KNOWLEDGE

    The PDMA Glossary for New Product Development

    Notice for Glossary:

    The English Glossary is provided for the use of members.  No part of this Glossary may be reproduced, photocopied, entered into a computer database or copied in handwritten format without the prior written permission of PDMA. Violators are subject to discipline under federal copyright laws.

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    Sales Forecasting: predicting the sales potential for a new product usign techniques such as the A-T-A-R (Awareness-Trial-Availability-Repeat) model

    Sales wave research: customers who are initially offered the product at no cost are re-offered it, or a competitor’s product, at slightly reduced prices. The offer may be made as many as 5 times. The number of customers continuing to select the product and their level of satisfaction is recorded

    S-Curve (Technology S-Curve): Technology performance improvements tend to progress over time in the form of an "S" curve. When first invented, technology performance improves slowly and incrementally. Then, as experience with a new technology accrues, the rate of performance increase grows and technology performance increases by leaps and bounds. Finally, some of the performance limits of a new technology start to be reached and performance growth slows. At some point, the limits of the technology may be reached and further improvements are not made. Frequently, the technology then becomes vulnerable to a substitute technology that is capable of making additional performance improvements. The substitute technology is usually on the lower, slower portion of its own "S" curve and quickly overtakes the original technology when performance accelerates during the middle (vertical) portion of the "S".

    Scamper:  an ideation too that utilizes actions verbs as stimuli. S – Substitute;

    C – Combine; A – Adapt; M – Modify; P – Put to another use; E – Eliminate; R – Reverse

    Scanner Test Markets: Special test markets that provide retail point-of-sale scanner data from panels of consumers to help assess the product's performance. First widely applied in the supermarket industry.

    Scenario Analysis:
    A tool for envisioning alternate futures so that a strategy can be formulated to respond to future opportunities and challenges. (See Chapter 16 of the PDMA ToolBook 1.)

    Screening: The process of evaluating and selecting new ideas or concepts to put into the project portfolio. Most firms now use a formal screening process with evaluation criteria that span customer, strategy, market, profitability and feasibility dimensions.

    Scrum:  A term used in agile product development. Arguably it is the most popular framework for implementing agile. With scrum, the product is built in a series of fixed-length iterations giving teams a framework for shipping software on a regular cadence

    Scrum-master:  Commonly used in agile product development. The facilitator for the team and product owner. Rather than manage the team, the ScrumMaster works to assist both the team and the product owner

    Scrum Team: Commonly used in agile product development. Usually made up of seven, plus or minus two, members. The team usually comprises a mix of functions or disciplines required to successfully complete the sprint goals (cross-functional team).

    Secondary market research: is defined as research that involves searching for existing data that was originally collected by someone else.

    Segmentation: The process of dividing a large and heterogeneous market into more homogeneous subgroups. Each subgroup, or segment, holds similar views about the product, and values, purchases, and uses the product in similar ways. (See Chapters 3 and 4 of The PDMA HandBook)

    Senior Management: That level of executive or operational management above the product development team that has approval authority or controls resources important to the development effort.

    Sensitivity Analysis:
    A calculation of the impact that an uncertainty might have on the new product business case. It is conducted by setting upper and lower ranges on the assumptions involved and calculating the expected outcomes. (See Chapter 16 of The PDMA ToolBook 1.)

    Services: Products, such as an airline flight or insurance policy, which are intangible or at least substantially so. If totally intangible, they are exchanged directly from producer to user, cannot be transported or stored and are instantly perishable. Service delivery usually involves customer participation in some important way. Services cannot be sold in the sense of ownership transfer, and they have no title of ownership.

    Short-Term Success: The new product’s performance shortly after launch, well within the first year of commercial sales.

    Should-Be Map:
    A version of a process map depicting how a process will work in the future. A revised "as-is" process map. The result of the team’s re-engineering work.

    Simulated Test Market: A form of quantitative market research and pre-test marketing in which consumers are exposed to new products and to their claims in a staged advertising and purchase situation. Output of the test is an early forecast of expected sales or market share, based on mathematical forecasting models, management assumptions, and input of specific measurements from the simulation.

    Six Sigma: A level of process performance that produces only 3.4 defects for every one million operations.

    Six thinking hats: A tool developed by Edward de Bono which encourages team members to separate thinking into six clear functions and roles. Each role is identified with a color-symbolic “thinking hat”

    Slip Rate: Measures the accuracy of the planned project schedule according to the formula : Slip Rate = ([actual schedule/planned schedule] -1) * 100%.

    Social media:   computer-mediated tools that allow people, companies and other organizations to create, share, or exchange information,  ideas, and pictures/videos in virtual communities and networks. 

    Specification: A detailed description of the features and performance characteristics of a product. For example, a laptop computer’s specification may read as a 90 megahertz Pentium, with 16 megabytes of RAM and 720 megabytes of hard disk space, 3.5 hours of battery life, weight of 4.5 pounds, with an active matrix 256 color screen.

    Speed to Market: The length of time it takes to develop a new product from an early initial idea for a new product to initial market sales. Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within a company. (See Chapter 24 of The PDMA HandBook)

    Sponsor: An informal role in a product development project, usually performed by a higher-ranking person in the firm who is not directly involved in the project, but who is ready to extend a helping hand if needed, or provide a barrier to interference by others.

    Sprint:  A term used in agile product development. A set period of time during which specific work has to be completed and made ready for review

    Stage: One group of concurrently accomplished tasks, with specified outcomes and deliverables, of the overall product development process.

    Stage-Gate Process: A widely employed product development process that divides the effort into distinct time-sequenced stages separated by management decision gates. Multifunctional teams must successfully complete a prescribed set of related cross-functional tasks in each stage prior to obtaining management approval to proceed to the next stage of product development. The framework of the Stage-Gate™ process includes work-flow and decision-flow paths and defines the supporting systems and practices necessary to ensure the process's ongoing smooth operation.

    Staged Product Development Activity: The set of product development tasks commencing when it is believed there are no major unknowns and that result in initial production of salable product, carried out in stages.

    Standard Cost: See Factory Cost.

    Star products: products that command a significant market share in a growing overall market.

    Stop-light Voting: A convergent thinking technique by which participants vote their idea preferences using colored adhesive dots. Also called preference voting.

    Storming:  the second stage in team formation where people start to push against the boundaries established. This is where many teams fail. Storming often starts where there is a conflict between team members’ natural working styles.

    Storyboarding: Focuses on the development of a story, possibly about a consumer’s use of a product, to better understand the problems or issue that might lead to specific product design attributes

    Strategic Balance: Balancing the portfolio of development projects along one or more of many dimensions such as focus versus diversification, short versus long term, high versus low risk, extending platforms versus development of new platforms.

    Strategic fit. Ensure projects are consistent with the articulated strategy.  For example if certain technologies or markets are specified as areas of strategic focus do the projects fit into these areas?

    Strategic New Product Development (SNPD): The process that ties new product strategy to new product portfolio planning. (See Chapter 2 of both Editions of The PDMA HandBook.)

    Strategic Partnering:
    An alliance or partnership between two firms (frequently one large corporation and one smaller, entrepreneurial firm) to create a specialized new product. Typically, the large firm supplies capital, and the necessary product development, marketing, manufacturing, and distribution capabilities, while the small firm supplies specialized technical or creative expertise.

    Strategic Pipeline Management: Strategic balancing, which entails setting priorities among the numerous opportunities and adjusting the organization's skill sets to deliver products.Strategic Plan: Establishes the vision, mission, values, objectives, goals, and strategies of the organization's future state.

    Strategic priorities. Ensures the investment across the portfolio reflect the strategic priorities? For example, if the organization is seeking technology leadership then the balance of projects in the portfolio should reflect this focus.

    Strategy: The organization's vision, mission, and values. One subset of the firm's overall strategy is its Innovation Strategy.

    Stratified sampling: the population is divided into strata according to some variables that are thought to be related to the variables that we are interested in. A sample is taken from each stratum.

    Subassembly: A collection of components that can be put together as a single assembly to be inserted into a larger assembly or final product. Often the subassembly is tested for its ability to meet some set of explicit specifications before inclusion in the larger product.

    Success: A product that meet's its goals and performance expectations. Product development success has four dimensions. At the project level, there are three dimensions: financial, customer-based, and product technical performance. The fourth dimension is new product contribution to overall firm success. (See Chapters 1, 29, 32, 35 and 36 of The PDMA HandBook 2nd Edition.)Success Dimensions: Product development success has four dimensions. At the project level, there are three dimensions: financial, customer-based, and product and process performance. The fourth dimension of product development success is measured at the firm level.

    Support projects: can be incremental improvements in existing products or improvements in manufacturing efficiency of an existing product. Generally they are low risk.

    Support Service: Any organizational function whose primary purpose is not product development but whose input is necessary to the successful completion of product development projects.

    Sustainable development:  development which meets the needs of current generations without compromising the ability of future generations to meet their own needs

    Sustaining innovation:  does not create new markets or value networks but only develops existing ones with better value, allowing the companies to compete against each other's sustaining improvements.

    SWOT Analysis: "Strengths, Weaknesses, Opportunities, and Threats" Analysis. A SWOT analysis evaluates a company in terms of its advantages and disadvantages versus competitors, customer requirements, and market/economic environmental conditions.

    System Hierarchy Diagram: The diagram used to represent product architectures. This diagram illustrates how the product is broken into its chunks.

    Systems and Practices: Established methods, procedures, and activities that either drive or hinder product development. These may relate to the firmís day-to-day business or may be specific to product development.

    Systems and Practices Team: Senior managers representing all functions who work together to identify and change those systems and practices hindering product development and who establish new tools, systems, and practices for improving product development.

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    Task: The smallest describable unit of accomplishment in completing a deliverable.

    Target Cost: A cost objective established for a new product based on consideration of customer affordability. Target cost is treated as an independent variable that must be satisfied along with other customer requirements.

    Target Market: The group of consumers or potential customers selected for marketing. This market segment is most likely to buy the products within a given category. These are sometimes called "prime prospects."

    Team: defined as a small number of people with complementary skills who are committed to a common purpose, with a clear set of performance goals and approach for which they hold themselves mutually accountable

    Team Leader: The person leading the new product team. Responsible for ensuring that milestones and deliverables are achieved, but may not have any authority over project participants. (See Sections 1 and 2 of The PDMA ToolBook for 8 product development tools for Team Leaders.)

    Team Spotter's Guide: A questionnaire used by a team leader (or team members) to diagnose the quality of the team's functioning (see Chapter 6 in the PDMA ToolBook 1.)

    Technology foresighting: a process for looking into the future to predict technology trends and the potential impact on the organization

    Technology-Driven: A new product or new product strategy based on the strength of a technical capability. Sometimes called "solutions in search of problems."

    Technology Road Map: A graphic representation of technology evolution or technology plans mapped against time. It is used to guide new technology development for or technology selection in developing new products.

    Technology Stage Gate (TSG): A process for managing the technology development efforts when there is high uncertainty and risk. The process brings a structured methodology for managing new technology development without thwarting the creativity needed in this early stage of product development. It is specifically intended to manage high-risk technology development projects when there is uncertainty and risk that the technology discovery may never occur and therefore the ultimate desired product characteristics might never be achieved. (See Chapter 11 in The PDMA ToolBook 1.)

    Technology strategy: a plan for the maintenance and development of technologies that supports the future growth of the organization and aids the achievement of its strategic goals.

    Technology Transfer: The process of converting scientific findings from research laboratories into useful products by the commercial sector. May also be referred to as the process of transferring technology between alliance partners.

    Test Markets: The launching of a new product into one or more limited geographic regions in a very controlled manner, and measuring consumer response to the product and its launch. When multiple geographies are used in the test, different advertising or pricing policies may be tested and the results compared.

    The product backlog:  A basis of agile product development. The requirements for a system, expressed as a prioritized list of product backlog items. These include both functional and non-functional customer requirements, as well as technical team-generated requirements.

    The triple constraint: the combination of the three most significant restrictions on any project: scope, schedule and cost. The triple constraint is sometimes referred to as the project management triangle or the iron triangle

    The waterfall process: a sequential design process, used in software development processes, in which progress is seen as flowing steadily downwards (like awaterfall) through the phases of conception, initiation, analysis, design, construction, testing,production/implementation and maintenance.

    Think Links: Stimuli used in divergent thinking to help participants make new connections using seemingly unrelated concepts from a list of people, places, or things.

    Think-Tank: Environments, frequently isolated from normal organizational activities, created by management to generate new ideas or approaches to solving organizational problems.

    Thought Organizers: Tools that help categorize information associated with ideas such that the ideas can be placed into groups that can be more easily compared or evaluated.

    Three Rís: The fundamental steps of Record, Recall, and Reconstruct which most creative minds go through when generating new product ideas.

    Threshold Criteria: The minimum acceptable performance targets for any proposed product development project.

    Thumbnail: The most minimal form of sketching, usually using pencils, to represent a product idea.

    Time to Market: The length of time it takes to develop a new product from an earl y initial idea for a new product to initial market sales. Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within the company.

    Tone: The feeling, emotion, or attitude most associated with using a product. The appropriate tone is important to include in consumer new product concepts and advertising.

    Tornado: A mid to late growth stage strategy that follows the "bowling alley" and which describes an often frenzied period of rapid growth and acceptance for a product category. Activities of the tornado phase include commoditization of a product to become an industry standard, competitive pricing to maximize share and low cost volume distribution channels. Success in the tornado is related to maintaining previously established product leadership and complementing it with operational excellence in a variety of strategic areas.

    Total Quality Management (TQM): A business improvement philosophy that comprehensively and continuously involves all of an organization's functions in improvement activities.

    Top down portfolio selection: Also known as the strategic bucket method, relies on starting with strategy and placing significant emphasis on project selection according to this strategy.

    Tracking Studies: Surveys of consumers (usually conducted by telephone) following the product's launch to measure consumer awareness, attitudes, trial, adoption and repurchase rates.

    Triple bottom line: reports an organization’s performance against 3 dimensions: Financial, Social, Environmental

    TRIZ: The acronym for the Theory of Inventive Problem Solving, which is a Russian, systematic method of solving problems and creating multiple-alternative solutions. It is based on an analysis and codification of technology solutions from millions of patents. The method enhances creativity by getting individuals to think beyond their own experience and to reach across disciplines to solve problems using solutions from other areas of science.

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    Unarticulated customer needs: those needs that a customer is either unwilling or unable to explain.

    Uncertainty Range: The spread between the high (best case) and low (worst case) values in a business assumption.

    User: Any person who uses a product or service to solve a problem or obtain a benefit, whether or not they purchase it. Users may consume a product, as in the case of a person using shampoo to clean their hair or eating a potato chip to assuage hunger between meals. Users may not directly consume a product, but may interact with it over a longer period of time, like a family owning a car, with multiple family members using it for many purposes over a number of years. Products also are employed in the production of other products or services, where the users may be the manufacturing personnel who operate the equipment.

    Utilities: The weights derived from conjoint analysis that measure how much a product feature contributes to purchase interest or preference.

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    Value: Any principle to which a person or company adheres with some degree of emotion. It is one of the elements that enter into formulating a strategy.

    Value-added: The act or process by which tangible product features or intangible service attributes are bundled, combined or packaged with other features and attributes to create a competitive advantage, reposition a product or increase sales.

    Value Analysis: A technique for analyzing systems and designs. Its purpose is to help develop a design that satisfies users by providing the needed user requirements in sufficient quality at an optimum (minimum) cost.

    Value Chain: As a product moves from raw material to finished good delivered to the customer, value is added at each step in the manufacturing and delivery process. The value chain indicates the relative amount of value added at each of these steps.

    Value Proposition: A short, clear, and simple statement of how and on what dimensions a product concept will deliver value to prospective customers. The essence of "value" is embedded in the tradeoff between the benefits a customer receives from a new product and the price a customer pays for it. (see Chapter 3 of the PDMA ToolBook 1).

    Vertical Integration: A firmís operation across multiple levels of the value chain. In the early 1900ís, Ford Motor Company was extremely vertically integrated, as it owned forests and operated logging and wood finishing and glass-making businesses. They made all of the components that went into automobiles, as well as most of the raw materials used in those components.

    Virtual Customer: A set of web-based market research methods for gathering voice-of-the-customer data in all phases of product development (See Dahan and Hauser, JPIM, July 2002).

    Virtual Product Development: Paperless product development. All design and analysis is computer-based.

    Virtual Reality: Technology that enables a designer or user to "enter" and navigate a computer-generated 3-D environment. Users can change their viewpoint and interact with the objects in the scene in a way that simulates real-world experiences.

    Virtual Team: Dispersed teams that communicate and work primarily electronically may be called virtual teams.

    Vision: An act of imagining, guided by both foresight and informed discernment, that reveals the possibilities as well as the practical limits in new product development. It depicts the most desirable, future state of a product or organization.

    Visionary Companies: Leading innovators in their industries, they rank first or second in market share, profitability, growth, and shareholder performance. A substantial portion (e.g., 30% or more) of their sales are from products introduced in the last three years. Many firms want to benchmark these firms.

    Visions: The new product development practitioner-oriented magazine of the PDMA.

    Voice of the Customer (VOC): A process for eliciting needs from consumers that uses structured in-depth interviews to lead interviewees through a series of situations in which they have experienced and found solutions to the set of problems being investigated. Needs are obtained through indirect questioning by coming to understand how the consumers found ways to meet their needs, and, more important, why they chose the particular solutions they found. (See Chapter 11 of The PDMA ToolBook 1.)

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    Waste: Any activity that utilizes equipment, materials, parts, space, employee time, or other corporate resource beyond minimum amount required for value-added operations to ensure manufacturability. These activities could include waiting, accumulating semi-processed parts, reloading, passing materials from one hand to the other, and other nonproductive processes. The seven basic categories of waste that a business should strive to eliminate: overproduction, waiting for machines, transportation time, process time, excess inventory, excess motion, and defects.

    Whole Product: A product definition concept that emphasizes delivering all aspects of a product which are required for it to deliver its full value. This would include training materials, support systems, cables, how to recipes, additional hardware/software, standards and procedures, implementation, applications consulting - any constitutive elements necessary to assure the customer will have a successful experience and achieve at least minimum required value from the product. Often elements of the whole product are provided via alliances with others. This term is most often used in the context of planning high technology products.

    Workflow Design Team: Functional contributors who work together to create and execute the work-flow component of a Stage-Gate™ system. They decide how the firm's Stage-Gate™ process will be structured, what tasks it will include, what decision points will be include d and who is involved at all points.

    Workplan: Detailed plan for executing the project, identifying each phase of the project, the major steps associated with them, and the specific tasks to be performed along the way. Best practice workplans identify the specific functional resources assigned to each task, the planned task duration, and the dependencies between tasks. See also, "Gantt chart."

    Worth What Paid For (WWPF): The quantitative evaluation by a person in your customer segment of the question: "Considering the products and services that your vendor offers, are they worth what you paid for them?"

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