New Product Development & Introduction (NPD/NPI)

–It is more important than ever to have a steady stream of successful new products.

–But currently almost 50% of new products fail to meet the targets set for them.

Money is being thrown away

–

Would you invest in a company with that level of performance?

Purpose of NPD Process

	•To obtain a higher success rate for new product development
	•To provide a common framework for all projects
	•To guide project teams with best practice models
	•To ensure all requirements are met
	•To identify problems early so as to rectify them or weed out weak projects
	•To help management identify the best projects in order to optimise the allocation of scarce resources

History of NPD

•Research by Academics and Consultancies in USA and Canada to find out differences between ‘winners’ and ‘losers’

	–Booz-Allen
	–Cooper & Edgett
	–Clark & Wheelwright
	–McGrath

•From this best practice has been distilled

•Cooper & Edgett invented the Stage-Gate^TM process

•PDMA formed in USA, now active in UK

Current NPD Performance

	•On average, 46% of NPD spending is on projects that are losers…top companies only spend 20% on losers. -
	•66% of CEOs are “somewhat” or “very disappointed” with their firms’ new product performance
	•>70% of projects take longer than expected
	•New products currently represent 50% of companies’ sales revenues & 40% of their profits, and this is growing
	•Innovativeness drives companies’ investment value
	•Only one in seven concepts is a winner
	•One-third of new products fail at launch

Stage-Gate^TMProcess

One way of helping to improve the situation is to have a formal Stage-Gate process. This brings discipline to the process and if well-applied will weed out the less favourable projects at an early stage, releasing resources for those projects that are likely to be more successful.

Portfolio Management

Portfolio Management is about Choosing the Right Projects

3 Goals of Portfolio Management

	•To maximize the value of the portfolio
	•To achieve a desired balance of projects
	•To link new product effort to the Business Strategy

Thanks to Bob Cooper from the Product Development Institute and Sopheon for some of the material here.

NPD / NPI Consultancy

Download our NPD/NPI Brochure or contact us by going to our Contact Page

The NPD / NPI process consultants at Elite Consulting can help you to review and improve your NPD / NPI process. Call to discuss.

We also have NPD / NPI software, called PD-Trak.