Click to learn more about author Bruck Assefa.
New product development and introduction requires the collaborative participation of different departments, often working in parallel. New product introductions (NPI) often represent a make-or-break opportunity for manufacturers and brands, especially in younger companies. Yet the statistics on NPI success are daunting — recent studies from LNS Research highlight that while companies may involve as much as a quarter of their personnel in NPI work, only half of new products meet all success criteria. An older, but widely cited statistic attributed to Harvard Business professor and disruptive innovation expert Clayton Christensen is even more alarming — in 2005, he claimed that of the 30,000 new products introduced every year, more than 90 percent fail.
NPI is no longer a matter of getting products onto store shelves. Consumers expect short delivery times, and demand options like home delivery or in-store pickup. They expect to complete their buying process across multiple channels and the brand engagement has to be consistent. This requires careful strategic planning and logistics work on the part of brands, suppliers, and sellers (retail stores, ecommerce websites, etc.)
NPI encompasses everything from early concept through design, production, marketing, and sales. The NPI process involves multiple internal divisions and third parties, but is hindered when each step is siloed and teams develop tunnel vision around their area of responsibility. Think about it, are those processes designed for the benefit of the department responsible or for the benefit of the product and the customer? Are your NPI processes costing you when they should be adding to your competitive advantage in a crowded, dynamic market?
Pulling off a successful omnichannel product launch is virtually impossible without deeper integration, automation, and Master Data Management. Three key elements of success are: timely product launch across multiple channels; streamlined order fulfillment across those channels; and increasingly, compliance. As regulated products (e.g., medical devices, IoT-enabled devices, products with public safety and privacy implications) expand their reach into various channels, organizations need to ensure their business and logistics processes still adhere to industry and government regulations. When strategically implemented, compliance-integrated processes boost quality and reduce errors and callbacks.
NPI Evolution — Past, Present, Future
Like many elements of digital transformation, NPI strategy has a maturity spectrum. It’s important to review your overall approach and drill down into singular processes to increase awareness of enterprise maturity and capability around product development and omnichannel introduction. Your NPI chain is only as strong as its weakest link.
Not too long ago, NPI processes were largely manual and paper-based. The approval process was multi-layered and convoluted. Think about how much extra work is involved in a process that rolls out like this: Designers work in single room to design a product on paper. They establish rules for version control and maintenance. Similarly, engineers and manufacturers communicate product changes through paper schematics and change order slips. Manufacturing teams analyze the change, issue a work order and make the necessary changes in the production lines. If they need to deviate from the design, that information may or may not loop back to the designers and engineers. Significant product delays and product quality issues ensue, and the lessons learned along the way are not efficiently captured and applied to the next version of the product.
Over the last decade or so, the evolution of purpose-built design and production management solutions has helped companies automate many facets of NPI, though the degree of integration is very much a work in progress for most companies. There are Computer Aided Design (CAD) systems for designers, Product Lifecycle Management (PLM) for engineers, Computer Aided Manufacturing (CAM) and Manufacturing Execution Systems (MES) for shop floors; and Customer Relationship Management (CRM) for sales. Built-in processes manage required tasks and assign data models to capture portions of the NPI process, but only those relevant to that particular function. Unfortunately, these traditional systems do not manage master data for sharing across multiple departments in a manner that is consistently understood throughout the NPI process.
This missing MDM link is the element that brands and manufacturers are working on now. An omnichannel NPI process must fully automate tasks, workflow, and data sharing across departmental boundaries, in real time. Next generation NPI must be built upon a solid foundation of master data that is accessible to and consistently used by all stakeholders.
Centralized, automated orchestration is key. It enables organizations to pre-define the necessary sequence of events for processes like New Item Setup or Regulatory Approval. The workflow can also dynamically orchestrate tasks and assign different actors based on different conditions, rather than defaulting to a one-size-fits-all approach.
The benefits of NPI workflow automation include:
- Repeatability: The same sequence of tasks can be repeated to generate similar outcome.
- Productivity: Stakeholders can focus only on the tasks they need to do without wasting time on back-and-forth emails with other stakeholders.
- Reliability: Reduction of human errors in managing data and tasks enhances process reliability and yield more predictable outcomes. Exceptions and errors can have their own workflow and escalation channels for timely resolution.
- Visibility: The NPI process becomes more measurable and transparent. For example, reports on task completion cycle time provide visibility into process bottlenecks and risks.
Master Data Management: A Must for Successful NPI Automation
MDM is the foundation that supports streamlined, integrated workflow processes throughout the product lifecycle. The MDM system serves as the centralized, referential repository for all product information.
An MDM solution makes it easier to manage the core elements of master data including product, customer, supplier and location information across disparate participating entities. For example, technical product specifications used in engineering, manufacturing and marketing departments need to be consistent to realize efficiency, quality, and reliability.
The NPI process benefits from MDM in the following ways:
- Centralized Master Data: relevant master data can be efficiently shared throughout the product’s lifecycle, reducing data fragmentation and inconsistency between multiple applications. For example, an MDM solution can help harmonize product master data that is often fragmented between PLM applications and ERP applications.
- Data Security: MDM enables role-based access to master data for different departments that need to participate in the enrichment of product and other types of master data.
- Data Quality and Data Governance: MDM helps ensure data is complete and validated. It provides full audit trail and version history to provide visibility into how the product and other types of master data changed throughout the NPI process. This establishes accountability and eases compliance activities.
- Data Sharing: MDM applications enable automated sharing of relevant master data to applications, trading partners and sales channels in their desired formats. In an omnichannel environment, MDM applications provide the foundation for personalized content delivery.
Successful NPI requires developing a solid strategic plan, leveraging automated processes, and following up with close governance. A major key to success is bringing the right resources together at the right time. Errors and inefficiencies arising from manual processes and multiple systems of record delay time to market and complicate omnichannel execution. The first few weeks of product release is a big revenue opportunity. To compete in a fast-paced global market, brands must be able to capitalize on that window. And in the age of social media reviews, they have to get it right the first time. Consumers are savvy and impatient; you won’t get a second chance at excellence.