Product Development Process: What Are Value Added Activities

The product development process is one of the most critical processes in your company. Today product lifecycle becomes as much as possible shorter. So, you need to invest enough effort in innovation. With innovation, they will develop new products and services if they want to stay at the top.

Like everything else in your business, you and your team members will take two types of activities in the product development process. The first activities are value-added activities that bring additional value to your company and your customers. The second type of activity is wasting time and money on something that doesn’t increase your business’s value, but you need to take them.

I want to open the subject related to value-added activities in the product development process in this post. Lean production originated from the Toyota Production System (TPS). It becomes more and more popular in the manufacturing sector and software development and service companies. The primary purpose of lean product development is to cut all wastes in the process and focus on everything that will add value to the business and customers.

Let’s start with the definition of value.

What Is Value?

The value isn’t the result of your product development process or what you have developed or produced. The value isn’t what you are offering to your customers. The real significant value for you as an entrepreneur is what your clients or potential customers value or will value in the future. It would be best to define value entirely from the customers’ perspective and not from your own or your team members.

James Womack defines value as the “right product to the right customers at the right price and at the right time.” This is a different definition from the traditional view of value. The product can be physical, software, mobile/web product, online training, or anything else that the company delivers into the customers’ hands. So, product development is the process of value development for your clients.

Knowledge Development as Value Added Activity in Product Development

The first significant activity in the group of value-added activities in your product development process is using and expanding specific knowledge that this process will need.

An efficient product development process will require a strong knowledge base inside the company. You will need knowledge for customers, knowledge of the capabilities of the value production processes, the knowledge that will help you integrate the knowledge of customers, and technical expertise.

product development and needs

Knowledge about customers as a part of the product development process

Knowing customers is one of the most valuable knowledge that you and your product development team will need to have at starting stages of the process. The related most valuable knowledge will be:

  • The knowledge about customer’s needs. What did your customers want? Or, what are customer’s biggest frustrations? What are the customer’s most significant problems?
  • Your knowledge of customer’s behavior. What are your customers doing? How they now solve a particular problem? How they now satisfy a specific need or want?
  • Knowledge about customer’s environment. How they interact with other people? Or how other people impact their decisions? How are other people related to their needs and behavior?

It is essential to understand your current and potential customers as much as possible if you want an efficient product development process, regardless of what type of product will be the subject of the process. It would be best if you put enough effort into building these kinds of knowledge, and because it is a value-added activity, it is an integral part of the whole process. So, start collecting information, meet with customers, and research their behaviour. You can visit places where they are buying or use your products to explore how they interact with your products.

You need to start collecting information, meet with customers, and research their behaviour. Visit places where they are buying or use your products to explore how they interact with your products.

Technical Knowledge as a part of the product development process

The next necessary knowledge you need to get is related to technical expertise about your product and production technology. When you know your customers, you will need to compare if this knowledge is compatible with your current product and manufacturing technology.

What design alternatives will there be? Or, what are manufacturing capabilities? What are suppliers’ capabilities? Is science giving you possibilities to develop what your customers want?

These and many more questions related to technology you will need to answer when you want to get the knowledge necessary for your product development process.

Integration Knowledge as a part of the product development process

The next necessary knowledge is knowledge about the integration of two previously. These activities will enable you to integrate customer’s needs with your production capabilities. How can you translate customers’ needs into product features that you will need to develop through the product development process?

The process of Product Development as Value Added Activity

You get knowledge about possible activities, and you have processes used for product development activities. Also, you have gained knowledge about your customers, and you know what they want. Additionally, you know how you can make what your customers want, and you know how you can translate what they want to the real value in their hands.

Different product development processes have different subprocesses integrated within. But, the most used subprocesses we can classify as:

1. Idea generation process

To a significant part, this process will depend on the knowledge you have about your customers and the knowledge about your technology to find problems and causes. Because this process’s output will give you concrete next steps that you will need to take as a part of product development, it is one of the most critical value-added activities.

2. Design process

The next relevant sub-process is the design process. In this process, you will start creating the design of the product and services. Here you will need to create:

  • Features related to customer’s needs,
  • specifications,
  • look and feel of the product and
  • specific action steps that you will need to take to produce such a product or service.

3. Communication process

Another important process that adds value to your product development process is communication between your team members. There will be a need for meetings, talking, and the exchange of information.

This process is crucial because it can quickly become waste instead of value. In most cases, this will happen if your team members start to practice long-hour meetings. Usually, these meetings end without clear decisions about future steps.

So, don’t hold a meeting if you don’t design it for decision-making or action taking.

4. Testing and Experimenting

And as a last important process that I will mention here is testing and experimenting. What you develop on the paper is not the same as when you start creating in reality. Experimenting will bring you many problems that you have not discovered in the earlier processes. On the other side, it is the last chance to improve some specifications. You need to test and experiment with the products, production processes, suppliers, and customers.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan