Donald G Reinertsen

there can be strong diseconomies associated with large batches. Furthermore, the modest reduction in variability due to the pooling of variances will be completely overwhelmed by the geometric increase in uncertainty caused by the longer planning horizons associated with large batches.

Donald G Reinertsen in The Principles of Product Development Flow

The current orthodoxy does not focus on understanding deeper economic relationships. Instead, it is, at best, based on observing correlations between pairs of proxy variables. For example, it observes that late design changes have higher costs than early design changes and prescribes front-loading problem solving. This ignores the fact that late changes can also create enormous economic value. The economic effect of a late change can only be evaluated by considering its complete economic impact.

Donald G Reinertsen in The Principles of Product Development Flow

how do we prevent all these small review meetings from driving up overhead? We conduct these review meetings on a regular time-based cadence. Every Wednesday afternoon at 1:00 pm, we review all the drawings completed in the last week. There is no need for a meeting announcement and no need to coordinate schedules. Meetings that are synchronized to a regular and predictable cadence have very low set-up costs. They contribute very little excess overhead.

Donald G Reinertsen in The Principles of Product Development Flow

We must recognize that our original plan was based on noisy data, viewed from a long time-horizon. For example, we may have started development believing a feature would take 1 week of effort and it would be valued by 50 percent of our customers. As we progressed through development, we may have discovered that this feature will require 10 weeks of effort and it will only be valued by 5 percent of our customers. This is a factor of 100 change in its cost-to-benefit ratio. This emergent information completely changes the economics of our original choice. In such cases, blindly insisting on conformance to the original plan destroys economic value.

Donald G Reinertsen in The Principles of Product Development Flow

To manage product development effectively, we must recognize that valuable new information is constantly arriving throughout the development cycle. Rather than remaining frozen in time, locked to our original plan, we must learn to make good economic choices using this emerging information.

Donald G Reinertsen in The Principles of Product Development Flow

variability is only a proxy variable. We are actually interested in influencing the economic cost of this variability.

Donald G Reinertsen in The Principles of Product Development Flow