npd process

What is the NPD Process?

The new product development process, or NPD for short, consists of every activity associated with taking an idea, developing a product based on that idea, and creating a sellable product that generates revenue and earnings, as illustrated above.

A common misconception is that NPD is solely the responsibility of R&D. While R&D certainly has the biggest and most visible role, management must realize that NPD is a key business process, not just an R&D function. Management must be fully engaged!

Concept of the Development "Vortex"

The NPD development process is commonly represented by a funnel. At the opening of the funnel is the universe of product ideas that a company could potentially work on. The ideas have to be screened and prioritized as every company has resource limitations and cannot possibly, or should, develop every idea into a product. Once a decision is made to develop the product, then a common approach is to use a "phased development process" with its series of phases and gates to guide the product development.

The concept of the funnel, however, implies an orderly process from one phase to the next. A better representation is to think of the development "funnel" as a "vortex", as illustrated to the right.

The real world of product development tends to be much more chaotic and the process is better visualized in the context of a vortex. As development proceeds in most companies, problems surface with projects. There are design loopbacks, forcing the project team to retreat to the previous phase. Project teams are delayed starting on a new project because of problems with existing projects. In the early phases, a project may get ejected from the process and put on hold. Other projects may be inserted. Helping companies manage this complex business process is what New Product Visions is all about!

How Do We Measure NPD Success?

NPD success is often measured by whether the new product meets:

1. Performance, product cost, and product quality objectives

2. Project cost objectives

3. Schedule targets

These three criteria are often referred to as the "triple constraint". While those are obviously important, it misses the point of why new products are developed in the first place: to satisfy customer needs better than competitive products and generate revenue and earnings growth for the firm. Just because a new product meets the performance, project cost, and schedule does not guarantee market success over the medium to long term. Maybe the definition for the new product was just not what the market wanted or needed. On the other hand, a new product might be a year late, but when it is introduced, is wildly successful in generating revenue and earnings growth

The point is that NPD success is about effectiveness and that's more than just satisfying the "triple constraint" criteria. Let New Product Visions help you achieve a higher level of NPD effectiveness!

Contact us today to find out more about how we can partner with you to improve the effectiveness of your new product development process.

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