Commerce and Consumer Goods

Why we think agile product development is a great option for the consumer goods industry

When developing consumer goods, Zühlke is increasingly employing agile methods. For software development, agile methods are already pretty standard, but agile principles also offer advantages for product developers. This article looks at the benefits of agile product development in the consumer goods industry and offers tips on how to get started.

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  • Advantages: Can adapt to fixed budgets and deadlines; failing early saves time and allows the budget to be better targeted; incorporates end customers and up-to-the-minute market needs into the development process; transparency for product managers and sales departments.

  • Hurdles: High complexity; needs to bring together different disciplines; requires adaptation of organisational structures.

  • Key factors: A common language across all disciplines; systems integration planning; continuous systems integration; teams organised by subassembly or feature.

Agile product development delivers a product which is exactly what the consumer wants and exactly what the market demands – not just whatever got put in the original specification.

When developing consumer goods, Zühlke is increasingly employing agile methods. For software development, agile methods are already pretty standard, but agile principles also offer advantages for product developers. This article looks at the benefits of agile product development in the consumer goods industry and offers tips on how to get started.

Waterfall vs. agile methodology

Up to now, most consumer product have been developed using the waterfall model.

In the waterfall model, the individual process phases are planned and performed sequentially. Deliverables are reviewed and approved at the end of each phase. The next phase is only given the go ahead once all details across all departments have been confirmed. Requirements and objectives are laid down in a specification sheet at the start of the project. The process and the work to be performed are at this point already defined. The waterfall model appears to achieve a high level of predictability and control. But appearances can be deceptive. New insights and observations during development and changes over the course of the project end up leading to major revisions.

Agile methodology, by contrast, represents a fundamentally different approach. With an agile methodology, the first thing you do is tackle key risks and develop an architecture which meets your minimum requirements. After that the development team implements those features that offer the greatest benefit to the client and the consumer. In contrast to the waterfall model, the level of detail for different features can be at very different stages of maturity.

The key features of agile product development are an iterative/incremental approach with short development cycles, cross-functional teams and regular external feedback on the developing product.

The advantages of agile product development at a glance

Below we explore the main advantages of agile product development for the consumer goods industry. We start with the ability to respond quickly to changing requirements:

Rapid implementation of up-to-the-minute market requirements for consumer goods

Doing away with complex specifications at the beginning of the project (cf. the waterfall model) reduces time-to-market and enables teams to react faster to changes in market requirements. For a product with a fixed budget and a fixed development timescale, agile methods make it possible to develop the product offering the greatest benefit to the client and consumer.

More importantly, the end result will meet actual consumer and market demand, rather than being bound by whatever was in the original specification.

These characteristics mean that agile methods can be highly appropriate for producers of consumer goods. This is a sector where ever more exacting consumer requirements result in ever more complex products and longer development cycles. It’s often the case that at the start of the project there are still a number of unknowns. Agile product development offers a high level of flexibility and responds well to new requirements and external factors.

Transparency for product managers and sales

A further advantage of agile product development is that projects are more transparent. Product marketers can keep abreast of ongoing development via the continuously developing interim product and switch course at an early stage in response to changing market requirements if required. The sales department can also use the interim product to update sales partners or canvas the views of pilot customers. This approach facilitates very rapid market feedback.

The agile workflow ensures best use of the development budget and time available, and alignment with market requirements. It ensures that the product management, marketing and sales departments – your interface with the market – are much more involved with the project.

An agile, cross-functional approach also prevents the client from having one discipline spend too long working on a solution that causes unnecessary problems for another discipline, setting the whole project back. 

A fixed budget and set deadlines

As well as engagement with the market and greater transparency, agile product development offers another important advantage – It enables us to achieve the best possible result for a given budget and in a given time frame. This is very much in keeping with the zeitgeist and meets the needs of our clients in the consumer goods industry and their customers. From a start-up that has agreed a fixed budget and timescale with its investors to a consumer goods company that needs fixed launch dates and a fixed development budget, agile methods work for companies of all shapes and sizes.

Regular access to the developing product gives the product manager a much clearer idea of what he or she is going to end up with. This makes it easier to correct erroneous developments, and also enables feedback from other departments, especially sales, and from test customers to be taken into account.

So now let's talk about getting started with and implementing an agile product development model. Below we summarise what we consider to be the five most important points to consider.

Tips for getting started with and implementing an agile product development process

For the consumer goods industry, agile product development offers the key advantage that it enables user involvement. You can react to the very latest user and consumer trends and conduct continuous market research.

1. A common language shared by all disciplines

Over the last few years, Zühlke has been working hard on transplanting agile ways of working rooted in software development to the development process for networked consumer goods made up of embedded software, electronics, mechanical components and often an IoT solution.

A key requirement for effective agile product development is good communication between all of the different disciplines involved. That means that all of these disciplines need to agree a common technical terminology. The term ‘prototype’ is a good example. Whereas, for a software developer, a prototype is a fairly throwaway object, as it represents a very early design model, for a mechanical engineer a prototype is the result of a lengthy development process and is almost production quality.

That’s why you should create a shared glossary featuring crystal clear terms such as ‘software prototype’ and ‘device prototype’. This kind of common language is essential for reducing misunderstandings and facilitating communication between different disciplines. 

2. The systems integration plan

With a nod to release planning in Scrum, here at Zühlke we use a systems integration plan which acts as a key element for controlling joint agile product development.

Based on the system requirements (for example in the form of a system backlog), the team defines the sequence of development steps. They then set deadlines for when specific versions of the electronics, mechanics and software should be able to work together. Each discipline has to work towards these integration points. On top of all that, it’s also important that infrastructure, testing and documentation activities don’t get forgotten. Once the team has committed to a systems integration plan, you’re already well on the way to agile product development. 

3. Continuous systems integration, not big bang

Now we come to identifying and dealing with risk. Agile projects enable us to tackle risks at an early stage. In software development, continuous integration is a key, established method of tackling and managing at the earliest possible stage the risks involved in integrating software modules.

For a product development project, however, continuous integration of the software alone, followed by a big bang integration of the finished software with the hardware and the finished system is just not good enough. Even if every discipline has done a nice tight job up to this point, integration will always throw up a multitude of details resulting in unplannable cycles of analysis and correction.

So we’ve extended the concept of continuous integration to cover all of the disciplines involved in product development. Software integration starts out on an evaluation board and gets moved onto the real project hardware at the earliest possible opportunity. In the same way, the mechatronic systems also get integrated with the hardware as early as physically possible. That means any obstacles to integration are dealt with at an early stage. And to reduce testing costs, we automate many of the steps involved in integration.

Take, for example, an Internet of Things product. Development work on the device, the app and the backend continuously flows together. Attention also needs to be paid to ever changing market and user requirements. Agile methods help you integrate the individual components correctly and keep your complex project under control.

4. Save time by failing early

If you do experience failure, it doesn’t really matter. Fail fast, fail cheap is the mantra – the earlier you recognise a problem, the more time you have to tackle it. This also gives you the opportunity to terminate a project that isn’t going to be commercially successful at an early stage and make more profitable use of the budget assigned to the project. Here at Zühlke, we have been applying this agile principle for years by using agile product development to develop complete consumer products. 

5. Organise your teams right

Our final tip is that teams should be centred around a subassembly or feature rather than a specific discipline.

The graphic shows an interdisciplinary team composed of mechanical engineers, electrical engineers and software engineers. As the product status progresses from ‘lab model’, to ‘integration model’ and finally to ‘close-to-production model’, the development teams are repeatedly reshuffled. The key factor in shaping these teams is how much of what sort of expertise is required at each stage of development. The teams are not fixed, they adapt depending on circumstances. A range of different experts come together during product development depending on requirements.

Take these five tips on board, and you’re already well on your way to a successful agile product development process.

Agile Software Development Graphic

The consumer goods industry needs agile methods

It’s not just for product development that agile and cross-functional ways of working are useful. Once successfully implemented, these project structures also boost internal collaboration and networking within the company. This way of working works for both small, dynamic companies and large corporations. To date we have been just as effective at supporting early-stage, venture capital-financed companies as we have large corporations with a fixed budget and fixed deadlines derived from internal ROI forecasting. 

Correctly applying agile methods is highly effective at keeping everything on time and on budget and delivering maximum benefit. And – particularly important in the case of consumer goods – the end result is what consumers, users and the market want.

If you have any questions on this issue, please get in touch.
Contact person for Germany

Jens von der Brelie

Managing Director ICP Germany & Partner

Jens von der Brelie has extensive experience in product development, product management and sales in the industrial sector. He has over 30 years experience in plant engineering, automation technology, building technologies, and the consumer goods industry. He joined Zuhlke in 2011, and currently leads our Industrial and Consumer Products division. He has a degree in electrical engineering from the Technical University of Braunschweig where he specialised in data technology.

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