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Managing flow in product development is different from managing flow in manufacturing. In manufacturing, we do not seek to scrap work; our goal is 100 percent first pass yield. However, in product development, we obtain new information as we progress. This new information alters the economics of our choices. For example, we may have originally believed that a feature was important to 50 percent of our customers and that it would take 1 week of engineering effort. Now, we discover that it is important to 5 percent of our customers and it will take 10 weeks of effort; the benefit to cost ratio of this feature has changed by 100x. When the economic consequences of past decisions have changed, we reevaluate these decision; even when this means scrapping partially completed work.
Emphasizing low attrition in product
development processes is fundamentally wrong. A development process with no
scrap rate is likely to be sub-optimized. But, do not interpret
this to mean that we should "celebrate scrap." We should celebrate good economic
choices.
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