Process structure
The product development process typically consists of several activities that firms employ in the complex process of delivering new products to the market. A process management approach is used to provide a structure. Product development often overlaps much with the engineering design process, particularly if the new product being developed involves application of math and/or science. Every new product will pass through a series of stages/phases, including ideation among other aspects ofProcess
#New Product Strategy – Innovators have clearly defined their goals and objectives for the new product. #Knowing Your Consumer – Doing market research or finding market research reports to understand the needs, problems, tastes, and desires of the consumer. #Idea Generation – Collective brainstorming ideas through internal and external sources. #Screening – Condense the number of brainstormed ideas. #Concept Testing – Structure an idea into a detailed concept. #Business Analysis – Understand the cost and profits of the new product and determining if they meet company objectives. #Product Development – Developing the sample, this involves the putting together of ideas and materials to form a testing product to the market. #Market Testing – Marketing mix is tested through a trial run of the product. #Commercialization – Introducing the product to the public. #Evaluation – Involves research to monitor the progress of new service offering in relation to organizational goals.Models
Conceptual models have been designed in order to facilitate a smooth process. * IDEO approach. The concept adopted by IDEO, a design and consulting firm, is one of the most researched processes in regard to new product development and is a five-step procedure. These steps are listed in chronological order: # Understand and observe the market, the client, the technology, and the limitations of the problem; # Synthesize the information collected at the first step; # Visualise new customers using the product; # Prototype, evaluate and improve the concept; # Implementation of design changes, which are associated with more technologically advanced procedures and therefore will require more time * BAH Model. One of the first developed models that today companies still use in the NPD process is the Booz, Allen and Hamilton (BAH) Model, published in 1982. This is the best known model because it underlies the NPD systems that have been put forward later. This model represents the foundation of all the other models that have been developed afterwards. Significant work has been conducted in order to propose better models, but in fact these models can be easily linked to BAH model. The seven steps of the BAH model are: new product strategy, idea generation, screening and evaluation, business analysis, development, testing, and commercialization. * Stage-gate model. A pioneer of NPD research in the consumers goods sector is Robert G. Cooper. Over the last two decades he conducted significant work in the area of NPD. The Stage-Gate model developed in the 1980s was proposed as a new tool for managing new products development processes. This was mainly applied to the consumers goods industry. The 2010 APQC benchmarking study reveals that 88% of U.S. businesses employ a stage-gate system to manage new products, from idea to launch. In return, the companies that adopt this system are reported to receive benefits such as improved teamwork, improved success rates, earlier detection of failure, a better launch, and even shorter cycle times – reduced by about 30%. These findings highlight the importance of the stage-gate model in the area of new product development. * Lean Start-up approach.Marketing considerations
There have been a number of approaches proposed for analyzing and responding to the marketing challenges of new product development. Two of these are ''the eight stages'' process of Peter Koen of the Stevens Institute of Technology, and a process known as ''the fuzzy front end.''Fuzzy front end
''The fuzzy front end'' (FFE) is the messy "getting started" period of new product engineering development processes. It is also referred to as the "Front End of Innovation", or "Idea Management". It is in the front end where the organization formulates a concept of the product to be developed and decides whether or not to invest resources in the further development of an idea. It is the phase between first consideration of an opportunity and when it is judged ready to enter the structured development process (Kim and Wilemon, 2007; Koen et al., 2001). It includes all activities from the search for new opportunities through the formation of a germ of an idea to the development of a precise concept. The Fuzzy Front End phase ends when an organization approves and begins formal development of the concept. Although the fuzzy front end may not be an expensive part of product development, it can consume 50% of development time (see Chapter 3 of the Smith and Reinertsen reference below), and it is where major commitments are typically made involving time, money, and the product's nature, thus setting the course for the entire project and final end product. Consequently, this phase should be considered as an essential part of development rather than something that happens "before development", and its cycle time should be included in the total development cycle time. Koen et al. (2001) distinguish five different front-end elements (not necessarily in a particular order): # Opportunity Identification # Opportunity Analysis # Idea Genesis # Idea Selection # Idea and Technology Development * The first element is the opportunity identification. In this element, large or incremental business and technological chances are identified in a more or less structured way. Using the guidelines established here, resources will eventually be allocated to new projects, which then leads to a structured NPPD (New Product & Process Development) strategy. * The second element is the opportunity analysis. It is done to translate the identified opportunities into implications for the business and technology specific context of the company. Here extensive efforts may be made to align ideas to target customer groups and do market studies and/or technical trials and research. * The third element is the idea genesis, which is described as evolutionary and iterative process progressing from birth to maturation of the opportunity into a tangible idea. The process of the idea genesis can be made internally or come from outside inputs, e.g. a supplier offering a new material/technology or from a customer with an unusual request. * The fourth element is the idea selection. Its purpose is to choose whether to pursue an idea by analyzing its potential business value. * The fifth element is the idea and technology development. During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this to be the first stage of the NPPD process (i.e., Stage 0). A universally acceptable definition for Fuzzy Front End or a dominant framework has not been developed so far. In a glossary of PDMA, it is mentioned that the fuzzy front end generally consists of three tasks: strategic planning, idea generation, and pre-technical evaluation. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is typically structured, predictable, and formal. The term ''fuzzy front end'' was first popularized by Smith and Reinertsen (1991). R.G. Cooper (1988) it describes the early stages of NPPD as a four-step process in which ideas are generated (I), subjected to a preliminary technical and market assessment (II) and merged to coherent product concepts (III) which are finally judged for their fit with existing product strategies and portfolios (IV).Other conceptualisations
Other authors have divided predevelopment product development activities differently.Phase zero of the Stage-Gate model of NPD
The Stage-Gate model of NPD predevelopment activities are summarised in Phase zero and one, in respect to earlier definition of predevelopment activities: # Preliminary # Technical assessment # Source-of-supply assessment: suppliers and partners or alliances #Early phase of the innovation process
A conceptual model of front-end process was proposed which includes early phases of the innovation process. This model is structured in three phases and three gates: * Phase 1: Environmental screening or opportunity identification stage in which external changes will be analysed and translated into potential business opportunities. * Phase 2: Preliminary definition of an idea or concept. * Phase 3: Detailed product, project or service definition, and business planning. The gates are: * Opportunity screening * Idea evaluation * Go/No-Go for development The final gate leads to a dedicated new product development project. Many professionals and academics consider that the general features of Fuzzy Front End (fuzziness, ambiguity, and uncertainty) make it difficult to see the FFE as a structured process, but rather as a set of interdependent activities ( e.g. Kim and Wilemon, 2002). However, Husig et al., 2005 0argue that front-end not need to be fuzzy, but can be handled in a structured manner. In fact Carbone showed that when using the front end success factors in an integrated process, product success is increased. Peter Koen argues that in the FFE for incremental, platform and radical projects, three separate strategies and processes are typically involved. The traditional Stage Gate (TM) process was designed for incremental product development, namely for a single product. The FFE for developing a new platform must start out with a strategic vision of where the company wants to develop products and this will lead to a family of products. Projects for breakthrough products start out with a similar strategic vision, but are associated with technologies which require new discoveries.Activity view on fuzzy-front end
Predevelopment is the initial stage in NPD and consists of numerous activities, such as: * product strategy formulation and communication * opportunity identification and assessment * idea generation * product definition * project planning * executive reviews Economical analysis, benchmarking of competitive products and modeling and prototyping are also important activities during the front-end activities. The outcomes of FFE are the: * mission statement * customer needs * details of the selected idea * product definition and specifications * economic analysis of the product * development schedule * project staffing and the budget * business plan aligned with corporate strategy Incremental, breakthrough, and platform products include: * ''Incremental products'' are considered to be cost reductions, improvements to existing product lines, additions to existing platforms and repositioning of existing products introduced in markets. * ''Breakthrough products'' are new to the company or new to the world and offer a 5–10 times or greater improvement in performance combined with a 30–50% or greater reduction in costs. * ''Platform products'' establish a basic architecture for a next generation product or process and are substantially larger in scope and resources than incremental projects.Strategies
*Management
The quote "Innovate or die!" is widely attributed toCustomer-Centric NPD
Customer-centric new product development focuses on finding new ways to solve customer problems and create more customer-satisfying experiences. Companies often rely on technology, but real success comes from understanding customer needs and values. The most successful companies were the ones that differentiated from others, solved major customer problems, offered a compelling customer value proposition, and engaged customers directly.Team-based NPD
Team-based new product development involves various company departments working closely together to overlap the steps in the product development process, which saves time and increases effectiveness. Departments that typically work together in cross-functional teams are legal, marketing, finances, design and manufacturing, suppliers and customer companies. If there is a problem, all the companies can work together to resolve it. Thanks to digital technology, customer co-creation has become an important part of the new product development process. This allows companies to get customer feedback and input early on in the process to ensure that they are developing a product that customers actually want.Systematic NPD
Systematic new product development focuses on creating a process that allows for the collection, review, and evaluation of new product ideas. This helps to ensure that good ideas are not lost and that the company is able to develop products that meet customer needs and desires. It also allows for the management of new product development from a holistic and systematic perspective, which can help increase the chances of success for new products. Having a way in which employees, suppliers, distributors, and dealers become involved in finding and developing new products is important to a company's success. It is also important for companies to have a process in place for monitoring the competition and their products so that they can stay ahead of the curve.Innovation Management
In order to successfully manage the new product development process, companies must have an= Innovation Manager
= An innovation manager is a senior person appointed to be responsible for implementing and managing the innovation management system. They are also responsible for ensuring that all aspects of new product development are taken into account and that the company is able to track and assess the progress of new products. The role of the innovation manager is becoming increasingly important, as more and more companies are realizing the importance of innovation and new product development. In order to be successful, companies must place a high priority on innovation and have the right tools in place to manage the process. Only then can they hope to create innovative and successful new products.= Cross-functional Innovation Management Committee
= A cross-functional innovation management committee is a team of individuals from different company departments,includingNPD in turbulent times
In difficult economic times, it is even more important for companies to focus on innovation and new product development. Oftentimes, such situations result in a short-sighted focus on cost-cutting and a reduction in spending on new products. However, companies that are able to innovate and create new products will be better positioned for the future. Although counter-intuitive, tough times may even call for a greater emphasis on new product development. This is because companies need to find ways to meet the changing needs and tastes of their customers. Innovation can help a company become more competitive and better positioned for the future. In difficult economic times, it is even more important for companies to focus on innovation and new product development. In addition, companies can use virtual product development to help reduce costs. Virtual product development uses collaboration technology to remove the need for co-located teams, which can result in significant cost savings such as a reduction in G&A (general & administrative) overhead costs of consulting firms. Another way to reduce the cost of new product development is through the use of 24-hour development cycles. This approach allows companies to develop products more quickly and at a lower cost. By using a 24-hour cycle, companies can shorten the time it takes to get a product to market, which can give them a competitive advantage and capability that can be extremely useful in cases where there is a sudden change in market conditions or customer needs. In difficult economic times, it is even more important for companies to focus on innovation and new product development. By using a variety of methods, such as virtual product development and 24-hour development cycles, companies can reduce the cost of new product development and improve their chances of success.Product Development Roles
There are many different roles in a product development team, however below is a list of some of the more common ones:Related fields
*See also
* Choice modelling *References
External links
* {{DEFAULTSORT:New Product Development Beginnings Design Industrial design Systems engineering