NPD lecture 1

Welcome

New product development is the term used to describe the complete process of bringing a new product or service to market.

Source: Wikipedia

New product development is the creation of products with new or different characteristics that offer new or additional benefits to the customer.

Source:

Hybrid Structures

Reflect strenghts and weaknesses of both centralized and decentralized structures

Increase the potential for achieving breakthroughs

Give business units the capacity to handle incremental innovation for current product

Definitions

Creation

Complete process

Product with new or different characteristics

New product or service

Customer

Market

Too many

ideas

Idea screen

Gate 1

&

Stage 1

Scoping

Second screen

Gate 2

&

Stage 2

Build business case

Go to development

Gate 3

&

Stage 3

Development

New Product

Development

Go to testing

Gate 4

&

Stage 4

Testing and validation

Stage-gate

Go to launch

Gate 5

&

Stage 5

Launch

Evaluation of NPD process

1. High quality new product process

2. Clear and well communicated new product strategy

3. Strategic focus and synergy

4. Entrepreneurial climate for product innovation

• Free time for doing creative things;
• Skunk works;

• Goals and objectives for the entire program are specified;
• The role of new products in achieving company goals is clearly communicated to all in the firm;
• There are clearly defined areas of strategic focus;
• New Product Program has a longer term thrust and focus;

Cooper (1986)

Few good ideas

• Having adequate resources;
• R&D budgets adequate;

• Product innovation process built on quality of execution;
• Completeness and thoroughness;
• Solid up-front homework;
• Sharp, early product definition;
• Market-oriented process;
• Tough Go/Kill decision points;

First hour:

• Presentation on NPD, Stage-gate and team organisation
• Idea generation session
• Presenting results

Hopefully it leads to....

Decentralized R&D

Centralized R&D

Team organization

Wheelwright and Clark (1992)

Functional teams

Autonomous team

Light weight project manager

Tirpak (2006)

Heavy weight project manager

Centralized R&D

Decentralized R&D

Strengths

• Encourages risk taking and long term thinking
• Increases likelihood of fundamental technology advances
• Emphasizes importance of research
• Helps attract top talent

Strengths

• Encourages alighment of projects and business needs; shortens time to market
• Increases accountability for budget
• Emphasizes incremental development
• Leverages efficiencies in business unites processes

Weaknesses

• May cause a disconnect beetween R&D and the company’s needs
• Product development cycles can be slow
• Accounting for benefits of the R&D program is hard
• ”Valley of death” can stop technology deployment

Weaknesses

• Short-term goals may compromise long-term sucesses
• Incremental improvements may overshadow top-line growth
• Efforts may be unintentionally duplicated
• Narrow focus of reaserch is common
• Difficult to adequately fund core competencies through the business cycle