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Resource optimization efforts often end up overloading your resources and creating bottlenecks. Make sure your critical resources have time built in to address unplanned activities. Focusing on fewer projects will speed up the time to market and avoid resource constraints.

New Product Development: Hurry up and wait

Posted  on 7/23/09

People waiting in a queueOften efforts to speed things up only slow things down

Resource optimization may ensure that your critical resources won't be available when you need them

Personally, whenever I hear the word "optimization,"  I shudder. To me, it means the same thing as "perfection," i.e., an effort in futility. Unfortunately, due to the current fixation on trying to do more with less, many companies embark on resource optimization, especially in the new product development area.

Usually, a resource optimization effort will start by identifying critical resources, those whose skills are in short supply and high demand. In NPD, this is often a resource in a shared function like quality or regulatory who gets spread across many teams.  A resource manager will determine how many activities this type of resource can accomplish and will then begin scheduling these activities for this resource in order to maximize their time. The result is that this person/people is spread even thinner on even more projects. However, no matter how much of a fudge factor is built in, this resource estimation is almost always wrong due to several factors. One is the planning fallacy which is our tendency to use best-case scenarios when making estimates. Another factor is multi-tasking. Every time someone switches to a new project or task, there is a small learning curve beforehand where they have to get up to speed with what they are doing. People can only remember so much information at one time. The more switching, the less time available for adding value. Lastly, similar to planning fallacy, we rarely consider that most of our day is spent in meetings, responding to emails, and fighting fires, not on our project tasks. The result is that our critical resources are always over-extended, ensuring that they become even bigger bottlenecks.

The only way to ensure that you have critical resources available for your important projects is to under schedule them. Critical resources should be underutilized to give them time to fight the inevitable fires that arise. As a rule of thumb, project resources should not be working on more than 3 or 4 projects at a time and a project manager should have no more than 1 or 2 projects at a time.

More projects in the pipeline mean less out the door

As a corollary to above, an easy way to reduce your time-to-market is to just work on less projects at a time. Spreading resources across numerous projects only increases your chances of bottlenecks, errors, and delays.  I once had the opportunity to see how this works using a simulation of the same number of projects - one scenario where they were scheduled sequentially and the other where the projects took place in parallel.  The projects completed in sequence resulted in faster cycle times, earlier product introductions, and more revenues. The only scenario where scheduling projects in parallel was more beneficial was when the teams needed to share lessons across the projects for successful development.

Creating the discipline to delay project start dates is difficult for many companies because they are afraid competitors will get there first or the project is a pet of the CEO's or an idea is so exciting everyone wants to start on it right away. It's just that starting now doesn't actually get you there any sooner.

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