Tools & Metrics Flashcards
What is the key performance indicator of the 4 of a balanced scorecard?
Customer Satisfaction
Product Concept
understanding of the dynamics of the product to showcase its best qualities
Scenario
In computers, its a narrative describing foreseeable interactions of type of users (characters)
Osborne said groups could _______ their creative output with brainstorming
Double
Gorilla
British advertising compaign launched by Cadbury Schwepps in 2007
- to pormote Cadbury Diary-Milk Choco
90 second tv, billboards, print, cinema
When was Brainstorming Method popularized?
1953 by Osborn from book Applied Imagination
Brainstorming
A group creativity techique designed to generate iseas for a solution to a problem
Scenarios include information about
- goals
- expectations
- motivations
- actions
- reactions
Attribute
a piece of data (statistic) that describes what extent a finctional character in a role-playing game possesses
a specific, natural inborn characteristic common to all characters of the game
Attribute Characteristics
- piece of data
- usually an abstract number or a set of dice
Other terms for Attribute
- Statistic
- (Primary) Characteristic
- Ability
T or F
Scenarios are predicts or forecasts
F
Scenarios are neither predictions for forecasts,
but rather
attempts to reflect or portay the way a system is used in the context of daily activity
4 Levels of Warfare
- Political goals or grand strategy
- Strategy
- Operations
- Tactics
Sunk Costs
Retrospective (past) costs that have already been incurred and cannot be recovered
What are sunk costs sometimes contrasted with?
- prospective costs
Prospective Costs
future costs that mayu be incurred or changes if action is taken
T or F
What are Retrospective and Prospective costs can either be fixed or variable?
True
Retrospective and prospective costs may be either fixed or variable
What do business need to include in Contingency Plans
- Marketing to gain stakholder support and understanding
Contingency Plan
A plan devised for a specific situation when things could go wrong
“Be prepared for anything that could happen”
Pricing
The process of determining what a company will receive in exchange for its products
Pricing Factors include
- manufacturing costs
- marketplace
- competitioin
- market condition
- quality of product
Microeconomic Pricing Theory
Pricing is a key variable in this model.
The way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an “invisible hand” that guides competing participants to an equilibrium price.
Cannibalization - Original Use
Reuse of military parts
Cannibalization - Manufacturing
reuse of salvageable parts
Cannabilization - Marketing
loss of a product share to another product of the same company
P3M3
Programme & Project Mgmt Maturing Model
(KPAs)
Best practice reference guide
P3M3 Value
helps identify gaps in current processes, plots and priortizes a roadmap for improvement
The Certainty Equivalent
The guaranteed amount of $$ that an individual views as equally desirable as a risky asset
Risk Premium
the min willingness to accept compensation for the risk
Min amount of $$ to induce an individual to hold the risky asset rather than the risk free asset
Premium
Promotional items
- toys
- collectibles
- suveniors
- household products
linked to a product -
Box tops or proof of purchase
Consumer usually pays for shipping
Other names for Premium
Prize
But is usually packaged with the product or available at retailer during time of purchase
Requires no additional cost
Television
derived from Latin and Greek terms meaning “far sight”
Word of Mouth
Oral communication and passing of info from person to person
What is the oldest form of Word of Mouth?
Storytelling
What is Oral Tradition?
Culturual material and traditions transmitted by word of mouth from one generation to another
Market Share - According to Carlton O’Neal
The % of the total available market or market segment that is being served by a company
How is market share often expressed?
Co’s sales revenue (from that market)
- divided by the total sales revenue available in that market
Can also be expressed in unit sales volume divided by volume of unit sales in that market
Product benefits from Early Adopters
can provide early feedback to help refine the product’s future releases
as well as associated means of distribution, service and support
Diffusions of Innovations - Practical Application
Internal influence from was formualed by H. Earl Pemburton
Provided institutional diffusion for
Postage Stamps
Compulsory School Laws
Diffusions of Innovation
theory that seeks to explain
- how
- why
- and at what rate
new ideas and technologies spread through cultures
Diffusions of Innovation - Origination
French Socializt Garbiel Tarde 1890
and German / Austrian anthropologiest Ratzel and Frobenius
Adoption is similar to Diffusion, except
adoption deals withthe psychological process an INDIVIDUAL goes through
rather than an AGGREGATE market process
Diffusion
The process by which a new product or idea is accepted into the market
Rate of Diffusion
speed that the new idea spreads from one customer to the next
Payback period (capital budgeting)
refers to period of time for the return of an investment to pay the same of the orignial investment
T or F
Time value of money is taken into account w/ payback period
False
Payback - Loyalty Scheme
launched in 2000
by AG metro company in Germany
was awarded the Big Brother Award in finance
Internal Rate of Return (IRR)
used in capital budgeting, measures and compares profitability of investments
IRR is also called
DCFROR (discounted flrow rate of return)
or
RoR - rate of return
In the context of savings and loans, IRR is also called _______
Effective Interest Rate
Financial Analysis
An assessment of the viability, stability and profitability of a business, sub-business or project
How are financial analysis performed?
By professionals preparing reports using ratios that make use of info from financial statement or other reports
Tools Definition
something used to perform an operation
or necessary in the practice of a vocation or profession
Tools for Stage 1 - Opportunity Identification
- Business Strategy
- Market Opp Assess / Analysis
- Environmental scanning
- VOC
Dynamics of a “Ideas First” Approach
FUNNEL
- Innovation is #’s game, the more the better
- Goal - fail fast
- Quickly evaluate which are best
- Evaluations doen without knowing all the customers’ needs… proxies are used
Guesswork - fails 70-90% of the time
Dynamics of a Needs-First Approach
- First uncover all customer’s needs
- determine which are unmet
- devise solutions that specifically address unmet needs
Outcomes Innovation - How to get a better product
Determine Needs
- Faster, quick and eary to do / use
- more predictable - easy to understand / operate
- quality - durable, better ease of use, easy to service
Outcomes Driven Innovation
Discover 1 - Its about the job
People buy products to get things done
The job is the unit of analysis
Products come and go
The job is stable, long-term focal point which value creation should be centered
According to Outcomes Driven Innovation, what products do customers migrate to?
Products that get the job done BEST
they are LOYAL to getting the job gone
According to Outcomes Driven Innovation, what is the goal
Devise ways to help customers get the job done better
Tools for Stage 2 - Idea Generation
- Ideation Tools
- Business Case Tools
- Sales & Revenue Forecasting Tools
Ideations AKA Brainstorming
What is Divergent Thinking
technique performed early in stage
- expands thinking
- generate, record and recall large # of ideas
Ideation / Brainstorming
What is Convergent Thinking
peformed late in phase to help funnel the high volume of ideas from Divergent thinking into a small group (or single) idea -to focus and analyze
Ideation / Brainstorming
Problem Based Ideation
problem solving approach to finding ideas
Ideation / Brainstorming
Problem Based Ideation Process
- study situation to identify problems
- screen the resulting problems
- develop concept statements (problem solutions) for evaluation
Ideation / Brainstorming
Affinity Charting
A “bottom-up” technique for discovering connections between pieces of data.
Ideation / Brainstorming
Delphi Process
Iterative rounds of concensus development across a group of experts to arrive at a forecast of the most probably outcome for some future state
Ideation / Brainstorming
Nominal Group Technique
individuals write down ideas separately then each is read aloud and discussed with the group
Business Case Tools
- Business Case
- Strategy & Assumptions
- Market Assessment
- Financials
- Risk Analysis
- Project Plan
Tools for Stage 2 - Concept Generation
Business Case Tools Financials - ROI - IRR - EVA - COST - Forecast - Break even point
ROI
standard measure of project profitability
discounted profits over life of project expressed as % of initial investment
EVA (Economic Value Added)
after tax cash flow generated by a business minus the cost of capital it has deployed to generate that cash flow
Forecasting Tools
a prediction over some time
Tools for Stage 2 - Forecasting Tools
A-T-A-R
Awareness
Trial (purchasing)
Availability (find)
Repeat (repurchase)
Tools for Stage 2 - Forecasting Tools
Diffusion of Innovation
similar to ATAR, depends on trying a product and buying it again
what is takes to produce a regular buyer of the product
the rate of acceptance (diffusion) of the product
Based on how innovation is spread through Early Adopters & Laggards
Tools for Stage 2 - Forecasting Tools
Life Cyle Concept
uses the lifecycle of a product to project / forecast
this model lets the mgr view the product as a living thing that is impacted in various ways through its life
Tools for Stage 3 - Concept Evaluation
- Project Mgmt
- Risk Management
- Lean NPD
Tools for Stage 3 - Concept Evaluation
Project Management
process where projects are defined, planned, monitored and controlled
delivered so that agreed benefits are realized
PM - a TOOL that ensures SUCCESS
Tools for Stage 3 - Concept Evaluation
Project Management - Components
- The Triple Constraint
- WBS
- Scheduling
- Budget Planning / Project Cost Estimating
- Monitoring & Controlling
Tools for Stage 3 - Concept Evaluation
Project Management - Process
- define goals of the project
- plan all work to reach the goal
- execute project & support teams
- monitor and track progress while completing the project satifactorility
- evaluate the process, product and lessons learned
The Triple Constant
Scope / Performance
Budget / Cost
Schedule / Time
WBS
a convenient method for dividing a project into small management work packages, tasks or activities
Tools for Stage 3 - Concept Evaluation
Project Management - Scheduling Tools
- Gantt Charts
- Critical Path - Float and Slack
- Schedule Compression
Gantt Chart
schedulding tool in which the time span of each activity is show as an horizontal bar or line
starts and ends shown by line on chart
Critical Path
the longest path from start to finish
or the path w/o any slack
The critical path is the set of linkages through the chart that is the longest. It determines how long a project will take.
Shortest time the project can be completed
Schedule Compression
Trying to compress original schedule to satisfy a market window or customer due date
Trying to compress without compromise to
- peformance
- quality
- scope
and without adding more cost
PM - Budget Planning - Cost Estimating Considerations
- use WBS, estimate each work package and sume
- use historical data PARAMETRIC MODEL
- on lengthy projects, have an inflation hedge
Elements of Project Cost
- labor / headcount
- Non labor
- Purchases / capital expenses
- sub contracts
- travel
Overhead and General Admin (GA) burden
PM - Monitor / Control
REPORTS "read out" of status to mgmt - budget / cost - schedule / time - business / financial impact
REVIEWS usually "interactive" and working level - budget / cost - schedule / time - business / financial impact
PM - Risk Mgmt Process
Risk Identification
Business Risks
- competition
- funding
- regulatory
Technical Risks
- impact on scope, budget, schedule, financials
probablility of occurence
PM - Risk Mitigation / Contingency Planning
- scope / performance
- budget / cost
- schedule / time
Risk Documentation
PM - Risk Quantification (Plotting)
Impact
Severe, High, Mod, Low, Trivial
Probability on scale of 0-100
Lean NPD
create product faster for less
relentless focus on customer
test (learn) first, then design
Challenges in applying Lean NPD for Manufacturing
Variability is bad Learning is from mistakes Process steps frequent and exact Production is physical (visual) Linear flow Small group of similar specialists
Lean NPD
- is profitable
- will have payback porportional to the work put into it
- is amazing results from brillant processes and average people
Lean NPD is NOT
Mediocre results from brilliant people with broken processes
5 Lean Principles
VALUE – focus on value to customer
VALUE STREAM MAPPING - know where value is created
FLOW - eliminate waste so value stream flows to customer uninterrupted
PULL - the customer pulls the product from you
PERFECTION - pursued through continous improvement
Challenges in Apply Lean NPD (how it is different from manufacturing)
- variability creates knowledge
- learning is the goal
- process steps repeated less frequently with intended variation
- product is informative (invisible)
- non-linear & multi-dimensional
- large, diverse group of various experts
Value Stream Maps
Shows bottle necks
- queues
- schedule impact
does not tell why (root cause)
Root Cause Analysis
- shows cause and effect issues
- identifies root causes and core problems
- any symptom not solved will return
- any symptom with multiple causes will return unless all causes are eliminated
Project Economic Model (PEM)
Enables tractical trade off decisons at the project level
(time, cost, performance)
- Cost of Delay (COD) is usually surprising
- creates convergence on the understanding of delay
- does not have to be perfect
Defending Lean NPD
- its scalable
- lean yourself, team, dept
- promote successes
- will not last if not embraced at highest level
Tools for Stage 4 - Development
- Rapid Prototyping
- Modular Product Architecture
- CAD, DEX, DOE
- House of Quality & QFO
- Concurrent Engineering
- Parallel Processing
- FMEA
Rapid Prototyping
any process that avoids tooling time in producing prototypes or parts
allows for non-functioning prototypes
produced in hours / days rather than weeks
frequently used to quickly test product’s technical feasibility or consumer interest
Modular Architecture
each element has its own chunk
often used to assit in quickly servicing product
focus is design for service
easier, faster means less downtown
CAD
designers / engineering computer aided design.
3D - wire or solid models
DFX (Design for Function / System)
systematic consideration for all lifecycle factors such as
- manufacturing
- reliability
- service
in the design and development process
DOE - Design for Experience
statisical mehtod for evaluating multiple project and process design parameters similtaneously
rather than one parameter at a time
House of Quality & QFD
both link to specifc consumer req’s with specific product consideration
translating customer needs into engineering req’s
Concurrent Engineering
integrated and concurrent development of a product and its processes
emphasizes response to customer expectations
embodies team values of
- cooperation
- trust
- shared decision making
Parallel work by all life cycle perspectives
synchronized ny brief exchanges to produce consensue
Similar to Parallel Processing
FMEA - Failure Mode Effect Analysis
Used at develoment state to determine ways a product MIGHT fail
& evaluating consequences of each failure type
Tools for Stage 5 - Launch
- Launch Plans
- Marketing Plans
- Sales Training Checklist
- Launch Review Checklist
- Distribution & Service Readiness
- Launch Metrics Tracking
Metrics Definition
a set of measurements that quantify results
- performance metrics quantity the units performed
- Projecft metrics - tells whether the project is meeting its goals
Business metrics - defined the business progress in measurable terms
PDMA Definition of Metrics
A prescribed set of measurements to track product dev
- allows firm to measure impact of process improvement over time
- varies by firm
- measures process and outcomes from prod dev
Possible FINANCIAL Performance Metrics
- NPV
- ROI
- EVA
- Break even time (BET)
Metrics - Caveats / Common Sense
- keep it simple
- what gets measured gets done
- avoid conflicting measurements
Cross-functional and functional team members should be measured differently
Allow team members to create own measurements for empowerment
Metrics - Measuring Success
The most appropriate measures of project and program level success depends on the firms
Project Strategy
and
Business Strategy
Respectively
4 Types of Process Metrics
Process - short term (NPD - days to launch, cycle time)
Project - med term (typical project length)\
Program - med term (new products launched this year)
Enterprise - long term and system wide - (effectiveness of a new technology launched across the organization)
Balanced Scorecard
A comprehensive performance measurement technique that balances four performance dimensions: 1. Customer perceptions of how we are performing; 2. Internal perceptions of how we are doing at what we must excel at; 3. Innovation and learning performance; 4. Financial performance.
Financial Metrics
Standard
ROI, IRR, EVA, Cost of Capital
Break Even Time (BET)
Weak Financial Metrics
NPV
Market Share
Success Metrics - Based on Griffin & Pages’ Research on Success Metrics By the following Strategy Types
New to world New to company New category entry Product improvements Cost Reduction Line Extension Re-Positioning
Success Measures for New to World / Prospector
% of profits from products <N years old customer acceptancec Met profit goals IRR or ROI Competitive Advantage
Success Measures for New to Co. / Fast Follower
- Market share goals
- revenue goals
- customer satisfaction
- met profit goals
- competitive advantage
Success Measures for Product Improvements
- customer satisfaction
- market share / revenue growth
- met profit goals
- competitive advantage
Success Measures for Line Extensions
- market share
- met profit goals
- competitive advantage
Success Measures for Re-Positioning
- customer acceptance
- met profit goals
- competitive advantage
Success Measures for Cost Reduction
- customer satisfaction / acceptance
- revenue goals
- met margin goals
- met performance specs
- met quality specs
Break-even point is found
Break-even point is found on the program return map
Quality function deployment
QFD is a structured method employing matrix analysis for linking what the market requires to how it will be accomplished in the development effort
The impact of well done portfolio management is?
Properly assigned resources
The team leader is a facilitator and has no real power and the types of projects assigned are usually slight changes or slight enhancements?
Functional Team
