., Design intent per drawing Production parts from surrogate parts, rapid (meet functional & physical intended suppliers prototype parts, FPGA vs. requirements) production process ASIC) Supplier Used Any (prototype house or Actual supplier Actual supplier actual supplier) Supplier production Non-production or Non-production or Intended production process production process/line production process/line process & line Production Location Lab Pilot or low-volume line in Intended production line Production Tooling, fixtures & test None Prototype/low-volume Final/production-ready software tooling, fixtures & SW tooling, fixtures & SW Qualification Test/ Functional only All - functional, reliability & All - functional, reliability & P0 Build P1 Build 2 3 Preliminary design review Released drawings

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Verification Verification subject

Product

environmental Product & process

environmental Process

NPD PROCESS TOOLS There are two classes of tools to support product development: design tools and management tools as shown in the following diagram.

A lot of attention has been given to the design tools over the last two decades. Management tools have received less attention. Project management tools have the longest tradition of use. Product Data Management (also known as Product Information Management and Collaborative Product Commerce) tools have been on the scene since the late 80's. Requirements Management tools are lesser known tools used to manage the requirements and specifications associated with complex products. More recently, a new class of tools has emerged to support managing the NPD process and serving as a repository for other documents that are not typically managed by a Product Data Management system. Therefore, there are three primary tools that most companies wanting to achieve a mature and wellmanaged process and data will put in place. These tools, shown below, overlap each other to a degree and will have logical interfaces.

While the functions of project management and product data management systems are well-known, NPD process management tools are new to many people. These NPD process management tools typically provide the following functions: Plan and manage a project portfolio Support pipeline management with resource planning and analysis of pipeline flow Document the NPD process in the form of stages/phases, gates, process flows, activities, deliverables, and responsibilities Provide templates for deliverable documents Provide process flexibility by allowing for selection of the product development process to be used on a project

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Support a phase-gate process with tracking phases and gate progress and distributing gate review documents to reviewers for approval Serve as a repository for business documents/deliverables (as opposed to product data which is best managed with a product data management system) Share project documents across the enterprise to team members and other authorized personnel Provide access control to documents and files Provide a collaboration platform for documents, activities and threaded discussions Track status of projects and deliverables against the defined process Coordinate process management with project management - project management schedules and responsibilities can be interfaced with process activities and deliverables Process activity and deliverable status can be shared with project management systems Provide monitoring and an overall summary of projects and their status

The objective of these tools is to: Assure adherence to the process Facilitate use of the process Facilitate planning Manage information/data/documents Facilitate communication Collect information on the status of the project relative to the process Communicate upcoming process requirements, planned activities and status Measure project performance

The Capability Maturity Model describes the stages of evolution in a process such as product development ranging from an ad-hoc and immature state to an optimized state. As companies strive to develop a more mature process, these tools can facilitate the objective of repeatability managed. This is required before the process can be optimized. PD-Trak is an example of a low-cost, commercially-available NPD Process Management, Portfolio Management, and Pipeline Management tool. CAPABILITY MATURITY MODEL The Capability Maturity Model (CMM) was developed by the Software Engineering Institute at CarnegieMellon University to describe a framework of five stages of evolution or levels of capability or process maturity. The CMM describes an evolutionary improvement path from an ad-hoc, immature process to a mature, disciplined process. This model applies to new product development as well as software development. While the CMM provides a model for process maturity, the Product Development Best Practices and Assessment software and the Product Development Assessment methodology provide a more comprehensive and sound framework for assessing and improving product development. The CMM model has been adapted by DRM Associates to describe the levels of maturity with the product development process. The five product development process CMM levels are: 1. Initial Level (ad-hoc, immature): At the initial level, the organization typically does not provide a stable environment for developing new products. When a organization lacks sound management practices, the benefits of good integrated product development practices are undermined by ineffective planning, reaction-driven commitment systems. process short-cuts and their associated risks, late involvement of key disciplines, and little focus on optimizing the product for its life cycle. The development process is unpredictable and unstable because the process is constantly changed or modified as the work progresses opr varies from one project to another.

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2.

3.

4.

5.

Performance depends on the capabilities of individuals or teams and varies with their innate skills, knowledge, and motivations. Repeatable Level: At the repeatable level, policies for managing a development project and procedures to implement those policies are established. Effective management processes for development projects are institutionalized, which allow organizations to repeat successful practices developed on earlier projects, although the specific processes implemented by the projects may differ. An effective process can be characterized as practiced, documented, enforced, trained, measured, and able to improve. Basic project and management controls have been installed. Realistic project commitments are based on the results observed on previous projects and on the requirements of the current project. The project managers and team leaders track NPD costs, schedules, and requirements; problems in meeting commitments are identified when they arise. Product requirements and design documentation are controlled to prevent unauthorized changes. The team works with its subcontractors, if any, to establish a strong customer-supplier relationship. Defined Level: At the defined level, the standard process for developing new products is documented, these processes are based on integrated product development practices, and these processes are integrated into a coherent whole. Processes are used to help the managers, team leaders, and development team members perform more effectively. An organization-wide training program is implemented to ensure that the staff and managers have the knowledge and skills required to fulfill their assigned roles. Projects tailor the organization's baseline development process to develop their tailored process which accounts for the unique characteristics of the project. A well-defined process can be characterized as including readiness criteria, inputs, standards and procedures for performing the work, verification mechanisms (such as team reviews), outputs, and completion criteria. Roles and responsibilities are clearly defined and understood. Because the software process is well defined, management has good insight into technical progress on all projects. Project cost, schedule, and requirements are under control, and product quality is tracked. Managed Level: At the managed level, the organization establishes metrics for products and processes and measures results. Projects achieve control over their products and processes by narrowing the variation in their process performance to fall within acceptable boundaries. Meaningful variations in process performance can be distinguished from random variation (noise). The risks involved in moving new product technology, manufacturing processes and markets are known and carefully managed. The development process is predictable because the process is measured and operates within measurable limits. This level of process capability allows an organization to predict trends in process and product quality within the quantitative bounds of these limits. When these limits are exceeded, action is taken to correct the situation. As a result, products are of predictably high quality. Optimized Level: At the optimized level, the entire organization is focused on continuous process improvement. The organization has the means to identify weaknesses and strengthen the process proactively, with the goal of preventing the occurrence of defects. Data on the effectiveness of the development process is used to perform cost benefit analyses of new development technologies and proposed changes to the organization's development process. Innovations that exploit the best integrated product development practices are identified and transferred throughout the organization. Product development teams analyze failures and defects to determine their causes. Development processes are evaluated to prevent known types of failures and defects from recurring, and lessons learned are disseminated to other projects. Improvement occurs because of both incremental advances in the existing process and by innovations using new technologies and methods.

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