New Product Development (NPD) New product to grow market share or within overall strategic process of product life cycle Operations Management 8 Stages 1.Idea generation (research, SWOT, consumer trends, R&D, competitors) 2.Idea screening phase (eliminate unsound concepts by asking questions) 3.Concept development and testing (marketing & engeneering details) 4.Business analysis (i.e. Selling price, sales volume, profitability etc.) 5.Beta testing and market testing (prototype, packaging, interviews) 6.Technical implementation (i.e. Resources, requirments, quality, logistics...) 7.Commerzialization (post NPD – launch, adverts, promos, distribution...) 8.NPD pricing (value analysis, procuct costs TIME!!!

New Product Development (NPD) The path to develop successful new products a) Talk to the customer b) nurture a project culture c) Keep it focused Operations Management

New Product Development (NPD) „Fuzzy Front End“ = the messy „getting ended“ period of a new product engeneering development. The front end where a company decides: - to formulate a concept - not to invest resources - to go ahead an do into a structured process Fuzzy Front End may not be an expensive part of the NDP but it can consume 50% of development time. It is where major commitments are made involving time, money and the products nature – setting the course for the entire project and final end product! Operations Management

Product Design Strategies for new product introduction New product development process Cross-functional product design Supply chain collaboration Quality function deployment Value analysis Modular design

Example pull: New Porsche car > „branding“ > existing need Example push: New perfume > „recognition“ > sleeping need Operations Management Market introduction strategy

New Product Development Process Operations Management Organized NPD process following specific phases, often formally defined in company documents. This is to gain control and to ensure that all important issues are addresses by NPD team > required by ISO 9000 Typical phases a)Concept development b)Product design c)Pilot production/testing

a) Concept development Operations Management Generate ideas Evaluate alternatives Select one to go to next phase Above decisison requires top managemenet approval At time of decision cross-functional team gets established (if not already existant) to design new product.

b) Product design Operations Management Design the physical new product From general idea to set of product specs and engeneering drawings/images in sufficient detail to build prototypes. Product design requires many different trade-offs, such as: Product costs Quality (features) Schedule Simultaniously: Process design

c) Pilot production/Testing Operations Management In many cases – testing! Hardware Software Lifetime tests of reliability Market test Production process gets finalized!

NPD product design process Operations Management Concept development Pilot / Testing Product design Prelim. Process design Final process design

Cross functional product design Operations Management Sequential approach Marketing EngeneeringOperations

Cross functional product design Operations Management Concurrent engeneering Marketing Engeneering Operations Effort Time

Supply chain collaboration Operations Management Customers & suppliers Customers: Ask the right questions! Present incentives Create collaborative technology platform Include customers as advisors to design team Suppliers Technical espertise Cabability – targets for costs, quality &product performance Capacity – meet schedule & ramp-up to production? Low-risk – what is the risk if supplier will not perform?

Quality Function Deployment Operations Management Quality Function deployment (QFD) = translating the ordinary language obtained from the customer to technical requirements understood by engineers. Or, in other words, linking customer requirements to technical specifications.  „House of quality!“ Consists of: Customer attributes Engeneering characterisitcs

Value Analysis Operations Management It is not only about meeting customer requirments but also about ensuring that the product is manufacturable! Desing for Manufacturing (DFM) is an approach consisting of: 1.Simplification of prodcuts 2.Manufacture of multiple products using common part, processes and modules

Modular Design Operations Management DFM also contains the aspect of how to simplify the design of multiple products.

Value Analysis Operations Management It is not only about meeting customer requirments but also about ensuring that the product is manufacturable! Desing for Manufacturing (DFM) is an approach consisting of: 1.Simplification of prodcuts 2.Manufacture of multiple products using common part, processes and modules