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Applying Agile Methodologies to Hardware Product Development 

Agile Hardware Product DevelopmentAgile methodologies: the early years

In the early 2000s, the future of product development changed forever. Agile methodology originated in the software sector as a new approach to managing software development.

Industry leaders knew they needed to find a new, innovative approach because many software development projects were failing or taking too much time to finish. A group of 17 software developers from Extreme Programming, Scrum, DSDM, Adaptive Software Development, and Crystal created and signed the Manifesto for Agile Software Development in 2001. The group had come together to explore alternatives to conventional project management techniques for software development.

The Agile Alliance marked the start of what are current agile methodologies. At first, agile was mainly used to manage software development projects. However, with today’s combined hardware and software products, speed-to-market demands, constant change, and remote workforces, it has evolved into a project management process that can and should be adopted by almost any engineering organization.

Using agile methodologies for new product development

Today, manufacturers are constantly revisiting their new product development (NPD) strategy to address fluctuating market conditions and gain a lead on the competition. With ongoing supply chain disruptions, evolving regulatory requirements, and increasing consumer demand for more personalized products, companies must drive greater flexibility and transparency throughout the NPD process to minimize risks and achieve commercialization success. The adoption of agile product development practices enables manufacturers to keep pace with innovation and deliver products that meet customers’ ever-changing needs.


Traditionally, product development has been broken down into linear or sequential phases, commonly known as Waterfall. Using this methodology, a new phase cannot begin until the previous one ends with sign-off and approval. Different teams are often assigned to different phases throughout the product development process.

This rigid, siloed approach works well if you are designing products with simple hardware components and the project requirements and milestones are clearly defined from the beginning. However, today’s environment is in constant flux. Furthermore, product designs are much more complex—integrating mechanical, electrical, and software elements as well as the Internet of Things (IoT), sensors, artificial intelligence (AI), and other advanced technologies. These products require feedback from key stakeholders and end users at every phase to ensure that they deliver the greatest value. To compound matters, companies are outsourcing a significant portion of their design and production work to contract manufacturers, multitiered suppliers, and other external partners for greater product differentiation.

Limitations of the Waterfall method in an evolving product development landscape

The Waterfall method fails to address this new way of working and factor in the many unknowns that come with getting highly sophisticated products to market within shorter NPD cycles. More likely than not, unexpected issues or new information will arise and impact the design of the product. Whether it be an unforeseen part shortage or customers’ desire for different hardware functionality, organizations need the flexibility to quickly change course throughout the entire concept-to-production process.

To compensate for the shortcomings of Waterfall, a team of software developers created the Agile Manifesto which provides principles to help guide organizations in adopting more agile product development practices1:

12 Principles Behind the Agile Manifesto

  1. Satisfy customers through early and continuous delivery of valuable products
  2. Welcome changing requirements
  3. Deliver working products frequently
  4. Encourage regular communication across teams
  5. Create an environment that motivates teams to get the job done
  6. Conduct face-to-face conversations whenever possible to convey information efficiently and effectively
  7. Use working versions of the final product to measure progress
  8. Drive sustainable product development by breaking down processes into small and achievable milestones
  9. Pay attention to technical excellence and good design
  10. Simplify your work
  11. Rely on self-organizing teams to create the best product design
  12. Regularly review and identify areas for process improvement, then adjust accordingly

Rapid Design Iterations

Adopting agile methodology for customer-driven and dynamic product development

Based on these principles, agile methodology utilizes rapid design iterations or “sprints” to respond quickly to change throughout the NPD process and deliver products that meet customers’ expectations. Unlike the traditional Waterfall method, team members work in parallel and collaborate frequently throughout each iteration to make incremental design enhancements and release them for assessment. There’s a continuous feedback loop between product teams, contract manufacturers, suppliers, customers, and other key stakeholders which drives better decision-making throughout each phase. The goal is to produce a finished product that resonates with current market conditions and makes the biggest impact.

Embracing change: the benefits of agile product development

There are many benefits of agile that can help hardware product companies effectively meet their goals. The decision to adopt an agile environment represents a conscious desire to embrace change. Agile manufacturing, or product development, emphasizes continuous improvement, quick design iterations, and frequent communication. The objective is to create products that resonate with customers and reflect the current market.

Here are five benefits of why the agile process can boost your company’s productivity and effectively meet its goals.

The benefits include Increased:

  1. Visibility: Increased visibility helps your teams understand how their work connects to the overall vision and why their work matters, especially critical for morale. If everyone is on the same page, it’s easier to make strategic, coordinated changes as needed. Visibility isn’t just helpful for leaders; it’s helpful for people and teams at every level of the organization.
  2. Alignment: Adaptability can’t happen without improved alignment. Agile alignment has both an internal and an external component. Internal alignment begins with motivated, self-organized teams who are empowered to execute from an earned level of trust and autonomy. External alignment comes from prioritizing customer feedback throughout the development process, even if it comes toward the end of the development cycle.
  3. Customer Satisfaction: Manufacturers can consult with the customer throughout the whole product development process while involving them in design decisions, especially in the early prototype stages where decisions can be exchanged surrounding product design. This helps companies deliver better value and ensure the final product is built according to the customer’s specific requirements.
  4. Acceleration of Product Releases: Agile teams maintain alignment and focus on achieving a common goal when a collaborative foundation is in place. They carry out several jobs simultaneously and maintain a steady, effective pace to quicken the NPD cycle.
  5. Business Value: Any agile team’s objective is to improve the value created for the client. Agile gives everyone the power to make sure that work is done in a way that maximizes customer value at every level of the organization. Everyone working on a task must decide at the start of each iteration which deliverables will be given priority. Collectively, everyone must choose the deliverables that will add the most value. This awareness makes it possible to ensure that the job done closely reflects the needs and wants of the clients.


Although the agile methodology was originally intended for software, more and more organizations are realizing the benefits of applying it to hardware product development. Core principles are the same for both digital and physical products; however, some modifications are needed to address the unique challenges of hardware development.

The key elements of agile product development for hardware include:

Rapid Experimentation

Through open communication, internal product team members and external partners regularly exchange new design ideas and experiment in the early concept phase to ensure that they pinpoint the actual market need. By leveraging technologies like additive manufacturing and 3D printing, they can quickly release physical prototypes for customer validation with each iteration. As part of the prototype release, teams determine:

  • What type of functionality and/or physical attributes should be incorporated
  • What key questions need to be answered by the customer to gain valuable insights

During this discovery exercise, the goal is to be receptive to new findings and not start crafting product requirements until adequate customer input is gathered and analyzed.


Teams identify and prepare for the possible unknowns and risks that are imminent over the course of the project. This includes developing a sourcing strategy to mitigate part shortages and other supply chain shocks. At this point, they start to formulate high-level product attributes that will eventually translate into specific requirements and features. A prioritized list of engineering and design tasks (i.e., product backlog) is also developed to ensure everyone stays on track.

Multidisciplinary Teams

Iterations run more efficiently when small cross-functional teams work concurrently to complete various tasks. The team is typically comprised of a product managerproject manager, engineers, functional leads (e.g., quality, procurement, operations), and external partners. Having full representation from these key disciplines throughout the entire project helps organizations stay abreast of design for manufacturability (DFM) mistakes, part delays, cost overruns, and other issues which could negatively impact the product.


With frequent collaboration and planning at the core of agile hardware development, cloud-native product lifecycle management (PLM) and quality management system (QMS) solutions provide a single source of truth for internal teams and external partners to access the latest product information and work in real time throughout the entire NPD process. Because product designs (i.e., mechanical, electrical, and software), assemblies, parts, requirements, quality information, and project tasks are linked together, everyone stays on track with completing key deliverables and has full visibility into any issues that warrant changes early in the iteration cycle. With a seamless connection to CAD, engineers can push updated designs to downstream team members for review. In turn, they can work in parallel to fine-tune certain features and quickly deliver the next release.

What does the future hold for agile?

It’s difficult to predict what’s going to happen to agile and how the future will shape its evolution. There’s been a lot of experience applying agile to small, straightforward single-team development projects, then scaling agile to larger and more complicated enterprise-level solutions.

As companies begin applying agile on a broader scale to larger and more complex projects, there’s often a need to blend some form of project or program management to be more effective. That challenge calls for a lot more expertise and knowledge, as well as a much deeper understanding of the agile guiding principles.

Agile was originally designed around small, simple, single-team projects and it can be difficult to scale. Many organizations are finding a better solution is to tailor the methodology to the nature of the problem. That may require a blend, a convergence of agile and a project management solution or the Waterfall method in the right proportions to fit the situation.

Learn about how to develop hardware like software-agile development:

To learn more about how cloud-native solutions drive more agile product development processes, visit our resource page.


Agile Alliance. The 12 Principles Behind the Agile Manifesto.