New Product Introduction (NPI)

The new product introduction (NPI) plays an important role in the business growth since it is a process of idea transformation from R&D stage into a launch product. As a first mover to adopt a new product into the market, it will improve profit and key competitor of the business. 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 product.

The NPI processes requires a dedicated project manager to ensure that the team is communicating effectively so the design, prototyping, engineering and manufacturing stages go as smoothly as possible. It is highly encouraged to develop the NPI plan in the beginning stage, the more efficient process will be. The process covers varies aspects which will bring the benefit to the organisation. The cost reduction in development stage can be avoid due late design changes, such as the material sourcing and other valuable resources on unnecessary prototypes. The NPI process also incorporates tools targeted at ensuring the product meets customer need and the process is capable of producing quality product.

This article discussed the NPI methodology including the different phases to implement NPI and the optimization for framework design of new product introduction management. The implication for the NPI process including the need of better understanding of inter-functional coordination are discussed.

Big Idea

What is NPI?

The NPI process (New Product Introduction) is an idea carries out process through various structed phased and result in a finished product being launched to the marketplace. The product could be something tangible, as in the case of a new model automobile, or intangible as in a particular service offered . NPI program involves a large great of collaboration in organization as well as cross-functional communication lead to the succeed.

NPD & NPD

The NPI sometimes can be referred to NPD (New Product Development) which are difference process. The New product development (NPD) is the foundation for NPI which is the process of idea developing to bring a new product to the marketplace. NPD phases required the input from various stage from engineering throughout supply chain partner whereas the NPI process focus on the product from the viewpoint of manufacturing.

Application

Phase-Gate Reviews

A Phase-gate or waterfall process is technique commonly use in project management. The phase-gate process is ideal for projects that involve large teams across multiple departments, as it is designed to handle many spinning plates in a short amount of time. It is typically used for new product developments, software/app/website launches and business-wide changes.

The NPI operates often using gate-phase model as it is the systematic model to manage a new product start to end. The number of phases and gates depend on the project/initiative size and a phase has only one gate associated . Each of phases ends in a gate review where the project manager asked to present the pre-defined deliverables and demonstrates the outcomes to the management whether the project should move on to the next phase of the product development process. Each of these reviews ends in a go/no-go decision . Therefore, there are opportunities for management to exterminate the project before committing to its launch.

New Product Introduction Steps

The NPI approach consists of six steps with five gates:

Step 1: Ideation

Ideation is the initiation of idea that has been generated. It is considered an the most important step where most of new product ideas come from. The idea could be developed from the exploring, market research and business analysis.

Step 2: Product Definition

The product definition often called discovery step as it is a process to explore the customer’s needs. In this step, the product requirements and concept are defined along with the voice of customers (VOC). The associate tool that often uses in this step in the Quality Function Deployment (QFD).

Step 3: Prototyping

The prototyping step involves the investment for developing the product. A detailed business plan is created with an intensive market research in parallel that proving the product feasibility. This is considered as the last phase of idea development where the idea will be finalized before starting to develop to the product. This is a crucial step as it reduces the market risk for the new product in all businesses. As it involves the investment, the financial model for the product is created and the price also determined in this step.

Step 4: Detailed Design

The activities in this step focus on the product design and carried out some early simple test of the product. In most cases the test performs with the customer to getting their feedback and incorporating it into the prototype. DFM/A (Design for Manufacture and Assembly) are performed in this step in order to finalize the design as well as BOM (Bill of Material) also generated. This is a stage where the procurement team will get involve heavily.

During the gate review, the project manager should cover the project information including the design, project timeline, risk assessment, business plan and financial status. Marketing, sales and production plans are also developed in this step as it is important that the goal of the project reflect in the plans.

Step 5: Pre-Production (Validation/Testing)

At this stage the product analysis and testing are performed to ensure that the prototype works as planned. The testing covers the product function, the manufacturing process, customer approval and the financial model for the products. PFMEA (Process Failure Modes and Effects Analysis) is a qualitative tool that can be used to identify the potential failure mode. The process risk is being to analyze and addressed.

As it is a last step before the final product is ready to be launch, the management requires to approve whether the project should be moving forward to the next step or the prototype need to be revised. Likewise, the market strategy needs to be confirmed at this point.

Step 6: Manufacturing

The pilot launch of the product is set up and the first production is performed in this step. The manufacturing processes are refined and validated through pilot builds and capability studies . As well as the documentation process including the production control plan, quality control and process work instruction are being developed and implemented. This is a step where the team required to bring the final product to the market including marketing and sales plans.

Limitations

A successful product performance and quality at initial release bring a lot of benefit and business growth in long term. Aspirational growth targets are fundamental to future business strategy and it greatly involves the exploring of new opportunities and introduce new products into the business.

Product quality, product performance, cost/margin and time to market are the successful criteria of NPI. These seems are the same criteria as general manufacturing process however, an excellent initial product release will reduce the risk of re-engineer the product. Since every gate that was assessed in NPI steps has been determine thoroughly on the engineering points therefore, it would be easy to manufacture on a small or large scale. Similar to the quality aspect, the process involves multi people assessing in each stage which is likely that the quality problem will be able to be addressed and analyzed in design steps. The output can be result in DFMEA (Design Failure Mode and Effect Analysis) and PFMEA (Process Failure Modes and Effects Analysis).

In addition, by incorporating the Voice of Customer (VOC) into the early stages of the project, the design team can avoid late design changes, multiple revisions and repeated costly validation testing.