Stage-Gate Model is a product innovation process which is a carefully designed business process. The need for a process like Stage-Gate Process is more than obvious from the fact that in many organizations, the research teams come up with new product ideas every now and then.
In order that an idea actually transforms into a product or service is totally dependent on the workability of the idea itself. If the idea is practical then there is a chance of resource allocation needed for the development of that particular idea into a product. More often, the ideas are dropped halfway through the development process resulting in losses for investing in the development.
Stage-Gate Model on the other hand helps to asses the idea for its workability, avoiding costs in the process. So, organizations can choose between n number of ideas and work on those which really have the potential to become good products.
Stage-Gate Process divides the product or service development process into predetermined set of stages. This provides a structure to the creative process and serves to improve the decision-making process. Each stage consists of a set of prescribed, cross-functional and parallel activities and each gate precedes each stage and serves as the quality control point and the Go/Kill check point.
An example for the Stage-Gate process can be shown in a drug development scenario. In drug development, the regulatory requirements function as the stage-gates. If a drug candidate fails a clinical test or a preclinical test, then the development has to be terminated as the Food and Drug Administration. And a drug cannot be sold without its approval.
Typically a stage-gate model typically has five stages. Sometimes there are several sub-stages in each stage depending upon the complexity of the product.
Stage 1: Initial investigation of the project.
Stage 2: Detailed investigation of the project. At this stage a business case of the project should be created which includes defining the product, the business jurisdiction and a detailed plan of action for the next stages.
Stage 3: Advanced design and development. It is important to define manufacturing and operating and operating process, marketing launch strategy, and test plans for the next stage.
Stage 4: Testing and Validation. The product is carefully verified and plans for marketing and production are made.
Stage 5: Launch and full-commercialization, production, marketing and selling take place.
Each stage costs more than the preceding stage and so stages are based on incremental commitment. Each stage aims at reducing uncertainties, although the expenditures of each stage increase. The Go/Kill decisions and prioritization points serve as quality control checkpoints.
To use the stage-gate process requires sufficient cross-functional teams and people willing to support each other and above all it requires an effective gate-keeping group. For large organizations managers with resource allocation authority can act as gate-keepers.
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