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What is ‘New Product Introduction’?
New Product Introduction (NPI) is a process in which an idea is taken from the first working prototype to a refined and reproducible product. In the process, a new or improved product is defined, developed and launched through a set of activities. The NPI process is framed from the contract manufacturer’s point of view.
NPI is how organizations bring about innovative goods and services to the markets. NPI is often confused with NPD, or New Product Development. But, NPD deals with the concept generation, design and commercialization of a new product, whereas NPI deals with the manufacturing and launching of new products. Since both in a way deal with the product cycle that flows from concept to development to launch, there is an overlap between the two terms.
In this blog, we are going to focus on the New Product Introduction process. We shall understand the fundamentals of the process as well as the steps involved in it in detail.
Understanding the New Product Introduction Process
When creating a new product, a number of moving components have to be managed at the same time. Every step needs to be carefully monitored right from the design stage to the first launch of the product. The New Product Introduction process helps streamline these operations.
The exact steps that are involved in the New Product Introduction vary from company to company and project to project. However, the goals of the process are the same throughout. These are to minimize waste in the process, avoid any sort of miscommunication, enhance production speed and save money.
The process involves multiple steps to take the product to the market. A special team tracks progress and performs assessments at regular intervals to make sure that the project is going in the correct direction.
This team usually includes:
- A project manager
- Members from each department involved in the process
- Stakeholders based on their need, determined by the manager
- POCs of any contract work
The NPI team usually isn’t very big. This helps avoid too many conflicts and align the team on one goal and work towards it. There should be proper communication between the departments and what is happening in each should be known to all team members. This NPI process often begins even before the project is past the design stage, to try and make the process more efficient.
Goals of the New Product Introduction Process
We’ve already stated the goals of the NPI process above. In the present market, companies need to develop products at the right time and cost, and a robust NPI process can help achieve this. Here’s a clearer explanation of how the process aims to get these goals. Note that there could be even more which we may have missed.
- Lower cost of development - when the customer’s needs are integrated early on in the process, continuous changes in design leading to higher development costs can be avoided.
- Faster time to market - Following the above, since the time of development would also be reduced, the products can then be released faster. Faster release would also lead to quicker revenue generation.
- Enhanced product quality - The NPI process tries to make sure that the necessary tools for making high quality products consistently to meet the customer’s needs are developed.
- Improved manufacturing efficiency - Best practices for design are employed so that the design process takes into consideration the manufacturing process. This way, any hiccups can be avoided.
Steps involved in implementing the New Product Introduction process
The NPI process differs based on the project’s particular needs. Hence, a generalised process is not feasible. However, there are a few steps which are common across all projects. The NPI process broadly involves the following steps:
Define the plan
Here, you’d get your NPI team together and note down the resources that you need to put the product together. The roles of the team members are also defined. Deadlines for various processes are also to be set in this stage, and all members should know what is expected of them in clear terms. Service Level Agreements (SLAs) with suppliers are also reviewed.
This is where you determine whether the process is actually possible and makes business sense. Early on, the team plans to optimize the process for production at scale. The technical feasibility of this process is also checked. Various options available for developing are tested out and the best one for the particular needs is determined.
This is where the company actually makes and refines the product. Working prototypes of the design are created and evaluated. These are then tested with beta users who give feedback based on their experience with the product. They also start gathering all the resources that are needed for the development. This includes material forecasting and shipments. Protocol for the processes is also set in place.
Validate the steps
Here, companies check if the steps that were undertaken actually seem to work or not. Any chances of improvements are also analyzed and worked upon. The prototype is improved until the desired outcome is obtained. The final production plan is tested to make sure that it works well.
Once this is done, the company starts placing orders for all the materials and other resources needed. A test-run of the process before scaling up is carried out.
As the term suggests, this is when the continuous manufacturing of the product takes place. Frequent quality checks are also carried out to ensure that things are operating smoothly across the production line. The product is introduced to the market.
A few weeks after the first run, the New Product Introduction process is evaluated and its performance is analyzed. The company also notes down areas of improvement. This phase involves reviewing the process performance, documenting the various processes involved and getting customer feedback. Accordingly, work is carried out by the internal team to improve the process.