In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market. A central aspect of NPD is product design, along with various business considerations. New product development is described broadly as the transformation of a market opportunity into a product available for sale. The product can be tangible (something physical which one can touch) or intangible (like a service, experience, or belief), though sometimes services and other processes are distinguished from "products." NPD requires an understanding of customer needs and wants, the competitive environment, and the nature of the market. Cost, time and quality are the main variables that drive customer needs. Aiming at these three variables, companies develop continuous practices and strategies to better satisfy customer requirements and to increase their own market share by a regular development of new products. There are many uncertainties and challenges which companies must face throughout the process. The use of best practices and the elimination of barriers to communication are the main concerns for the management of the NPD .
1 Process structure
3.1 Fuzzy Front End 3.2 Other approaches
4 Organizations 5 Strategies 6 Management 7 Related fields 8 See also 9 References
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 of design, as well as manufacturing and market introduction. In highly complex engineered products (e.g. aircraft, automotive, machinery), the NPD process can be likewise complex regarding management of personnel, milestones and deliverables. Such projects typically use an integrated product team approach. The process for managing large-scale complex engineering products is much slower (often 10-plus years) than that deployed for many types of consumer goods. The product development process is articulated and broken down in many different ways, many of which often include the following phases/stages:
Fuzzy front-end (FFE) is the set of activities employed before the
more formal and well defined requirements specification is completed.
Requirements speak to what the product should do or have, at varying
degrees of specificity, in order to meet the perceived market or
The front-end marketing phases have been very well researched, with
valuable models proposed. Peter Koen et al. provides a five-step
front-end activity called front-end innovation: opportunity
identification, opportunity analysis, idea genesis, idea selection,
and idea and technology development. He also includes an engine in the
middle of the five front-end stages and the possible outside barriers
that can influence the process outcome. The engine represents the
management driving the activities described. The front end of the
innovation is the greatest area of weakness in the NPD process. This
is mainly because the FFE is often chaotic, unpredictable and
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 this step will require more time.
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 BAH model are: new product strategy, idea
generation, screening and evaluation, business analysis, development,
testing, and commercialization.
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.
Over the last few years, the
Lean Startup movement has grown in
popularity, challenging many of the assumptions inherent in the
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 lead 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).
The Fuzzy Front End is also described in literature[by whom?] as "Front End of Innovation", "Phase 0", "Stage 0" or "Pre-Project-Activities". 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, especially, 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) 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 approaches Other authors have divided predevelopment product development activities differently:
Source-of-supply assessment: suppliers and partners or alliances
Market research: market size and segmentation analysis, VoC (voice of
the customer) research
Product idea testing
Customer value assessment
These activities yield essential information to make a Go/No-Go to Development decision. One of the earliest studies using the case study method defined the front-end to include the interrelated activities of:
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 the development schedule project staffing and the budget a business plan aligned with corporate strategy
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  argue 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. Incremental, platform and breakthrough 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.
Product Development and
Lean product development
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 Companies must take a holistic approach to managing this process and must continue to innovate and develop new products if they want to grow and prosper.
CUSTOMER CENTERED New Product Development. Focuses on:
Finding new ways to solve customer problems. Create more customer-satisfying experience
Companies often rely on technology, but the 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 Engaged customer directly
TEAM BASED New Product Development
An approach: To deserving new products in which various company's departments work closely together overlapping the steps in the product development process in order to:
Save time Increase effectiveness
SYSTEMATIC New Product Development
Development process should be holistic (alternative) and systematic
not to good ideas die.
This process is installed on Innovation
the company appoints to a senior person to be the Innovation Manager who encourage all the company employees, suppliers, distributors and dealers to become involved in finding and developing new products.
Then, there is a Cross-Functional Innovation
Evaluate new products ideas Help bringing good ideas
To sum up, New-Product success requires: New ways to create valued customer experience, from generating and screening new product ideas to create and roll out want-satisfying products.
New Product Development IN TURBULENT TIMES
When we are in a tough economic situation usually management reduces spending on: new-product development. Usually it is done from a short-sighted point of view. Tough times might even call for:
Greater new-product development, offering solutions for changing customer needs and tastes. Innovation helps Making the company more competitive Positioning it better for future.
Virtual product development
Uses collaboration technology to remove need for co-located teams Reduces G&A overhead costs of consulting firms Advent of 24-hour development cycle
End user Brand management Engineering Industrial design Marketing Product management
Choice modelling Commercialization Conceptual economy Product lifecycle Pro-innovation bias Requirements management Social design Soft launch Market penetration
^ A dictionary of business and management (5th ed.). Oxford [England]:
Oxford University Press. 2009. ISBN 9780199234899.
^ Kahn, Kenneth B. (2012). The PDMA handbook of new product
development (3 ed.). Hoboken, New Jersey: John Wiley & Sons Inc.
ISBN 978-0-470-64820-9. A thorough understanding of customers'
needs and wants, the competitive situation, and the nature of the
market is an essential component of new product success.
^ Koen, Peter A. "The fuzzy front-end for incremental, breakthrough
and platform products and services" (PDF). Consortium for corporate
entrepreneurship. Retrieved February 5, 2017. [dead link]
^ Smith, P. Robert; Eppinger, P. Steven (1997). "Identifying
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^ Yassine, Ali; Braha, Dan (2003),"Complex Concurrent