Dynamics of Project Screening in a Product Development Pipeline

摘要

Management of a product development pipeline involves starting and steering several promising projects through a sequence of screens known as stages/gates. Only projects with payoffs above a predetermined threshold survive each screen. We model a two-stage product development pipeline as an aging chain with a co-flow. The co-flow structure tracks the number of projects and the corresponding net present value (NPV) of payoff. Managers at each stage must decide on capacity utilization, subject to a trade-off between throughput and value creation rate. Our simulation study mimics a range of relevant decision scenarios by varying the number of starts, screen thresholds, and managerial biases while adjusting utilization. Results illustrate that screening can eliminate the backlog bullwhip effect in the pipeline. Allied statistical analysis indicates a non-linear relationship between the number of starts and the value created at end of the pipeline. An increase in the screening threshold, in either stage, increases the average value of the projects but reduces the total value created. We also show that a managerial bias towards reducing backlog, instead of improving utilization, affects the average NPV negatively but does not affect the total value created at the end of the pipeline.