Why we think agile product development is a great option for the consumer goods industry
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.
Insight in brief
- 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.
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.
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.