New Product Development - Fuzzy Front End

Fuzzy Front End

The Fuzzy Front End is the messy "getting ended" period of new product engineering development processes. It is in the front end where the organization formulates a concept of the product to be developed and decides whether or not to invest resources in the further development of an idea. It is the phase between first consideration of an opportunity and when it is judged ready to enter the structured development process (Kim and Wilemon, 2002; Koen et al., 2001). It includes all activities from the search for new opportunities through the formation of a germ of an idea to the development of a precise concept. The Fuzzy Front End ends when an organization approves and begins formal development of the concept.

Although the Fuzzy Front End may not be an expensive part of product development, it can consume 50% of development time (see Chapter 3 of the Smith and Reinertsen reference below), and it is where major commitments are typically made involving time, money, and the product’s nature, thus setting the course for the entire project and final end product. Consequently, this phase should be considered as an essential part of development rather than something that happens “before development,” and its cycle time should be included in the total development cycle time.

Koen et al. (2001, pp. 47–51) distinguish five different front-end elements (not necessarily in a particular order):

1. Opportunity Identification
2. Opportunity Analysis
3. Idea Genesis
4. Idea Selection
5. Concept and Technology Development

The first element is the opportunity identification. In this element, large or incremental business and technological chances are identified in a more or less structured way. Using the guidelines established here, resources will eventually be allocated to new projects.... which then lead to a structured NPPD (New Product & Process Development) strategy.

The second element is the opportunity analysis. It is done to translate the identified opportunities into implications for the business and technology specific context of the company. Here extensive efforts may be made to align ideas to target customer groups and do market studies and/or technical trials and research.

The third element is the idea genesis, which is described as evolutionary and iterative process progressing from birth to maturation of the opportunity into a tangible idea. The process of the idea genesis can be made internally or come from outside inputs, e.g. a supplier offering a new material/technology or from a customer with an unusual request.

The fourth element is the idea selection. Its purpose is to choose whether to pursue an idea by analyzing its potential business value.

The fifth element is the concept and technology development. During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this to be the first stage of the NPPD process (i.e., Stage 0).

The Fuzzy Front End is also described in literature as "Front End of Innovation", "Phase 0", "Stage 0" or "Pre-Project-Activities".

A universally acceptable definition for Fuzzy Front End or a dominant framework has not been developed so far. In a glossary of PDMA, it is mentioned that the Fuzzy Front End generally consists of three tasks: strategic planning, concept generation, and, especially, pre-technical evaluation. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is typically structured, predictable, and formal. The term Fuzzy Front End was first popularized by Smith and Reinertsen (1991). R.G.Cooper (1988) describes the early stages of NPPD as a four step process in which ideas are generated (I), subjected to a preliminary technical and market assessment (II) and merged to coherent product concepts (III) which are finally judged for their fit with existing product strategies and portfolios (IV). In a more recent paper, Cooper and Edgett (2008) affirm that vital predevelopment activities include:

1. Preliminary market assessment
2. Technical assessment
3. Source-of-supply-assessment: suppliers and partners or alliances
4. Market research: market size and segmentation analysis, VoC (voice of the customer) research
5. Product concept testing
6. Value-to-the customer assessment
7. Product definition
8. Business and financial analysis

These activities yield vital information to make a Go/No-Go to Development decision.

In one of the most earliest studies using the case study method, Khurana and Rosenthal defined the front-end to include the interrelated activities of:

• product strategy formulation and communication
• opportunity identification and assessment
• idea generation
• product definition
• project planning
• executive reviews

Economical analysis, benchmarking of competitive products and modeling and prototyping are also important activities during the front-end activities.

The outcomes of FFE are the

• mission statement
• customer needs
• details of the selected concept
• product definition and specifications
• economic analysis of the product
• the development schedule
• project staffing and the budget
• a business plan aligned with corporate strategy

In a paper by Husig, Kohn and Huskela (2005) a conceptual model of Front-End Process was proposed which includes early Phases of Innovation Process. This model is structured in three phases and three gates:

• Phase 1: Environmental screening or opportunity identification stage in which external changes will be analysed and translated into potential business opportunities.
• Phase 2: Preliminary definition of an idea or concept.
• Phase 3: Detailed product, project or concept definition, and Business planning.

The gates are:

• Opportunity screening
• Idea evaluation
• Go/No-Go for development

The final gate leads to a dedicated new product development project. Many professionals and academics consider that the general features of Fuzzy Front End (fuzziness, ambiguity, and uncertainty) make it difficult to see the FFE as a structured process,but rather as a set of interdependent activities ( e.g. Kim and Wilemon, 2002). However, Husig et al., 2005 argue that front-end not need to be fuzzy, but can be handled in a structured manner. In fact Carbone showed that when using the front end success factors in an integrated process, product success is increased. Peter Koen argues that in the FFE for incremental, platform and radical projects, three separate strategies and processes are typically involved. The traditional Stage Gate (TM) process was designed for incremental product development, namely for a single product. The FFE for developing a new platform must start out with a strategic vision of where the company wants to develop products and this will lead to a family of products. Projects for breakthrough products start out with a similar strategic vision, but are associated with technologies which require new discoveries.

It is worth mentioning what incremental, platform and breakthrough products are.

• Incremental products are considered to be cost reductions, improvements to existing product lines, additions to existing platforms and repositioning of existing products introduced in markets.
• Breakthrough products are new to the company or new to the world and offer a 5-10 times or greater improvement in performance combined with a 30-50% or greater reduction in costs.
• Platform products establish a basic architecture for a next generation product or process and are substantially larger in scope and resources than incremental projects.