The best practices for New Product Introduction (NPI) in Manufacturing
Any business looking to boost revenue growth needs to launch new products or services. Yet, one professor at Harvard Business School alarmingly suggests that 30,000 new products hit the market each year, but as many as 95% fail. This is a real cause for concern for businesses because more than a quarter of their revenue and profits are generated from the launch of new products.
Research has also shown that companies that focus on creating new products and services while maintaining core competencies across functions grow faster than their peers. And as companies look to future growth, the overwhelming majority expect it to come from creating new products, services, or business models.
In a digitally-driven world, companies must continuously strive to improve existing products or introduce new models to ensure they keep up with digital trends. Yet all the work involved in the design, development and introduction of new products is often overlooked.
Why is it so difficult to launch a product?
Technology has upped the ante and made successful product launches more challenging. New systems have lowered the bar for product development, allowing companies and start-ups to roll out more launches more quickly and at a lower cost. Digital technologies, in particular, have allowed companies to rapidly pilot and scale new services, from loyalty programs to support for existing products.
As the risks of failure inherent in every new product situation vary, so do the returns. The balance of investments, risk and returns is a major criterion in deciding whether or not to proceed with a new product. Acknowledging that virtually every new product will inevitably carry some level of risk does not, however, prevents companies from striving to limit risk to a minimum.
The introduction of new products that consumers and OEMs demand require detailed information, time and dedicated resources from an organisation. Companies who successfully develop and launch new or revised products regularly follow a structured and well-planned process. New Product Introduction (NPI) helps bring all the right resources together at the right time.
With shorter life cycles and the demand for greater product variety, continual pressure is put on new product development (NPD) teams to produce an extensive portfolio of new product opportunities. Meanwhile, it's understood that these teams have the resources to manage the risks associated with progressing new products through every stage, right from initial development to the eventual launch.
Bringing a successful product to market is a team effort. While a design engineer's job covers managing the design process - including customer usability and user experience - many factors contribute to the success or failure of NPD. Additionally, many of these are beyond the direct control of a design engineer.
An NPI program encompasses all the activities within an organisation to define, develop and launch a new or improved product. The product can be a tangible device - a car, mobile phone, instrument - or an intangible service. The NPI process can vary from one organisation to the next, and in some cases, these variances exist across different divisions of the same company. For an NPI to succeed it must have the full active support of management across business sectors and departments. An effective NPI program involves a large amount of cross-functional communication and teamwork.
Most successful organisations realise the importance of implementing an NPI process. In today's highly competitive market, companies are under pressure to develop the right product at the right time, and at the right cost. Therefore, formulating and following a robust NPI process can often be the difference between success and failure. Some of the advantages of a robust NPI process include:
- Reduced development cost: By incorporating the Voice of Customers (VOC) in the early stages of the project, the product design team can avoid late design changes, multiple revisions, and costly validation testing.
- Faster time to market: With a reduction in development time, the product will reach the consumer faster.
- Efficient manufacturing: Through the effective use of Design for Manufacturing and Assembly (DFM/DFA) best practices, products are designed with the process in mind.
- Improved product quality: The NPI process incorporates tools that are targeted at ensuring the product meets customer needs and that the process is capable of consistently producing quality products.
How do Manufacturers implement NPI?
An NPI process can consist of various phases or gates. The phase gate system keeps management apprised of the project progress and ensures that all activities are completed on time and on budget. The example shown below consists of six phases:
- Define
- Feasibility
- Develop
- Validate
- Implement
- Evaluate
The NPI process is not a straight line - each phase of the NPI process feeds into the next. Many organisations look at the process as having a beginning (define) and an end (evaluate). Some variations combine the define and feasibility phases into one and develop and validate into another. A lot of companies leave the evaluate phase out completely, thus losing valuable information for future projects. The hardest phase for many organisations is the evaluate phase. The timing of the evaluate phase can vary depending on the organisation, the product being produced, or the service provided. It is generally initiated 30 to 60 days following the product launch and serves several purposes in the product introduction process. This phase provides the team with an opportunity to tie up any remaining documentation tasks, review process performance and collect customer feedback.
At this stage, the team takes the opportunity to review any lessons and document them for future projects. One tool that has proven effective for organisations is the TGR/TGW exercise. This stands for "Things Gone Right / Things Gone Wrong." During this exercise, the team objectively reflect on the project, discussing what went well and what didn't go to plan or could have been improved. The causes of the TGWs are examined and countermeasures are developed to prevent re-occurrence in the next project. The TGRs should be carried over to future projects as a continuous improvement effort within the NPI process, essentially closing the loop in NPI, helping to retain valuable information and to develop a more robust and progressive NPI process.
Find your next job with Redline Group
Are you looking for your next New Product Introduction (NPI) job? You can find a full breakdown of the typical Manufacturing & Operations Recruitment handled by Redline or begin the search for a Manufacturing Engineer job. To find out more about careers in manufacturing or to see our latest job opportunities, get in touch with Tom Drew, Principal Consultant within our Manufacturing & Operations team.
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