Stage and gate process

Like discovery-driven planning, stage-gate design places checkpoints in the development process for review of progress and outcomes. However, it only focuses on the pre-launch phase of the product life cycle, not the post-launch phase. Discovery-driven planning extends further into the product life cycle, covering both before and after launch periods of the product life cycle. 

Management pushed projects into the pipeline without considering what effect the additional project would have on those projects already in progress. This is analogous to the push method for production control. 

FIGURE 29.1 Before and After views of stage and gate implementation. 

Eventually, the product pipeline becomes stuffed with projects, and too few reach completion. In many cases, there is also little involvement by supply chain partners. There is no formal mechanism for their involvement. Unreliable schedules are another obstacle. 

TABLE 29.1 Applying the Stage-Gate Technique to Supply Chain Management 

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Stage and gate approach to product development Formal processes used for the development of new products and services in companies of all sizes. It includes (1) clearly defined stages in which specific tasks are undertaken, (2) the development of compelling, comprehensive business cases, (3) go/no go decision points at the end of each Stage using clearly defined measurable criteria, and (4) the objective review of actual versus planned performance for every new product, after its introduction to the marketplace. (Adapted from Winning at New Products)... 

Stages and gates, an approach developed by Robert Cooper, will improve supply chain planning in companies with numerous projects. ln these situations, the projects are usually of different sizes and priorities. They are moving at different paces through a product development "pipeline." While many companies already use some form of the technique, that use is often confined to the technical side of the development process. We believe the stage and gate technique suits both product and process improvement. 

The cost of treatment to process one tonne is difficult to define since it depends on many factors such as scale, location, scope, preparation stages, and economic parameters used. As a rough example, for a 25,000 tpa plant in Western Europe (1998 prices), BP estimated the investment to be 15 to 20 million. This would imply a gate fee of around 172 per tonne (some 250). For a 50,000 tpa plant the gate fee could be 100 per tonne (some 150).These figures are net, i.e., include product values but exclude collection and preparation. 

The cost of treatment depends on many factors such as scale, location, scope, required preparation stages, and economic parameters used. Hence, comparison of the processes is difficult. The investment costs of a plant of 25 000 tpa, located in Western Europe in 1998, were estimated as 15-20 M . Under these conditions, a gate fee of some 250 /tonne is necessary. For a 50000-tpa plant this gate fee could be some 150 /tonne. These hgures exclude the cost of collection and of preparation. 

The fixed capital investment is the cost to build the manufacturing facility. Corresponding to the different levels in the gating process given in Table 16.1 are methods of cost estimation that have different levels of accuracy. Here we describe estimation methods for the conceptual design stages that use process cost correlations (which are usually accurate to 40 to 50%) and the bare module factor method ( 30%). Some estimation methods provide improved accuracy but require vendor quotations detailed estimates of material costs of piping, valves, and insulation and estimates of installation labor hours and the mix of labor rates. Such methods are beyond the scope of this chapter. 

Because of the importance of these decisions many companies have elected to have a formalized process to review projects and decide which projects should be supported and which should be discontinued. Without a rigorous method, the wrong projects often get selected. Instead of decisions being based upon facts and objective criteria, they are often based upon company politics and emotion with the end result that too many fail [9]. One of these formalized processes was introduced by Robert Cooper and is called the Stage-Gate process. It is described in his popular book first introduced in 1998 and now in its fourth edition [10]. 

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