Introduction to New Product DevelopmentJanuary 18, 2007.ppt

Introduction to New Product DevelopmentJanuary 18, 2007 Introduction to NPD Why is NPD an exciting topic? What separates winners from losers? Why does NPD matter? The NPD Process Introduction to NPD Why is NPD an exciting topic? Risky To avoid failure, everything has to be right: Concept Design Pricing Positioning Packaging Advertising and Promotion Risky New Products Showcase and Learning Center Largely for consumer products that tend to have higher failure rates: Critical Critical Introduction to NPD Why is NPD an exciting topic? What separates winners from losers? Winners vs. Losers Winners vs. Losers Introduction to NPD Why is NPD an exciting topic? What separates the winners from the losers? Why does NPD matter? Well-managed NPD processes are a significant source of performance improvement Decrease Development Time by 30-70% Reduce # of Engineering Changes by 65-90% Reduce Time-to-Market by 20-90% Increase Overall Product Quality by 200-600% Increase White Collar Productivity by 20-110% Increase Dollar Sales by 5-50% Increase Return on Assets by 20-120%Source: Product Leadership (2000) Robert Cooper PDMA Best Practices Survey (’97) The Best: average 49% of sales from products 5 yrs old have a success rate over 80% Use stage/gate processes more extensively ( more stages) reward team non-financially in public and private ways innovate in their use of market research and engineering design tools Source: Drivers of NPD Success: The PDMA Report Introduction to NPD Why is NPD such an exciting topic? Introductions Why does NPD matter? The NPD Process The NPD Process The NPD Process The NPD Process The NPD Process The NPD Process In phase 3 is really where the critical screening function begins. Not all concepts get from 2 to 3, but once in 3, the stakes are higher. We’ll talk about this phase a lot:concept tests, full screens, NPVs. Phase 4: 3 types of concrete development 1)Item/service acquires finite form -- a tangible prototype or a sequenc