Developing profitable, timely, high-quality products is more important today than ever before. Business-to-business customers and consumers alike are swimming in a sea of unprecedented product performance and product quality insights—about your products and your competitors—with a direct impact on purchasing decisions. What's more, the global value chain continues to squeeze margins and time to market for many manufacturing companies.
Industrial organizations feel intense pressure to “do it all” successfully: develop and manufacture the right product, pack in more innovation, deliver with high quality, and produce it on time and at volume. Even the most innovative manufacturers are destabilized by poor quality or poor adherence to production schedules.
Much of the market needs a new approach to new product introduction (NPI), but that tends to be political, complex and time-consuming. Is there something we can do today to make progress?
Obstacles to NPI success
LNS researched the multi-stakeholder approach to NPI, examining successes, practices and outcomes. Among other findings, the study conclusively demonstrates:
- NPI stakeholders must be strategically aligned. There are many with a shared vested interest in successful NPI. Without alignment, teams are as likely to compete as they are to collaborate.
- NPI success hinges on collective decision-making, engagement and culture of change. Think of collectively gathering insights, adapting course based on those insights, deciding collaboratively and then acting.
- Digitalization is a fundamental differentiator. Leading manufacturers that apply technologies that enable sensor proliferation, machine learning and digital twins reduce uncertainty and generate granular decisions.
- Three things cripple NPI: late cross-functional engagement, poor technology strategy and inconsistent processes. They are the leading causes of NPI failure, and result in delayed product launches, reduced initial quality, less revenue and missing the market.
Manufacturers devote considerable cost and effort to NPI. Research by LNS reveals that the median manufacturer invests 25 percent of its personnel in NPI and introduces a new product in 24 months on average. Even with this substantial investment, NPI often fails to deliver expected outcomes. Only 56 percent of new products meet all NPI success criteria.
In fact, after all this investment, today’s NPI success is effectively a coin toss. This is partially because quality, cost and time to market are three common requirements for NPI success, and late-cycle compromises result in coin flip choices among these “firm” requirements.
What can we do today?
LNS’s research into NPI reveals the state of the market, best practices and frameworks needed to transform NPI and position manufacturers for success in today’s market. However, transformations take time. Aside from the big picture transformation, the research also identifies smaller, tactical actions that manufacturers can implement in weeks, and can improve outcomes immediately.
The first tactical improvements relate to requirements management. The study shows that requirements management challenges have a serious negative impact on NPI, including delayed launch, increased costs, missing the market and reduced initial quality.
Fully transforming requirements management can take many cycles. However, companies can improve four of the top requirements management challenges with just three easy-to-implement people, process and technology changes:
- Include all discipline and cross-functional stakeholders in requirements and specifications review processes. That means operations stakeholders too, and across all reviews starting with product concept.
- Provide objectivity by including reviewers that are very familiar with the product and its production, plus all those with expertise or oversight in other areas, such as corporate functions and management, or from other product families.
- Leverage one of the many document management solutions already in place to manage requirements documents, notify stakeholders of changes and enable review.
Any manufacturer can take these steps and can do so fairly quickly. More sophisticated actions will continuously improve upon early steps and results, and organizations should certainly include them in the journey toward differentiated NPI.
Takeaways
LNS Research recommends that manufacturing operations and quality personnel examine and understand today’s market drivers, and learn how to build and execute strategic, collaborative, digitalized NPI. While working on the NPI transformation, take the first steps outlined above to achieve near-term value. If you’d like to learn more, read the research ebook from LNS Research, “Sustainable Growth via Profitable, High-Quality NPI.”
>>Dan Jacob is practice director and principal analyst with LNS Research. He primarily focuses on enterprise quality management systems with collaborative coverage across automotive, aerospace and defense, high-tech and electronics, and medical devices.
