Why Batch Size Matters To Product Managers Who Want To Be Successful

by drjim on December 17, 2012

Product managers who know how to manage batches can take the cake…

Product managers who know how to manage batches can take the cake…
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Most of the products that we product managers are responsible for are made up of many different parts. Even if you are in charge of a service product, I’m willing to bet that there are a number of different “parts” that go into creating the product that you offer to your customers. Here’s a very important question for you that should be part of your product development definition: when your product is being created, should you work with it in large or small batches?

All About Batches

How many individual parts go into creating the product that you manage? 10, 50, 100, more? When you are putting your product together, as its product manager you have an important decision to make. When do you start to test and evaluate the quality of the product that you are building? Do you wait until all of the individual parts have been created and assembled or do you start earlier? Answer this question correctly and you’ll have something to add to your product manager resume.

I’m going to make a confession here. Deep down inside I belong to the “put it all together and test it” group. I mean really, until the thing has been completely built, does it really make any sense to work with it or test it? It turns out that it does.

Let’s say that your product consists of 100 different parts that all have to be assembled in order to create one of your products. If you start to test the products that you are creating once you’ve gotten 20 of these parts put together, something magical will start to happen. There’s a thing called “batch size” – the number of your products that are sitting around waiting to be sold. If you reduce the number of products that you have on hand before you start performing testing, then you will have dramatically shrunk the size of your batches.

Why Small Batches Are Better Than Large Batches

Small batches are much better for a product manager to be dealing with than large batches. The reason for this is because when you shrink your batch size, it causes all of the queues in your product development process to shrink also.

When you are able to make the queues that your product has to sit through smaller, then all of a sudden you’ve been able to apply “lean manufacturing” to your product. The benefits of this are well known: faster feedback, better cycle times, better quality, and increased efficiency.

All too often we product managers like to set up the creation process for our products to use large batch sizes. The reasons for this are varied, but it basically comes down to a mistaken belief on our part that large batches provide us with economies of scale.

It turns out that this isn’t quite correct. As an example of large batch sizes, think about going to the store and buying milk. Assuming that you use one container of milk per week, then you could buy 52 containers of milk at the beginning of the year and be done with buying milk for the rest of the year. However, that milk isn’t going to last and you’re going to end up with a lot of waste. The same thing can happen with creating large batches of your product – you may end up creating large batches that have to be thrown away.

The correct thing for a product manager to do is to come up with a balance between batch sizes that are too large and batch sizes that are too small. Discovering this quantity will all you to improve the development of your product.

What All Of This Means For You

Product managers need to change the way that they think about how their product is being developed. They need to discard their old belief that creating large batches of their product will result in economies of scale. That was never in your product manager job description.

Instead what product managers need to understand is that starting testing of their product using smaller batches will allow them to balance holding costs vs transaction costs and will minimize the amount of waste that their product development process creates.

Nobody ever said that this product management job was going to be easy. Before you can market and sell a product successfully, you are going to have to make sure that your company does a good job of creating it. Taking the time to discover what the correct batch size is for your product can reduce development queue sizes and boost the quality and quantity of your product.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think doing a series of experiments would be the best way to determine your optimal product development queue size?

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What We’ll Be Talking About Next Time

If you got a chance to sit down with another product manager and share with them what you thought that they would have to do in order to be successful, what would you tell them? I’m thinking that a lot of us would tell them that they needed to make sure that once they came up with a development plan for their product, they needed to make sure that their team stuck with it. This is considered to be part of the product development definition. It turns out that this just might be the worst advice that you could give to a product manager…

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