Phase–gate model

A phase–gate model, also referred to as a phase–gate process or a stage-gate process, is a project management technique in which an initiative or project (e.g., new product development, process improvement, business change) is divided into stages or phases, separated by gates. At each gate, the continuation of the process is decided by (typically) a manager or a steering committee. The decision is based on the information available at the time, including the business case, risk analysis, and availability of necessary resources (e.g., money, people with correct competencies). The phase–gate model may also be known as stage-limited commitment or creeping commitment.

Phased scope development and investment decision is a fundamental concept of chemical engineering and engineering economics, particularly since the 1940s as chemical complexity and scale of chemical processes grew. One source describes eight phases in the development of a chemical product starting with research, economic study, scale-up (pilot plant) and design leading to full funds authorization. In 1958, the American Association of Cost Engineers created four standard cost estimate type classifications to match these development and approval phases. Other industries with complex products and projects picked up on the process. For example, NASA practiced the concept of phased development in the 1960s with its phased project planning or what is often called phased review process. The phased review process was intended to break up the development of any project into a series of phases that could be individually reviewed in sequence. Review points at the end of each phase required that a number of criteria be met before the project could progress to the next phase. The phased review process consisted of five phases (Preliminary Analysis, Definition, Design, Development, Operations) with periodic development reviews between phases. NASA's phased review process is considered a first generation process because it did not take into consideration the analysis of external markets in new product development.

The phase–gate model refers to the use of funnel tools in decision making when dealing with new product development. "Gates" or decision points are placed at places in the product development process that are most beneficial to making decisions regarding continuance of product development. These production areas between the gates are idea generation, establishment of feasibility, development of capability, testing and validation and product launch. At the conclusion of each of these areas of development of a new product, it is the responsibility of senior management to make a decision as to whether or not the product should continue to be developed. The passing of gate to gate can be accomplished either formally, with some sort of documentation, or informally, decided upon based on the preferences and culture of the organization.

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