Risk Management for New Product/ Service Development
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Would you like to minimise the risk during new products launching? Are you interested in finding the best solution for risk management in your daily work? What are the benefits of avoiding profit loss through proper risk management? Most companies want to increase the success rate, and reduce the time and cost to market launch, of their new product development and the commercialisation of their R&D work. Much of the disappointments come from bad surprises leading to delays, development and manufacturing cost overruns, product performance shortfalls, poor sales figures and poor ROI. Robust risk assessment and management, supplementing well established NPD management processes are all vital to prevent, or at least minimise, these shortfalls. For new product development (NPD) and the commercialisation of R&D projects, the need for risk management is still not well appreciated or understood, and therefore usually not formally applied. Indeed it is sometimes purposefully and dangerously ignored and even discouraged by senior management as being “negative thinking”, “preparing excuses for lack of success” and “excuse for asking for more funding for risk contingencies”.
- Turning 'Theory' into 'Practice'?
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This intensive 2 day course is to assist managers and staff working on NPD and R&D to improve their approaches to assessing and managing risks, to prevent or minimise as far as possible the damaging surprises and their impacts. The course will also help the participants to promote risk management to their seniors, peers, and juniors. The sessions, run as workshops, will present risk management as a sensible requirement and provide the basics of the best approaches, methods and tools for it. Each session will typically consist of periods of presentations with cases and facilitated discussions. The various tools will be highlighted. The exchange of ideas and experience between the participants and the presenter will also be a valuable feature of the workshops.
- Who should attend?
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This course is designed for Directors, Heads, VPs, Managers and Project leaders. Specialists from all industries will benefit from the course. Job titles include: • Product / Service Development • R&D • Engineering and Systems • Project Leaders • Business Development • Marketing and sales • Those wishing to develop their career towards new product / service development, R&D and business development. • Sponsors, fund suppliers, venture capitalists for new product / service development and R&D • Established companies and also new start-ups being done by stand-alone entrepreneurs
- Key areas to be covered in the programme and documentation
- Introduction to Risk Management: Pure and Speculative Risk• Effectively defining what risk is and how it influences us• Differentiating between pure and speculative risk and learning ways of benefiting from each• Risk profiling: “Probabilities” and “Impacts”• Differentiating and dealing with risk from internal and external sources• Examining why some projects do not meet expectationsCase Studies Exercise: What were the main success and failure root causes (examples to be chosen to suit the participantsDefining and Profiting from the “Risk Management Businesses”• Discovering unexpected and extreme events that are more likely to occur: The “fat tails” of the normal distribution curve• Mastering risk aversion methods and tools: Past gain / loss experiences, statisticaldata of chance and impacts, Delphi, review processesFacilitated Discussion: Examining specific case studies from well known companiesCase Study: Key leanings from the risk management businesses like insurance, venture capital, and investment bankingDeveloping Processes and Tools for NPD and R&D Projects• Understanding differences between “new product development (NPD)” and “R&D”• Exploring the types of NPD that can vary from “new to the world” to “just a small easy change to existing product”• Successful product portfolio management and choosing the best out of several project opportunitiesExercise: Exploring the differences and similarities between Service Products and Physical ProductsInfluencing and Developing a Proactive Company Culture• Conducting due diligence and rigour of TQM (Total Quality Management) whilst reviewing processes• Selling “risk management” to senior management• Discovering why human behaviour is a major influencing risk factor• The Golden Rules– Risks with unaffordable impacts are not to be accepted?– Only take risks which you understand ?– Do not commit to plans which are obviously unrealistic i.e. well beyond“stretch targets”?– Risk assessment / management / reduction / prevention does not come for free?Video Case Study: Mercedes A-Class product failure, re-call, remedial action and event managementEffectively Preventing Mistakes• Risk Reduction and Avoidance Stemming from Sensible Practices, Methods and Tools• Avoiding mistakes, detecting errors and avoiding undue iteration• Usage of the well established stage-gate process and the available methods and tools for product definition, business planning, market assessments, design substantiation, manufacturing and supply chain substantiation• Technical review of various examples• Continuous review and decisions of “Go - No go” decisions• Dealing with “sunk costs” and “throwing good money after bad”Exercise: Decision leadership and damage limitationRisk Assessment and Management by Pro-active Risk Profiling - Determiningthe Size and Scope of Risks, Preparing Sufficient Contingency Plans and Funds• Identifying the risks: “External” and “internal” sources• Dealing with “What if ? scenarios”• Estimating the probabilities and impact for each risk item - including the uncertainties– Learning and referring to previous project experience, expert judgment consensus– Use of help templates• Decreasing risk profile by addressing each risk item• Considering overall risk profiles in order to help assess best, likely and worst case overall financial impacts• Determining whether the project is still “robust” or now “delicate”• Including an allowance in the project budget for the contingency funding needed for the back-up recovery plansExercise: Best / likely / worst case analysisRisk Management During the Project: Continual Monitoring and Risk Management• Documentation of the project, parts list / bill of materials, reliability growth• Reporting of project information, including the key metrics score card and statement of status of known risks and possible “show stoppers”• Effective assessment, monitoring and change control of:– Design and product performance, quality and safety conformance– Development costs– Suppliers’ prices (firm or estimates?)– Monthly recalculation of manufacturing costs– Rise of new competition– Sales volumes and financials: Break even time, ROI, IRR and NPV– Overall risk profile decrease as project proceeds• Assigning individuals as “risk owners” – Exploring the “risk owner” conceptVideo Case Study: Mercedes A-Class product failure, re-call, remedial action and event managementAchieving Commercial Success: NPD Projects Expected to Succeed Commercially• Assigning special exceptions e.g. “trial marketing”, “disruptive innovation”, “first of a kind”• Avoiding long term commercial prospects being reduced by “profitless price competition” if product becomes “commodity” or “me-too”Exercise: Robustness of the development projectVideo Case Study: “Catching the Wave” – Disruptive Innovations: opportunities and threatsCommercialisation Challenges for “R&D Projects” that are more Speculative than most NPD Projects• Maximising the chances of success by emphasising the “marketing aspects” of value proposition and competitive advantages• Identifying customer groups, product manufacturers, sales and distribution arrangements and establishing how the resulting products will eventually make profit• Assigning project approval and project management to managers with commercial interest and acumen• Emphasising feasibility studies and demonstration prototyping for new technology or new design concept projectsDiscussion: Is it sometimes preferable for an “R&D” group to hand the project on to an “NPD” group for commercialisation?
- Benefits to you
• Developing a professional, responsible and structured approach to risk management (covering the technical, financial, marketing, etc. aspects
) • Acquiring proactive risk management techniques
• Exploring best methods, templates and tools for dealing with the various sources and types of risks
• Efficient risk profiling, risk identification, assessment and reduction
• Effectively dealing with crisis management
• Learning best ways of persuasively presenting risk management issues to colleagues and senior management
• Keeping up with accepted “good practices” that are best used for reducing risk
• Exploring contingency planning, recovery plans and costs
• Embedding effective project management to improve and effectively manage risk
- Companies already benefiting include:
- Duration of Course
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2 Day Course
- Course details
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4th & 5th June 2018, London, UK, PT3737
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- Testimonials
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"This course will allow my company to develop its existing strategies to a much greater and hopefully profitable level."
Managing Director, Tarmac