new product development (npd) new product to grow market share or within overall strategic process...

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New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages 1. Idea generation (research, SWOT, consumer trends, R&D, competitors) 2. Idea screening phase (eliminate unsound concepts by asking questions) 3. Concept development and testing (marketing & engeneering details) 4. Business analysis (i.e. Selling price, sales volume, profitability etc.) 5. Beta testing and market testing (prototype, packaging, interviews) 6. Technical implementation (i.e. Resources, requirments, quality, logistics...) 7. Commerzialization (post NPD – launch, adverts, promos, distribution...) 8. NPD pricing (value analysis, procuct costs TIME!!!

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Page 1: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

New Product Development (NPD)New product to grow market share or within overall strategic process of product life cycle

Operations Management

8 Stages

1. Idea generation (research, SWOT, consumer trends, R&D, competitors)

2. Idea screening phase (eliminate unsound concepts by asking questions)

3. Concept development and testing (marketing & engeneering details)

4. Business analysis (i.e. Selling price, sales volume, profitability etc.)

5. Beta testing and market testing (prototype, packaging, interviews)

6. Technical implementation (i.e. Resources, requirments, quality, logistics...)

7. Commerzialization (post NPD – launch, adverts, promos, distribution...)

8. NPD pricing (value analysis, procuct costs

TIME!!!

Page 2: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

New Product Development (NPD)

The path to develop successful new products

a) Talk to the customer

b) nurture a project culture

c) Keep it focused

Operations Management

Page 3: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

New Product Development (NPD)

„Fuzzy Front End“

= the messy „getting ended“ period of a new product engeneering development. The front end where a company decides:

- to formulate a concept- not to invest resources- to go ahead an do into a structured process

Fuzzy Front End may not be an expensive part of the NDP but it can consume 50% of development time. It is where major commitments are made involving time, money and the products nature – setting

the course for the entire project and final end product!

Operations Management

Page 4: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Operations Management

Product Design

• Strategies for new product introduction• New product development process• Cross-functional product design• Supply chain collaboration• Quality function deployment• Value analysis• Modular design

Page 5: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Example pull: New Porsche car > „branding“ > existing needExample push: New perfume > „recognition“ > sleeping need

Operations Management

Market introduction strategy

Page 6: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

New Product Development Process

Operations Management

Organized NPD process following specific phases, often formally defined in company documents. This is to gain control and to ensure that all important issues are addresses by NPD team > required by

ISO 9000

Typical phases

a) Concept development

b) Product design

c) Pilot production/testing

Page 7: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

a) Concept development

Operations Management

• Generate ideas• Evaluate alternatives• Select one to go to next phase• Above decisison requires top managemenet approval• At time of decision cross-functional team gets established (if

not already existant) to design new product.

Page 8: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

b) Product design

Operations Management

Design the physical new product

From general idea to set of product specs and engeneering drawings/images in sufficient detail to build prototypes.

Product design requires many different trade-offs, such as:• Product costs• Quality (features)• Schedule

Simultaniously: Process design

Page 9: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

c) Pilot production/Testing

Operations Management

In many cases – testing!• Hardware• Software• Lifetime tests of reliability• Market test

Production process gets finalized!

Page 10: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

NPD product design process

Operations Management

Concept development

Pilot / Testing

Product design Prelim. Process design

Final process design

Page 11: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Cross functional product design

Operations Management

Sequential approach

Marketing Engeneering Operations

Page 12: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Cross functional product design

Operations Management

Concurrent engeneering

Marketing EngeneeringOperations

Effort

Time

Page 13: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Supply chain collaboration

Operations Management

Customers & suppliers

Customers:• Ask the right questions!• Present incentives• Create collaborative technology platform• Include customers as advisors to design team

Suppliers• Technical espertise• Cabability – targets for costs, quality &product performance• Capacity – meet schedule & ramp-up to production?• Low-risk – what is the risk if supplier will not perform?

Page 14: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Quality Function Deployment

Operations Management

Quality Function deployment (QFD) = translating the ordinary language obtained from the customer to technical requirements understood by engineers. Or, in other words , linking customer requirements to technical specifications.

„House of quality!“

Consists of:

Customer attributes

Engeneering characterisitcs

Page 15: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Value Analysis

Operations Management

It is not only about meeting customer requirments but also about ensuring that the product is manufacturable!

Desing for Manufacturing (DFM) is an approach consisting of:

1. Simplification of prodcuts

2. Manufacture of multiple products using common part, processes and modules

Page 16: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Modular Design

Operations Management

DFM also contains the aspect of how to simplify the design of multiple products.

Page 17: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages
Page 18: New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages

Value Analysis

Operations Management

It is not only about meeting customer requirments but also about ensuring that the product is manufacturable!

Desing for Manufacturing (DFM) is an approach consisting of:

1. Simplification of prodcuts

2. Manufacture of multiple products using common part, processes and modules