Managing Product Development – Mapping efficient resource allocation

Abstract: Backgrund Product development (PD) in the plant breeding industry is characterized by long development cycles and decisions framed with uncertainty concerning key questions such as likely future competitor actions or the market outlook 10-15 years from now. In many ways the contemporary picture of the industry is changing rapidly; new technologies are developed to shorten the length of PD cycles and time-to-market, competing with proven methods to deliver on key objectives such as sufficient properties in resistance and quality traits. The ambition to position SW Seed as a key player in this changing environment demands a structured way to incorporate both certain and uncertain factors in the strategic as well as tactical decisions made in PD.
Purpose This thesis addresses this demand by delivering on three objectives; firstly the current ways of developing crops at SW Seed are elicited, complete with price tags on key activities driving the major costs. Secondly the elicited process is analysed and tweaked according to the latest findings in the theoretical field of PD in order to develop a generic process better suited to describe and evaluate the activities in PD. Thirdly a set of key metrics to follow up and manage the process are proposed, both to adjust a flawed process proactively and to measure the PD process performance in a longer time perspective.
Method The task of costing the current PD process follows the activity-based costing (ABC) methodology, acknowledging that activities in a process rather than functions deliver value and customer satisfaction. A prerequisite of allocating costs to activities is a map over the activities conducted, described at a reasonable level of detail. No such map of the current PD process at SW Seed was in place prior to the thesis, rendering the compilation of one the first prioritization. In delimiting the thesis perspective a decision was made to model the description based on the Winter wheat Baltic programme. The programme had sufficient size, characteristics as well as the staff requirements sought. Following the walk-through methodology in process mapping; identifying and interviewing key personnel in the PD process, a mapping of the conducted activities were achieved.
Conclusions The thesis main result is the BREED process; Breeder’s Roadmap to Efficiency and Excellency in product Development. The building of BREED included elements of
process design, using the elicited activities in the current process as building blocks, structuring them to facilitate the introduction of formal decision-points (DCP). In four DCP’s, spread over the thirteen year long PD process, external as well as internal factors are weighted to enable tough project reviews, aiming to allocate resources to the projects best aligned with SW Seed strategy, holding the biggest potential for future revenues. A dugout in the company accounting system showed that 87 % of the direct costs – the costs that affects, and is affected by, the sought decisions – can be allocated to the BREED activities. In all, the methodology proposed by the BREED process should create new opportunities for SW Seed to evaluate and manage their PD process in a way better suited to cope with the internal and external challenges inherent in PD in general and plant breeding specifically.
To manage a PD process aspiring for efficiency and excellency the key is to evaluate and adjust the process according to four critical success factors (CSF); develop a clear innovation and technology strategy, enable empowered multifunctional PD teams, scrutinize PD projects through portfolio management and implement a rigorous stage-gate process (such as BREED). The challenge for top level management is to translate the overall strategy objectives, expressing them both in terms of these CSF’s and through the connections between these factors and the day-to-day work within the PD process. To aid general management in this task a metrics-matrix for gap analysis between current and best practice is presented to deliver on the third thesis objective.