27.40.2028, 19:02 New Product Introduction (NPN) - appom
New Product Introduction (NPI)
From apppm
By Nongnapat Suksusiang, 5213572
The new product introduction (NPI) plays an important role in business growth since it is a process of idea transformation
from R&D stage into a launch product. As a first mover to adopt a new product into the market, it will improve profit and
key competitor of the business. Yet, one professor at Harvard Business School alarmingly suggests that 30,000 new products
hit the market each year, but as many as 95% fail. This is a real cause for concer for businesses because more than a quarter
of their revenue and profits are generated from the launch of new product !"
‘The NPI processes requires a dedicated project manager to ensure that the team is communicating effectively so the design,
prototyping, engineering and manufacturing stages go as smoothly as possible (I, It is highly encouraged to develop the NPI
plan in the beginning stage, the more efficient process will be. The process covers varies aspects which will bring the benefit
to the organisation. The cost reduction in development stage can be avoid due late design changes, such as the material
sourcing and other valuable resources on unnecessary prototypes. The NPI process also incorporates tools targeted at
ensuring the product meets customer need and the process is capable of producing quality products,
This article discussed the NPT methodology including the different phases to implement NPI and the optimization for
framework design of new product introduction management. The implication for the NPI process including the need of
better understanding of inter-functional coordination are discussed.
Contents
1 Big Idea
= 1.1 What is NPI?
= 2 Why NPI is important?
= 13 NPD & NPD
2 Application
= 2.1 Phase-Gate Reviews
= 2.2 New Product Introduction Steps
3 Limitations
= 3.1 Apply Lean Thinking to NPI
= 4 Annotated Bibliography
= 5 Reference
Big Idea
What is NPI?
‘The NPI process (New Product Introduction) is an idea carries out process through various structed phased and result in a
finished product being launched to the marketplace. The product could be something tangible, as in the case of a new model
automobile, or intangible as in a particular service offered . NPI program involves a large great of collaboration in
organization as well as cross-functional communication lead to be successful. This process is driven and managed by a
functional team that keeps a check on every aspect of the project. The different phases are controlled by approval gates,
which ensure the project has met specific criteria before moving onto the next phase in the process 31,
Although NPI process required a dedicated project manager to conduct and coordinate between different functions, however
itis more elaborate than a to-do list. The process is carefully managed by a team of expert including representatives from
different department (for example financial, procurement, engineering and marketing) and stakeholders,
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Why NPI is important?
Visibility to product performance has never been higher, while competitive pressures continue to squeeze margins and time
to market. To compete, manufacturers must deliver better, faster and cheaper [4], A new product that is brought to a rapidly
changing market on time but 50% over budget cuts profits only by 4% over the first five years. Yet, coming out six months
late but within the development it will earn 33% less profit 5]
‘The implementation of NPI has become imperative for small and medium size business following the industry leader that
have realized the importance of NPI. The well-defined NPI process will create robust and successful products, Another
obvious reason that NPI should be involved in the beginning step of development is to keep teams in constant
communication and ensure everyone is hitting their deadlines, However, there are other benefits from those who have
already implemented it have realized as following:
|. Improve product quality: The NPI process incorporates tools focused on ensuring the best practices of design,
engineering and testing, which help assure the best quality of products. This helps to maintain consistent new product,
quality
2. Reduce manufacturing cost: By incorporating the Voice of Customer (VOC) into the early stages of the project, the
design team can avoid late design changes, multiple revisions and repeated costly validation testing.
3. Fast time to market: Reduced new product development period mean that the product will take a shorter time to
reach the right customers and start to generate revenues. There are several critical factors that affect the manufacturing
time such as design errors, material issues, manufacturing defects and more, During the NPI process, all of these
factors take into account which helps improve the time to market capabilities.
4, Improve production efficiencies: Throughout the NPI process, the team will employ the good practice of DFM/DFA,
(Design Manufacturing and Assembly) which will help streamline manufacturing process efficiently.
NPD & NPD
The acronyms NPI (New Product Introduction) and NPD (New Product Development) are used interchangeably by many
organizations. In some cases, NPI activities begin after design and development and merely deal with the product production
launch and marketing !“), The New product development (NPD) is the foundation for NPI which is the process of idea
developing to bring a new product to the marketplace. NPD phases required the input from various stage from engineering
throughout supply chain partner whereas the NPI process focus on the product from the viewpoint of manufacturing. NPD
process transform a market opportunity into a marketable new product to satisfy customer requirements.
Application
Phase-Gate Reviews
‘A Phase-gate or waterfall process is technique commonly use in project management. The phase-gate process is ideal for
projects that involve large teams across multiple departments, as itis designed to handle many spinning plates in a short
amount of time. It is typically used for new product developments, software/app/website launches and business-wide
changes [7]
‘The NPI operates often using gate-phase model as it is the systematic model to manage a new product start to end, The
number of phases and gates depend on the project/nitiative size and a phase has only one gate associated 'S1, Each of phases
ends ina gate review where the project manager asked to present the pre-defined deliverables and demonstrates the
‘outcomes to the management whether the project should move on to the next phase of the product development process.
Each of these reviews ends in a go/no-go decision !°), Therefore, there are opportunities for management to exterminate the
project before committing to its launch
New Product Introduction Steps
‘The NPI comprises all the activities concemed with a new product development right from the conceptualization to launch.
and implementation phase. The steps involved in this process may vary from project to project, however the goals are the
same: reduce waste, avoid miscommunication, speed up production and save money. It can be easily broken into the six
steps with five gates:
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DEVELOPMENT
Step 1: Ideation
Ideation is the initiation of idea that has been generated. It is considered an the most important step where most of new
product ideas come from. The idea could be developed from the exploring, market research and business analysis,
Step 2: Product Definition
‘The product definition often called discovery step as itis a process to explore the customer's needs. In this step, the
product requirements and concept are defined along with the voice of customers (VOC). The associate tool that often
uses in this step in the Quality Function Deployment (QFD) which convert the product requirements to design
specification, After the specification are integrated into one ot more concepts, it should be review by the project team.
A project charter develops containing following information:
= Project Budget
= Project Scopes
= Project Objectives
Key Deliverables and
Identify Stakeholders
Step 3: Prototyping
The prototyping step involves the investment for developing the product. A detailed business plan is created with an
intensive market research in parallel that proving the product feasibility. This is considered as the last phase of idea
development where the idea will be finalized before starting to develop to the product, This is @ crucial step as it
reduces the market risk for the new product in all businesses. As it involves the investment, the financial model for the
product is created and the price also determined in this step.
Step 4: Detailed Design
The activities in this step focus on the product design and carried out some early simple test of the product. In most
cases the test performs with the customer to getting their feedback and incorporating it into the prototype. DEM/A
(Design for Manufacture and Assembly) are performed in this step in order to finalize the design as well as BOM (Bill,
of Material) also generated. This is a stage where the procurement team will get involve heavily. Below are some of
the common outputs during the detailed design steps.
+ 3D Models of the design
= Bill of Materials (BOM)
= Design Failure Mode and Effects Analysis (DFMEA)
=| Manufacturing preliminary footprint
+ Preliminary engineering design
During the gate review, the project manager should cover the project information including the design, project
‘timeline, risk assessment, business plan and financial status. Marketing, sales and production plans are also developed
in this step as itis important that the goal of the project reflect in the plans.
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Step 5: Pre-Production (Validation/Testing)
At this stage the product analysis and testing are performed to ensure that the prototype works as planned. The testing
covers the product function, the manufacturing process, customer approval and the financial model for the products.
PFMEA (Process Failure Modes and Effects Analysis) is a qualitative tool that can be used to identify the potential
failure mode. The process risk is being to analyze and addressed.
As itis a last step before the final product is ready to be launch, the management requires to approve whether the
project should be moving forward to the next step or the prototype need to be revised. Likewise, the market strategy
needs to be confirmed at this point. The common outputs in this stage are:
= Process Flow
= Process Failure Mode and Effects Analysis (PFMEA)
= Process Work Instruction (for prototype)
+= Fixture or Tooling creation and build
1 Prototype Builds
Step 6: Manufacturing
The pilot launch of the product is set up and the first production is performed in this step. The manufacturing
processes are refined and validated through pilot builds and capability studies As well as the documentation
process including the production control plan, quality control and process work instruction are being developed and
implemented. This is @ step where the team required to bring the final product to the market including marketing and
sales plans, During this step, there are many on-going activities following examples:
Process Work Instruction and Standard Work
Training
Production Control Plans
Process Capability Studies
First Article Inspection (FAI) for Pilot Build
Development of Manuals
Limitations
A successful product performance and quality at initial release bring a lot of benefit and business growth in long term,
tional growth targets are fundamental to future business strategy and it greatly involves the exploring of new
opportunities and introduce new products into the business
Product quality, product performance, cost/margin and time to market are the successful criteria of NPI. These seems are the
same ctiteria as general manufacturing process however, an excellent initial product release will reduce the risk of re-
engineer the product. Since every gate that was assessed in NPI steps has been determine thoroughly on the engineering
points therefore, it would be easy to manufacture on a small or large scale. Similar to the quality aspect, the process involves
‘multi people assessing in each stage which is likely that the quality problem will be able to be addressed and analyzed in
design steps. The output can be result in DFMEA (Design Failure Mode and Effect Analysis) and PEMEA (Process Failure
Modes and Effects Analysis).
As mentioned earlier up to 95% of new products fail to introduce to the market, this is due to a common high risk and the
areas involve multiple stakeholders, risk, product verification and validation. Therefore, the challenges of NPI are vary by
discipline. Three common issues cause to the failure of NPI are: lack of consistent or formal processes, disparate systems
and data sources, and late engagement in NPI which are directly impact to the key NPI success criteria
Apply Lean Thinking to NPI
‘The origins of Lean are in the Toyota Production System (TPS) pioneered by the late Toyota Chief Engineer Taiichi Ohno
(Ohno 1978, 1988, Monden 1983, 1993) and sensei Shigeo Shingo (Shingo 1989) !1°), They started developing the ideas in
the late 1940s and early 1950s, and by the early 1960s they had fully worked out the principles of lean production (Womack
etal. 1990) !"!), Toyota aims to complete their product on very low budget, with this reason it leads to leaner operations
which help to expose further waste and quality problems in the system. Thus the systematic attack on waste is also a
systematic assault on the factors underlying poor quality and fundamental management problems (Monden 1993) "121, There
are seven commonly wastes in the TPS: over- production, waiting, transportation, inappropriate processing,
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‘The goal of lean is to eliminate waste — the non-value added component in any process and inefficiency in manufacturing,
operations. The process became so successful that it has been embraced in manufacturing sectors around the world. By
applying the lean principle, it can create huge improvements in efficiency, cycle time, productivity, material costs, and scrap,
leading to lower costs and improved competitiveness. Lean principles are not a strategy however it is much more powerful
enabler when applied effectively 3)
According to the Karlsson and Ahlstrom (1996) "41, their observation of a company over 2.5 years and found out that the
principle of lean product are involved the following elements:
Supplier involvement
Cross-funetion teams
Simultaneous engineering
‘A focus on integration of activities instead of co-ordination
Strategic management
Black box engineering
Based on the observation, they state that a successful lean product development requires approaching these interrelated
techniques as elements of @ coherent whole rather than implementing some of the techniques.
Following The Machine that Changed the World, Womack and Jones (1997) !'5] develop a comprehensive Lean philosophy,
based on the five principles, that could be applied to the entire enterprise not just to manufacturing.
= Specify value
The value should be defined precisely from the idea initiation phase. Covering the perspective of the end customer in term
of a specific product with specific capabilities offered at a specific price and time, Similarly to the beginning step of NPI
process, the output of processes are in the form of data, information or knowledge, as opposed to material in manufacturing
To develop the detailed characteristics of an NPI process that is world class at ‘specifying value’, the needs of both internal
and external customers were analysed by the researcher !!31, The characteristics of an NPI proce
value principle are the following:
that satisfies the specify
- Identify the right customer, market and product
«Identify the customer needs in term of performance, quality price, timing, desirability, and options
- Deliver the right information at the right time, and at targeted cost to downstream processes/customers
= Identify the value stream and eliminate waste
By analyzing the value stream of current NPI that delivers the specified value, will eliminate non-value adding processes
and activities. The process or value stream management can be defined as the process of Defining, analyzing documenting,
controlling and improving. An NPI process that identifies the ‘value stream and eliminates wastes’ have characteristics as
following:
= Ithas processes in place that enable identification of the value streams (both current and future)
= Its value streams (processes and activities) are clearly defined, mapped, standardized and measurable
Milestones are achieved with minimum possible waste, and non-value adding activities, and within budget (cost)
= Make the value flow
Information is an important element in NPI activitics. The inefficacy information handling will create delay in process
which will impact the delivery target in consequence. In order to implement the principle of flow, an organization should be
able to control information flow. As well as add information value as activities progress from one to the next and eliminate
non-value added information. An NPI process that enables the ‘flow’ of value have the features or characteristics
following:
- A process and organisation structure that focuses on improving integration of NPI functions as opposed to just co-
ordination
- Effective program planning and control
- No excessive batching or buffering of information
- Effective communication and data flow of multifunctional information
- Effective flow of technology into Projects
= Let the customer pull (value) process
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A program plan in which activities, workload and objectives are based on customer needs or downstream activities are the
key that program manager should have in control. An effective information should be available and accessible as and when
desired,
- Activities are driven by a stage-gate reviewed program plan (including resource plan, communication plan, work
breakdown structures, and organization breakdown structure) based on the needs of downstream processes and
customer
- Suppliers are responsible for developing complete modules, with detailed specifications. The company focuses on
product functionality rather than detailed guidelines and specific measurements and features. (Black box engineering)
= Pursue perfection
Continually identify ways to eliminate wastes and non-value adding are the important ability that should be considered.
- Has a process and organizational infrastructure dedicated to lean transformation and leadership that enables
continuous review and improvement of NPI value streams, products, and services
- Uses tools and techniques that enable continuous sustainable improvement
According to the UK LAI (Lean Aerospace Initiative) research activity, the wasted within NPI process was carried out. The
investigation was performed based on the application of seven TPS wastes which adapted with the area of NPI processes.
‘The workshop performed with 60 participants including engineers and non-engineering function and extensive literature
reviews. The research result identity as waste category which would enabler a better-managed and targeted waste
elimination process. The wastes in NPI process ate shown in the table below:
ik’ doing-projects orgindex phpiNew_Product_Introduction_%28NPI%29 oe27.40.2028, 19:02 "New Product Introduction (NPN) - appom
Waste Category ‘Types
Over
Defective Information
production = Too many products and projects
= Misunderstanding information leads to a poor long-term
understanding customer needs
Organizational wastes . x not cle .
Wrong organization Poor process focus and visibility; roles not clear; poor team
wens arrangements (including geography)
= Poor training and skills development
Lack of resources = Lack of Human resources
Inapp
chain
Defective Activities
= Poor technology take up
ropriate supply = Poor supply chain management
processes = Lack of supply chain knowledge capability
= Poor design for X — manufacture, assembly, cost, reliability, and
supply
1 Inadequate design tool generate poor design
= Failure to capture and understand requirements
1 Use immature technology
tive Product)
= Waste time to process the information; waiting for the
Waiting information (for example the delay process of prototypes will
Unnet
lead to the launching schedule and the ability to deliver products)
= Unnecessary manual intervention due to poor system
ssary Transfer of connectivity
Information ‘= Information forwarded to wrong people
Too many data interf
Annotated Bibliography
Maximizing New Product Introduction Success by Matt Wuensch, Market Development Manager, Valor Divisionof
mentor graphics corporation
This paper discusses the key success of NPI process including two keys criteria: ‘First Time Right’ and Design data
flow.
Apply Lean Thinking to New Product Introduction by Badr Haque & Mike James-moore
This paper discusses the lean thinking and its principles as prescribed by Womack and Jones which have been
successfully applied to manufacturing and operation environments. The paper associates with case studies and
research literature have been published extensively.
Redefining the new product introduction process by Donald Gerwin and Paul Guild
This paper discusses attempts to reorganize the NPI process occurring in the information technology industries. The
project discussed involve change in the roles of the design and manufacturing function in both upstream and
downstream phases.
iki doing-projects orgindex phpiNew_Product_Introduction_%28NPI%29 7827.40.2028, 19:02 New Product Introduction (NPN) - appom
R
Ret
wk,
eference
1. }0 1-1 The best practices for New Product Introduction (NPI) in Manufacturing.
hutps:/iwww.redlinegroup.com/insights/the-best-practices-for-new-product-introduction-npi-in-manufacturing-
97314115541
2. f Understanding the New Product Introduction (NPI) Process hitps://www:pacific-research.com/understanding-the-
new-product-introduction-npi-process-pr
3. J Analyzing the (NPI) New Product Introduction Process & its Benefits https://qualityinspection.org/npi-new-product-
introduetion-process-benefits-podeast!
4, 4 The Importance of New Product Introduction & Why It Can Fail https:/industryforum.co.uk/blog/the-importance-
of-new-product-introduction-npi-and-common-reasons-for-its-failure
5. t Nevens T.M., Summe GL and Uttal. B (1990) ‘Commercializing technology: What the best companies do’, Harvard
Business Review. May-June. pp. 154-163
6. t New Product Introduction (NPI) https://quality-one.com/npili#Why
7. Phase-Gate Process in Project Management: A Quick Guide https://www-projectmanager.com/blog/phase-gate-
process
8. f http:/thepmjournal.com/welcome-npi-in-product-management-processes!
9. { New Product Introduction [NPI] Definitive Guide https://www:tcgen.com/new-product-introduction/#modem
(0. | Shingo, S., 1989, A Study of the Toyota Production System from an Industrial Engineering Viewpoint (Cambridge,
MA: Productivity Press)
11. | Womack, J.P, Jones, D.T., and Roos, D., 1990, The Machine That Changed the World (Toronto: Collier Macmillan)
12. t Monden, Y., 1983, Toyota Production System. A Practical Approach to Production Management (1st edn) (Atlanta,
CA: Industrial Engineering and Management Press, Institute of Industrial Engineers)
13. t 3-913 apply Lean Thinking to New Product Introduction by Badr Haque & Mike James-moore
14, f Karlsson, C., and Ahlstrom, P,, 1996, The difficult path to Lean product development. Journal of Product Innovation
Management, 13, 283-295
15. | Womack, J., and Jones, D.T., 1997, Lean Thinking, Banish Waste and Create Wealth in Your Corporation (New
York: Touchstone Books)
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