New product development

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:

1. 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 business need.
2. Product design is the development of both the high-level and detailed-level design of the product: which turns the what of the requirements into a specific how this particular product will meet those requirements. This typically has the most overlap with the engineering design process, but can also include industrial design and even purely aesthetic aspects of design. On the marketing and planning side, this phase ends at pre-commercialization analysis stage.
3. Product implementation often refers to later stages of detailed engineering design (e.g. refining mechanical or electrical hardware, or software, or goods or other product forms), as well as test process that may be used to validate that the prototype actually meets all design specifications that were established.
4. Fuzzy back-end or commercialization phase represent the action steps where the production and market launch occur.

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 unstructured.[4] Engineering design is the process whereby a technical solution is developed iteratively to solve a given problem[5][6][7] The design stage is very important because at this stage most of the product life cycle costs are engaged. Previous research shows that 70–80% of the final product quality and 70% of the product entire life-cycle cost are determined in the product design phase, therefore the design-manufacturing interface represent the greatest opportunity for cost reduction.[8] Design projects last from a few weeks to three years with an average of one year.[9] Design and Commercialization phases usually start a very early collaboration. When the concept design is finished it will be sent to manufacturing plant for prototyping, developing a Concurrent Engineering approach by implementing practices such as QFD, DFM/DFA and more. The output of the design (engineering) is a set of product and process specifications – mostly in the form of drawings, and the output of manufacturing is the product ready for sale.[10] Basically, the design team will develop drawings with technical specifications representing the future product, and will send it to the manufacturing plant to be executed. Solving product/process fit problems is of high priority in information communication design because 90% of the development effort must be scrapped if any changes are made after the release to manufacturing.[10]

1. New Product Strategy – Innovators have clearly defined their goals and objectives for the new product.
2. Idea Generation – Collective brainstorming ideas through internal and external sources.
3. Screening – Condense the number of brainstormed ideas.
4. Concept Testing – Structure an idea into a detailed concept.
5. Business Analysis – Understand the cost and profits of the new product and determining if they meet company objectives.
6. Product Development – Developing the product.
7. Market Testing – Marketing mix is tested through a trial run of the product.
8. Commercialization – Introducing the product to the public.
9. Evaluation – Involves research to monitor progress of new service offering in relation to organizational goals.

Conceptual models have been designed in order to facilitate a smooth process.

• IDEO approach. The concept adopted by IDEO, a design and consulting firm, is one of the most researched processes in regard to new product development and is a five-step procedure.[11] These steps are listed in chronological order:

1. Understand and observe the market, the client, the technology, and the limitations of the problem;
2. Synthesize the information collected at the first step;
3. Visualise new customers using the product;
4. Prototype, evaluate and improve the concept;
5. Implementation of design changes which are associated with more technologically advanced procedures and therefore this step will require more time

• BAH Model. 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.[12] This is the best known model because it underlies the NPD systems that have been put forward later.[13] 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.
• Stage-gate model. 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.[14] 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%.[15] These findings highlight the importance of the stage-gate model in the area of new product development.
• Lean Start-up approach. Over the last few years, the Lean Startup movement has grown in popularity, challenging many of the assumptions inherent in the stage-gate model.
• Exploratory product development model. Exploratory product development, which often goes by the acronym ExPD, is an emerging approach to new product development. Consultants Mary Drotar and Kathy Morrissey first introduced ExPD at the 2015 Product Development and Management Association annual meeting[16] and later outlined their approach in the Product Development and Management Association's magazine Visions.[16] In 2015, their firm Strategy2Market received the trademark on the term "Exploratory PD".[17] Rather than going through a set of discrete phases, like the phase-gate process, exploratory product development allows organizations to adapt to a landscape of shifting market circumstances and uncertainty by using a more flexible and adaptable product development process for both hardware and software. Where the traditional phase-gate approach works best in a stable market environment, ExPD is more suitable for product development in markets that are unstable and less predictable. Unstable and unpredictable markets cause uncertainty and risk in product development. Many factors contribute to the outcome of a project, and ExPD works on the assumption that the ones that the product team doesn't know enough about or are unaware of are the factors that create uncertainty and risk. The primary goal of ExPD is to reduce uncertainty and risk by reducing the unknown. When organizations adapt quickly to the changing environment (market, technology, regulations, globalization, etc.), they reduce uncertainty and risk, which leads to product success. ExPD is described as a two-pronged, integrated systems approach. Drotar and Morrissey state that product development is complex and needs to be managed as a system, integrating essential elements: strategy, portfolio management, organization/teams/culture, metrics, market/customer understanding, and process.[16]

There have been a number of approaches proposed for analyzing and responding to the marketing challenges of new product development. Two of these are the eight stages process of Peter Koen of the Stevens Institute of Technology, and a process known as the fuzzy front end.

• Lean product development
• Design for six sigma
• Quality function deployment
• Phase–gate model
• User-centered design

[35] 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
  • Company departments work closely together in cross functional teams overlapping the steps in the product development process (to save time and increase effectiveness).
  • Those departments are: legal, marketing, finances, design and manufacturing, suppliers and customer companies.
  • If there is a problem, all the company can work.
  • Nowadays due to digital technology, involvement of customer through the process of customer co-creation has become an important part of the new product development process.
• SYSTEMATIC New Product Development
  • Development process should be holistic (alternative) and systematic not to good ideas die.
  • This process is installed on Innovation Management System that collect, review, evaluate new product ideas and manage
    • 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 Management Committee which:
    • 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
• Innovation
• Market penetration
• Open innovation
• Pro-innovation bias
• Product lifecycle
• Requirements management
• Social design
• Soft launch