tm&i 2010 IV.1

technology management & innovation

new product development (NPD)

tm&i 2010 IV.2

innovation & technology development

Some large Corporations

Companies (both small & large)Universities & Research Institutes

Governments & Research Councils Private investors Venture Capital Firms Corporate R&D Sales Revenue (ROI)

BASIC APPLIED NEW PRODUCT DEVELOPMENT ON MARKET

From Technology Strategy Board,

tm&i 2010 IV.3

new product development (NPD) is a critical part of the overall process in transforming new technologies into functional products

tm&i 2010 IV.4

technology development process*

• Fundamental development & proof of principle

• Patent filings

• Product & license opportunities

• Business & marketing strategy

• Product developments

• License negotiations

• Transfer to manufacture

• On-going IP management

• On-going development

Early Phase

Mid Phase

Late Phase

Technology Transfer

Product Development

Product Innovation

*slide courtesy of Erasmus Technology LLP

http://www.erasmus.eu.com

tm&i 2010 IV.5

NPD

IP

technology

know-how

$ capital

market awareness

new product

new product development is a process

•NPD has inputs & outputs, and requires time to complete

time

tm&i 2010 IV.6

traditional NPD process

compartmentalised (department or function-based) processes

serial flow from one division to the nextmultiple “handover” pointsplenty of scope for misunderstandingslittle or no opportunity for design changesR&D function isolated from end users

R&D manufacturing marketing sales

tm&i 2010 IV.7

product

marketing sales

R&D manufacturing

C-TEAM

integrated product development

marketing sales

R&D manufacturing

marketing sales

R&D manufacturing

B-TEAM

A-TEAM

product A

product C

time

product launch date

A B C

B

tm&i 2010 IV.8

integrated PD process

advantages•cross-functional teams•work flow is project (product) based•core team is responsible for product from concept to completion•integrated approach bridges communication gaps between different business functions•design improvements/changes more easily incorporated•product is more closely aligned to end-user’s needs

marketing sales

R&D manufacturing

the cross-functional core team are responsible for the full product

design cycle, from concept through to completion

tm&i 2010 IV.9

product life cycle curve*sales vs time

sales

timeintroduction

growth

maturity

decline

introduction

new product development

*reproduced from ‘Product Innovation: leading change through integrated product development’. D. Rainey. CUP (2005), p.82.

tm&i 2010 IV.10

• the standard product life cycle curve is a plot of sales against time

• there are four distinct phases:• introduction, growth, maturity &

decline

• the purpose of NPD is to replace those products, or product families, that are in decline

tm&i 2010 IV.11

the six phases of the NPD process*

*reproduced from ‘Product Innovation: leading change through integrated product development’. D. Rainey. CUP (2005), p.113

idea generation

concept developmen

t & selection

NPD programme

planning

design & developmen

t

validationpre-

commercial

tm&i 2010 IV.12

new product development

• NPD translates technology innovations into products

• it’s a business process, with inputs & outputs• integrated NPD uses cross-functional teams in

order to produce better products, quicker• products in the market tend to follow a “life

cycle”• the business objective of NPD is to replace

ageing products (in decline) with innovative new products