As with many processes at IBM, product development can be summarized with the three-letter abbreviation IPD—Integrated Product Design.
Simply put, IPD is a systematic process for product development based on fact based decision making involving all relevant job disciplines including sales, marketing and the supply chain, which includes manufacturing, logistics, procurement and fulfillment.
For companies using a discipline business process like IPD, the goal is to bring a solution to market that satisfies client needs and makes bottom-line results more predictable and profitable.
The IPD process ensures all factors in developing a proposed solution are considered throughout the checkpoint process and the solution’s entire life cycle before it ever goes to market.
Working in a Vacuum
Before IPD became widely accepted and implemented, engineers, just like many other people in manufacturing organizations, worked in silos—de-veloping products and lobbing them over the wall to sales and marketing.
This scenario describes IBM’s problem in the early 1990s. IBM funded products that didn’t meet the needs of the marketplace or never made it outside the laboratory. Creative ideas and innovations typical of IBM’s 3,000 patents annually needed predictable business processes that were consistent and reliable to transform them into marketplace product successes.
Lack of consistency and commonality across 30 internal individual supply chains also hampered product cost and quality at IBM. This impacted product design significantly because IBM was unable to leverage cost and quality benefits of a common building block process aligned to a standard set of preferred suppliers.
Measuring Success And Best Practices
By 1998, IBM had fully implemented IPD across its entire organization. The impetus for IPD was a new CEO. At the time, IBM was slow to market with several technologies and had lost focus. Negative corporate business results and sagging stock prices weren’t helping, either.
Something had to give: IBM’s brand needed to be transformed and reignited. To stop the bleeding, IBM hired a new CEO who wanted to see change fast and results even faster, thus launching a reengineering transformation. Since IPD, IBM has:
Cut the list of suppliers in half to 33,000.
Driven commonality across the different IBM brands and increased parts reuse to 63%.
Reduced abandoned project ex-penses from 25% to less than 2%.
Improved time to market three to four times across all IBM eServer platforms.
Enhanced operational efficiencies by quantum leaps.
Clearly, IPD has been the vehicle to make this happen—so much so that the IPD process has been turned into an IBM services consulting engagement. Clients are able to take pieces of IPD’s governance model, processes, and enabling tools and technologies to help achieve similar successes.
Based on IBM’s lessons learned, keys to IPD success include:
Executive support. Whether it’s a top down approach driven by the CEO or convincing a board of directors, support from the top will drive participant compliance within the organization and generate the attention it deserves.
Communication: This is essential to get the compliance needed for success. IBM targeted employees, management and executives and rolled out a worldwide training curriculum to explain IPD’s value and its importance to IBM.
Customer focus: IPD enabled IBM to become market driven with clearer customer centric processes.
Building one team: IPD broke down the silos and depended on the ability of cross functional teams to work together and execute.
Benchmarking: Measure progress with key targets while benchmarking against the industry. This is crucial in understanding strengths and weaknesses and to recognize areas that require focus.
Figure 1 illustrates the IPD process (at beginning).
Ever Evolving IPD
The world of on demand is predicated on constant change and rising customer expectations. So the work for IPD is still not complete, particularly as IBM’s products become more complex—integrating services, software and hardware into tightly woven business solutions.
The IPD team continues to improve the product development process by improving supply chain collaboration, particularly with the web of suppliers, external contractors and business partners that are part of IBM’s $40 billion global supply chain.
JIM DICKERSON is the director of integrated product design at IBM’s integrated supply chain division in Poughkeepsie, NY. He has a bachelor’s degree in electrical engineering from Rensselaer Polytechnic Institute in Troy, NY.