Bringing a new product to market is a challenging and oftentimes complicated process. To do so, companies must follow a series dof steps known as the Product Development Lifecycle. These steps can be summarized into 3 stages: (1) Conceive, (2) Design, (3) Realize.
In reality, this process can be simplified even further. Stages 1 and 2 answer the question, "What do I need to do to make one unit of a product?" Stage 3 answers the question, "What do I need to do to make many units of this same product?" The answers to these two questions are known as New Product Development (NPD) and New Product Introduction (NPI), respectively. While NPI and NPD are similar in some respects, they vary when you start to question what problem each is trying to respectively answer
New Product Development
In NPD, your goal is turn an idea into a product. As mentioned previously, we accomplish this goal by answering the question:
What do I need to do to make one unit of a product?
To answer this question, an organization will go through what is frequently referred to as Idea Generation and Screening. During this stage of development, internal team members from marketing, sales, market research, finance, and others will come together to evaluate the market, identify an opportunity, ideate on products which would allow their company to capture that opportunity.
After an idea has been established and agreed upon comes Concept Development. This is when product requirements and constraints are outlined. This includes technical specifications, regulatory requirements, as well as expectations around costing and quality. Once constraints have been defined, and business leaders verify that developing this product is still worthwhile for the organization, product developers must create a Development Plan. This plan will often times consist of a sequence of milestones to create a final design and prototype of the product by a specific date. Plans will frequently begin with system level design, progress into more detailed level design, and finally become a completed design which can be tested, iterated, and improved upon. These efforts will culminate in a final product design: a single unit of the product. In this way, NPD helps establish an understanding of the right way to build the right product. Next comes the question of product realization, or new product introduction.
New Product Introduction
In NPI, the goal is to create and utilize a system that can supply and distribute a large quantity of the product developed during NPD. In similar fashion as NPD, we accomplish this goal by answering the question:
What do I need to do to make many units of this same product?
This question can be answered in a similar way as we did the previous question. The only difference between NPI and NPD is the type of system being designed. Wherein NPD produces a system that fulfills a market opportunity (a product), NPI produces a system that can scale and distribute or realize that product. Since in both instances a system is being designed, roughly the same sequence of steps is followed.
With the understanding that the end goal of NPI is to implement a system to mass produce a product, the process starts immedeatly at the conceptualization/constraints stage. In this stage, an understanding of what the requirements for the system are come into frame. Information around demand expectation, internal business timelines (marketing, sales, etc), budgeting information, supply chain constraints, and others come to the front of attention. With this, development teams can sort out what the ideal supply chain configuration should be and when different parts of it should be assembled by.
With a concept of the system and its requirements
is fleshed out, planning can begin. The content of that plan will depend on the maturity and flexibility of a company's existing supply chain. Frequently that plan will include sourcing (selecting a contract manufacturer, material suppliers, and logistics + freight services), scaling (gradually ramping up production with larger and larger batch sizes for product and manufacturing validation), as well as mass production on the tail end. Key milestones due dates are chosen knowing all of the business constraints laid out during the conceptualization stage. Often times, small scale production runs are timed to be completed and delivered in time for product launch marketing collateral or for early retail sales. At the end of every NPI plan is a launch date. The goal of this stage of planning is to create a schedule of milestones and tasks that if accomplished, will result in the company spending the least amount of money to make the generate the most revenue.
After a plan is complete, teams can begin coordinating internally and externally with contract manufacturers and other service providers. In this stage, plans are communicated to all relevant parties and sourcing (manufacturing, materials, logistics, etc.) begins. Sourcing requirements are dictated by the budget constraints laid out during the conceptualization stage.
Finally, all that's left is to execute on the plan made. All relevant parties play their role according to the broader plan. Without any errors, unforced or not, the plan should execute to completion. That said, errors are frequently unavoidable. Executing a new product introduction is much easier said than done. The interdependent, connected nature of the milestones within an NPI plan mean that small errors can result in big delays in the overall timeline. Delays in NPI milestones can have major unintended consequence depending on what business functions are dependent. In this way, effective planning and execution are critical to a successful NPI and product launch. Launch timing is critical and often times highly influential on a business's income. Timing the launch to coordinate with maximum mind-share from marketing efforts and available inventory from production is a businesses best odds at maximizing their post-launch revenue.
Bringing a product to market
Both NPD and NPI require roughly the same sequence of operations - namely because both stages are mechanisms for problem solving and solution development. In this way, NPD and NPI both roughly follow the following six steps of the Engineering Method:
Examining NPD as an engineering problem is intuitive. Doing the same for NPI may not seem as obvious. That said, by seeing NPI as a means of building and operating a system rather than an operational workflow you can measure, understand, and improve performance in a much more systematic way. In upcoming posts, we will examine what a successful NPI looks like and then how to measure and optimize for success in the future.