What is a New Product Introduction (NPI)?
New product introduction isn’t simply the creation of a new or improved product and introducing it to a marketplace. NPI encompasses the entire process of bringing an idea to life from the early concept phase all the way to launch. Depending on the organization, NPI could be referred to in general terms such as the Phase Gate Development Process or, more specifically, as Product Commercialization Process (PCP) or Integrated Project Management (IPM). This process comes in many variations and is performed by companies and corporations, large and small. The purpose is to provide an adequate decision-making process to allocate and invest resources into a profitable and value-generating product while aligning the entire organization on the project’s goal.
Sometimes, especially in the case of smaller organizations, a less structured and undefined approach is taken with New Product Introduction. But even with a structured process in place, much ambiguity exists as it pertains to roles and responsibilities and unclear definitions of milestones. This leads to many hiccups along the way, such as team members aren’t made aware of changes, things needing to be redone because a cohesive understanding of the project was not properly communicated broadly, or stakeholder misalignment across the organization. This can lead to delayed launches, lost revenue, unprofitable projects, unhappy investors, or all of the above.
Our formal New Product Introduction framework is a great place to start avoiding these pain points and make your team move as a cohesive unit through the product concept, development, and launch phases of a project. It can also be adapted to fit your organization’s needs depending on the industry, product, or culture. There is no one size fits all, but a general framework is a great place to start to ensure success. Even if an NPI process is already in place, this framework will help fill in any gaps in your process that may be missing.
What is the New Product Introduction Process?
The New Product Introduction process is a framework that can be used to iterate concepts into products. It is a multi-step, linear plan used to efficiently and effectively introduce a new product to the marketplace. The framework includes high-level plans for each phase of the NPI process, such as design, manufacturing, marketing, distribution, and performance metrics.
We’ve created a framework to assist you when going through the NPI process. Download it HERE. Contact One TEAM Partners for detailed and intricate explanations of each phase of the process.
The NPI framework allows a massive team to cooperate on a project simultaneously, utilizing a handful of interconnected sub-teams and constant communications. Every relevant member of the team will be aware of every little change to the timeline, requirements, designs, and pretty much anything else about the product. This gives the NPI process several advantages compared to simpler or more loosely structured approaches.
What Makes New Product Introduction a Preferred Process for Product Development?
Better Marketplace Understanding
With a customer-focused mindset from the beginning, there is a high probability of traction for any idea that makes it to the next step of the process. Furthermore, the marketing team will need to be looped in throughout the design, development, and production process to have a clearer picture of the finished product’s position in the market.
Product Market Fit
Let’s be real; there is a much lesser chance of product or concept flaws passing through the intentional “gates” of each step in the process due to the massive number of eyes overseeing every decision. With a more splintered approach, (not following the NPI framework), a sub-team working on product development may not show the marketing team every iteration of the design, which could lead to delays down the line. However, with a robust NPI process, the entire organization will be interconnected and abreast of all hurdles faced during the development process. No one is ever left out of the loop.
Decreased Development Cost
Due to the increased interconnectivity of the teams involved with the project, there will be fewer wasted materials and resources on prototypes and designs. The entire team is actively aware of each iteration of the product during development, which ensures that the project moves consistently in the direction of overall team objectives. For example, complex technologies that involve a piece of hardware, which utilizes consumable materials and software to run it, often require separate development teams who work in unison. Collaboration among the development teams will reduce the risk of a redesign due to the incompatibility of component parts.
Quicker Speed to Market
Because the entire team is on the same page, it creates a speed-to-market advantage, as there won’t be multiple sub-teams working on entirely different project phases simultaneously. The alignment allows for quicker delivery of assets.
Since the manufacturing team was informed of the concept and design decisions from the start, there is a much lesser chance of redesign due to manufacturability. Ideally, the manufacturing team will provide input on the capabilities of their production line that provides guardrails for the development team. In addition, if the manufacturing experts foresee an issue with manufacturing the new product at the desired scale, they can speak up before it’s even designed or prototyped.
A 6-Step Guide to the NPI Process
The New Product Introduction process comes with a handful of different hurdles. It’s typically viewed as a phase gate system, and each step must be completed and approved by management before moving on to the next. Every gate has its own objective, and the passing criteria to move on to the next phase has specific requirements. From conceptualization to launch, the timescale for products, especially in industries like biotechnology and pharmaceuticals, can range from as few as 2 to over ten years, depending on the complexity of the technology and defined regulatory requirements.
We’ve created a framework to assist you when going through the NPI process. The rest of this blog will thoroughly dive into each of the six steps, and it may be helpful to follow along while you read. Download it HERE.
The first step in the New Product Introduction involves conceptualizing the idea. This includes determining what the product itself generally will be and what it will do. But it does not stop there. The primary goal of this phase is to build both a scientific and business rationale that justifies investment into the idea. A good scientific rationale consists of endorsement by scientists, developers, and engineers that the concept is possible and feasible for the company to build. The business rationale generally revolves around whether the marketing and sales-focused team members can see the product filling a need in the marketplace and become a profitable project. This often involves gathering Voice of Customer (VOC) data from the marketplace to understand them and their needs. A business case is often generated that summarizes all the findings of the technology and business assessment. In addition, estimates of costs (money and human resources) and projected revenues are often provided to gain a sense of the necessary requirements to bring this idea to the marketplace.
If the idea looks both feasible and profitable, it may be able to move on to the next step. As a reminder, management approval and stakeholder buy-in are not only pivotal, but required at this point; This is the step where many projects end or are stalled. Oftentimes, there are a multitude of ideas, but only some of them will be feasible with the resources available, and even fewer will also appear profitable.
Once the major milestone of gaining approval for a project to proceed in the process is achieved, the project team is assembled to map out all the necessary tasks and deliverables to develop and launch the product. This is the phase where a lot of the details for the rest of the project are hammered out. Teams of subject matter experts are assembled for various purposes such as research & development, operations, regulatory, quality assurance, marketing, and sales. Other details like project deliverables, KPIs (key performance indicators), and an adequate timeline are agreed upon.
This is also where any resources used for the project are allocated, assuming they haven’t already been committed in the conceptualization phase. This includes internal capital, investor capital, teams of staff, and potentially new equipment or facilities needed for the product’s development and launch. This is usually where things like process flow diagrams and workflow diagrams are created to ensure all roles and responsibilities specific to the project are defined and clearly communicated.
To see a great case study of conceptualization and planning done well, look at this $26 million project that was stalled for over three years and was ready to hit the ground running within six months.
The development process is the first step that varies significantly for projects of differing natures. For example, a mechanical product may need CAD drawings and prototypes to be made, while a new therapeutic will call for research studies and lab work.
In the case of life science-related products, the R&D team must complete any research studies with the utmost scientific discipline. However, they must also be done according to the budget and timeline agreed upon earlier in the process, which is why the technical members of the team need to provide input when determining a reasonable and adequate timeline. Sometimes parts of the development process are outsourced to external product developers, adding another layer of complexity as organizations differ in their development processes. During this stage, material forecasting, design specifications, and design concepts are also tested and decided upon.
Typically, there will be a handful of milestones the development team will meet. Once a final product with defined attributes and specifications are in place, the team can move on to validation and manufacturing. This is where the New Product Introduction process effectively moves from the early stages, or planning phases, into the action phases. Many steps beyond this point require more dedicated resources for manufacturing operations, validation testing, and other technical action steps.
It is important not to forget the sourcing aspect during the product development phase. The sooner the strategy is in place for sourcing raw materials, the smoother the manufacturing phase will be. Lastly, a regulatory pathway is finalized and agreed upon to ensure that adequate data is provided for the registration of the new product in select countries/regions around the world.
This step, much like development, will differ depending on the type of project. In any case, the primary purpose of the manufacturing phase is to ensure a quality product can be repeatedly produced per agreed-upon specifications and that the adequate amount of supply meets the agreed-upon forecast. This stage includes things like training personnel, building a manufacturing process, meeting all quality standards, and that the product is properly packaged and ready to ship (oftentimes worldwide). Sometimes production is outsourced to a manufacturing company, but the manufacturing processes won’t usually differ if done in-house. Hopefully, a reliable and efficient process can be implemented during this phase to produce the desired output of the product in preparation to launch.
The launch phase is where final arrangements are made before releasing the product to the marketplace. Ensuring there is an adequate amount of product availability, arranging customer support, sales support, and providing any final training will be completed during this phase. The marketing will have been thoroughly planned and prepared, and sales teams will be ready. Oftentimes, all the details of the launch are detailed in what is called a Launch Plan.
Now the product can be launched to the public. This is usually the first time real customers are exposed to the product, and it’s also the step that provides the team with the most results to use in the next phase, evaluation.
Often referred to as Post-Lauch activities, the launch is evaluated in this final phase of the NPI process, and the team will review process performance. The KPIs are examined, and the group reviews the deadlines, budgets, and other project aspects. The team will evaluate sales figures and profit margins, ensure efficient manufacturing, and collect customer feedback. This helps to determine how successful the project/product was and whether the team should revisit any steps. Usually, this would be in the development, manufacturing, or launch phases.
Sometimes a product is not marketed properly and needs to find a new position in the marketplace to sell well. Other times, a more effective manufacturing process could make the product more profitable. If there is something notable to improve, this is where the team will generally find it by analyzing KPIs or collecting customer feedback. This step is perhaps the most important because it pushes the team into a continuous improvement effort by revisiting some of the steps that could be done better.
How to Optimize the NPI Process
Performing a robust NPI process with only in-house talent can be difficult in itself. Interdepartmental teams must communicate with one another and be aligned on all tasks and timing. Communication of any roadblocks and/or delays is pertinent to ensure dependent tasks and deliverables are adequately considered. In addition, suppose the team is working with any third-party service providers or contracted talent. In that case, external team members must also be willing and able to participate in the New Product Introduction process that your team uses on the project. Even externally rendered services must include precise outlines and details, including deadlines. Not only that, but updates to the point of contact need to be made regularly, and all prototypes, designs, and products must be tested and vetted thoroughly before moving to the next step. In addition, updates to forecasts and costs need to be done as well.
This can be extremely difficult to pull off successfully, so if your team needs some help to perform an optimized New Product Introduction, check out One TEAM’s New Product Introduction Consulting service offering!
Goals of the New Product Introduction Process
As stated before, the primary goal of creating and introducing a new product is to ensure investments and resources are allocated to the projects that contribute to the future viability of the company. Profitability and Return on Investment are the primary drivers of the NPI process. However, the process is not so direct in how it does this.
Remember when we mentioned the dominant factors of New Product Introduction as a framework? They include better marketplace understanding, improved product quality, decreased development cost, quicker speed to market, and simplified manufacturing. These factors create a profound competitive advantage for the companies that utilize the process. They’re likely to save money, time, and other resources and return a more valuable asset. The main goal of the NPI process is to streamline product development and create a competitive advantage for the team using it.
We’ve created a framework to assist you when going through the NPI process. Download it HERE.